Written Answers Nos. 52-89
59. Deputy Fergus O'Dowd asked the Minister for Finance if the operation of the stay and spend incentive will be reviewed in view of the impact of successive lockdowns on the scheme, which has good potential; and if he will make a statement on the matter. [1696/21]
Amharc ar fhreagraThe purpose of the Stay and Spend Tax Credit scheme is to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds. Under the relevant legislation, the scheme is due to expire at the end of next month.
Since 1 October 2020, a total of 59,172 receipts have been uploaded to the Revenue Receipts Tracker, as at 25 March 2021. The related expenditure recorded on these receipts amounts to €9,722,399, and the potential tax cost is €1,944,480, assuming all such expenditure is claimed and qualifies in full for tax relief. As at 25 March, 3,145 service providers have registered for the scheme.
The scheme was developed at a time when there appeared to be a steady downward trend in infection rates and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged.
Decisions on next steps relating to the scheme have yet to be taken. However, I would make the point that Stay and Spend should not be viewed in isolation from the other significant measures put in place to support businesses generally, including the hospitality sector.
In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9% from 1 November 2020. This is a temporary but important measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity. It will apply until 31 December 2021. It should be noted that this VAT rate reduction came after the introduction of the Stay and Spend Tax Credit and reflects the fact that the latter was not intended to be the sole sector-specific support for hospitality.
Also, the Employment Wage Subsidy Scheme (EWSS) continues to be a key component of the Government’s response to the COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS and, as announced by Government last month, the scheme is being extended in its enhanced form to the end of June 2021.
The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.
Businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.
62. Deputy Willie O'Dea asked the Minister for Finance the number of companies in Limerick currently availing of the Covid restrictions support scheme. [17139/21]
Amharc ar fhreagra68. Deputy Willie O'Dea asked the Minister for Finance if any companies have left the Covid restrictions support scheme over the past month. [17140/21]
Amharc ar fhreagraI propose to take Questions Nos. 62 and 68 together.
The legislative basis for the Covid Restrictions Support Scheme (CRSS) is provided by Section 11 of the Finance Act 2020 and is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities the profits of which are chargeable to tax under Case 1 of Schedule D.
A qualifying business must operate from a premises located in a region that is subject to restrictions introduced in line with the Government’s Living with COVID-19 Plan and must be required to either prohibit or significantly restrict customers access (to the premises) to purchase goods or services. Also, for the period of restrictions, the turnover of the business must not exceed 25% of its average weekly turnover in 2019 (2020 in the case of a new business). For the purposes of the scheme, a business premises is defined as a building or other similar fixed physical structure from which a business activity is ordinarily carried on.
The most common reasons for businesses leaving the scheme include circumstances where they no longer meet the turnover test due to changes in trading operations, for example moving to an online or takeaway service, or where they opt not to renew lease agreements on their premises. During March (to date), eleven businesses deregistered from the CRSS.
Revenue has also confirmed that 21,600 businesses had registered for the CRSS in respect of 23,900 premises by 25 March 2021 and almost €407 million had been paid to date. Of these, 640 businesses are located in Limerick and have received over €14 million in payments since the scheme commenced.
Revenue has published detailed statistics on the main COVID-19 subsidy schemes since late March 2020, including the Temporary Wage Subsidy Scheme (TWSS), the Employment Wage Subsidy Scheme (EWSS) and the Covid Restrictions Support Scheme (CRSS). These statistics are available on the Revenue website and are updated on a weekly basis.
63. Deputy Paul Murphy asked the Minister for Finance the amounts due to be returned from employers for overpayments of the temporary wage subsidy scheme and employment wage subsidy scheme; the manner in which this will be carried out; and if he will make a statement on the matter. [17209/21]
Amharc ar fhreagraThe Temporary Wage Subsidy (TWSS) was in place between 26 March and 31 August 2020 and was introduced as an emergency income support for employees of vulnerable firms whose businesses had been negatively impacted by COVID restrictions and whose turnover had reduced by at least 25% during Q2 while the strictest public health measures were in place. The support was paid via the employer so as to maintain employment links between the employee and employer insofar as was possible and, to that end, the rate of Employers' PRSI was also significantly reduced to 0.5%. The level of income given to each individual employee was based on previous wages received in January and February 2020. Over 66,500 employers received a subsidy under the TWSS with payments worth just under €2.9 billion paid out to a total of 664,000 workers.
The TWSS amounts due to be returned from employers (reconciliation balances) arise primarily due to the rapid introduction of the scheme as an emergency response to the Covid-19 pandemic in early 2020. For the initial ‘transitional phase’ from 26 March to 3 May 2020, Revenue operated a simplified process so that employers could be supported as quickly as possible and, as an interim measure, paid employers the maximum subsidy amount of €410 per week in respect of each employee. Revenue provided extensive guidance on how to calculate the correct subsidy amount due and employers made a declaration that they would return any overpayments. Most of the balances now repayable relate to this phase rather than the ‘operational phase, which ran from 4 May 2020 to 31 August 2020.
Revenue has recently completed the reconciliation between the TWSS subsidy amounts paid to employers in respect of their employees and the actual amounts correctly due and paid to them. From the initial analysis, 41% of employers are in a balanced position, 3% of employers are due additional subsidy payments totalling €1.4m and 56% of employers have reconciliation balances to be repaid, totalling €224 million. Of this sum, approximately €90 million has already been repaid.
Revenue has at this stage notified most employers of their TWSS balance, other than a small number of more complex cases where calculations are still being finalised. Revenue appreciates that employers will wish to review these figures and ensure that all payments to their employees have been correctly reported. To facilitate these reviews, a period of three months, to end June 2021, is available to examine the data, make any necessary amendments and repay any amounts owing at that point, thereby finalising the reconciliation process.
Any reconciliation balance owing at end June 2021 may be paid to Revenue in similar manner to a tax liability. However, to ensure that these liabilities do not cause undue hardship to businesses at this difficult time, I introduced measures in the Finance Act 2020 to extend the Tax Debt Warehousing provisions to include any amounts owing in respect of TWSS. Employers not in a position to avail of Tax Debt Warehousing may request a phased payment arrangement from Revenue. Where employers do not avail of the opportunity to finalise matters by end June, Revenue will consider the current reconciliation balance as owing and will collect the outstanding amounts.
This is a historic issue as the TWSS was replaced by the Employment Wage Subsidy Scheme (EWSS) from 1 September 2020. The EWSS operates differently to the TWSS and is not included in the reconciliation process.
