Dáil debates

Tuesday, 30 June 2020

Estimates for Public Services 2020 - Vote 32 - Business, Enterprise and Innovation (Revised)

 

12:00 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I move:

That a sum not exceeding €1,401,200,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 2020, for the salaries and expenses of the Office of the Minister for Business, Enterprise and Innovation, including certain services administered by that Office, for the payment of certain subsidies and grants and for the payment of certain grants under cash-limited schemes and that a sum not exceeding €42,150,000 be granted by way of the application for capital supply services of unspent appropriations, the surrender of which may be deferred under Section 91 of the Finance Act 2004.

It is a while since I have done this. Thanks very much, a Cheann Comhairle. You might bear with me.

Our country has been living through four months without precedent in the history of the State. Lives were lost, businesses were closed and it took a terrible toll on families, communities and the country. Yesterday, we began phase 3 of the reopening plan. Things are still very difficult for many people but confidence is slowly coming back to the economy and people are hopeful again. The new Government's job over the coming weeks and months is to give meaning to that hope by backing people and businesses and doing what we can to help.

During the darkest days of this pandemic we developed a vision for how the country would emerge from the crisis and how we would get workplaces and businesses open and the country back to work. As Tánaiste and Minister for Business, Enterprise and Innovation, it is my responsibility to realise that vision and to help the country to recover, repair the damage that has been done and restore confidence and prosperity. It can be done. To achieve this, the July jobs stimulus will have to be radical and far-reaching. It needs to be. It has to be of a scale to meet the enormous challenge we face. It will have to be done soon because we have no time to waste.

This is a critical moment and we must make the right decisions to set us on the right course for the next five years and beyond. Today, I seek the approval of the Dáil of the Department's Revised Estimate for 2020 in order that we can help enterprises to survive and emerge from this emergency. This will also enable us to operate the programmes that will help consumers, workers, businesses and society. The stakes are high because we need the authority from this House and the funds to continue the work being done beyond the next couple of weeks. The projected gross expenditure of the Department in the original Estimate was €970.9 million. This was broken down between €338.9 million in current expenditure and €632 million in capital expenditure. This represented an increase of approximately €21 million over the 2019 Revised Estimate allocation. The current expenditure provision of €338.9 million secured for the Department in the Revised Estimate last December represented an increase of €8.7 million on the 2019 current expenditure ceiling of €330.2 million. The additional funding was intended to provide for pay increases to staff of the Department and its agencies, arising from the public service stability agreement; additional pension requirements; Brexit-specific recruitment in the Department; regulatory bodies and agencies; targeted information campaigns; and the expansion of our global footprint as we continue to promote Ireland as a leading destination for foreign direct investment, FDI, trade and research. The Revised Estimate being presented to the House today does not involve any current expenditure or funding beyond what was provided for in December.

In terms of capital expenditure, the Department secured €332 million in the Revised Estimate last December. This represents an increase of €12 million or 2% on the 2019 allocation of €620 million. The additional capital funding secured for 2020 was intended to develop ambitious programmes, including the second phase of the disruptive technology innovation fund under Project Ireland 2040, the renewal of the Science Foundation Ireland, SFI, research centres programme and to respond to the challenges and opportunities presented by Brexit.

The Revised Estimate being presented to the House seeks additional capital funding to enable the Department to continue the various Government-approved Covid enterprise initiatives and supports, which have been developed in recent weeks and months. An additional €483 million in capital funding is being sought. The total capital ceiling now being sought is €1.115 billion, which represents an increase of 76% on the allocation from last year and 80% on 2018.

As part of this initial response, the Department has reprioritised and repurposed existing programmes to respond to Covid-19. These include the repurposing of the Enterprise Ireland online retail, lean continuity voucher and financial planning grant schemes; local enterprise offices' business continuity and trading online voucher schemes; InterTradeIreland's e-merge and emergency solution schemes; the credit guarantee scheme, the working loan capital scheme and the microfinance loan scheme.

The Department has also been to the forefront of developing actions to assist businesses in this challenging crisis. These were approved by the previous Government which gave rise to the need for €483 million in additional capital funding, to be sought in the Revised Estimate. The additional capital moneys break down as follows: a total of €180 million is allocated for the sustaining enterprise fund.

