Tuesday, 7 Jul 2015

Written Answers Nos. 133-155

Banking Sector

Ceisteanna (133)

Anthony Lawlor

Ceist:

133. Deputy Anthony Lawlor asked the Minister for Finance given the analysis being carried out by a company (details supplied) on the possible sale of Allied Irish Banks shares, depending on the advice received, if it is envisaged that this money will be used to reduce the national debt or if it will be invested in capital projects; if a cost-benefit analysis and an analysis of the economic benefits of investing in capital projects has been completed; and if he will make a statement on the matter. [26119/15]

Freagraí scríofa

Minister for Finance

AIB is  well on the road to recovery and officials in my department are working with AIB on reconfiguring its capital structure and setting out a path for the bank to begin to return capital to the State. Given the scale of the State's investment - some €20.8 billion - and the different financial instruments this money is invested in, there are a range of options available to recoup value from the bank and it is critical that we get these decisions right. As a result Goldman Sachs International and William Fry are assisting the Department with this work by providing financial and legal advice respectively.  

Reconfiguring the bank's capital structure, which is not longer fit for purpose given the new regulatory regime, is just the start of the process, but it is an essential first step on the road to recovering value for the taxpayer. Discussions commenced recently with the SSM (Single Supervisory Mechanism) and the Central Bank, AIB's regulators, regarding AIB's capital structure and this process is expected to take a number of months.  

No decision has been made by the Government to sell any of our investments in AIB. All options remain on the table and while I have said previously that an Initial Public Offering or IPO on the stock market, looks like the most likely exit route for the State, it is too early to specify what steps will be taken or to put a timeline on decisions. Any sale will involve selling shares held by the ISIF.

As I have previously stated on numerous occasions, Government policy is that we will not remain a holder of our banking investments in the long term. Given our high debt to GDP ratio, we do not have the luxury of holding all of these investments indefinitely and I envisage receipts from the gradual sale of these investments helping to play their part in reducing the State's overall debt burden in the coming years.

Mortgage Lending

Ceisteanna (134)

Terence Flanagan

Ceist:

134. Deputy Terence Flanagan asked the Minister for Finance if he will address a matter (details supplied) regarding mortgages; and if he will make a statement on the matter. [27217/15]

Freagraí scríofa

Minister for Finance

The Central Bank of Ireland (Bank) has recently introduced new macro prudential measures for residential mortgage lending which apply certain loan to value and loan to income limitations on such lending. The key objective of these regulations is to increase the resilience of the banking and household sectors to the property market and to reduce the risk of bank credit and house price spirals from developing in the future. Within the overall framework, the Bank has allowed for a certain flexibility by lenders to exceed these limitations when assessing individual cases. However, in line with the requirements of the Consumer Protection Code and other regulations, lenders will still be required to assess an individual borrower's affordability and lend prudently on a case by case basis. Lenders will be required to submit data on their residential mortgage lending to the Bank on two reporting dates: (a) at 30 June each year to reflect activity in the 6-month period ending on that date and (b) annually at 31 December to reflect activity in the 12-month period ending on that date.  

A preliminary aggregate level data submission must be submitted to the Bank within 10 working days of the reporting date. Within 20 working days of a reporting date, a completed monitoring template including loan level data must be submitted to the Bank together with a final reconciling aggregate-level data set. The first reporting date will be 30 June 2015 and this will be for the period from the date the Regulations came into effect until 30 June 2015.

Regarding the level of mortgage activity, data from Banking and Payments Federation Ireland indicates that, on average, around 2,340 mortgages per month were approved in the first five months of 2015 and this compares to the monthly average of around 1,810 for the same period in 2014.

Pension Levy

Ceisteanna (135, 141)

Finian McGrath

Ceist:

135. Deputy Finian McGrath asked the Minister for Finance the position regarding the pension levy in respect of the Electricity Supply Board retired staff association (details supplied); and if he will make a statement on the matter. [27235/15]

Patrick O'Donovan

Ceist:

141. Deputy Patrick O'Donovan asked the Minister for Finance if he will revert to this Deputy on the points raised in correspondence (details supplied); and if he will make a statement on the matter. [27439/15]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 135 and 141 together.

The original 0.6% stamp duty levy on pension fund assets ended last year. The additional levy of 0.15% which I introduced for 2014 and 2015, mainly to help continue to fund Jobs Initiative, will also end after this year.

The position is that the equivalent value of all of the money raised from the stamp duty levy has been used to fund the wide range of measures introduced in the Jobs Initiative to protect existing jobs and to help create new jobs and the Initiative has been a success in this regard. The measures introduced include expenditure measures such as the Jobbridge and Springboard schemes, as well as a number of tax and PRSI incentives such as the reduction in the VAT rate from 13.5% to 9% for the tourism and hospitality sectors and the halving of the lower employer PRSI rate. 

