Since the end of the transition period, the UK’s departure from the EU has resulted in uncertainty as to whether Northern Ireland resident directors meet the requirement set out in Section 137 Companies Act 2014 for an Irish registered company to have at least one EEA resident director. Chartered Accountants Ireland has been corresponding with the Irish Government on this issue and we are told that the advice of the Attorney General is still awaited. We know from member feedback that the lack of clarity is causing operational issues within some companies. Our most recent letter to Tánaiste Leo Varadkar, the most recent response from the Government and previous letters are available on our website.

In this week’s Public Policy Bulletin, read about the removal of the mandatory retirement age in Ireland, Google’s recently released Irish SME report, CSO’s 2021 personal and work life balance statistics and the new Atlantic Technological University. We also cover the release of the most recent Quarterly Bulletin from the Central Bank and NISRA’s Composite Economic Index for Q4 2021. Abolition of Mandatory Retirement Age reaches Dáil Second Stage The Employment Equality (Abolition of Mandatory Retirement Age) Bill 2022, currently in Dáil Second Stage, seeks to abolish the mandatory retirement age. Irish law currently allows mandatory retirement ages to be set by employers in employee contracts. This Bill would provide an individual with the choice to continue working beyond the age of 65, if they wish to do so. Exceptions are provided in the Bill for An Garda Síochána, the Defence Forces, fire services or security-related employment prescribed by the Minister for Justice and Equality and/or the Minister for Defence. The Bill also states that it shall not be unlawful for an employer to provide financial incentives for the voluntary retirement of an employee at a particular age. Chartered Accountant Ireland advocated for the abolishment of mandatory retirement age to afford workers the choice to work or retire as long as they desire to in our response to the public consultation on sustainable State Pensions into the future. Details of the Bill can be found here. Google releases report on digital capabilities in Irish SMEs Google commissioned Amárach to survey 1,000 Irish SMEs in December 2021 to develop a report on their digital journey. The report provides a comprehensive picture of the landscape directly from a cross-section of SME leaders and concludes that ambitious investment in digital skills could result in Ireland’s GDP in 2025 being €9.5 billion higher (€544.2 billion) than currently forecast. The report makes reference to the Government’s digital strategy, which Chartered Accountants Ireland recently responded to by public consultation, and states that its implementation, coupled with the ambition of SMEs, can ensure Ireland is on the right path to achieve its digital targets. In three years, the majority of SMEs expect to be at least halfway on their digital journey. In realising their digital potential, 28 percent of SMEs believe they could increase wages and salaries and 30 percent of all exporters say they could export more. The report concludes that these advances would cause an additional annual increase in Ireland’s GDP of 0.5 percent. The full report can be read here. CSO releases 2021 Personal and Work-Life Balance Survey   A recently released survey from the Central Statistics Office tells us that 22 percent of workers did not take any annual leave in 2021 and “being short staffed” was identified as the most common barrier. Only 8 percent of part-time employees working in small organisations of less than 20 people took paid sick leave in 2021, compared to 16 percent for full-time employees. While over 20 percent of workers at an overall level took paid sick leave, only 6 percent of workers took sick leave without pay in the same period. 20 percent of lone-parent workers took unpaid sick leave, compared with 6 percent of workers of families with two adults with dependent children. Employees in the financial sector availed most of flexible hours, with 32 percent availing of some flexible working arrangement in the previous 12 months. New Atlantic Technological University opened by Minister Harris   This week, Minister for Further and Higher Education, Research, Innovation and Science, Simon Harris, opened the new Atlantic Technological University (ATU). Atlantic TU sees the dissolution of Galway-Mayo Institute of Technology, Institute of Technology Sligo, and Letterkenny Institute of Technology. These institutions will merge to become ATU. Read more here. Central Bank releases Quarterly Bulletin  The most recent Quarterly Bulletin from the Central Bank indicated that economic growth would continue to grow, but at a slower rate than previously forecast. The revised annual growth rates are 4.8 percent in 2022, 4.3 percent in 2023 and 3.9 percent in 2024. Consumer price inflation is predicted to average 6.5 percent this year, driven by particularly high energy price inflation. This is expected to reduce to 2.8 percent in 2023 and 2.1 percent in 2024. Read the Central Bank’s press release here. NISRA releases Q4 2021 NI Composite Economic Index Northern Ireland Statistics and Research Agency recently released its final 2021 quarterly measure of the performance of Northern Ireland’s economy report. Quarter 4 of 2021 saw an increase in economic output of 1.2 percent, bringing the increase over the year to 4.9 percent. The level of economic activity in Northern Ireland continued the general upward trend from the series low in Quarter 2 2020, reaching a thirteen-year series high in Quarter 4 2021 and achieving a level last exceeded in Quarter 2 2008.  

