The rising cost of insurance is the top business cost concerns among companies in Ireland, according to a report published today by the Joint Committee on Business, Enterprise and Innovation.

The Report on the Cost of Doing Business was compiled based on submissions to the Joint Committee in 2017, followed by eight months of gathering oral testimony from 30 organisations.

It identifies and analyses six key drivers of uncompetitive costs:

• Insurance premiums
• Commercial rates
• Credit and banking
• Labour
• Skills shortages
• Retail crime

The increasing cost of insurance was raised by most business organisations that appeared before the committee. Some firms claimed to have been experiencing exponential increases in their insurance premiums over the last number of years.

A number of businesses also told the committee that the Book of Quantum – which provides the guidelines on how much compensation should be paid in personal injury cases -- is not adhered to in many cases.

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“SMEs are the most affected by the increasing cost of doing business in Ireland,” said Committee Chair Mary Butler.

“Increases in their costs can threaten the viability of the business. Entrepreneurs who found and run small and medium enterprises assume all the risk and reward of the venture they undertake. Getting started and staying in business with all the associated costs can be extremely difficult.”

In relation to the insurance costs issue, the report makes the following suggestions:

• Judges should provide a written explanation if they make awards in excess of Book of Quantum guidelines.
• The Book of Quantum should be improved to incorporate proposals from the Personal Injuries Commission and the Cost of Insurance Working Group.
• The government should ‘examine the feasibility’ of toughening the laws on perjury.
• An Garda Síochána should establish an insurance fraud unit.
• Claimants found by courts to have made false claims should face automatic referrals for prosecution.

In relation to businesses’ credit and banking concerns, the report notes that Irish banks’ prevailing interest rates and account charges remain significantly higher than European norms, putting Irish businesses at a competitive disadvantage.

It calls on the Central Bank of Ireland to take an active role in overseeing the fees charged by banks for the physical handling of cash.

As part of its consideration of reducing labour costs, the committee recommends:

• The government should expand apprenticeship programmes to boost the supply of skilled workers.
• Intreo offices should better match skills gaps and training courses on offer.
• Work permits should be issued only in cases where the Irish labour market and training programmes have demonstrably failed to produce the skilled workers required.

The commission did not recommend any reduction in the minimum wage, noting that while it is high compared with other EU countries, “Ireland’s hourly labour cost is broadly in line with similar member states”.