Dáil debates

Thursday, 18 February 2021

Covid-19 (Enterprise, Trade and Employment): Statements


1:20 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael) | Oireachtas source

I am glad to have this opportunity to update the House on the topic of business and Covid-19 under this new format of statements and questions and answers. I look forward to answering Deputies' questions. I am sharing time with the Minister of State, Deputy Troy.

Although today's topic is business and Covid-19, I will also speak about how my Department is supporting employees. Covid-19 financial assistance, low cost loans and workplace health and safety guidance are in place for workers as much as for businesses. Every business saved is at least one job saved, a livelihood secured and a family sustained. The financial support the Government is providing to businesses and workers in unprecedented. Almost 1 million people of working age are now in receipt of weekly payments, including the pandemic unemployment payment, PUP, employment wage subsidy and jobseeker's benefit or jobseeker's allowance. Support for business includes the weekly Covid restrictions support scheme, CRSS, payment for businesses forced to close their doors to the public, reduced VAT rates, a commercial rates holiday, the sustaining enterprise fund, the tourism business continuity scheme and low cost loans.

Last week, I announced €160 million in additional funding for businesses during the pandemic. This includes a new €60 million scheme, the Covid-19 business aid scheme, CBAS, which is being developed to provide grants to businesses that are ineligible for the Government's other existing schemes that are designed to help defray the cost of fixed costs. Wholesalers, suppliers, caterers, office-based enterprises and events companies that are down more than 75% in turnover on last year and in receipt of a rates bill may benefit. While the grant is modest at €8,000, it will help smaller businesses in particular to cover the costs of rent, insurance, utilities and security. An additional €10 million will be allocated to the Covid-19 products scheme to help in the fight against the virus. Firms researching or manufacturing personal protective equipment, PPE, sanitisers, tests, equipment or other medicinal products which are relevant to the battle against Covid-19 are eligible for funding of up to 50% of their capital investment costs. The Government also approved an additional €90 million for the sustaining enterprise fund which offers funding of up to €800,000, with €200,000 or 50% in non-repayable grants to eligible manufacturing and internationally traded services companies. Deputies may not be as familiar with this fund as they are with other schemes, but it has proven to be very popular and has helped to protect 22,000 jobs throughout the State.

The three main schemes, the CRSS, employment wage subsidy scheme, EWSS and PUP, compare favourably with any other packages on offer in other countries. It is important to explain that the EWSS is designed to help with payroll costs and to keep people in employment, the PUP is to replace lost income for those laid off, and the CRSS and CBAS are to assist with fixed costs that businesses have to pay even when closed. The Government is very much open to proposals from specific sectors as to how it can help further. However, I must be clear that our schemes are there to help meet fixed costs that cannot be avoided and to provide basic weekly income support up to maximum of €350 per week. We cannot provide compensation for loss of personal income above this level or compensation for loss of profits for any sector. To do so for any single sector would be unfair and it would be unaffordable to do so for all.

To complement the unprecedented levels of financial assistance to businesses, we are also going to fast-track the introduction of a new, low cost, so-called summary rescue process, separate from the examinership process, which some people have referred to as examinership lite. A public consultation is under way, and legislation is planned for the summer. My colleague, the Minister of State, Deputy Troy, has responsibility for company law and he will take the lead on this.

Turning to workers' rights, the Government moved swiftly last year to introduce the Covid-19 enhanced illness benefit. This payment provides €350 per week to anyone who is self-isolating with Covid-19. awaiting a test or restricting his or her movements on the instruction of a doctor or the HSE. In most cases, it is paid for two weeks, but can be paid for much longer if somebody is out sick with Covid-19 for a prolonged period. The existence of this payment is sometimes lost in the debate about sick pay. However, I acknowledge that the pandemic has highlighted the need to put a longer term, sustainable scheme in place to cover all illnesses and bring Ireland into line with most other EU countries. I have committed to introducing a statutory sick pay scheme for Ireland as part of my work programme for this year. Having consulted the public, unions and employers, we plan to have a general scheme by the end of next month, with legislation enacted by the summer.

Separately, in line with the programme for Government, I have formally asked the Low Pay Commission to examine and make recommendations on the best approach and design for a living wage for Ireland. This is now included in the Low Pay Commission's work plan for 2021. I welcome the fact the Irish Congress of Trade Unions has retaken its seats on the Low Pay Commission. I am very conscious that the living wage, sick pay and auto enrolment will present additional costs for businesses, particularly small businesses, over the coming years. We must consider carefully how to manage these major reforms, how they are sequenced and timed and how the additional costs are met. Our objective is to improve terms and conditions for many and to raise the threshold of decency for those in poorly paid and insecure employment, but this will not be achieved if, as an unintended consequence, businesses become less viable, hours are cut and jobs are lost. We must guard against that and get the balance right.

