COMMITTEE OF PUBLIC ACCOUNTS debate -
Thursday, 21 Jul 2005

Single Premium Insurance Schemes.

Mr. J. Purcell (An tArd Reachtaire Cuntas agus Ciste) called and examined.

Mr. F. Daly (Chairman, Revenue Commissioners) called and examined.

Chairman

Witnesses should be aware that they do not enjoy absolute privilege before the committee. The attention of members and witnesses is drawn to the fact that as from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act grants certain rights to persons identified in the course of committee proceedings. These rights include the right to give evidence, the right to produce or send documents to the committee, the right to appear before the committee either in person or through a representative, the right to make a written and oral submission, the right to request the committee to direct the attendance of witnesses and the production of documents, and the right to cross-examine witnesses. For the most part these rights may only be exercised with the consent of the committee. Persons invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of these rights and provided with the transcript of the relevant part of the committee's proceedings if the committee considers it appropriate in the interests of justice.

Notwithstanding this provision in the legislation, I remind Members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. Members are also reminded of the provisions within Standing Order 156 that the committee shall also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government and the merits of the objectives of such policies.

Mr. Frank Daly

I am accompanied this morning by Mr. Paddy Donnelly, head of our investigations and prosecution division; Mr. TomDowling, liaison officer with Oireachtas committees and the Comptroller and Auditor General; and Mr. Dave Coleman in the Visitors Gallery who is our press officer.

I wrote to the committee in April to announce that we were formally initiating the investigation into the use by individuals of single premium life assurance products for the purposes of tax evasion. In my letter I also outlined the general approach we were taking. By way of background, I might remind the committee of what prompted us to look at this area of tax evasion. Based on intelligence gathered from a number of sources, including the bogus non-resident accounts investigation and offshore assets group investigation, clear indications emerged of the use of these insurance products for the purposes of tax evasion. We formed a strong view that a considerable number of individuals had funded such investments using untaxed income or gains not previously disclosed to the Revenue Commissioners and that this practice had continued over many years.

In February 2004 it was reported in the media that Revenue was carrying out inquiries into the use of these products. At the PAC hearing on 18 November 2004 the matter was raised by the Chairman and I confirmed that our research was well under way. In November 2004 we met the representative body for the life assurance industry as well as with representatives of a number of life assurance companies with a view to progressing the inquiries. As a part of this preliminary work, Revenue requested statistical information from individual life assurance companies for the period from 1980 to date and ascertained that about 700,000 policies of this type were taken out in this period. We decided to advance this inquiry in two stages using a similar model to that which was successfully used in the bogus non-resident account and offshore assets investigations.

In the first stage, which was the voluntary disclosure stage, taxpayers who invested undisclosed and undeclared funds in life assurance products were given until 23 May 2005 to give notice to Revenue of their intention to make a disclosure. This part of the disclosure stage has now been successfully completed and about 10,000 persons have notified Revenue that they may have tax issues. Those who have such tax issues and who opted for the voluntary disclosure route have until tomorrow, 22 July 2005, to pay their outstanding liabilities. A further 2,000 persons wrote to Revenue during the voluntary disclosure period to say that while they purchased such products, they have no outstanding tax issues with them.

In the second stage, the follow-up investigation, which effectively began immediately after the May deadline had passed, Revenue started to identify all those who used such products for tax evasion but did not make voluntary disclosures. As part of this process Revenue contacted and met representatives of a number of life assurance companies about the new sampling powers provided in the Finance Act 2005. The remaining companies will be contacted in due course. At all times the Irish Insurance Federation has given assurances to the Revenue representatives that the industry will fully co-operate with the Revenue investigation as the law requires and this has been the experience to date.

The bulk of the payments due under stage one will probably not come into Revenue until tomorrow but I can inform the committee that as of this morning, €106 million has been paid by 1,972 taxpayers as part of this voluntary disclosure phase. It is not possible right now to estimate what the ultimate yield will be from this voluntary disclosure phase of this investigation. This will only become clear in the next week or so. Still less is it possible to estimate the yield that will result from the second phase of the investigation as we deal with those who have liabilities but did not avail of voluntary disclosure.

Chairman

Up to yesterday, 1,972 taxpayers had paid €106 million. Mr. Daly also stated that 10,000 people had notified the Revenue Commissioners that they thought they might have a liability of some sort. Would it constitute false accounting to state that the first phase yield would be about five times €106 million?

Mr. Daly

I am not sure I would call it false accounting, but that would be quite speculative.

Chairman

Are the Revenue Commissioners expecting money from another 8,000 people?

Mr. Daly

The nature of these disclosures is that we get people who will write in on a protective basis, just in case they have an issue. They then go to their accountant and have their situation analysed. They might then find that they do not have tax liabilities. I am confident that of the 10,000 people, around 8,000 would have some liability.

I should also note, in the context of extrapolating or averaging, that in recent days alone, Revenue has encountered everything from a liability of more than €3 million to a cheque for €32. I caution against drawing conclusions. However, I am confident there is more money to come.

Chairman

I apologise for interrupting Mr. Daly.

Mr. Daly

As I am here, perhaps I can also give the committee an update on the latest developments in the other major investigations which we have been conducting and in which it has taken a continuing interest. First, I will set out the up-to-date figures. The Ansbacher figure now stands at €49.8 million. The yield from the NIB Clerical Medical Insurance scheme stands at €54 million, from tribunal related inquiries at €34.8 million, from the entire deposit interest retention tax or bogus non-resident accounts investigation at €814.2 million, and from the offshore assets investigation at €747.2 million. The total, if one excludes the €106 million from the insurance product investigation comes to €1.7 billion. If the figure of €106 million is included — that figure is up to this morning rather than last evening — the total is €1.806 billion. This represents an increase of €197 million since I last reported to this committee on our special investigations.

I wish to make an important point to the committee. The bogus non-resident accounts investigation is now 98% complete and we are working through a number of cases to finish that investigation. The work on the follow-through phase of the offshore assets investigation — the process of identifying those who did not avail of the voluntary disclosure phase — is now well under way. In that context, to date we have obtained three High Court orders against financial institutions relating to transfers to and from their offshore subsidiaries. The information in respect of one of these orders is being provided to Revenue. As for the other two, the information is being collated by the financial institutions concerned and will shortly be passed to Revenue. Further applications to the High Court are in preparation, a number of which are at an advanced stage and may be heard before the current law term ends. It is Revenue's firm intention to seek a High Court order against all Irish financial institutions which had or have an offshore affiliate.

