Written Answers Nos. 158-179
158. Deputy Joe Carey asked the Minister for Transport further to Parliamentary Question No. 46 of 25 November 2020, the process and timetable for the examination of the submission; when he will be in a position to refer the matter to the Minister for Finance and the Minister for Public Expenditure and Reform; and if he will make a statement on the matter. [42033/20]
View answerMy officials are examining the submission which has been made by some staff of the Irish Aviation Authority. It is a comprehensive and substantial submission which covers a range of superannuation-related issues. As with any submission of this nature, it requires thorough consideration.
I am not in a position to provide a timeline for this but I assure the Deputy that the matter is being dealt with.
159. Deputy Pádraig O'Sullivan asked the Minister for Transport the status of the development of the Cork metropolitan area transport strategy; and if he will make a statement on the matter. [42107/20]
View answerThe Deputy will be aware that the Cork Metropolitan Area Transport Strategy (CMATS) was published earlier this year. It was developed by the National Transport Authority (NTA) in collaboration with Transport Infrastructure Ireland (TII), Cork City Council and Cork County Council.
Noting the NTA's responsibility in the matter, I have referred the Deputy's question to the NTA for a direct reply on the status of CMATS. Please contact my private office if you do not receive a reply within 10 days.
160. Deputy Gary Gannon asked the Minister for Transport the percentage or number of staff working with a disability within his Department and the agencies under his aegis in 2018, 2019 and 2020; and the actions being undertaken by his Department to actively recruit and retain persons with disabilities. [42154/20]
View answerThe information requested by the Deputy is set out in the table below. It should be noted that the data relates to Department staff who have chosen to disclose that they have a disability as defined under the Disability Act 2005.
|
Year |
Percentage of Staff who disclosed a disability |
|
2018 |
3.2% |
|
2019 |
3.95% |
|
2020 |
Not yet available |
In terms of actions being taken to actively recruit and retain persons with disabilities, my Department's Human Resources Development strategy was launched in February 2020 with a strong focus on diversity and inclusion. Strategic priorities derived from this include: Actively promoting inclusion and diversity through initiatives such as Disability Networks, nurturing an attractive, rewarding and inclusive work environment, promoting excellence in Human Resources practices and responding to the changing nature of work.
The Department of Transport also engages the services of the Public Appointments Service (PAS) who is the centralised provider of recruitment, assessment and selection services for the Irish Public and Civil Service.
As the leading recruiter for the Civil and Public Service, PAS welcomes people with disabilities to apply for career opportunities on their website. PAS promote and support the development and employment of people with disabilities and promote diversity and inclusion throughout the Civil and Public Service. Under the Comprehensive Employment Strategy for People with Disabilities for 2015 – 2024, the Government has committed to progressively increasing the statutory target for the employment of people with disabilities from 3% to a minimum of 6% in the public sector by 2024. The Department is continually working to ensure that it meets all commitments in this regard.
I have asked the aegis bodies under my Department to provide the information requested for their organisations directly to the Deputy.
161. Deputy Róisín Shortall asked the Minister for Transport if he will discuss with the National Transport Authority, Irish Rail and Luas the possibility of ensuring the automatic opening of all train and tram carriage doors each time the service reaches a stop without a button having to be pressed by passengers exiting or alighting as a Covid-19 precaution measure both to ensure passengers do not have to press the door opening button and also to ensure good ventilation and circulation of air in the carriages; and if he will make a statement on the matter. [42164/20]
View answerContinued operation of the public transport sector is important, and public transport has been designated among the essential services that have carried on during the Covid crisis. A number of measures have been introduced across the system, guided by public health advice, to ensure the continued operation of services safely during the pandemic, including enhanced cleaning regimes and social distancing measures across the network.
The Government is committed to ensuring that essential transport services, and passengers utilising these services, are protected and supported. The National Transport Authority (NTA) continues to be guided by public health advice to improve journey safety for all across the public transport system and is working closely with transport operators with regard to the implementation of specific measures. .
I have therefore forwarded the Deputy's question to the NTA for direct reply. Please advise my private office if you do not receive a response within ten working days.
