Insurance Costs

Ceisteanna (207)

Robert Troy

Ceist:

207. Deputy Robert Troy asked the Minister for Finance the progress of the cost of insurance working group to date; and the proposals forthcoming from the group which will have an immediate impact on the cost of motor insurance and insurance for operators in the leisure industry. [33189/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

At the outset the Deputy should note  that I am very conscious of the difficulties being faced by many operators in the leisure sector in relation to the cost and availability of insurance. I also appreciate that there is some frustration about the perceived pace of reform.  However as the Deputy is aware there is unfortunately no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises.  This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied, and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of consumers or businesses seeking insurance.

I wish to however to emphasise how important this issue is for the Government.  As the Deputy is aware, the Cost of Insurance Working Group (CIWG) was established in July 2016 and undertook an examination of the factors contributing to the increasing cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses.  The Deputy will recall that the CIWG has produced two reports since its inception and has been working to implement the 33 recommendations of the Cost of Motor Insurance Report published in 2017, as well as the 15 Recommendations of the Cost of Employer and Public Liability Insurance Report, published in 2018.  To that end, the key achievements to date from the two reports, including the following: 

- the passing of the Judicial Council Bill by the Oireachtas on 9 July in order to implement recommendation of the Personal Injuries Commission regarding award levels in this country, including a judicial recalibration of the existing Book of Quantum guidelines;

- the commencement by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform;

- the establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance;

- reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019;

- commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;

- the reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers; and,

- various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality. 

I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from June 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak).  The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.

Undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs particularly for small businesses is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions.  In this regard, the Personal Injuries Commission has highlighted the significant differential between award levels in Ireland and other jurisdictions, and has made a number of recommendations to address this issue, in particular the establishment of a Judicial Council to compile guidelines for appropriate general damages for various types of personal injury.  Minister of State D’Arcy and I have worked closely with the Minister for Justice and Equality, Mr Charlie Flanagan TD to progress the Bill through the Houses of the Oireachtas as a matter of priority.  I am therefore pleased that the Bill was passed by both Houses of the Oireachtas on 9 July, and I expect it will be signed into law by the President shortly. 

Now that the Bill has been passed, it will be a matter for the Judiciary to put in place the Judicial Council and to establish the Personal Injuries Guidelines Committee.  While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly and take account of the PIC’s benchmarking report.

Finally, I would like to assure the Deputy that the Cost of Insurance Working Group will continue to focus on implementing the remaining recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance and the Ninth Update Report by the Cost of Insurance Working Group was published last week.  I am hopeful that the cumulative effects of the completion of the two Reports’ recommendations will include increased stability in the pricing of insurance for businesses and a more competitive insurance market.

Insurance Industry

Ceisteanna (208, 209)

Michael Moynihan

Ceist:

208. Deputy Michael Moynihan asked the Minister for Finance the level of engagement he had with insurance companies here in the past 12 months; the outcome of any of these discussions; and if he will make a statement on the matter. [33235/19]

Amharc ar fhreagra

Michael Moynihan

Ceist:

209. Deputy Michael Moynihan asked the Minister for Finance if he has met groups calling for reform of the insurance industry here in the past 12 months; and if he will make a statement on the matter. [33236/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 208 and 209 together.

As Minister for Finance, I frequently meet companies, lobbying groups and various interest groups on a range of issues that are directly or indirectly related to my role as Minister. The issue of insurance has arisen in those engagements. However my colleague in the Department, Minister of State with responsibility for Insurance Michael D’Arcy T.D., has had a much more significant and ongoing engagement with representatives from insurance companies and other relevant stakeholders in relation to insurance related matters in his role as chair of the Cost of Insurance Working Group (CIWG).

As the Deputy will be aware the problem of rising motor insurance premiums was the main impetus for the establishment of the CIWG.  Its Report on the Cost of Motor Insurance was published in January 2017 and makes 33 recommendations with 71 associated actions to be carried out in agreed timeframes, set out within an Action Plan. The Working Group continued its work throughout 2017 and subsequently published the Report on the Cost of Employer and Public Liability Insurance in January 2018.

Stakeholder consultation formed the foundation upon which the CIWG’s two reports and their recommendations were developed.  This consultation process undertaken by the CIWG involved a wide range of stakeholders representing the different voices within this sector, including representative bodies, the major individual insurance providers and interest groups.  The impact of excessive premiums being charged to consumers was a feature of this engagement process with industry.

