Pandemic unemployment payment taper
Mary Lou McDonald pressed the Taoiseach to maintain income supports for workers still unable to return by September. He defended extending the PUP to September and phasing it out to February while expanding training and new employment opportunities.
Tens of thousands of people have gone back to work this month and many more will go back in the weeks ahead as restrictions are lifted. This is very good news because people need and want to be back at work. Their enthusiasm to return was demonstrated last year when 400,000 went back to work as restrictions were lifted. Workers do not want to be on the pandemic unemployment payment, PUP. They, and indeed all of us, hope such supports will be required and necessary only for the shortest possible time. The reality is that, come September, some people will still be locked out of work due to public health restrictions. Among them will be those in aviation, hospitality and events, those whose jobs depend on international travel and those in many other sectors. That is why the Taoiseach's decision to start cutting the PUP by instalments of €50 from September is premature and deeply unfair.
It has always been understood that when the Government stops people from going back to their place of employment, for good public health reasons, it has a responsibility to support them. It seems now, however, that the Government has chosen to pull the rug from under the workers. I heard a woman on the radio last week who said she remained locked out of work despite the reopening. She described her experience and said that, for the first six months of lockdown, her family availed of the mortgage break and that, when that went, the family tapped into their savings. Now that money is gone, too. How on earth is it fair to say to this woman or thousands of workers like her who will not be back at work in September and may not be allowed back until next year that their supports are going to be cut? The Taoiseach is walking away from his responsibility to these workers and their families. He will cut their incomes, in effect, by one third. That is absolutely huge. It is the difference between them just getting by for the next few months and not doing so.
For the vast majority, the need for the PUP will fall away naturally as sectors reopen. That is what the evidence tells us but the Taoiseach's decision to cut the PUP ensures those who remain locked out of work will be made poorer. They still have to pay their mortgages, rent, childcare fees and utility bills but they will be abandoned by the Government when they are at the end of their tether. What happened to "We are all in this together", as was the slogan of the Government? The Taoiseach promised no cliff edge but cliff edges mean nothing to those who are relying on every single euro. To slash payments by €50 a go is devastating when workers are prevented from working.
What the Taoiseach now proposes is a mirror of the plan he wanted to introduce in January but it was the wrong approach then and it is the wrong approach now. His approach to this matter sends out a signal that the recovery he envisages is one that is unfair and leaves people behind. Let us not go down that road again. I ask the Taoiseach not to press ahead with these cuts and to ensure that full support will remain in place for those workers who are prevented from going to work for as long as they are prevented from doing so.
Comment on this
First of all, I agree with the Deputy in terms of the good news in recent weeks that people are returning to work in considerable numbers. We have been in a position to do this through our management of the pandemic and through a successful and efficiently run vaccination programme that is having a dramatic impact on the severity of illness in society from the virus and on reducing death and hospitalisation and numbers in intensive care. The efficient national vaccination effort is enabling us to return to economic growth and recovery and to bring people back to work.
What we announced today in terms of extending the schemes is a continuation of that economic recovery story. We have fulfilled our commitment in terms of not having a cliff edge. The employment wage subsidy scheme supports 315,000 workers. We are extending that to Christmas. The whole idea is to support enterprise and to enable enterprises that retain jobs to stay viable and keep jobs going in the economy.
We are doing the same with the Covid-19 restrictions support scheme extension with enhanced restart payments of three weeks at a double rate. This will be significant for people in hospitality, for example, and in other sectors. This significant restart grant really gives people a fighting chance not only in maintaining the employment they have maintained under the supports they have got from Government but by increasing employment in the coming weeks. We know that more and more people will come off the pandemic unemployment payment during the summer months. We are extending the pandemic unemployment payment out to September. Then, gradually, we are easing out of that up to February 2022.
We are not just doing that. All of that is in parallel with an unprecedented work activation programme with substantial funding being allocated to reskilling training programmes, upskilling programmes, education places, increased apprenticeships and increased internship programmes. There will be more placements available in the public service for many people and investment in research to create a new approach and new orientations within the economy. We will use the funding we are receiving from the recovery and resilience fund in Europe not only to invest in the human capital side and in people but also to create new jobs in retrofitting and public transport. This is what we are going to do with the railway project for Cork, which will be significant in terms of leveraging other economic and employment opportunities there. That is one example. Another is the new facility in Beggar's Bush. The new Department building there is a pathway finder building. It will be state-of-the-art in terms of emissions reduction and so on.