Chairman

I thank Mr. Daly. May the committee publish his statement?

Mr. Daly

Yes.

Deputy Hayes

In regard to the insurance investigation, how many years has this been the practice within insurance companies? Are the people coming forward business people or people in the private sector? What is the source of most of the funds? Regarding the smaller amounts — this is important from a public perception perspective — many people are living in fear of their lives in respect of some of the issues raised concerning tax evasion, particularly since the insurance investigation began. I refer to many people who genuinely bought an insuranceproduct over time and who had no knowing intention of evading tax. They are being caught in that general trap and some are very concerned. The issue of genuine people must be addressed. May I have Mr. Daly's response to these queries?

Mr. Daly

First, Revenue is investigating the period from 1980 to date. In reality it will probably investigate up to 2001 because thereafter the tax treatment of life assurance policies changed. I will explain how that had an impact on our decision in a minute. Roughly speaking, we are talking about a 20-year period. The year 1980 became a starting point because that was the year in which the single premium policies business began to grow to a substantive amount, although the real growth probably occurred later on.

As to the type of individual involved, the investigation is only at its earliest stage and members should remember that all we have received thus far are notices of intention to make a voluntary disclosure. Hence, we do not have enough information to state what type of people are involved. I can perhaps give the Deputy a "top of the head" view, which is that I do not believe that any categories will be excluded. From what we have seen, all categories of people are affected. I would not suggest that it is primarily business people or PAYE workers. We will probably find examples from all categories but, as yet, we do not have an analysis which would give a breakdown.

Deputy Hayes

Are pensioners involved? Some of the people who I know to be very concerned about this are older people. People had pensions and their plans for the rest of their lives made out. Can Mr. Daly clarify that?

Mr. Daly

That is a specific piece of information which I definitely do not have. All I can say is that by definition, if one goes back to 1980, one will come across people who are middle aged or perhaps elderly. Undoubtedly, in all our investigations in recent years, such as those into bogus non-resident accounts and offshore assets, a number of elderly people have been caught up in them and I am sure this investigation will be the same. Moreover, while I am sympathetic and while Revenue always treats the elderly or people with problems as sympathetically as we can within the law and within the concept of equity for all, some elderly people have made very substantial settlements and have had some very substantial tax issues with Revenue over the years.

We treat such people sympathetically. We have not and have never had a wish to frighten anyone in this respect. We are at pains in our advertising and by asking some of our staff to go on local radio to explain to people what this is about. This is about serious tax evasion. For example, we deliberately did not target anyone who had an investment of less than €20,000 on the basis that we did not think they were risky areas. It would also be fair to state that we thought this might exclude many of the more vulnerable people to whom the Deputy refers.

However, I have heard some of the comments on radio and received some letters from people who, in the early stages of this investigation, became distressed when they received letters from the insurance companies. We made an effort with the insurance companies to ensure the letters were purely for information purposes. We were anxious to ensure that everyone knew about the benefits of the opportunity for voluntary disclosure opportunity. While one can suggest that writing to people worries and concerns them, I would be concerned if people did not become aware of the opportunity available for voluntary disclosure. That would probably be worse. We went to great pains to reassure people about this issue but, inevitably, all categories of people will be caught up in something like this.

As an organisation, Revenue cannot exclude any particular category from an investigation. However, I have sympathy for the elderly. I am rapidly heading that way myself. If people have real difficulties because of age or inability to pay, we repeat what we have always stated in the past, which is to come and talk to us. One should not sit at home worrying about it. Revenue will be found to be as understanding as possible within the concept of equity for all.

Deputy Hayes

Mr. Daly is giving an assurance to the committee that he will be sympathetic to such people.

Mr. Daly

I will be sympathetic but I must also be fair. We must treat people with a sense of equity. I have given that assurance to this committee before in respect of the bogus non-resident accounts and the offshore assets accounts. I have no difficulty giving it again.

Deputy Hayes

That is very important as this issue is of concern to many of these people. In respect of the sum of money that might be owed, will people get a chance to pay it off over a period for one reason or another? Will Mr. Daly consider that?

Mr. Daly

I have referred to the matter of inability to pay, which does not just arise in these investigations but often arises with regard to tax that might be owed by individuals for whatever reason. Again, we deal with them case by case. We do not aim to strip somebody of every penny he or she has in a period of 24 hours. We make arrangements for deferred payment. A matter of interest arises in that situation. We are reasonable with regard to deferred payment arrangements where a genuine case is made.

Deputy McGuinness

I will follow on from the questions posed by Deputy Hayes because this is a very relevant point which was previously made in the committee by Deputy Deasy. Given the experience with DIRT and what has happened since then, the Revenue Commissioners have shown that they are determined, as they should be, to collect the outstanding taxes. They are to be complimented on the way the investigations have been carried out since the original Committee of Public Accounts investigation into DIRT and what has been revealed to date.

Given the experiences that the Revenue Commissioners have had with those people from whom they collect the taxes, there is another need to issue public information constantly, particularly to the elderly, as to how to contact local tax offices. Many people I have met do not have accountants, their husband or wife has probably died and they are now trying to deal with this history or baggage from the past in a way that is acceptable by current standards rather than those of 20 years ago. I have come across this in my work as a public representative, and Deputy Hayes outlined his similar experiences. This is an issue for individuals and families and causes great concern. While everything must be dealt with in the context of the law, these people must be encouraged to see the Revenue Commissioners as being helpful in this issue. In some cases, this message does not seep through to the members of the public affected.

In the region of €33 billion from 1988 to the present is connected with policies written regarding these premiums. If the amount of single premium life insurance written between these dates is €33 billion, we can safely say that no sector in society has escaped. Regarding this particular trawl, not enough is said about people who might have these policies legitimately. People have invested in such policies who have no story to tell and no tax implications. For older people in particular, there is a need to tell them constantly that while the job must be done, it may not affect them. This point follows on from the comments made by Deputy Hayes.

Could Mr. Daly send out this message more loudly and clearly from this meeting? Are there local officers within Mr. Daly's section in the Revenue Commissioners who can talk to the people affected and sort out their problem in a way that does not cause them the sort of concern they have at present? In today's newspaper, the Minister commented on tax advisers who made the same point about the elderly. They argued that because it is having a harrowing effect on some people and families, perhaps some special arrangement could be made for the elderly. We are all working along the same lines because it helps them to the point of disclosure. This needs to be explored further and more needs to be said about it.

