Ceisteanna Eile - Other Questions

Insurance Costs

Marc MacSharry


57. Deputy Marc MacSharry asked the Minister for Finance the measures that can be taken in order that insurance companies provide rebates and premium reductions to customers in the case of a decline of claims costs related to Covid-19; and if he will make a statement on the matter. [17166/21]

James Lawless


144. Deputy James Lawless asked the Minister for Finance the way he is engaging with the insurance industry on the way it responds to the needs of its customers during the pandemic. [17146/21]

This question is for the Minister of State, Deputy Fleming. Will he outline the measures that can be taken in order that insurance companies provide rebates and premium reductions to customers in the case of a decline of claims costs related to the Covid pandemic?

The provision and pricing of insurance products are underpinned by the EU Solvency II Directive insurance framework. Consequently, neither the Minister for Finance nor the Central Bank of Ireland can direct insurance companies as to their business activities, nor can they compel any insurer operating in the Irish market to provide refunds to its customers as this is a commercial matter.

However, working to protect insurance policyholders during and after the Covid-19 crisis remains a priority issue for the Government. As such, it is included in the Action Plan for Insurance Reform. Throughout the pandemic, the Government has consistently called on insurers to treat customers honestly, fairly and professionally, as well as in line with the Central Bank’s consumer protection code.

Both the Minister and I have had extensive engagement with insurers and other key policy stakeholders. In the Minister's meeting with industry representatives, Insurance Ireland, almost a year ago, he called on motor insurers to be proactive and generous towards their customers. He noted what was likely to be a significant reduction in claims due to the travel restrictions then in place. This intervention saw several insurers announcing a range of forbearance measures and motor insurance rebates for policyholders. A variety of methods for offering rebates were used such as cheques being sent out, electronic transfers and vouchers.

As part of a comprehensive stakeholder engagement on the insurance reform agenda, I held a series of subsequent meetings with the main insurers late last year. I met with the chief executives of each of the main insurance companies individually when I again raised the need for industry to respond to both the Government’s ongoing reform agenda, as well as the needs of customers during this pandemic through lowering premiums, continuing to offer forbearance measures, and expanding their risk horizon across various market segments.

Building on this engagement to date, I will be meeting with the insurers individually from next week to discuss their assessment of the new personal injuries guidelines. The industry’s ongoing response to the pandemic will be included on the agenda for these meetings. Both the Minister and I will continue to put our views across on these issues, engaging with insurers and other relevant stakeholders regarding the importance of supporting customers and providing the necessary reliefs throughout this crisis period.

I thank the Minister of State for his response.

Part of the issue is when we end up in government we have to say different things. I do not doubt the Minister of State's commitment. As a former Chairman of the Committee of Public Accounts, I know more than anybody that he would be least likely to go native as quickly as others in the past.

The answer prepared for him is that all of these rules are set by Europe, it is a commercial decision for the company and so on. The programme for Government, however, gives a clear commitment on what we will do to reduce the insurance costs of companies all over the country, as well as the reduction in personal injury pay-outs. For that, we need the support of the Judiciary. When we raise that, we will be told it is a matter of separation of powers and we cannot get in there. This is frustrating for the people. The people want their Government to take action that will lead to an outcome that benefits them.

A number of key achievements have already happened in the past few months since we went into government and as a result of the Action Plan for Insurance Reform. We established a new office to promote competition in the insurance market which I chair. That entails meeting the individual companies which operate in the State to ask them to increase their risk appetite. That means for them to go into sectors in which they are not currently.

I have met with some companies that have already withdrawn from certain sectors of the Irish economy because of the unpredictable nature of awards. The personal injury guidelines that were published about four weeks ago are introducing certainty. The original book of quantum operated by the Personal Injuries Assessment Board, PIAB, will now be replaced by these judicial guidelines. Just last week, this House and the Seanad passed those new guidelines into law and they will be commencing very shortly.

I welcome the news about the group the Minister of State chairs. Ultimately, the Government needs to consider the establishment of a State bank, which was not far away from Fianna Fáil, or indeed Fine Gael, policy in the past. Both the Minister and the Minister of State need to unite around the Cabinet table and look at the establishment of a State financial services provider, be that in banking, which we will go into another day and I had the opportunity to do so some weeks ago, or insurance. If there is one way of regulating and ensuring fair conditions in a market, it is to be the State provider of competition in that market for a period. We have done it before with ACC and ICC. The model worked and it can work again. It has never been more necessary than it is today.

