In this week’s Public Policy news, read how Exchequer and CSO figures released this week show a mixed picture for Ireland’s economy; the launch of schemes to support retail and businesses in both Ireland and Northern Ireland; the UK’s enshrining in law of its 78 percent target to reduce its greenhouse gas emissions; and the opening of new Europe Direct centres in Ireland to reinforce the connection between the EU’s institutions and its citizens. Exchequer figures show increase in both tax revenues and expenditure Exchequer figures published this week show an increase in tax revenues in April of 20 percent compared to this time last year, with robust income tax receipts and excise duties. Total gross voted expenditure to end-April was €2.2 billion higher than for the same period last year, with spending by the Department of Social Protection to-date up €2.3 billion year-on-year. The 12-month rolling Exchequer deficit stands at just under €12.5 billion. Commenting on the figures, Minister for Finance, Paschal Donohoe, TD, said that while the figures show the continuing impact of the pandemic on public finances, they also point to some of the underlying strengths in the economy, with income taxes and excise duties, in particular, continuing to perform well: “The flexibility and adaptability shown by employers and employees throughout this pandemic has been extraordinary. Today’s figures suggest that as the economy opens up they can look forward to brighter days and a sustained recovery ahead”. CSO publishes April 2021 monthly unemployment statistics Figures released by the Central Statistics Office (CSO) this week show that the ‘COVID-19 adjusted’  unemployment rate for April 2021 was 22.4 percent if all claimants of the Pandemic Unemployment Payment (PUP) were classified as unemployed. This figure is down from 23.8 percent in March 2021, and from 30.5 percent this time last year. The seasonally adjusted figures show that the rate of unemployment in Ireland in April 2021 remains unchanged from the March 2021 figure of 5.8 percent, and 1.1 percent up on the figure for this time last year.  These figures classify claimants of the PUP as employed. Supports continue for Irish retail and business Minister of State for Business, Employment and Retail, Damien English, this week launched a new round of the Covid-19 Online Retail Scheme, under which €5 million will be made available to help Irish businesses upgrade their websites and improve their competitiveness in online retail. Separately a report was published by Bank of Ireland on credit card data revealed that overall consumer spending dropped by 5 percent in April, and showed a ‘mixed picture’ of spending levels. Commenting, Christian Pierce, Group Chief Data and Analytics Officer at Bank of Ireland said that while April spending saw a slight dip overall, “a more detailed analysis reveals that people are looking forward to a brighter summer ahead.”  Minister English also invited entrepreneurs and entrepreneurial teams to apply for Enterprise Ireland’s €1m Competitive Start Fund (CSF),which aims to increase the number of diverse High Potential Start-Ups (HPSUs) that have the potential and ambition to succeed internationally. This fund is now open for applications from founders of early-stage start-ups from all sectors with an eligible innovative product or service set for global markets. Schemes to support retail and holidays-at-home in Northern Ireland          Further supports for retail in Northern Ireland were announced this week, as Economy Minister Diane Dodds revealed that every person in Northern Ireland aged 18 and over will be eligible to apply for a pre-paid card worth £100 to spend in their local high street under the High Street Stimulus scheme. The Minister made the announcement as retail outlets re-opened under the recent Coronavirus guidelines. Part of the Economic Recovery Action Plan, the High Street Stimulus (HSS) is designed to stimulate local businesses, including retail and hospitality sector outlets, following the pandemic. Under the scheme, eligible individuals aged 18 and over will be asked to apply for the pre-paid card through a dedicated online portal. The card must be used in ‘bricks and mortar’ businesses within Northern Ireland and cannot be used online. The Minister also revealed that, if conditions are right, the HSS scheme will open at the end of the summer. Also announced was the Holiday at Home Voucher Scheme, which will allow Northern Ireland households to claim back 50 percent off a stay of two nights or more in certified accommodation, up to the value of £100. The scheme will be launched in the autumn to drive demand after the summer season. Further details will be released in due course. UK enshrines in law its record-high targets for emissions reductions The UK government has enshrined in law one of the world’s most ambitious climate change targets:  its new target under the sixth Carbon Budget to reduce the country’s greenhouse gas (GHG) emissions by 78 percent by 2035 from 1990 levels.  