The pension fund stamp duty levies are charged on the trustees of pension schemes and others (including insurance companies) who have responsibility for the management of the assets of pension schemes or plans. It is up to the trustees of pension schemes, for example, to decide whether and how the impact of the levy should be passed on and who should be impacted and to what extent. I have no detailed information on the decisions made by pension fund trustees or others in relation to the passing on of the full or a partial impact of the levy to the current, deferred or former (retired) members of pension schemes. I am aware, however, that where trustees have made the decision to pass on the impact or part of the impact of the levy to pensioners that a smaller reduction in pension payments over the lifetime of the pension may have been made in many cases in preference to a larger reduction over a shorter period.

While the pension fund levies have ceased and will be ceased as I have already outlined, I have no plans to repay the pension fund levy collected as requested in the details supplied with the questions. The value of the funds raised by way of the levy have been used to protect and create jobs and this has helped to create the improving financial and economic position of the State. Taxpayers to whom the impact of the levy may have been passed on by the chargeable persons responsible for the payment of the levy (the pension scheme trustees etc) will benefit from the changes which I began in Budget 2015 and which will continue in future Budgets to reduce the tax burden on those on low and middle incomes.

Tax Code

Ceisteanna (136)

Thomas P. Broughan

Ceist:

136. Deputy Thomas P. Broughan asked the Minister for Finance his views on introducing a social responsibility levy on drinks manufacturers, as recommended by the national substance misuse strategy group and the National Youth Council of Ireland; if he will consider this revenue raising measure as part of the upcoming budget; and if he will make a statement on the matter. [27287/15]

Freagraí scríofa

Minister for Finance

The Steering Group Report on a National Substance Misuse Strategy recommended a series of actions to deal with the harms caused by alcohol use and misuse, including the introduction of a social responsibility levy on the 'drinks industry' which the Report defined as some or all of those involved in the manufacturing, distribution and retailing of alcohol. The Deputy will be aware that the Minister for Health has primary responsibility for the implementation of the Strategy.

The Deputy has suggested that a social responsibility levy be introduced solely on the manufacturers of alcohol products. I understand that the policy objective of such a levy would be to impose a levy on the drinks industry commensurate with the damage to society caused by the abusive consumption of the products that industry produces. I believe that applying such a levy to drinks manufacturers alone would not achieve that objective, as the availability of cheap and below cost alcohol is not solely a matter for the manufacturers, but for certain retailers of alcohol products. In addition, any consideration of the introduction of such a levy would need to examine wider issues such as its impact on Ireland's export trade. In 2014, exports of alcohol products amounted to nearly €938 million.

All proposed changes to tax policy are considered in the context of the annual Budget and Finance Bill process.

Fuel Laundering

Ceisteanna (137, 138)

Michelle Mulherin

Ceist:

137. Deputy Michelle Mulherin asked the Minister for Finance if he will provide details of the tests that are carried out by the State laboratory to detect petrol and diesel fuel contamination; the type of equipment used in the tests; the accuracy of the tests in identifying contaminated samples; the repeatability of the tests carried out; and if he will make a statement on the matter. [27303/15]

Michelle Mulherin

Ceist:

138. Deputy Michelle Mulherin asked the Minister for Finance the average length of time it takes the State laboratory to identify a sample of contaminated petrol or diesel, and to provide the results to the Revenue Commissioners; and if he will make a statement on the matter. [27304/15]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 137 and 138 together.

I am informed by the State Laboratory, which works closely with the Revenue Commissioners in the area of fuel fraud, that the State Laboratory uses a range of tests to establish whether a petrol or diesel sample meets required specifications and to check for fuel contamination. The exact suite of tests applied depends on the whether a petrol or diesel sample is to be tested and could include any of the following tests: specific gravity; distillation characteristics; simulated distillation profiles; methanol; ethanol; oxygenates; olefins and aromatics; lead; manganese; sulphur; RON and MON. Tests may also be carried out to check for the presence of a range of different fuel markers.

The types of instruments used in the tests include density meters, automated distillation units, UV-Vis spectrophotometers, gas chromatogaphs, gas chromatograph coupled to a mass spectrometer detector, high performance liquid chromatographs, X-Ray Fluorescence spectrometer and a wide range of other commonly available laboratory equipment.

The accuracy and precision (repeatability) characteristics of test methods depend on the sample preparation and analysis technique used, the matrix being tested and the level of analyte present. These parameters have been determined via validation studies for all test methods used by the State Laboratory for routine testing of petrol and diesel samples.

However because contamination of petrol and diesel can occur in many different ways, analyses carried out to test for contamination may also involve some non-routine testing, and accuracy and precision values determined during validation may not be fully applicable.

The State Laboratory has Service Level Agreements in place with all its client Departments and Offices and operates on the basis of agreed turn around times for results to be reported. In the case of Revenue Prosecution samples in the hydrocarbon oils area, the agreement is that 80% of samples will be reported within 50 days. However, achieving this target will depend on the types of samples submitted and the testing required, and on the numbers of samples being within expected levels. Also, at the request of Revenue, testing of priority samples takes precedence, which could have a negative impact on the turn around times for less urgent samples.