Mr. Daly

I wish to address a number of points. During the information campaign we did a considerable amount to assure the elderly, particularly because there were people who would have invested lump sums or redundancy payments in these products, that these products were not the focus of the investigation. We had a widely advertised telephone helpline, the number of which was included in every letter sent. We received approximately 19,000 calls, many of which were from the type of people Deputy McGuinness referred to. They wanted reassurance that they did not have a problem and most who rang went away reassured.

A slight difficulty is that the voluntary disclosure phase of this investigation is now closed. Our next stage is to identify the people who did not come forward. I assure Deputy McGuinness that in the process of that identification, we will build on the approach we took by putting a threshold of €20,000 in place so that we would not be targeting people with small amounts of money or driving people with small amounts of money who, as Deputy McGuinness noted, would not normally hire accountants or advisers to hire these people and incur expense. In terms of making contact or whatever we do in the follow-up phase, I can assure Deputy McGuinness that we will take account of his views about a cadre or category of vulnerable people who might exist.

The point regarding the representations made to the Minister by the institute is slightly different because what it sought was a legislative basis to deal differently with people over a certain age in terms of publication, interest on tax underpaid, penalties and prosecution. This would certainly create real difficulties in the tax system because a person would only have to avoid the Revenue Commissioners until he or she reached a certain age to benefit from a softer regime. There would be real difficulties and equity issues in that.

Deputy McGuinness mentioned the €33 billion worth of insurance business written in the period. It is important to say that this figure, as I understand it, includes business that would have been written by IFSC and Irish companies for overseas clients, neither of which is within the scope of this investigation. It would also include a considerable amount of money that was rolled over each year. The basic figure invested might not be of that scale. From the beginning we have said that these are legitimate products so much of the money invested is legitimate with no tax issues, for example, redundancy payments, lump sums and national lottery winnings. This is not the focus of our investigation.

Deputy McGuinness

Mr. Daly referred to the breakdown of the €33 billion. Does he have figures on where the money came from? Where is the focus of the Revenue Commissioners' investigation within that figure of €33 billion? What amount is being focused on? I think I invested a Celebration Bond in one of these premiums. Many such products are outside the scope of the investigation.

Perhaps Mr. Daly might comment on insurance companies that were not obliged to report. They do not report large amounts of money. Within the sum of €33 billion, a large amount will form the focus of the investigation. This will include a number of large sums. It appears that where a large figure for a product investment such as this is involved, there is no obligation on the companies to report to anyone. Is this correct?

Mr. Daly

If it is any consolation, I received a couple of letters in respect of this investigation.

Deputy McGuinness

I want to know how much.

Deputy M. Smith

It is no consolation.

Mr. Daly

It should be some comfort that no one is above the law. For the record, these were legitimate investments on my part. What the Deputy said is quite correct. There is an issue surrounding on how much of the €33 billion and 700,000 policies we must focus. This is the purpose of the current phase of the operation, namely, the sampling under the powers given to us in the Finance Act 2005 in order to narrow down the money and policies in which we have an interest. We must get a handle on how much of this was overseas business, rolled over policies or matters in which we are clearly not interested. The sampling exercise has started and will form the basis for the seeking of High Court orders in the autumn using a focused approach rather than searching for something that is of no interest to us. I do not have figures for the different categories mentioned by the Deputy.

Deputy McGuinness

In respect of the insurance companies needing to report on larger amounts, I will refer to comments made by the industry itself. I do not know whether this is true but it is said there was an awareness that this money was "red hot", to quote some of the expressions used, and that a 3% premium was being paid. They were encouraged to sell. It is a little like the role of the banks in respect of the other products being sold in that, seemingly, the companies would have known at the time that some of the money was hot, particularly the larger amounts. They continued to do business and did not report the matter. Those who sold got a return of 3%. We might say this was the culture but, at the same time, there is a responsibility on everybody. The responsibility on taxpayers now is to pay. What is the responsibility of insurance companies and the brokers who sold the policies? Has Mr. Daly a view on the issue?

Mr. Daly

As part of this further exercise, we are very interested in the information we will derive from analysing the payments and background documentation coming to us this week. We would welcome establishing the position of the insurance companies, brokers and intermediaries in order to determine what they were doing. As I have said previously to the committee, we do not have any evidence of facilitation or encouragement of tax evasion. I have also said that we will examine the documentation and information we receive in this phase to verify the situation or to adopt a different view and, from that, to take whatever action we can.

On the matter of reporting by insurance companies, there has been money laundering legislation since 1994. Reports of suspicious transactions are required from all financial institutions. From 2003, there is an obligation on insurance companies, brokers and intermediaries, which are all designated bodies as those that get the money in the first place, to report to the Revenue Commissioners on these transactions. The threshold of €1,750 is quite low and would encompass any significant amounts of money going into insurance companies. This requirement to report to the Revenue Commissioners has been in place since May 2003. I can only speak on behalf of the Revenue Commissioners, but there was not an obligation on insurance companies to report large amounts of money before then.

Deputy Curran

I have two general questions to ask Mr. Daly. At this point in time, the Revenue Commissioners have almost 2,000 voluntary disclosure returns amounting to over €100 million. That is approximately €50,000 per case. How does this compare with voluntary disclosures in other investigations?

Mr. Daly

I will start with the bogus non-resident accounts and offshore assets. Does the Deputy wish to discuss the Ansbacher accounts?

Deputy Curran

Those two would be sufficient.

Mr. Daly

In the voluntary disclosure phase for bogus non-resident accounts, we had 3,675 disclosures and €227 million. Is the Deputy looking for an average figure?

Deputy Curran

Yes, if the figure is substantially less.

Mr. Daly

The average amount per bogus non-resident account voluntary disclosure was €61,700. In the offshore assets investigation, there were voluntary disclosures of 11,686 paying a total of €589 million with an average of €50,000 per disclosure. There were two other elements to the offshore situation. The first was the Irish Life and Permanent an Isle of Man subsidiary of an Irish financial institution and the second was the Bank of Ireland a Jersey subsidiary of another Irish financial institution. In the Isle of Man case, the average amount paid was approximately €36,000. In the Jersey case, the average was €414,000. There was much money but only a few people. To factor this would distort the overall figures.

