Tuesday, 11 Dec 2012

Written Answers Nos. 134 - 141

Overseas Development Aid Oversight

Questions (134)

Maureen O'Sullivan

Question:

134. Deputy Maureen O'Sullivan asked the Minister for Finance in view of the visit by the chair of the Committee of Public Accounts to investigate corruption in African countries and in view of the U.K. Public Accounts Committee calling multi-national corporations into Westminster to examine their profits and tax responsibilities, if he will request the Committee of Public Accounts to call in multi-national companies to outline their responsibilities in relation to payment of corporate tax here. [55243/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

I should take this opportunity to highlight the significant contribution that multinational companies make to the Irish economy, both in terms of generating employment and contributing tax revenue. According to an Autumn 2012 Report from IDA Ireland, 146,000 people are directly employed by multinationals in Ireland, and the total of direct and indirect jobs attributable to multinationals is around 250,000.

The corporation tax responsibilities of multinationals in Ireland are clear: all companies in Ireland pay the 12.5% rate on their trading profits which are generated in Ireland.

I am, however, aware of recent media reports which refer to the ways that some companies structure their international tax affairs to minimise their global tax costs. The ability of entities to lower their global rate of tax using international structures reflects the global context in which Ireland and indeed all countries operate. Ireland is fully supportive of international efforts to ensure fairness in taxation. Ireland participates fully in the EU Code of Conduct Group, which addresses harmful tax competition, and in the OECD Forum on Harmful Tax Practices.

In relation to the specific question raised by the Deputy, I would emphasise that it is for the Public Accounts Committee to organise their own schedule of work.

Tax Yield

Questions (135)

Seamus Kirk

Question:

135. Deputy Seamus Kirk asked the Minister for Finance the amount of VAT and excise duty collected on agricultural diesel for each of the past three years; and if he will make a statement on the matter. [55315/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

I am informed by the Revenue Commissioners that the agricultural sector uses two types of diesel namely Marked Gas Oil (MGO) and Auto-Diesel. Both MGO and Auto-Diesel are also used in residential and other commercial sectors and excise returns are not captured by sector.

Similarly, the information to be furnished on VAT returns does not require the yield from particular sectors of trade to be identified. In the circumstances the amount of VAT collected in respect of diesel, regardless of sector, cannot be identified in the overall yield of VAT.

Credit Availability

Questions (136)

Peter Mathews

Question:

136. Deputy Peter Mathews asked the Minister for Finance if reclassification of debt or the exiting of Bank of Scotland Ireland from the Irish market is responsible for the reduction in credit to households for house purchases of €4.1 billion and the increase of credit to investment and pension funds of €3.15 billion between July and August 2009; the reduction of household loans by €7.55 billion and the increase of loans to funds by €6.09 billion between November and December 2010; the reduction in household loans of €17.17 billion and increase in credit extended to financial funds by €16.23 billion between September and October 2011; if these changes are considered to be household deleveraging; and if he will make a statement on the matter. [55336/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

The Deputy refers to changes in the outstanding amounts of credit advanced to Irish households by credit institutions resident in the State, as published in the Central Bank’s Money and Banking Statistics.

I have been informed by the Central Bank that the developments in this series in 2009 and 2011 noted by the Deputy do not reflect issues related to Bank of Scotland (Ireland), but rather the derecognition of securitised loans from the statistical balance sheet of other credit institutions in the State. The developments noted in 2010 do reflect, inter alia, the closure of Bank of Scotland (Ireland) and the transfer of outstanding loans to its parent in the UK.

All issues highlighted by the Deputy refer to changes in outstanding amounts on the statistical balance sheet of credit institutions in the State, and by themselves do not reflect wholly household deleveraging. These changes can result from a number of factors, such as securitisation or other loan transfers, reclassification, valuation effects, and the underlying business transactions of loan draw-downs and repayments.

