Written Answers Nos. 43 - 63
43. Deputy Michael McCarthy asked the Tánaiste and Minister for Social Protection the position regarding an appeal for carer's allowance in respect of a person (details supplied) in County Cork; when that person will receive a decision; and if she will make a statement on the matter. [13508/15]
View answerThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was referred to an Appeals Officer on 25 February 2015, who will make a summary decision on the appeal based on the documentary evidence presented or, if required, hold an oral hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions in relation to social welfare entitlements.
44. Deputy Michael Moynihan asked the Tánaiste and Minister for Social Protection when legislation will be brought forward in relation to the changes to the contributory State pension planned under the national pensions framework; if she will provide clarity on this matter for persons who are currently unsure of their future pension eligibility; and if she will make a statement on the matter. [13509/15]
View answerThe State pension is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives and the reform measures introduced to date go somewhat toward that goal. To ensure that the individual can maximise their entitlement to a State pension, all contributions paid over their working life from when they first enter insurable employment until pension age is taken into account when assessing their entitlement and the level of that entitlement.
Since 1961, when contributory pensions were first introduced, the average contributions test has been used in calculating pension entitlement. Work has commenced on changing this to a total contributions approach, where anomalies arising with the current method would not occur. Under the total contributions approach, the number of contributions recorded over a work life will more closely reflect the rate of pension payment received.
It is expected that the total contributions approach to pension qualification will replace the current average contributions test for State pension (contributory) from 2020, although that date is subject to change, as this is a very significant reform with considerable legal, administrative, and technical challenges to be overcome in its implementation. When proposals are agreed, legislation will be brought forward to underpin the necessary changes. It is unlikely that this legislation will be ready in the current year. It is my intention that the changes will be announced well in advance of introduction, to allow those workers affected to factor the new rules into their retirement planning.
Where a person does not qualify for a full contributory pension following these reforms, alternatives such as the State pension (non-contributory) will continue to be available.
45. Deputy Tom Fleming asked the Tánaiste and Minister for Social Protection if she will expedite consideration of an appeal for a rent supplement in respect of a person (details supplied) in County Kerry; and if she will make a statement on the matter. [13572/15]
View answerThe Social Welfare Appeals Office has advised me that an appeal by the person concerned was referred to an Appeals Officer on 24 March 2015, who will make a summary decision on the appeal based on the documentary evidence presented or, if required, hold an oral hearing.
The Social Welfare Appeals Office functions independently of the Minister for Social Protection and of the Department and is responsible for determining appeals against decisions in relation to social welfare entitlements.
46. Deputy Clare Daly asked the Minister for Finance if a system is in place to highlight to citizens the garages which have been involved in and prosecuted for selling laundered diesel, and the penalties imposed upon those garages. [13465/15]
View answerI am advised by the Revenue Commissioners, who are responsible for tackling all forms of fuel fraud, that every person on whom a fine or a penalty is imposed by a court under the taxes acts, including fines or penalties on foot of a conviction by a court for a fuel laundering offence, will have their name, address and occupation published in accordance with Section 1086 of the Taxes Consolidation Act, 1997. The defaulters list is published every 3 month on Iris Oifigiúil and on the Revenue website. The data can be accessed by the public at http://www.revenue.ie/en/press/defaulters/index.html.
In addition, a register of auto fuel and marked fuel traders' licenses is published on the Revenue website and these details are updated monthly. The data can be accessed at
http://www.revenue.ie/en/tax/excise/mineral-oil-traders/licensed-auto-fuel-traders.xls ; and http://www.revenue.ie/en/tax/excise/mineral-oil-traders/licensed-marked-fuel-traders.xls .
Revenue may revoke a mineral oil trader's licence and where this happens it is removed from the register and, should the person continue to trade without a licence, the filling station will be closed down by Revenue.