65. Deputy Fergus O'Dowd asked the Minister for Finance if engagement has been held on the use of the tax system to support householders with the cost of renovations and retrofit projects both to combat climate change and ensure that accommodation is suitable for persons at all life stages; and if he will make a statement on the matter. [1695/21]
Amharc ar fhreagraPrimary policy responsibility for climate change and housing lies with the Minister for Environment, Climate Change and Communications and the Minister for Housing, Local Government and Heritage. However, in relation to tax-based measures for retrofit projects, my officials considered such a measure in the context of a Tax Strategy Group paper in 2019. That paper was published with the Budget 2020 documentation. In brief, it was found that there could be a duplication of supports with the direct SEAI grant system already in place and that a scheme such as this could conflict with the overarching need to increase overall housing supply.
The paper also observed that:
- In terms of current direct expenditure measures in the energy efficiency sector, the Government continues to make grants available to householders who wish to improve the energy efficiency of their home through the SEAI’s Better Energy Homes (BEH) and Deep retrofit Grant programme.
- Research undertaken by the ESRI into householder preferences regarding retrofit subsidy schemes found that households strongly prefer cash payment subsidies (i.e. up-front discounts or cash back post works) versus other indirect methods of financial support such as tax credits).
- From an equity perspective, tax expenditure measures can be regressive by nature, given that only those who pay taxes qualify, and those with greatest income benefit the most. As such, a tax incentive measure as proposed may be of little benefit to certain groups who are most likely to suffer from energy poverty, for example the elderly or those on limited incomes. The Home Renovation Incentive (the tax measure on which the proposal was based) expired on 31 December 2018 following an ex-post analysis of the scheme. The review found that in the context of the current housing supply shortage, and the need at that time to deliver 25,000 additional housing units per annum over the period 2017-2021, there was a risk that the retrofit scheme could lead to increased competition for scarce resources within the construction sector, leading to upward pressure on construction costs and house prices. The review concluded that the potential for displacement of labour from work on new builds to work on home renovations would create a high opportunity cost of labour associated with HRI which was not present at the inception of the scheme. Given the continued constraints on the construction sector’s ability to deliver a supply of new housing units, similar issues may arise with regard to the introduction of this proposed tax based measure.
In the normal course of events, the introduction of any new tax expenditure measure would take place in the context of the annual Budget and Finance Bill process. It would also be usual that proposals for tax expenditure measures would be assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention. Furthermore, I must always be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base and a strong and convincing case for the benefits and outcomes need to be articulated in order for due consideration to be given for the commitment of scarce taxpayer resources for such reliefs.
67. Deputy Jim O'Callaghan asked the Minister for Finance the status of the programme for Government commitment on a senior executive accountability regime to deliver heightened accountability with the banking system; and if he will make a statement on the matter. [17143/21]
Amharc ar fhreagraAs the Deputy will note, there has been extensive engagement on this topic at the start of this session but I will re-state that the Central Bank already has extensive regulatory powers to investigate and impose sanctions where there are breaches of financial services legislation. The introduction of the Senior Executive Accountability Regime (SEAR), will complement these existing powers, ensuring that the Central Bank has the additional powers necessary to provide appropriate regulation.
The legislation required to provide for SEAR is complex as it gives rise to a number of constitutional issues. Very careful consideration has had to be given to the proposals due to the need to ensure that they are robust and can withstand legal challenge. Officials from my Department have been in ongoing and detailed discussions with the Central Bank and the Attorney General’s office on the detail of the proposed Bill.
SEAR will require firms to set out clearly the roles and responsibilities of their senior executives including the production of Management Responsibility Maps documenting key management and governance arrangements in a comprehensive and accessible way. This should ensure that there is clarity as to who is responsible for what.
The legislation will include Conduct Standards for individuals and firms, giving the Central Bank additional powers to enforce obligations on financial services providers, and relevant individuals working within them, with respect to expected standards of conduct.
The legislation will also enhance the existing Fitness & Probity Regime and break the “Participation Link” to facilitate the Central Bank in taking action against either a firm or an individual where a contravention of financial services legislation occurs.
As work on the various aspects of the legislation is advanced, I will consider how SEAR will be rolled out across the various sectors of the financial services industry but I would expect that the most significant financial sectors would be encompassed by the legislation.
I intend that the heads of Bill will be drafted and presented to Government before the summer recess. This is subject to the Attorney General’s advice on the adequacy of the safeguards included to protect the constitutional rights at stake.
69. Deputy Bríd Smith asked the Minister for Finance the reason the Revenue Commissioners deduct tax refunds due to workers for medical expenses from outstanding amounts owed from the administration of the pandemic unemployment payment and temporary wage subsidy scheme; and if he will make a statement on the matter. [17189/21]
Amharc ar fhreagraThe Pandemic Unemployment Payment (PUP) and the Temporary Wage Subsidy Scheme (TWSS) payments are classified in legislation as income supports and as such are subject to income tax.
The PUP reflects the standard approach to the taxation of social welfare type payments, which means it is liable to income tax but exempt from the Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). The TWSS is also exempt from PRSI but is liable to income tax and USC.
The PUP and TWSS were not taxed in ‘real-time’ in the normal manner in 2020, meaning the collection of any tax due was deferred until year end. This approach was adopted to minimise the impact on employee’s incomes and ensure payments reached recipients as quickly as possible.
Regarding any tax liabilities arising in 2020, including in relation to the PUP and the TWSS, I am advised by Revenue that on 15 January 2021, Revenue made a Preliminary End of Year Statement available to all PAYE taxpayers through its online myAccount facility. The statement provided taxpayers with a preliminary calculation of their income tax and USC position for the year and indicated whether their tax position was balanced, underpaid, or overpaid for 2020.
However, an employee’s income tax and USC position for the year is not finalised until he or she submits an income tax return. The income tax return provides the employee with an opportunity to update any personal record details, declare any additional income and claim additional tax credits or reliefs, such as qualifying health expenses. The employee’s annual tax liability is then calculated having regard to the tax rate appropriate to his/her income, including PUP and/or TWSS payments, and the application of all tax credits and reliefs that are correctly due, including Health Expenses. A refund only applies where an excess amount of tax was paid relative to a person’s total income and allowable tax credits and reliefs.
There is no legal basis for Revenue to exclude a source of income from the calculation of a person’s tax liability.
Where a liability for 2020 still exists after taking account of all credits and reliefs, the amount owed can be collected, interest free, over four years from 1 January 2022 by reducing tax credits, thereby minimising any financial hardship to the greatest extent possible.