I acknowledge the Deputy's points about the State's involvement in insurance. Through the State Claims Agency we have very extensive involvement in settling insurance claims taken against any public body, as well as Irish public bodies that are not State bodies but are connected very closely to the local authorities, and it covers all claims against local authorities and education and training boards. The State itself is directly involved in settling claims and we have first-hand experience of that.

The private insurance market is a matter for the private sector. The need for a State bank is an interesting point and the Deputy referred to the ones we owned previously. It must be stated we are the majority shareholder in AIB. We own well over 70%. We are also the majority shareholder in Permanent TSB and own well over 70% of that. We have a very high stake in Bank of Ireland. There is probably no other country in Europe where the state has such an ownership level in all the major banking and financial institutions. When it comes to having a State bank, we are involved in every single one of them.

Banking Sector

Mick Barry


58. Deputy Mick Barry asked the Minister for Finance the steps he will take to defend jobs and services in the branch networks of banks; and if he will make a statement on the matter. [17194/21]

What steps does the Minister intend to take to defend jobs and services in the branch networks of banks? I ask him to make a statement on the matter.

As the Deputy will be aware, decisions with regard to staff and the management of branch networks are the responsibility of the board and management of individual banks, which are run on an independent and commercial basis. As Minister for Finance, I do not have a role in these commercial decisions.

The withdrawal of Ulster Bank from the market and the decision by Bank of Ireland to close 88 branches in the Republic of Ireland are a deep blow, particularly for their customers and staff, and they represent very unfavourable developments for the Irish banking market. Bank of Ireland has commented it will be working closely with its employees at these branches and will be setting out a range of options for them, including relocating to a different branch, moving to a new role in the bank, or voluntary redundancy for those who choose it. I also welcome Bank of Ireland's announcement of a partnership with An Post to ensure counter services will still be available for its customers locally.

With regard to Ulster Bank, while the management of staff matters is a matter for the bank and any counterparty that acquires its business, I expect all stakeholders will be very sensitive to the needs and rights of staff. This includes full compliance with the European communities regulations of 2003, which refer to the protection of employees on the transfer of undertakings and the honouring of all agreements in place between the bank and its staff representative bodies. In addition, I would expect such banks to engage with staff body representatives, as appropriate.

The Deputy will be aware I met with representatives from both Ulster Bank and its parent company in recent months. During these engagements, I strongly emphasised the importance of timely communication with staff, customers and other stakeholders about the future of Ulster Bank. I also met with the Financial Services Union, FSU, and the Minister of State, Deputy Fleming, met the FSU yesterday.

Let us recap what we are talking about as regards job losses. In Bank of Ireland there will be 1,400 to 1,700 redundancies. In Ulster Bank 2,800 jobs are in jeopardy, as are 300 at PTSB and 1,500 at AIB. The grand total is more than 6,000. It is not good enough for the Government to say market forces rule and it is not going to interfere, or it appealed to the boards of the banks to play by the Queensberry rules, etc. A pause should be put on these redundancies and closures, at the very least until the end of the Covid pandemic. The FSU has raised the idea of a banking forum, which could look at issues such as improving customer services, improving the work-life balance of staff and so on. Perhaps optional redeployment into other areas could be part of that forum. What does the Minister have to say about that proposal put forward by that trade union?

It is only very recently that I have ever heard Deputy Barry talk about the people who work in the banks. Any time he stood up all he had were words of harsh criticism for banks, which at times I understand, but I have never heard him make any reference to the people who work in the banks in any exchange with me until recent weeks. I welcome his new-found interest in the people who work for the banks.

It has always been a priority of mine to see how we can put policies in place that allow our banks to grow in such a way as to allow them maximise employment. However, I do not play a role in that area nor can I direct the banks on how many people they employ or where those people should be employed. I do not have that power. Deputy Barry wants to complete the nationalisation of our banks so perhaps he might explain how we would be able to pay for that. I regret many of the decisions that have been made and wish they were otherwise but I do not play a role in that regard and I cannot direct the banks to reverse them.

I assure the Minister that my interest in the well-being of bank workers is far from new-found. If he talked to some of the bank workers I have assisted in their various campaigns in the 1980s, 1990s, 2000s and 2010s, that might clarify the position for him. We will leave that matter there.

This is a test for the Government. There are massive redundancies coming down the line in retail, and post Covid there will be massive redundancies in other industries as well. Now there are more than 6,000 jobs on the line in the banking sector. Are the Minister and the Government going to stand on the sidelines or stand idly by and say the market rules and there is nothing they can do? Will the Government make meek appeals to the boards of the banks to show a little bit of fair play and compassion or will it intervene in a serious way in an attempt to defend jobs and services? The ball is in the Minister's court.