This is an imaginative programme designed to prepare the country for recovery in the coming period and to start growing jobs in new sectors like the green economy and digital transformation. It is about giving the supports to aviation that are required and about clarity in direction of travel in terms of the reopening of international travel and the events industry. Significant supports are in place for musicians under the music entertainment business assistance scheme. This will support musicians in wedding bands or those who perform in smaller live venues. We are initiating a basic income pilot scheme for artists.
This is a significant comprehensive agenda ultimately with a view that, by 2024, we will have 2.5 million people in jobs. That will exceed the numbers of people in employment before the pandemic. The broader objective of Government is to create opportunities for people to return to work.
Comment on this
Be that as it may, the Taoiseach will acknowledge that, come September, there will be workers who will not be returned to work and not be in a position to get back to work. The Taoiseach knows that. The economy will not be operating at full tilt by September. The Taoiseach knows that. Yet, the Government is choosing to cut the supports on which these workers and their families rely. Everybody wants to get back to work as quickly as possible. However, the State and the Government have to make provision for the section of workers who will not have returned by September or even during the course of this year, including workers in aviation, events and hospitality.
It is wrong and unfair to punish those workers who cannot return to work because of a public health emergency. I again put it to the Taoiseach that the fair thing to do is for this Government to tell all workers that we want them to return to work quickly and safely but also to support them for as long as they cannot return to work because of the public health emergency. I invite the Taoiseach to do that rather than to cut the very support these people need to survive and that they will need through September. Many of them will rely on it until the end of the year.
Comment on this
As I said earlier, hotels, bed and breakfast accommodation and guest houses will open again tomorrow. This will create jobs and get people back to work. Next week, restaurants, pubs and other facilities will open. All of that will help. Last February, approximately 481,000 people were on the pandemic unemployment payment. This figure has already decreased to 334,000 and it will continue to decrease over the summer months. We have extended the pandemic unemployment payment until September.
Comment on this
The Government will then cut it.
Comment on this
The Deputy and her party's spokespeople agreed that it would have to be phased out. Deputy Doherty is on the record as saying that. No one expected emergency pandemic payments to remain forever. We now want to allocate resources elsewhere. We will help everybody who has difficulty getting a job as we move into the latter half of 2021. Very substantial resources are being put into upskilling provision in terms of places in further education, apprenticeships and third level education. The thousands of workers who have been supported through the employment wage subsidy scheme should also not be forgotten.
Comment on this
There are many positive things in today's plan, particularly the supports for small businesses, which are critical in creating employment. Will the Taoiseach address the issue of people who have lost their jobs as a result of the Covid pandemic? He has repeatedly promised that there will be no cliff edge when it comes to the withdrawal of the pandemic unemployment payment, PUP, yet today he has announced that there will be such a cliff edge. No matter what level of restrictions are in place across the country in September, payments will be reduced by €50. A further reduction of €50 will occur in November and a final reduction of €50 in February. In total, this amounts to a massive 40% cut to an already meagre payment. This is the very definition of a cliff edge. The Government has chosen an arbitrary date and determined to cut people's payments, no matter what the public health advice is at that time and no matter what jobs are or are not available. These payments are a lifeline for hundreds of thousands of people whose jobs were casualties of the pandemic.
Experience tells us that, when businesses reopen, people will go back to work. They do not want to remain on the PUP longer than they have to. Last year, 400,000 people closed their PUP claims once the economy partially reopened. Since this payment was introduced more than a year ago, just 3,000 complaints have been made to the Department of Social Protection by employers alleging that staff were reluctant to return to the workforce. That is 3,000 out of more than 600,000 people, or 0.5%. The Department has also clarified that the vast majority of those 3,000 cases did not involve any misclaiming. Why then has the Taoiseach done what he has sworn he would not do? Why has he created a cliff edge for those in receipt of this payment, a cliff edge which will undoubtedly lead many more into poverty?
As the economy opens up over the summer months - a reopening that everyone in this House hopes will be very successful - the numbers in receipt of the PUP will significantly reduce naturally. There is no evidence that this payment is being abused or that people are preferring to claim the PUP rather than return to work. Despite this, the Government has introduced a cliff edge in September when there will be an initial 15% cut, which will grow to 40%. A reduction of that magnitude will cause serious financial problems for those people who can least afford them. It has been a very tough year for everyone but especially those who have been forced out of their jobs because of the pandemic. They have now been told by this Government that their meagre incomes will be slashed in September even if the businesses in which they work have not reopened.