There will be €11.79 million for the further recapitalisation of the microenterprise loan fund; €41.21 million to fund a €450 million increase in the Strategic Banking Corporation of Ireland, SBCI, Covid lending through the €250 million expansion of the Covid working capital scheme; the €200 million expansion in the future growth loan scheme; and €250 million for the restart grant.

Specifically, the €180 million being sought for sustaining enterprise fund will enable Enterprise Ireland to increase overall funding under its financial grant planning scheme by €2.5 million. More than 540 businesses have received grant aid approval so far under the scheme. The sustaining enterprise fund will also enable Enterprise Ireland to increase the funding available under its retail online scheme by €6 million and provide an additional €12 million to its hubs and incubation centres. The fund will also enable Enterprise Ireland to fund its new sustaining enterprise scheme. The €124 million scheme is directed at SMEs in the manufacturing and international traded services sector and is available to enterprises with more than ten employees that applied for funding from a financial institution. This includes SMEs that have applied to the SBCI for the Covid-19 working capital loan scheme. Under this, eligible companies can apply for a minimum of €100,000 and a maximum of €800,000 per undertaking in several forms, including repayable advances, equity and loans. Funding must be approved by Enterprise Ireland by 31 December. While the volume of applications under the scheme has been relatively modest, we expect applications will increase significantly as more businesses resume trading.

It also means we can increase the funding available under the local enterprise office business continuity and trading online voucher scheme by €27 million and €6 million, respectively. In excess of 10,600 continuity vouchers and more than 3,200 trading online vouchers have been approved to date. The sustaining enterprise fund is also providing €2.5 million for InterTradeIreland e-merge and emergency services business solutions to help businesses deal with challenges in areas such as online sales, emergency cash flow and loan applications. Aside from the sustaining enterprise fund, the additional capital funding being sought in today's Revised Estimate will provide €250 million for the restart grant. This grant is targeted at micro and small businesses that have suffered a dramatic loss of turnover due to Covid-19 restrictions and need help reopening. The fund is a direct grant scheme for impacted businesses. Grants of between €2,000 and €10,000 are available to businesses that commit to reopening and re-employing their staff. The grant scheme, operated through local authorities, opened at the end of May. We believe that 100,000 small and microbusinesses will apply. Businesses can apply online and payments will be made directly to businesses by electronic funds transfer. It will be a straightforward and efficient application with an assessment to make things as easy as possible for businesses to reopen, restock and re-employ staff. More than 15,000 businesses applied for the new grant scheme in the first week.

The additional capital will provide the necessary funding for significant increases to finance measures, including an increase of €450 million in the lending available through the SBCI. This will be achieved through an expansion of the €250 million in the Covid working capital scheme and an expansion of €200 million in the future growth loan scheme. The working capital scheme was originally launched as part of our budget 2018 response to Brexit and was redesigned in light of the challenges posed by the pandemic. The revised Covid scheme, a joint scheme with the Department of Agriculture and Marine, is administered by SBCI and was an immediate first step in meeting the liquidity needs of SMEs. The additional funding of €250 million will help SMEs and small mid-caps negatively impacted by Covid-19, to access appropriate and competitively priced finance for their working capital needs. The scheme provides loans from €25,000 up to €1.5 million, with the first €500,000 unsecured, and a maximum interest rate of 4%. The costs of the scheme are split on a 60:40 basis between my Department and the Department of Agriculture and Marine.

Up to €27.6 million in funding is required to meet the cost of the Department’s contribution to the €200 million increase in lending under the future growth loan scheme. This scheme was originally launched in April 2019 to respond to an identified market failure in the availability of long-term lending for investment purposes to SMEs. However, as with the working capital scheme, the future growth loan scheme has been repurposed to assist enterprises in responding to Covid-19. It aims to support appropriately financed strategic investments by SMEs, including farmers and fishermen, as well as small mid-caps to recover from the impacts of Covid-19, adapt for the post-Brexit environment and transform their businesses to achieve growth, sustainability and resilience.