Since the publication of the reports, my officials regularly raise specific issues affecting consumers  during their ongoing engagement with Insurance Ireland.  Additionally, there is frequent correspondence with various insurance companies and other bodies with an interest in insurance reform, such as the Alliance for Insurance Reform.

In addition it should be noted that in the past 14 months, Minister of State D’Arcy has had two notable series of meetings with each of the major insurance companies separately. The first took place in June 2018 and concerned the impacts of the storm events in early 2018; the second took place in June 2019 regarding the Judicial Council Bill 2017 and sought commitments by insurers to lower premiums should award levels come down as a result of the new law.

The Deputy should also note that Minister of State D’Arcy and my officials regularly update me on insurance matters, including engagements with the insurance industry and all other interested parties.

In conclusion, I believe in an overall sense the work of the CIWG including its engagement with the insurance industry and other stakeholders is bearing fruit particularly in relation to motor insurance (CSO figures from May 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak). However, I do acknowledge that this benefit is not being felt by small business in relation to public liability cover and that further work is required. This is why the passing of the Judicial Council Bill last week was so important as once enacted it will provide scope for the Judiciary to introduce guidelines for personal injury awards which better reflect levels in other jurisdictions. If this happens, I believe it will have a positive impact both on premiums and on the availability of cover.

Revenue Commissioners Resources

Ceisteanna (210)

Seán Haughey

Ceist:

210. Deputy Seán Haughey asked the Minister for Finance the estimated full-year cost of purchasing eight extra dogs for the Revenue Commissioners dog unit; if there will there be an increase in the number of dogs in the unit having regard to Brexit; and if he will make a statement on the matter. [33308/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the initial cost of each additional detection dog team is approximately €100,000. This includes the cost of a trained detection dog, salary of the handler, 8 weeks training for the handler with the dog, a fully fitted out dog transport van, a kennel and associated security at the handler’s home. The ongoing annual cost would be in the region of €40,000 which would include salary, allowances, uniform, food, vet bills and other related costs.

Revenue currently operate a complement of 25 Detection Dog Teams, each consisting of one detection dog with a trained handler.  There are no immediate plans to increase the number of Detection Dog Teams for Brexit. Revenue keeps its detection dog requirements under constant review having regard to risk assessment and operational needs.

Tax Code

Ceisteanna (211)

Brendan Ryan

Ceist:

211. Deputy Brendan Ryan asked the Minister for Finance his plans to restore the marginal relief exemption limit to tax payers over 65 years of age from the reduced rate of €36,000 to the rate of €40,000 that pertained prior to 2011. [33315/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

A person aged 65 and over is fully exempt from income tax where his or her total income from all sources is less than the relevant exemption limit. For 2019, the exemption limits are €36,000 for a married couple or civil partners and €18,000 for a single individual. Where an individual exceeds the exemption limit, he or she is liable to tax based on the normal system of rate bands and tax credits, subject to marginal relief where relevant.

The age exemption limits were reduced from €40,000 to €36,000 for jointly assessed married couples, and from €20,000 to €18,000 for single persons in Budget 2011. This was legislated for in Finance Act 2011 and took effect for the year of assessment 2011 and subsequent years.

The purpose behind the age exemption is to strike the appropriate balance between ensuring that those who are in receipt of income pay some tax and contribute to the Exchequer, against the need to safeguard against poverty in retirement. 

I am satisfied that the current limits are appropriate.  In 2016, this measure benefited 74,400 taxpayer units and I understand that there is no evidence to indicate that the current exemption limits are causing any undue financial hardships for those over 65.

It should also be noted that the age exemption is only one of many types of relief that are available for those at retirement age – as those over 66 are exempt from Employee PRSI, and those over 70 with a total annual income of less than €60,000 benefit from a reduced rate of Universal Social Charge.  Furthermore, other income tax credits may also be available depending on the personal circumstances of the individual, such as the personal tax credit, those for widows/widowers, for blind individuals, for those caring for incapacitated children or dependant relatives, and for health expenses incurred by the taxpayer.  These apply in additional to the various expenditure measures that give support to the over 65s, including the State pension and free travel pass.

Any consideration of an increase to the Age Exemption would need to be cognisant of the significant changes to the demographics in Ireland that are projected in the medium to long-term regarding the ageing of the population. As a result, even without making any discretionary changes such as the Deputy is suggesting, there will be significant pressure on the Exchequer to fund expenditure in areas such health and social welfare.