71. Deputy Aindrias Moynihan asked the Minister for Finance his plans to ensure that insurance premiums are successfully reduced for motorists, businesses and other users in line with the revision of guidelines for personal injury awards; and if he will make a statement on the matter. [17175/21]
Amharc ar fhreagra113. Deputy Peter Fitzpatrick asked the Minister for Finance the measures being taken to ensure that insurance premiums in Ireland are more aligned to other countries in the EU, given that despite a fall in insurance payouts, insurance premiums in Ireland continue to be amongst the highest in Europe; and if he will make a statement on the matter. [15411/21]
Amharc ar fhreagra386. Deputy Niall Collins asked the Minister for Finance his plans for insurance reform; his views on correspondence (details supplied); and if he will make a statement on the matter. [17308/21]
Amharc ar fhreagraI propose to take Questions Nos. 71, 113 and 386 together.
This Government is committed to bringing about meaningful insurance reform, as reflected in the Programme for Government. In this regard, the Action Plan on Insurance Reform contains 66 actions across several departmental policy areas. Its implementation is overseen by a Cabinet Sub-Group on Insurance Reform, the most recent meeting of which took place last week. High level achievements to date include: the adoption of Personal Injuries Guidelines by the Judicial Council which significantly reduce many common injury award levels and the creation within the Department of Finance of The Office to Promote Competition in the Insurance Market.
The Deputies will also be aware that last week, the Minister for Justice introduced amendments to the Family Leave and Miscellaneous Provisions Bill to implement these new Guidelines. As such the guidelines will now be in place ahead of schedule. This means that many claims will begin to be assessed by both the Personal Injuries Assessment Board (PIAB) and the judiciary using the guidelines rather than the Book of Quantum. Accordingly, this should mean more consistency and will help to bring more certainty to claimants and insurers, and thereby underscore the benefits of using PIAB. This in turn should further reduce the costs of claims, particularly legal fees.
In addition, I would hope that the improved insurance operating environment will help to attract new entrants into the Irish market, thereby increasing competition. I also strongly believe that this provides an opportunity for insurers to now increase their risk appetite, and extend cover to new market segments or areas they may have previously withdrawn from.
While the new Guidelines are a major step to reducing the cost of claims for insurers, I reiterate my strong expectation that insurers respond to this key piece of reform in a positive and generous manner by passing on these savings. The insurance industry previously committed to reduce premiums in line with lower award levels. As such, I am meeting the CEOs of the main firms in April to hear how they will meet this pledge.
In summary, the Deputies can be assured that the Government intends to ensure that all savings from the insurance reform agenda are passed on to consumers. Other necessary reforms remain important and the Department of Finance will continue to engage with all relevant stakeholders, in order to ensure that these begin to deliver a more sustainable and competitive insurance environment to the benefit of all groups in Irish society.
72. Deputy Dara Calleary asked the Minister for Finance if he will extend the local property tax exemption under operation via the Finance (Local Property Tax) (Amendment) Act 2015 to cover homes that qualify for the defective concrete blocks scheme 2018; and if he will make a statement on the matter. [17161/21]
Amharc ar fhreagraThe Programme for Government "Our Shared Future" includes a number of commitments in relation to the Local Property Tax (LPT). These are
(a) To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase,
(b) To bring new homes, which are currently exempt from the LPT, into the taxation system, and that
(c) All money collected locally will be retained within the county. This is to be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer.
I am currently examining options for the reform of the Local Property Tax in the light of the 2019 Interdepartmental LPT Review Report, the views of the Budgetary Oversight Committee and the Programme for Government commitments. In this context I am examining a range of issues relating to the tax including the exemptions that apply. I hope to be able to bring proposals for amending legislation to Government soon. The Deputy will appreciate that it would not be appropriate for me to comment further before the Government has had an opportunity to consider the matter fully.
73. Deputy Neale Richmond asked the Minister for Finance his views on the viability of the banking sector in Ireland in view of recent announcements; and if he will make a statement on the matter. [16451/21]
Amharc ar fhreagraThe recent announcements by Ulster Bank and Bank of Ireland represent unfavourable developments for the Irish banking market. These decisions may have an impact on competition in the banking market and are a reflection of the wider challenges banking is facing, not only in Ireland but also abroad.
It should also be noted that the banking sector has been strengthened in recent years through a range of reforms that have improved its resilience to adverse shocks. This resilience has been evident in the lack of any additional amplification of the COVID-19 crisis through the financial sector. These changes have included a large increase in the quality and quantity of loss-absorbing capital on bank balance sheets since the previous global crisis, a reduced reliance on short-term unstable market-based funding, and substantial reductions in non-performing loans. Some facts include:
- The aggregate Common Equity Tier 1 capital ratio of the domestic banking system stood at 18.2% at end 2020 which is between 2 and 3 times the level in the system in 2008.
- Domestic lending is now funded primarily through domestic retail deposits, rather than less stable sources of short-term, wholesale financing from abroad.
- Non-performing loans on domestic banks’ balance sheets have fallen by 85% since 2014.
- Total assets of domestic Irish lenders are around €280bn, less than half the 2008 peak.
Although each of the banks in which the State has a shareholding recorded significant losses in 2020, the second half for the year was an improvement on the first half with both AIB and BOI recording underlying profits. In addition, new lending recovered strongly in the second half of the year. Despite the significant losses recorded in 2020, the funding and capital positions of the banks remain significantly above regulatory minima leaving them well positioned to manage through the crisis and to support the recovering economy.
Notwithstanding recent announcements in the banking sector, Ireland continues to have an extensive network for banking services, including post offices and credit unions that are spread right across the country in addition to the bank networks.
Revised Central Bank lending regulations were enacted on 1 January 2020 which materially expanded the lending capacity of the credit union sector, including for mortgage and SME lending. The sector had a combined mortgage and SME loan book of €344 million at end 2020.
There is a significant network of post offices in areas where there is no bank branch. In addition, An Post offers counter services for AIB, allowing customers to lodge and withdraw cash at An Post branches. Bank of Ireland has announced that it is following suit.
74. Deputy Richard Boyd Barrett asked the Minister for Finance if he will explain his reported remarks on 4 March 2021 in which he warned of increased taxes post the Covid-19 pandemic; if he is considering specific tax increases; if so, the details of same; and if he will make a statement on the matter. [17198/21]
Amharc ar fhreagraI understand the Deputy is referring to the speech I made at the ESRI on Thursday 4 March 2021, "Taking stock and charting an economic path forward for Ireland & Europe” in which I addressed some of the main challenges facing the Irish economy over the short, medium, and long-terms.