In this week’s Public Policy Bulletin, read about Ireland’s the new auto-enrolment pension scheme, the Sick Leave Bill 2022’s progress and Bank of Ireland’s recent economic pulse survey which shows significantly reduced consumer confidence. We also cover a meeting of Ireland for Finance strategy’s Joint Committee attended by Minister Sean Fleming and Commissioner Mairead McGuinness, £170 million funding for three innovation projects at Queen’s University Belfast and the launch of Northern Ireland’s new Skills Strategy. Irish Government announces new automatic enrolment pension scheme The long-awaited new auto-enrolment pension scheme announced by Minister Heather Humphreys this week plans to automatically enrol an estimated 750,000 workers aged between 23 and 60 and earning over €20,000 from January 2024. They may choose to ‘opt out’ after six months but will be automatically enrolled again after two years. For the first three years, employers will be required to match employee contributions at a rate of 1.5 percent to a maximum of €80,000 earnings. The Government will also contribute €1 for every €3 contributed by employees. The contribution rates for employees and employers will increase to 6 percent over a ten-year period.  The Institute has long advocated for the introduction of this scheme to help increase private pension coverage in Ireland and reduce the reliance on the State Pension. In a statement, the Institute welcomed the Government’s announcement with cautious optimism, citing that sustained momentum is needed to introduce the scheme by 2024. Publication of the Sick Leave Bill receives Government approval This week, Tánaiste and Minister for Enterprise, Trade and Employment, Leo Varadkar received Government approval for the publication of the General Scheme of the Sick Leave Bill 2022. The new laws plans to give all workers the right to paid sick leave, which to be phased in over a four-year period. The Bill has completed Dáil Éireann, First Stage. Once signed into law, the Bill will entitle employees to up to and including three statutory sick leave days in the first year, rising to five days in 2024, seven days in 2025, and ten days in 2026. Sick pay will be paid by employers at a rate of 70 percent of an employee’s wage, subject to a daily maximum threshold of €110 but the Bill does not prevent employers offering better terms or unions negotiating for more through a collective agreement. It had been expected that this scheme would be in place from 1 January 2022 and a definitive start date has not been outlined by the Government for the refreshed legislation; however, the Tánaiste expects this to be around the middle of the year. The results of a survey of members last year showed broad support for the introduction of Sick Leave. The Institute has however written to the Tánaiste on several occasions outlining concerns over the planned timeline for its introduction, noting that businesses will need at least six months to implement a system of sick pay from the issuance of clear guidance. We will continue to communicate with the Tánaiste’s department and will keep members updated on this. The Sick Leave Bill 2022 and Explanatory Memorandum can be found here. Bank of Ireland’s recent economic pulse survey indicates significant knock to customer confidence this month   According to the most recent Bank of Ireland economic pulse survey, consumer confidence dropped to a 17-month low in March 2022, driven by concerns for the economy and inflation. Nine out of ten households expect consumer prices to rise over the next twelve months. The Economic Pulse is based on a series of monthly surveys of households and firms where they are asked for their views on a wide range of topics including the economy, hiring activities, business plans, personal spending and financial situations among others. This month, 83 percent of businesses reported an increase in their non-labour input costs, up from 79 percent in the previous month. Despite this, over a third of businesses expect to spend more on investment this year. According to Bank of Ireland’s chief economist Loretta O’Sullivan, “Having reached a new peak last month, the Housing Pulse came unstuck this month”, with households in all regions paring back their expectations for future house price gains. Three in four believe rents will continue to rise as the demand for accommodation remains higher than the number of properties available to buy and let.   Commissioner McGuinness welcomed by Minister Fleming at the Q1 Joint Committee of the Ireland for Finance strategy Commissioner McGuinness was welcomed by Minister of State Sean Fleming to address the first quarter meeting of the implementation committees of the Ireland for Finance Strategy, held this week in Dublin. Commissioner McGuiness was invited by Minister Fleming to provide an update on the status of the Digital Finance Package and the Sustainability Finance Strategy to executives from the International Financial Services sector.   Speaking at the meeting, Minister Fleming stated: “Ireland’s membership of the EU and our commitment to the development of a single market for financial services has been at the core of our success in developing the international financial services sector here. It was a pleasure welcome Commissioner McGuinness to Dublin to meet with representatives of the sector and hear first-hand our plans to build on that success as we look to enhance and extend the Ireland for Finance strategy.” Employment in the Financial Services sector is at its highest level with 52,000 people working across Ireland in investments funds, international banking, insurance and fintech. The Joint Committee, which is made up of senior executives from the private sector, senior officials from government departments and the enterprise agencies, meets quarterly to oversee the implementation of the Ireland for Finance strategy and to approve the annual action plans that look to develop and grow the number of people working in international financial services. Read the full report here. £170 million for three innovation projects at Queen’s University Belfast Northern Ireland’s Economy Minister Gordon Lyons announced more than £170 million in funding for three innovation projects at Queen’s University Belfast as part of the Belfast Region City Deal. The three innovation projects are as follows: Advanced Manufacturing Innovation Centre Global Innovation Institute Institute of Research Excellence for Advanced Clinical Healthcare The Minister visited the Northern Ireland Technology Centre (NITC) at Queen’s University Belfast to view progress on the Advanced Manufacturing Innovation Centre, which will be a springboard for manufacturing innovation in Northern Ireland. Minister Lyons launches new Skills Strategy for Northern Ireland Last Friday, Minister Gordon Lyons launched ‘Skills for a 10X Economy’ at Belfast Met’s Titanic Quarter campus. The strategy sets out plans to focus on innovation by increasing further education qualifications in technical and professional skills and rebalancing higher education towards Science, Technology, Engineering and Maths, as part of the wider 10X Economic Vision for Northern Ireland. At the launch, Lyons stated: “As we look to accelerate the economic recovery, our vision is to make Northern Ireland one of the world’s elite small economies. The skills of our workforce are central to achieving this goal.” The strategy plans to tackle inequality by supporting people with low or no qualifications to overcome barriers to employment, with Lyons highlighting that 13 percent of Northern Ireland’s working age population hold no qualifications, nearly double the UK average. Read more here.

Originally posted on Business Post 06 March 2022. In German the term “merkeln” is a somewhat backhanded compliment to the former German chancellor. It means to put off decisions until conditions improve. The EU response to the atrocious Russian invasion of Ukraine is showing that this attitude has had its day. An extreme development, even within a week of extremes, has been the decisiveness of the EU approach when responding to the Russian invasion. This wasn’t just a triumph over the labyrinthine EU process and bureaucracy. There has been a change in mindset. The EU is not a defence union, but it has decided to act like one. But then the EU wasn’t a healthcare union either until it was forced to become more organised following the onslaught of Covid-19. The EU response was disjointed during the early weeks and months of the pandemic because the mechanisms were not there to coordinate healthcare policy across the member countries. Remember the initial approach to vaccine purchases by the bloc? There has been no such dithering in response to the Ukraine crisis. The latest indication of the newfound appetite for rapid reaction is the use of the Temporary Protection Directive, a process that would give immediate permission for Ukrainians to live and work within the EU and have access to some social welfare benefits. Up to now controlling the freedom of movement of non-EU citizens has been a Brussels totem, unshaken across other humanitarian crises. This directive has existed since 2001, but was never used. If Covid-19 introduced bigger EU governance, one of the permanent outcomes of the Ukraine war is that future EU influence will extend even further. This is not merely a consequence of improved political decision-making at EU level. Nor can it be fully explained by the historical instincts of the EU Nato members to push back against unacceptable behaviour within the former Soviet bloc. The theatre of war has changed. Everyone knows that war is now waged with cyber-attacks and with disinformation spread on social media platforms. Conflict in the second decade of this century goes beyond the screens of computer hackers and onto the screens of the financial traders. An army still marches on its stomach and sanctions make those bellies harder to fill. Announcing sanctions is one thing, but enforcing them is quite another. Governments are reaching deep into their financial services sectors to ensure adherence with the “new normal” approach to Russian commerce. Britain has its own Office of Financial Sanctions Implementation. Ireland does not have a separate such office, but officials have not been slow in setting out the obligations on financial institutions and professionals. Here, the Central Bank is the lead agency for financial sanctions. The application of new financial sanctions inevitably spurs attempts by the people who are targeted to avoid them. At this point the existing anti money-laundering rules kick in. Money-laundering is a criminal activity to conceal the proceeds of crime, and rules already exist to check out unexplained funds or wealth. The financial affairs of politicians and public officials are also subject to scrutiny as they could be bribed or influenced. The decisiveness and rigour of government decisions across Europe will have consequences for a long time. Adding to the existing impetus behind the anti money-laundering regulations, new powers to control and regulate data are on the EU agenda. Similarly, moves to counter climate change at EU level, though slipping on the agenda because of current events, will eventually gain new impetus. They won’t perhaps be driven by the worry of global warming, but by the fear of energy dependence. Though it is the least of our worries just now, businesses operating in the EU will in future be dealing permanently with more scrutiny and regulation over what they deal in and who they deal with. It is difficult for governments to impose tough sanctions and obligations when these have a severe impact on their own citizens. The price increases at the fuel pumps are an early sign that sanctions cut two ways. This is only the start of a phase of higher prices with some goods and services increasingly in short supply. As they deal with Covid restrictions in their capital cities, the Canadian and New Zealand prime ministers are finding that voters dislike being backed into a corner. Our response to the Ukraine disaster has to be different. Whatever the outcome of the illegal invasion, and even if the invasion were to end tomorrow, the European political climate has changed. It is not so much that the centre is holding, but that the centre has resolved to take decisions quickly and ensure they are enforced. The way the EU will conduct its affairs in future has been permanently changed, not by Brexit, nor by the EU Council or Commission or Parliament, but by the evil, though natural, action of the coronavirus and the evil and unnatural action of Vladimir Putin. Dr Brian Keegan is Director of Public Policy at Chartered Accountants Ireland

In this week’s Public Policy Bulletin, read about the Central Bank of Ireland’s SME statistics for Q4 2021, findings of a recent industry pension survey, the introduction of a new European pension savings regime and the Central Bank warning on investing in crypto assets. We also cover the latest Labour Market Report and Index of Services Bulletin from the Northern Ireland Statistics and Research Agency. Central Bank of Ireland releases Q4 2021 SME and Large Enterprise Credit and Deposits statistics Recently released statistics from the Central Bank of Ireland show gross new lending of €1.1 billion to SMEs in the final quarter of 2021, the highest level of quarterly lending seen in 2021. While this is an increase from 2020, it is still 25 percent lower than 2019. Net lending to SMEs was €91 million in Q4 2021, reversing some of the decreases from Q2 and Q3 2021. Full year repayments still exceeded new loans by €179 million in 2021. Annual repayments by all SMEs were €4.2 billion in 2021, the lowest annual repayment level since the series began. Read the full report here. Standard Life releases results from recent pension survey Standard Life surveyed 1,150 people across Ireland as part of their “Bringing Retirement Into Focus: 2021” report. Results indicate that men are more prepared than women for retirement, with 43 percent of women indicating that they feel financially unprepared, compared to 31 percent of men. The report also highlights that 58 percent of millennials (aged 21 to 39) do not own a pension, but over 35 percent of this cohort admit that thinking about pensions makes them anxious. Over half of adults in Ireland surveyed expect that they will continue to work in some capacity in “retirement”, even if financially comfortable. Read the report in full here. Introduction of the Pan-European Personal Pension (PEPP) This week, a new voluntary retirement savings option for EU citizens, the EU PEPP regime, entered into application. This regime complements existing pension schemes and allows people to pay into the same scheme throughout the EU, intending to address the current challenges involved in transferring pensions across multiple jurisdictions. The option will be available to anyone wanting to save for retirement, including students, unemployed, employees and self-employed individuals. Costs will be capped at 1 percent of the accumulated capital per year and a switch in providers every five years will be built in at capped costs. The European Insurance and Occupational Pensions Authority will monitor the PEPP market and will be responsible for developing technical standards.     Central Bank warning on investing in crypto assets The Central Bank released a fresh warning this week on the risks involved with investing in crypto assets. The highly risky and speculative nature of crypto-assets and the risk of misleading advertisements, particularly on social media, are highlighted. This press release is part of a European-wide campaign by the European Supervisory Authorities stating that crypto-assets may not be suitable for retail customers. The Central Bank’s cryptocurrency explainer can be found here. Northern Ireland Labour Market Report and the latest Index of Services published This week, Northern Ireland Statistics and Research Agency (NISRA) published its most recent Labour Market Report. This report shows an increase of 5.4 percent in the number of payrolled employees in the twelve months to February 2022. February 2022 is the ninth consecutive month where payrolled employees are higher than the numbers seen pre-pandemic. The claimant count of 39,600 people in February 2022 stood at 4 percent of the workforce, a decrease of 2.3 percent from the previous month’s figures. This is still 30 percent higher than the figures seen pre-pandemic but is a 38 percent improvement from the peak in May 2020. The Index of Services Bulletin provided positive news, with Northern Ireland’s Service output now at a series high. Q4 2021 Services output is reported to be 3.5 percent above pre-pandemic levels, using Q4 2019 as a comparative. Q4 2021 was the third successive quarter increase following a period of five consecutive quarters of annual decline in the NI index.

In this week’s Public Policy Bulletin, read about the temporary reduction in excise duty on fuels, CSO’s latest press release, the planned introduction of gender pay gap reporting and the newly released Code of Practice on Equal Pay. We also cover the latest Labour Force Survey from the Northern Ireland Statistics and Research Agency. Temporary reduction in excise duty on fuels announced This week, Minister for Finance, Paschal Donohoe TD, announced a temporary reduction in excise duty on fuels. Reductions of 20 cent and 15 cent per litre of petrol and diesel respectively will be implemented from 10 March to 31 August 2022. A reduction of 2 cent on marked gas oil will also be applied. Over €2 billion was collected in excise duty on fuel in 2021 and the estimated cost to the Exchequer of the new measures is €320 million. Read the full press release here. CSO releases show GDP increase of 13.5 percent in 2021 The CSO released the preliminary Quarter 4 2021 international and national accounts this month. Gross Domestic Product (GDP) increased by 13.5 percent in 2021, driven by multinational-dominated sectors. The Balance of Payments Current Account recorded a surplus of €58.8 billion in Ireland’s transactions with the rest of the world in 2021. International exports of goods for Q4 2021 totalled €73 billion, well exceeding imports of €31 billion. However, on the services side, imports of €99 billion exceeded exports by nearly €16 billion.  In the quarterly national accounts, investment and imports for Q4 2021 were up 76.5 and 22.7 percent respectively from Q3, but industry (excluding construction) experienced a drop of 12.2 percent. Read the press release here. Introduction of gender pay gap reporting in 2022 announced The Gender Pay Gap Information Act 2021 was signed into law on 13 July 2021 by President Michael D Higgins. Under the Act, businesses will be required to report on pay and bonus differences between male and female employees, which will highlight the pay gap between the genders. This week, on International Women’s Day (March 8), Minister for Children, Equality, Disability, Integration and Youth, Roderic O’Gorman, announced that organisations with over 250 employees will need to report their gender pay gap data in 2022. Employers will choose a ‘snapshot’ date of their employees in June 2022 and will report on the hourly gender pay gap for those employees on the same date in December 2022.   The report, which will need to include a statement from the employer setting out the reasons for the gap, along with measures proposed and being taken to eliminate or reduce that gap, will need to include the following: The mean and median hourly wage gap, the former reflecting the entire pay range in an organisation and the latter excluding the impact of unusually high earners. Data on bonus pay. The mean and median pay gaps for part-time employees and for employees on temporary contracts. The proportions of male and female employees in the lower, lower middle, upper middle and upper quartile pay bands. This approach differs from that of the UK, where similar data is required to be reported, but on an annual basis. More details will be published in the coming weeks. Code of Practice on Equal Pay released This week, the Irish Human Rights and Equality Commission (IHREC) released its Code of Practice on Equal Pay. This has been approved by Minister Roderic O’Gorman. The code aims to provide practical guidance to employers, employers’ organisations, trade unions and employees on the right to equal pay, the elimination of pay inequality and the resolution of pay disputes. The Code of Practice can be accessed through the IHREC site. Women in Northern Ireland Labour Force Survey published This week, Northern Ireland Statistics and Research Agency (NISRA) published its most recent Labour Force Survey report. This annual report summarised key labour market statistics for women in Northern Ireland, looking at the period July 2020 to June 2021. Key points include the following: The number of self-employed males in 2021 was more than two and a half times the number of self-employed females 60 percent of employed women with dependent children worked full-time, compared to 94 percent of employed males with dependent children Females earned 5.7 percent less than males but the gap has decreased over the past 20 years The 50 to 59 age group saw the largest gender pay gap of 16 percent, with men earning nearly £2.5 more an hour than women (£15.33 compared to £12.87) 31 percent of working aged women were economically inactive in 2021, compared to 24 percent of men