It seeks to provide longer-term financing by SMEs, including farmers and fishers, and small mid-caps in the event of alternative State help not being available. This will enable them to manage payments of current and accrued liabilities related to trading that have arisen as a consequence of Covid-19.

Loans under the expanded scheme will range from €25,000 to €3 million per eligible business, with loans of up to €500,000 available unsecured. Loan periods of seven to ten years will be made available for investment loans, and of five to ten years for financing debt management. Competitive interest rates will be applied.

The future growth loan scheme is also administered by the SBCI, backed by the European Investment Bank and the European Investment Fund. The cost of the scheme is being met by my Department and the Department of Agriculture, Food and Marine on a 60:40 basis. Loans to the value of €140 million have already been approved under the scheme.

The microenterprise loan scheme was originally established in 2012 to provide loans to microenterprises that cannot obtain funding through traditional sources. With the advent of the current crisis, a discrete Covid-19 loan was introduced to help them to access funding. Covid-19 loans from Microfinance Ireland, MFI, are available for eligible microenterprises that are facing a reduction in income or profit of 15% or more. Loans of up to €50,000 are available with terms that include a six-month interest and repayment moratorium, with the rest of the loan repaid over the remaining 30 months of the 34-month programme. The demand for MFI help continues to be very strong, with more than 580 loans with a value of nearly €15 million approved so far, and many more expected.

It is obvious that more needs to be done, so the Department is developing a further set of interventions ready for the July stimulus programme and then we will do further work in advance of the new economic plan for October. Some actions such as the discrete Covid-19 guarantee credit scheme, further expansions to the microfinance loan fund and the future growth loan scheme require primary legislation. This is currently being drafted.

Apart from the additional Covid-19 funding, the Revised Estimate of €1.4539 billion presented to the House today also includes the funding required to operate the normal programmes in jobs and enterprise development, innovation and regulation. As set out in the Revised Estimate, a total of €951.7 million is being provided to fund various activities under the Department's jobs and enterprise development programme. This is more than double the original provision intended for this year. The vast majority of this additional allocation is as a consequence of Covid-19. Funding of €951 million will ensure normal enterprise development and job creation activities can continue. Additional funding is also being provided to enable our enterprise agencies to respond to the UK's departure from the EU. With the innovation programme, a total of €414.2 million is being requested in the Revised Estimate. This funding will help various innovation and research activities and our membership of international research organisations, including the European Space Agency and the European Southern Observatory.

It is vital to our long-term recovery that we fund the second phase of the disruptive technology innovation fund and the renewal of the SFI research centres programme. The €87.9 million in funding that is sought for regulation will ensure we can continue to promote a business environment that facilitates investment and development, competition in the marketplace, and high standards of consumer protection and corporate governance. Our regulatory offices and agencies have been at the forefront of our Covid-19 business response, helping consumers and businesses as the country navigates through the return-to-work plan.

Today we are also seeking the approval of the Dáil to carry over €42.15 million in unspent capital from 2019 for use this year. The underspend arose as a result of a significant increase in own-resource income generated by the agencies. Of this money, €23.5 million will be allocated to Enterprise Ireland to help the Border region to prepare for Brexit; €6 million will be provided to the local enterprise development offices; €3 million will be given to MFI for recapitalisation to meet increased demands arising from Brexit; €6.425 million will be allocated to SFI; €425,000 will be provided to meet commitments under the programme for research in third level institutions; and the final €2.8 million will be for the disruptive technology innovation fund this year.

As we all know, Brexit is still a major challenge, and the Revised Estimate presented to the House today provides further Exchequer funding to continue the critical work in preparing our businesses for it.

Budget 2020 recognised the potentially disastrous effect of a no-deal Brexit. While we hope the ongoing discussions will be successful, the possibility of there being no agreement cannot be ruled out. Budget 2020 made provision for a contingency fund to be made available in the event of a no-deal Brexit to help those enterprises and sectors most affected. This contingency may be required and will have to be given further consideration in the months ahead.

I present these Estimates to the House to ensure we can continue to assist businesses impacted by Covid-19 and to operate our normal enterprise, innovation and regulation programmes. Failure to approve the Estimates would mean that the Department would no longer have a legal basis to provide this help or operate its programmes, which would have devastating consequences for businesses and, indeed, everyone in those businesses who is trying to return to work.