Deputy Curran

My reason for examining the average figures of €50,000 or €60,000 is that an individual case came to my attention wherein the family has discovered it owes a liability. The person in question is now elderly. One of the interesting facets of these cases, particularly in the one in question, is that the people do not have enough cash. They have assets but no cash. How are the Revenue Commissioners dealing with this situation? Many elderly people may not have the cash needed to meet their liabilities.

Mr. Daly

Without generalising, the people should speak with us. We cannot ignore the fact that they have assets that were presumably acquired from moneys undeclared for tax purposes. Equal treatment is a factor. I cannot give too much comfort. Unless a property is the family home or so on, they should dispose of some of their assets. We would give them time and discuss with them how and when it could be done.

Deputy Curran

Moving away from the single premium insurance issue to offshore investigations, it is mentioned on the last page of the report that the Revenue Commissioners have three High Court orders against financial institutions with a number of others being prepared. Should I take it from this that the financial institutions are not co-operating fully?

Mr. Daly

That would not be fair.

Deputy Curran

Could Mr. Daly please explain?

Mr. Daly

The reality is that because we are looking for information about clients that they would regard as confidential, the financial institutions take the view that they need the protection of a High Court order to give this information to the Revenue Commissioners. We get very good co-operation from the financial institutions on the process of seeking these High Court orders and in our discussions with them as we prepare the arrangements on how information pertaining to the draft orders will be passed. It is a case of financial institutions protecting themselves, which I can understand. In going to the High Court we do not encounter non-co-operation. Although I am open to correction I believe to date no financial institution has opposed an application for a High Court order.

Deputy Curran

On the issue of offshore investigations, are the financial institutions being investigated all Irish-based?

Mr. Daly

Yes, they are.

Deputy Curran

They may be Irish-based with foreign subsidiaries or branches.

Mr. Daly

They are Irish-based with offshore affiliates. We have no ability to get High Court orders against foreign-based banks at present. However, I have high hopes of this as a result of the EU savings directive that requires considerable reporting of interest and payments across the EU.

Deputy Curran

Mr. Daly mentioned that the single premium insurance investigation was a result of information gleaned from previous investigations. Have any of these investigations led Mr. Daly to believe there may be substantial funds in accounts other than Irish-based accounts? This refers to institutions to which Mr. Daly does not have access at present but about which he may have gained information from previous investigations.

Mr. Daly

We can come to the conclusion that there are funds in other institutions. Relative to the funds placed in Irish-based institutions we would not say they are substantial. Irish people tend to be loyal to Irish institutions. In the offshore assets investigation, people who had accounts in foreign institutions voluntarily disclosed. I do not wish to give the impression that we have given up tracing accounts in non-Irish institutions. We will use every avenue of mutual assistance with other tax administrations, as well as the EU savings directive and tax information exchange agreements to explore this.

Deputy J. Higgins

I want to know about the methodology of the investigation. Mr. Daly stated that there were 700,000 policies and that his office has heard from 10,000 people making voluntary disclosure. This leaves 690,000 policyholders from whom his office has not heard. How can it be ascertained that among these there is not a substantial number with tax liabilities?

Mr. Daly

Some 700,000 policies is the overall figure and includes policies written for non-residents and policies written by IFSC companies largely focussed abroad. These are of no relevance to this investigation.

The figure of 700,000 also includes moneys rolled over from one policy to another. The practice of a policy being extant for a certain period and then being rolled over into a new policy presumably continues. This is essentially the same money plus the growth in the fund. Many of these policies were taken out with funds that were legitimate in terms of tax, such as redundancy money, lump sums or lottery winnings. The whole purpose of our sampling process is to narrow down the figure of 700,000. It will be narrowed down substantially but until we complete the sampling I cannot say the extent to which that will be done.

A figure of 10,000 may seem small in the context of 700,000 but I do not think 700,000 is anything near the real figure in which we are interested.

Deputy J. Higgins

I have no doubt about that but the Revenue Commissioners cannot examine 690,000 policies and ask questions of each one.

Mr. Daly

We have no intention of examining 700,000 insurance policies or any figure like that. As soon as we get into the insurance companies, see what information they have, their systems, how many policies are rolled over, how many policies are under €20,000, of which there are many, we will narrow down the figure of 700,000 to a substantial degree.

Deputy J. Higgins

Of those under €20,000, some will date back to 1981. What would a sum equivalent to €20,000 in 1981 be worth today?

Mr. Daly

I cannot give the Deputy a figure but the point he is making is that it represented a fair amount of money in 1981.

Deputy J. Higgins

It would have been a substantial amount of money.

Mr. Daly

We gave much consideration to this threshold. The process is not an absolute science and we could have chosen €5,000 or €10,000. We took the view that the risky money was in excess of €20,000.

One must bear in mind that much of the growth in these policies did not occur until the 1990s. When we receive the information in the voluntary disclosures we will examine whether the threshold was too generous. Of the 700,000 policies I would suggest that a substantial number were less than €20,000. Do we really want to examine all those at this stage?

As Deputies McGuinness and Hayes pointed out we could end up targeting people who would then find themselves unable to pay. If these people were able to employ a clever accountant he or she could ensure that the Revenue Commissioners could not pursue the client for this money. Do we want to put people to this trouble? From a purist viewpoint we should consider everything but we must be realistic.

Deputy J. Higgins

Yes, I agree that Mr. Daly is correct in terms of the current value of money. The Revenue Commissioners could have done an inflationary calculation of what the equivalent of €20,000 in 1982 would amount to today. It would be much more than €20,000.

A figure of €1.7 billion, brought in by the investigations and work of the Revenue Commissioners, is a substantial amount of money. This prompts me to state that if the wealthy had paid their taxes at that time, rather than when they were chased to the ground, we would not have had such a crisis in hospital beds and other areas.

My final question concerns corporation tax reductions, to 12.5%, implemented by the Minister in the past three to four years. Does Mr. Daly have a quick calculation on how much money business has been able to keep that would otherwise be paid in the three to four years since these measures were introduced?

Mr. Daly

Concerning the Deputy's first point, as of this morning €1.8 billion has been collected. Only €750 million or €800 million of this sum was tax because interest and penalties have been added. If people paid it at the time they would not have paid €1.8 billion, they would have paid approximately——

Deputy J. Higgins

It would be worth much more in today's money.

