Thursday, 23 May 2013

Written Answers Nos. 44-52

IBRC Liquidation

Questions (44)

Michael McGrath

Question:

44. Deputy Michael McGrath asked the Minister for Finance the reason the completion of the Irish Bank Resolution Corporation liquidation will be delayed; and if he will make a statement on the matter. [24958/13]

Written answers

Minister for Finance

I have been advised by the Special Liquidators that the valuation of IBRC's loan assets will be completed by no later than 30 November 2013 and that the sale of IBRC’s assets shall be agreed or completed by no later than 31 December 2013 or as soon as practicable thereafter. It is the view of the Special Liquidators based on the internal documentation and information within IBRC that this timetable will afford the best opportunity for delivering value for the State.

Central Bank of Ireland Investigations

Questions (45, 49)

Michael McGrath

Question:

45. Deputy Michael McGrath asked the Minister for Finance when compensation payments to persons who were mis-sold payment protection insurance will commence; the length of time he expects the process to take; and if he will make a statement on the matter. [24959/13]

Michael McGrath

Question:

49. Deputy Michael McGrath asked the Minister for Finance the number of payment protection insurance policies sold by entities regulated by the Central Bank of Ireland since mid-2007 and currently subject to the ongoing investigation by the CBI into the sale of PPI policies; if he will provide details of the current stage of the investigation; when he expects it to be concluded; the restitution options for customers who are found to have been mis-sold a PPI policy; and if he will make a statement on the matter. [24969/13]

Written answers

Minister for Finance

I propose to take Questions Nos. 45 and 49 together.

I have been advised by the Central Bank that it is conducting an on-going investigation into the sale of Payment Protection Insurance (PPI) by firms from July 2007. In September 2012 the Central Bank broadened its investigation to include a number of other banks and credit institutions. Approximately 340,000 PPI policies were sold by bank/credit institutions since 2007.

The Central Bank issued an update on its on-going investigation into the sales of Payment Protection Insurance policies on 17 May 2013. Ten firms are currently undertaking reviews of their Payment Protection Insurance sales. At the request of the Bank, the firms previously informed all their customers included in the PPI sales review of their intention to provide updates to them as the review progresses.

The firms have commenced writing to their customers who purchased PPI in July 2007 to inform them of the outcome of the review as it relates to their situation. Approximately 13,000 customers will receive letters over the coming week. The Central Bank is advising customers who receive a letter and have any questions, to contact their bank or credit institution directly.

It is too early at this stage to comment on the number of consumers that will receive refunds or the total amount to be refunded. Some firms may be able to indicate to their July 2007 customers how much they will be restituted but the majority will not, until customers have decided if they wish to have restitution, or to keep the policy subject to further suitability assessment. The Central Bank will make a comprehensive statement at the conclusion of the overall process.

Throughout 2013, firms will continue to conduct the review and will directly contact all other PPI customers included in the review with the outcome of the on-going review. The Central Bank will continue to require firms to take an orderly, co-ordinated and consistent approach to the review and will monitor progress on an on-going basis with the firms involved, and with the independent third party overseers who were appointed at the request of the Central Bank.

Corporation Tax

Questions (46)

Michael McGrath

Question:

46. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the gross amount of corporation tax paid in each year from 2008 to 2012 by the top 10 multinational firms as measured by corporation tax paid; and if he will make a statement on the matter. [24960/13]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that the amount of corporation tax paid by the top 10 multinational companies (as measured by corporation tax paid) is per the following table. The table includes the gross amounts paid in corporation tax for each year and the net corporation tax paid for each year. The difference could be for a number of reasons e.g. if a company overestimates its preliminary tax, a repayment may be due when the return is filed and the actual figures are available.

