Dáil Éireann Debate, Thursday - 7 March 2019
2. Deputy Maurice Quinlivan asked the Minister for Business, Enterprise and Innovation the actions she has taken to date in response to the findings and recommendations of the Joint Committee on Business, Enterprise and Innovation’s cost of doing business report; and if she will make a statement on the matter. [11342/19]
View answerWhat action has the Department taken in response to the findings of the Oireachtas Joint Committee on Business, Enterprise and Innovation's Report on the Cost of Doing Business? I am specifically interested in what the Department has done to help Irish businesses to deal with the serious problem of insurance costs. Massive insurance premia and the refusal of insurers to cover some sectors entirely is resulting in businesses closing down and people losing their jobs. What is the Department doing to address this escalating problem for businesses?
I thank Deputy Quinlivan for his question. Any proposals that can contribute to keeping the costs of doing business down are to be welcomed, including those contained in the report of the Oireachtas Joint Committee on Business, Enterprise and Innovation on the costs of doing business. In terms of maintaining our cost competitiveness, both the public and private sectors must proactively manage the controllable portion of their respective cost bases, drive productivity and continue to take action to minimise costs.
There are a number of areas addressed by the committee's report that come under the remit of the Department of Business, Enterprise and Innovation, including employment permits, the work of the Personal Injuries Assessment Board, PIAB, access to affordable finance for SMEs and supports for business productivity. The Department is taking action on a number of issues relevant to the recommendations set out in the report. We have reviewed the policies underpinning the current employment permits regime to ensure that it is fully supportive of Ireland’s emerging labour market needs, including skills and labour shortages in certain sectors. The Ministers for Business, Enterprise and Innovation and Justice and Equality announced yesterday that the spouses and partners of highly skilled workers coming here from outside the EEA will now have immediate access to the labour market, effective from 26 March. We have also amended the employment permits regulations to allow for the granting of general employment permits to certain chef grades, which has been welcomed by the hospitality sector.
The work of the Personal Injuries Commission, whose second and final report was published in September 2018 by my Department, the implementation of the report on the cost of motor insurance and the complementary work of the cost of insurance working group all should help to reduce insurance costs for businesses. We were pleased to bring through the Oireachtas the Personal Injuries Assessment Board (Amendment) Act 2019, which was signed into law by the President on 25 February 2019. We propose to commence that Act shortly. This is important legislation as it enhances the role of the PIAB to benefit users of the service and society more generally and it forms an integral part of the Government’s response to facilitate cost savings.
Additional information not given on the floor of the House
We are committed to ensuring that SMEs have access to appropriate and affordable finance and the Department supports ongoing key SME access to finance initiatives including the credit guarantee scheme, the Brexit loan scheme, the future growth loan scheme and the microenterprise loan fund scheme. All these schemes have been developed to meet the specific needs of SMEs and to provide them with finance at lower costs and on better terms and conditions than available on the marketplace.
In addition to the wide range of existing supports provided by the Department and agencies, budget 2019 allocated additional funding for the Department to boost business productivity, for example, a doubling of the retail online pilot scheme to €1.25 million. An additional €2.75 million was also awarded to Enterprise Ireland for its SME regional innovation and technology clusters programme and €5 million to the local enterprise offices, LEOs, to support a broad range of indigenous microenterprises to prepare for the challenges and opportunities associated with Brexit. Budget 2019 provides €8 million extra for the Department’s Brexit response and the expansion of our global footprint.
It is also important to be aware of the role that the National Competitiveness Council, NCC, plays in relation to competitiveness. The NCC is an independent advisory body that reports to the Taoiseach and the Government, through the Minister for Business, Enterprise and Innovation, on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland’s competitiveness position. The reports published by the NCC, which include the Costs of Doing Business Report, Ireland’s Competitiveness Scorecard and Ireland’s Competitiveness Challenge effectively monitor the cost of doing business in Ireland.
We are in a really absurd situation here. Opposition parties, business groups and citizens have been pleading for years with the Government to do something about the rotten insurance system in this State but the Government refuses point blank to do anything serious about it. The insurance system in Ireland is broken. It is bleeding ordinary motorists dry with ridiculously high premiums that are not seen anywhere else in the world. The situation is so bad that businesses are closing down because their insurance premiums are increasing by 300% and 400% in some cases. This is pure greed on the part of insurance companies but they are being allowed to get away with it by this Government. It is ridiculous that when asked about the cost of insurance, all the Government does is cite the cost of insurance working group. We need action, including new laws and we need to challenge the insurance industry on its behaviour. We certainly do not need endless reports. Has the Department of Business, Enterprise and Innovation met insurance companies to find out why some of them are refusing to insure entire sectors, as we are seeing with play centres across the country?
We are all aware of the negative impact of high insurance costs on consumers and business. Consumers are entitled to a fair and reasonable price for insurance. Of course, motor insurance falls under the remit of the Minister for Transport, Tourism and Sport, while responsibility for the insurance industry more generally is a matter for the Minister for Finance. The Department of Business, Enterprise and Innovation has no direct responsibility for insurance. As I said earlier, however, much work has been done by my Department and the Department of Finance on the PIAB. The Personal Injuries Assessment Board (Amendment) Act was signed into law in February. Anecdotal evidence suggests that insurance premia have fallen in recent times, including motor, home and business insurance. Insurance is just one of the many costs faced by businesses, which also include rates. The Government is working on the issue. The Minister of State at the Department of Finance, Deputy D'Arcy, has been engaged on the matter for some time, as has my Department. The measures that we have put in place will assist business owners.
The Government is not as active as it should be in addressing the cost of insurance. Businesses and their employees are losing out but there seems to be no urgency on the part of the Department of Finance to take the radical action needed. It is up to the Department of Business, Enterprise and Innovation to stand up for Irish businesses on this critical issue. Commenting on the latest update from the cost of insurance working group, the Alliance for Insurance Reform said the following:
This the time for real action because the insurance crisis is affecting Irish charities, sports clubs, festivals, voluntary groups, playgrounds, local authorities and businesses right now. Playing with the statistics looks like moving the deck chairs around the Titanic.
These damning comments stem from the alliance's frustration at the Government's lack of urgency, particularly on the part of the Departments of Finance and Business, Enterprise and Innovation. The latter needs to take the lead role on this issue because jobs are being lost and businesses are closing down. This must be a priority for the Department.
I commend the work done by the Oireachtas Joint Committee on Business, Enterprise and Innovation and in particular, its report on the cost of doing business. It is a positive indication of the commitment of the members of that committee that it produced a report containing 50 recommendations. Not all of the recommendations relate to the Department of Business, Enterprise and Innovation but we have taken action on those that do. We are very conscious of the high costs of doing business in certain areas. Indeed, Deputy Eamon Ryan has also submitted a question on the costs of doing business in this country. Insurance costs contribute to the overall costs of doing business here, including labour costs, rates and so on. It is very important that we highlight problems in the insurance sector, as has been done by the Minister of State, Deputy D'Arcy, and others. The legislation to which I referred earlier will contribute to bringing down the cost of insurance. As I said already, if one compares the cost of insurance in 2017 with 2018 and 2019, one will see that it is falling. We hope that it will fall further as a result of the various measures that the Government has put in place.