Mr. Daly

With regard to the second point, the answer is that I do not. Essentially the Deputy is asking me to give a figure for tax foregone off the top of my head. I do not have that figure because of changes in rates.

Deputy J. Higgins

The figure in respect of what the Minister has allowed them to keep is also probably approximately €1.7 billion.

Mr. Daly

I have no idea.

Deputy J. Higgins

Not to mention the rotten rich tax exiles. On that point, does Mr. Daly do a calculation on the tax foregone as a result of the tax exile "legal scam", as I call it. People can live abroad for so many days of the year and be actively economic here. Does Mr. Daly knows how much is lost to the Revenue Commissioners in this regard? How much tax would they pay if they were resident here and taxed like PAYE workers?

Mr. Daly

The Deputy is referring to what tax they would pay to us on their worldwide income as opposed to their Irish sourced income. We would not have that figure. They do pay tax on their Irish sourced income.

Deputy J. Higgins

When one particular business made a killing on the mobile phone network it did not have to pay tax on it even though it was an Irish concern.

Mr. Daly

That was capital gains tax. I do not want to talk about individuals. The Deputy will remember at the time there was a particular issue with regard to the tax treatment of capital gains tax in Ireland and Portugal. That was a loophole which was exploited at the time but has since been closed off by the Minister's legislation. The Deputy is referring to a particular case which I do not want to discuss.

Deputy M. Smith

I welcome the statement made on dealing as sympathetically as possible within the limits of law and equity with regard to the elderly who are caught up in the single premium life assurance products saga. Many of them are trying to cater for nursing homes and various other costs associated with old age without being entitled to subventions from the health boards in the absence of having some resources themselves. I do not take the side of people who wish to evade their tax liabilities but it seems that skill, innocence and deliberate intention are mixed up in this. What penalties apply to companies that knowingly advise clients who have a certain amount of resources to deploy them in a way tax can be evaded? It seems, particularly with regard to smaller amounts and elderly people who desperately fought to save to provide for old age, that the penalties are much greater for the individual who has been landed in this situation than insurance companies or brokers who deliberately advised them to take that course.

Mr. Daly

Again, I do not want to appear unsympathetic but the reality is that the penalties for the people who practise tax evasion are quite severe, rightly or wrongly. In my experience in most cases tax evasion is premeditated. The bulk of the penalty rests on the individual. On a couple of occasions this committee discussed penalties attaching to intermediaries or financial institutions who may have encouraged or facilitated tax evasion. I spoke at length on the difficulties we had in the past of getting prosecutions or taking actions against such entities because of the narrowness of the legislation in force at the time. Committee members will remember that last year I stated we would ask the Minister to change that legislation. He did so in the Finance Act 2005 to introduce a broader power to deal with facilitating tax evasion. Under the legislation the individual or company who does so can be jailed for up to 12 months or face a fine of €5,000 on summary conviction. On indictment the Act allows for imprisonment for up to five years or a fine of €100,000. I am quoting those figures from the top of my head but I am quite certain they are accurate.

The committee members will remember that during the DIRT inquiry the issue of penalties arose with regard to the banks. At that stage the penalties for banks was €800 because it was a transaction based penalty rather than a tax penalty. That has also been changed and the penalties would be much more severe now. To return to a debate we had at the last committee meeting, that change in the aiding and abetting legislation is of necessity and constitutionally forward looking.

Deputy M. Smith

I understand it cannot be dealt with retrospectively. Are there any cases or developments with regard to High Court proceedings being taken in any case? Is it too early to say?

Mr. Daly

It is too early to say. As I said before in any investigation, including this insurance investigation and the offshore assets investigation, if we can assemble a case of facilitation of tax evasion we will do so.

Deputy M. Smith

When did the Revenue Commissioners first know these products were being used to evade tax?

Mr. Daly

We would have had some indications from the bogus non-resident account investigation. Those suspicions were reinforced by information from the offshore assets investigation. It was in the past two years we had concrete information. One cannot launch an investigation without some reasonable concrete evidence. It is also true that for some years prior to that there may have been a suspicion that these products were being used. It was referred to at this committee and the Chairman raised it last November. We discussed the impact of this investigation on many people. It would be unreasonable for the Revenue Commissioners to launch an investigation such as this without having completed a lot of research and having concrete information. That began to come to us through the bogus non-resident account investigation and the offshore assets investigation.

Deputy M. Smith

Earlier it was mentioned that the figures the Revenue Commissioners receive range widely, from €3 million to an extremely small and infinitesimal amount which I cannot recall.

Mr. Daly

It was €32.

Deputy M. Smith

There were 700,000 individual products. That means it stretches over relatively small amounts and extremely high amounts.

Mr. Daly

I used the examples of one payment of over €3 million and another of €32 to illustrate the dangers of averaging or extrapolating. There will be few cheques for €32. I encourage everybody to get their tax affairs in order, but I am not certain that we would be particularly interested in €32. I thank the person who sent it in. That person obviously has a conscience and fair dues to him or her. The average amount recovered in this investigation will be similar to that recovered in earlier investigations but there will be a wide range. In the offshore accounts investigation some cases involved millions of euro while others involved €5,000, €10,000 or €50,000.

Deputy M. Smith

Unlike Deputy Joe Higgins, I welcome the threshold under which the Revenue Commissioners are operating. It is fair in terms of trying to deal with the more serious cases and also taking into account that people try to make some provision for nursing home care, which is very expensive. While I am not standing over any tax evasion, I believe it is a genuine effort to exclude those the pursuit of whom would not yield much in comparison with the efforts expended in doing so.

Deputy J. Higgins

Would any of the members like to table a motion to abandon the investigation?

Chairman

That is a policy issue.

Deputy Dennehy

Since our first inquiries into the banks and the DIRT issue, this committee has given total backing and support to the Revenue Commissioners. We asked Mr. Quigley and other predecessors of Mr. Daly whether additional powers were required, and where they were, we recommended that they be granted. At the same time, we have expressed concerns about the treatment of particular categories of persons, for example, the elderly and widows. I was also concerned about the advertisement run by the Revenue Commissioners. I am aware that Mr. Daly responded to some of the concerns expressed by stating that Revenue did not send out any letters. However, the advertisement was very stark, with a gentleman, whom I mistook for Mr. Daly, standing with a letter in his hand and the message and tone seemed to be one of "We will get you". I was concerned about that aspect and I drew it to the attention of those in the House who would have had some input in this area because it was different to the approach adopted by Revenue up to now.