Year	Gross Amount Paid in Corporation Tax by top 10 multinational companies	Net Amount Paid in Corporation Tax by top 10 multinational companies
2012	€1,423M	€1,420M
2011	€1,422M	€1,420M
2010	€1,412M	€1,399M
2009	€1,516M	€1,440M
2008	€843M	€828M

Corporation Tax

Questions (47, 50)

Michael McGrath

Question:

47. Deputy Michael McGrath asked the Minister for Finance if he has received representations from the UK authorities in respect of their views on the operation of Ireland's corporation tax regime; and if he will make a statement on the matter. [24961/13]

Michael McGrath

Question:

50. Deputy Michael McGrath asked the Minister for Finance his views on the references to Ireland at the recent House of Commons public accounts committee hearing regarding Google's tax affairs; and if he will make a statement on the matter. [24970/13]

Written answers

Minister for Finance

I propose to take Questions Nos. 47 and 50 together.

I am precluded from discussing the tax affairs of any particular individual or company, but I can confirm that I have received no such representations from the UK authorities in respect of the operation of Ireland's corporation tax regime.

Ireland has a positive international reputation based on transparency and co-operation, as is confirmed by our extensive tax treaty network with countries throughout the world, including the United Kingdom.

Tax Compliance

Questions (48)

Michael McGrath

Question:

48. Deputy Michael McGrath asked the Minister for Finance if he will arrange for a letter to be issued to a person (details supplied) in County Cork explaining the netting off of separate issues regarding their income tax affairs. [24965/13]

Written answers

Minister for Finance

I am informed by the Revenue Commissioners that as a result of a previous review of the taxpayer's affairs (Question No. 56 of 9 February 2012), some additional liabilities were identified. These have been partially dealt with by offsetting superannuation relief, and Revenue has been in touch with the taxpayer in relation to the balance. Revenue will now write again to the taxpayer fully explaining the situation.

Question No. 49 answered with Question No. 45.

Question No. 50 answered with Question No. 47.

IBRC Liquidation

Questions (51)

Michael McGrath

Question:

51. Deputy Michael McGrath asked the Minister for Finance if he will provide a detailed update on the work of the special liquidator of Irish Bank Resolution Corporation; and if he will make a statement on the matter. [24971/13]

Written answers

Minister for Finance

The liquidation of IBRC is progressing well and I am satisfied with the work performed by the Special Liquidators to date. Unfortunately due to commercial sensitivities and the potential detrimental impact that a disclosure of the details of work performed might have on asset recovery in the impending sales process, I cannot provide a detailed update on the work of the Special Liquidators.

The Department of Finance is in regular contact with the Special Liquidators. Weekly meetings are held at which the Special Liquidators provide an update on key developments and outstanding issues. Furthermore a monthly report is furnished to the Department detailing the progress on all matters in relation to the liquidation including the valuation and sales process, finance, deposits, derivatives and hedging, legal issues and litigation, HR, IT operations, compliance and governance and overall project management. Overall I am satisfied that the liquidation is progressing well.

Departmental Legal Costs

Questions (52)

Seán Fleming

Question:

52. Deputy Sean Fleming asked the Minister for Finance his views on whether sufficient progress is being made in reducing the State's legal bill in his Department and any State agencies under his aegis; and if he will make a statement on the matter. [25167/13]

Written answers

Minister for Finance

In response to the Deputy's question my Department has developed in house legal capacity which manages a portion of the Department of Finance legal work and seeks to minimise the use of external counsel for general matters.

With effect from 5 August 2011 the functions of the Banking Unit of the National Treasury Management Agency were transferred to the Department of Finance. Prior to transferring to the Department, the Banking Unit had put in place a legal panel of three external law firms using a competitive tendering process. When the functions of the Banking Unit were transferred, the contract for legal services with those external law firms was novated to the Department. It is intended that the Department of Finance will re-tender for a panel of external law firms and it is expected that further savings will be made through this tender process.

Counsels fees in relation to litigation in which the Department of Finance is involved are regularly reviewed by the Office of the Attorney General and the Chief State Solicitors Office to ensure that costs are minimised and duplication is avoided.

State Agencies under the remit of my Department have provided me with the following information:

Financial Services Ombudsman's Bureau

The Financial Services Ombudsman's Bureau tendered for legal services in 2012. They now have three legal firms working with the Bureau which will lead to better value being achieved going forward.