I am well aware of the responsibilities I have. It is interesting to hear the Deputy refer to the interest he appears to have had for many decades in the people who work for those banks. I stand by the comment I made. The first time he ever raised this matter with me was in recent weeks.

I am of course aware of the challenges many big employers face within our country, but many of them are employers in which this country and its taxpayers do not have a share. As regards the banking system to which we are referring, we do have a share in each of the three banks but we do not have a role in the commercial decisions those banks make. Deputy Barry knows that. He knows I do not have the legal power to intervene and do what he is looking for me to do. He knows I cannot mandate boards of banks to do things differently from what they are planning regarding employment. What I have looked to do is engage directly with the banks. Through the engagement I have had with NatWest, for example, I look to deal seriously with the issues to which the Deputy is referring, as opposed to making the kind of comments he has just made.

Question No. 59 replied to with Written Answers.

Insurance Costs

Marc MacSharry


61. Deputy Marc MacSharry asked the Minister for Finance if he will make contact with the insurance industry to request that annual premium renewals are reduced for sports clubs that are being hit by large premiums. [17165/21]

Pádraig O'Sullivan


76. Deputy Pádraig O'Sullivan asked the Minister for Finance the steps he is taking to tackle the cost of rising insurance premia which are currently crippling businesses; and if he will make a statement on the matter. [17073/21]

Gabhaim buíochas leis an Aire. Rachaimid ar aghaidh anois le Ceist Uimh. 61 In the name of Deputy MacSharry and the linked Question No. 76 in the name of Deputy Pádraig O'Sullivan. I call Deputy MacSharry to speak now.

I thank the Leas-Cheann Comhairle and the Minister of State, Deputy Fleming, again and ask him if we will make contact with the insurance industry chiefs and request that the annual premium renewals are reduced for sports clubs that are being hit by very large premiums.

As I indicated earlier, I am meeting with the chief executives of each of the major insurance companies in Ireland over the next fortnight and I want to give an assurance to the Deputy that I will specifically put that item on the agenda for those insurance companies that deal with sports clubs, and not with just these clubs but with other voluntary sector organisations, together with groups and people in the community sector who also have difficulty in getting insurance. I will be asking those who are involved in the industry at that meeting to re-examine the premiums being charged for the coming year in view of the fact that many of the sports clubs and voluntary sector organisations were closed for most of last year and are currently under restrictions, which will continue for some time. There will be much reduced activity, risk of injury and of claims as a result.

I will also be asking those companies that are not directly involved in this area, which for one reason or another either pulled back from it or were never involved in the sports insurance area, to have a look at the industry now, especially since the judicial guidelines have been published and enacted in law.

Two key issues were mentioned regarding the provision of insurance in Ireland in all of my engagements with the insurance companies last autumn. One was the level of awards and the associated legal costs. The second was the lack of certainty where they could not plan or make reasonable financial projections as to the cost of claims over a reasonable period of time. The Judicial Council guidelines have achieved a very substantial reduction in personal injury claims which are, on average, in the region of 50%. In some cases it will be much higher than 50% but in other cases it will obviously be lower. There are very substantial reductions in the awards planned under the new judicial guidelines in a number of the main areas of claims we are talking about, small injuries that cure within a short period of time and which leave no lasting effect on the individual, compared with the book of quantum that PIAB uses at the moment.

In addition, the issue of certainty is very much back on the table. From our point of view, up to now we were in a weak position because nobody in Ireland could reasonably predict what would come out of a court case. Now that the judges have collectively made this decision and have issued very strict guidelines, to ensure that the judges themselves follow the guidelines they have agreed to, these will apply bar in very exceptional circumstances where a case must be stated. This level of certainly will help us to bring other insurance companies back into the business of providing cover in this sector.

One further point to be made is that there are other elements involved because incidents happen in sports fields, clubs and sporting activities where people can suffer significant injuries. We hope that all recover within a very short period of time. We were not able to predict how much some of the awards would cost up until now. That is now happening and I have met some sports clubs over the past year that have given me examples of some very serious awards against their club and their insurance company which resulted in them not being able to get insurance cover on a subsequent occasion. I am confident in saying that those days are behind us and insurance will be available for all of these groups now. We want to increase competition because we cannot mandate precisely the price ourselves. It is not within our gift and is a commercial decision but I believe that we will get a positive response from the chief executive of these companies when we meet over the next two weeks.

I thank the Minister of State for that reply. I am aware of his response to the State getting involved in financial services and he mentioned Irish Public Bodies, IPB Insurance. Is it possible, perhaps, when it comes to community initiatives such as sports clubs, not-for-profit organisations, local festivals and such events, playgrounds and so on, that IPB Insurance could be considered as the insurer for such a situation?