The Government has provided an enormous amount of fiscal support in response to the Covid-19 and Brexit crises. With a value of almost €38 billion, or nearly a fifth of national income (GNI*), the budgetary support provided by Government has been extraordinary. A range of measures were put in place by Government to support people and businesses most affected by the financial shock of the pandemic. These include the COVID Pandemic Unemployment Payment (PUP) and the Employment Wage Subsidy Scheme (EWSS). Businesses may also be eligible to warehouse VAT and PAYE (Employer) debts and also excess payments received by employers under the Temporary Wage Subsidy Scheme. The Covid Restrictions Support Scheme (CRSS), the Small Business Assistance Scheme for COVID (SBASC) and Tourism Business Continuity scheme have also been established in order to support those businesses most at risk, with significant cost to the exchequer. Other schemes which have been established include the Live Performance Support Scheme (LPSS) and the Music Entertainment Business Assistance Scheme (MEBAS), both of which are targeted at supporting the commercial live performance sector.
It is entirely appropriate that we have acted to support the economy in this way. The current crisis is a once-in-a-century event. The fundamentals underlying our economy are strong. We started this crisis from a position of strength – a budget surplus, cash reserves and significant progress in lowering our debt. Therefore, public finances can absorb this shock, letting debt rise on a one-off basis in order to provide support to the economy.
We are committed to restoring the public finances to a sustainable trajectory and ensuring that Ireland does not become a fiscal outlier as we emerge from the pandemic period. It is expected that economic growth will do much to boost taxes and restore the public finances to a sustainable setting. Once the public health situation allows, pandemic supports must also be unwound in an appropriate and incremental way. But we must not forget that permanent increases in expenditure must be met by permanent increases in revenue. If the State is to have a larger footprint in the future, this must be paid for.
We are in a period of unprecedented uncertainty. With the agreement by Government on the revised plan, COVID-19 Resilience and Recovery 2021: The Path Ahead, a cautious and measured approach will be taken as we lay the foundations for the full recovery of social life, public services and the economy.
75. Deputy Mairéad Farrell asked the Minister for Finance the expected grant allocations under the resilience and recovery facility in nominal and percentage terms in the periods 2021-22 and 2023, respectively; if the expected allocation has been reduced from the previously committed total of €1,273; if so, the reasons for the reductions; his views on the reasons; and if he will make a statement on the matter. [17184/21]
Amharc ar fhreagraThe Recovery and Resilience Facility is a €672.5bn instrument, made up of €360bn loans and €312.5bn in grants and is the key element of the Next Generation EU / Recovery Plan Package of €750bn (€360bn in loans and €390bn in grants) agreed by the European Council in July 2020.
70% of the total €312.5 billion grants from the Recovery and Resilience Facility are to be committed in the years 2021 and 2022. The 70% amounts are pre-allocated under a statistical methodology taking into account GDP per capita, population and unemployment. (Article 11(1) (a) and Annex II). Ireland’s allocation under the 70% tranche is €853million (2018 prices). This has not changed.
The remaining 30% of grants will be fully committed by the end of 2023, based on a similar formula but replacing the unemployment criterion with GDP loss in 2020-2021 (Article 11(1) (b) and Annex III).
As set out in the final regulation, all Member States’ allocations under the 30% pot are indicative only at this time. The amounts allocated will be based on actual cumulative GDP output from 2020 and 2021, as published in 2023 (Article 11(2)).
There has been no reduction in Ireland’s share of the Recovery and Resilience Facility grant funding. The Irish allocation under the 30% tranche will not be determined until 2023. It may ultimately increase or decrease compared to the current indicative amount. Initial indicative allocations from the 30% pot (€420m – 2018 prices) were based on the Commission’s Summer Economic Forecast. More recent figures (in the region of €68m) are linked to the Commission’s latest (Winter) economic forecast which incorporate a large upward revision to the level of Irish GDP due to the much stronger than anticipated performance in 2020. The final allocation will be determined in 2023, based on actual cumulative GDP output from 2020 and 2021.
77. Deputy James O'Connor asked the Minister for Finance his plans to review the fiscal compact deficit spending targets if the next generation of EU funding proves inadequate to meet the societal needs of future-proofing the European economy with alternative European-level funding mechanisms (details supplied); and if he will make a statement on the matter. [17178/21]
Amharc ar fhreagraThe EU’s fiscal rules have been an integral part of our own fiscal framework for a number of decades, dating back to the adoption of the Stability and Growth Pact (SGP) in 1997. Alongside a number of reforms to these rules since their inception, the Fiscal Compact was introduced in 2013, with the aim of strengthening fiscal governance and reinforcing the SGP. The Fiscal Compact represents one section of the Treaty on Stability, Coordination and Governance, which is an intergovernmental treaty that exists outside of the Stability and Growth Pact. As such, any reform of the Fiscal Compact would not automatically alter the existing rules under the Pact.
As regards the current application of the EU's fiscal rules, in March 2020, following the onset of the Covid-19 pandemic, the general escape clause of the Stability and Growth Pact was activated. The clause allows for a temporary departure from the normal operation of the fiscal rules in a situation where there is a severe economic downturn in the EU. This clause has suspended the regular fiscal requirements in 2020 and 2021.
A Communication from the European Commission in March set out their framework for assessing the conditions required in the EU for the clause to be deactivated. This framework suggests a return to pre-crisis levels of economic activity in the EU should be achieved before the deactivation of the clause. Based on the Commission’s own 2021 winter forecast, EU GDP is not expected to reach its 2019 level until the middle of 2022. As such, it is expected that the general escape clause will continue to be in place in 2022.
As regards the broader question of reform of the EU fiscal rules, early last year, the Commission opened a formal review of the legislative packages known as the Six- and Two-pack, including the launch of a public consultation on the operation of the fiscal rules. Discussions around this review were paused because of the pandemic, with the public consultation suspended. I welcome the confirmation by the Commission in their recent Communication that they intend to relaunch the public debate on the fiscal framework when the recovery takes hold. My officials and I will actively engage in these discussions. In particular, I support efforts to enhance the transparency, predictability and simplicity of the rules. However, it must be recognised that there are difficult trade-offs involved. This means that finding agreement will be challenging.
78. Deputy Éamon Ó Cuív asked the Minister for Finance the rate of increase of public, employers and vehicle insurance premia over the past ten years; the steps that have been taken since the Government was formed last summer to reduce these premia; the effect to date of these actions on insurance premia; the target reduction in premia over the next four years; and if he will make a statement on the matter. [16452/21]
Amharc ar fhreagraAs Minister for Finance, I am responsible for the development of the legal framework governing financial services regulation, including for the insurance sector. As such, my Department does not collect the information being sought. However, in order to help address the question, my officials examined Consumer Price Index (CPI) data for private motor insurance produced by the Central Statistics Office (CSO).