47. Deputy Pearse Doherty asked the Minister for Finance if he will clarify the practice whereby some utilities offer credit or vouchers off a utility bill yet charge value added tax on the full pre-reduction price; if this is an acceptable practice; and if he will make a statement on the matter. [13472/15]
View answerI am advised by the Revenue Commissioners that VAT is a consumption tax, that is, it is a tax that is paid by the final consumer of the good or service. VAT is an EU-wide tax and Irish VAT law must comply with the EU VAT Directives. Section 37(1) of the VAT Consolidation Act 2010 provides that VAT is chargeable on the full consideration which a taxable person becomes entitled to receive in respect of or in relation to a supply of goods or services "including all taxes, commissions, costs and charges whatsoever" but not including the Value-Added Tax itself.
It is Revenue's understanding that, in general, utility providers offer discounts in two ways. The first is a percentage discount, say 5%, on the standard energy unit price. The discounted price, in this case 95% of the standard energy unit price, is then used to calculate the VAT-inclusive bill amount. In this way the customer does not pay VAT on the 5% discount. The second way is by means of a bill credit or cashback. The bill credit or cashback amount is offset against the VAT-inclusive bill. Take, for example, a customer whose VAT-inclusive bill is €227 made up of €200 plus €27 VAT. If this customer receives a bill credit or cashback of €100 then the customer's bill is only €127. The utility provider accounts for VAT on the VAT-inclusive amount of €127 (VAT-exclusive amount of €112 plus €15 VAT at 13.5% on the €112) being the full consideration which the provider becomes entitled to receive in relation to that supply. The customer's bill credit or cashback of €100 is essentially a VAT-inclusive discount made up of a VAT-exclusive amount of €88 plus €12 VAT at 13.5% on the €100). If this is the practice described by the Deputy then it is in line with VAT legislation.
48. Deputy Stephen S. Donnelly asked the Minister for Finance his views that an independent appeals process should be available to borrowers who are working with lenders to restructure their debts; if so, the way and when this might be accomplished; and if he will make a statement on the matter. [13256/15]
View answerIf the Deputy's question is in relation to the operation of the Personal Insolvency legislation, I should point out that the implementation and monitoring of this legislation comes under the responsibility of my colleague, Frances Fitzgerald, TD, Minister for Justice and Equality. The Deputy should, therefore, direct his question to Minister Fitzgerald.
The Central Bank's Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residence. Provision 49 of the CCMA provides that a lender must have an appeals process to enable a borrower to appeal in relation to a decision of the lender and for this purpose must establish an Appeals Board to consider and determine any such appeals submitted by borrowers.
If the borrower is not happy with the outcome of the appeal/complaint made to the lender they can refer the matter to the Financial Services Ombudsman (FSO). The FSO, as an independent body, will consider whether the lender complied with the CCMA in reaching the decision and may direct a lender to re-assess the borrower's case. Further information on how to make a complaint to the FSO is available at www.financialombudsman.ie.
The Central Bank also has a Code of Conduct for Business Lending to Small and Medium Enterprise (the SME Code). Under the SME Code, regulated entities must have and implement policies and procedures for dealing with SME borrowers in financial difficulties. Such policies and procedures must be aimed at assisting the SME borrower in the SME borrower's particular circumstances. In particular provision 21 of the SME Code requires that the regulated entity must make available to borrowers in financial difficulty, an information booklet containing, inter alia, the borrower's right to appeal a regulated entities decision on an arrangement and the timeframes involved. Where a regulated entity is not willing to offer an alternative repayment arrangement, or if an SME borrower is not willing to accept an alternative repayment arrangement, the regulated entity must advise the SME borrower of its right to make an appeal to the regulated entity. Where a participating bank refuses to assist with the restructuring of credit facilities up to €3,000,000, SME borrowers may be entitled to refer the matter to the Credit Review Office. SME borrowers with an annual turnover of less that €3,000,000 may also take their complaint to the Financial Services Ombudsman.
49. Deputy Pearse Doherty asked the Minister for Finance the number of the 370 applications received by the National Asset Management Agency under the rent abatement scheme that were received from debtors and from receivers. [13530/15]
View answer50. Deputy Pearse Doherty asked the Minister for Finance the number of the 370 applications received by the National Asset Management Agency for the rent abatement scheme related to commercial tenants in a shopping centre in County Cork. [13531/15]
View answer51. Deputy Pearse Doherty asked the Minister for Finance the number of vacant shops in a shopping centre in County Cork that are secured by the National Asset Management Agency. [13532/15]
View answerI propose to take Questions Nos. 49 to 51, inclusive, together.