162. Deputy Richard Boyd Barrett asked the Minister for Transport if it will be ensured that all the requirements of the Work Safely Protocol issued on 20 November 2020 are implemented with particular reference to the contents of section D3 (details supplied) in his Department; and if he will make a statement on the matter. [42598/20]
View answerMy Department has developed a COVID-19 Response Plan in collaboration with representatives from the staff unions.
A COVID-19 Return to the Workplace Safely Committee has been established under the Plan and meets fortnightly. The Committee’s membership is made of up representatives from my Department's Human Resources, Facilities Management and Information Services Division, the Health & Safety Officer, Union Representatives and Worker Representatives. The Committee's main role is to coordinate all activity related to the Department’s COVID-19 response in respect of the safe attendance at and return to the workplace of its staff, ensuring stringent control measures including social/physical distancing, communications and procedures are in place to minimise the risk to staff and visitors to Department premises. Signage and information regarding physical/social distancing, face masks, hygiene measures, maximum occupancy and other control measures have been placed in multiple areas across all of the Department’s premises.
The vast majority of staff in my Department have been working from home since March 2020 and will continue to do so in accordance with the advice under the Government's Plan for Living with COVID_19 during the currency of the Plan. Where staff are required to attend the office all necessary measures have been implemented to ensure appropriate physical/social distancing.
163. Deputy Mattie McGrath asked the Minister for Finance if the Covid restrictions support scheme will be increased for publicans who are not allowed to operate during the festive period; and if he will make a statement on the matter. [41322/20]
View answer164. Deputy Mattie McGrath asked the Minister for Finance if the Covid restrictions support scheme will be increased for publicans who chose to remain closed during the festive period; and if he will make a statement on the matter. [41323/20]
View answer190. Deputy Christopher O'Sullivan asked the Minister for Finance if hotels can claim the CRSS scheme under level 3 restrictions before 18 December 2020 when county restrictions are to be lifted; and if he will make a statement on the matter. [41731/20]
View answer191. Deputy Christopher O'Sullivan asked the Minister for Finance if pubs that sell food are permitted to reopen from 4 December 2020; if they will no longer be eligible for the CRSS payment from 4 December 2020; and if he will make a statement on the matter. [41734/20]
View answerI propose to take Questions Nos. 163, 164, 190 and 191 together.
The CRSS is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health Regulations to combat the effects of the Covid-19 pandemic. It applies to businesses who, under the specific terms of the regulations, are required to prohibit or significantly restrict members of the public from accessing their business premises, with the result that the business is required to temporarily close or to operate at significantly reduced levels. Support provided under CRSS is intended to enable businesses to meet normal fixed costs associated with their business premises such as rent, insurance, utilities and so on, during the period which they are subject to such restrictions.
Domestic travel restrictions or social distancing measures are not the level of restrictions to which the CRSS refers. To be eligible to make a claim under CRSS, the applicable restrictions should require the business to either prohibit, or significantly restrict, customers from accessing the business premises in which the relevant business activity is carried on.
There has been an easing of restrictions on businesses, with a phased move to Level 3 restrictions nationally from 1 December, with some restrictions easing from 4 December and 18 December respectively. Since 1 December, hotels, guesthouses and B&B’s have been allowed to reopen to provide accommodation services to the general public. Gyms, leisure centres and swimming pools, including those within hotels, were also allowed to reopen for individual use. From 4 December, bars, cafes and restaurants (including hotel restaurants and bars) which serve substantial meals prepared onsite are allowed to open for indoor dining.
In most cases, hotels ceased to be significantly restricted from operating from 4 December and therefore cease to qualify for CRSS from that date. However, a hotel, like other businesses reopening after the period of restrictions, will be eligible to claim an additional week’s support under CRSS (referred to as a ‘restart week’) to assist the hotel in meeting the costs of reopening.