In that regard, the most recent data shows that in the ten year period from February 2011 to February 2021, the price level for private motor insurance has increased overall by 12.7 per cent. However, it is important to note that there was a 65.1 per cent increase from the beginning of this period to July 2016, with a subsequent decline of 31.7 per cent since the July 2016 high point. The Deputy should note that the CSO does not collect price information in relation to employer and public liability insurance for businesses.
I would like to assure the Deputy that insurance reform is a key priority for the Government. A Cabinet Sub-Group for Insurance Reform has been established to help drive the reform agenda. In December, the Government launched the Action Plan for Insurance Reform. This sets out 66 actions to bring down costs for consumers and business; introduce more competition into the market; prevent fraud and reduce the burden on business, community and voluntary organisations. This ambitious plan is heavily front-loaded, with 97 per cent of actions due for completion this year. A number of key actions have already been delivered, including:
- New Personal Injuries Guideline to replace the Book of Quantum have been published and will be adopted shortly;
- An Office to Promote Competition in the Insurance Market has been established within the Department of Finance;
- A public consultation on enhancing the role of the Personal Injuries Assessment Board (PIAB) has commenced; and,
- New regulations on solicitors’ advertising have been introduced.
While the Action Plan is ambitious, the Government has not set specific targets for reduction in premia. Nonetheless, it is our intention that both the affordability and availability of all insurance types will increase as a result of the implementation of the actions. Data from both the CSO and National Claims Information Database will assist the Government in tracking the progress of the Action Plan and how it is impacting upon insurance costs.
In conclusion, seeking to secure a more sustainable and competitive market through both deepening and widening the supply of insurance in Ireland remains a priority issue for this Government. Minister of State Fleming and I will continue to play a lead role in this policy area.
79. Deputy Dara Calleary asked the Minister for Finance the action being taken to deliver a strong and vibrant credit union sector; and if he will make a statement on the matter. [17162/21]
Amharc ar fhreagra149. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the way in which he plans to enable the credit union movement to grow as a key provider of community banking in Ireland. [17163/21]
Amharc ar fhreagraI propose to take Questions Nos. 79 and 149 together.
The Government welcomes the important work credit unions are doing to support communities throughout Ireland at this difficult time and recognises the key role that credit unions play in the delivery of financial services in local communities across Ireland. The Minister of State in my Department, Sean Fleming TD, has credit unions as part of his remit.
The Government regularly engages with the sector to discuss its current and future plans. I met all of the credit union representative bodies in September 2020, the third such meeting during 2020. In addition, Minister of State Fleming met two of the main representative bodies in January 2021 and again in March 2021. Minister of State Fleming has also met with a number of individual credit unions and groups of credit unions since his appointment in July 2020.
There are a number of commitments set out in Programme for Government, including a review of the policy framework in which credit unions operate. As part of the review, the Department has held extensive engagement with the credit union representative bodies since September 2020 to seek feedback on their key priorities for the sector. In addition, the Department is taking into account work already completed by the Credit Union Advisory Committee (CUAC). The review is now at an advanced stage.
In terms of delivery of a strong and vibrant credit union sector and supporting and enabling the sector to grow, the following are some recent developments in relation to lending and investment regulations, SME lending, access to finance for retrofit, current accounts and investment in Approved Housing Bodies (AHBs).
Review of Lending and Investment Regulations
The Central Bank has in recent years completed reviews of both the lending and investment frameworks to ensure that credit unions operate under a framework that is both tailored and proportionate, to reflect the unique nature of the sector, and to provide flexibility for credit unions who have ambitions to grow.
Following introduction of the new lending regulations on 1 January 2020, credit unions now have a combined capacity to provide up to approximately €1.1 billion in SME and mortgage loans, with further additional lending capacity available to credit unions who can comply with certain conditions or on approval by the Central Bank. As at December 2020, credit unions had a combined mortgage and SME loan book of circa €344 million, an increase of 12% year-on-year.
The revised investment regulations took effect on 1 March 2018. Under these regulations, credit unions are permitted to place their surplus funds that have not been lent to members in a range of investments including accounts in authorised credit institutions, certain bank and corporate bonds, sovereign bonds and investments in Tier 3 Approved Housing Bodies (AHBs) to provide social housing.
SME Lending
I very much welcome the recent announcements that nineteen credit unions, supported by ILCU, CUDA and Metamo, have been approved by the Department of Enterprise, Trade and Employment for participation in the Covid-19 Credit Guarantee Scheme. With their local knowledge, credit unions are ideally placed to support the recovery and providing loans to local businesses is a key element of the recovery. Further development of SME lending in a controlled manner could also assist credit unions in growing and diversifying their loan book.
Access to Finance for Retrofit
As you will be aware, the Government significantly increased the funding available to support retrofit in Budget 2021. My officials have been engaging with the Department of Environment, Climate and Communication, the Department of Public Expenditure and Reform, and the Sustainable Energy Authority of Ireland to support increased credit union participation in green retrofit loan schemes.
Current Accounts
The Deputies may also wish to note that under the additional services regime set out in the 2016 regulations credit unions can seek approval from the Central Bank to offer additional services such as current accounts and debit cards. 51 credit unions, representing circa 50% of sector assets, currently have approval to provide Member Personal Current Account Service (MPCAS).
Investment in Approved Housing Bodies
Since 1 May 2018 it has been possible for credit unions to invest in Approved Housing Bodies through a regulated vehicle. I understand that a number projects are being progressed by the sector at present, which will hopefully lead to investment in AHBs.
80. Deputy Mairéad Farrell asked the Minister for Finance if he has had engagement with the Central Bank regarding unregulated loan notes issued by a company (details supplied) between 2012 and 2019 and administered by another company; and if he will make a statement on the matter. [17185/21]
Amharc ar fhreagraI am aware of the matter that the Deputy has raised, and my officials will continue to monitor the situation.
As the House knows, the Central Bank of Ireland is the independent regulator for financial services and as such it determines what measures or actions need to be taken in relation to any potential or actual wrongdoing by regulated financial service providers. I am informed by my officials that the Central Bank of Ireland cannot comment on investigations, and this extends to confirming whether an issue or firm is the subject of an investigation.
I would also refer the Deputy to a recent PQ response I have provided on this matter, which sets out further details on the legislative framework pertaining to the provision of financial services in relation to unregulated financial products by regulated financial service providers, as well as options available to consumers that are dissatisfied with such services. This PQ response can be accessed at: https://www.oireachtas.ie/en/debates/question/2021-03-24/487/#pq_487.