I am advised by NAMA that the 370 applications that it has received to date under its rent abatement initiative relate to 56 debtor connections, eight of which are fully enforced and a further 24 are partially enforced.
As the Deputy is aware, NAMA has acquired loans and is not the owner/operator of properties. Properties securing NAMA's loans continue to be managed by their existing owners or, in the case of enforcement, on their behalf by duly appointed insolvency practitioners. As a secured lender NAMA cannot comment on individual assets.
As Minister for Finance I am happy to respond to questions on general policy matters relating to NAMA however it would not be appropriate for me to comment on individual assets that secure NAMA's loans or on commercial arrangements between private parties.
I would like to remind the Deputy that NAMA operates a dedicated email address, oir@nama.ie, to enable TDs and Senators to raise matters of concern directly with it and I would recommend that if the Deputy is concerned about a particular issue, he should feel free to bring this to NAMA's attention at this address. I can assure the Deputy that NAMA fully investigates all matters of concern brought to its attention.
52. Deputy Clare Daly asked the Minister for Finance if he will formally request from Ulster Bank the details of its procedures for dealing with shortfall unsecured debt, consequent to the proceeds from the sale of a family home not covering the original amount borrowed to buy the house. [13538/15]
View answerSubject to compliance with relevant statutory or regulatory requirements, decisions on credit are a commercial matter for the individual financial institution. Accordingly, the particular policies and procedures put in place by credit institutions to deal with their impaired or distressed loans are commercial matters for the individual credit institution and I have no role in such matters.
However, there are certain consumer protection regulatory requirements in place that apply to all regulated mortgage lenders. On a general level, the Consumer Protection Code requires financial service providers to act honestly, fairly and professionally in the best interests of its customers. In addition, the Code of Conduct on Mortgage Arrears (CCMA) contains a number of further protections for a person who is in arrears on a mortgage secured on his or her primary residence. The CCMA also provides that, where a lender disposes of a property that has been repossessed, the lender is obliged to provide information to the borrower on his/her liability for
1. the balance of the outstanding debt (if any)
2. details and amount of any costs arising from the disposal of the property which have been added to the mortgage loan account and
3. the interest to be charged on the remaining balance (if any).
As the Deputy has indicated, unless the shortfall amount has been otherwise secured it will, following the sale of the property, be an unsecured debt and can, if necessary, be treated as such in the new insolvency frameworks provided for in the Personal Insolvency Act. Furthermore, any insolvency arrangement put in place under that Act to deal with a mortgage shortfall will, in order to protect the interests of debtors and any dependants, have regard to the Insolvency Service of Ireland income guidelines on a reasonable standard of living and reasonable living expenses.
53. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which provision will be made to ensure that first time house buyers, or those currently without a family home, are not priced out of the market by investors; the extent to which provisions already in place to assist first time buyers continue to remain effective; and if he will make a statement on the matter. [13589/15]
View answerAs the Deputy will be aware, the Central Bank of Ireland has put in place new macro prudential regulations for residential mortgage lending. These regulations provide that, in respect of mortgage for a principal dwelling, first time buyers will be subject to a maximum mortgage LTV of 90% for a property valued up to €220,000, and subject to an 80% LTV on any excess value above that amount. For non-first time buyers, a mortgage will be limited to 80% of the value of a principal dwelling house.
However, investors who wish to purchase a buy to let property will have to meet a higher deposit threshold when borrowing from a bank to fund the purchase. Such borrowers will be subject to a loan to value ratio of 70% meaning that they will have to have 30% deposit in order to obtain a mortgage on a buy to let property.
Additionally the Deputy may wish to note that, in Budget 2015, I announced a number of measures to support a functioning housing market. In particular, in order to support first time buyers to save towards a deposit for their first home, DIRT will be refunded in respect of savings up to a maximum of 20% of the purchase price. This measure will run until the end of 2017.
54. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this economy remains competitive in the context of all others throughout the European Union, both within and outside the eurozone; and if he will make a statement on the matter. [13590/15]
View answerSubstantial progress has been made in terms of improving Ireland's competitiveness in recent years.
There has been a significant improvement in Ireland's economy-wide cost competitiveness. The European Commission in its recent winter forecasts estimated that real unit labour costs in Ireland fell by 4.3 per cent for 2014 as a whole, which is the largest decline across all EU Member States and compares with a fall of 1 per cent in the UK, a fall of 0.2 per cent in the USA and increases of 0.1 per cent in the EU, and 0.3 per cent in the euro over the same time period.
Improved competitiveness has been achieved through wage moderation as compared with our trading partners as well as through productivity improvements. In addition, relatively low consumer price inflation over the last number of years has contributed to the improvement in Ireland's competitiveness because Irish price levels have fallen considerably relative to those of our euro area peers. For instance, annual HICP inflation in Ireland has been below that of the euro area average for every year since 2009.
The European Central Bank's Expanded Asset Purchase Programme (EAPP), which began on 9 March, has been associated with a depreciation of the euro in recent months. This should also improve the competitiveness, and therefore the export potential, of firms in Ireland.
55. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which current economic indicators remain in line with best practice; the extent to which this is likely to generate positive economic activity over the next five years; and if he will make a statement on the matter. [13591/15]
View answerFirst estimates of economic activity for 2014 show that real GDP rose 4.8 per cent in 2014 compared with 2013. GNP rose by 5.2 per cent. Domestic demand grew on an annual basis for the first time since 2007. Both private consumption and investment contributed to this growth. Exports rose by 12.6 per cent annually in 2014. This was the fastest rate of expansion since 2001. Exports are now at an all-time high. Based on data published to date, Ireland was the fastest-growing economy in the EU in 2014.
Other data released recently have provided room for encouragement. Consumer spending was strong in 2014 with the volume of retail sales up by over 6 per cent when compared with 2013. Core sales (excluding motor trades) were up by close to 4 per cent in 2014. This trend has continued into 2015. Headline sales were up 8.2 per cent in February with core sales up by 4.5 per cent year-on-year.
Investment is also growing, with both construction activity and machinery and equipment spending on a rising path. Recovery in the construction sector continued in February with the Purchasing Managers' Index for the sector recording its eighteenth successive month of expansion. The euro has depreciated considerably on a trade-weighted basis since last summer. This is a positive development for the Irish export sector.
The improvements in the real economy are being reflected in the labour market. Total employment grew by 1.5 per cent (+29,100) over the year to Q4 2014, marking a ninth successive quarter of employment growth. This was driven by increases in full-time employment and was broadly-based, with gains recorded in 11 of the 14 sectors reported by the CSO. The unemployment rate continues to fall from the peak of 15.1 per cent in early 2012, but still remains high at 10.1 per cent in February this year.
My Department published its latest macroeconomic forecasts in October with Budget 2015 in which GDP is expected to expand by 3.9 per cent in 2015 and 3.4 per cent in 2016. Annual average growth of just over 3 per cent is expected in the following years. Revised forecasts will be published with the Spring Economic Statement next month and these will take into account the latest data and developments at that point.
56. Deputy Bernard J. Durkan asked the Minister for Finance the steps required to prevent large scale repossessions of family homes where the borrowers are willing to make or continue to make payments within their means and circumstances; if particular attention has been drawn to unregulated third parties who have acquired the loan books; and if he will make a statement on the matter. [13592/15]
View answerThe Government's response to mortgage arrears has been multi-faceted.
The Central Bank has undertaken capital assessment reviews, stress tests, distressed credit operation reviews, balance sheet assessment exercises, a range of on-site inspections and throughout this period there has been on-going and intensive supervisory engagement with the banks.
The Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residence. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. The CCMA states that a lender may only commence legal proceedings for repossession where the lender has made every reasonable effort to agree an alternative repayment arrangement under the CCMA with the borrower or his/her nominated representative and the specific timeframes set out in the CCMA have been adhered to or the borrower has been classified as not co-operating. The CCMA does however recognise that, having considered the full individual circumstances of the borrower, in certain cases the only available option may be the sale of the property. In some cases this may involve voluntary surrender or legal action for repossession.