It is my view that the current income exemption limits are reasonable and represent the appropriate use of limited resources, taking account of the various other State supports for people in retirement.

Help-To-Buy Scheme Data

Ceisteanna (212)

Pearse Doherty

Ceist:

212. Deputy Pearse Doherty asked the Minister for Finance the estimated annual cost of extending the help-to-buy scheme but at a reduced cap of €250,000, €300,000 and €400,000, respectively; and if he will make a statement on the matter. [33358/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that extending the Help to Buy (HTB) scheme in the manner outlined by the Deputy, whereby the purchase/self-build of a house costing in excess of the amounts stated would not be eligible for a refund, would cost an estimated €60m, €25m and €10m per annum respectively for reduced caps of €400,000, €300,000 and €250,000. This is estimated from 2018 data.

Climate Change Policy

Ceisteanna (213)

John Lahart

Ceist:

213. Deputy John Lahart asked the Minister for Finance if he is considering a scrappage scheme in the context of the Climate Action Plan 2019 for diesel cars; and if he will make a statement on the matter. [33369/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Government's Climate Action Plan contains the following action point: As an alternative to the current grant regime, consider in 2020 a car-scrappage scheme to promote the purchase of electric vehicles. This is directed to my Department.

The previous car scrappage scheme operated from January 2010 to July 2011. VRT relief of up to €1,500 was available upon registration of a new vehicle, subject to the scrappage of a qualifying old vehicle. The VRT relief was provided where a new category A, or passenger car of emissions band A or B with CO2 emissions of 140g/km or lower was purchased and registered and an old car scrapped.

To qualify for relief, the scrapped vehicle must have been registered in the State in the name of the purchaser of the new car for at least 18 months previous to the date of scrappage;  and on the day of scrappage been ten years old or more from the date of first registration.

The current situation is different. There are currently significant Government-backed incentives in place for electric vehicles including VRT relief of up to a further €5,000. Based on this existing relief, a person purchasing an electric vehicle with an Open Market Selling Price of under €36,000 would currently pay no VRT. This suggests that any car scrappage scheme that was based on the provision of VRT relief would be ineffective because no VRT is paid on the registration of most Battery Electric Vehicles to begin with. The principal effect of any such VRT relief would be to gift taxpayers money to reduce the acquisition costs for buyers of higher end BEVs. In that regard it is unlikely that there would be high volume of motorists with 10 year old cars who would be in the market for higher end Battery Electric Vehicles.    

In addition, the market is more complex than in 2010 with the emergence of PCPs as a popular method of acquiring a car for use and potentially purchasing it. The default position is that the legal owner of the vehicle, generally the car financing company, would be the direct beneficiary of any such VRT relief.

End-of-Life Vehicles Disposal

Ceisteanna (214)

John Lahart

Ceist:

214. Deputy John Lahart asked the Minister for Finance his plans to deal with the expected reduction in diesel and petrol-fuelled cars as a result of the ambition set out in the Climate Action Plan 2019 regarding the way in which such cars will be disposed of; and if he will make a statement on the matter. [33374/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

My Department is responsible for matters relating to the registration and taxation of vehicles. 

The disposal of vehicles is governed by the European Union (End-of-Life Vehicles) Regulations 2014 and is a matter for the Minister for Communications, Climate Action & Environment.

Excise Duties Yield

Ceisteanna (215)

John Lahart

Ceist:

215. Deputy John Lahart asked the Minister for Finance the plans he has considered to offset the anticipated significant reduction in excise duty and other fuel taxes as a consequence of the increase in electric car sales uptake; and if he will make a statement on the matter. [33375/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Though the number of electric vehicles on Irish roads make up a very small portion of the current fleet, I am aware of ambitious targets to increase these numbers as set out in the Cliamte Action Plan. Increased uptake of electric vehicles, in substitution for internal combustion engine vehicles, will impact on revenues the exchequer receives through fuel taxation. 

This is a matter under active considertion and some options are set out in my Department's Climate Action & Tax Paper produced for the Tax Strategy Group. This can be accessed at: https://assets.gov.ie/19116/c447474fea5e422080a6384b7a84fbed.pdf.