This announcement will cause serious stress and anxiety among a large cohort of people, many of whom are barely keeping their heads above water. Why has the Government broken its promise and introduced a cliff edge for the PUP?
Comment on this
I disagree fundamentally with the Deputy. We have not introduced a cliff edge. The opposite is the case. We have extended the PUP to September, following which there will be a phasing out of it out to next February, which will be the second anniversary of the introduction of the payment. By then the payment will have been in place for two years. It was originally introduced for 12 weeks. That was the original timeframe the then Government put in place for the PUP. The pandemic has lasted much longer than that, obviously.
We want to create employment opportunities for people. I agree 100% that people want to work. There is no suggestion by Government or anybody that there is any abuse of the payment. Rather, we are saying that we now have to reorientate the economy and reallocate and target resources for growth and for economic recovery. That means creating substantial funding for work placement programmes, training programmes, education and higher education. For example, we want to create new jobs in retrofitting in the private sector in private housing, but also in the public sector through direct grants. We will need skill sets to enable us to do that comprehensive programme for retrofitting across the country in terms of our housing stock. People will have to retrain and reskill to do that type of work.
Likewise, a substantial allocation will be provided for the re-wetting of bogs. There will be new opportunities in the economy. It is about what we do now as we emerge from the pandemic and people naturally come off the PUP, as they will, and are, in significant numbers. It should be remembered that all the while we are supporting workers in employment as well through extensions of the employment wage subsidy scheme and the Covid restrictions support scheme. The orientation of the plan is to support workers to retain the jobs they are in and are currently being subsidised and to give companies a fighting chance to retain those jobs and enhance them, and, by enhancing them, recruit people.
I will make one final point. Deputy McDonald made the point that Government had stopped people from going to work. The Government has not stopped anybody from going to work; the Covid-19 virus has stopped people from going to work and it caused the most severe and rapid recession since the wars across the world. Government has responded comprehensively to this pandemic and in a very effective way. We have underpinned income and jobs to the best of our ability and we will continue to do that, but we are moving into a new phase in economic recovery. That new phase involves the targeting and allocation of resources that can create new opportunities in new sectors of the economy and, crucially, more support for sectors, such as aviation, tourism, the arts and live events, in the coming months, which is what we are doing in the allocation of resources.
Comment on this
The Taoiseach spoke about other sectors. The investment in other sectors is welcome, but it is not going to help people who will be unable to get a job by next February. Those people lost their jobs as a result of the pandemic. The Taoiseach has accepted that it will not be possible to reboot the economy by next February. What then is he saying to those people who will not get their jobs back by next February? He is saying to them that they can sustain a cut of 40% in their already low incomes. The Taoiseach will know from the studies that have been done that the basic social welfare payment is not sufficient to maintain any kind of life of dignity, yet the Government, by its actions, is forcing those people onto the breadline. What is the justification for cutting people's incomes by 40% when many of the jobs that were lost will not be reinstated by next February? We hope many new jobs will be created, but it is undoubtedly the case that there will still be high levels of unemployment among those people who have lost their jobs. What is the Government offering those people who cannot get a job by next February? At the moment, all it is offering them is a 40% cut in pay and that is going to drive them into poverty.
Comment on this
By the Deputy's own admission, hundreds of thousands of people came off the PUP last year and so I think she is overstating the case. The same will happen this year. I do not accept that people currently on the PUP will not be able to get a job in the economy in the coming months. I think there will be a significant recovery.
Sustaining it for the medium term is what the plan is about. It is not just about the immediate sort of bounceback that will happen in some sectors. It is also about maintaining that for the medium term. That is why we are allocating resources to new sectors. It is to give added funding to sectors that can create new jobs, economic activity and economic momentum, which is very important, and to underpin all of that with training and reopening the economy, as we have been doing over the past number of weeks. Construction, full retail and personal services are back. Tomorrow, hotels, guest houses and bed and breakfast accommodation are back. The vaccination programme will continue to be rolled out. We look forward to restaurants and pubs reopening next week and further openings in July, all of which will create employment opportunities and facilitate people naturally coming off the pandemic unemployment payment.