As to a State bank, the Minister of State mentioned that we had a high shareholding in so many financial institutions, and I agree with that assessment. We are probably, however, one of the most passive shareholders in the world. I would be taking a very strong view, given the strength and size of our shareholding, on the policies that are being pursued by that financial institution, which we are not prepared to take on. That is why I would like to see a State bank. I thank the Leas-Cheann Comhairle.

I call Deputy O'Sullivan now.

Gabhaim buíochas leis an Leas-Cheann Comhairle. I welcome the Government's Action Plan for Insurance Reform which was launched in December. I note the progress made to date and the update the Government provided last week. Actions delivered upon include the adoption of new personal injuries guidelines, a public consultation on enhancing the role of the Personal Injuries Assessment Board, new regulations on solicitors' advertising, and a response to the Central Bank report on dual pricing.

Many small businesses have been kept afloat with the assistance of Government supports over the past year and I want to acknowledge the great amount of work done by the Minister of State, his Department, and the Minister, Deputy McGrath, in that regard. If businesses are to recover post Covid-19, however, we must ensure that the reform of the insurance sector happens as quickly as possible. Can the Minister of State give a commitment that the issue of insurance reform will be addressed this year?

I want to thank both Deputies for their contributions and I also appreciate the summary provided of the activities we have carried out in the insurance sector. I have concentrated on the judicial guidelines but our priorities for the next three months include the reform of the duty of care legislation, which is very important for all businesses, especially for sporting, voluntary and community organisations where accidents can happen.

We are strengthening the law on perjury; enhancing the enforcement powers of the Competition and Consumer Protection Commission; expanding the National Claims Information Database operated by the Central Bank; and, for the first time ever, we will be bringing out a report on employer public liability insurance. That report will be the first ever such report we will have had available to us and will cover all of the issues referred to here by the Deputy.

Finally in my reference to IPB Insurance, this is a mutual insurance company generally managed by the County and City Management Association and responsible to it. I suggest the Deputies make contact with their relevant local authority manager to make contact, in turn, with the County and City Management Association to see if it can assist in insurance for festivals and playgrounds.

I thank the Minister of State very much for his words but to conclude, there are many reasons not to do something. Real leadership is having the courage to do things. I would like to see the State ultimately entering the financial services world. I do not trust any of the banks, whether we are shareholders in them or not, and I am a former employee of one of them. I do not trust any of our insurance companies either because, as I said here some weeks ago, their business is cold profitability being delivered through dividends for their shareholders. We work for the people and not for the financial services industry. In that regard, we should be prepared to look at the establishment of a State bank and a State insurance company and the provision of a broad range of financial services to our people. We can then have an element of control of consumer price rather than one that is based exclusively on cold profitability. I ask both Ministers to please consider this point.

Exaggerated and misleading insurance claims have for far too long driven up costs and impacted competitiveness. It was the case in previous years that businesses had to eat into their everyday cash flow in order to pay off the high cost of insurance. This will not be an option for most businesses post Covid-19 as many of them are financially vulnerable. In the past, areas such as hospitality were greatly impacted by increases in premiums. Hospitality is one of those most vulnerable sectors at the moment due to the public health emergency. I am cognisant that as businesses reopen they are going to be in an exceptionally vulnerable financial position. Can the Minister of State ensure we get this right and implement the reforms as quickly as possible?

I ask that the Leas-Cheann Comhairle might indulge me for a moment longer.

Today, along with 20 other Senators and Deputies, I received a rapid antigen test. I have mentioned the hospitality sector, and I believe this product will be fundamental to what we do after the lockdown when we open up. Does the Minister for Finance have plans to give a tax rebate or tax exemption to companies supplying these products?

Two issues were mentioned in particular regarding the hospitality sector. Last Friday, I met the Irish Hotels Federation and a key issue it is concerned about is the wider support for those in the industry from the Government, for which they are grateful. They would not continue to exist without this high level of support. Separately, today I met a group of 20 hoteliers from the Munster region to discuss insurance. They made a number of key points, which we are taking on board. Some of them rely on underwriters from outside the State and this is an issue we have to look at because in my opinion it is not a fair process that a number of the major hotels in the country have to get their insurance from outside the country because of instability in insurance awards in the past. Some companies have been slow to cover businesses with very high footfall.