Climate Change Policy

Ceisteanna (216)

John Lahart

Ceist:

216. Deputy John Lahart asked the Minister for Finance his plans to reduce parking facilities for civil and public servants in the city within the city cordon area in the context of the Climate Action Plan 2019; and if he will make a statement on the matter. [33376/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Climate Action Plan was agreed by Government last month.   The Plan is not prescriptive on the question of parking for civil and public servants.  However, I note that it has a multi-annual focus and that it envisages the development and implementation “of planning rules and guidelines across residential and non-residential parking locations for EV charging infrastructure.  

I am of the view that policy in relation to the matter raised by the Deputy should evolve taking account of the general thrust of the Climate Action Plan.

NewERA Data

Ceisteanna (217)

Catherine Murphy

Ceist:

217. Deputy Catherine Murphy asked the Minister for Finance the amount expended by NewERA on external advice and consultancy regarding its work with the Department of Transport, Tourism and Sport and all other NewERA-designated bodies in the past five years by amount, consultancy firm hired and the reason and or projects the external consultancy was engaged in tabular form; and if he will make a statement on the matter. [33395/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

It was not possible for the National Treasury Management Agency to provide the information sought in the time available and, therefore, I will make arrangements to provide the information to the Deputy in line with Standing Orders.

Tax Code

Ceisteanna (218)

Micheál Martin

Ceist:

218. Deputy Micheál Martin asked the Minister for Finance if he and his officials have received correspondence from a charity (details supplied) regarding concerns about tax certainty; and if he will make a statement on the matter. [33438/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

My Department has recently received a representation from the organisation concerned and a reply is being prepared. The Deputy will appreciate that I cannot comment in detail in advance of the reply issuing but I would make the point that Revenue is statutorily independent in its administration of the tax system and it would therefore be inappropriate for me to intervene in its work.

Excise Duties

Ceisteanna (219)

Michael McGrath

Ceist:

219. Deputy Michael McGrath asked the Minister for Finance the excise provisions and rates that apply to aviation fuel, fuel used for agricultural purposes, fuel used by haulage companies and fuel used by private motorists in tabular form; the estimated revenue yield from each in 2018; and if he will make a statement on the matter. [33493/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Finance Act 1999 provides for a duty of excise, known as Mineral Oil Tax (MOT), to be applied to all mineral oil released for consumption (i.e. for use as a fuel) in the State or released for consumption in another Member State and brought into the State.  It also provides for MOT to be applied to vehicle gas supplied to a vehicle gas dispenser.

MOT is composed of a carbon and a non-carbon component. The carbon component is based on the amount of carbon dioxide emitted from the fuel when it is combusted. The total applicable rate of MOT depends on the fuel type and the purpose for which the fuel is used. The current rates of MOT applying to fuels used for air navigation, in road vehicles and in agricultural tractors, as set out in Schedule 2 of Finance Act 1999, are given in the following table. The table also provides a breakdown of MOT rates into their carbon and non-carbon components.

 Fuel type and use

Non-carbon component

“A”

Carbon component

“B”

Mineral Oil Tax per 1,000 litres

 “A” + “B”

Light oil (petrol) used to propel a road vehicle

541.84

45.87

587.71

Heavy oil (auto diesel) used to propel a road vehicle

425.72

53.30

479.02

Heavy oil (marked gas oil) used to propel an agricultural tractor

 47.36

54.92

102.28

Heavy oil (jet fuel/kerosene) used for air navigation

425.72

53.30

479.02

Light oil (aviation gasoline) used for air navigation

541.84

45.87

587.71

Liquified petroleum gas (auto LPG) used to propel a road vehicle

 63.59

32.86

 96.45

Liquefied petroleum gas (LPG) used to propel an agricultural tractor

       0

32.86

 32.86

Vehicle gas used to propel a road vehicle

 5.66

3.70

9.36 per mwh

 MOT legislation provides for a full relief from taxation for heavy oil (jet fuel/kerosene) used for commercial air navigation so there is no MOT yield from heavy oil used in the commercial air navigation sector. Heavy oil is the predominant fuel type used for commercial air navigation. MOT legislation also provides for a partial relief from taxation for light oil (aviation gasoline) used for commercial air navigation. This partial relief is set at €232.27 per 1,000 litres giving an effective MOT rate of €355.44 for light oil used for commercial air navigation. I am advised by the Revenue Commissioners that the total excise yield in 2018 for light oil used for commercial air navigation was €0.44m. However, as already stated, the majority of fuel used in the commercial air navigation sector is heavy oil which is exempted from taxation.

