I am advised by the Revenue Commissioners that the Hidden Economy Monitoring Group (HEMG) was set up in 1990 at the request of the Central Review Committee of the Programme for National Recovery. Chaired by Revenue, it is a multilateral Group comprising of representatives of IBEC, SFA, CIF, ICTU and SIPTU, Government agencies, Department of Social Protection, Department of Jobs Enterprise and Innovation and the National Employment Rights Agency. Its terms of reference are:-
“To provide a forum for the exchange of views on the effectiveness of measures introduced in combating the hidden economy between the Revenue Commissioners, the Department of Social Protection (DSP), the Department of Jobs Enterprise and Innovation and the National Employment Rights Agency (NERA) and representative bodies of employers, unions and industry. The group is to prepare a brief report on its activities each year for presentation to the Department of an Taoiseach".
The group met 3/4 times a year between 1990 and 2011 and contributed to the establishment of multi-agency investigation units, producing a "Code of Practice for Determining Employment or Self-Employment Status of Individuals", and in 2007 sponsored legislation which provided for the exchange of employment information on the earned income of individuals between the Minister for Enterprise, Trade and Employment, the Minister for Social and Family Affairs and the Revenue Commissioners, the first steps into information exchange. The ‘Code of Practice’ has been used extensively by all of the above-mentioned Government Agencies to combat numerous cases of unregistered and misclassified workers since its introduction in December 2007.
Under its terms of reference, the Group prepares a written annual report that is presented to the Department of the Taoiseach. I am further advised by the Revenue Commissioners that in 2011 the Group reviewed its own effectiveness and ability to deliver, in accordance with its terms of reference, and reached the conclusion that its purpose would be better served by operating at a more local level, utilising resources more familiar with the difficulties that were being experienced by SMEs and unions locally and using local Government agency resources to arrive at workable solutions.
In November 2011, the full HEMG devolved its terms of reference to four regionally based Liaison Groups, namely the Border Midlands West, Dublin, East & South East and South West Hidden Economy Monitoring Liaison Groups, with a requirement that all groups meet regularly and provide reports as required to the HEMG. The constituent members of the Regional Liaison Groups nominated were locally based members of the original attendee representative bodies and agencies, with the meetings organised and chaired by Revenue officials. The four Regional Liaison Groups met a total of 11 times during 2012. The 2012 report of the HEMG is currently being prepared.
On 30 January 2013 the full HEMG met to review the effectiveness of the first year of operations of the Regional Liaison Groups and to see what supports could be put in place to achieve and sustain improved outcomes from the work of the Groups. In order to make the HEMG more representative it was expanded to include a number of other interested representative bodies such as ISME and Retail Ireland. A schedule of meetings was agreed that requires the full HEMG to meet twice, and the Regional Liaison Groups to meet quarterly, in 2013.
The Revenue Commissioners have advised that attendees at the HEMG meetings, in a representative capacity, varies from time to time, however the January 2013 meeting was chaired by Mr. Declan Rigney, Assistant Secretary, Office of the Revenue Commissioners and was attended by:
- The Revenue Planning Division team Mr. Séamas O’Cathasaigh, Mr. Sean Nolan, Mr. Vincent Kenrick and Mr. John Morrissey.
- The Chairs of the four Regional Liaison Groups (also Revenue), Ms. Phil Uí Bhróithe (Border/Midlands/West Region), Ms. Lynda Hendley (Dublin Region), Mr. Pat Murphy (South-West Region) and Mr. Thomas Keating (East/South/East Region).
- The other Government Agencies were, Mr. Phil Cox – Department of Social Protection, Mr. Fran Power – National Employment Rights Authority and Ms. Joan Kehoe – Department of Jobs Innovation and Enterprise.
- The Employee Group representatives (Unions) were Mr. Fergus Whelan – Irish Congress of Trade Unions and Mr. Christy McQuillan – Services Industrial Professional and Technical Union.
- The Employer Group representatives were, Mr. Ger Brady – Irish Business and Employers Confederation, Mr. Eddie Keenan – Construction Industry Federation, Ms. Liz Carroll – Irish Small and Medium Enterprises and Mr. Jim Copeland – Hardware Association of Ireland.
- Apologies were received from Ms. Avine McNally – Small Firms Association, Mr. Stephen Lynam – Retail Ireland, Mr. Donal O’Keefe – Licensed Vintners Association and Mr. Patrick Cribben – Vintners Association of Ireland.
In order to open up the Group’s deliberations to the fullest range of hidden economy activities, the membership has been enlarged over the years most recently, to include representatives from Retail Ireland and the licensed trade.
I am advised by the Revenue Commissioners that although the hidden economy is not defined within the Group’s terms of reference, no restrictions have been placed on the scope of hidden economy activities discussed within the HEMG and the Regional Liaison Groups. While the Group’s discussions during the last decade concentrated to a large degree on the construction sector, other issues discussed within the Group included employment rights, the problem of people “working and signing” as well as under-reporting of income by cash businesses. Another initiative that Revenue developed during 2011 for the HEMG was a reporting template which facilitates the provision of information by representative bodies relating to shadow economy activities being carried on in their respective sectors.
I am advised by the Revenue Commissioners that during the course of the January 2013 full meeting of the HEMG, and in a series of bi-laterals that Revenue held with a number of representative bodies prior to the full meeting, Revenue used the opportunity to remind relevant attendees about the reporting template, they also highlighted the type of information that is helpful to them in tackling the shadow economy and drew relevant Group members’ attention to the tobacco hotline that is run by Revenue.
I am satisfied that Revenue is taking a robust approach to tackling the Shadow Economy, and in defending legitimate traders, and I welcome their continuing productive engagement with other State Agencies and with the representative groups through the Hidden Economy Monitoring Group.