Currency Circulation

Ceisteanna (139)

Ruth Coppinger

Ceist:

139. Deputy Ruth Coppinger asked the Minister for Finance further to Parliamentary Questions Nos. 85 to 87, inclusive, of 24 June 2015, if he will clarify that the rounding to the nearest five cent will apply only to cash payments, and that electronic payments will remain unrounded. [27358/15]

Freagraí scríofa

Minister for Finance

I can confirm that rounding will be to the nearest five cent, and will only apply to cash payments and not to electronic payments (such as by debit card) which will remain unrounded. Rounding will apply on a voluntary basis for both retailers and consumers. The rounding rules will not apply to amounts being paid in cash at banks and post offices, and will only apply at the point of sale for the purchase of a good or a service. The Central Bank will continue to ensure that there is an adequate number of coins to meet demand, though demand is expected to fall significantly. The Central Bank has been asked to co-ordinate the communications campaign to ensure consumers and retailers are fully informed about rounding in advance of the national roll-out.

Primary Medical Certificates Applications

Ceisteanna (140)

John McGuinness

Ceist:

140. Deputy John McGuinness asked the Minister for Finance if an application for a primary medical certificate will be granted on appeal in respect of a person (details supplied) in County Kilkenny [27427/15]

Freagraí scríofa

Minister for Finance

I understand the individual concerned appealed the decision of the Health Service Executive to not award them a Primary Medical Certificate to the Disabled Drivers Medical Board of Appeal. I am informed by the Medical Board of Appeal that this appeal was not upheld. 

A citizen can re-apply for a Primary Medical Certificate after six months if there is a deterioration in their condition.

Given the independence of the Medical Board of Appeal is provided for by Regulation 6(1)(e) of S.I. 353 of 1994, the Deputy will appreciate it would not be appropriate for me as Minister for Finance to intervene in the clinical determinations of the Medical Board of Appeal.

Question No. 141 answered with Question No. 135.

Central Bank of Ireland Expenditure

Ceisteanna (142)

Joe Carey

Ceist:

142. Deputy Joe Carey asked the Minister for Finance the payments made by the Central Bank of Ireland to Ernst and Young for the years 2011 to 2014 and for 2015 to date; and if he will make a statement on the matter. [27468/15]

Freagraí scríofa

Minister for Finance

The following table outlines the payments made to Ernst and Young for the years 2011 to 2014. All figures are inclusive of VAT. These figures have been prepared by the Central Bank on an accruals basis, based on when the costs are incurred and not on when the costs are paid.

Fiscal Year	Amount
2011	€2 - €2.5m
2012	€2 - €2.5m
2013	€9.5 - €10m
2014	€11.5 - €12m
2015	€0 - €0.5m

IBRC Operations

Ceisteanna (143)

Michael McGrath

Ceist:

143. Deputy Michael McGrath asked the Minister for Finance the process in place within his Department since the nationalisation of Anglo Irish Bank for reviewing the minutes of the bank's credit committee; if he will confirm whether the minutes of the Irish Bank Resolution Corporation's credit committee were included in the monthly board packs sent by the corporation to his Department, and if so, when his Department began to receive the minutes of the corporation's credit committee; and if he will make a statement on the matter. [27483/15]

Freagraí scríofa

Minister for Finance

As the Deputy will be aware the terms of reference of the proposed Commission of Investigation in relation to IBRC include the following explicit term of reference dealing with information received by the Department of Finance:

"in relation to each transaction under investigation, whether the Minister for Finance or his Department was kept informed where appropriate in respect of the transactions concerned, and whether he, or officials on his behalf, took appropriate steps in respect of the information provided to them."

Both Houses of the Oireachtas have approved these terms of reference. It is important that I do not interfere with or prejudice the important work to be conducted by the Commission of Investigation. In those circumstances I have received legal advice that it would be inappropriate for me to comment publicly in respect of information received from IBRC in relation to the various transactions under review.

Insurance Industry

Ceisteanna (144)

John Halligan

Ceist:

144. Deputy John Halligan asked the Minister for Finance in view of this Deputy's understanding that he is on record of Dáil Éireann stating that claims made against Setanta Insurance would be met by the Motor Insurers Bureau Ireland, if he will provide an explanation as to how it can be justified that genuine claimants are still being denied their court-awarded compensation and are currently caught in limbo; his views that this situation should no longer be permitted; if his opinion on this matter has changed; his Department's plans to ensure a situation of this nature is not permitted to happen; and if he will make a statement on the matter. [27485/15]

Freagraí scríofa

Minister for Finance

Setanta Insurance Company Limited is a Maltese incorporated company. Setanta was formally placed into liquidation by the Maltese Financial Services Authority on 30th April 2014 when a liquidator was appointed under the provisions of the Maltese Companies Acts 1995. The liquidation is proceeding according to Maltese law. 