With regard to the issue of a State insurance company, I do not think we have any plans to go down that road. We are in the EU. There is free movement of goods and services and it is an essential element of why Ireland joined the EU. For us to say we are not willing to allow that situation to continue and that we want to take over and nationalise the insurance industry in Ireland is not an option.

Arrangements have been made for Deputy Doherty to take Question No. 60.

Tax Code

Matt Carthy


60. Deputy Matt Carthy asked the Minister for Finance if he will extend the exemption of green diesel from the increase to the carbon tax introduced as part of budget 2021; and if he will make a statement on the matter. [17195/21]

I appreciate this. The question is about whether the Minister will extend the exemption on green diesel from the increase in carbon tax introduced in budget 2021. There is an extension whereby it will not come into effect until 1 May of this year, as a result of the dual issues of Brexit and the pandemic. These issues have not been resolved but there are also serious issues in terms of the fairness of the tax. We want to hear the views of the Minister on it.

Ireland’s excise duty treatment of fuel used for motor and heating purposes is based on European Union law as set out in Directive 2003/96/EC on the taxation of energy products and electricity, commonly known as the energy tax directive.

Mineral oil tax is an excise duty comprised of carbon and non-carbon components. The carbon component is often referred to as carbon tax, but it is only one part of the overall tax that applies to mineral oils and other fuels used for motor and heating purposes. Mineral oil tax as applied in Ireland is subject to the requirements of the energy tax directive.

The main agriculture exposure to excise duty comes from the fuel inputs primarily through the use of marked gas oil, which is also commonly referred to as green diesel, farm diesel or agricultural diesel. Marked gas oil is currently subject to a rate of mineral oil tax of 11.8 cent per litre. This compares to the current full rate of mineral oil tax for auto diesel used as a propellant of 51.5 cent per litre.

Farmers and agricultural contractors who incur expenses in relation to farm diesel in the course of their trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.

Section 26 of the Finance Act 2020 increased the rate of carbon tax to €33.50 per tonne. This applied to transport fuels from midnight on budget night but in line with the policy approach applied in this area in recent years, I delayed its implementation on all other fuels, including marked gas oil, until 1 May, after the winter heating season. This was not an exemption of marked gas oil from the budget 2021 increase. It was a repeat of what we did in previous years. I remain committed to the plans I outlined in the Finance Bill.

The Minister will appreciate that the agricultural sector is going through very challenging times as a result of Brexit and, like many other sectors, the pandemic. He is also aware that as he introduced the budget, despite the fact this issue was postponed until 1 May there was quite a backlash from the agricultural sector with regard to this increase. These are people who care for the land very much but have seen this increase as a way of picking their pockets. Many people, particularly in communities such as mine in Donegal and along the west coast, are struggling to survive on the small farm holdings they have. The introduction of this has been postponed until 1 May. The question is whether the Minister is open to deferring it further. In particular, will he address the inequalities that exist between farm contractors and farmers with regard to being able to claim back the relief under section 664A?

I am very much aware of the issues Deputy Doherty has referred to and the hardship many people in our agricultural community are facing due to the issues of the pandemic and the consequences of Brexit. However, this measure has been introduced on a phased basis over many years. The ongoing challenges that members of the agricultural community face regarding the costs and impact of carbon taxation on their living standards and the bills they need to pay are reflected in the taxation treatment provided for with respect to carbon tax. This is how we are recognising the issues Deputy Doherty is referring to. It is my understanding that not only farmers but also agricultural contractors who incur expenses on farm diesel in the course of their trade are able to claim this back as a business expense against either their income tax or their corporate tax bill.

The Minister is aware that farm contractors are not able to claim back the double income tax reliefs that farmers do. He is aware of this because he previously stated he would consider looking into it. Has he considered this matter? Is he aware that, for example, the association of farm contractors has made it clear that the costs involved are in the region of €13,455 per annum per contractor? They state they will have no option but to pass this on to the individual farmers for whom they work. This is why the issue is important. Is the Minister open, as he has indicated previously, to considering the matter? Has it now been concluded? Where does he stand on the issue that while farmers are able to avail of the double income tax relief under section 664A farm contractors are not?

I remain committed to the implementation of the carbon tax changes that were included in the Finance Bill. These include the increase in carbon pricing and a number of other fuels from 1 May. I am aware of the issue Deputy Doherty referred to regarding independent agricultural contractors. I remember with the Finance Bill before last referring to difficulties I faced regarding the definition of these contractors and the work they do. I will get an update for the Deputy on where work on this issue stands. With regard to the core issue as to whether the change is going ahead, I need to inform the Dáil that it will be, and while I acknowledge the many challenges it poses for some, it is an essential part of how we can respond to the challenge of climate change.

