Tuesday, 15 Jun 2021

Written Answers Nos. 108-127

Covid-19 Pandemic Supports

Questions (109, 111, 355, 378, 383, 405)

John Lahart

Question:

109. Deputy John Lahart asked the Minister for Finance the measures he will be taking to support businesses as they reopen in the coming months; and if he will make a statement on the matter. [31776/21]

Barry Cowen

Question:

111. Deputy Barry Cowen asked the Minister for Finance the further economic supports he is providing for businesses as they reopen following Covid-19 restrictions; and if he will make a statement on the matter. [31766/21]

Niamh Smyth

Question:

355. Deputy Niamh Smyth asked the Minister for Finance his plans to reintroduce the restart grants; and if he will make a statement on the matter. [31196/21]

Jackie Cahill

Question:

378. Deputy Jackie Cahill asked the Minister for Finance the details of the financial supports that will be made available to assist pubs that do not serve food to reopen; the way publicans can apply for this funding; when the funding will be paid out; and if he will make a statement on the matter. [31694/21]

Christopher O'Sullivan

Question:

383. Deputy Christopher O'Sullivan asked the Minister for Finance if the Covid recovery support scheme will continue past September 2021 where necessary; and if he will make a statement on the matter. [30181/21]

Bernard Durkan

Question:

405. Deputy Bernard J. Durkan asked the Minister for Finance if the steps he has taken remain adequate to offset the effects of Covid-19; and if he will make a statement on the matter. [32087/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 109, 111, 355, 378, 383 and 405 together.

The Government has committed on multiple occasions that there will be no “cliff edge” to supports for business. Following the Government meeting on 1 June, I announced a number of measures to provide certainty to businesses as public health restrictions are lifted and allow them to plan for the future as they re-open and resume normal trading.

These measures include

the extension of the Employment Wage Subsidy Scheme to the end of 2021,

the extension of the Covid Restrictions Support Scheme to the end of 2021 and its enhancement to provide additional support to businesses upon re-opening,

a new additional business support scheme (Business Resumption Support Scheme or BRSS) for businesses with reduced turnover as a result of public health restrictions to be implemented in September 2021,

the extension of the tax debt warehousing scheme to allow the period where liabilities arising can be “warehoused” to be extended to the end of 2021 for all eligible taxpayers, with an interest free period during 2022, and to include overpayments of EWSS in the scheme, and

the extension of the reduced rate of VAT of 9% applying on a temporary basis to Hospitality and Tourism related goods and services until 1 September 2022.

An enhanced CRSS restart payment is being introduced for businesses availing of CRSS who can re-open from 2 June, they will be eligible to claim an enhanced restart payment of three weeks at double rate of payment paid in one ‘restart week payment’ as they exit the scheme. The statutory maximum payment will be increased from €5,000 per week to €10,000 per week for this restart payment. This means that businesses opening from 2 June will receive a maximum of €30,000 restart payment calculated with reference to the average weekly turnover of the business in 2019.

As the economy re-opens, a new general scheme the BRSS will be introduced, aimed at businesses which have had reduced turnover as a result of public health restrictions. Similar to CRSS it will apply to businesses registered with Revenue, whose profits are chargeable to tax under Case I of Schedule D, and their turnover is reduced by 75% in the reference period ( 1 September 2020 to 31 August 2021) compared with 2019. Qualifying businesses will be able to apply to Revenue for a once-off cash payment, representing an advance credit for trading expenses that are deductible for income and/or corporation tax purposes. The scheme will be implemented in September 2021.

The extensions of the EWSS and CRSS, the tax debt warehousing enhancements and the new BRSS will apply across the economy and are not specific to any sector. However, the Government recognises the continuing challenges facing the Hospitality and Tourism sectors, and have agreed that the reduced VAT rate of 9% applying to the sectors on a temporary basis will be extended to September 2022. The extension of the reduced rate until the end of the 2022 summer season allows for a longer period of recovery for the sector.

The Government will continue to assess matters as we move forward with the reopening of the economy and I will continue to work with Ministerial colleagues to ensure that appropriate supports are in place to mitigate the adverse effects of the pandemic as far as possible.