The liquidation of an insurance company is a legally complex and time consuming process. The Liquidator has advised that settlements and refunds of premiums can only be paid out by the Liquidator after all of the Company's liabilities are quantified. Since it could some time for a particular case to be finalised and, under the Statute of Limitations, claimants are given two years following an accident to make an initial claim, it may take some years before the liquidation process is completed. 

In the immediate aftermath of the announcement of the liquidation of Setanta, my officials were informed by Insurance Ireland that the Motor Insurers' Bureau of Ireland had indicated that they intended to accept all third party claims. My statements in the Dáil reflected this position which was accurate based on the information available at the time. 

However, the MIBI obtained a legal opinion and, having considered it, they advised the Minister for Transport, Tourism and Sport in late July 2014 that the 2009 Agreement with him does not require the MIBI to satisfy awards against drivers covered by a policy of insurance where the insurer is unable to pay all or part of an award because of insolvency. Jointly with the Minister for Transport, Tourism and Sport, I obtained legal advice on this matter from the Attorney General. Having considered the Attorney General's advices, I proceeded on the basis that the MIBI would not be playing a role in compensating claimants due awards under Setanta policies and that all Setanta claims, including those which were settled but not paid out by Setanta, would fall to be processed as part of the Setanta liquidation. The Accountant of the Courts of Justice and the Setanta Liquidator have done much work to agree procedures to allow for advance payments of up to 65% in respect of claims to be paid from the Insurance Compensation Fund.  

This updated position was provided by me in response to Parliamentary Questions regarding Setanta Insurance and the MIBI on 17th September 2015.

The respective roles of the Insurance Compensation Fund and the Motor Insurers' Bureau of Ireland in the compensation of former Setanta policyholders is currently before the High Court. The matter will be heard by Mr Justice Hedigan on 13 July 2015. 

My Department and the Central Bank will in due course be reviewing the circumstances relating to Setanta and will be reporting to me on what lessons can be learnt and how the framework can be strengthened. However, since Setanta is a Maltese authorised company subject to prudential supervision by the Malta Financial Services Authority, any follow-up investigation on the regulatory issues surrounding the firm's failure falls under the responsibility of the MFSA as home regulator.

Tax Code

Ceisteanna (145)

Michael Healy-Rae

Ceist:

145. Deputy Michael Healy-Rae asked the Minister for Finance his views on a matter (details supplied) regarding inheritance tax; and if he will make a statement on the matter. [27488/15]

Freagraí scríofa

Minister for Finance

Capital Acquisitions Tax (CAT) is the overall title for both Gift and Inheritance Tax. The tax is charged on the amount gifted to, or inherited by, the beneficiary of the gift or inheritance.

For the purposes of CAT, the relationship between the person who provides the gift or inheritance (i.e. the disponer) and the person who receives the gift or inheritance (i.e. the beneficiary), determines the maximum life-time tax-free threshold known as the Group threshold below which gift or inheritance tax does not arise.

There are, in all, three separate Group thresholds based on the relationship of the beneficiary to the disponer.

The Group A tax free threshold of €225,000, applies where the beneficiary is a child (including adopted child, stepchild and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.

The Group B tax free threshold of €30,150, applies where the beneficiary is a brother, sister, a nephew, a niece or lineal ancestor or lineal descendant of the disponer.

The Group C tax free threshold €15,075, applies in all other cases.

Where a person receives gifts or inheritances in excess of their relevant tax free threshold, CAT at a rate of 33% applies on the excess over the tax free threshold. In recent years these thresholds were reduced and the rate has been increased in order to maintain the yield from capital taxes in the face of falling asset prices and as part of our fiscal consolidation efforts. In addition, taxes on certain capital are less harmful from an economic perspective than taxes on employment.

I am aware that property values have increased, with developments which had been restricted to the Dublin area now manifesting in other areas of the country, though not to the same extent in terms of price rises. I recognise that the increase in property values has a bearing on taxation of the inheritance and gifting of property with respect to CAT thresholds. In this light I will, as the Deputy acknowledges in the details supplied, be keeping Capital Acquisitions Tax thresholds, rates and other aspects of the tax under review, particularly in the context of preparations for Budget 2016 and the consequent Finance Bill. I am not in a position nor would I intend to say at this point what specific changes I may or may not propose but I will bear in mind the Deputy's concerns in my consideration of these issues.

Mortgage Debt

Ceisteanna (146)

Finian McGrath

Ceist:

146. Deputy Finian McGrath asked the Minister for Finance his views on a matter (details supplied) regarding mortgage arrears; and if he will make a statement on the matter. [27602/15]

Freagraí scríofa

Minister for Finance

I have been informed that for reasons of client confidentiality AIB/EBS does not comment on individual cases. However the institution is satisfied that the referenced case is being dealt with in a manner consistent with the treatment strategy for customers in mortgage difficulty.