Questions Nos. 62 and 63 replied to with Written Answers.

Banking Sector Remuneration

Mick Barry


64. Deputy Mick Barry asked the Minister for Finance his views on the continuation of the bankers' pay cap; and if he will make a statement on the matter. [17193/21]

What are the Minister's views on the continuation of the bankers' pay cap? Will he make a statement on the matter?

The Deputy will be aware that Government policy on banking remuneration has remained unchanged since the financial crisis. Extensive restrictions are in place and these are not simply confined to a small number of senior bankers whose pay is restricted by the €500,000 cap. These restrictions affect approximately 23,000 workers across the three banks in which the State has a shareholding. The policy dictates that variable pay, including bonuses and any other benefits such as health insurance and childcare, cannot be paid to any staff members from the most junior, lowest paid staff to, of course, the most senior ranks.

The previous Government reviewed this issue. Stakeholders engaged with included the major institutional investors in the banks, advisory firms, the Financial Services Union, the chairs of the remuneration committee in each of the banks, the Central Bank of Ireland and representatives of the Single Supervisory Mechanism. I acknowledge there is a very different environment in place now from a regulation point of view, which will help prevent the return to some of the excesses of the boom years.

Furthermore, the powers of the Central Bank were significantly enhanced by the Central Bank (Supervision and Enforcement) Act 2013, in particular powers to take action against wrongdoing by financial services providers and to strengthen the ability of the Central Bank to take action against individuals.

In the Minister's exchange with Deputy Doherty earlier, he made the point that Goodbody was not covered by the cap, that the State had no control over the remuneration it paid its top executives and that he was not proposing any change to the cap for AIB executives. However, what he did not deal with was the fact that if AIB takes control of Goodbody, then AIB executives can transfer over to Goodbody, and those executives can be paid €500,000-plus and the bankers’ bonuses without the 87% rate. They can find a way around the cap. The Minister indicated his support for that deal on that basis. I ask him whether he is prepared to reconsider his position on that, particularly given what the ordinary rank-and-file bank workers have to suffer at the moment.

The Deputy is correct that I did not refer to that in the earlier exchange but I did refer to it, I believe, in the answer I gave to Deputy Doherty. I certainly referred to it on the night of the debate on the banking sector in the Dáil a number of weeks ago on this and other issues.

The reason I support it is that if Goodbody is going to be integrated into AIB - and I believe that is the appropriate thing for AIB - it is part of what can offer a better future for the bank, the people who work for it, Fexco and Goodbody itself. If that is going to happen, there will be AIB people involved in providing some essential services within Goodbody or, indeed, playing senior management roles within Goodbody, and they will be paid as Goodbody employees. If I did not have a provision like this in place, we would end up with the potential for mockery and people leaving AIB and then going to work for Goodbody. That would be a dishonest position to present to the Dáil.

Unfortunately, the Minister’s very weak position on this issue is encouraging other senior bankers who want to drive a coach and four through the banking cap and find a way around it. At the Oireachtas finance committee recently, the CEO of Bank of Ireland, Ms Francesca McDonagh, was not prepared to discuss her bank's interest in Davy and what would happen if it was to purchase Davy, but was prepared to discuss a theoretical situation where the bank would acquire an entity, which we agreed to call entity B. She made precisely the point that if Bank of Ireland acquired entity B, it would be in favour of keeping the high rates for entity B and allowing executives from Bank of Ireland to transfer over and to avail of those rates as well, subject to the Minister's agreement. It would be kind of hard for him to oppose it when he has given it the green light this time around.

The reason I have agreed to this particular proposal is that I believe it is good for three Irish companies involved in it - for the company that was looking to sell Goodbody, for Goodbody itself and for AIB. These are all very big employers and are all companies that matter to the economy. Perhaps Deputy Barry is against that transaction happening at all. Although he is against the sale happening, we still have one Irish company looking to sell part of its company, that is, Goodbody. That sale was attempted on two different occasions but did not happen on either of those occasions. I believe it is in the overall long-term interest of those three companies that the sale happens, which is why I have supported this agreement. I came into the Dáil shortly afterwards and explained why.

In regard to what Bank of Ireland may or may not do, that is a matter for that bank and the decision it makes about any commercial process it is involved in.

Question No. 65 replied to with Written Answers.