National Assets Management Agency (NAMA)

Since its establishment, NAMA has sought to minimise legal costs to the greatest extent possible. It has established panels of legal firms and runs mini-tenders in order to ensure that pricing for any work assignment is as competitive as possible. In 2010 and 2011, NAMA incurred legal costs arising from the requirement to carry out legal due diligence on its acquired loans; these costs were part of overall due diligence costs which were largely recovered from the participating institutions. As regards on-going legal costs incurred by NAMA in the management of its acquired portfolio of loans, these fell from €9.5 million in 2011 to €4.6 million in 2012. The higher level of legal costs in 2011 reflected costs associated with NAMA's establishment. NAMA legal costs include costs incurred in defending litigation initiated by debtors who NAMA has to defend to protect the taxpayers interest and this element of cost is therefore outside of the Agency’s control. In addition, some of the legal costs incurred by NAMA are recoverable from debtors and, in the case of enforcement, from the proceeds of asset disposals by receivers.

National Treasury Management Agency (NTMA)

The NTMA has a range of functions providing asset and liability management services to Government. These include borrowing for the Exchequer and management of the National Debt, the State Claims Agency (SCA), the New Economy and Recovery Authority (NewERA), the National Pensions Reserve Fund (NPRF), the National Development Finance Agency (NDFA) and National Asset Management Agency (NAMA). The NTMA assigns staff to NAMA and also provides it with business and support services and systems. NAMA reimburses the NTMA for the cost of these staff and services from its operations. NAMA is responsible for its own legal costs.

The NTMA typically sources legal advice in-house and, apart from exceptional matters such as implementation of the various Government responses to the economic and financial issues facing the State, expenditure on external law firms and barristers by the NTMA has generally been limited. The NTMA recently conducted a competitive tender for the appointment of a panel of external legal advisers in relation to Irish law and it is expected that the panel appointments will take effect in June 2013. The panel will operate for a period of three years (with an option for the NTMA to extend it for a further 2 year period) and the fees rates will be fixed for the initial three year period. The legal panel will also cover the NPRF and NewERA.

The NDFA incurs external legal fees on behalf of State Authorities principally associated with its mandate for procuring public private partnerships projects. All appointments of external legal advisers in respect of such projects are by competitive tender.

The NDFA is designated as the State Claims Agency when performing the claims management and risk management functions delegated to it under the National Treasury Management Agency (Amendment) Act 2000.

Following a competitive tender process, legal fees paid to defence solicitors relating to CIS* and ELPLPD** claims were capped at 40% of the plaintiffs’ professional legal fees down from the previous figure of 50%. Some tenderers accepted fee levels of less than the 40% cap. The combined impact of the tendering process and the 8% government reduction*** has reduced solicitors' legal fees by as much as 20% in some instances.

* Clinical Indemnity Scheme (CIS) relates to the management of all clinical claims taken against health enterprises/hospitals and clinical, nursing and allied healthcare practitioners covered by the Scheme.

** Employer Liability (EL) means the liability of an employer to its employees for its negligent acts or omissions, and those of its employees. Public Liability (PL) means the liability of an owner/occupier of premises for its negligent acts or omissions affecting members of the public. Property Damage (PD) Liability means the liability of an owner/occupier for its negligent acts or omissions leading to damage to a third party’s property.

*** All fees for external legal services provided to the SCA are subject to the 8% reduction as implemented by Government Decision S180/20/10/0964C of 3 February, 2009 which came into effect from 1 March 2009 for services rendered after that date.

The State Claims Agency (SCA) has also imposed caps on the levels of the fees paid to its panel solicitors in District, Circuit and High Courts and in respect of catastrophic injury.

In August 2012, the SCA announced a new procurement structure requiring barristers to engage in a competitive tendering process under which their fees were capped at up to 25% below prior levels. This was the first time a State agency had procured barristers for personal injury claims in this way.