I appreciate the difficult position many people find themselves in with respect to mortgage arrears but it would not be appropriate for me to intervene directly in discussions between any financial institution and a third party. It is advisable for any individual dealing with debt to seek financial and legal advice on their specific situation and on the alternative courses of remedial action that are open to them.

There are  a number of  sources of independent advice on dealing with debt including: the Money Advice and Budgeting Service (MABS) offer advice on dealing with mortgage debt. Their web address is www.mabs.ie. The Insolvency Service of Ireland, www.isi.gov.ie, offers professional advice and practical assistance in framing a personal insolvency arrangement to distressed borrowers and can be reached at the following telephone number - 076 106 4200. In addition, a dedicated website, www.keepingyourhome.ie, has been put in place to provide information on mortgages arrears issues. There is also a Mortgage Arrears Information Helpline, which was established under the aegis of the Citizens Information Board, to provide more tailored information to individual callers. Their contact number is 076 107 4050.

The Code of Conduct on Mortgage Arrears (CCMA) provides a strong  consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long-term resolution is sought by lenders with each of their borrowers. In dealing with these difficult circumstances borrowers must be dealt with in a fair and transparent manner and on a case-by-case basis.

If the person on whose behalf the Deputy raised this question is dissatisfied with the way their lender applied the CCMA, there is an appeals process and recourse to the Financial Services Ombudsman thereafter, if the complaint is not satisfactorily resolved at the appeals stage. 

I would like to assure the House that both I and the Government as a whole are acutely conscious of the impact of debt on families across the country and are determined to see it resolved.

Mortgage Debt

Ceisteanna (147)

Finian McGrath

Ceist:

147. Deputy Finian McGrath asked the Minister for Finance if he will address a matter regarding mortgage arrears in respect of a person (details supplied) in Dublin 5; and if he will make a statement on the matter. [27604/15]

Freagraí scríofa

Minister for Finance

I appreciate the difficult position many people find themselves in with respect to mortgage arrears but it would not be appropriate for me to intervene directly in discussions between any financial institution and a third party. It is advisable for any individual dealing with debt to seek financial and legal advice on their specific situation and on the alternative courses of remedial action that are open to them.

There are  a number of  sources of independent advice on dealing with debt including: the Money Advice and Budgeting Service (MABS) offer advice on dealing with mortgage debt. Their web address is https://www.mabs.ie. The Insolvency Service of Ireland, www.isi.gov.ie, offers professional advice and practical assistance in framing a personal insolvency arrangement to distressed borrowers and can be reached at the following telephone number - 076 106 4200.

In addition, a dedicated website, www.keepingyourhome.ie, has been put in place to provide information on mortgages arrears issues. There is also a Mortgage Arrears Information Helpline, which was established under the aegis of the Citizens Information Board, to provide more tailored information to individual callers. Their contact number is 0761 07 4050.

The Code of Conduct on Mortgage Arrears (the CCMA) provides a strong  consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long-term resolution is sought by lenders with each of their borrowers. In dealing with these difficult circumstances borrowers must be dealt with in a fair and transparent manner and on a case-by-case basis. If the person on whose behalf the Deputy raised this question is dissatisfied with the way their lender applied the CCMA, there is an appeals process and recourse to the Financial Services Ombudsman thereafter, if the complaint is not satisfactorily resolved at the appeals stage. 

I would like to assure the house that both I and the Government as a whole are acutely conscious of the impact of debt on families across the country and are determined to see it resolved.

Mortgage Debt

Ceisteanna (148)

Finian McGrath

Ceist:

148. Deputy Finian McGrath asked the Minister for Finance his views on a matter (details supplied) regarding a building society; and if he will make a statement on the matter. [27605/15]

Freagraí scríofa

Minister for Finance

I have been informed that the institution referred to is not refusing to deal with customers in financial difficulties. Rather in circumstances where borrowers have a difficulty it is working with those customers to implement a sustainable mortgage restructure that allows the customers to stay in their home. The institution also has policies and processes in place to ensure that it is consistent in its approach to assessing sustainable mortgage affordability for challenged customers.

I appreciate the difficult position many people find themselves in with respect to mortgage arrears but it would not be appropriate for me to intervene directly in discussions between any financial institution and a third party. It is advisable for any individual dealing with debt to seek financial and legal advice on their specific situation and on the alternative courses of remedial action that are open to them.

There are  a number of  sources of independent advice on dealing with debt including: the Money Advice and Budgeting Service (MABS) offer advice on dealing with mortgage debt. Their web address is https://www.mabs.ie. The Insolvency Service of Ireland, www.isi.gov.ie, offers professional advice and practical assistance in framing a personal insolvency arrangement to distressed borrowers and can be reached at the following telephone number - 076 106 4200.

In addition, a dedicated website, www.keepingyourhome.ie, has been put in place to provide information on mortgages arrears issues. There is also a Mortgage Arrears Information Helpline, which was established under the aegis of the Citizens Information Board, to provide more tailored information to individual callers. Their contact number is 0761 07 4050.