Depending on the particular trade of a hotel, the hotel may, under the current public health regulations, continue to be subject to some level of restrictions. For example, nightclubs are not allowed to reopen under the current public health regulations and restrictions on indoor gatherings remain, which may impact a hotel with significant conferencing facilities or a hotel whose trade consists substantially of the hosting of large wedding receptions (which are limited to 25 patrons under current regulations). In certain limited cases, restrictions under the current public health regulations might amount to significant restrictions for a hotel, having regard to the mix of its services. If so, the hotel will continue to be eligible to claim under CRSS. If a hotel business forms the view that, having regard to the totality of its trade carried on from the hotel premises, it continues to be significantly restricted under the regulations, and therefore is eligible to claim under CRSS, it should retain evidence to support the basis of its claim for future checking by Revenue.
Pubs that serve substantial meals prepared on the premises were allowed to reopen on 4 December and therefore, from that date, ceased to qualify for CRSS. However, they are eligible to claim the restart week on reopening. Pubs that do not serve substantial meals which are prepared on the premises are not allowed to reopen and, therefore, remain eligible to claim under CRSS. I announced an additional seasonal support for businesses who cannot reopen through December. Payable for a period of three weeks beginning 21 December, the additional support will provide up to double the amount of the weekly CRSS support payment due subject to the statutory maximum payment of €5,000 per week.
This additional seasonal support is being made available in recognition of the additional financial impact on those business of being closed at Christmas time, which for many would be a particularly busy trading period. All businesses benefiting from this additional seasonal support will still qualify for the additional ‘restart week’ under CRSS once they can reopen.
Any business that can reopen without having to prohibit or significantly restrict access to their business premises, but chooses not to reopen, will not be eligible to claim under CRSS.
165. Deputy Mattie McGrath asked the Minister for Finance if he will consider tax breaks and reliefs for workers who have incurred additional individual travel costs due to the reduction in carpooling to work during the Covid-19 pandemic; and if he will make a statement on the matter. [41331/20]
View answerAs the Deputy will be aware, employees may claim a tax deduction in respect of (a) the cost of travelling expenses necessarily incurred in the performance of the duties of their employment or office; and (b) the cost of other expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment. However, these deductions do not ordinarily include the cost of travelling to and from a principal place of work.
With regard to considering any tax reliefs on the cost of the use of private vehicles when traveling to and from a place of work, I would draw the attention of the Deputy to the tax expenditure guidelines issued by my Department. Under the guidelines, the introduction of new tax incentive measures should only be considered in circumstances where there is a demonstrable market failure and where a tax based incentive is more efficient than a direct expenditure intervention. While I appreciate the particular contribution made by essential workers attending their place of employment at this time, a measure such as the one proposed does not appear to address a clear market failure, and I have no plans to introduce such a relief.
166. Deputy Sean Sherlock asked the Minister for Finance when an appeal by a person (details supplied) in County Cork will recommence in respect of the disabled drivers and disabled passengers tax concessions scheme 1994. [41335/20]
View answer182. Deputy Michael McNamara asked the Minister for Finance if he plans to implement section 92 of the Finance Act 1989, as amended; when he will replace the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994, determined to be ultra vires of the Minister by the Supreme Court on 18 June 2020; and if he will make a statement on the matter. [41338/20]
View answer185. Deputy Niall Collins asked the Minister for Finance if he will address issues raised in correspondence by a person (details supplied) in relation to the primary medical certificate; and if he will make a statement on the matter. [41382/20]
View answerI propose to take Questions Nos. 166, 182 and 185 together.
The Disabled Drivers & Disabled Passengers Scheme provides relief from VRT and VAT on the purchase and use of an adapted car, as well as an exemption from motor tax and an annual fuel grant. The cost of the scheme in 2019, excluding motor tax, was €72m.
The Scheme is open to severely and permanently disabled persons as a driver or as a passenger and also to certain organisations. In order to qualify for relief an organisation must be entered in the register of charitable organisations under Part 3 of the Charities Act 2009, be engaged in the transport of disabled persons and whose purpose is to provide services to persons with disabilities.
In order to qualify for relief the applicant must hold a Primary Medical Certificate (PMC) issued by the relevant Senior Area Medical Officer (SAMO) or a Board Medical Certificate (BMC) issued by the Disabled Driver Medical Board of Appeal. Certain other criteria apply in relation to the vehicle and its use, including that the vehicle must be specially constructed or adapted for use by the applicant.
The terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994 set out the medical criteria, and that one or more of these criteria is required to be satisfied in order to obtain a PMC.
A Supreme Court decision of 18th June found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a PMC. The judgement found that the medical criteria set out in the Regulations did not align with the regulation making mandate given in the primary legislation to further define criteria for ‘severely and permanently disabled’ persons.
On foot of the legal advice received, it became clear that it was appropriate to revisit the six medical criteria set out in Regulation 3 of Statutory Instrument 353 of 1994 for these assessments. In such circumstances, PMC assessments were discontinued until a revised basis for such assessments could be established. The medical officers who are responsible for conducting PMC assessments need to have assurance that the decisions they make are based on clear criteria set out in legislation. While Regulation 3 of Statutory Instrument No. 353 of 1994 was not deemed to be invalid, nevertheless it was found to be inconsistent with the mandate provided in Section 92 of the Finance Act 1989.
In order to allow for the PMC assessments and appeals to recommence I brought forward an amendment to the Finance Bill to provide for the existing medical criteria in primary legislation. When the Bill is enacted, this will allow for assessments to recommence from the 1st January 2021 in circumstances where the legal basis for such assessments is clarified.
I consider this to be an interim solution only. While I am very aware of the importance of this scheme to those who benefit from it, I am also aware of the disquiet expressed by members of this house and others in respect of the difficulties around access to the scheme. With this in mind I have asked my officials to undertake a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities, and on foot of that review to bring forward proposals for consideration.
167. Deputy Alan Kelly asked the Minister for Finance if he plans to have the Finance (Miscellaneous Provisions) Bill 2020 enacted by end 2020 to ensure that credit unions can have virtual AGMs; if he will commence the relevant sections as soon as possible in order to enable credit unions to pay back interest rebates to members before Christmas 2020; and if he will make a statement on the matter. [41532/20]
View answer196. Deputy Martin Browne asked the Minister for Finance if his attention has been drawn to the fact that due to Covid-19 a credit union (details supplied) has been forced to postpone paying the annual loan interest rebate repayments and dividends to its customers as it cannot hold an AGM to do so; if he will address the lack of legislation to hold an online AGM; if he will contact the Central Bank on the matter; and if he will make a statement on the matter. [41916/20]
View answerI propose to take Questions Nos. 167 and 196 together.
As the Deputy references in his question, under current Government health measures, which limit numbers allowed at public gatherings, credit union annual general meetings (AGMs) would not be able to proceed as normal. The Government has, therefore, brought forward the Finance (Miscellaneous Provisions) Bill 2020 to allow credit unions to hold wholly or partly virtual AGMs and to provide credit unions with greater flexibility in terms of the mechanisms for voting at general meetings. The legislation also provides for an "interim period" which extends the deadline for holding AGMs related to year end-September 2020 until end of April 2021.
This Bill has been listed as priority legislation for enactment this term. The Bill completed all stages in the Seanad on 30 November and is currently expected to be debated in the Dáil shortly.
We will support its progress through the Dáil with a view to enactment before the end of the year.
Once enacted the legislation will take immediate effect and credit unions will be able to convene an AGM to seek whatever approvals may be required from members to pay dividends and a loan interest rebate.
It should be noted that virtual AGMs are not prohibited by Central Bank regulations, rather they are not allowed for under the Credit Union Act 1997.
168. Deputy Alan Farrell asked the Minister for Finance the number of companies in Dublin Fingal availing of wage support schemes, including the Covid restrictions support scheme and the employment wage subsidy schemes, respectively; and if he will make a statement on the matter. [41586/20]
View answerRevenue publishes regular statistical updates on the operation of the Employment Wage Support Scheme (EWSS) and the COVID Restrictions Support Scheme (CRSS). These updates are available at link: https://www.revenue.ie/en/corporate/information-about-revenue/statistics/number-of-taxpayers-and-returns/covid-19-support-schemes-statistics.aspx.
I am advised that while breakdowns by Local Authority area are not available, county level information is provided. The latest CRSS information by county is published in the update dated 3 December at the above link and the latest EWSS information by county is contained in the update dated 12 November also at the above link.