The Central Bank provides transactions data in Money and Banking Statistics to determine the underlying change in credit due to draw-downs and repayments and considers that these developments more comprehensively reflective of deleveraging. For the months mentioned in the question, loans to households from Irish resident credit institutions decreased by a net €169 million, €725 million and €612 million respectively, based on repayments exceeding draw-downs. These data are presented from the perspective of the credit institutions balance sheet.

I am advised that the Central Bank considers that deleveraging by the household can be better analysed in its publication Quarterly Financial Accounts. This series shows that Irish households have reduced their loan liabilities by €20.6bn from 2009 Q4 to 2012 Q2.

Illegal Moneylenders

Questions (137)

John Deasy

Question:

137. Deputy John Deasy asked the Minister for Finance the number of licences that have issued to moneylenders; the number of convictions in each of the past five years for illegal trading as a moneylender; the checks, if any, that are carried out by the Central Bank of Ireland on licensed moneylenders to ensure they are charging the declared interest rate; his plans to cap the rate of APR charged by moneylenders; and if he will make a statement on the matter. [55371/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

Moneylenders are licensed by the Central Bank of Ireland in accordance with the provisions of Part VIII of the Consumer Credit Act 1995 (as amended). Moneylenders have to apply to the Central Bank each year for renewal of the licence. In addition to the provisions of the Consumer Credit Act 1995, a licensed moneylender must comply with the provisions of the Consumer Protection Code for Licensed Moneylenders (the Code) and with the European Communities (Consumer Credit Agreements) Regulations 2010.

I have been advised by the Central Bank that, as at 29 November 2012, there are 44 licensed moneylenders.

Compliance with the terms and conditions of the licence is monitored on an ongoing basis by the Central Bank through supervision, themed inspections, mystery shopping, consumer intelligence and complaints from the Financial Services Ombudsman. Failure to adhere to the terms and conditions of the licence may lead to proceedings under the Central Bank’s Administrative Sanctions Procedures, which enable the Central Bank to sanction and fine regulated entities for breaches of regulatory requirements. Since 1 December 2011, licensed moneylenders are also subject to a fitness and probity regime. The Central Bank undertook a themed inspection of licensed moneylenders in 2010. The main findings were that, overall there was a high level of compliance among firms and that consumers were charged in accordance with moneylenders’ authorised APRs and costs of credit. The Central Bank carried out another themed inspection of moneylenders recently and is currently finalising reports.

Interest rates charged are not regulated by the Central Bank so each institution determines the rate it charges its customers, depending on a number of factors, including risk. Interest rate caps for moneylenders are not provided for in the Consumer Credit Act, 1995. As the Deputy is aware, I mentioned in the House on 18 July 2012, at the conclusion of the debate on the Private Members' Bill on the issue of capping the interest rate charged by licensed moneylenders, that I would draw to the attention of the Governor of the Central Bank, the concerns and points raised during the debate. I have received a reply from the Governor and its contents are being examined.

The Central Bank endeavours to increase disclosure and understanding of the costs associated with loans provided by moneylenders and the Consumer Protection Code for Licensed Moneylenders requires the disclosure of the all the fees, costs and interest in a clear manner. Prior to entering into a loan agreement with a consumer where the APR is 23% or higher, the licensed moneylender must prominently display that fact and use the words typed in high font: ‘Warning: This is a high-cost loan.’

I have been informed by my colleague the Minister for Justice and Equality, that persons operating as illegal moneylenders are in breach of the law. It is a matter for An Garda Siochana to investigate their activities. Under Section 98 of the Consumer Credit Act 1995, An Garda Siochana have sole responsibility for the investigation and prosecution of such offences. The Central Bank has no function or power in this regard. If the Central Bank has reason to believe that a person is operating as an illegal moneylender, the matter is reported to An Garda Siochana. The latest available figures provided by the Courts Service, as at 1 November 2012, indicate that no prosecutions for illegal moneylending have been recorded over the past five years.