When borrowers engage with their lender it is usually possible to agree a sustainable restructure to address and resolve their difficulties. Data released by the Central Bank shows that almost 115,000 mortgage accounts were classified as re-structured at the end of 2014. This represented an increase of about 30,000 accounts over the course of 2014.
In relation to situation where unregulated third parties have acquired loan books the Deputy should note that the Consumer Protection (Regulation of Credit Servicing Firms) Bill 2015 was published in January and second stage of the Bill was taken in the Dáil on 4 February. Since then, my officials have been in contact with the Central Bank and with the Office of the Attorney General to further progress the legislation. It is my intention to ensure that borrowers whose loans are sold by a regulated entity to a currently unregulated entity maintain the same protections as they had prior to the sale. The Bill will continue its progress through the legislative process and I look forward to further discussion of the Bill at Committee Stage. The legislation is not retrospective. However, it will apply to all loans as defined, regardless of when they were acquired, thus capturing loan books that have already been sold. A similar approach was used in 2013 in relation to debt management firms.
57. Deputy Bernard J. Durkan asked the Minister for Finance if he is satisfied that discussions in respect of a common consolidated corporate tax base at European level will not damage this country’s position as a location for foreign direct investment in the future; and if he will make a statement on the matter. [13594/15]
View answerThe EU Commission published the proposal for a Common Consolidated Corporate Tax Base (CCCTB) in March 2011. The proposal provides for common rules for calculating the corporate tax base, a consolidated tax base for all group entities within the EU and apportionment of the consolidated tax base between Member States under a formula of apportionment.
While Ireland remains sceptical of the proposal, we are engaging constructively in the ongoing technical discussions on this issue at EU Council level. Only by actively engaging on these matters can we ensure a full and comprehensive discussion and advancement of Ireland's interests.
This engagement has no impact whatsoever on our corporation tax rate. The draft proposal on the CCCTB does not provide for any harmonisation of corporate tax rates within the EU. We remain steadfastly committed to the 12.5% corporation tax rate which is a central element of our strategy for an export-led sustainable economic recovery that promotes investment and employment. We will continue to play fair but play to win.
The Department of Finance commissioned Ernest & Young to carry out an independent economic impact assessment of the CCCTB proposal and this report was published in 2011. The results of this economic impact assessment indicate that CCCTB would result in a slight reduction in employment and foreign direct investment in the EU. It also points to the possibility of significant winners and losers arising from the re-distribution of tax bases among Member States.
It is clear from the discussions that have taken place to date on the various elements of the CCCTB proposal that there is no consensus among the Member States on the issue. The Commission is currently reviewing the CCCTB proposal with a view to a re-launch of the proposal in the summer and Ireland will actively participate in any ensuing discussions on the matter.
58. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this country’s economic performance remains in line with best practice and expectations throughout the eurozone and the wider European Union; and if he will make a statement on the matter. [13595/15]
View answerIreland was the fastest growing economy in Europe in 2014 with real GDP growth of 4.8 per cent compared with real GDP growth in the euro area economy of 0.9 per cent and 1.3 per cent in the EU economy. Economic growth in Ireland is now more broadly balanced, with exports contributing to growth as a result of competitiveness gains and with the domestic economy (private consumption and investment) also contributing to growth once again.
According to the European Commission, Ireland is expected to be the fastest growing economy in Europe again this year. The European Commission expects Ireland's economy to grow by 3.5 per cent in 2015; the euro area's economy to grow by 1.3 per cent and the EU's economy to grow by 1.7 per cent.
Our priority must be to ensure continued, balanced economic growth in order to further reduce unemployment and to increase living standards.
59. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to monitor the ongoing situation which may lead the United Kingdom to exit the European Union; if he expects the need to take particular steps to protect the financial services sector; and if he will make a statement on the matter. [13596/15]
View answerThe Government's position on developments in relation to the UK's membership of the EU has been set out on a number of occasions by the Taoiseach and the Minister for Foreign Affairs and Trade. The UK's continuing membership of the EU is a strategic objective for the Government. It is very important for our economy and for the ongoing development of good relations between Ireland and the UK. It is the Government's stated position as well that the EU itself is stronger and more effective with the UK as an integral member.