Illicit Trade

Brendan Smith


66. Deputy Brendan Smith asked the Minister for Finance the additional measures he will implement to counteract the illegal and cross-Border trade in tobacco and drink products and household fuel products; and if he will make a statement on the matter. [17154/21]

The Minister may recall that I table questions on a regular basis regarding the need to ensure the statutory agencies have the resources and tools available to them to deal with illicit trade and cross-Border smuggling. Sadly, despite all the good measures and the good work of our statutory agencies at local level, substantial illegal trade is still happening. I ask that we be vigilant at all times and that we introduce new measures, if needed, to counteract such illicit behaviour by gangsters and criminal gangs.

I am assured by Revenue that combating the threat which fuel fraud and the illicit alcohol and tobacco trades pose to legitimate businesses, consumers and the Exchequer continues to be a priority. Steps taken by Revenue to combat the illegal mineral oils trade, including home heating oils, include the introduction of stringent supply chain controls and reporting requirements, a rigorous programme of risk-focused enforcement action and the application of robust legislation. In addition, Revenue and the UK Revenue and Customs undertook a joint initiative to introduce a new marker for use in marked fuels, which came into operation in April 2015. The industry view, I believe, is that the actions taken have been successful in curtailing fuel fraud.

Solid fuel carbon tax is an excise duty that applies to coal and peat when first supplied in the State for use as a fuel. Neither the movement of solid fuel into the State nor the physical presence of solid fuel in the State generate a liability to solid fuel carbon tax. Therefore, there is no smuggling offence, in terms of evasion of solid fuel carbon tax, attaching to coal coming into the State from Northern Ireland. It is collected by Revenue on a self-assessment basis and compliance with the law is enforced using the full range of compliance interventions and enforcement provisions for self-assessed taxes. I am advised that a solid fuel carbon tax compliance module has been included in Revenue’s ongoing mineral oil tax national compliance project.

I am well aware of the importance of this matter and all of the work that goes on between Revenue and An Garda Síochána to deal with the very serious issues that Deputy Smith has persistently raised with me on behalf of his constituents.

I thank the Minister for his reply. I want to take the opportunity to complement the members of the Garda, the Revenue Commissioners and other statutory agencies and local authorities who have had to deal with these thugs and criminal gangs over the years. They are a very sophisticated outfit and I know there has been very good work done. However, we need to be vigilant. Our measures, legislation and regulations need to be monitored and reviewed because we know things move on with technology and so on. It is a bit of a misnomer to use the term "self-assessment" in regard to smugglers. I know what type of self self-assessment they do.

There will be an additional problem after 1 May in that there will be an extra carbon tax here on smokeless and smoky coal, and there will be a big differential between the price charged by legitimate businesses in our State in comparison to what is being charged north of the Border. I see those depots right along the Border. I spoke to some of the people in small and medium companies who are working extremely hard to survive.

They are at their wits' end in regard to the uncompetitive environment they are working in, trying to deal with imports of much cheaper product from Northern Ireland. I ask that officials would look again at that issue after 1 May.

I assure the Deputy that all that can be done is being done by An Garda Síochána, their counterparts in Northern Ireland and Revenue on this matter. I accept that the changes to our carbon tax that come into force in May will have an impact on the differentials to which Deputy Smith refers. However, the differentials that can lie behind the smuggling to which the Deputy referred will be the subject of a minor change that can be attributed to the increase in carbon pricing in May. I know that there will be a change but I do not believe that, of itself, will be a contributor to some of the issues referred to by him.

I will give the House an example of the kind of work that is under way. Cigarettes and other tobacco goods to the value of €36.9 million were seized by the Revenue Commissioners across 2020. I am advised that at the beginning of this year, Revenue participated in a number of joint operations within low smoke zones to deal with some of the issues of concern to the Deputy.

For some time, I have advocated more cross-Border agency work and a joint approach by both police forces and Revenue offices. That is happening and it is very welcome. Again, I take the opportunity to compliment officials at local level who are dealing with these matters but there is a trade going on out there and small-scale traders, the owners of legitimate businesses who dutifully pay their taxes and dues to this State who are finding it hard to survive. My message is that we must be constantly vigilant and attentive to this matter. If additional resources or powers are needed by statutory agencies, these should be provided. At times there are additional demands on our local authorities to conduct additional inspections but no additional resources are provided. That happened last year with regard to the monitoring of smokeless fuels. Local authorities were not given the additional resources they needed to carry their statutory obligations. I ask that the Department would look at that in the overall context.

Resources are being made available, particularly to the Revenue Commissioners, to deal with the issues referred to by the Deputy. I mentioned earlier the work now being done by Revenue in terms of the joint operations being conducted in low smoke zones. Revenue is collaborating with the Department of the Environment, Climate and Communications and local authority solid fuel inspection teams with a view to checking compliance with the important taxes in this area. If the Deputy is aware of any particular issues in terms of additional resources that are needed to enhance this work, I ask him to let me know. Although it is not directly connected to the issues he raises now, he might be interested to know that in relation to seizures of oil, there were 601 different activities by Revenue across 2020 alone. These are really serious issues which are being taken very seriously by the Revenue Commissioners and the Government.