81. Deputy Peter Fitzpatrick asked the Minister for Finance the cost to date of all Covid-19-related payments in his Department to individuals and corporate entities; and if he will make a statement on the matter. [15409/21]
Amharc ar fhreagraI am advised by Revenue that the total cost of the Covid Restrictions Support Scheme (CRSS) as of 29 March is €409m. 21,600 businesses have registered 25,300 premises for CRSS with Revenue. To date 121,500 claims for payments of €413m have been received in respect of 24,000 premises, €409m of which has already been processed for payment.
In terms of the Employment Wage Subsidy Scheme (EWSS), currently 49,100 employers are registered with Revenue for EWSS. €2,548m in subsidies has been paid to 48,200 employers in respect of 544,600 employees under the Scheme. An additional €423m in employer PRSI has been forgone due to the reduced rate of PRSI on wages paid which are eligible for EWSS.
The Temporary Wage Subsidy Scheme (TWSS) was in place from 26 March to 31 August 2020. The cost to the Exchequer of the Scheme over that period is just under €2.9 billion.
82. Deputy David Stanton asked the Minister for Finance if his Department has carried out or commissioned a review or analysis of the current rate of capital gains tax; the way in which the national rates compare with rates in the UK and EU countries; his plans to make changes to the current rate; and if he will make a statement on the matter. [17079/21]
Amharc ar fhreagraIn general, Capital Gains Tax (CGT) is charged on the value of the capital gain made on the disposal of an asset. The current rate of CGT stands at 33% cent for disposals made from 6 December 2012 with a limited number of exemptions and reliefs.
While Ireland's headline rate of CGT appears high compared with our European counterparts, in order to carry out a fair comparison, account has to be taken of the specific details of various CGT systems in different jurisdictions. This includes examining special rates, and reliefs and exemptions, rather than focusing solely on the applicable headline CGT rates for the purposes of comparison.
For example, there are a number of very generous and targeted reliefs from CGT already in existence in the Irish CGT regime including but not limited to the CGT Principal Private Residence Relief, the CGT Revised Entrepreneur Relief, CGT Retirement Relief and as well as relief for certain disposals of land or buildings acquired between 7 December 2011 and 31 December 2014.
In general, the availability of significant reliefs in respect of a particular tax head often requires a higher rate in order to generate an appropriate yield. Conversely, a wider base with fewer exemptions may facilitate a lower headline rate of tax as it applies to a wider set of economic and commercial activities potentially maintaining a more sustainable yield in the longer term. It is also important from a tax policy perspective to maintain stability and certainty in terms of taxation.
CGT is subject to ongoing review, which involves the consideration and assessment of the rate and the relevant reliefs and exemptions. CGT policy and legislation is reviewed by the Tax Strategy Group (TSG), as part of the annual Budget and Finance Bill process, and is considered in the wider tax policy context. Any changes to the CGT regime are considered in the context of the yearly Budget and Finance Bill process.
83. Deputy Neale Richmond asked the Minister for Finance the efforts that have been made to attract financial services jobs to Ireland post Brexit; and if he will make a statement on the matter. [16450/21]
Amharc ar fhreagraFrom 1 January 2021, many aspects of our relationship with our nearest neighbour have changed fundamentally as we no longer share EU membership. While the Government remains committed to protecting and strengthening the Ireland-UK relationship following the end of the transition period, I can advise the Deputy that the net impact of Brexit on the policy areas within my remit is anticipated to be strongly negative.
One area that Ireland has been growing for nearly four decades is the international financial services sector. The Ireland for Finance whole of government strategy 2019 provides a clear roadmap to maximise any opportunities in the international financial services that may arise as a consequence of Brexit.
The Ireland for Finance strategy was included in the Programme for Government with action measures built upon the 4 pillars of operating environment, technology and innovation, talent, and communications and promotion.
The Government and the State Agencies, such as the IDA, continue to work to fully deliver on any opportunities for inward investment that emerge through promoting Ireland as an English-speaking committed EU member State. As such we have unfettered access to the EU Single Market, continued access to EU talent and that of the Common Travel Area. In addition, our pro-business environment is underpinned by a strong and fully-independent financial services regulator.
The nature, scale and complexity of Ireland’s international financial services sector is changing in a number of ways. This is as a result of the financial services investments won in recent years, including those firms relocating from the UK as a result of Brexit and those looking to set up operations in the EU for the first time. The financial services industry in Ireland has become broader and more diverse with more firms carrying out a greater range of regulated activities than previously.
The full impact of Brexit for the industry in Ireland may not be fully realised for some years. At present, firms are establishing the foundations of a new or significantly expanded presence in Ireland, creating a platform for future growth opportunities in all sectors: insurance, banking, and investment management.
Since the Brexit referendum in the UK, we can point to the success of Barclays and Bank of America in banking plus the many investment firms who have chosen Ireland, as their European base, such as Legal and General, and Aberdeen Standard. Three of the largest market infrastructure players in their respective markets have made Ireland their post Brexit location for their European business, namely Refinitiv, EquiLend, and DTCC. The Standard Club and North P&I Club both marine insurers are establishing operations here. Kroll/KBRA became the first ratings agency to announce that its EU HQ location would be in Dublin and this was followed by S&P’s announcement in December 2017 that Dublin would become its EMEA HQ.
Thus overall, while it is only a few months into the post-Brexit era, it is clear that Ireland is increasingly being considered as a location of choice for many financial services firms.
84. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if he will convene a forum meeting with the banks and financial institutions in co-operation with the Minister for Housing, Local Government and Heritage to request that they immediately play a partnership role with the State and affected families in the financial challenge of making homes safe across counties Donegal and Mayo under the defective concrete blocks grant scheme. [16454/21]
Amharc ar fhreagraI appreciate this is a very difficult issue for households which have been affected by defective concrete blocks and I know my colleague the Minister for Housing, Local Government and Heritage, who has responsibility for policy and administration of the State scheme to provide financial assistance to those private households impacted by defective blocks, has met and discussed the implementation of the redress scheme with the Donegal Action Mica Group.