I welcome the opportunity to discuss the Revised Estimates with Deputies.

12:20 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I thank the Tánaiste, and we wish him success in his new role. The next slot is with Fianna Fáil, which has 15 minutes. Have we Fianna Fáil Deputies offering? No. The Sinn Féin Party is next, then. It has 15 minutes. I call Deputies Munster and Ó Broin.

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I hope the absence of any Fianna Fáil representative to speak on behalf of SMEs is not a sign.

I welcome the opportunity to contribute on the Revised Estimates, which Sinn Féin will support. We are in a situation where entire sectors of the economy are at risk of failure if the State does not provide adequate supports and incentives for SMEs. I do not mean to say that this will happen. If the State and other stakeholders do their bit, there is no reason it should happen, but given the current level of support on offer from this Government, it is a real danger.

A number of schemes have been introduced since the crisis began. Some have been more successful than others. Unfortunately, only one Covid-specific grant scheme has come on stream. We all know that businesses are struggling with the low level of grant funding, which is estimated by IBEC to be an average of €3,000 per firm.

In the Revised Estimates, the additional €483 million for enterprise supports falls entirely within programme A - jobs and enterprise development. The majority of that amount will go to Enterprise Ireland and double the allocation previously made under this heading. Given the scale of the current disaster, however, it is an extremely small allocation.

The main allocation under this heading comprises €180 million to the sustaining enterprise fund and €250 million to the restart fund, amounting to €430 million. The remainder appears to be additional funding to Microfinance Ireland, the future growth loan scheme and local enterprise development.

At the end of this debate, the Tánaiste might be able to answer a question on business continuity vouchers. A number of weeks ago, I received a response to a parliamentary question from the Minister, Deputy Humphreys, where it was made clear that the business continuity voucher scheme was to be closed to new applicants. Does its allocation of €27 million under these Estimates mean that the scheme will reopen or is this money that has already been spent and the scheme will remain closed?

I had assumed that these figures would be much higher. Does this mean that the Government does not expect increased funding under the restart grant scheme? Once the €250 million is gone, will the scheme close? What about the July stimulus? Does the Government expect to introduce a Supplementary Estimate later in the year to accommodate that or should we be worried that very little Exchequer funding will be allocated to it?

We know what is needed - we have been saying it since the crisis began. We need grant aid for businesses and we need interest-free loans for those who are in a position to borrow. We also need options for businesses to deal with rent and other debts. None of these matters has been adequately addressed, though. The same issues that were there on day one are still there and there has been so sense of urgency from the Government in addressing them.

We welcomed the temporary wage subsidy scheme, TWSS, and the pandemic unemployment payment, PUP, that the Department of Employment Affairs and Social Protection introduced as well as the introduction of several loan options, the restart grant and the rates freeze, but these should have been initial steps.

This is simply not enough at this stage of the crisis.

Some practical measures were introduced by Government, including the restart grant and the rates freeze. I will speak shortly about the issues around the restart grants but we need clarity on a further suspension of rates, in particular for sectors that will not be recovering any time soon. These are a good start but we need to build on this and introduce further measures such as additional grant aid targeted at specific sectors, interest-free loans, measures to manage debt and rent and ways to stimulate growth and development. The Government might consider Sinn Féin's proposal for the tourism and hospitality sector as a starting point. We also put forward ideas for grants and loans to the Minister for Business, Enterprise and Innovation and the Minister for Finance. What businesses need is very clear. When one looks at the Department's loan tracker, the number of enterprises availing of these loans is worryingly low. Under the Covid-19 working capital scheme, only 584 loans were sanctioned, only 581 under the Covid-19 loan and six under the sustaining enterprise fund. Grants have unsurprisingly had a stronger uptake, with 9,754 restart grants sanctioned, 10,642 issued under the business continuity voucher and 3,218 under the trading online voucher. If we want to genuinely support businesses we need more grants and interest-free, easily applied for loans. The uptake figures speak for themselves. I hope this is reflected in the July stimulus plan. If it is more of the same approach then businesses will, I fear, be in real trouble.

