Ceisteanna Eile (Atógáil) - Other Questions (Resumed)

Illicit Trade in Fuel and Tobacco Products

Brendan Smith

Question:

8. Deputy Brendan Smith asked the Minister for Finance the additional measures he plans to introduce to counteract cross-Border smuggling and illicit trade in tobacco, drink and fuel products; and if he will make a statement on the matter. [39042/19]

Permission has been given to Deputy Breathnach to take Deputy Brendan Smith's question.

I speak in the absence of Deputy Brendan Smith, but I am reflecting the view of all Border Deputies. What additional resources does the Minister plan to introduce to counteract cross-Border smuggling and illicit trade, especially in tobacco, drink and fuel products? Will he make a statement on the matter?

Revenue has assured me that it has implemented a comprehensive risk-based intervention programme to identify, target and disrupt all forms of cross-Border smuggling and criminality. Revenue’s focus on such activity will continue regardless of the outcome of Brexit. I am satisfied that its focus on cross-Border smuggling is appropriate and well targeted. I know that Revenue keeps such matters under active review and is committed to quickly confronting any new risks as they emerge.

The threat that smuggling and the illicit trade in tobacco, drink and fuel products pose to legitimate business, consumers and the Exchequer is clear and I am assured by Revenue that combatting such criminality continues to be it highest priority. Steps it has taken, of which I am sure the Deputy will be aware, include the introduction of stringent supply chain controls and reporting requirements, and a rigorous programme of enforcement action. In addition, Revenue and Her Majesty's Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, which came into operation from April 2015. Revenue has also conducted random national sampling programmes in the years 2016 to 2019 to assess the extent of fuel laundering. The industry view is that the actions taken have been successful in curtailing fuel fraud and the results of Revenue’s sampling programmes continue to support such a view.

The Revenue Commissioners act against all aspects of the illegal tobacco trade and use a combination of risk analysis, profiling and intelligence and the screening of cargo, vehicles, baggage and postal packages to intercept illicit products. Action after importation includes checks at retail outlets, markets and private and commercial premises.

I thank the Minister for his response. I want to make a number of suggestions that he might consider. I commend the work of the Revenue Commissioners and the Customs service. I commend the resilience of Border traders who have struggled during the years owing to volatility which is much greater in the context of Brexit. I would like the Minister to consider providing extra staff and for an amendment to the Finance Act 2001 to include members of An Garda Síochána in the definition of the term "officer", giving them the same search warrant rights as officers of the Revenue Commissioners. This is badly needed.

I wish to raise the issues of carbon taxes and minimum alcohol pricing, about which I spoke to the Minister at a meeting of the Committee on Budgetary Oversight. Minimum alcohol pricing which is due to be introduced will have a serious impact. Smokeless coal from the North will also have an impact and cause more problems for the health of people living in the region.

The effects of minimum alcohol pricing on the movement of goods and decisions to shop across the Border are well understood by me. I absolutely take the Deputy's point that if there is to be a change in the price of a product that is so inherently mobile and valuable, we need to take great care in assessing its impact on the retail trade in this country.

I will certainly take the Deputy's suggestions on board. I always do my best to respond favourably to any request to me from the Revenue Commissioners in looking for additional resources or support. Let me give the Deputy a sense of the scale of current activity. For example, on 16 January, officers at Dublin Port seized over 11,000 l of alcohol. The smuggled alcohol included over 10,000 l of blended Scotch whiskey and over 800 l of alcopops. The effect of the sale and distribution of these products on decent, law-abiding retailers is really clear and serious. The Deputy will be aware that, as recently as last November, Revenue officers seized 8 million cigarettes at Dublin Port.

We must be cognisant that it is not just a question of illicit trade; ultimately, people along the Border and beyond seek a bargain. They cannot be blamed for this, but the problem is that, when they seek to buy the cheaper products, they will also do their weekly shopping, which further affects revenue streams in the South. I have an illicit trade Bill that is being promoted by Retailers Against Smuggling. The Minister might consider introducing it as part of further measures, particularly in the context of Brexit. I have said and continue to say that unless there is physical alignment of taxes and VAT in the North and the South, issues will arise. I do not believe it will happen. It is difficult enough to achieve regulatory alignment, but without fiscal alignment, we will continue to see a major leakage of trade. I am reflecting the view of most Border Deputies in saying this is of serious concern, particularly to smaller retailers whose businesses will be greatly affected.