If achieved, this target would bring the UK more than three-quarters of the way to ‘net zero’ by 2050. The UK is required under the Climate Change Act 2008 to issue carbon budgets which provide Ministers with advice on the volume of GHG emissions the UK can emit during the period 2033-2037. The government set the target following advice published in December 2020 by the Climate Change Committee (CCC). Under the sixth Carbon Budget the government will incorporate the UK’s share of international aviation and shipping emissions for the first time. Policies to meet the carbon budgets – and the Net Zero Strategy – will be published before COP26, the United Nations Climate Change Conference to be held in Glasgow in  November 2021. Seven EUROPE DIRECT centres open in Ireland Seven new generation EUROPE DIRECT centres opened in Ireland this week following an announcement by the European Commission that it would be revamping its network of information and communication points around Europe. The centres are part of a community of 424 Europe Direct centres around Europe whose purpose is to reinforce the connection between EU institutions and citizens. Their role will be to help explain how Europe is combatting the COVID-19 pandemic, boosting recovery through NextGenerationEU, and tackling the green and digital transitions. The centres will offer information on EU policies and priorities to local media and will help the Commission keep track of local sensitivities linked to EU policies. They will also promote active European citizenship in schools, and coordinate with other EU networks in the regions, ensuring easier local access to information for citizens, organisations and businesses. The centres are in Ballinasloe, Blanchardstown, Clones, Letterkenny, Portlaoise, Sligo and Waterford.   You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre

  In this week’s Public Policy news, read about developments in Ireland’s transition towards a circular economy, as well developments in Ireland’s pension reform, along with the publication of Ireland’s summer legislative programme. Also covered is the growth in Northern Ireland’s sales and exports. Transition towards a circular economy for Ireland The Government has published a draft national strategy on how Ireland can transition to a Circular Economy. The draft strategy sets out what a circular economy is, why Ireland needs to achieve it, and how national policy will support that goal. Businesses, communities and citizens are invited to contribute their views through a public consultation which can be found here until 11 June. Also launched recently was the Circular Economy Innovation Grants Scheme (CEIGS), under which social enterprises, voluntary and community organisations and businesses with fewer than 50 employees can apply for funding of up to €50,000 for projects that support innovation and circular economy initiatives. Finally, a consultation has launched on Ireland’s new Circular Economy Programme. This new programme, which is led by the Environmental Protection Agency (EPA), aims to provide leadership and maintain a competitive programme of supports and knowledge to businesses about the opportunities afforded by the circular economy. The public consultation on the Programme is open until 17:30, 11 June 2021. Major study published on opportunities for Ireland from EU free trade agreements A major new trade study was published this week on the economic opportunities and effects for Ireland arising from EU Free Trade Agreements (FTAs) recently concluded with Korea, Canada, Mexico and Japan. The study, which was conducted by Copenhagen Economics, found that the FTAs will raise GDP by 2.3 percent by 2030. This increase will be driven by a 3.3 percent increase in Irish exports, and an equal increase in imports, which will continue to become cheaper for consumers and Irish firms with global value chains. The study also found that wages are expected to rise by between 2.6 and 4.4 percent in 2030, especially for low-income workers. Speaking at the publication of the study Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar TD, stated that “trade deals open up new and exciting markets, make doing business easier removing bureaucracy, tariffs, quotas and regulatory barriers. This is particularly important for SMEs, given that trade barriers tend to disproportionately burden smaller firms.” Minister of State with responsibility for Trade Promotion Robert Troy TD added: “As a small, open economy trade and investment is crucial to our recovery and future prosperity. The more we trade, the more jobs we support and the better the living standards for all.” You can read the full report here: Four EU Free Trade Agreements – Opportunities and Impacts for Ireland. Pension reform in Ireland with “IORP II Directive” This week Regulations were formally signed which had the effect of transposing the “IORP II Directive” into Irish law. While many of the provisions of the Directive have already been transposed into Irish law, the over-arching objective of this Directive is to facilitate the development of occupational retirement savings in the European Union. The requirements of the Directive (in keeping with Ireland’s Roadmap for Pensions Reform) will now apply to all schemes and trust Retirement Annuity Contracts (RACs), including small schemes and one-member arrangements, where possible and as appropriate, in order to ensure that all members and beneficiaries are afforded equal protection irrespective of size. IORP II investment and borrowing rules will apply only to new investments or borrowings entered into by such arrangements, and not to existing one-member arrangements, to which a 5-year transitional period will also apply to in respect of new IORP II requirements (other than investment and borrowing-related requirements). Speaking after signing the Regulations, Minister for Social Protection, Heather Humphreys, TD, said the regulations “will