I am afraid that we only have time for one more question. We will move on to Question No. 70 in the name of Deputy Doherty.

Questions Nos. 67 to 69, inclusive, replied to with Written Answers.

Mortgage Insurance

Pearse Doherty


70. Deputy Pearse Doherty asked the Minister for Finance the engagement he has had with mortgage lenders regarding mortgage applicants unable to draw down their mortgage loans due to their inability to secure mortgage protection insurance on health grounds in the context of Covid-19; if he has discussed their ability to waive this requirement under section 126 of the Consumer Credit Act 1995; and if he will make a statement on the matter. [17180/21]

I wish to ask the Minister what engagements he has had with mortgage lenders regarding applicants who have not been able to draw down their mortgage. I refer to individuals who have conditions that may make them more susceptible to adverse outcomes if they contract Covid-19. They are not being provided with mortgage protection insurance. In some cases, they have paid a deposit for a house. They have been pre-approved for a loan from the bank but the bank is not letting them draw down that loan. What engagement has the Minister had on this?

When a person applies for a mortgage loan to buy a home, he or she will generally be required to take out mortgage protection insurance. In most cases, a lender is legally required under section 126 of the Consumer Credit Act 1995 to make sure that a mortgage applicant has mortgage protection insurance in place before granting a mortgage loan. This is an important statutory provision designed to protect the borrower's dependants and their home should the borrower die before the mortgage has been repaid. However, the Act also recognises that in certain cases such protection is not necessary or would be inappropriate and it provides for a number of limited exemptions to this statutory obligation, such as where the borrower belongs to a class of persons and other exemptions.

I do not play a role in the mortgage and insurance issues raised by the Deputy, which relate to commercial decisions made by banks. However, I am aware that this is an issue. It has been raised by a number of constituents and other Deputies, as well as by the Deputy, in recent days and weeks. While I cannot instruct the banks with regard to this, I will engage with them on it. In what is a difficult time for so many, these decisions can become even harder. I cannot instruct the banks with regard to this but I will engage with them on it and see if I can bring any further clarity to the issue for the Deputy.

I thank the Minister for that and ask that he would also raise it in his engagements with the insurance industry. Indeed, some of the banks own some of the insurance companies providing mortgage protection insurance. Bank of Ireland, for example, has its own insurance company, which is not providing mortgage protection cover to anybody who had symptoms of Covid-19 over the past three months. It is putting those applications on hold for at least a month. The provision in section 126 exists for a reason. It does not exist in Britain, for example, but I believe it is important because it provides protection for families. As the Minister said, however, there is provision for exemptions and that needs to be used, particularly in cases where families thought they had bought their house. They paid their deposit and knew that the mortgage had been approved but they fell at the very last hurdle. Not only did they fall, they lost the house and the deposit. The law allows banks to make an exemption and that must be impressed upon them. I encourage the Minister to engage with the banks on this matter and urge the Minister of State, Deputy Fleming, to engage with the insurance industry on it. The Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach has written to the banks and insurance companies on the matter.

The Deputy made an important point. There is a reason exemptions are provided for in section 126 of the relevant law. I appreciate that many families are in difficult circumstances because of the effects of this disease on them and many others and this issue is dealing them an even harsher blow. I must be precise here because I do not want to mislead the Dáil. I cannot instruct the banks on how to handle this particular matter. That said, I do appreciate the distress it is causing and I am planning to understand the matter further with the banks, particularly why individual decisions are being made, and to see if there are any policy consequences.

I appreciate that. My last point may be a matter more specifically for the Minister of State, Deputy Fleming. The banks can give exemptions. We all know why they want this protection and rightly so but the insurance industry needs to look at its policies now, particularly with regard to people who have diabetes. This is the most prevalent issue in the cases coming into our offices. If a person has diabetes, many of the providers are putting his or her application on hold, some for six months and others, such as Royal London, for 12 months. That needs to be addressed in the context of where we are with Covid.

I assure the Deputy that in the engagement that the Minister of State, Deputy Fleming, is having with our leading insurance providers on the matters we covered earlier in the debate, he is planning to raise that particular issue.

That concludes this session.

Written Answers are published on the Oireachtas website.
The Dáil adjourned at 8.30 p.m. until 10 a.m. on Thursday, 1 April 2021.