There are no differentiated MOT rates for fuels supplied to commercial road haulage operators or private motorists. However certain road transport operators may qualify, under the Diesel Rebate Scheme, for a partial repayment of MOT for fuel used in the course of business transport activities in qualifying motor vehicles. The rebate under the scheme applies for qualifying applicants when the price of diesel reaches a certain level. Currently, the quarterly diesel repayment rate is calculated using the national average purchase price. The Central Statistics Office provides this information. The repayment rate is calculated on a sliding scale basis. At present, there is no repayment when the price of diesel, including VAT, is at or below €1.23 per litre. The maximum amount repayable under the scheme is 7.5 cent per litre when the price including VAT, is €1.54 per litre or over. I am advised by the Revenue Commissioners that the total amount repaid under the scheme in 2018 was €2.4m.

I am advised by the Revenue Commissioners that MOT receipts from fuel oil categories in 2018 are as follows:

2018

Non-Carbon

€m

Carbon

€m

Total MOT

€m

 

Petrol  

597.58

48.09

645.67

Auto   diesel

1,520.74

182.82

1,703.56

Marked   Gas Oil*

43.57

54.31

97.88

Auto   LPG

0.20

0.09

0.29

LPG   for other uses*

-

10.24

10.24

Aviation   gasoline

0.44

0.04

0.48

Total 

2,162.53

295.59

2,458.12

* The figures above provide the total yield for MGO and for LPG for all reduced rate purposes. These include fuel used for agricultural purposes and for other qualifying purposes, e.g. the operation of industrial and commercial machinery and for commercial and home heating. It is not possible to specifically identify the MOT yield resulting from agricultural usage.

Data Sharing Arrangements

Ceisteanna (220)

Michael McGrath

Ceist:

220. Deputy Michael McGrath asked the Minister for Finance the number of times data relating to persons was shared by the Revenue Commissioners with the Department of Employment Affairs and Social Protection in each year since 2015, by category in tabular form; the nature of the data that was shared; the process involved by which the Department of Employment Affairs and Social Protection is seeking data from the Revenue Commissioners relating to a person; if there has been and continues to be full compliance with data protection and the general data protection regulation in respect of such data sharing; and if he will make a statement on the matter. [33496/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Section 851A of the Taxes Consolidation Act 1997 permits Revenue to disclose taxpayer information where, amongst other things, the disclosure is permitted by another enactment.  Section 851B(1)(d) provides a legal basis for the processing of taxpayer information, which includes disclosing the information or data by transmitting, disseminating or otherwise making it available.

 I am advised that Revenue and the Department of Employment Affairs and Social Protection (DEASP) enjoy very close working relations and co-operate on a wide range of strategic and operational matters of mutual interest.  These arrangements are overseen by a long-established, high-level group of senior officials from both organisations that meets on a quarterly basis.

 I am further advised that the mutual exchange of data is a critical component in the effective and efficient functioning of both organisations.  A wide range and volume of data is, consequently, exchanged on both a systematic and a case specific basis, all of which is underpinned by extensive enabling legislation, principally, the Social Welfare Consolidation Act 2005.  Details of the relevant legislation are set out in the Table attached.  In addition, the exchange of information is governed by a Memorandum of Understanding agreed between Revenue and the DEASP and by signed Data Exchange Agreements which list the detail of the exchanges. 

Given the importance of taxpayer confidentiality to its activities, compliance with Data Protection (including GDPR) obligations is a major consideration for Revenue.  I am advised that Revenue continually reviews its data exchange arrangements, even where these are long-standing ones, to ensure that they are in keeping with best practice.  Where new sources of data are being exchanged, as happened recently with the introduction of realtime reporting of employment data by employers under PAYE Modernisation, Revenue will examine the detail of the proposed exchange to ensure that it adheres to all Data Protection requirements.

A summary of the data shared by Revenue with the DEASP is shown by category in the Table herewith.

I welcome the fact that the Data Sharing and Governance Act 2019 was recently enacted by the Oireachtas.  It provides greater opportunities for the public service to share data, subject to the necessary Data Protection safeguards, to increase the cohesiveness of the public service and to make citizens' live easier.   

I compliment Revenue and the DEASP for the way they have collaborated over many years in relation to data exchanges and this collaboration provides a tangible model for how data exchanges across the wider public service could be implemented under the terms of the new legislation.