provide for a number of improvements within the area of occupational pensions in Ireland such as – enhanced governance standards for schemes and trust RACs in Ireland - better protections for pension scheme members and beneficiaries - enhanced information provision to scheme members and beneficiaries including the introduction of a Pension Benefit Statement on an annual basis - the removal of obstacles for cross-border provision of services and transfers, and - promotion of long-term investment in growth, environment and employment enhancing economic activities”. Ms Humphreys described many of the provisions in the IORP II Directive as “support[ing] positive reform of the Irish occupational pension sector in keeping with the Government’s Roadmap for Pensions Reform.” Summer Legislative Programme 2021 published A programme containing 43 bills for prioritisation by Government ministers and has been approved by Cabinet, following consultation with all government departments, officials and the Attorney General. Among the Bills to be considered is the Statutory Sick Pay Bill, to deliver a statutory sick pay scheme for workers, is also being prioritised. Chartered Accountants Ireland contributed to a public consultation on this Bill, which can be found here. Statistics show growth in Northern Ireland’s sales and exports Total sales by companies in Northern Ireland were estimated to be worth £71.9 billion in 2019, an increase of 4.6% (£3.2 billion) over the calendar year, according to a ‘Broad Economy Sales and Exports Statistics’ report published this week by the Northern Ireland Statistics and Research Agency  (NISRA). The Broad Economy Sales and Exports Statistics (BESES) is an experimental annual measure of local businesses’ sales to markets outside Northern Ireland. The report, which was originally scheduled for December 2020 was published this week as it was necessary to extend the data collection period and delay the publication due to the COVID-19 pandemic. Among its findings, the report stated that sales within Northern Ireland are at their highest level since the survey commenced in 2011, and had increased by £2.4 billion to £48.9 billion, up 5.2 percent over 2019. Great Britain remains the most significant single market for external sales from Northern Ireland, having increased by £0.7 billion to £11.3 billion, up 6.6 percent over the year. However, Ireland remains Northern Ireland’s single largest export market with exports increasing by £404 million (9.9%) over the year, to £4.5 billion.   You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre. Read all our updates on our Public Policy web centre

  In this week’s Public Policy news, read about the international wave of climate-related initiatives that coincided with Earth Day (April 22), from the EU’s adoption of a package of sustainable finance measures to US President Biden’s Virtual Leaders Summit on Climate. Also covered is the second stage of Ireland's Climate Act Bill, and the Glasgow Financial Alliance for Net Zero (GFANZ), a new initiative that brings together net zero finance initiatives into one sector-wide strategic forum. Ireland Minister for Transport, Eamon Ryan, TD, introduced the second stage of the Climate Action Bill on Wednesday, stating that the Bill facilitated “a transition to a cleaner, more secure, more socially just, environmentally rich natural world in our country” through six five-year carbon budgets. Chair of the Oireachtas Climate Committee, Brian Leddin, TD, in turn pointed to the economic opportunities that will arise from the societal transformation necessary to achieve our climate ambitions as “unparalleled economic and employment opportunities – in renewable energy, nature conservation, sustainable transport and in retrofitting our homes and schools and hospitals.” However, as we have pointed out this week unswerving commitment from Government is needed by the businesses in Ireland which will be tasked with realising the Government’s historically ambitious targets, and in doing so will need the assistance of their accountants. Glasgow Financial Alliance for Net-Zero launched Top finance firms have joined a coalition that brings together existing and new net zero finance initiatives into one sector-wide strategic forum called the Glasgow Financial Alliance for Net Zero (GFANZ). Including 160 companies (43 of which are banks) with more than $70tn assets, the coalition aims to work as an ‘umbrella organisation’ for the various net zero coalitions launched by the financial sector. It is chaired by former governor of the Bank of England Mark Carney, and is in partnership with the UNFCCC Climate Action Champions, the Race to Zero campaign and the COP26 Presidency..   The financial institutions joining the GFANZ have pledged to reduce their greenhouse gas emissions and ensure their investment portfolios align with the climate science by diverting investment towards low-carbon infrastructure and technologies, and discouraging high-carbon investments. According to  a statement from the group, the companies in the coalition will cooperate to improve data-gathering and “advocate for public policy that supports economy-wide transition to net zero”. GFANZ will also catalyse strategic and technical coordination for sectors of finance (e.g. insurance underwriters) that do not yet have net zero coalitions in place as part of the UN-backed climate campaign.   