Public Sector Receipts

Questions (138)

Pearse Doherty

Question:

138. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 227 of 27 November 2012, if he will provide a breakdown by Department and scheme of the expected public sector receipts from the EU budget in 2012 and 2013 of €1.85 billion and €1.7 billion respectively. [55388/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

The table below contains estimates of expected Irish public sector receipts from the European Union for 2012 and 2013 and is presented in the format of the Budget and Economic Statistics published by the Department of Finance.

The 2012 figures are based on estimates of expected receipts provided earlier this year by Government Departments. Accordingly, these figures are likely to be revised when the final outturn for this year is fully known. Equally, the 2013 forecast is based upon a number of assumptions, including the estimated 2012 receipts and may also be subject to change.

Breakdown of Public Sector Receipts from the EU Budget (millions)

	EAGF	EAFRD	ESF	ERDF	Cohesion	Other	Total
Year	European Agriculture Guarantee Fund	European Agricultural Fund for Rural Development	European Social Fund	European Regional Development Fund	Cohesion Fund
2012	1,280	320	80	70	0	80	1,830
2013	1,260	190	60	120	10	80	1,720

The main Paying Authorities for EU public sector receipts are the Departments of Agriculture, Food & the Marine (EAGF, EAFRD), Education & Skills (ESF) and Public Expenditure & Reform (ERDF, Cohesion Fund).

The “Other” column includes expected receipts from the following areas: the Veterinary Fund, the European Fisheries Fund (Department of Agriculture, Food & the Marine), Education programmes including Erasmus and Youth in Action (Department of Education & Skills), and the European Energy Programme for Recovery (Department of Communications, Energy and Natural Resources). A number of other smaller programmes are also included under this heading.

NAMA Court Cases

Questions (139)

Pearse Doherty

Question:

139. Deputy Pearse Doherty asked the Minister for Finance further to publication by the National Assets Management Agency of a report into the purchase of a property under its control by a former employee, if he will provide details of the two independent valuations of the property which NAMA previously claimed had been undertaken; specifically the dates of the valuations and the valuation amounts or ranges. [55389/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

I do not intend to go beyond the extensive information that NAMA, based on legal advice, has already made publicly available on this matter.

On 27th November, NAMA published, in line with the commitment by the NAMA Chairman at the recent meeting of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform, the detail of a report by its internal auditors, Deloitte, on the transaction. This report outlines the sequence of events relating to the transaction, the disclosure requirements imposed on NAMA staff under the NAMA Act 2009 and associated codes of practice, and the key recommendations made by Deloitte, all of which have been accepted by the NAMA Board and which now have been implemented.

The Deputy will also be aware that the NAMA Chairman provided considerable detail on the transaction at that recent meeting of the Joint Oireachtas Committee on Finance, Public Expenditure and Reform.

Departmental Legal Case Numbers

Questions (140)

Pearse Doherty

Question:

140. Deputy Pearse Doherty asked the Minister for Finance further to a newspaper report that the Irish Bank Resolution Corporation requested a borrower to withdraw a complaint by the borrower against a company (details supplied) the reason IBRC would specifically or in general adopt such an approach to one of its borrowers. [55390/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

I have been informed that it should be noted that the newspaper article in question published details of privileged information and the Bank has not waived the privilege attaching to that information. These matters are the subject of on-going litigation and it is not appropriate for the Minister to make any comment.

Departmental Legal Case Numbers

Questions (141)

Pearse Doherty

Question:

141. Deputy Pearse Doherty asked the Minister for Finance further to the recent application by the Irish Bank Resolution Corporation in the High Court where a company (details supplied) is named as the respondent, if he will provide an outline of the application and remedies sought by IBRC. [55391/12]

Written answers

Minister for Finance (Deputy Michael Noonan)

IBRC have advised me that it issued proceedings on 27 November 2012 against the company referred to in the question. These proceedings relate to the role of that company as auditors to Anglo Irish Bank Plc. pre-nationalisation. As this matter is now the subject of litigation, it would be inappropriate for me to comment further at this time.