The Code of Conduct on Mortgage Arrears (CCMA) provides a strong  consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long-term resolution is sought by lenders with each of their borrowers. In dealing with these difficult circumstances borrowers must be dealt with in a fair and transparent manner and on a case-by-case basis. If the person on whose behalf the Deputy raised this question is dissatisfied with the way their lender applied the CCMA, there is an appeals process and recourse to the Financial Services Ombudsman thereafter, if the complaint is not satisfactorily resolved at the appeals stage. 

I would like to assure the House that both I and the Government as a whole are acutely conscious of the impact of debt on families across the country and are determined to see it resolved.

Credit Union Fund

Ceisteanna (149)

Seamus Healy

Ceist:

149. Deputy Seamus Healy asked the Minister for Finance if he will use some of the credit union fund of €250 million already established to develop the credit union movement for the wider social benefit of society, and in particular to support credit unions to develop electronic financial services, including current accounts; and if he will make a statement on the matter. [27680/15]

Freagraí scríofa

Minister for Finance

The Credit Union and Co-operation with Overseas Regulators Act 2012 provides the statutory basis for the restructuring of credit unions and placed the Credit Union Restructuring Board - ReBo - on a statutory footing from 1 January 2013. ReBo is currently in the process of overseeing and facilitating restructuring on a voluntary, incentivised and time-bound basis, as recommended by the Commission on Credit Unions. The Government has made available €250 million to the Credit Union Fund specifically for restructuring purposes.

Section 43 of the 2012 Act provides that the Minister for Finance will conduct a review of ReBo s work by January 2016 at the latest. The Review will ascertain if ReBo has completed the performance of its functions and also the cost of restructuring, including the estimated cost of future mergers during the life of ReBo. 

The terms of the State aid Restructuring package agreed between the Department of Finance and DG Competition enable me as Minister for Finance, under section 57(5) of the 2012 Act, to provide restructuring support from the Credit Union Fund on such terms and conditions as I consider appropriate.

The terms of the Restructuring Scheme are specific to restructuring credit unions. In other words, there is no provision within those terms to use any the €250 million for any purpose other than credit union restructuring.

However, my Department is always open to examining any proposals from the representative bodies or individual credit unions in relation to the development of a strengthened and revitalised credit union sector.

NAMA Assets Sale

Ceisteanna (150)

Brendan Smith

Ceist:

150. Deputy Brendan Smith asked the Minister for Finance if his Department was kept informed by the National Asset Management Agency of the process involved in selling off its loan book in Northern Ireland; the contact there has been between his Department and the Northern Ireland Executive regarding the disposal of such property; and if he will make a statement on the matter. [27681/15]

Freagraí scríofa

Minister for Finance

I was not directly involved in the sales process itself but was kept informed by the NAMA Chairman on overall progress in relation to the sale of the NAMA Northern Ireland loan book. As the Deputy will appreciate, decisions on sales transactions are a matter for the NAMA Board in the context of its statutory independent commercial mandate.

In light of the political sensitivities in Northern Ireland to NAMA's exposure to Northern Ireland, the potential sale of such a large portfolio and the impact it may have on the Northern Ireland economy, I had a number of meetings with members of the Northern Ireland Executive where discussions of NAMA's Northern Ireland portfolio and a potential sales process were discussed. I can confirm the following meetings between myself, my officials, and members of the Northern Ireland Executive where NAMA's Northern Ireland portfolio and its potential sale were discussed:

13/06/2013 - Meeting in Dublin with Minister of Finance and Personnel

04/09/2013 - Meeting in Dublin with Minister of Finance and Personnel

27/09/13 - Meeting in Stormont with First Minister & Minister of Finance and Personnel.

14/01/14 - Phone call with First Minister & Deputy First Minister.

28/03/14 - Phone call with First Minister.

I also regularly attended the biannual North-South Ministerial Council meetings between members of the Irish Government and the Northern Ireland Executive, where finance matters with cross border implications were regularly on the agenda and at which I briefed attendees on NAMA's general progress. It was not unusual to discuss high-level matters relating to NAMA's Northern Ireland Portfolio at these meetings.

In respect of the bearing these meetings had on the ultimate sale of NAMA's Northern Ireland loan portfolio, I have set out further detail below.

Following a meeting on 13 June 2013 with the Minister of Finance and Personnel of Northern Ireland regarding banking issues with cross border implications, I received a letter for the Minister of Finance and Personnel which included a letter he had received from the law firm Brown Rudnick regarding potential investor interest in acquiring NAMA's Northern Ireland loan portfolio. In my response to the Minister, I advised him that such an expression of interest should be made directly to NAMA and that any decision to entertain such interest would be a decision for NAMA. I also indicated that NAMA's policy is to conduct openly marketed and competitive sales processes.

