Covid restrictions and business supports
Deputy Catherine Murphy raised concerns that NPHET could recommend further restrictions, threatening hospitality and late-night venues, and described a business facing lost bookings and possible closure. The Tánaiste said Government would await NPHET advice before deciding on restrictions and any related financial supports, including wage and income supports.
We are all braced to see if the National Public Health Emergency Team, NPHET, recommend further restrictions later today to suppress Covid. Media reports suggest that the level of socialising during the Christmas period could be the target of that advice. We are told this could extend to new limits on the numbers allowed in hospitality settings, reduced booking sizes and even reduced opening hours. This amounts to death by a thousand cuts for the hospitality and entertainment sectors. The late night sector has already been, in effect, shut down after just about three weeks of being open. The hospitality, entertainment and tourism sectors are struggling to cope with the wave of cancellations after NPHET and the Government appealed to people to reduce their social contacts.
While the advice was undoubtedly necessary to stem the steep increase in Covid cases, it came with a very real cost. Previously, when public health advice put limits on the ability of businesses to trade, the Government stepped in with business supports. This was in recognition of the fact that businesses were acting to their financial detriment in an effort to protect public health. However, the situation we now find ourselves in is different. The public has heeded the advice and restrictions are being announced, but the supports to cushion the financial blow of these restrictions are either being withdrawn or eroded. There is an inherent hypocrisy in this on the part of the Government. Restrictions are still deemed necessary to suppress Covid transmission, but supports for workers and businesses are being phased out.
The Tánaiste enthuses about personal responsibility as a means of suppressing Covid, but what about the Government's responsibility? The pandemic unemployment payment, PUP, has long been closed to new entrants and has already been cut twice to its current level of €250. The employment wage subsidy scheme, EWSS, which has been a vital lifeline for business, has now been slashed. Wage subsidies that were paid to nearly 30,000 employees were cut yesterday just a few weeks before Christmas. Previously, there were four rates of €203, €250, €303 and €350 a week, but these have now been reduced to two flat rates of €150 and €203.
Why did the Government proceed with these cuts, given the restrictions are still being announced? Why is there not a targeted approach? Is there now some kind of Darwinian survival-of-the-fittest approach towards the businesses that can withstand this new fourth wave and what it will bring to some of the ones that will survive? Will the Tánaiste commit to restoring EWSS rates for those businesses that can demonstrate they need continued support and PUP for those workers who have lost their jobs because of public health advice?
Comment on this
I thank the Deputy for her questions. As she knows, NPHET will meet today. It will formulate its advice after that meeting and a letter will be written to the Minister for Health. Once the Government has received advice from NPHET, it will consider it and make a decision on its implementation. As part of those considerations, we will have to make decisions regarding the pandemic unemployment payment, the employment wage subsidy scheme and other financial supports that businesses may need. It is prudent to see what the advice will be and how it will impact on people and businesses before deciding what our response will be in respect of financial support for workers and business. I do not want to pre-empt the outcome of that meeting, which has not even happened yet.
It is important to say the pandemic unemployment payment has given people vital income support throughout this pandemic. I was present the day it was invented, along with then Minister for Employment Affairs and Social Protection, Regina Doherty, and then Minister for Finance and Public Expenditure and Reform, Paschal Donohoe. I am glad we did it. It made a big difference and was very necessary. At peak, 650,000 people were in receipt of it; we are down to approximately 60,000 people now. If it is the case that people end up being laid off or are made redundant over the course of the next few weeks, and I am not saying that will happen, we will need to respond to that. It would not be fair to say to those people, some of whom are potentially being laid off for the second or third time, that all we have for them is the traditional jobseeker's payment. That is my view.
We have to give close consideration to what we may do about the employment wage subsidy scheme. It should be borne in mind that 2.4 million people are now at work in Ireland, which is close to more than ever before, believe it or not. Most business owners I encounter tell me they are struggling to find staff. That is the economic context in which we are now operating. Most of the companies that benefit from the wage subsidy scheme are not in the hospitality, arts and entertainment sectors. We have to bear that in mind too. It would appear that one of the difficulties with the employment wage subsidy scheme is that it cannot be broken down on a sectoral basis. We will get more information from the Revenue Commissioners on that.
It is important that anything we do is targeted at workers who may be affected and at businesses in the affected sectors. It should not necessarily be a cross-economy approach for sectors that may not need these financial supports anymore, which are ultimately very expensive and at cost to the taxpayer. The employment wage subsidy scheme, for example, costs €400 million a month, which is a huge amount of money. We need to make sure anything we do is targeted at the businesses and sectors that need support and not those that do not.
Comment on this
People, in their droves, heeded the advice from NPHET and the Government to reduce their contacts. People have been cancelling, for example, Christmas parties, going to events and so on. One of the people who contacted me, and I am sure people in the same situation are contacting the Tánaiste, told me that 80% of his or her bookings have vanished, with the expectation that another 20% will go in the coming days. This individual said it is a very stressful time for his or her employees. This person is talking about possibly having to close the business and whether it will survive Christmas. This was going to be the month that would help that business over the lean months in early new year. The person who contacted me talked about the increases in utility bills, food costs, overheads such as insurance, and all of that.
I am not saying these payments should not be targeted. There needs to be targeted supports for these sectors, which enrich our towns, villages and tourism offering. In essence, the problem is we cannot afford to lose these businesses but they cannot afford to keep the doors open either. Will the Tánaiste commit to giving particular consideration to those industries that are already seeing a serious hit, even without the advice coming from NPHET?
Comment on this
I am happy to give that commitment to the Deputy today. How we realise that commitment and what form it takes will depend on the advice we receive today from NPHET. It did not make sense to the Government to announce a set of financial supports for businesses on Tuesday, only to receive advice from NPHET on Thursday and then change supports again on Friday. It made sense to wait to see what the advice from NPHET is today. We will do that.
I acknowledge the truth in what the Deputy said, which is that even though we have not closed any businesses, people are voting with their feet. A huge number of bookings have been cancelled in restaurants and bars, as have a large number of parties and events. People are even cancelling trips away, in the country and abroad. That is having a significant economic impact on those businesses and workers. For the hospitality sector, Christmas is the harvest. It is the time businesses essentially make money to get them through a tough period, usually in the early part of the new year. The Government recognises that, but exactly what we do regarding EWSS, PUP, the Covid restrictions support scheme, CRSS, commercial rates and all those things has to be targeted. We are at the point where we will be able to make decisions in the next couple of days.