The Government is monitoring developments in the relationship between the UK and the EU very carefully in order to best understand the different interests at stake. My Department is focusing, in particular, on the economic and financial issues involved.
In this regard, it is worth noting that an agreement between this Department and the Economic and Social Research Institute on a research programme covering macroeconomic and taxation issues was signed on 3 February. One of the topics being covered by the research programme concerns the macroeconomic links between the UK and Ireland in the context of joint membership of the EU. This will include trade and investment aspects of our relationship with the UK, including financial services. The research will be published in due course.
We recognise, of course, that the nature of the UK's relationship with the EU is primarily an issue for the British people. While respecting that fact, my Department will continue to work alongside other Departments, particularly the Department of the Taoiseach, to enhance our understanding of any developments which have a potential impact on Ireland. We will also seek to play a constructive role in the evolving debate on the matter, when appropriate.
60. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department continues to monitor the situation in regard to mortgage arrears, with particular reference to family homes; and if he will make a statement on the matter. [13597/15]
View answerTackling mortgage arrears is a priority for the Government. A whole-of-Government approach has been adopted in addressing the issue with a view to maximising the level of loan restructuring arrangements and minimising the number of home repossessions. Initiatives such as the reform of Personal Insolvency legislation and establishment of the Insolvency Service of Ireland, the introduction of a Mortgage Arrears Information and Advice Helpline and the availability of mortgage to rent scheme ensure that borrowers are assisted in dealing with their arrears.
In March 2013 the Mortgage Arrears Resolution Targets (MART) framework was introduced which set out demanding quantitative targets for mortgage arrears resolution at six Irish mortgage lenders who account for about 90% of the mortgages in Ireland. The six lenders (Allied Irish Banks, Bank of Ireland, Permanent tsb, Ulster Bank, ACC Bank and KBC Bank) were required to meet targets for proposed and concluded sustainable solutions at quarterly intervals.
In addition, the Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or in mortgage arrears on their primary residence. The CCMA provides a strong consumer protection framework to ensure that borrowers are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers. Under the CCMA a lender may only commence legal proceedings for repossession only after it has made every reasonable effort to agree an alternative repayment arrangement with the borrower or his/her nominated representative and specific timeframes have been adhered to, or the borrower has been classified as not co-operating.
My Department and the Central Bank monitor the situation in regard to mortgage arrears on an ongoing basis. Data published by the Central Bank in early March for end-2014 showed continued improvements in the number of PDH accounts in arrears of greater than 90 days, which reduced by 7.4% over the quarter, representing the 5th consecutive reduction the number of accounts in arrears for this category. In addition, the number of borrowers reaching agreement with their bank to restructure their mortgage is increasing.
Mortgage arrears is, however, an area that remains under continuous review. More and concerted action can be undertaken by the banks to assist customers in arrears and, as the Taoiseach has previously announced, my Department is considering a range of options to support the existing framework and to improve the uptake of personal insolvency solutions.
61. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which any sector of the economy tends to overheat, having regard to previous experience; if corrective action is required on an ongoing basis; and if he will make a statement on the matter. [13598/15]
View answerMy Department monitors the overall performance of the economy and of individual sectors on an ongoing basis. Key sectors of the economy are subject to scrutiny as part of this process. In addition, my Department plays an active role in supporting and contributing to the Government's range of strategies such as the Construction 2020 Strategy and the Action Plan for Jobs 2015 as well as taxation policy.
These strategies are designed to ensure that the economy, employment and living standards will continue to increase on a sustainable basis across all sectors in the short and longer terms.
62. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Department continue to monitor the levels of bank charges being imposed by various banks; the basis for such charges, nationally and internationally; and if he will make a statement on the matter. [13599/15]
View answerAs I stated in my reply to the Deputy in a previous Parliamentary Question No. 59 on 4 February 2015, all credit institutions in Ireland are independent commercial entities. I have no statutory role in relation to the charges applied by credit institutions. Section 149 of the Consumer Credit Act 1995 requires that credit institutions, prescribed credit institutions and bureaux de change must make a submission to the Central Bank if they wish to introduce any new customer charges or increase any existing customer charges in respect of certain services. Section 149 does not cover interest rates rather it applies to fees and commissions only. The Central Bank may direct the institution not to impose the new or increased charge or it may approve the charge, or approve it at a lower level than requested by the institution. Once approved, the bank is entitled to impose the charge.
My Department published a report on the review of the regulation of bank fees and charges in December 2013. This contains a detailed description of the process by which the Central Bank makes decisions on whether or not to approve proposed charges. It is available on my Department's website at www.finance.gov.ie. Among the key findings of the review was that while fee and commission income has become a more important source of income to the banks in recent years, net fee and commission income in Irish banks was well below the average of their European peers.
The European Communities (Payment Services) Regulations 2009 (the Payment Services Regulations) include requirements for banks and other payment institutions to provide information to the consumer about charges, interest and exchange rates on the accounts and these are reflected in the Central Bank's Consumer Protection Code 2012, which contains requirements in relation to the provision of information on charges to consumers. The website of the Competition and Consumer Protection Commission (CCPC) also lists the various charges imposed by the various financial institutions in Ireland for different types of transactions www.ccpc.ie.
Irish financial institutions have varying models for charges and have different regimes and conditions under which they are willing to grant transaction free banking. Individuals' use of their bank account will be specific to each individual and I would strongly encourage people to look at this comparison site with their specific circumstances in mind in order to decide which institution offers the best product for their pattern of account usage.
63. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which Government policy towards assisting small and medium sized enterprises, by way of enhanced lending for working capital or other purposes, has been successful to date; and if he will make a statement on the matter. [13600/15]
View answerThis Government recognises that small businesses play a central role in the sustainable recovery of the Irish economy. To facilitate this, Government policy since 2011 has been focused on ensuring that all viable SMEs have access to an appropriate supply of credit for working capital or other purposes from a diverse range of bank and non-bank sources.
As regards the success of Government policy towards assisting SMEs with enhanced lending, it should be noted that the most recent Department of Finance credit demand survey shows that 86% of credit applications were approved by the banks, with positive trends also seen around trading performance, profitability and employment.
The Strategic Banking Corporation of Ireland (SBCI) was established during September 2014 with the core purpose of enhancing the supply of credit to SMEs. The SBCI has already signed up the two largest SME lenders in the country, AIB and Bank of Ireland, to deliver products to SMEs. Loans have been available since 9 March 2015 at branches of both banks throughout the entire country. SBCI's funding must be passed to SMEs and the SMEs must receive the full benefit of any discounted rate offered to the partner lenders. SBCI has committed €200m to each of the initial bank lending partners and has a further €400m available to other future lenders. Talks are continuing with circa ten other potential funding partners from both the banking and non-banking sectors. The SBCI will offer working capital facilities which are of at least 2 years duration. It can also offer loans for investment on longer terms, loans to agriculture and loans for the refinancing of credit originally extended by banks who have since exited the Irish market. Further information is available at http://sbci.gov.ie/.
In seeking to build on the progress to date and to further support the financing of growth within the SME sector our focus in 2015, outlined in the Action Plan for Jobs, will be to implement a series of actions under the following thematic areas:
- Support and influence the effective implementation of major policy initiatives to ensure that the maximum benefits are afforded to SMEs;
- Continue to raise awareness and understanding amongst SMEs and entrepreneurs of the full suite of State business supports that are available;
- Ensure that the Local Enterprise Office network is a key conduit in providing information, support and advice to small businesses on access to finance issues and strengthen the linkages between enterprise capacity building, accessing finance and business guidance;
- Deepen our engagement with international funding institutions;
- Facilitate and support the development of a more diverse range of financing options for SMEs;
- Maintain a strong focus on policy impact, evaluation and learning; and
- Develop measures to ensure prompt payments and promote improvements in the payment culture and practices in Ireland.