Carney, who is British Prime Minister Boris Johnson’s adviser for green finance, described the initiative as “the breakthrough in mainstreaming climate finance the world needs” and stated that “GFANZ [will be] the gold standard for net zero commitments in the financial sector.” Signatories in the group include the Bank of America, Barclays, Deutsche Bank, HSBC, Société Générale, Morgan Stanley and UBS, as well as insurers Allianz, Aviva and Swiss Re, and the UN-Backed (NZBA) a group of 43 lenders that also launched this week. Although campaigners warn that the scheme falls short of aligning the financial sector’s activity with global climate goals, the initiative has been praised by both British Prime Minister Boris Johnson and John Kerry, US President Joe Biden’s special envoy for climate. Prime Minister Johnson described it as leading the charge “to scale up our ambition, accelerate our shift and help us to build back greener together,”  while John Kerry stated “As countries around the world move to decarbonize, the large sums these institutions are dedicating to climate finance also reflect a growing understanding of how critical a low-carbon global economy is to their business models.” Major developments in EU’s Climate Action Two major developments occurred this week in EU’s climate action: the European Climate Law and the sustainable finance package of measures. After months of talks between the European Parliament, the Commission and the Council, policymakers this week reached provisional agreement on the European Climate Law, first proposed in March 2020. Described as ‘the law of laws’ by João Pedro Matos Fernandes, Portugal’s Minister of Environment and Climate Action, it sets the framework for the EU’s climate-related legislation for the next 30 years. It puts the EU’s goal of climate neutrality by 2050 into law, becoming the first of the world’s three top polluters to do so (the other two being China and the US). Under the agreement, the EU will aim to reduce its greenhouse gas emissions by 55 percent above 1990 levels by 2030, an increase of 15 percent from the current 40 percent target. This new target is in line with the level endorsed by EU leaders in December (but is lower than the Parliament’s original demand of 60 percent). The deal includes a commitment to negative emissions after 2050, and recognises the need to enhance the EU’s carbon sink. It also includes stronger provisions on adaptation; maintained the bloc’s 2050 climate neutrality goal at EU-level (rather than requiring each country to apply that deadline at home); and commits to a process for setting a 2040 climate target. The agreement also establishes an independent advisory council, called the European Scientific Advisory Board, which will provide scientific advice on the EU’s climate course, and will use the concept of a greenhouse gas budget for 2030-2050 to be published by the Commission to determine how much the EU can still emit to stay in line with its climate objectives, to inform the EU’s 2040 climate target. Once the provisional agreement is formally approved by Parliament and Council, the European Climate Law will be published in the Official Journal of the Union and will enter into force. The European Commission also introduce a package of measures aimed at improving the flow of money towards sustainable activities across the EU to finance the EU’s climate action plans: Political agreement was reached on the text of the European Commission’s first EU Taxonomy Climate Delegated Act, which aims to support sustainable investment by introducing the first set of technical screening criteria to define which economic activities can be categorised as ‘green’. The Delegated Act, once formally adopted, will be scrutinised by the European Parliament and the Council for up to six months. A proposal for a Corporate Sustainability Reporting Directive (CSRD). This proposal revises and strengthens the rules introduced by the Non-Financial Reporting Directive (NFRD), aiming to create a set of rules which will – over time – “bring sustainability reporting on a par with financial reporting”. The Directive will extend the EU’s sustainability reporting requirements to all large companies and all listed companies, resulting in an increase in the number of companies required to follow detailed EU sustainability reporting standards from 6,000 to 50,000. The Commission also proposes the development of separate, proportionate standards for SMEs, which non-listed SMEs can use voluntarily. This move will make sustainability reporting by companies more consistent, with the goal that financial firms, investors and the broader public can use comparable and reliable sustainability information.  Six amending Delegated Acts were also proposed to ensure that financial firms include sustainability in their procedures and their investment advice to clients. The Acts – which cover investment and insurance advice, fiduciary duties, and investment and insurance product oversight and governance – aim to encourage the financial system to support existing sustainable businesses, support businesses on their sustainability journeys, and help the EU to combat ‘greenwashing’. The Acts are expected to apply from October 2022, following up to six months’ scrutiny by the European Parliament and the Council. European Commissioner for Financial Stability, Financial Services and the Capital Markets Union, Mairead McGuinness has described the measures as ground-breaking, but did not shy away from the difficulties that will face all sectors of the economy:  “Of course this is difficult. This is transformational beyond our wildest thoughts because we now know within a short few years every single sector of our society and our economy, will have to be rapidly transformed in order for us to achieve our climate targets and indeed to reverse other environmental problems.” Read more here. US resumes leadership role in climate diplomacy at a virtual leaders summit on climate The US this week hosted 40 world leaders for a virtual climate conference, the Leaders Summit on Climate.  