Data Shared by Revenue

Tracker Mortgage Examination Data

Ceisteanna (221)

Michael McGrath

Ceist:

221. Deputy Michael McGrath asked the Minister for Finance the number of complaints before the Financial Services and Pensions Ombudsman relating to the tracker mortgage examination of the Central Bank; the approach of the Ombudsman in dealing with such complaints; and if he will make a statement on the matter. [33502/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Firstly, I must point out that the Financial Services and Pensions Ombudsman is independent in the performance of his statutory functions.  I have no role in the day to day workings of his office.

However, I have been advised by the Financial Services and Pensions Ombudsman that at the end of June 2019, he had 1,141 tracker mortgage related complaints on hand.

The Financial Services and Pensions Ombudsman maintained that the most effective and efficient way to provide redress and compensation to borrowers who have been wrongly denied tracker mortgages was for the banks to co-operate fully with the Central Bank Examination. Therefore, whilst the Examination was still underway individual tracker mortgage-related complaints were placed on hold pending confirmation that the Central Bank Examination had concluded in respect of those complainants.  

As the examination reached its conclusion those complaints which could potentially progress were taken off hold and progressed in the normal manner.  At the end of June 2019, 838 tracker mortgage-related complaints were actively being progressed and 303 remained on hold. Some of the complaints that remain on hold relate to complainants who have been deemed impacted and have appealed the outcome of the examination. The FSPO expects that the majority of complaints on hold will shortly be progressed.  

The FSPO has a dedicated Tracker Mortgage Team. Complaints are resolved through both informal and formal means. This can include mediation, by telephone and email and through meetings. Each complaint is considered on its own merits.  Where the informal interventions do not resolve the dispute, the FSPO investigates and adjudicates complaints in a fair and impartial manner. In the first six months of 2019 the FSPO closed 297 tracker mortgage-related complaints.

I understand that the FSPO wrote to all members of the Houses of the Oireachtas informing them of the Protocol for the Provision of Information to Members of the Oireachtas by State Bodies and providing a dedicated email address for the timely provision of information to members of the Oireachtas.

Insurance Industry

Ceisteanna (222)

Brendan Griffin

Ceist:

222. Deputy Brendan Griffin asked the Minister for Finance his views on a matter regarding a company (details supplied); and if he will make a statement on the matter. [33514/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

At the outset, the Deputy should note that I am responsible for the development of the legal framework governing financial regulation.  Neither I, nor the Central Bank of Ireland, can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept.  This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.  Consequently, I am not in a position to direct insurance companies as to the price or the level of cover to be provided to consumers or businesses.  The Deputy will appreciate that I, as Minister for Finance, cannot comment on individual cases mentioned in the details supplied relating to insurance matters.

However, I acknowledge the general problems faced by many consumers, businesses, and community and voluntary groups, in relation to the cost and availability of insurance.  I also appreciate that there is some frustration about the perceived pace of reform.  Unfortunately, there is no single policy or legislative “silver bullet” to immediately stem or reverse premium price rises.  This is because there are many constraints faced by the Government in trying to address this issue in particular the fact that for constitutional reasons, it cannot direct the courts as to the award levels that should be applied and for legal reasons it cannot direct insurance companies as to the pricing level which they should apply in respect of businesses seeking insurance.

I wish to reemphasise how important this issue is for the Government.  As the Deputy is aware, the Cost of Insurance Working Group (CIWG) was established in July 2016 and undertook an examination of the factors contributing to the increasing cost of insurance in order to identify what short, medium and long-term measures could be introduced to help reduce the cost of insurance for consumers and businesses.  The Deputy will recall that the CIWG has produced two reports since its inception and has been working to implement the 33 recommendations of the Cost of Motor Insurance Report published in 2017, as well as the 15 Recommendations of the Cost of Employer and Public Liability Insurance Report, published in 2018.  To that end, the key achievements to date from the two reports, including the following:

- the passing of the Judicial Council Bill by the Oireachtas on 9 July in order to implement recommendation of the Personal Injuries Commission regarding award levels in this country, including a judicial recalibration of the existing Book of Quantum guidelines;

- the commencement by the Law Reform Commission (LRC) of its work to undertake a detailed analysis of the possibility of developing constitutionally sound legislation to delimit or cap the amounts of damages which a court may award in respect of some or all categories of personal injuries, as part of its Fifth Programme of Law Reform;

- the establishment of the National Claims Information Database in the Central Bank to increase transparency around the future cost of private motor insurance;