Under the new procurement arrangements, barristers were required to set out their fees and compete with each other, subject to the respective caps specified by the SCA, for a wide range of legal services in respect of the High Court, District Court and Circuit Court. The Invitation to Tender was posted on the State’s public procurement website, www.etenders.gov.ie and closed in October 2012. The barrister panels will be announced in June. In total the SCA received approximately 1,000 responses to the invitation to tender. The new procurement structure also contained a provision that for the first time enabled barristers who have been in practice for less than five years to supply their services to the Agency. It is expected that this initiative will reduce the overall level of fees paid to barristers by as much as 35%.

The SCA endeavours wherever possible to reduce defence legal costs. Only a proportion of the claims managed result in defence legal costs as a significant volume of these are managed by the SCA's in-house legal team or due to their nature can be managed directly by the SCA's claims management team without resort to legal services thereby limiting the use of external legal services.

Revenue Commissioners

I am advised by the Revenue Commissioners that the Revenue Solicitor provides legal services for Revenue and in that capacity engages external barristers in circumstances that require specific legal advices and legal opinions in Tax, Customs and general litigation, for advising proofs for Court and Administrative Tribunal cases and for providing full advocacy services in the conduct on Tax, Customs and general litigation (both civil and criminal) before the District, Circuit, High and Supreme Courts, Appeal Commissioners and other administrative tribunals. External solicitors are engaged for debt collection and recovery. These are key components of Revenue's care and management of tax and duties.

Enhanced procedures governing the payment of professional fees to the panel of Counsel instructed by the Revenue Solicitor's Division were introduced in 2011 and further augmented and strengthened in 2012. The Revenue Solicitor and Deputy Revenue Solicitor manage the approval, selection and payment of Counsel. The procedures are designed to achieve the objectives of transparency, good governance and value for money

Indicative capped fees have been fixed for Counsel briefs and other items relating to Revenue litigation. Advisory work provided by Counsel will be paid on the basis of hours worked by Counsel subject to capped fees. The panel has also been expanded to ensure the utilisation of the appropriate level of counsel and to ensure value for money.

In addition to internal procedures to ensure value for money, all brief fees paid to counsel in excess of €10,000 exclusive of VAT, are considered and advised on by the Office of the Attorney General and then considered and sanctioned by the Department of Public Expenditure and Reform. Revenue also consults with the Chief State Solicitor's Office and the Attorney General's Office on fees paid to counsel to ensure consistency across State agencies.

The total fees paid in the years 2008, 2009, 2010, 2011, 2012 are shown in Table 1.

Table 1

Total fees paid to Counsel in respect of services provided to Revenue Commissioners, including VAT.

2008	2009	2010	2011	2012
€1,949,170	€1,660,464	€1,489,762	€1,720,556	€ 2,168,905

Revenue has contracts with six firms of solicitor to provide legal services associated with debt collection and recovery. These contracts were entered into following an open tendering process undertaken in 2009. The contract came into operation on 1 January 2010 and will remain in place for six years.

A Value for Money Policy Review (VFMPR) on the "Use of External Solicitor Enforcement to Recover Tax Debt" was undertaken to as part of the Revenue Commissioners' programme of review under the VFMPR initiative. The object of the evaluation was to assess whether the expenditure by Revenue on the use of external solicitors to pursue tax debts represented value for money. The overall conclusion was that such expenditure did represent value for money.

The report, which was laid before the Houses of the Oireachtas in March 2012 can be accessed through the following link:

http://www.revenue.ie/en/about/publications/vfmpr-external-solicitor-enforcement.pdf

The total fees paid in the years 2008, 2009, 2010, 2011, 2012 are shown in Table 2.

Table 2

Total fees paid to External Solicitors in respect of services provided to Revenue Commissioners.

2008	2009	2010	2011	2012
€4,387	€4,803	€4,804	€4,909	€ 5,000

While Tables 1 and 2 show increased expenditure, this is attributable to significant volumes of work, I am satisfied that the underlying trend in costs is downward.