In that context, I am concerned about the individual who may have paid Revenue €32 and for whom that cheque caused a lot of concern and worry. There are many legitimate cases of people who had no tax liability. People approached me and I had to carefully explain to them, despite the advertisements, that buying one-off insurance premia is a legitimate practice. The message that people received was the opposite to that. Letters were sent by advisers and those working in the financial area, who possibly created some of the trouble initially. Nonetheless, there was major concern and Mr. Daly must accept that.

Deputy McGuinness referred to the fact that we are dealing with a changed culture in the area of finance, particularly in the last ten years. One area that has been brought to my attention by various legal representatives concerns people in their late 80s or 90s, often widows, who had no idea what financial transactions were carried out on behalf of their households and who are now very concerned. In many cases, these people simply do not know from where money came.

The positive aspect of this, despite the concerns of Deputy Joe Higgins, was the balanced decision to use €20,000 as the cut-off point. While I take his point that a policy might be worth €40,000 now if an individual invested in the 1980s, the approach taken by Revenue was sensible and practical in this regard. Had the cut-off point been lower, more people would have been dragged into the net and that would not be beneficial, even from the point of view of Revenue, in the sense that it would be receiving more cheques for €20 or €32.

I do not believe that any member of this committee would have sympathy for the person who is obliged to pay €3 million, which is the higher limit and the figure that will be quoted. However, we have major concerns about many of the people down the line. I am particularly concerned about the large tranche of people who have no liability but who are still worried. The Revenue Commissioners advised people that there was no need to engage tax advisers but people had seen what happened in the DIRT enquiry, where individuals who were not in big business were penalised and therefore they had major concerns. I am not exaggerating here and many of the people to whom I am referring have no tax liability.

Does the Revenue have any way of teasing out the 700,000 life assurance policies? I appreciate there will be multiples within that total, with some people having four or five different policies. If we are advertising the fact that 2,000 people have a problem and that 10,000 people have written to Revenue to declare that they may have a tax issue, we should make some attempt to tell the legitimate policy holders, who may number 90,000, that they have no tax difficulties. Many members of the committee received letters about this matter. People working for the committee had to ask themselves whether their affairs were in order. People had worries in this regard and the Revenue should bear such people in mind.

I agree with Deputy Michael Smith that the perception exists that people who had hot money are untouchable. The numbers of such people have probably reduced in the last five years, but it was a big issue in the early 1990s and following the DIRT inquiry. There was a time when I, as a PAYE worker, paid 67% tax, with nine to feed from the remaining 33% of my income and it is galling to think that hot money was being thrown around. The perception is that certain people are untouchable, that they are like the banks. I appreciate the difficulties, as outlined by Mr. Daly, in securing prosecutions but nonetheless the perception persists that they are untouchable. Furthermore, the belief is that the bigger the company, the less likely that action will be taken against it by Revenue.

I welcome the changes introduced by the Minister for Finance, Deputy Cowen, but financial experts may well be unconcerned by them because those to whom they gave financial advice are paying fines and bearing the costs of illegal activity. The advisers are simply warned that if they behave in the same manner in the future, they will be penalised. As politicians, we have difficulties explaining that to the general public.

I would like the Revenue to send a message of reassurance to the compliant taxpayer, who always worries. Around the world, people worry about revenue commissioners. In the United States, I believe, you can take out insurance against revenue-related worry. The reassurance should contain information which indicates that approximately 90,000 people have nothing to worry about. People are still concerned about this issue, even though the deadline for disclosure has passed.

I wish the Revenue Commissioners well in their work. This committee has always encouraged Revenue, even if Deputy Joe Higgins takes a different view to mine. Nonetheless, if everybody had paid their fair share of tax, we would not have had a tax rate of over 50% in the 1980s. When the former Minister for Finance, Mr. McCreevy, cut capital gains tax from 40% to20%, the yield doubled. People became more compliant and were willing to do business with Revenue. Therefore, it was necessary to do such things and I welcome many of the changes that have been introduced. I am concerned, however, that people who took advice from professionals are penalised, while those who gave them bad advice are not. I am referring particularly to people in their 80s and 90s, often widows, who would not have conducted their own financial transactions.

Some elderly people expect to get money back from the State because of the illegal nursing home charges but I am concerned that we may be doing the opposite here, that is, that we will be chasing people who cannot pay. I am not asking that the rules be changed so that everyone over 65 is exempt. I agree with the approach of the Revenue and the Minister for Finance in that regard. However, I am concerned. I hope that the 19,000 callers to Revenue were reassured but there is still a large number of people who have some element of concern and the sooner we can set their minds at rest, the better.

Mr. Daly

I assure Deputy Dennehy that I do not feature in the advertisement to which he referred. I do not engage in double-jobbing, whatever else I may do. With regard to the advertisement itself, it was a hard one to call. As I mentioned to Deputy Hayes earlier, the whole focus of the advertisements and the letters from the insurance companies, which I asked them to write and which almost all did, was to get people to take seriously the voluntary disclosure opportunity. We appreciate the insurance companies' actions in this and they were useful for the campaign. Sometimes one needs to hit hard. It is difficult to get the balance right but it would have been worse if the voluntary disclosure opportunity had passed people by because they were not aware of it.

Deputy Dennehy

It was a Lord Kitchener type of advertisement, reaching out to grab people. In Lord Kitchener's case it was "your country needs you" and in this case it is "your country needs your money".

Mr. Daly

That was just to explain the purpose of the advertisement. I agree with the Deputy about the person who paid us €32. That person has a conscience and should be commended. A great deal of soul searching and angst was probably behind the payment, and I sympathise with the individual.

I appreciate the comments on the €20,000 threshold but it should be clear that the Revenue does not condone tax evasion at any level or threshold. Our decision on that threshold was related to risk and the risk approach taken by the Revenue Commissioners. The view is that investments under this threshold would not be risky. I mentioned in that context that we did not wish to push these people to employ accountants or tax advisers. Tax advisers and accountants have enough problems with me and if I discouraged people from going to tax advisers or accountants I would be in real trouble. I am not discouraging people in general but in relation to the €20,000 threshold. The Revenue did not want people who probably did not have a problem to have to go through the expense of employing an accountant.