The summit is the current administration’s first big geopolitical climate event after re-joining the Paris Agreement, and the first of its kind to be convened by a United States president. Among the world leaders who joined President Biden were President Xi Jinping of China, German Chancellor Angela Merkel, Russia’s President Vladimir Putin, and Canadian Prime Minister Justin Trudeau. Opening the summit, US President Joe Biden was clear in how he interpreted the urgency of the threat, describing the 2020s as a “decisive decade” for tackling climate change, saying “The signs are unmistakable, the science is undeniable and the cost of inaction keeps mounting”. He went on to formally pledge that the US will cut carbon emissions by 50-52% below 2005 levels by 2030, essentially doubling previous promises. President Biden also drew a clear line between climate adaption and mitigation and economic benefit, reportedly claiming that “those that do take action and make bold investments in their people, and the clean energy future, will win the good jobs of tomorrow, and make their economies more resilient, more competitive.” Key themes of the Summit include: Galvanizing efforts by the world’s major economies to reduce emissions to achieve the 1.5 degree target. Mobilising public and private sector finance to drive the net-zero transition and to help vulnerable countries cope with climate impacts. The economic benefits of climate action, with a strong emphasis on job creation, and the need for a fair transition to a new clean energy economy. Spurring transformational carbon-reduction and climate-adaption technologies and the creation of economic opportunities and future industries. Addressing the global security challenges posed by climate change and the impact on readiness, and address the role of nature-based solutions in achieving net zero by 2050 goals. In a worldwide diplomacy campaign, Biden's climate envoy John Kerry had laid out clear expectations for the meeting, which included that leaders should announce new measures to lower their greenhouse gas emissions, assist developing countries to cope with the spiralling impacts of the crisis and form a club where the biggest polluters work together. Pledges from world leaders during the Summit included that of President Xi Jinping, who restated China’s commitment to reach carbon neutrality. This is to include a reduction in China's use of coal, the largest contributor to global warming, by the middle of the decade. You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre. Read all our updates on our Public Policy web centre

  In this week's Public Policy news, read about a positive economic forecast for Ireland for 2021, preliminary analysis showing a drop in Ireland’s power-generation and industrial emissions, and new guidance published on human rights for business enterprises. In other news, the UK’s BEIS Department’s has announced that next month’s ‘Your business journey to Net Zero’ will focus on Northern Ireland SMEs, and the EU is to borrow €806 billion to finance its green and digital plan.  Positive economic forecast for 2021 Minister for Finance, Paschal Donohoe TD, this week published the Government’s Stability Programme Update for 2021. This update sets out the Department of Finance’s macroeconomic and fiscal forecasts for the period 2021­–2025. The update, which must be submitted by all Member States to the European Council and Commission by the end of April each year, forecasts the following for 2021: a 4.5 percent expansion of GDP a 2.5 percent growth in Modified Domestic Demand (MDD), described as ‘a more useful indicator of domestic economic conditions’ a 16.25 percent averaging of the unemployment rate an 80,000 increase in the employment level a General Government Deficit of 4.7 per cent of GDP The projected economic recovery over the second half of 2021 will depend on the success of the vaccination programme and the assumption of an easing of public health restrictions. Employment is projected to remain below its pre-crisis peak until 2023. Commenting, Minister Donohue said: ‘The impact of the pandemic on the domestic economy and the public finances has been severe. However, the acceleration of the vaccination programme means that the beginning of the end is, hopefully, now in sight.  The strength of our economic model and more importantly, our people, clearly demonstrate that we should face this current period with optimism.  