Banks told to pay army escort costs

DEFENCE Minister Willie O’Dea will seek to impose a levy on banks if they refuse to pay a substantial share of the Army’s €6.64 million cash escort bill.

At the moment, the banks pay just 40% of the Army cash escort costs.

This is in contrast to footing 90% of the Garda bill for the same service.

Mr O’Dea has asked his officials to review the current charges and provide him with a figure which they should be charging the banks by Friday.

“I am determined that the banks will have to do a full review of their contract with my department and if they don’t agree then I will be asking Finance Minister Brian Cowen to impose a financial levy on them in the Budget,” he said.

The banks must pay a substantial portion of the Army escort service in light of the huge profits they are making, the Minister said.

Latest figure show the annual Army bill for cash escorts was €6.64m but the financial institutions only paid the Department of Defence €2.86m.

Army escorts for banks moving large amounts of money started in 1978 following a large bank robbery on a security van in County Limerick, but Mr O’Dea said the security threat had been reduced with the evolution of the peace process.

Public Accounts Committee vice-chairman John McGuinness said there had been reviews of these costs in the past and the only acceptable solution was for the banks to pay the full costs of security.

“If the banks bought the security service from the private sector, notwithstanding the issue of arms, they would pay for it,” Mr McGuinness added.

But the Irish Bankers Federation (IBF), which represents the major financial institutions, insisted yesterday that the overall cost of the cash escort security must be put in context.

The security escorts for cash transport were brought in at the State’s request, an IBF spokesman said.

He added that a high proportion of the cash transported around the country was required to meet State payment needs like social welfare payments and pensions at An Post counters.

“As just one of a number of beneficiaries of the cash escort system, the banking sector agreed with Government a fair contribution towards the overall cost,” the IBF spokesman said.

Banks and financial institutions already pay €1.4bn in taxes to the State and an extra €300m levy, the spokesman said.