In the next phase, as we sample, narrow the focus and contact people who we believe have a liability, the committee's comments about the elderly and the need for reassurance will be heeded. The need to pursue the serious cases rather than those who do not have a liability will also be heeded.

Deputy Dennehy

Is it possible to give a reasonably accurate figure of the number of actual clients rather than the number of policies? How quickly would the Revenue Commissioners be able to comment on this?

Mr. Daly

We must get through the sampling stage, which will take several months, and we will have to get to the High Court. It will be well into next year before such figures are available.

Chairman

In replying to Deputy Michael Smith's question of when the Revenue first became aware that single premium insurance products were being used for evasion, it was stated that hard information only became available in recent years. There are reports that an official from the Revenue Commissioners prepared a paper on this issue as far back as 1992, I believe. This apparently went through the system, going as far as the then chairman of the Revenue. Can the representative take the committee through those events?

Mr. Daly

That paper was produced and was the subject of much discussion at the DIRT inquiry. The focus of the paper, which I have not seen in a long time, was more on bogus non-resident accounts. There may have been references in it to other means of tax evasion, and it may have included single premium policies. My recollection, bearing in mind that it is some time since I saw it last, was that the focus was on bogus accounts and the type of issue that formed the main subject of the DIRT inquiry.

Deputy McGuinness

My question is almost the same as the one just put, specifically on that report, which I believe dates back to 1991 and which covered tax evasion using bogus non-resident accounts and investment in unit trusts. My question deals with the report's progress through the Revenue, the process it followed and why it was or was not used at the time as a means to explore this issue. Reports exist that it was rejected in 1992 and surfaced again in 1999. Does there exist a unit which would examine issues such as these? What other relevant reports are there? Is a similar process in place that is better placed within the Revenue Commissioners to create such reports drawing the attention of the Revenue to areas where tax may be evaded and products that could be used to do so? In sum, why was the report from 1991 not used, lying rejected up until 1999, and what is being done now relative to reports such as that from the early 1990s?

With regard to the banks and other financial institutions, with either bogus or offshore accounts, a television exposé was broadcast on these issues with rumours of how people felt they had confided in banks and that these ideas had been suggested. Surely the Revenue came across cases such as this. Is the Revenue using reports of known cases to investigate how involved the financial institutions were in the issues of bogus non-resident or offshore accounts at that time? Financial institutions played a role at that time, which cannot simply be ignored. We seem to be ignoring it to a degree nonetheless. Stories are in the public domain, being told through the media, on how particular cases were treated. Is the Revenue taking these cases into account with the view to establishing evidence salient to financial institutions?

The Revenue has spelt out clearly its human side, which I believe to be very important, and how it assists people. The case of the €32 being repaid is an example of people coming forward to discuss their cases. What happens at a local level, where such an approach might not be as evident? Does a system exist where people have the right to appeal within the system? From what I hear in the media and from sitting on this committee, such a system is not being implemented. I wish to use the system of disclosure to ascertain what the Revenue is outlining today.

Mr. Daly

I do not wish to go over the 1992 report as what happened to that report was dealt with extensively through the DIRT inquiry. At the time, the reality was that the powers available to Revenue to do anything about this issue would have been extremely limited. It was only in 1999, with a suite of powers contained in the Finance Bill, that the Revenue was empowered to seriously tackle what was going on with bogus accounts and financial institutions. The Revenue Commissioners has been completely restructured in recent years. Paddy Donnelly heads its investigation and prosecution division, with a focus on many types of special investigations and prosecutions. There is a focus on gathering information that becomes available on facilitating tax evasion and attempting to identify scams that might exist, orchestrated by any financial institution, sector or group. The Revenue Commissioners carry out much research and has a research function in that area. We also have a strategic research branch that actively looks for indicators of the scams like bogus accounts, offshore accounts and life assurance products, which may be used for tax evasion.

Revenue is getting to or is at the stage where we actively look for indicators of scams such as bogus accounts, offshore accounts, life assurance products and other things that might be used for tax evasion, rather than waiting for cases to emerge. The phrase "scanning the horizon" is a management buzzword, but is what we do to ensure that we have a focus on the issue. I assure the committee that any reports or indicators produced anywhere in the organisation are acted upon and followed through.

As to the "Prime Time" television programme and the hard cases it showed, Revenue has examined similar stories and has looked at cases. As I told this committee previously, we have encouraged people to join us in an attempt to take an aiding and abetting case against a financial institution or an adviser. It is extremely difficult to do so. There is a big difference between stories — which I am sure are true — and the willingness or capacity of the individual to get involved. In our experience, a person deals with the issues, gets his or her tax affairs sorted out and thensimply wants a quiet life. Such people do not want to get involved with Revenue in prosecutions. However, the committee should be in no doubt about our intent and determination to tackle the facilitation of tax evasion, if we can ever make or find a case against it.

The Deputy's final point concerned the human face of Revenue. The human face of Revenue is not me appearing before the Committee of Public Accounts, but is the many Revenue staff who deal sympathetically and in a business-like way with cases every day. Certainly, I would be surprised if the message of a sympathetic approach to people in difficulty is not practised or is not known to be our policy and ethos at a local level. We continually remind our senior managers that this is our philosophy. It does not mean going totally soft, being bamboozled or listening to tall stories, but it is a philosophy where, in the case of a genuine problem, one deals with the individual in a sympathetic way. I can certainly reinforce this message again.

The Deputy mentioned appeals and there is a structure within Revenue for dealing with people who are dissatisfied with the treatment they receive at any level within the organisation. One can deal first of all with the individual in Revenue who deals with one's affairs. If one is dissatisfied with that, one can go to the local manager. If one does not wish to do that but wishes to stay away from the local manager, we have an internal appeals system in our head office. We have three external assessors or advisers who will hear complaints about Revenue. They are independent and will examine cases where people are dissatisfied. As far as more formal structures are concerned, people go to the Appeal Commissioners. That route is available to them and people also can and do go to the Ombudsman. However, I am encouraged by the fact that in recent years, the number of Revenue cases going to the Ombudsman has fallen, which I hope can be taken as an indicator of fewer issues with the manner in which Revenue deals with people.

Deputy Curran

In response to Deputy Dennehy, Mr. Daly spoke of the disclosure stage in respect of this investigation and mentioned there were advertisements on television, in the newspapers and so forth. He went on to state that the insurance companies were then encouraged to write to the policyholders. At the time, one did not, namely, Irish Life and Permanent plc, unless I am mistaken. Since 23 May last, 10,000 people have come forward to the Revenue Commissioners to disclose that they may have a liability. Given that this company did not write to its policyholders, are the trends for them any different? Have the Revenue Commissioners noticed anything different in respect of policyholders with that company?