These statistics are updated every Thursday with the most recent available data (and published at the same link).
169. Deputy Thomas Gould asked the Minister for Finance the number of psychoactive substances which were seized on importation by the Revenue Commissioners in each of the years 2015 to 2019 and to date in 2020, in tabular form. [41719/20]
View answerI am advised by Revenue that the table below contains the information requested by the Deputy in respect of seizures by it of psychoactive substances in each of the years 2015 to 2019, and to date in 2020.
|
Year |
Number of Seizures |
Volume (Kgs) |
|
2015 |
65 |
0.7 |
|
2016 |
90 |
3.2 |
|
2017 |
70 |
1.4 |
|
2018 |
80 |
2.8 |
|
2019 |
161 |
60.3 |
|
2020 (01 Jan – 30 Nov) |
645 |
133.9 |
I am also advised that Revenue works closely with the appropriate Government Departments and agencies in the State, including An Garda Síochána, the Department of Justice and Equality and the Health Products Regulatory Authority, in acting against the illegal drugs trade.
170. Deputy Michael Collins asked the Minister for Finance the reason persons (details supplied) do not qualify for the first-time buyers help to buy scheme; if other grants are available to them; and if he will make a statement on the matter. [41870/20]
View answerThe Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation.
I am advised by Revenue that in addition to the conditions laid down in section 477C Taxes Consolidation Act 1997 (TCA), including that the property is occupied as the sole or main residence of a first time purchaser, section 477C(2) defines a ‘qualifying residence’. The legislation is very specific as to the definition of a qualifying residence. It must be a new building which was not, at any time, used or suitable for use as a dwelling. Renovation or refurbishment of old houses to either upgrade or reinstate them for habitation does not qualify for HTB. In the circumstances where the house was previously used as a dwelling but knocked down and rebuilt, then it is “new”.
Based on the information outlined by the Deputy, it appears that in this case the applicants are renovating an old house which would not be considered as “new” for the purposes of the HTB scheme and accordingly doesn’t qualify for the HTB. Revenue does not have discretion to vary the statutory conditions for qualification for relief under the HTB scheme.
171. Deputy Gary Gannon asked the Minister for Finance if his attention has been drawn to the matter of persons with diabetes who cannot get mortgage funds released due to life assurance companies deferring and declining due to underlying illness; and if he will make a statement on the matter. [42134/20]
View answerAt the outset, it is important to note that neither I, nor the Central Bank of Ireland, can intervene in the provision or pricing of insurance products or have the power to direct insurance companies to provide cover to specific individuals or businesses. This position is reinforced by the EU framework for insurance (the Solvency II Directive) which expressly prohibits Member States from doing so. Consequently, I am not in a position to direct companies as to how they price their policies or what terms and conditions apply.
It is my understanding that insurers use a combination of rating factors in making their individual decisions on whether to offer life insurance and what terms to apply. These can include age; health; family medical history; occupation; and lifestyle. In addition, these may be determined or linked to the policy duration. In the case of mortgage protection policies, these tend to be over the lifetime of the repayment schedule. In addition, my understanding is that different insurers do not use the same combination of rating factors. Accordingly, prices and availability of cover varies across the market, and will be priced in accordance with firms’ prior claims experience.
My officials contacted Insurance Ireland, the representative body for such providers, on this issue recently. It stated that while most customers are still able to get life; critical illness; or mortgage protection insurance at this challenging time it is aware of a small number of individual cases where a final decision on some applications is being postponed for a period of time where applicants have an underlying health condition, due to COVID-19. However, it stated that while unaware of any cases where life cover has been denied, such policies are assessed on a case-by-case basis and that underlying health conditions, such as Type 1 diabetes, will be taken into account by the underwriters, as was the case pre-COVID-19. Insurance Ireland further noted that it understands that mortgage protection is not a universal requirement by banks, who in practice apply the following exceptions to holding life cover when an applicant applies for a mortgage:
- The applicant already has sufficient life cover.
- The applicant is over age 50.
- The mortgage is not on the applicant’s principal private residence.
- The applicant cannot get insurance, or only at a much higher rate than normal.
Notwithstanding this, the Deputy will be aware that both Minister of State Fleming and I have consistently and publicly stated that in the context of COVID-19 we expect insurance firms to treat their customers fairly, honestly, and in accordance with the Central Bank’s Consumer Protection Code. The Government will continue to work to protect customers during and after the COVID-19 crisis, and engage with the insurance industry in relation to how it responds to the needs of its customers. This commitment is included in the Programme for Government.
Finally, where somebody feels they have been treated unfairly by a particular insurance provider, they have the option of making a complaint to the Financial Services and Pensions Ombudsman (FSPO). The FSPO acts as an independent arbiter of disputes which consumers may have with their insurance company or other financial service provider. The FSPO can be contacted either by email at info@fspo.ie or by telephone at 01-567-7000.
172. Deputy Catherine Murphy asked the Minister for Finance the amount drawn down from the recovery and resilience facility; the way in which it has been disbursed since drawdown; and if he will make a statement on the matter. [41093/20]
View answerThe Recovery and Resilience Facility (RRF) is the key element of the €750bn Next Generation EU/ Recovery Plan Package agreed by the European Council in July 2020. The Recovery and Resilience Facility accounts for €672.6bn of the total NGEU, made up of €360bn in loans and €312.5bn in grant (2018 prices).
The RRF is currently at trilogue negotiations between the EU Council (represented by the Presidency), the European Parliament and the Commission. The aim is to finalise agreement by end year so that the Facility can become operational in January 2021.
In order to access funds, Member States will need to prepare National Recovery and Resilience Plans (NRRPs) setting out the reform and investment objectives for the years 2021-26, for which they are seeking funding. Member States are expected to submit plans to the European Commission for approval no later than April 2021. Disbursements will then take place upon the achievement of pre-set targets and milestones identified in the plans. The final payment must take place during or before 2026, and the final target/milestone must be met by August 2026 to ensure enough time to process payment.
To date, no funding has been disbursed under the RRF, to any Member State.
173. Deputy Seán Canney asked the Minister for Finance the engagement he has had with a bank (details supplied) in relation to the long-term plans; and if he will make a statement on the matter. [41156/20]
View answer174. Deputy Seán Canney asked the Minister for Finance his views on the competitive nature of retail banking; his further views on the impact the closure of a bank (details supplied) would have on banking in Ireland; and if he will make a statement on the matter. [41157/20]
View answer175. Deputy Seán Canney asked the Minister for Finance if he has considered the impact of the closure of a bank (details supplied) on small businesses, farmers and communities; and if he will make a statement on the matter. [41158/20]
View answerI propose to take Questions Nos. 173, 174 and 175 together.
As the Deputy will be aware, I met with representatives of Ulster Bank on the 21 of October, when I outlined that:
- I expect Ulster Bank to keep all its stakeholders, especially its staff and customers, fully informed about any developments in the review and engage with them in relation to any proposals or decisions that result from the review promptly; and
- I expect that staff, customers and other stakeholders would be informed promptly about any decisions being made
I also emphasised the importance of Ulster Bank to the Irish financial services market, to the wider economy and to the communities it serves. News of the review is, of course, unsettling for all stakeholders, especially the staff and customers.
Ulster Bank confirmed that the strategic review is ongoing and that no decisions have yet been taken. Ulster Bank also confirmed that there is no set timetable for this review and that it is fully aware of the strategically important role that Ulster Bank plays in the provision of financial services to the Irish market.
The continued presence of a viable and active Ulster Bank in the Irish market would be the most welcome outcome. Ulster Bank is a significant employer with 2800 employees and has 88 branches across the country. Ulster Bank is also important in terms of providing competition in the Irish retail banking market.
In the absence of direct knowledge about NatWest’s strategic review of Ulster Bank’s operations, I cannot and will not comment or speculate on possible outcomes as there is no basis for such speculation, which would be open to misinterpretation.
While I will have further engagement with the bank as the review process continues, I would like to emphasise that I have no role in the review or any commercial decisions arising from it. My officials will continue to monitor developments.