Programme for Government

Questions (110)

Cormac Devlin

Question:

110. Deputy Cormac Devlin asked the Minister for Finance the status of progress to implement the programme for Government commitment to reduce the cost of insurance and increase competition in the market. [31807/21]

Written answers

Minister for Finance

The Government recognises the concerns felt around the cost and availability of insurance. As such, timely implementation of the Action Plan for Insurance Reform is high on the Government’s agenda. This sets out 66 actions which aim to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden that insurance costs can have on business, community and voluntary organisations.

I would like to note that significant progress has been made to date in this regard. This includes:

The establishment of an Office to Promote Competition in the Insurance Market within the Department of Finance;

The adoption of new Personal Injuries Guidelines by the Judicial Council;

The creation of a public process on enhancing the role of the Personal Injuries Assessment Board (PIAB).

Work is continuing to progress other key actions, such as reforming of the duty of care, strengthening the laws on perjury, enhancing the enforcement powers of the Competition and Consumer Protection Commission (CCPC), expanding the National Claims Information Database (NCID) with a view to publish its first report on employer and public liability insurance, continuing to reform PIAB, and considering issues related to the Central Bank’s upcoming report on differential pricing so that we can respond accordingly.

As the Deputy will be aware, the new Personal Injuries Guidelines came into effect on 24 April. These materially reduce award levels for many categories of common injuries, particularly those of soft tissue. As a result, a number of common injuries will now move to the jurisdiction of the District rather than the Circuit Court, thus reducing associated legal fees. In addition to the lower awards and legal fees, the Guidelines will be used by both the judiciary and PIAB. Accordingly, they should help bring more certainty to claimants and insurers and reinforce the benefits of using PIAB, thereby further reducing the costs of claims.

Another key achievement of the reform agenda is the creation of the new Office to Promote Competition in the Insurance Market . Since its establishment, the Office has held meetings with a wide range of stakeholders including insurance companies, representative bodies, civil society groups and other state regulators on the issues surrounding competition. Minister of State Fleming chairs meetings of the Office which has met on a number of occasions since its establishment and reports on a regular basis to the Cabinet Sub-Group on its progress.

In conclusion, securing a more sustainable and competitive market through deepening and widening the supply of insurance in Ireland remains a key policy priority for this Government. In this regard, it is my intention to work with my Government colleagues to ensure the timely implementation of the Action Plan which will have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland.

Question No. 111 answered with Question No. 109.

EU Funding

Questions (112)

Neale Richmond

Question:

112. Deputy Neale Richmond asked the Minister for Finance if he will confirm the use of the €2.5 billion allocated to Ireland under the SURE instrument operated by the European Commission; and if he will make a statement on the matter. [31594/21]

Written answers

Minister for Finance

In the Budget 2021 speech, I announced the Irish Government’s decision to make a formal application to the European Commission for funding under the Support to mitigate Unemployment Risks in an Emergency (SURE) Instrument.

The SURE instrument is intended primarily to support Member States with efforts to protect workers and jobs, and also support some health-related measures.

The application was submitted on 26 October and was based on costs already expended by the Government as part of the Covid-19 Temporary Wage Subsidy Scheme (TWSS), which satisfied the conditions of the SURE instrument. The Temporary Wage Subsidy Scheme was introduced in March 2020 to support firm viability and preserve relationships between employers and employees. When the scheme ended in August 2020, nearly 70,000 employers and over 600,000 employees had been supported.

The application was assessed and accepted by the European Commission. On foot of this assessment, the Commission published a proposal for a Council Implementing Decision on 16 November, which was subsequently adopted by the European Council on 4 December 2020.

I can confirm to the Deputy that Ireland received €2.492 billion under SURE instrument on 30 March, 2021.

Insurance Coverage

Questions (113)

Cathal Crowe

Question:

113. Deputy Cathal Crowe asked the Minister for Finance his policy in relation to increasing flood insurance coverage and the provision of risk equalisation in this regard; and if he will make a statement on the matter. [31772/21]

Written answers

Minister for Finance

It is important at the outset to state that the provision of cover is a commercial matter for insurance companies, based on an assessment of the risks they are willing to accept. As such the Government cannot interfere in the provision or pricing of insurance, or direct as to what cover is provided on. Consequently, neither I nor the Central Bank of Ireland can interfere in this, as reinforced by the EU framework for insurance (Solvency II Directive).

Current Government policy in relation to increasing flood insurance coverage is primarily focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. Almost €1 billion in flood relief measures is being invested over the lifetime of the National Development Plan 2018-2027, with an expectation that insurers will provide cover where this has occurred. A key pillar of Government policy is the Memorandum of Understanding between the Office of Public Works (OPW) and industry representatives Insurance Ireland. This provides for the exchange of data in relation to the 18 completed flood defence schemes which should, in turn, provide a basis for the increased provision of flood insurance in these areas. While there has been an overall increase in the provision of flood insurance between 2015 and 2020, it is acknowledged that some households are still experiencing difficulties in areas with demountable flood defences. My officials are engaging with both Insurance Ireland, the OPW and other stakeholders regarding flood defence schemes and how the levels of insurance cover might be improved in areas where flood defence works have been completed.

Legislating for compulsory flood insurance was an option considered by my Department in its review of policy in relation to flood insurance in 2016, which formed part of the ‘Interdepartmental Flood Policy Coordination Group Interim Report’. It was found that such an approach would have limited impact on the availability of flood cover. More recently, in 2019 my Department published a discussion paper on flood insurance entitled ‘Public Consultation on Climate Change and Insurance in the context of the ‘Climate Action Plan 2019 to Tackle Climate Breakdown ’. My Department is continuing to review the challenges of property insurance and flooding as part of the action points for my Department under the Climate Action Plan.

Finally, the Deputy should be assured that Minister of State Fleming and I will also continue to engage on all aspects of insurance reform, including flood insurance issues, and that every effort is being made to encourage a responsive approach from the insurance industry.

Covid-19 Pandemic Supports

Questions (114, 348)

Joe Flaherty

Question:

114. Deputy Joe Flaherty asked the Minister for Finance the details of the business resumption support scheme; and if he will make a statement on the matter. [31768/21]

Jennifer Carroll MacNeill

Question:

348. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the exact criteria of the business resumption support scheme; and if he will make a statement on the matter. [30991/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 114 and 348 together.

The Government have provided for a range of sectorial support grant schemes aimed at assisting businesses in financing their fixed costs and focussed on those that have seen a significant decrease in turnover (75%) or are closed by restrictions.

As the economy re-opens, it is intended that these direct grants will be replaced with a more targeted measure for vulnerable but viable businesses, particularly in sectors that were significantly impacted throughout the pandemic, even during periods when restrictions were eased. It is expected that there will be a limited number of such businesses and it is important that support is provided to these businesses. This Business Resumption Support Scheme (BRSS) will be implemented in September 2021.

Businesses whose turnover is reduced by 75% in the reference period (1 September 2020 to 31 August 2021) compared with 2019 will be eligible. The scheme will not be restricted by location, rate paying or physical premises. Businesses who previously availed of other schemes such as SBASC and the Tourism Business Continuity Scheme for example as well as CRSS will be eligible to apply provided they meet the qualifying criteria.

The BRSS will be administered by Revenue and will operate in a similar way to CRSS.

It will apply to businesses registered with Revenue, whose profits are chargeable to tax under Case I of Schedule D, and their turnover is reduced by 75% in the reference period.

The reference period will be 1 September 2020 to 31 August 2021 compared with turnover in 2019. This reference period should better target those businesses whose trade is still impacted even when restrictions are easing.

Qualifying businesses will be able to apply to Revenue for a once-off cash payment, representing an advance credit for trading expenses that is deductible for income and/or corporation tax purposes, similar to CRSS.

Payments will be calculated on the basis of 3 weeks at 10% of the first €1m in turnover and 5% thereafter, based on average turnover for 2019, and will be subject to a maximum weekly payment of €5,000.

This means that the maximum payment under the scheme will be €15,000.

Similar conditionality to CRSS and EWSS will apply including tax clearance, and payment will be conditional on the business trading or where the business cannot trade the business has the intention to trade. I hope to bring legislative proposals into the Dáil before the summer recess to give effect to this scheme.

Tax Code

Questions (115)

Thomas Pringle

Question:

115. Deputy Thomas Pringle asked the Minister for Finance the examinations his Department is undertaking regarding the proposal by the International Monetary Fund of a solidarity tax on those companies which accumulated wealth during the Covid-19 pandemic; and if he will make a statement on the matter. [20151/21]

Written answers

Minister for Finance

I am aware that the International Monetary Fund, in its bi-annual Fiscal Monitor released on 7 April 2021, suggested that countries could consider a temporary Solidarity Tax on high earners and businesses that have prospered during the pandemic.

While I understand why some may feel the introduction of such a measure is justified, I would urge caution in calling for the adoption of such a measure. It is important to acknowledge the role played by innovative sectors of the economy. The growing digitalisation of business in recent years has allowed many parts of the economy to continue to function while others were forced to close. This has enabled home working and allowed trade in essential goods and services to continue.

Furthermore, the fact that sectors of the economy have continued to function has allowed Governments to extend supports to other sectors of the economy who have fared less well particularly in areas such as hospitality and retail. Most importantly, we should acknowledge the remarkable work of the pharmaceutical sector in rapidly developing vaccines which I believe will be key to allow us to return to our normal lives as quickly as possible.

Countries will need to repair public finances once we have emerged from the pandemic. This will require us to be open to ideas and Ireland will give careful consideration to any proposals which may be helpful. However, I am of the opinion that innovation needs to be encouraged, and I remain to be convinced on taxes which target specific innovative sectors.

Question No. 116 answered with Question No. 78.

Grant Payments

Questions (117, 389)

Michael Moynihan

Question:

117. Deputy Michael Moynihan asked the Minister for Finance if he has plans to reconfigure the disabled drivers and passengers' scheme; and if he will make a statement on the matter. [31773/21]

Catherine Connolly

Question:

389. Deputy Catherine Connolly asked the Minister for Finance further to Parliamentary Question No. 217 of 13 May 2021, the status of the promised review of the disabled drivers scheme; the person or body carrying out the review; the terms of reference of the review; when the review will be completed; and if he will make a statement on the matter. [31866/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 117 and 389 together.

A Supreme Court decision of 18th June 2020 found in favour of two appellants against the Disabled Drivers Medical Board of Appeal's refusal to grant them a Primary Medical Certificate (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 which, following the approval of the Finance Act 2020, allowed assessments to recommence.

Following approval of the Finance Act 2020, a comprehensive review of the scheme, to include a broader review of mobility supports for persons with disabilities and the criteria for qualification for the Scheme, will be conducted this year. On foot of that review new proposals will be brought forward for consideration.

Tax Code

Questions (118)

Mick Barry

Question:

118. Deputy Mick Barry asked the Minister for Finance if he will report on the impact assessment on the changes to taxation charged to so-called cuckoo funds in particular the impact on affordability of housing; and if he will make a statement on the matter. [31778/21]

Written answers

Minister for Finance

As the Deputy will be aware, on May 19th this year I introduced by way of a Financial Resolution a new measure which applies a stamp duty charge on bulk purchases of houses, which took effect from midnight that day. This new stamp duty rate replaces the pre-existing stamp duty rates for residential property, which are 1% for the first €1 million in consideration and 2% on amounts above €1 million (on a per-property basis).

In brief the new measure has the following effect.

The charge applies to bulk purchasers, being a purchaser who acquires 10 or more residential dwellings (other than apartments) within a 12 month period.

When the threshold of 10 is passed, the higher 10% rate applies in respect of all purchases within the 12-month period. For example, a purchase of 4 houses in August 2021 would be liable at normal residential rates. If the same purchaser acquires a further 6 units in November 2021, the 10% rate applies on all 10 houses, with credit allowed for stamp duty already paid on the earlier purchases.

The measure applies in respect of bulk purchases of residential dwellings, other than of apartments in apartment blocks. Apartments are defined as a multi-storey building of 5 or more units, having common or shared access.

Alongside the recent stamp duty measure, my Department has also introduced a number of measures in recent years designed to regularise the tax affairs of property focussed investment funds and to ensure they are taxed at an appropriate level .

Finance Act 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland, based on an established international standard. The purpose of the REIT regime is to allow for a collective investment vehicle which provides a comparable after-tax return to investors to direct investment in rental property, by eliminating the double layer of taxation at corporate and shareholder level which would otherwise apply.

Finance Act 2016 introduced the Irish Real Estate Fund (IREF) regime to address the use of certain fund vehicles facilitating the investment in Irish property by non-resident investors, thereby avoiding a charge to tax on profits arising from Irish real estate. The regime provides that the profits arising to an Irish fund from Irish property remain within the charge to Irish tax. Generally IREFs must deduct a 20% withholding tax on distributions to non-resident investors.

Finance Act 2019 made amendments to the taxation of REITs and IREFs to ensure the regimes operate as intended. In relation to REITs, Finance Act 2019 extended the obligation to deduct Dividend Withholding Tax to include distributions of the proceeds of capital disposals. In addition, the deemed disposal provisions upon cessation of REIT status were restricted to REITs that have been in operation for at least 15 years, in line with the regime's stated objective of encouraging long-term, stable investment in rental property. In relation to IREFs, amendments were made in Finance Act 2019 to prevent the use of excessive debt and other payments to reduce distributable profits, and to prevent the avoidance of tax on gains on the redemption of IREF units. These amendments were made to ensure appropriate levels of tax are paid by investors in Irish property.

Given the timescales involved in property investment, it is not yet possible to assess the impact of the various more recent measures, including (where appropriate) their impact on the affordability of housing. I can however assure the Deputy that my Department keeps tax issues under ongoing review and I will consider any further measures in respect of the taxation of property funds if and when I think it necessary.

Question No. 119 answered with Question No. 77.

Question No. 120 answered with Question No. 65.

Insurance Coverage

Questions (121)

Steven Matthews

Question:

121. Deputy Steven Matthews asked the Minister for Finance the position regarding his engagement with the insurance sector specifically related to individuals and businesses that are unable to get flood protection cover despite the completion of OPW flood defences to protect the location of their properties; and if he will make a statement on the matter. [20056/21]

Written answers

Minister for Finance

As Minister for Finance, I am responsible for the development of the legal framework governing financial services regulation, including for the insurance sector, while the provision of cover is a separate commercial matter for insurance companies. This is based on an assessment of the risks they are willing to accept. Consequently, neither I nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as reinforced by the EU framework for insurance (Solvency II Directive).

Current government policy in relation to increasing flood insurance coverage is primarily focused on the development of a sustainable, planned and risk-based approach to managing flooding problems. As such, almost €1 billion in flood relief measures is being invested over the lifetime of the National Development Plan 2018-2027, with an expectation that insurers will provide cover where this has occurred. This approach is complemented by a Memorandum of Understanding between the Office of Public Works (OPW) and industry representatives Insurance Ireland. This provides for the exchange of data in relation to completed flood defence schemes which should, in turn, provide a basis for the increased provision of flood insurance in these areas.

While there has been an overall increase in the provision of flood insurance between 2015 and 2020, it is recognised that some householders are still experiencing difficulties, for example in areas with demountable flood defences. I am conscious of the challenges that the absence or withdrawal of flood insurance cover can cause to homeowners and businesses. My officials are engaging with both Insurance Ireland, the OPW and other stakeholders regarding flood defence schemes and how the levels of insurance cover might be improved in areas where flood defence works have been completed.

Furthermore, the Deputy should be assured that Minister of State Fleming and I will also continue to engage on all aspects of insurance reform, including flood cover, and that every effort is being made to encourage a responsive approach from the industry.

Insurance Industry

Questions (122)

Jackie Cahill

Question:

122. Deputy Jackie Cahill asked the Minister for Finance the status of the measures his Department is taking under the action plan on insurance reform; and if he will make a statement on the matter. [31762/21]

Written answers

Minister for Finance

The Cabinet Committee Sub-Group on Insurance Reform oversees implementation of the Action Plan for Insurance Reform. This sets out 66 actions across several departmental policy areas, including that of the Department of Finance, to improve the insurance environment for consumers, businesses and community groups. This cross-Governmental reform agenda has been adopted in recognition of the need for a comprehensive and structured approach in order to deliver real reform in this important area.

Implementation of the Action Plan is well underway, and the first biannual update report is due to be published this summer. Key achievements since the launch of the Action Plan include:

Creating a new Office to Promote Competition in the Insurance Market, chaired by Minister of State Fleming;

Expanding the National Claims Information Database (NCID) to gather data on employer and public liability insurance;

Enacting the majority of provisions under the Consumer Insurance Contracts Act 2019 (with the remainder to take effect from September 2021); and

Publishing the Oireachtas Post-Enactment Scrutiny Report in relation to this Act.

Work is continuing at pace to progress other key responsibilities, such as preparing for the publication of the first National Claims Information Database (NCID) report on employer and public liability insurance, which is expected in the coming weeks. There is ongoing consideration of proposals to regulate claims harvesters, and options to establish an insurance databank for new market entrants. Of particular importance is the work that is already underway to consider how best to tackle the issue of differential pricing, which will include responding to the Central Bank’s final Review of Differential Pricing in the Motor and Home Insurance Market when it is published in the coming months.

As the Deputy will be aware, Minister of State Fleming has undertaken an extensive programme of stakeholder engagement, including meeting individually with the main insurers to discuss the impact of the Personal Injuries Guidelines. Minister of State Fleming and I will remain proactive both in engaging with stakeholders, and working with colleagues across Government, to continue driving forward this whole-of-Government reform agenda, which I believe provides the best opportunity to improve both the cost and availability of insurance for consumers, businesses and community groups.

Economic and Social Research Institute

Questions (123)

Ged Nash

Question:

123. Deputy Ged Nash asked the Minister for Finance his views on a recent ESRI report (details supplied); his further views on whether the recurrent tax levied on wealth and assets could raise substantial amounts of revenue; his plans to conduct an analysis into the additional revenue which could be raised for the Exchequer through targeted growth-friendly wealth taxes; and if he will make a statement on the matter. [31610/21]

Written answers

Minister for Finance

My officials and I are familiar with the ESRI report entitled “Options for raising tax revenue in Ireland” and I welcome this type of research, which is very beneficial to informing policy decision making and which can aid budgetary decision making.

The ESRI’s key finding is that “increases in taxes on income, consumption and property may be needed to fund future public spending.” This report also provides significant insights into the exchequer, distributional and income effects of tax changes, which are important considerations for budgetary policy.

In the context of discussions around taxes on wealth and assets, it is important to note the ESRI’s findings that the vast majority of household wealth is held in the form of residential property, and for that reason, the Local Property Tax functions as an effective wealth on tax. In particular, the ESRI refer to potential for increased revenue by bringing properties built since 2013 into the charge for tax. This supports the Government’s recent decision to take this course of action which is projected to deliver a yield of €560 million.

Aside from the role of the Local Property Tax as a functional wealth tax, it is also important to note the ESRI’s findings of the difficulties associated with introducing a wider wealth tax. Namely, that it would be difficult to raise substantial revenues from a wealth tax without applying it at a low level, with few exemptions. However, without such exemptions, tax liabilities would fall heavily on low income households. Furthermore, the authors refer to a number of economic distortions which could result from the introduction of a wealth tax, such as potential disincentives for earnings, to a further increase in the price of owner-occupied housing.

It should be noted that, as well as the Local Property Tax, Ireland already taxes wealth in a variety of other ways, such as through our Capital Gains Tax and Capital Acquisitions Tax (CAT), which are levied on an individual or company on the disposal of an asset in the case of CGT, or the acquisition of an asset through gift or inheritance, in the case of CAT.

I would also highlight that analysis previously undertaken by the ESRI, using OECD data, shows that Ireland’s tax system does more than any other country in the EU to reduce the gap between market and disposable incomes, which is an important consideration in wider discussions around the redistributive role of our tax system.

My Department keeps tax options under ongoing review, but there is no plan at this time for it to conduct a specific analysis of the type the Deputy suggests.

Insurance Industry

Questions (124, 354)

Pearse Doherty

Question:

124. Deputy Pearse Doherty asked the Minister for Finance his views on the policy statement published by the Financial Conduct Authority on 28 May 2021 to end the practice of dual pricing in the insurance market; if his Department has consulted the Financial Conduct Authority, Central Bank or the insurance industry on the details of this policy statement and its impact on insurers operating in both the Irish and British markets; and if he will make a statement on the matter. [31814/21]

Róisín Shortall

Question:

354. Deputy Róisín Shortall asked the Minister for Finance the steps he is taking to eliminate dual pricing in the insurance industry; and if he will make a statement on the matter. [31193/21]

Written answers

Minister for Finance

I propose to take Questions Nos. 124 and 354 together.

The Deputies will be aware that the Programme for Government includes a commitment to work to remove dual pricing, a form of differential pricing, from the insurance market. In this regard, the Action Plan for Insurance Reform also commits to examine the forthcoming final report and recommendations of the Central Bank Review of Differential Pricing in the Motor and Home Insurance Markets and take any appropriate actions as deemed necessary, in light of the final publication.

The Central Bank’s Interim Report, published in December, marks an important milestone in its review of the issue and summarises the initial observations from its ongoing market analysis and consumer research. I look forward to the final report being published shortly. I note that the Central Bank has stated that differential pricing can be associated with both benefits and costs for consumers. Accordingly, completion of the analysis will be essential in order to ensure a full market perspective, evidence-based conclusions and in turn appropriately calibrated regulatory interventions as are needed to apply to the specificities of the Irish market. In addition, the associated consumer research will also provide insights which will be essential to the Central Banks’s overall analysis.

Both Minister of State Fleming and I have repeatedly called on the industry to treat its customers fairly and in line with the Central Bank’s Consumer Protection Code. Minister of State Fleming has raised his concerns with the main insurers that dual pricing in particular may be unfair for some customers and that it be proactive in responding to the Central Bank’s interim findings. However, the Government also believes that prior to bringing forward any solutions, it is important that the Central Bank’s review is completed, so as to ensure remedies are evidence-based and do not impact consumers negatively, including impacting the ability of consumers to shop around for better deals. This position is consistent with the Action Plan for Insurance Reform.

In advance of the publication of that report, my Department is proactively considering issues raised in the general debate on this, including the Private Member’s Bill proposed by Deputy Doherty in February. As part of this work, it is examining recent developments in the UK, where the Financial Conduct Authority (FCA) has announced of a ban on the practice of ‘price walking’ for motor and home insurers, to come into effect next year. This is the practice where providers initially offer a lower premium to new customers, which is then increased in subsequent years on renewal. While my Department is not directly consulting the FCA on its policy statement at this time, my officials are engaging, both through our Embassy in London and directly, with the UK Treasury on this and other financial services issues of relevance. I would expect that during the course of this work, in particular following the publication of the Central Bank’s final report, that relevant stakeholders will be consulted, as necessary, so as to ensure that any policy solution proposed is fully considered and evidence-based.

Question No. 125 answered with Question No. 87.

Question No. 126 answered with Question No. 67.

Corporate Governance

Questions (127)

Willie O'Dea

Question:

127. Deputy Willie O'Dea asked the Minister for Finance his views on whether the legislation governing financial and corporate behaviour here is fit for purpose; if not, the changes he plans to make; and if he will make a statement on the matter. [31700/21]

Written answers

Minister for Finance

As the Deputy will be aware, since 2011, the Government has enacted a broad range of primary and secondary legislation to address issues that arose prior to 2008, to provide more consumer protection and to ensure greater oversight, stability and sustainability of the Irish financial services sector.

The regulatory landscape has been utterly overhauled since the financial crisis, with:

the Central Bank Reform Act 2010;

the Central Bank Supervision and Enforcement Act 2013;

the creation of the European Single Supervisory Mechanism in 2014

the Consumer Protection (Regulation of Credit Servicing Firms) Act 2018.

These, among other legal and regulatory changes have significantly changed the regulation and supervision of the financial sector.

The Central Bank of Ireland is acknowledged now as being one of the most robust and challenging financial regulatory institutions in Europe.

Additionally, like a number of other countries, we are advancing national legislative change to improve culture within the financial services sector.

As the Deputy will be aware, the Programme for Government includes a commitment to introduce a Senior Executive Accountability Regime (SEAR). SEAR will drive positive changes in terms of culture, greater delegation of responsibilities, and enhanced accountability while simplifying the taking of sanctions against individuals who fail in their financial sector roles.

My officials are engaging with the Attorney General's Office in advance of submitting draft heads of Bill to Government so as to ensure that the correct balance is struck between appropriate additional powers for the Central Bank and the protection of individuals' constitutional rights.

It is my hope that the Heads of Bill can be published in July. This, however, will be subject to the Attorney General’s advice on the adequacy of the safeguards included to protect the constitutional rights at stake.