Part of my Department's remit is protecting the health and safety of workers and members of the public in workplaces. The Government published the Work Safely Protocol on 20 November 2020, to replace the Return to Work Safely Protocol. It incorporates the current advice on the public health measures needed to reduce the spread of Covid-19 in the workplace as issued by NPHET and the Department of Health. The Health and Safety Authority continues to be the lead agency for monitoring compliance with the protocol. Its inspectorate is supplemented significantly by deploying other inspectors from across Government, including from the Workplace Relations Commission, the Department of Agriculture, Food and the Marine, environmental health officers from the HSE, the Department of Education as well as the Sea-Fisheries Protection Agency and Tusla. This has resulted in an additional 700 inspectors checking compliance with the protocol as part of their normal inspection regime. To date in excess of 25,500 Covid-19 inspections of workplaces, checking compliance with the protocol, have taken place. Compliance in workplaces is reported to be high, but we must remain vigilant. Officials are now re-examining the Work Safely Protocol in line with the new version of the living with Covid-19 plan and any reopening of the economy that may occur later in the spring or summer.

Turning to the wider economic picture, I believe the pandemic has accelerated some of the deep structural shifts that were already in motion across the economy. The sudden shift online poses serious problems for the traditional retail industry, for example. We have begun to see the consequences of that unfold in the cases of Debenhams and Arcadia. More and more purchases are happening online, and while there will be more jobs in tech, warehousing and delivery, there will be fewer jobs as sales assistants. Retraining and other opportunities will be key.

The pandemic also widened the digital divide. While many workers in well-paid jobs moved seamlessly to the online world, many customer-facing workers in more vulnerable sectors simply could not move online. At primary, secondary and third level, students from less well-off backgrounds and in rural areas have faced similar challenges. The Government has worked on a range of initiatives to help narrow the gap. On the positive side, the move online has proven that remote working can work on a mass scale. Our remote work strategy, published last month, set out our plan to build a new and better normal, incorporating all that we have learned from living our lives and doing business in a very different way for the past year. The requirement to work from home where possible has demonstrated how viable home, remote and blended working can be. Post pandemic, I want remote working to be part of a new world of work. As part of this, next month I will be signing a legally admissible code of practice on the right to disconnect, and later this year we will introduce legislation to provide employees with the right to request remote working.

Despite all the challenges we face, I am optimistic for the year ahead, especially the second half. When I last spoke here in October on the topic of business and Brexit, we discussed the very serious implications of a possible no-deal Brexit. The EU-UK Trade and Cooperation Agreement has led to some difficulties for businesses, and we are working our way through them, but the economic outlook is much improved because we have a deal.

October's budget was premised on the basis of a no-deal Brexit and the absence of the broadly available vaccine. Neither scenario has materialised in 2021, which provides us with grounds for hope. On the down side, however, October's budget did not project a prolonged level 5 lockdown in January, February and March.

Unlike previous occasions in our history Ireland entered this economic crisis in a very strong position, with low unemployment, a budget surplus, falling public and private sector debt, and exports in 2020 broke all records. We are again expecting economic growth in 2021, at least as measured by GDP and GNI*. This is driven by Ireland's booming export sector and the release of pent up consumer demand later in the year. However, as is often the case headline figures such as GNP, GDP and GNI* do not paint the full picture and do not describe the human experience of people currently living in this society and economy. The Irish economy is hurting and people are hurting, and sadly will hurt for months to come. Therefore, in the short term, the Government will extend into quarter 2 the vital financial supports in place for business, including the Covid-19 restrictions support scheme, CRSS, employment wage subsidy scheme, and the pandemic unemployment payment. It will also provide more targeted financial support, beyond quarter 2 for those sectors that have been particularly wounded by this pandemic, such as aviation, tourism, hospitality, the arts and entertainment.

We will bounce back, possibly sooner and quicker than some people think, but I am not naive to think that things will go back to normal, nor should they. Some things will change forever and the pandemic will leave scars, economic and social, lost family and friends, lost jobs, and lost livelihoods. Our challenge is to rebuild the economy, and not just return to the old normal, but to build a better new normal when the pandemic is over.


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