- reforms to the Personal Injuries Assessment Board through the Personal Injuries Assessment Board (Amendment) Act 2019;

- commencement of the amendments to Sections 8 and 14 of the Civil Liability and Courts Act 2004 to make it easier for businesses and insurers to challenge cases where fraud or exaggeration is suspected;

- the reform of the Insurance Compensation Fund to provide certainty to policyholders and insurers; and,

- various reforms of how fraud is reported to and dealt with by An Garda Síochána, including increased co-ordination with the insurance industry, as well as the recent decision by the Garda Commissioner to develop a divisional focus on insurance fraud which will be guided by the Garda National Economic Crime Bureau (GNECB) which will also train Gardaí all over the country on investigating insurance fraud, and the recent success under Operation Coatee, which targets insurance-related criminality. 

I believe that these reforms are having a significant impact with regard to private motor insurance (CSO figures from June 2019 show that the price of motor insurance is now 24.5% lower than the July 2016 peak).  The Government is determined to continue working to ensure that these positive pricing trends can be extended to other forms of insurance, including those relevant to businesses.

Undoubtedly the single most essential challenge which must be overcome if there is to be a sustainable reduction in insurance costs particularly for small businesses is to bring the levels of personal injury damages awarded in this country more in line with those awarded in other jurisdictions.  In this regard, the Personal Injuries Commission has highlighted the significant differential between award levels in Ireland and other jurisdictions, and has made a number of recommendations to address this issue, in particular the establishment of a Judicial Council to compile guidelines for appropriate general damages for various types of personal injury.  Minister of State D’Arcy and I have worked closely with the Minister for Justice and Equality, Mr Charlie Flanagan TD to progress the Bill through the Houses of the Oireachtas as a matter of priority.  I am therefore pleased that the Bill was passed by both Houses of the Oireachtas on 9 July, and I expect it will be signed into law by the President shortly. 

Now that the Bill has been passed, it will be a matter for the Judiciary to put in place the Judicial Council and to establish the Personal Injuries Guidelines Committee.  While the Government cannot interfere in their deliberations, I would hope that the Judiciary will recognise the importance of this issue and prioritise it accordingly and take account of the PIC’s benchmarking report.

I would like to assure the Deputy that the Cost of Insurance Working Group will continue to focus on implementing the remaining recommendations of the Report on the Cost of Employer and Public Liability Insurance in parallel with implementing those from the Report on the Cost of Motor Insurance and in this regard you should note that the Ninth Update Report by the Cost of Insurance Working Group was published last week.  I am hopeful that the cumulative effects of the completion of the two Reports’ recommendations will include increased stability in the pricing of insurance for businesses and a more competitive insurance market.

Finally, Insurance Ireland operates a free Insurance Information Service for those who have queries, complaints or difficulties in relation to obtaining insurance.  Insurance Ireland can be contacted at feedback@insuranceireland.eu or 01-6761914.

National Debt

Ceisteanna (223, 224)

Richard Boyd Barrett

Ceist:

223. Deputy Richard Boyd Barrett asked the Minister for Finance the size of the national debt. [33517/19]

Amharc ar fhreagra

Richard Boyd Barrett

Ceist:

224. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount of interest that will be paid on the national debt in 2020. [33518/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I propose to take Questions Nos. 223 and 224 together.

The National Treasury Management Agency (NTMA) advise me that at end-June 2019 National (net) Debt was €188 billion.

Exchequer cash interest on the National Debt for 2020 was estimated at €4.8 billion in the Stability Programme Update (SPU) in April. This is a reduction of over €250 million on the Budget 2019 estimate of last October. The next estimate will be published as part of Budget 2020 in October.

Exchequer Returns

Ceisteanna (225)

Richard Boyd Barrett

Ceist:

225. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated primary Exchequer surplus for 2020. [33519/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The primary Exchequer surplus is the Exchequer balance adjusted for the impact of the national debt cash interest cost.

As per Stability Programme Update 2019, the national debt cash interest cost in 2020 is projected to be €4,826 million and the 2020 Exchequer surplus is forecast at €445 million. Therefore the 2020 primary Exchequer surplus is estimated to be €5,271 million.

Tax Collection

Ceisteanna (226)

Richard Boyd Barrett

Ceist:

226. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of revenue collected through vehicle registration tax in 2018. [33520/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that €885.3 million was paid in respect of Vehicle Registration Tax in 2018.