We can and we will rebuild our economy, get our people back to work and safely emerge from the pandemic.” EPA report shows drop in Ireland’s power generation and industrial emissions Preliminary analysis from the Environmental Protection Agency released this week reveals that greenhouse gas (ghg) emissions from Irish power-generation and industrial companies covered by the EU Emissions Trading Scheme (ETS) fell by 6.4 percent in 2020, their lowest level since the EU ETS was introduced in 2005. This compares however with a decrease of approximately 11-12 percent across Europe. The decrease is due to the impact of lower production in some industrial sectors during the COVID-19 pandemic, combined with a significant drop in emissions from power-generation. Emissions from the electricity-generation sector decreased by 8.4 percent, due to increased use of renewable energy (mainly wind generation) and less of fossil fuels, such as peat, in our energy mix. The EPA did report that some sectors such as dairy processing and pharmachem are increasing emissions year on year. The EPA is the Competent Authority in Ireland for the EU Emissions Trading System (ETS). This is an EU initiative which was set up to help it reach its climate targets under the Kyoto Protocol. It is the world’s first carbon market, and remains the largest. It operates as a ‘cap-and-trade system’ in which governments set an allowable total amount of emissions (‘cap’) over a certain period and issue tradable emission permits (‘trade’). These permits are typically good for 1 tonne of CO2 and are the are the currency in carbon markets.  Further information about Ireland's overall greenhouse gas emissions is available on the EPA website, along with infographics and detailed greenhouse gas inventory. New guidance published on human rights for business enterprises Minister for Foreign Affairs and Minister for Defence, Simon Coveney, TD, has this week launched new guidance on human rights for business enterprises. The guidance was developed by a multi-stakeholder group with representatives from business, government and civil society, as part of the implementation of the National Plan on Business and Human Rights. This plan aims to promote responsible business practices at home and overseas, including in developing countries, by all Irish business enterprises. Breege O’Donoghue, Chair of the plan’s implementation group, pointed to the legislative developments in the area of sustainable corporate governance that are taking place at EU level, and stated that “it is essential that businesses familiarise themselves with the UN Guiding Principles on Business and Human Rights and implement best practice in their operations.” She went on to urge Irish businesses to consult the guidance and also avail of a practical workshop for businesses, which is being organised by the Trinity Centre for Social Innovation, in partnership with The Global Business Initiative on Human Rights. The new Guidance on Business and Human Rights for Business Enterprises is available here. ‘Your business journey to Net Zero’ in Northern Ireland – Thursday 29 April 2021 10:00-16:20 The Department for Business, Industrial Strategy & Energy (BEIS) is bringing its popular ‘Your business journey to Net Zero’ to Northern Ireland on 29 April. In conjunction with the Northern Ireland Office and the Federation of Small Businesses Northern Ireland, BEIS will run the event virtually and it is aimed at SME businesses in  Northern Ireland that want to take part in tackling climate change, but are unsure of where to start ‘Your business journey to Net Zero’ will help SMEs understand the practical steps for embarking on their own Net Zero journey, and will help businesses consider the opportunities stemming from the transition to a low carbon economy.  Minister for Small Business, Consumers and Labour Markets, Paul Scully, and Minister of State at the Northern Ireland Office, Robin Walker will open the event. The UK government’s Net Zero Business Champion, Andrew Griffith MP, will be holding a panel session with businesses, and the Minister for the Economy in the Northern Ireland Executive, Diane Dodds MLA, will be also providing her closing comments in the afternoon. In addition, there will be a virtual exhibition hall for delegates to find out about local and regional Northern businesses and institutions, along with more products and services that will be of interest to them as they look to lower their carbon emissions.   Click here for details and registration. All sessions will be recorded, and any questions can be emailed to business.engagement@beis.gov.uk EU to borrow €806 billion to finance green and digital plan The European Commission has outlined plans to borrow €806 billion on the capital markets to finance its Recovery and Resilience Fund to allow it give hundreds of billions of euros in grants and low-interest loans to EU countries. The move makes it the biggest debt issuer in euros. Around 30 percent, or €250 billion, will be issued in green bonds (the Commission will present a green bond standard later in 2021). In addition to the €386 billion in loans to be repaid by EU countries, the Commission is expected propose new EU-wide levies in June to cover €407.5 billion in grants and service interest. The Recovery and Resilience Fund is the centrepiece of ‘NextGenerationEU’, the EU’s temporary recovery instrument to respond to the coronavirus crisis and to support the economic recovery and build a greener, more digital and more resilient future. The Recovery and Resilience Fund is an instrument to provide grants and loans to support reforms and investments in the EU Member States.   You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre

  In this week's Public Policy news, read about new training that is available for businesses responding to climate change; a report on the submissions received to the public consultation on Statutory Sick Pay; a public consultation on the introduction of a statutory right to request remote work and an increase to the UK’s National Living Wage and National Minimum Wage.  ‘Climate Ready’ Programme for Irish Businesses launches A five-year national initiative was launched this week that aims to equip businesses with skills to respond to climate change. The initiative, Climate Ready, is a partnership between Skillnet Ireland, Chambers Ireland, Wind Energy Ireland, and Sustainable Finance Ireland. It includes training on reducing energy waste, saving costs and protecting the environment, as well as reducing water consumption and helping staff understanding their impact on climate action. Speaking at the launch Minister for the Environment, Climate and Communications, Eamon Ryan, TD, described the actions that will be taken by business as “critical” to achieving Ireland’s ambitious targets. These targets are to halve greenhouse gas emissions by the end of the decade and achieve net-zero by 2050, as set out in the recently approved Climate Action Bill. Climate Ready also supports the aims of the Department of Further and Higher Education, Research, Innovation and Science’s Statement of Strategy 2021-2023, in respect of climate action, ensuring the provision of a workforce skilled in sustainable techniques and technologies. Public Consultation on putting the right to request remote working into law The Department of Enterprise, Trade and Employment has announced a public consultation on the introduction of a statutory right to request remote work. Tánaiste and Minister for Enterprise, Trade and Employment Leo Varadkar, TD, has encouraged employers and employees to engage with this consultation. Commenting, the Tánaiste stated that putting the right to request remote working into law would provide “a clear framework around which requesting, approving or refusing remote work can be based”. He further stated that the Government would take a balanced approach with the new legislation in recognition that remote working may not work for everyone or for every organisation. The announcement comes after the coming into effect last week of the Code of Practice on Right to Disconnect Right to Disconnect, which gives employees the right to switch off from work outside of normal working hours. The closing date for submissions to the consultation is Friday, 7 May 2021. Statutory Sick Pay public consultation - report on the submissions received The Department of Enterprise, Trade and Employment have released a report on the submissions it received from the public consultation for Statutory Sick Pay which broadly showed support for the introduction of such a scheme in the private sector. A total of 118 submissions were made, including a response from Chartered Accountants Ireland. Some of the headline responses include: 50% of respondents were in favour of the rate of payment to be a fixed percentage of the employee’s weekly earnings, with 59% of that cohort recommending full pay 43% said there should be no minimum period that the employee must be out sick before statutory sick pay applies 54% said statutory sick pay should only apply to illnesses that have been certified by a medical professional or medical body 67% were in favour of financial supports for employers who genuinely cannot afford to pay statutory sick pay More detailed responses can be found on gov.ie.   Survey by the OECD-NDA on employment of persons with disabilities in Ireland The Organisation for Economic Cooperation and Development (OECD) has partnered with the  National Disability Authority (NDA) to conduct a review of employment of persons with disabilities in Ireland. As part of the project, the OECD has prepared an online survey for companies on how they can better create job opportunities for persons with disability. Closing date for survey responses is  Wednesday, 21 April 2021 and the survey takes approximately 15 minutes to complete. Northern Ireland report shows decrease of economic output Economic output in Northern Ireland decreased by 1.4 percent over the quarter to December 2020, according to a report on the Northern Ireland Composite Economic Index (NICEI), the quarterly measure of Northern Ireland’s (NI) economic performance based on available official statistics. The report, published this week by NI Statistics and Research Agency (NISRA), suggests that the decrease in economic growth was largely driven by the decline in the Services, Production and Construction sectors. The level of economic activity in Northern Ireland is currently 9.5 percent below the maximum value recorded during the economic downturn in Quarter 2 of 2007, while UK GDP is estimated to be 5.1 percent above its pre-economic downturn peak.    UK National Living Wage increases An increase to the UK’s National Living Wage and National Minimum Wage has come into effect, with increases per age group as follows: National Living Wage (23+) up 2.2 percent from £8.72 to £8.91 National Minimum Wage (21-22) up 2 percent, from £8.20 to £8.36 National Minimum Wage (18-20) up 1.7 percent from £6.45 to £6.56 National Minimum Wage (under 18) up 1.5 percent from £4.55 to £4.62. The age threshold for eligibility for the National Living Wage has also been lowered from 25 to 23 years for the first time increasing the number of young people eligible for the National Living Wage since it came into effect in 2016. For those from school-leaving age to 22, the National Minimum Wage will apply. The Apprentice Rate has also increased 3.6 percent from £4.15 to £4.30.   You can find information, guidance and supports to help members understand sustainability and meet the challenges it presents in our Sustainability Centre.   Read all our updates on our Public Policy web centre