As the Deputy may be aware, the responsibility for competition policy rests with the Department of Enterprise, Trade and Employment and the Competition and Consumer Protection Commission (CCPC) is an independent statutory body that is responsible for the enforcement of competition law in Ireland.
The Irish retail banking system is concentrated by international standards, with five retail banks accounting for the majority of new mortgage lending, and three retail banks accounting for the majority of new bank lending to SMEs. However, the wider context is one of improving competition in the provision of financial services, with new entrants to both bank and non-bank lending markets for households and businesses in Ireland already announced. Indeed, it is a welcome development that a new residential mortgage lender has recently entered the market. This will be of benefit to new mortgage borrowers and also to borrowers who may wish to consider switching to a new lender.
Price competition is possible even in a concentrated system. It should be noted that recent trends indicate that rates have been falling. For example, interest rates on new fixed rate mortgages (excluding renegotiations) have fallen from 4.11% in December 2014 to 2.64% in September of this year. There have also been reductions in interest rates on loans to SMEs from 5.19% to 4.33% over the period Q1 2015 to Q2 2020, as well as reductions in interest rates on consumer loans (for example, from 8.3 to 7.54% on APRC consumer loans from January 2015 to September 2020).
As the Deputy may be aware, the Department of Finance published a paper in 2019 by Indecon Consulting on an Evaluation of the Concept of Community Banking in Ireland. This was a follow on to a previous paper on Local Public Banking published by the Department of Finance in 2018. The Indecon report concluded that there is no business case for the State to establish a public banking system in Ireland, supporting the outcome of the previous report on Local Public Banking. Indecon’s report also noted that there is extensive provision of and access to banking services through some 1,900 bank branches, credit union offices and An Post branches across the country, as well as a wide range of Exchequer funded existing supports.
Credit unions are increasing the offering of financial products for their members. The Credit Union Act, 1997 (the 1997 Act) and the Credit Union Act 1997 (Regulatory Requirements) Regulations 2016 set out the services that credit unions may provide to their members. These include loans and savings under the 1997 Act and a further suite of services under the 2016 Regulations such as third party payments; ATM services; bureau de change and certain insurance services on an agency basis. I understand that a number of credit unions provide some of the services provided for under the 2016 Regulations. Where a credit union wishes to provide other services to its members, an application may be made to the Central Bank for approval to provide such services in accordance with the provisions set out in sections 48-51 of the 1997 Act.
One such additional service includes the Member Personal Current Account Service (MPCAS). In 2016, the Central Bank defined and described a suite of additional services known as MPCAS, under which approved credit unions may offer personal current accounts with debit cards, overdrafts and a wide range of payment services within an appropriate risk framework. To date, 54 credit unions have been approved to provide MPCAS.
An Post offers financial services including a payment account, personal loans, credit cards, a range of insurances, money transmission and foreign exchange services. An Post offers counter services for a number of retail banks, allowing customers to lodge and withdraw cash at An Post branches. There is there is a significant network of post offices in areas where there is no bank branch within five kilometres.
176. Deputy Pádraig O'Sullivan asked the Minister for Finance his Department’s current projection of the extent to which the economy will contract in 2020; and if he will make a statement on the matter. [41227/20]
View answerThe latest data shows the economy recovered in the third quarter of this year, with GDP increasing by 11 per cent relative to the previous quarter, following the sharp decline seen in the second quarter, a pattern seen in all economies. As a result, GDP was 8.1 per cent higher on an annual basis. However, as has been well documented GDP is not an accurate measure of what is going on in the domestic economy, given the size of the multinational sector. In the third quarter, modified domestic demand – a proxy for the domestic economy – was down -2.4 per cent year-on-year, with personal consumption down by -5.7 per cent and (modified) investment down by -4.4 per cent. On the other hand, exports were up 5.5 per cent, due to strong growth in the multinational dominated pharmaceutical sector.
