Gerald Nash (Louth, Labour) | Oireachtas source

I am pleased to speak on the motion and we will not oppose it. Any day we debate a sincerely tabled motion in this Chamber to protect and support enterprise is a good one.

I recall only too well debates on jobs and business in this Chamber, which were held in very different circumstances when I first entered this House 13 years ago. The fiscal crash meant we had an unemployment rate of 16% and businesses were closing at unprecedented rates. We had one job and that job, as far as I was concerned, was to get people back to work and fix the economy. Crucial innovation in 2011 was the targeted VAT rate cut to stimulate the hospitality sector. At a time of high unemployment, low demand and economic recession and stagnation, it was the right policy at the right time, and objectively it worked. At a time when the labour market is tight, the economy is putting in a stellar performance and demand is high, the Government appears to have concluded that a VAT rate cut for the sector is not something it is prepared to reintroduce now. If it is the case that at any point in the future a VAT rate cut is reintroduced, a condition should be applied to it with regard to employment conditions. We should return to the idea of a joint labour committee and an employment regulation order for the industry. No cash should be provided by the State without conditions.

I note also that the low-margin, locally traded sectors of retail and hospitality added one third, or 90,000, of all new jobs created last year. That is a superb performance in these sectors that are so important to every town, village and city and they are owed a great credit.

There is no doubt that this is not the full picture. These sectors were in the top three as regards reliance on the tax debt warehousing scheme, for example. We are familiar with the relatively high rates of attrition in the industry and the rates of churn. There is an issue with insolvencies in certain businesses. Nobody can deny that. There are individual hospitality businesses across the country that are in real trouble. The reasons are many and can be complex. There has not been a normal trading year for several years. We had Brexit, the pandemic, war in Europe and high energy costs. We are in the era of the polycrisis.

The challenges facing the SME sector, and hospitality in particular, could be best addressed in the longer term and sustainably by taking a series of comprehensive actions that could change the picture structurally for the SME sector in this country. In Ireland in 2024, we have, for example, businesses paying among the highest rates for energy in all of the EU. Where is the Government plan to tackle the high cost of electricity? Where is it? We have a Victorian commercial rates system that hammers main street hospitality businesses – bricks and mortar firms – that have no choice but to pay their annual rates bill to the council and which, by their nature, have high labour costs to deal with as they are labour-intensive sectors. Where is the reform that is so badly needed to a system that is objectively unfair and inequitable? The commercial rates system we currently have bears no relationship to the reality of business in the 21st century. Therefore, we need to reform how local government is funded and we cannot continue to over-rely on commercial rates and the kind of Victorian system we continue to have.

We have the continuation of training levy into an important fund that is more than €1 billion in surplus. Where is the plan to use this to keep the businesses we are all concerned about competitive, to help them innovate, to help workers upskill and to help those firms become much more productive and innovative than they currently are and sustain them? There is a case for the suspension of that levy for a period of time. However, I have heard very little from this Government, the relevant Minister or the finance or enterprise Ministers about this proposition. Why not keep the employment permit system under more frequent review and make it more flexible and responsive to evolving needs in the hospitality sector, for example?

While the plan seems to be to process asylum applications quicker, might we also look at allowing those in the system to work earlier than is currently the case and make the contribution they want to make? Let us also carry out skills assessments of those who are here and establish if we can match them with skills needs in our tight labour market. We could also look at extending, for example, the hours that those who are on stamp 2 permissions are allowed to work. It is 20 hours a week. People who are working 20 hours a week may wish to work longer. In my experience, those who I represent who are on stamp 2 permissions would like to do that, as would their employers. There are experienced workers who are very valuable to the hospitality industry but they would be in breach of the law if they were to work any longer than 20 hours per week.

The best outfit in the country at displacing jobs in the hospitality sector is the Department of integration – a Government Department. That Department’s failures have deprived my town, as the Minister of State knows, of its largest hotel. Just a few weeks ago, a newly opened pub and restaurant, €2 million worth of refurbishment work later and less than six months in operation, decided it wanted to try to become a centre accommodating international protection applicants and beneficiaries of temporary protection. That tells us all we need to know about the situation facing hospitality businesses at the moment. Because of generous support, if I can describe it as such, it is more profitable for them to try their luck, as they say, as accommodation centres hosting international protection applicants and refugees from Ukraine. That too is reflective of this Government’s abject failure to build the human rights-informed accommodation centres that we require to accommodate international protection applicants, with all of the services they need and require. I hope this House in its entirety agrees that a small hotel room is no place for a family or a young child fleeing trauma and seeking international protection here, in the same way as it is no place to host a child from a homeless Irish family.

Here is an idea for a subsidy for the hospitality sector that might work and is practical by nature. It was a proposal made to me by a local pub manager in my home town. Why does the Government not grant-aid hospitality businesses to add rooms and improve their product and offering in areas where there are high displacement rates of hotel beds because of this country’s excessive reliance on the hospitality business to do that? We could add a condition that the businesses that are grant-aided to improve their product and add rooms will only operate as hospitality businesses for, say, a minimum period of five years.

That is something the Government could practically do to help towns like mine where there has been significant displacement of hotel beds we rely on to support local jobs. Next week, I will meet representatives of the local business community to discuss the economic analysis the local BID group did on the displacement of hotel beds at the D Hotel. That is a proposal the Minister of State should take back to the Government. It is worth consideration as it would have a practical impact on the hospitality sector.

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