  Originally posted on Business Post 4 April 2021. A democratic left-leaning president can always be expected to favour big spending programmes, but has anyone ever been as big a spender as US president Joe Biden? After committing $1.9 trillion to pandemic responses, he now proposes to commit a further $2 trillion to infrastructure spend. This marks a radical shift in economic approach between Biden and his predecessor. Donald Trump seemed to view economic growth as being primarily private sector-driven. Biden, on the other hand, is betting on a public expenditure programme. A trillion here, a trillion there, and suddenly you're talking real money. Even for an economy as vast as that of the US, expenditure in the trillions of dollars cannot be sustained by standard taxation or borrowing. Additional tax has to be found somewhere. In line with his election promises, Biden is looking to raise it from the corporate sector, with a shake-up of the tax code and a headline-grabbing hike in corporation tax from 21 per cent to 28 per cent. Any mention of changes to US corporation tax policy tends to cause a flurry among the commentariat here, many of whom seem to regard Ireland's attraction as a destination for US investment as being purely tax-driven. However, Biden‘s proposed reforms are all about how much money is collected by Uncle Sam. The US already has many counterbalancing measures in its tax code to reduce the attractiveness of offshore tax planning by American-headquartered companies. Since 2017, there have been restrictions on tax breaks for foreign expenditure. Intangible assets like patents, held overseas by US corporations, are deemed to generate taxable income in the US. The key to assessing how Ireland will fare as a destination for US foreign direct investment following these reforms is the extent to which Irish corporation tax paid by a US subsidiary reduces the overall tax bill of its US headquarters. At the moment, most (if not all) corporation tax paid in Ireland by a US subsidiary is available to offset against the ultimate US tax bill. There is insufficient detail available yet on the proposals to know if that will continue. Another factor is whether or not these US changes will prejudice how Irish tax rules operate when compared with the tax regimes of competitor countries in Europe, in the Far East and in Latin America. That didn’t happen with the 2017 changes, and hopefully it won’t happen this time either. More broadly, the proposals could well reinforce the position of the US as the ultimate arbiter of cross-border tax policy. There is ongoing OECD work towards reforming the tax landscape for multinationals in the digital sector like Google, Amazon and Facebook. This will involve shifting the taxability of digital services away from the countries where the services are provided, and into the countries where the market exists for those services. As the homeland for most of the tech giants, the US has the most to lose from such a policy shift, and needs to have compensating measures. A minimum effective rate of corporation tax worldwide is also on the OECD agenda. This is a concept the US is far more comfortable with. The Biden administration may be stealing a march by enhancing its own existing models of restricting foreign deductions and claiming the earnings of overseas subsidiaries for additional tax in the US. Will any of this come to pass? US tax reform has traditionally moved at a glacial pace. There were no significant developments in US tax policy between 1985 and Trump’s Tax Cuts and Jobs Act of 2017. Yet the current proposals may be landing at a good time. First of all, if only because of the pandemic response and the obvious need for infrastructure investment in the US, it's hard to argue with a move to increase taxes on companies. After all, companies don’t vote. Secondly, the Democrats currently have a (tenuous) grip on both houses of Congress, which is essential for any fiscal legislation to pass. The main proposal requiring House of Representatives and Senate approval would be hiking the tax rate up to 28 per cent. Thirdly, it seems that many of the plans involve strengthening measures that are already in place to tighten the offshore regime. It’s always easier to work with what’s already there, rather than try to invent new taxes. Ireland has used tax policy to good effect in promoting industrial policy for more than half a century, but tax is not the only driver of foreign direct investment. Speaking at a US-Ireland Economic Roundtable virtual event last week, Congressman Richard Neal pointed towards the Irish education system and the stability of the political system as components for a successful foreign investment regime. That observation has particular significance because all US tax law has to be passed by the House Ways and Means Committee, which Neal chairs. Irish corporation tax policy on its own may no longer be the investment attraction it once was, but as long as it does not become a handicap we can still compete very well. In the years ahead, the Irish policy imperative should be to secure the corporation tax yields that we already have. Joe Biden's America is not the only country that needs to be able to spend on pandemic responses and infrastructure. Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland