Vol. 962 No. 5
6. Deputy Alan Kelly asked the Minister for Finance if his attention has been drawn to concerns that the funds being made available by the Strategic Banking Corporation of Ireland, SBCI, are not reaching a sufficient number of small and medium enterprises, SMEs; and if he will make a statement on the matter. [50874/17]
What funding is available through SBCI and how much of it is going to small and medium-sized businesses as opposed to bigger businesses?
The SBCI's purpose is to facilitate access to more flexible, appropriately priced finance with better terms to SMEs as well as promoting the economic development of rural and regional SMEs. It does this by delivering effective financial support to Irish SMEs and addressing failures in the Irish credit market while also encouraging competition and innovation.
It began lending in March 2015. To the end of June 2017, €855 million of SBCI funding has been provided to 21,132 Irish SMEs, directly and indirectly supporting 106,728 jobs. This represents an increase of 57% in SBCI lending since the end of December 2016. The interest rate on SBCI loans is 1.15% lower than the average market interest rate on loans to SMEs and 85% of SBCI loans were to SMEs based outside of Dublin.
The SBCI has €1 billion of funding available from the German bank KfW, the European Investment Bank, EIB, the National Treasury Management Agency, NTMA, and the Council of Europe Development Bank, as well as a loan facility of €215 million available from the Ireland Strategic Investment Fund, ISIF. To date, €881 million of that funding has been committed to the SBCI's seven on-lenders, of which three are banks and four are non-bank finance providers. As the Deputy is aware, the SBCI does not directly lend to SMEs and other organisations but does so via intermediaries.
The lending is largely driven by market demands as well as needs that are not fully met by the private sector. My Department's biannual SME credit demand survey indicates that demand for credit from SMEs has been decreasing and that only 20% of SMEs have sought bank finance in the past six months.
My concern is that this mechanism is not as widely available as it should be. My understanding is that much of it is available through the pillar banks and that, as in the case of the Ireland Strategic Investment Fund, ISIF, to some extent, there does not seem to be any great desire to advertise the take-up to SMEs. The interest rate quoted by the Minister is relatively high by European standards. Presumably, it has been designed to help the banks to gather more profit on their business. In areas on the fringes of Dublin or in rural Ireland there are many opportunities and sites that would allow for affordable and social house building, provided small or medium-sized construction firms could access credit. I appreciate that many of them have an impaired credit rating as a consequence of the crash and may not be in a position to access finance. If the Minister wants to make an impact on the housing construction figures which, notwithstanding all of the efforts made and the money allocated in theory, are actually very slow-----
The Deputy must, please, finish.
-----he should utilise this measure.
I ask Deputies and the Minister to observe the time limits.
In response to the Deputy's two points about the availability of credit for SMEs outside Dublin I reiterate the point I made, that 85% of the funding available to the Strategic Banking Corporation of Ireland for lending is made available through its intermediaries to SMEs located outside the capital city. This points to the fact that it has been successful in supporting SMEs in rural Ireland and other cities. It has also participated in several initiatives to make known the funding it is able to provide through the banks, for example, using the SME online tool. If an SME answers eight questions about the size of its business, it will be made aware of the support open to it, including support and credit enabled by the Strategic Banking Corporation of Ireland.
In response to the Deputy's second point about additional home building and the need for small companies to gain funding which they cannot access to build homes, I will set up home building finance Ireland-----
The Minister's time is up.
I was asked several questions. If I did not answer the questions put to me, the Deputy would say I was not answering her questions.
The Minister was asked one question. He has to stay within the number of minutes allocated to him.
Briefly, that is why we are setting up home building finance Ireland early next year to provide funding for the kind of projects to which the Deputy referred.
The Minister said in a reply to me yesterday that he did not anticipate legislation on home building being brought before the Dáil until some time in the new year and that home building finance Ireland would be set up later in 2018. That is part of my concern because that means that it will be the guts of another full year before it is fully under way because it will have to establish itself and will probably then be working through the pillar banks. There are bureaucracy and organisation involved, followed by loan assessments and evaluations. The end result is the reason credit and funding are not flowing into small-scale house building, whether on the fringes of Dublin where there are more sites available or throughout the rest of the country.
Home building finance Ireland will not be lending through the pillar banks or intermediaries. It will lend directly to companies that can provide a viable business plan, that are deserving of funding and that need funding. They will not do it through intermediaries for the reason identified by the Deputy. Those involved in running home building finance Ireland and those who will be making credit decisions are well capable of doing that work and I do not see the need for any existing bank to play an intermediary role. On the timing, I said I was aiming to bring the legislation before the House early next year and to have the organisation set up and running before next summer. While that may not be as fast as the Deputy wants, putting in place a new organisation such this over several months is, by any objective measure, a fast response to what I acknowledge is a problem we need to address.
We will move to Question No. 7 in the name of Deputy Michael McGrath.
I seek guidance, please. Are Questions Nos. 7 and 32 being grouped together? They both deal with the Ulster Bank Global Restructuring Group, GRG, and the interaction between the Minister and the Central Bank. I did not see any notification of this fact.
They are the same question and I am happy for them to be taken together.
7. Deputy Michael McGrath asked the Minister for Finance the actions taken by the Central Bank in relation to the placing of 2,141 SME companies in the Global Restructuring Group, GRG, by a bank (details supplied); his views on whether there is scope for a formal review by the Central Bank; and if he will make a statement on the matter. [50798/17]
32. Deputy Pearse Doherty asked the Minister for Finance if he has discussed with the Central Bank the actions of a bank’s (details supplied) restructuring group; his plans to do so; and if he will make a statement on the matter. [50886/17]
This issue relates to Ulster Bank's Global Restructuring Group, GRG, in Ireland. Between 2008 and 2013 over 2,100 SME customers were put into GRG, with loans of between €1 million and €25 million and a total portfolio value in the region of €14 billion, I think, but I will have to double check that figure. The issue is the role of the Central Bank in dealing with the complaints submitted to Ulster Bank about its GRG process in Ireland.
I propose to take Questions Nos. 7 and 32 together.
I am informed by the Central Bank that, while it cannot generally comment on interactions with regulated firms, the Ulster Bank Ireland designated activity company is engaging with the bank in relation to this matter. As the Deputy is aware, in November 2016, RBS announced a new complaints review process overseen by an independent third party and the automatic refund of fees to SME customers in the Global Restructuring Group, GRG, in the United Kingdom and Ireland between 2008 and 2013. In February this year Ulster Bank sent letters to SME customers who were in this group between 2008 and 2013. The letters informed them about the new GRG complaints review process and whether they were included in the automatic refund of fees. Ulster Bank has indicated that a large proportion of its customers have now been contacted. The Central Bank encourages all GRG customers who have concerns or issues to fully engage with the complaints process. More information is available at: http://digital.ulsterbank.ie/business/grg-announcement.html.
I am confident that legislative changes since the financial crisis have equipped the Central Bank with the necessary investigative, regulatory and enforcement powers to ensure regulated financial service providers adhere to the requirements of financial services legislation. In addition, the Central Bank is proactively regulating the financial system and has issued regulations aimed at protecting SMEs when dealing with regulated and unregulated firms. The revised SME regulations introduce specific requirements for regulated lenders, including contacting and warning SME borrowers and expanding the grounds for appeal. Under the regulations, regulated financial services firms must have a complaints handling procedure in place. Complaints against financial institutions should first be discussed with the institution concerned. The Central Bank will continue to monitor and engage in this matter.
The central allegation is that the GRG was something of a graveyard for businesses and that Ulster Bank, much like Royal Bank of Scotland, RBS, in the United Kingdom, acted inappropriately and very aggressively in the appointment of receivers and liquidators, with the ultimate objective of gaining control of the assets of the underlying business.
That is the central allegation. Last month the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, received an update from Ulster Bank. Ulster Bank in Ireland has received 48 complaints at this stage as part of the Global Restructuring Group complaints process and, as of last month, had paid out just €362,000. What is the Central Bank doing on this issue? The Financial Conduct Authority in the United Kingdom undertook an investigation. The Central Bank knows that Ulster Bank engaged in wrongdoing in the treatment of customers in the GRG. As the regulator, what has it done to deal with the issue?
I confirm that the Central Bank of Ireland is now engaged in this matter. It would not be appropriate for me to indicate what the status of this engagement is, nor can I do so, because the bank is leading that work as the independent Central Bank of Ireland. The Deputy will be aware of the legal protections in place for firms which have been affected by this issue. They include the Consumer Protection Act 2015 which was passed this year to deal precisely with protection gaps for firms the loans of which are sold by the original lender to an unregulated firm. As I indicated, the Central Bank is engaged in this matter and while I know that it is a serious issue, it would not be appropriate for me to answer on the bank's behalf about the work it is doing, nor can I do so.
I have been raising this issue at the joint committee on finance for a couple of years. I also brought it to the attention of the Taoiseach on the Order of Business last week. This is another scandal involving 2,141 Irish companies being placed with the Global Restructuring Group, which basically was death row. Ulster Bank informs us that fewer than 100 of these companies came out of the process alive, while other reports suggest only six survived.
The Minister referred to compensation and other matters. Ulster Bank has acknowledged wrongdoing in the application of complex fees. However, this is only one aspect of the issue. In Britain, where the Financial Conduct Authority is continuing its assessment, we know that the authority's interim report summary found, among other matters, that the GRG had placed "an undue focus on pricing increases and debt reduction without due consideration to the longer term viability of customers". It also found a "failure to handle the conflicts of interest inherent" in the structure and operation of West Register, GRG's property arm. Even the name, West Register, was duplicated by Ulster Bank and the experiences of Irish businesses have been the same as those investigated by the Financial Conduct Authority. Has the Minister discussed this issue with Ulster Bank? Is he willing to engage with the victims of GRG to hear at first hand their experiences at the hands of a bank that is regulated in the State?
No, I have not discussed this matter with Ulster Bank. The reason is that this matter and the work being done on it are being handled by the Central Bank. I must recognise the authority and role of the Central Bank in the matter. Given its seriousness, I first want the Central Bank to conclude the work under way before I make any further comment.
I thank the Minister for his reply. I respect the independence of the Central Bank and it is true that while matters are ongoing, it does not disclose actions relating to individual institutions. However, Deputies deserve some more information on what the word "engaged" means in this context. The Minister has indicated that the Central Bank is engaged in this issue. We know what the bank's role is, what its statutory powers are and what harm has been done in this case. Deputy Pearse Doherty outlined some of the allegations made. While a start has been made in refunding complex fees in Ireland, that is not the full story. Although the Financial Conduct Authority in the United Kingdom did not uphold some of the most serious allegations made against Royal Bank of Scotland, it certainly found much evidence of inappropriate behaviour. There is no reason to suggest the same practice was not evident in Ireland in the case of Irish borrowers of Ulster Bank. The central allegation is that GRG was essentially a graveyard for businesses which went into the group but did not come out again. We need transparency, answers and accountability in that regard.
I am aware of the Deputies' views on this matter and the way in which the issue has unfolded and been dealt with in the United Kingdom. I am also aware of the consequences for many of the companies and firms that dealt with the group. There may be a point in the future at which I or the Central Bank can say more about the work the bank is doing, but I cannot do so while the work is ongoing. I am well aware of the seriousness with which the Deputies view the matter, but I expect that given that they are hoping to see progress made on the issue, they will also understand the only organisation that has and should have the power to do this work is the Central Bank. Before I comment further on the matter, I must allow it to do its work, at which point it will also comment.
I too value and respect the independence of the Central Bank. However, it was also behind the curve on this issue, which is not new. I acknowledge that the Central Bank and Ulster Bank are engaging, whatever that word means in this context. It could mean, for example, that they are engaging on the fees structure, which is at the minor end of what has been alleged about GRG, or that they are asking whether GRG organised strategic defaults to put viable Irish businesses into liquidation, thereby collapsing them, imposing serious hardship on the directors and families concerned and putting many thousands of workers out of work. That is what lies at the heart of the allegations. When the finance committee started to deal with this issue, the Central Bank was not involved in any engagement or taking any action, but the committee pushed it in that direction. We will have a module on the activities of Irish banks on this issue at the start of 2018.
I reiterate the question I asked the Minister. I welcome his engagement last week with victims of the tracker mortgage scandal. Will he also engage or is he open to engaging with victims of GRG - the businesses that were put to the wall as a result of its activities - in order that he will be better informed on the full consequences of the group's actions?
I met victims of the tracker mortgage issue after the Central Bank had done a substantial amount of work in dealing with the issue. As that work was unfolding, I met a number of people who were affected by the issue because I believed it was the appropriate thing to do. I am open to engaging with people on this matter in the near future. However, given the Deputy's recognition of the independence of the Central Bank, he must also understand that before I engage further in this matter, I must allow the Central Bank to conclude important work that is under way. I know that it is endeavouring to do so.
8. Deputy John Curran asked the Minister for Finance when the working group on the cost of motor insurance last met; the number of times it has met to date in 2017; the number of the report's 71 actions that have been implemented in full to date; the number that will be implemented in full by the end of 2017; the timeframe for all the actions to have been implemented in full; if reductions in motor insurance policies have been achieved following a number of years of excessive premium increases; and if he will make a statement on the matter. [50869/17]
14. Deputy Jack Chambers asked the Minister for Finance the status of the implementation of the recommendations made in the report by his Department's working group on reducing the cost of motor insurance; the number of recommendations that have not been implemented to date; the reason for same; and if he will make a statement on the matter. [50834/17]
It is almost a year since the working group on motor insurance published its report containing 33 recommendations and 71 specific actions. Will the Minister update the House on the implementation of the report and, more importantly, the effect it has had on motor insurance premiums?
I propose to take Questions Nos. 8 and 14 together.
The cost of insurance working group's report on the costs of motor insurance was published in January 2017. It makes 32 recommendations, with 71 associated actions to be carried out within agreed timeframes which are set out in the action plan. The most recent meeting of the working group took place on 25 October and the group has met 14 times thus far this year. In parallel with the ongoing implementation of the motor insurance report's recommendations, the working group has been undertaking an examination of the employers' liability and public liability insurance sectors. In addition, two subgroups examining the specific issues relevant to these sectors were established and have been meeting on a near weekly basis.
In line with the commitment to publish quarterly update reports on the implementation of the recommendations made in the report on the cost of motor insurance, the working group has published three update reports to date, most recently on 23 October 2017. I am pleased to note that of the 32 actions due for completion before the end of the third quarter, 29 have been completed. Substantial work has taken place on the nine action points categorised as ongoing.
Of the three actions which have not been fully completed to date, two relate to the same recommendation which requires the approval of the Minister for Justice and Equality and the Garda Commissioner for potentially far-reaching co-operative mechanisms between Insurance Ireland and An Garda Síochána to be formalised. The other outstanding action is contingent on the establishment of the new office of the legal costs adjudicators, now scheduled for 2018.
While it is inevitable that some recommendations will take longer to implement than envisaged at the time the report was written, I am satisfied that, in overall terms, the recommendations made in the report are being implemented in a timely fashion. The fourth quarterly update should be published early in the new year and will focus on the 14 actions due for completion in the final quarter of 2017. All of the remaining actions are scheduled to be completed before the end of 2018.
In response to the question of whether reductions in motor insurance costs have been achieved, the most recent CSO-CPI data for October indicated that average private motor insurance premiums had decreased by 15.2% since peaking in July 2016.
I thank the Minister of State for the answer and understand he had to summarise everything within the time available. The first issue concerns the effectiveness of the report and its implementation. It is worth reflecting on the fact that in the three years before the actions were taken, there were significant annual increases in the cost of motor insurance premiums. I understand that in 2015 alone the rate of increase was over 30% and that there were double digit increases in other years. I reiterate that having no increase will not be a result, rather we need to see significant decreases in insurance policy costs. The Minister of State might comment on the establishment of a fully functioning, integrated insurance fraud database and a database of uninsured drivers. It was indicated that both would have an impact on premiums. What progress has been made in establishing the databases?
Of all the insurance issues I have taken up since I was appointed Minister of State, this involves the most effective group of people I know. The group is cross-sectoral and comprises officials from the Departments of Justice and Equality; Transport, Tourism and Sport, and Finance, as well as the Central Bank. Everyone is working to try to implement the recommendations made in the report as quickly as possible. There is, however, no silver bullet and the effect will be cumulative. We have to examine a number of facts. Prior to 2011, there was, in effect, a price war in the insurance market. Price wars never end well. Companies were providing insurance policies at too low a rate. The increase in cost since has been about 60%. There has been a 15% increase since the peak. However, things are moving in the right direction. We have dealt with all of the recommendations made, the implementation of some of which will take time. It will require co-operation with other Departments and agencies over which we do not have control, but we are pushing and pulling in every which way we can to try to implement as many of the recommendations made as possible in order that we can bring down the cost of insurance. I know of the impact hikes in the cost of insurance premiums are having on individuals and businesses.
I welcomed the publication of the report in 2016. It contained a number of ambitious recommendations and targets, as well as an action plan. My question relates to the 11.6% increase in 2014, the 30.8% increase in 2015 and an increase of up to 28% in 2016. We know that we have reached the peak, but many people, including taxi drivers, have seen their premiums rocket. I recognise, however, that work is being done. I refer to the targets set in the third update on progress. The approval of the Garda Commissioner is required for a mechanism to provide for further co-operation between the insurance sector and An Garda Síochána in insurance fraud investigations. Does the Minister of State have a specific update on that matter and why the target has been missed? I refer to the giving of approval by the Minister for Justice and Equality for a mechanism to provide for further co-operation between the insurance sector and An Garda Síochána in insurance fraud investigations. Why have the targets not been achieved?
I will touch on the issue of fraud as quickly as I can. Fraud has a major impact on the cost of insurance. There are two types. The one which receives more coverage is where somebody sets up an accident. Another type which occurs much more frequently than the first involves exaggerated claims. There is a perception that it is not quite fraud because the Irish mindset is that if there is an accident, one will get the maximum one can out of it, rather than what the level of a compensation claim should be. Serious constitutional issues need to be concluded in respect of An Garda Síochána in the transfer of information. There are data protection and other concerns which perhaps were not thought out effectively. We are working on that aspect and doing the very best we can, but we may or may not be able to achieve implementation of that recommendation. It will depend on the advice from the Attorney General and the views and opinions of other Departments.
While we give the global figures, it is worth pointing to some individual cases which are often not reflected in the figures. Some two or three issues come up in my office time and again. One concerns people who have been accident and claim free for several years and are now a bit older. They are finding it more difficult to obtain quotes which are getting are higher.
The second issue concerns people who are driving cars which are approaching the age of ten years or thereabouts. They are also experiencing difficulties, despite the fact that their cars have passed the NCT and so forth. In the modern era such cars would not be seen as unreliable or unsafe. However, motor insurance companies are taking a different view.
The third issue is more disturbing. In my constituency I have dealt with a number of cases in which people have moved to new houses a couple of miles away. In one case a woman who was renting in one part of the constituency and then bought a house somewhere else had to pay €300 for the privilege of having a different address.
Was that the cost of the motor insurance premium?
I am only referring to motor insurance. I do not want to labour the point, but global figures do not always reflect what is happening in the insurance market.
I thought I had heard of everything, but this is the first time I have heard of that happening. I will ask the officials whether they have been made aware of it. One criticism I have of the insurance sector concerns the arbitrary nature of the figures quoted to customers. On multiple occasions an arbitrary figure seems to have been plucked out of the sky. One man told me that his insurance premium had increased from €500 to €900. His broker told him that he could not get it any cheaper with the company. He then went to a different broker who contacted the same company and was quoted the original price. I cannot explain it. When I put the case to the insurance companies and asked them to explain it, they were unable to do so. There is an inconsistency which is creating a difficulty and adding to insurance costs. The global figures are decreasing. I always advise people to challenge brokers or insurance companies when premium costs jump to try to get the best possible price.
I echo the concerns expressed by Deputy John Curran. Taxi drivers are being driven out of self-employment. Young drivers cannot obtain insurance policies or have to be included in secondary or other policies. As a result they have to sell additional cars. There is a contradictory policy within the State whereby we are trying to incentivise people to improve their cars via the obtaining of NCT certificates, but insurers will not provide insurance policies. It is also an issue of competition. Have licence applications been rejected? Many insurance companies misrepresent themselves by offering numerous marketing gimmicks and schemes.
We are all familiar with the different branding that exists under the one arm, and especially under the one underwriter. Has any investigation taken place regarding consumer protection under the licensing regime? Have other international insurers applied to enter the market? How difficult has this been in the context of the current problem around competition?
No cases have been brought to my attention relating to taxi drivers whose insurance has increased by such an amount that they have gone out of business. If the Deputy is aware of individual cases, I ask that he tell me and I will take up the matter. If someone has not had an accident, or there is no obvious reason that his or her premium should increase, I ask that the Deputy make me aware of it and I will take it up on his or her behalf.
I am aware of an important facility for young drivers which is not commonly known. One company, AIG, gives young drivers the opportunity to place a black box-type device into their cars. It provides information about where the car is, how fast it is driving and how it is being driven. AIG's premiums are around half that of the average of other companies, but drivers must know that if they drive irresponsibly, their premiums will be withdrawn. AIG has removed insurance in some 18 or 20 cases. The opportunity is there, however, and it is half the cost of other companies for young drivers. It is a good idea for young drivers, if people are prepared to take it up. I am raising it here, although perhaps I should not,-----
Deputy.
-----because it is in the interests of the insured young drivers.
9. Deputy Richard Boyd Barrett asked the Minister for Finance the reasoning behind the decision of the former Minister for Finance in budget 2014 to raise the cap on the capital allowance of tangible assets from 80% to 100%; if he will report on lobbying, submissions, discussions or meetings in relation to this issue prior to it being included in that budget; the minutes, memos and communications with regard to this change; and if he will make a statement on the matter. [50865/17]
12. Deputy Richard Boyd Barrett asked the Minister for Finance if he will report on all meetings and communications involving his Department officials, himself or his predecessor and a company (details supplied), other large multinational companies or a group in which the issue of corporate tax, intellectual property or intangible assets were discussed in each of the years 2011 to 2016 and to date in 2017; the submissions received or commitments made on these issues during those years; if all relevant documents received or sent in relation to same will be provided; and if he will make a statement on the matter. [50867/17]
We are aware that Apple avoided paying €13 billion in tax through the double Irish scheme using Irish registered companies. The Paradise Papers reveal that in 2014 and 2015, changes made by then Minister for Finance, Deputy Michael Noonan, to the intangible assets allowance enabled Apple and almost certainly other companies to continue to avoid billions of euro in tax, using Irish registered companies and offshore tax havens. Will the Minister tell us what lobbying, discussions and communications took place for the Government to make the decision in 2014 which facilitated Apple and others?
I propose to take Questions Nos. 9 and 12 together.
Capital allowances for intangible assets were introduced in Finance Act 2009 to support the development of the knowledge economy and the provision of high quality employment. When the capital allowances were introduced, to ensure that a measure of tax remained in charge annually, a restriction was provided to cap the amount of income that the allowances could be used against in any year at 80%. The restriction did not deny the use of the capital allowances. It merely lengthened the period over which they could be utilised.
Ireland is not unique in providing capital allowances for intangible assets and the tax treatment of intangible assets is similar to the approach taken in other countries, such as the UK and the US. In the Finance Act 2014, the cap of 80% was increased to 100%, effective for accounting periods commencing on or after 1 January 2015. The rationale for increasing the cap was to bring the tax treatment of intangible assets into line with the tax treatment of similar assets in other jurisdictions. The change also ensured that the treatment of intangible assets was in line with the treatment of other capital assets in our tax code. Noting a significant increase in the use of the capital allowances in 2015, the Coffey review recommended that to ensure some smoothing of corporation tax revenue over time, the 80% cap be restored. The cap does not affect the overall capital allowances available but merely lengthens the timeframe over which they can be used.
Regarding meetings, my officials and I meet a range of organisations and individuals regularly and I note that this subject was discussed at length on Committee and Report Stages of the Finance Bill. As I noted on those occasions, as part of regular pre-budget meetings, I met with the American Chamber of Commerce but the subject of capital allowances for intangible assets was not discussed. I did, however, have many meetings with my officials on this and other policy choices. On the basis of these discussions, I implemented the recommendation of the Coffey review and re-introduced the 80% cap to capital expenditure incurred from budget night.
Regarding meetings held at the time of the 2014 change, I gave an undertaking on Committee Stage of the Finance Bill to ask my Department to review its records from that time to establish the position with regard to that period. This review is ongoing.
The change made by the former Minister, Deputy Noonan, in 2014 is a scandal. Séamus Coffey said that had we not made that change, we would have collected €722 million in additional tax in 2015, and presumably there would have been a similar figure in subsequent years. Mr. Coffey said that if one ensured that all claims for this allowance was under the 80% regime, we would have an extra €1 billion next year. In 2015, a window was opened, through which Apple jumped, using Jersey and Ireland. This was conveniently opened that year by the former Minister, Deputy Michael Noonan. We need to know what lobbying took place, what discussions were undertaken and what the rationale was for increasing that allowance in 2015. It cannot be a coincidence that after the double Irish was closed, Apple and others restructured their tax avoidance arrangements using Irish companies and Jersey to escape billions of euro in tax.
I have not commented on any engagement or action that may have been taken by an individual company in the Paradise Papers, and it is not appropriate for me to do so. However, something that emerges from the papers is that they show how quickly large international companies can respond to changes in tax codes in any jurisdiction and if further efforts are to be made to increase the efficiency and the legitimacy of global tax collection, it must be done on a co-ordinated basis. All countries and all jurisdictions must move in the same direction.
On lobbying, I have already given a commitment to make those records available. I have outlined the rationale. We changed the tax treatment of intellectual property assets in line with what was happening in other jurisdictions with which we could compare ourselves. I entirely reject the Deputy's description of this as a scandal. That change was made for the reasons I outlined but as we were making those changes, the OECD process on how we deal with these matters was under way elsewhere and that was a factor in what took place.
During the committee hearings that year, it was said that the much trumpeted double Irish would, in fact, be replaced by another scheme through which the same companies would be able to avoid pretty much the same amount of taxes, but in a slightly different way, by speaking about patents and intellectual property rights. That is exactly what happened. The Government was warned about it. The Minister acts as though he is some sort of innocent and Apple got the better of him, but the change that the then Minister, Deputy Noonan, made in that budget resulted in them avoiding billions of tax, just as I said it would at the committee meeting. The mechanism through which they did this has now been revealed in the Paradise Papers. The former Taoiseach, Deputy Enda Kenny, met the CEO of Apple earlier that year, as did the Minister, Deputy Richard Bruton, and in the 2015 budget which was presented in October 2014, the change was included which opened the window for this tax avoidance scheme. Is the Minister seriously suggesting that he did not know this would be the result, and that conveniently Apple would be allowed to onshore billions of euro of assets and, as Séamus Coffey pointed out, not pay any extra tax at all even though the profits in that year jumped by approximately €50 billion?
I have outlined to the Deputy the reason those changes were made. I have given him a commitment that any records for the period in question that are available will be shared. A recognition of the change to the tax code that was made in last month's budget is entirely missing from the points made by Deputy Boyd Barrett. In light of the understanding we now have of how big and valuable these assets are, I believe it is appropriate to go back to the regime that was in place previously. I reiterate that a key insight which has emerged from these papers is the need for all countries and jurisdictions to move on the same journey at the same time as we seek to improve global tax collection.