I am advised that following a subsequent expression of interest to NAMA, NAMA appointed Lazard, a major international investment bank, to assess the market interest in a potential sale of NAMA's Northern Ireland loan portfolio and to subsequently advise on and oversee the sales process. Lazard invited eight major global investment groups, alongside PIMCO, to participate in a competitive sales process (Project Eagle).

I am further advised that on 10 March 2014, PIMCO informed NAMA that its compliance staff had discovered that PIMCO's proposed fee arrangement with Brown Rudnick included a proposed payment of fees to Tughans, the legal firm who acted as a subcontractor for Brown Rudnick and a proposed payment of fees to a former external member of NAMA's Northern Ireland Advisory Committee (NIAC). NAMA viewed this disclosure as a very serious development and the NAMA Board met on 11 March 2014 to consider the most appropriate course of action. The NAMA Board decided that if PIMCO did not withdraw, NAMA could not permit them to remain in the sales process. On 12 March 2014, NAMA indicated its serious concerns to PIMCO regarding the proposed fee arrangement and, in particular, the proposed fee payment to the former member of the NIAC. On 13 March 2014, PIMCO informed NAMA that it would withdraw from the Project Eagle sales process. For the avoidance of doubt, no fee payment was made by NAMA to PIMCO or to any of the parties involved. I was informed of these developments by NAMA, including the withdrawal of PIMCO from the process.  

NAMA and Lazard continued to engage with the remaining bidders and I am informed that Cerberus emerged as the highest bidder for the loan portfolio. In light of the matter disclosed to it by PIMCO in March 2014, before confirming Cerberus as its preferred bidder, I am advised that NAMA, sought and received confirmation from Cerberus that no fee was payable to any person connected with NAMA in relation to any aspect of Project Eagle.  The proposed sale to Cerberus was announced in April 2014 and completed on 20 June 2014.

NAMA has also recently made statements regarding the sales process which outline that NAMA takes all measures it considers appropriate to safeguard the integrity of all of its sales processes. NAMA's statement reiterates that confirmation was sought from Cerberus that no fee was payable to any person connected with NAMA, in advance of the conclusion of the sales process. The Deputy will also note that Cerberus has stated publicly that in providing that confirmation to NAMA it sought and received the same confirmation from its legal advisor Brown Rudnik and, through Brown Rudnik, from the Northern Ireland law firm Tughans.

I am fully satisfied that the best return to the taxpayer was achieved at that time and that the Agency acted conscientiously in exercising its commercial discretion.

I understand that the very serious allegations made recently in the Dáil refer to the actions of a former partner of Tughans. Tughans, in their released statement, confirmed "that a former partner diverted to an account of which he was the sole beneficiary, professional fees due to the firm without the knowledge of the partners". Tughans also confirmed that the individual in question no longer works for the firm and that they have "reported the circumstances of the departure of the former partner to the Law Society". Therefore questions regarding the specific allegations are a matter for Tughans, the NI Law Society, and potentially law enforcement authorities in Northern Ireland. 

I understand that Cerberus, in their statement, have emphasised that "no improper or illegal fees were paid by [Cerberus] or on [Cerberus'] behalf and [they] take any allegation to the contrary extremely seriously."  

I wish to stress that the recent allegations, made by Deputy Wallace, in the Dáil regarding the alleged misappropriation of funds within Tughans law firm are not in any way applicable to NAMA. The swift remedial action taken by NAMA when an issue of concern did arise with one of the bidders, verifies NAMA's commitment to safeguarding the integrity of its sales processes.

I would add that both NAMA and the Government will cooperate fully with any criminal investigation, should such cooperation be needed. Similarly, I understand that NAMA will appear before the Oireachtas Public Accounts Committee, on Thursday 9 July 2015. The NAMA Chairman and CEO have stated that they welcome the opportunity to put on the record the factual position in relation to the sale of the loan portfolio of Northern Ireland debtors and to address any issues, of which NAMA has knowledge, which may be raised by the Committee.

NAMA Assets Sale

Ceisteanna (151)

Brendan Smith

Ceist:

151. Deputy Brendan Smith asked the Minister for Finance if any assessment has been carried out on the potential impact on the Northern Ireland economy following the sale of the National Asset Management Agency's Northern Ireland loan book; and if he will make a statement on the matter. [27682/15]

Freagraí scríofa

Minister for Finance

Neither NAMA, nor my Department, has carried out an assessment on the Northern Irish economy in relation to the sale of these loans.

NAMA Assets Sale

Ceisteanna (152)

Brendan Smith

Ceist:

152. Deputy Brendan Smith asked the Minister for Finance if a memorandum of understanding exists between his Department, the National Asset Management Agency and the successful bidder for the Northern Ireland loan book; and if he will make a statement on the matter. [27683/15]

Freagraí scríofa

Minister for Finance

The Department of Finance did not enter into any Memorandum of Understanding with NAMA, the ultimate purchaser, or any other third party in respect of the sale of the Northern Ireland loan portfolio. I am advised by NAMA that the Agency, likewise, did not enter into any such Memorandum of Understanding with any involved third party. The sale of NAMA Northern Ireland loan portfolio was conducted on an open market competitive basis and all bidders were given equal access to the same information. As is standard in any loan sale between two parties, there is a Loan Sale Agreement between NAMA and the loan sale buyer which is commercially confidential.