Looking forward, a contraction in the domestic economy is expected for the fourth quarter as a result of the move to Level 5 of the Living with Covid Plan. However I am optimistic that it will not be as large as that recorded in the second quarter as many sectors of the economy including construction, manufacturing, education and childcare remained open. In the labour market, while the numbers of persons in receipt of the pandemic unemployment payment has increased by around 105,000 to 350,000 since Level 5 restrictions were introduced, the overall number of recipients has remained well below the peak of 600,000 in early May.
While GDP growth may in the end be positive for the year, modified domestic demand will almost certainly still be negative, in line with previous expectations, with private consumption expected to be particularly hard-hit from the restrictions. The extent of the contraction of the domestic economy will become apparent in the coming weeks as hard economic data covering the Level 5 lockdown becomes available.
177. Deputy Ged Nash asked the Minister for Finance if the Central Bank will be enforcing the guidelines for the Payment Services Directive 2 from 1 January 2021 in view of the fact that it will apply for strong customer authentication for online transactions; if there will be no disruption to online commerce from 1 January 2021 as a result of the new requirements; and if he will make a statement on the matter. [41260/20]
View answer178. Deputy Ged Nash asked the Minister for Finance if online transactions involving a bank will be declined if the retail bank does not comply with the Payment Services Directive 2 in relation to strong customer authentication for online transactions from 1 January 2021; and if he will make a statement on the matter. [41261/20]
View answer179. Deputy Ged Nash asked the Minister for Finance if the Central Bank will be giving a further extension to banks in relation to the new strong customer authentication requirements under the Payment Services Directive 2 in view of the fact that the previous 15 month extension agreed by the European Banking Authority is due to expire at end of 2020; and if he will make a statement on the matter. [41262/20]
View answer181. Deputy Ged Nash asked the Minister for Finance if he or his officials have met with the BPFI in relation to the strong customer authentication requirements under the payment services directive requirements in 2020; if he has received assurances from all retail banks that there will be no disruption as a result of the new requirements on 1 January 2021; if he is satisfied that all retail banks will be ready to implement strong customer authentication on 1 January 2021 without any disruption to online commerce; and if he will make a statement on the matter. [41264/20]
View answerI propose to take Questions Nos. 177, 178, 179 and 181 together.
The revised Payment Services Directive (PSD2) of 2015 introduced strong security requirements for the initiation and processing of electronic payments, which apply to all payment service providers (PSPs). This approach is intended to reduce the risk of fraud for all types of electronic payments (especially online payments) and to protect the confidentiality of the user’s financial data.
PSPs are obliged to apply strong customer authentication (SCA) when a payer initiates an electronic payment transaction. SCA under PSD2 requires the customer to go through two-factor authentication made up of elements from two of three separate categories: knowledge, possession, and inherence. SCA is a combination of something you know (a password or PIN), something you have (a card reader or token generator) and something you are (a fingerprint).
The European Banking Authority (EBA) was tasked with developing standards for strong customer authentication and secure communication. These standards were published on 13 March 2018 and came into effect from 14 September 2019.
In an Opinion published on 16 October 2019 the EBA set the final deadline for full compliance with SCA requirements at 31 December 2020. The EBA felt that this time should be sufficient for issuing and acquiring payment service providers and their merchants to migrate to SCA-compliant approaches and solutions.
Following the outbreak of Covid-19 earlier this year industry bodies from across the EU, including the Banking and Payments Federation of Ireland (BPFI), wrote to the EU Commission and the EBA seeking a further extension to the deadline for compliance with the SCA requirements. They outlined that Covid-19 was clearly having an impact on all sectors of the EU economy and that industry was unlikely to be able to meet the current deadline of 31 December 2020 for SCA migration.
Where a regulated payment service provider (PSP) is in a position to implement the requirements with effect from 1 January 2021, the Central Bank expects them to do so, in a manner that does not cause customer detriment.
Through engagements with regulated PSPs on the progress of their SCA migration plans, the Central Bank is aware of some issues around the full implementation of SCA by 31 December 2020. The Central Bank has communicated to these PSPs that they are required to implement the Requirements as soon as possible in a manner that does not cause customer detriment.
As the deadline for SCA implementation approaches, Department officials will continue to work with the Central Bank and BPFI to minimise payment disruption experienced by consumers and merchants.