I remember the work the Deputy did in proposing the Private Members' legislation to deal with the issue for Border communities and communities beyond. At the time I had a concern that the Bill, as drafted, would not have the effect the Deputy desired and felt the powers available to the Revenue Commissioners were what were needed and proportionate. However, I entirely agree with the Deputy that this issue has a really big effect on those working in legitimate, law-abiding employments, particularly in the Border counties. I will be well aware of the issue in making any possible decision on minimum alcohol pricing. It is not so long ago that the amount of cross-Border shopping was having a serious effect on the national finances. Thankfully, we have avoided some of it to date. I am aware, however, of the possible effect of further movement in the value of sterling. If it is exacerbated by the illegal activity to which the Deputy referred, we must consider ways in which to respond. I offer the support the Revenue Commissioners sought and will continue to consider whether there are new ideas or new things we need to do.

Fiscal Data

Barry Cowen

Question:

9. Deputy Barry Cowen asked the Minister for Finance his views on the assessment from the Irish Fiscal Advisory Council that expenditure in 2018 breached the expenditure benchmark for that year; the margin in 2019 between expected expenditure and the amount permitted under the expenditure benchmark; the potential consequences if the expenditure benchmark in 2019 is breached; and if he will make a statement on the matter. [25803/19]

This question has been transferred from the Department of Public Expenditure and Reform. I am taking it on behalf of Deputy Cowen. It seeks the Minister's views on the assessment of the Irish Fiscal Advisory Council that expenditure in 2018 breached the expenditure benchmark for that year. The question also seeks the margin between expected expenditure and the amount permitted under the benchmark for 2019 and the consequences of any breach.

In the light of the complexities of European fiscal rules, the Irish Fiscal Advisory Council has adopted a principles-based approach to its assessment of compliance. While it is based on the EU framework, the approach incorporates a number of adjustments to make it more relevant in an Irish context.

The council has assessed that the medium-term budgetary objective, MTO, was achieved in 2018. Furthermore, the achievement of the MTO was not due to windfall revenues. Once the MTO is achieved, the expenditure benchmark does not formally apply.

The council's report states the net expenditure growth rate limit for 2018 was exceeded by one percentage point. The report notes that "compliant" and "significant deviation" were not applicable, reflecting the achievement of the MTO.

The European Commission is responsible for assessing compliance with EU fiscal rules and its ex post assessment of 2018 judged that the breach of the expenditure benchmark was not significant. Put another way, the Commission's overall assessment of 2018 is one of broad compliance.

Assessment of 2019 is currently on an ex ante basis. The council has stated net expenditure growth is forecast to be below the expenditure benchmark limit. This is in line with the Commission's assessment of the SPU that the expenditure benchmark has been complied with. The Deputy might be aware that there is a debate on the operation of fiscal rules developing between the European Commission, Eurogroup and ECOFIN. We had an informal ministerial meeting a number of weeks ago, at which a presentation was made by the European Fiscal Board on the operation of fiscal rules. It raised a number of issues, particularly about the rules' complexity and whether changes to them could play a role in supporting future investment in renewable technologies.

From what I understand the Minister said, the European Commission did record a breach of the expenditure limit but not one that was significant enough to warrant further action. Will the Minister confirm that the Commission is still using the commonly agreed methodology for measuring expenditure by comparison with the benchmark, whereas the Irish Fiscal Advisory Council has adopted what it calls a "principles-based approach"? Do potential overruns in certain departmental Votes which would require further Supplementary Estimates in 2019 put us at risk of breaching the expenditure limit for 2019?

The answer to the last question is "Yes". I will be studying very closely the September expenditure figures that will be available early next week. Our position at the end of August showed that total Government expenditure was slightly below profile. For the Department of Health it was a bit above profile but far less so than it would have been this time a year ago. If Supplementary Estimates are required, something that will become clear to me when I see the September figures, I cannot say at this point whether they will be significant, but they will be lower than those required last year.

Brexit Preparations

Pearse Doherty

Question:

10. Deputy Pearse Doherty asked the Minister for Finance the number of companies and economic operators that have applied for and received an economic operators registration and identification, EORI, number to date; and if he will make a statement on the matter. [39085/19]

As we approach 31 October, we know that thousands of businesses that rely on their trade with British businesses to stay open do not yet have the registration they need to continue to trade into the British market post Brexit. This serious issue is coming down the tracks. Our economy and our business sector need to be ready. How many companies and businesses have applied for and received an EORI number to date? How many companies that trade with Britain have yet to receive such a number and, therefore, will be unable to continue to engage in such trade in the event of a no-deal Brexit?