I am aware that the Northern Ireland Executive sought to agree letters of intent with potential purchasers of the NAMA Northern Ireland loan portfolio regarding the intended management of the portfolio post acquisition from NAMA. I understand that the purpose of establishing such letters of intent by the Northern Ireland Executive was to help protect and promote the recovery of the Northern Ireland property market and broader economy in the context of the potential concentrated ownership of property across that economy by a single investor following its sale by NAMA.

NAMA Assets Sale

Ceisteanna (153)

Brendan Smith

Ceist:

153. Deputy Brendan Smith asked the Minister for Finance if he will provide, in tabular form, the dates and location of all meetings which took place between his Department and the National Asset Management Agency's Northern Ireland advisory committee from 1 March 2011 to date in 2015; and if he will make a statement on the matter. [27684/15]

Freagraí scríofa

Minister for Finance

I can confirm to the Deputy that there were no meetings between my Department and NAMA's Northern Ireland Advisory Committee. The principal responsibility of the Northern Ireland Advisory Committee was to advise the NAMA Board in relation to strategy for its Northern Ireland assets. The Deputy will note that the NAMA Board, with my agreement as Minister for Finance, having regard to the implications of the sale of the Northern Ireland loan portfolio (Project Eagle) for the Northern Ireland Advisory Committee, resolved to dissolve the Committee following its meeting on 8th September 2014.

NAMA Assets Sale

Ceisteanna (154)

Brendan Smith

Ceist:

154. Deputy Brendan Smith asked the Minister for Finance the status of the National Asset Management Agency's Northern Ireland advisory committee; if he will provide, in tabular form, the period of service of all those persons who have served on the committee; and if he will make a statement on the matter. [27685/15]

Freagraí scríofa

Minister for Finance

The NAMA Act provides for the establishment of Advisory Committees. Following discussions between the then Minister for Finance and the Minister of Finance and Personnel of Northern Ireland, it was agreed that an advisory committee would be established to advise the NAMA Board in relation to matters regarding NAMA's Northern Ireland assets. On the proposal of the then Minister for Finance, NAMA established the Northern Ireland Advisory Committee ("NIAC") in early 2010.

Members of the Committee were selected and appointed by the main NAMA Board to which the NIAC reported. Potential external appointees to the NIAC were provided for consideration to the NAMA Board by a number of stakeholders including the Minister of Finance and Personnel of Northern Ireland.

The Board resolved, with my agreement as Minister for Finance, and having regard to the implications of Project Eagle for the Committee, to dissolve the NIAC on 8th September 2014.

The period of service of all those persons who have served on the Committee is set out in the following table:

Name	Member	Appointment	Resignation/End of Tenure
Frank Daly (Chair)	NAMA Board Chairman	13-Oct-11	08-Sep-14
Peter Stewart (Chair)*	NAMA Board Member	04-Feb-10	10-Oct-11
Brian McEnery	NAMA Board Member	25-Feb-10	08-Sep-14
Eilish Finan	NAMA Board Member	06-May-10	21-Dec-13
Ronnie Hanna	NAMA Executive	06-May-10	08-Sep-14
Willie Soffe	NAMA Board Member	10-Mar-11	08-Sep-14
Brian Rowntree	External Member	16-Apr-10	08-Sep-14
Frank Cushnahan	External Member	16-Apr-10	08-Nov-13

*Peter Stewart was Chairman of the Committee until his resignation from the Board and Committees on 10 Oct 2011. He was replaced as Chairman of the Committee by Frank Daly.

I would also like to refer the Deputy to NAMA's Annual Reports available on NAMA's website for further detail. Each annual report sets out the NIAC membership and provides further detail regarding the workings of the NIAC.

Social and Affordable Housing Provision

Ceisteanna (155)

Seamus Healy

Ceist:

155. Deputy Seamus Healy asked the Minister for Finance if he will establish a credit union supported, State-backed fund for social housing, given the availability of €7 to €8 billion for such a fund from the credit union movement, and the huge social housing waiting lists; and if he will make a statement on the matter. [27686/15]

Freagraí scríofa

Minister for Finance

The Department of the Environment, Community and Local Government is the Department primarily responsible for the formulation and implementation of policy and for the preparation of legislation in relation to housing. Any social housing funding mechanism would have to be in line with that Department's policy.

My Department is always open to examining and discussing any proposals received from credit unions or their representative bodies. Over the last number of years (and even as recently as within the last month) credit union representative bodies have been in contact with the Department of Finance regarding social housing initiatives. Officials from my Department are facilitating ongoing discussions with the representative bodies regarding this matter.