While oversight of the banking sector falls within my remit, including matters relating to the overall policy for the financial sector, the supervisory framework for regulated financial service providers and the overall consumer protection framework for Central Bank regulated entities, I do not have any role in relation to the policies and individual decisions (either of a contractual or voluntary nature) of Central Bank regulated entities. Furthermore, in relation to those banks in which the State has a shareholding interest, this commercial independence is specifically provided for in a legally binding "Relationship Framework" document which states that each bank continues to be a separate economic unit with independent powers of decision making and that it is the respective boards and management of each bank that determines its commercial policies and conducts its day-to-day operations. I am, therefore, precluded as Minister for Finance from any involvement in the commercial and day-to-day decisions of such a bank and accordingly it will not be possible or appropriate for me to intervene with individual banks on this particular matter. However, as the relevant Minister, it is open to the Minister for Housing, Local Government and Heritage to engage with any person or entity that he considers to be necessary or desirable in relation to the implementation of the scheme to support impacted households.
85. Deputy Cormac Devlin asked the Minister for Finance the actions his Department is taking to encourage greater competition in the Irish insurance sector. [1860/21]
Amharc ar fhreagra128. Deputy James Lawless asked the Minister for Finance the actions he is taking to encourage greater competition in the Irish insurance sector. [17145/21]
Amharc ar fhreagra136. Deputy Colm Burke asked the Minister for Finance the progress made by the new office to promote competition in the insurance market to date; the level of engagement that has occurred; when a reduction in the cost of insurance is expected to take effect; and if he will make a statement on the matter. [17082/21]
Amharc ar fhreagra361. Deputy Jennifer Carroll MacNeill asked the Minister for Finance the progress of the recently established office in his Department to promote and encourage competition in the insurance market; if the office has agreed a work plan for 2021; if the work plan will be published; and if he will make a statement on the matter. [1914/21]
Amharc ar fhreagraI propose to take Questions Nos. 85, 128, 136 and 361 together.
The Deputies will be aware that in recent years segments of the Irish insurance market have experienced a decline in competition due to withdrawals by several insurers and curtailed risk appetite in some market segments. In this regard, the Programme for Government includes a commitment to create an office tasked with encouraging greater competition in the Irish insurance market. As part of the Action Plan on Insurance Reform, launched last December, an Office to Promote Competition in the Insurance Market, chaired by Minister of State Fleming, was established in my Department.
The Office has met on a number of occasions since its establishment. At its most recent meeting on 22 March, the Office agreed its work programme, which was published on its website (https://www.gov.ie/en/organisation-information/07d2a-office-to-promote-competition-in-the-insurance-market/). This work programme consists of four broad themes: Promotion; Transparency / Information; Engagement with relevant Competent Authorities, and Innovation. Minister of State Fleming will report its progress on a regular basis to the Cabinet Committee on Economic Recovery and Investment Sub-Group on Insurance Reform.
Since its establishment, the Office has also held a number of meetings with several important stakeholders, including representatives of the insurance industry and business groups, such as Insurance Ireland and the Alliance for Insurance Reform, as well as representative of civic society including: Age Action; the Consumers Association; Union of Students in Ireland; and the National Youth Council of Ireland, to discuss consumer empowerment, and increasing the provision of relevant information. It has also had useful discussions on how other state regulators try to encourage competition in their respective sectors, including: ComReg; the Health Insurance Authority; and the Commission for Utilities Regulation. Similarly, the Office also had preliminary discussions with the Central Bank on promoting competition and switching and will engage with them further on these issues.
In conclusion, I believe that this Office is an important element of the Government's ambitious insurance reform programme and that it will employ a strategic approach to the promotion of insurance competition, including encouraging transparency and championing the provision of information in relation to the insurance market and available products.
86. Deputy Catherine Connolly asked the Minister for Finance if a loan holder who enters into a loan restructuring agreement with a lender that honours that agreement in full and has never missed a repayment under the agreement and has cleared the loan is considered to have an imperfect credit history on the Central Credit Register; if his attention has been drawn to discrepancies between the credit reports issued by the Central Credit Register and the Irish Credit Bureau particularly in respect of loans which were subject to restructuring agreements prior to the establishment of the Central Credit Register; and if he will make a statement on the matter. [17152/21]
Amharc ar fhreagraThe Central Credit Register (CCR) is established by the Central Bank under the Credit Reporting Act 2013. Under the Act lenders are obliged to report personal and credit information to the CCR for loans of €500 or more, and are obliged to seek a credit report in respect of loan applications for €2,000 or more.
The Central Bank advises that the submission of information to the CCR was implemented on a phased basis, commencing with consumer loans (credit cards, mortgages, personal loans and overdrafts) on 30 June 2017. In March 2018, moneylender loans, local authority loans and business loans were added. Finally, hire purchase, PCP and similar type finance were added in June 2019. Lenders commenced reporting factual information from the relevant date for each product type. Any credit performance history that pre-dates these implementation dates is not included on the CCR.
The submission of information to the CCR must be consistent with the credit arrangements agreed and in accordance with lenders obligations under the Credit Reporting Act 2013, and this may include details in respect of restructures if agreed by the parties. For active loans (ones where payments are being made, or are expected to be made), lenders will be provided with performance data for the most recent 24 months on a credit report.
For a closed loan (one where all payments have been discharged, or the loan closed off by the lender), a lender will see the final two years of payment performance information. When the oldest information reaches five years old, each separate entry will be deleted month by month thereafter. The closed loan information will be completely removed from the credit report five years after the last payment was made.
The CCR produces credit reports based on factual information submitted by lenders. It does not comment on the payment history, or provide any opinion on the content of the credit report, or provide guidance or instruction as to how a lender should interpret or act based on the content of the report. Also, the CCR does not produce credit scores or ratings. The CCR does not decide or determine if a credit application is approved or not; that is and remains a commercial decision of the lender considering the credit application.
In relation to the ICB, that is an independent commercial entity and is outside the remit of the Central Bank. However, if a person is of the opinion that data held on the ICB is not accurate or up to date that person can make a complaint to the Data Protection Commission.
87. Deputy Martin Browne asked the Minister for Finance his views on the unequal impact of the Covid-19 crisis on the economy as revealed in the latest Exchequer figures; his views on the way the figures indicate the way in which low paid workers and SMEs lose out the most as a result of the impacts of the Covid-19 pandemic; and his plans to enable a fairer economy once the current crisis is over that will make these sectors of the economy more resilient. [1822/21]
Amharc ar fhreagraThe impact of Covid-19 on the labour market has been unprecedented, but some sectors have been more severely affected than others. In particular, consumer-facing services sectors have been significantly impacted. Unfortunately, many of these sectors have a higher proportion of lower-paid employees, and those working on a part-time basis.