I am advised by Revenue that there have been more than 17,200 EORI registrations so far this year. There has been a significant increase in registrations since the start of the latest phase of Revenue's trader engagement programme, which commenced in July of this year.  Almost 5,000 businesses registered in August, with an additional 4,418 businesses having registered so far this month. This brings the total number of registrations to just over 57,000. The current phase of the trader engagement programme encompasses all businesses that traded with the UK in 2018 and the first half of 2019.  Such businesses were identified by Revenue through analysis of VAT information exchanges system returns. Each business that traded with the UK in 2018 or first half of 2019 has been written to and is being provided with suggestions regarding the steps it needs to take. Additional follow-up telephone contact is being made with businesses that have the largest volumes of trade with the UK - greater than €5,000 - and those that trade most frequently with the UK, which would be at least quarterly. We believe there are approximately 44,000 such businesses. Revenue has directly contacted almost 25,000 of the 44,000 businesses and expects to contact the rest of them by the end of this month. Some 90% of the total value of imports from the UK in 2018 was carried out by businesses that now have an EORI number. Some 97% of the total value of exports to the UK in 2018 was carried out by businesses that now have an EORI number. The outstanding businesses that need to get a number, which comprise a low share of this country's total exports to the UK, or imports from the UK, are valuable companies that employ people. This is why the engagement programme will continue until the end of this month.

Those figures are quite scary. These companies trade with Britain and employ people through their trade with Britain. Their ability to retain their employees relies on the success or failure of this aspect of their business in many cases. The Minister told me three weeks ago that 40% of exporters did not have the necessary authorisation that will be the minimum requirement for businesses that wish to trade with or through the UK after Brexit. Given the Minister stated some 44,000 businesses do not yet have the authorisation they are required to get if they are to continue to trade with Britain after the end of next month, it is clear that a serious question needs to be answered. Are we failing to prepare ourselves for the emerging chaos related to Brexit? Are thousands of businesses and exporters sleepwalking into this chaos? The Minister mentioned that 25,000 of these 44,000 businesses have been directly contacted and that the other 19,000 will be contacted by Monday. Is that correct? Will the Minister reaffirm that? Does the contact in question take the form of a letter, or are follow-up conversations with these businesses taking place? We need to ramp this up dramatically.

It has been ramped up significantly. I have referred to the new programme that has been in place since the summer. The Deputy is correct that a company that does not have this number will face massive challenges in continuing its work in the event of a no-deal Brexit at the end of October. As I said in my initial reply, 90% of exports to the UK, by value, are covered by companies that have EORI numbers. The Deputy also asked about the further contact that will take place. A direct phone call will be made to each of the companies in question to ensure it is aware that it needs to get this number. If the UK becomes a third country, companies will need EORI numbers to trade with the UK. The Deputy is also correct that 19,000 companies are outstanding. I am informed by Revenue that phone calls will be made to them by the end of this month, which is next Monday.

I question the contention that it has been "ramped up significantly". I acknowledge the figures that have been provided by the Minister in respect of August. While there were 5,000 registrations that month, it is worrying that there has been a dip or a reduction in September, with just 4,418 registrations to date this month. I accept that the figures for the full month are likely to be different. It is worrying that three years after Brexit, some 19,000 companies have yet to be contacted directly by Revenue. We are a number of weeks out from Brexit now. These small companies, which might not conduct a large volume of trade with Britain but which provide employment associated with it, need to get registered and to hear a clear message from the Government. We encourage them to register without delay. Many of them are located close to the Border in areas that do not have the type of employment that is a feature of more urban areas. Some of them are located in my own county of Donegal, which has a high unemployment rate. Do the rest of the actions from the Government and Revenue amount to no more than a phone call? Will further conversations take place? Is there a process within Revenue and the Department to make sure the rest of these companies are registered?

I stated in my reply than an "additional" phone call will be made to these companies. They have already been written to by Revenue to tell them they need an EORI number. The programme I am referring to is the additional contact that is now taking place. Revenue is contacting these companies again on behalf of the Government to tell them they need an EORI number. When I have attended seminars to see how they work, I have seen how the kind of information that companies will need if the UK becomes a third country has been explained to them. As I have said, this is just the latest round of contact to be undertaken by Revenue. I will review where we are again in October - I have no doubt that Revenue will do likewise - to see if further action needs to be taken, for example by contacting these companies once more to ensure the basic requirement of an EORI number is in place.