Knowledge Development Box

Ceisteanna (227)

Richard Boyd Barrett

Ceist:

227. Deputy Richard Boyd Barrett asked the Minister for Finance the amount of tax that was forgone due to the knowledge box in the latest available figures. [33521/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that the most recent data for the annual cost (in terms of tax foregone) of the Knowledge Development Box (KDB) are published on page 18 of Revenue’s paper on 2018 Corporation Tax payments and 2017 tax returns, available at https://www.revenue.ie/en/corporate/documents/research/ct-analysis-2019.pdf.

In regards to the above, the Deputy may be aware that a claimant company has a period of up to 24 months to make a claim for KDB relief. It is anticipated that companies will make use of the 24 month time frame available, therefore more claims in respect of the year ended 31 December 2017 may be made by September 2019.

No data in respect of 2018 will be available until the Corporation Tax returns for the accounting years ended in 2018 are filed and analysed. Likewise, data on later years are not currently available.

Stamp Duty

Ceisteanna (228)

Richard Boyd Barrett

Ceist:

228. Deputy Richard Boyd Barrett asked the Minister for Finance the amount collected in stamp duty charged on the purchase of stocks and marketable securities of Irish incorporated companies in 2018. [33522/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that a breakdown of Stamp Duty receipts up to 2018 in tabular form is available at https://www.revenue.ie/en/corporate/information-about-revenue/statistics/receipts/receipts-stamp-duty.aspx.

NAMA Operations

Ceisteanna (229)

Richard Boyd Barrett

Ceist:

229. Deputy Richard Boyd Barrett asked the Minister for Finance the amount NAMA has made available to developers in loan facilities to complete projects by year up to the end of quarter 2 of 2019. [33523/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Since its inception, NAMA has advanced capital funding to its debtors and receivers in cases where it can be shown that such funding will enhance the value of the assets securing NAMA’s loan portfolio. Subject to commercial viability, NAMA funds capital expenditure for the planning, design and construction of new residential and commercial projects. NAMA also funds infrastructure, as necessary, to facilitate these developments. Additionally, NAMA provides funding for essential remediation works to existing assets or to improve the income producing and disposal potential of assets.

The following table shows the breakdown of capital expenditure funding by year since inception. A total of €3.48 billion has been advanced to end-June 2019 for new and existing projects.

Year

2010

2011

2012

2013

2014

2015

2016

2017

2018

Q2 2019

€’m

168

205

150

188

477

631

521

525

433

178

All of this funding is procured from within NAMA’s own resources without any reliance on Exchequer funding.

Household Debt Statistics

Ceisteanna (230)

Richard Boyd Barrett

Ceist:

230. Deputy Richard Boyd Barrett asked the Minister for Finance the most recent figures of total household wealth and the property and financial assets less all liabilities. [33524/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

According to the latest figures from the Central Banks Quarterly's Financial Accounts, the net worth, or wealth, of households in Ireland stood at €761bn at the end of 2018. This includes financial and housing assets, net of all liabilities.

The value of total household assets excluding liabilities is €908bn.

The following table provides a breakdown of household net worth:

Q4 2018

Financial Assets

Liabilities

Housing Assets

Net Worth

€bn

374

-147

534

761

Household net worth rose by 4.6 per cent during 2018, driven by a 7.1 per cent rise in the value of housing assets. This is above the pre-crisis peak of €721bn.

The series reached a record high of €769bn in the third quarter of 2018, before falling slightly in the fourth quarter due to developments in international financial markets reducing the value of financial assets.

NAMA Expenditure

Ceisteanna (231)

Richard Boyd Barrett

Ceist:

231. Deputy Richard Boyd Barrett asked the Minister for Finance the amount NAMA has paid out to date for repair and maintenance of properties in its portfolio. [33525/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

NAMA may provide funding to its debtors and receivers to protect and enhance their assets so as to optimise their income-producing potential and disposal value. This is in accordance with section 10 of the NAMA Act which states that NAMA is required to protect or enhance the value of its acquired assets and to obtain the best achievable financial return for the State.

NAMA advances loans to its debtors and receivers for a range of purposes, including essential expenditure required to ensure that properties are compliant with health and safety requirements, and remediation works so as to enable unfinished or defective housing to be brought to a habitable standard.

I am advised that from inception to end- June 2019, NAMA has provided approximately €130m for remediation works on property securing its loans. This figure includes funding for works completed, in progress or approved but yet to commence.