This was reflected in the Exchequer figures for 2020, which showed income tax down by only 1 per cent on 2019. This remarkable resilience is a testament to the highly progressive nature of our tax system, which places many of these works outside of the income tax net. The Government has acted decisively to support these workers, through initiatives such as the Pandemic Unemployment Payment, the Employee Wage Subsidy Scheme and the Covid Restrictions Subsidy Scheme as well as a range of additional supports to households and businesses. The suite of measures that the Government has introduced are focussed on supporting businesses in retaining employment, providing support to those out of work, and on getting people back to work as soon as possible.
The most recently available data, to March 22nd, shows that 449,500 people are being supported by the Pandemic Unemployment Payment, with the figures particularly high in the severely affected accommodation, food and retail sectors. Revenue data to March 25th shows that an additional 311,500 employees are being supported by the Employee Wage Subsidy Scheme, and that 21,300 businesses have registered claims under the Covid Restrictions Subsidy Scheme.
These figures highlight the deep effect that Covid-19 has had on our economy and labour market, but also the Government’s continuing commitment to provide the necessary fiscal support to cushion the worst impact of the pandemic on our society.
88. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which his Department continues to monitor the ill effects of Brexit, with particular reference to impeding economic performance here; if particular issues have been pinpointed as being in need of urgent attention in this regard; and if he will make a statement on the matter. [17157/21]
Amharc ar fhreagraThe new Trade and Cooperation Agreement between the EU and UK is a positive conclusion to the transition period. However, the new agreement still represents a break from previously existing arrangements, and thus a permanent shock to the Irish economy. Therefore, Brexit will still have a negative economic impact on the Irish economy and living standards compared to the previous relationship.
For Irish exporters, the Trade and Cooperation Agreement is positive, compared to a no-deal scenario, as it will provide for zero-tariffs and zero-quota trade for qualifying EU and UK goods. However, it is important to note that the agreement does not completely mitigate against trade frictions in the form of non-tariff barriers, such as customs checks and procedures. So, while tariffs and quotas have been avoided for qualifying goods, non-tariff measures or non-tariff barriers represent a change in trading relations and an increased cost to trade. In addition, disturbances to retail and distribution supply chains could have a direct impact on Irish consumers through reduced competition and higher prices. Further import controls will be introduced by the UK, on a phased basis from October 2021, on certain categories of EU goods, including plant and animal products.
The Government has put in place extensive financial supports for sectors over recent years to assist businesses prepare for and mitigate the impacts of Brexit, including various financial, advisory, and upskilling supports. The Government has also invested heavily in our port infrastructure, as well as working closely with businesses to navigate the new customs arrangements. A range of Government support is available to Irish exporters, including training and grants, to help businesses deal with these changes. It is vital that business prepare for the further changes which will arise over the coming months due to the UK’s new import controls.
The successful negotiation of the Protocol on Ireland / Northern Ireland, as part of the Withdrawal Agreement, delivered key economic objectives for Ireland. The Protocol secures Ireland’s place within the Single Market, avoids a hard border on the island, protects the all-island economy, and provides Northern Ireland with unique access to both the British internal market and the EU single market.
In the weeks since the end of the transition period on 31 December 2020, a level of trade friction has been evident. Given the phased basis of the new import controls which are being applied by the UK, it will take time for these to feed through to overall exporting activity, and to assess any associated economic impact.
The Government remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples’ livelihoods to the greatest extent possible.
89. Deputy John Lahart asked the Minister for Finance the responsibilities of his Department under the Action Plan for Insurance Reform. [17147/21]
Amharc ar fhreagra105. Deputy Emer Higgins asked the Minister for Finance if he will report on the progress of his Department in tackling the high cost of insurance and the competitiveness of the insurance market here; and if he will make a statement on the matter. [17150/21]
Amharc ar fhreagra108. Deputy Jennifer Murnane O'Connor asked the Minister for Finance the progress made to date with regard to the measures his Department is taking under the insurance reform plan; and if he will make a statement on the matter. [17164/21]
Amharc ar fhreagra117. Deputy Jim O'Callaghan asked the Minister for Finance the measures he is taking to address high insurance costs; and if he will make a statement on the matter. [17144/21]
Amharc ar fhreagra131. Deputy John Lahart asked the Minister for Finance the status of proposals to regulate claims harvesters in insurance. [17148/21]
Amharc ar fhreagra350. Deputy John Lahart asked the Minister for Finance the responsibilities of his Department under the Action Plan for Insurance Reform. [1862/21]
Amharc ar fhreagraI propose to take Questions Nos. 89, 105, 108, 117, 131 and 350 together.
Insurance reform is a priority for this Government, as is reflected in the whole-of-Government approach being adopted by Government's Action Plan for Insurance Reform. This Action Plan contains a range of deliverables across a number of Government policy areas, including the Department of Finance, which aim to improve the insurance environment in Ireland. The Plan is being overseen by the Cabinet Committee Sub-Group on Insurance Reform, which is chaired by an Tánaiste. The sub-Group met last week and took stock of the considerable progress that has been made in the first three months of the Plan.
In terms of the actions attributable to my Department, the Minister of State Sean Fleming TD has primary responsibility for delivery and the key achievements to date include:
- Establishing a new Office to Promote Competition in the Insurance Market;
- Working with the Central Bank of Ireland to expand the scope of the National Claims Information Database (NCID) to now gather data on employer and public liability insurance;
- Commencing the bulk of provisions under the Consumer Insurance Contracts Act 2019 (with the remainder to take effect from September 2021); and
- Publishing the Oireachtas Post-Enactment Scrutiny Report in relation to this Act.
In addition, another key responsibility for my Department is to request from industry and stakeholders an assessment of the expected impact of the reforms upon premium levels. In this regard, both Minister of State Fleming and I have had extensive engagement with these groups, and this will continue into the future. As the Deputies will be aware, Minister of State Fleming is to shortly meet with the main insurers, particularly in relation to the new Personal Injuries Guidelines.
Work is also continuing within my Department to progress other key actions due in the coming months. This includes preparing for the publication, by the Central Bank of Ireland, of the first National Claims Information Database (NCID) report on employer and public liability insurance, and the Central Bank’s final Review of Differential Pricing in the Motor and Home Insurance Market. My officials are also engaging with the officials in the Central Bank to explore options on establishing an insurance databank for new market entrants.
In addition, another key action for my Department, in conjunction with the Department of Justice, is to set out proposals to regulate claims harvesters. Officials are currently examining this issue, including how other jurisdictions regulate these type of entities.
In conclusion, as Minister for Finance, I, along with Minister of State Fleming, am committed to working with my Government colleagues to achieve a more sustainable and competitive insurance market, and to continue to drive the Action Plan forward. It is my belief that this whole-of-Government approach provides the best opportunity to improve both the cost and availability of insurance for all consumers, businesses and community groups.