Question No. 11 answered with Question No. 6.

Insurance Costs

Martin Heydon

Question:

12. Deputy Martin Heydon asked the Minister for Finance the status of work to assist businesses that are struggling to obtain insurance at all or at reasonable rates; and if he will make a statement on the matter. [39088/19]

Fiona O'Loughlin

Question:

13. Deputy Fiona O'Loughlin asked the Minister for Finance if he will consider plans to address the current insurance crisis; and if he will make a statement on the matter. [39034/19]

Michael McGrath

Question:

18. Deputy Michael McGrath asked the Minister for Finance the steps he plans to take to tackle the growing insurance crisis affecting certain sectors of the economy; and if he will make a statement on the matter. [39061/19]

Aindrias Moynihan

Question:

43. Deputy Aindrias Moynihan asked the Minister for Finance the steps he is taking to reduce the cost of employers' and public liability insurance for businesses and community groups; and if he will make a statement on the matter. [39091/19]

Niamh Smyth

Question:

47. Deputy Niamh Smyth asked the Minister for Finance the status of plans to deal with the increasing cost of motor, home and business insurance; the steps being taken to prevent businesses from closing and to bring down premiums; and if he will make a statement on the matter. [38583/19]

I want to ask about the efforts that are being made across the board to support businesses that are struggling to get insurance cover. The Minister of State met representatives of a significant number of businesses in County Kildare when I brought a delegation to him before the summer recess. The delegation included people who have businesses in the hospitality sector and small family-run businesses that are facing substantial challenges as they seek to access insurance cover at a reasonable rate. I am looking for an update on the progress that has been made since the passing of the Judicial Council Bill 2017 earlier this year. I acknowledge that the Bill received support from all sides of the House. Where are we at in this regard?

I propose to take Questions Nos. 12, 13, 18, 43 and 47 together.

In the short time available, I will repeat where we are at now that the Judicial Council Bill 2017 has been passed. Some sections of the Act are now operational. The Judicial Council will be established by the end of this year. I have requested that the establishment of the personal injury committee under the council should happen in parallel with the establishment of the council. I have also requested that the seven members of the committee should be appointed by the Chief Justice by the end of this calendar year. I have also asked for the reduction in the guidelines for the five primary areas for personal injury to be taken on board. If that happens, we will have a different insurance sector in 2020.

That is very helpful. Obviously, there is a clear separation between what we do in this House and what the Judiciary does. The passing of the Judicial Council Bill 2017 is a sign of the clear determination of Deputies on all sides of the House. We know what needs to happen.

It is now up to the legal profession to deal with this. We need to keep a very close eye on the situation to ensure progress is made in reducing the cost of claims, in particular for whiplash and soft tissue injuries where we are out of line with neighbouring countries. The passage of an amendment the Civil Liabilities and Courts Act has made a significant difference to businesses which faced people presenting with claims after more than two years at which point CCTV footage had been lost. Having to notify businesses of a claim within 30 days is the correct approach.

I thank the Minister of State for agreeing to answer Question No. 13. There is no doubt that the cost of employer and public liability insurance is a direct threat to businesses throughout the country and many aspects of the leisure industry. Triathlon Ireland stated during the summer that insurance premiums for races are jeopardising the future of sport in Ireland. Athy and Naas Triathlon Clubs are booming due to an increase in members.

I am aware of a crèche owner in Portarlington who was recently quoted a figure of €250,000 for insurance. There is no public swimming pool in Newbridge and the nearest swimming pool was run by a private company, Spin Activity Centre, which had to close at the end of August because it was quoted €100,000 for insurance, a fourfold increase on the previous year. The closure resulted in 20 people losing their jobs. Deputy McGrath has put forward very good suggestions and Bills and I suggest the Government examine them in order to try to bring down the cost of insurance for businesses and community and leisure facilities.

Public and employers' liability insurance is a significant issue for community groups and smaller employers in many areas. Increased transparency in respect of claims was a clear step identified by the working group, but there were delays in bringing forward the various databases and reports. What action has the Minister of State taken in that regard? How soon can we expect to see improvements in the rates?

The response of the Minister of State will be circulated.

Written Answers are published on the Oireachtas website.