Mr. Daly

We have not, as the notice of intention to make a voluntary disclosure does not contain any information other than the fact that the individuals intends to make a disclosure. Hence, there is no background information about where the insurance policy might have been, whether it is with Irish Life and Permanent plc or any other company. We do not have that information as of yet. I make no bones about the fact that I was disappointed that Irish Life and Permanent plc did not write. In fairness to that company, we had discussions with it and its representatives gave me reasons. We have moved on and are getting full co-operation from it in the sampling phase. However, we would obviously be interested to see whether anything of the kind to which the Deputy refers emerges later.

Deputy Curran

Will it emerge and will the Revenue Commissioners be able to trace it over time to measure the impact of the company not having complied with their request?

Mr. Daly

We will be able to trace it, but at that stage it will be a largely academic exercise which may inform us for future reference of the value of individual institutions writing to their customers.

Deputy Curran

Mr. Daly is obviously of the opinion that this was important.

Mr. Daly

I am strongly of the view that it was important. The committee might recall that we started such an approach when I met the ten chief executives of the banks in respect of the offshore assets inquiry. They agreed to write to their customers and it was a major factor in that successful voluntary disclosure regime. I am of the same view in respect of the life assurance investigation. Paradoxically, perhaps the controversy generated by the refusal of Irish Life and Permanent plc to write also ratcheted up the publicity.

Deputy Curran

Is Mr. Daly concerned that policyholders with Irish Life and Permanent plc may not have availed of the voluntary disclosure option at the same rate as those with other institutions, because it did not write to them?

Mr. Daly

I have no evidence of that.

Deputy Curran

Is that not a concern?

Mr. Daly

Certainly, if that were the case, I would be concerned for those policyholders. However, I wish to make it clear that I have no evidence. I do not want to come before the committee and discuss a particular company, but Irish Life and Permanent plc took the view that matters involving communication with its customers should be dealt with formally rather than on an informal ad hoc basis and that the procedures in legislation involving sampling and High Court orders should be adopted. That was its view and I respect its right to such a view. I had a different viewpoint but I repeat that it has been co-operative in all other stages of this inquiry.

Deputy Curran

Did the rest of the companies in the Irish insurance industry co-operate fully and contact their policyholders?

Mr. Daly

Absolutely.

Chairman

We have had a full discussion and I thank Mr. Daly for the approach he has adopted. Certainly, there is concern that some people who did not have a liability were frightened by the campaign. Mr. Daly's assurances are welcome. The threshold of €20,000 is also welcome. By implication, Mr. Daly has suggested that the Revenue Commissioners will not pursue people below the €20,000 threshold in any future phase. Am I correct in saying there will not be a formal campaign?

Mr. Daly

We have stated that we have set the threshold. The only way in which we can do our business is to take a risk-based approach. We have taken the view that there is not a significant risk attached to amounts below €20,000. We have included the caveat that if the information that comes to us as part of the ongoing investigation leads us to the conclusion that a significant risk exists in this regard, we may be obliged to review that situation. However, I hope we can stay away from it.

Chairman

The committee and the public very much appreciate that the Revenue Commissioners' recent campaigns have yielded €1.8 billion to date and that amount is rising. It is a significant amount of money. The payment of taxes is essential to a democracy and if there are large groups of people not paying taxes, this corrodes the foundations of democracy. For many years, there was significant tax evasion and people paid no price for it. I am pleased that the Revenue Commissioners have addressed it in such a forthright way in recent years and that the yields are coming through.

It is natural to be sympathetic to hard luck cases and I share this sympathy. I also share the view expressed by Deputy Dennehy that very high tax rates could have been avoided if everybody paid their fair share in the past. However, there is another side to this matter which should not be forgotten. We should not forget the children who left school illiterate because classes were too large as a result of a lack of money to reduce the pupil-teacher ratio. We should not forget the fact that many children who are unable to avail of mainstream education had no remedial teachers because there was no money to resource them. We should also not forget the many families that had to take full care of handicapped children because there were no residential places available due to the fact that there was no money to resource them. We should think of the people, particularly public patients, who failed to get essential surgery because there was no money available. We should remember the cutbacks in the then Department of Health in the late 1980s, which were the prime years for tax evasion, when wards were closed in hospitals throughout the country because there was no money to keep them open. The health services were hit with a blow from which they are barely recovering 12 years later.

An overview of tax evasion should be taken. This committee, when it operates at its best, is the champion of the taxpayer, whether it is rooting out waste of money or tax evasion. We should be unapologetic in encouraging the Revenue Commissioners to root out tax evasion and collect the money that is due because tax evasion had severe social consequences in the 1980s and 1990s. I like to think that we could put those days behind us. With lower tax rates, everybody paying their fair share will not only keep tax rates down but will also provide the resources to provide proper public services. We are ad idem on that issue, we thank the Revenue Commissioners for the good work they have done and we thank Mr. Daly and Mr. Purcell for coming before the committee today.

Mr. John Purcell

I assure the committee that we will always review the Revenue Commissioners to ensure they are discharging their functions in an effective and diligent way. Members will recall that in my report last year we did not let the Revenue Commissioners away with going through the entrails of the bogus non-resident investigations. This is important for the Revenue Commissioners and ourselves. If the Revenue Commissioners were ever tempted to take the easy option, they will have to justify doing so to me and if I am not satisfied, the matter will be brought before this committee. I am not saying that it is likely that the Revenue Commissioners will take the easy option, certainly not under the chairmanship of Mr. Daly. I was glad to hear him state that €20,000 is not the base for all cases, that matters are dealt with very much on a risk basis and that whereas the €20,000 limit may well be appropriate in this case, it does not apply to all investigations or all areas of activity. It is important that this message is made absolutely clear because, just to sober matters up slightly, I remember how €20,000 would buy a house of reasonable size in Dublin in 1980.

Chairman

I thank Mr. Purcell and Mr. Daly for their contributions. I propose that the committee suspends for five minutes before we invite in the delegation from the Department of Agriculture and Food to come before us.

The witnesses withdrew.

Sitting suspended at 1.35 p.m. and resumed at 1.40 p.m.