Loans that have interest rates a percentage point or two below what they were in February are not going to save Irish SMEs. They need grant aid. Then we need loans without interest, which thankfully we are in a position to provide at this time due to the low cost of borrowing and changes to state aid rules. Grants will obviously cost the State significantly, no one is saying otherwise, but it is not money down the drain. It is an investment in our future and one that is long overdue.

It is high time that Irish SMEs were prioritised by Government. Giving grants to SMEs at this time will save us money in the long term, people can stay in their jobs, businesses will be able to diversify and communities and town centres will be supported. If we do not provide grants businesses will fail, people will lose their jobs and there will be a knock-on effect on other businesses and sectors that we know are already in dire straits. Every business group has said this, and we know it. The only group that is not on board appears to be the Government.

Will the Tánaiste clarify what businesses can be expect will be announced in the July stimulus package? There has been so much uncertainty in recent months. Businesses need to plan and to know what is going on.

Other countries have provided much more comprehensive support for businesses from the very beginning of the crisis. Germany and Britain had much higher loan and grant amounts available to ensure that businesses maintained liquidity. In Germany businesses with up to ten employees were eligible for grants of up to €15,000. Up the road in the North, the average available to businesses is between €10,000 and €25,000 in grant aid, depending on the type of business. The average grant received by Irish businesses is by comparison a paltry €3,000 and there is only one Covid-specific scheme available, and it is clearly not enough. Goodbody has estimated that Ireland has given out €95 million in liquidity supports while Britain has given out €41 billion. If one scales the British supports to Ireland that would be €4.5 billion, 4.5 times more than the Government is currently offering.

I have spoken on numerous occasions about the problem with the restart grants. They are badly-designed and underfunded. We need to end the link to rates that bar so many other people from applying. We need to ensure that those most in need are given the best chance of survival and we need much more in the pot than €250 million.

Loans and debt are other issues we need to address. Will the Government make provision for interest-free loans for small businesses or will the profit of banks continue to be a priority for them? What plans does the Government have to address the matter of debt?

They are still accumulating debt and have been doing so since March. Last week, IBEC estimated that the average Irish SME has run up debts of €50,000 during the lockdown. Some of this is owed to banks and large corporate landlords, groups that might have to take a hit in light of the current situation, but much of the debt will be owed to other small businesses so the knock-on effects of this could be catastrophic. Businesses need a support plan now. Will the Tánaiste confirm the Central Bank and Government are formulating a plan of this type which does not rely on the State to step in and take on the debts of major landlords and banks and other large profit-making entities? Will the Government consider getting rid of tax breaks and loopholes provided for CEOs of multinationals and multinationals themselves to free up spending for small businesses? We need to see a radical shift in how the State interacts with SMEs. It cannot be piecemeal. If we are to recognise the importance of SMEs in terms of our economy, employment and communities we must shift the balance from kowtowing to foreign direct investment and focus on investing in SMEs for the duration of the Government.

In terms of cost we need to be strategic. Blanket measures were initially implemented by the Government in terms of supports. This was appropriate at the time but now we have a clearer idea of what is needed and we can be more strategic. Not every sector suffered. Some need more help than others and we need to treat sectors according to their need. We cannot give up on vulnerable sectors.

We keep hearing about the new normal. This has to include a changed attitude towards how we deal with SMEs and the State re-evaluating how banks, corporate landlords and multinationals are put on a pedestal and cannot be interfered with in terms of their profits. We need an entire systems change whereby the State will intervene in private business for the betterment of the economy. It will not cost the State money but the benefit for SMEs will be enormous. The State should be able to instruct banks and large landlords to take action that might interfere with their profits in the short term but will ensure the State's economy can benefit as businesses stay open, jobs are saved and local economies are protected. The time for asking them nicely is long over. We do not think the State should step in and write a blank check; nobody is saying that. We are just asking that everyone takes their fair share of the burden. Certain interest groups are always protected by the State but this time they will have to do their bit. The State should invest in business in a targeted and strategic way, and that way we will reap the rewards for the economy generally.

I ask the Tánaiste to answer a couple of questions on the new grants. Does the Government have plans for new grants? Will the Tánaiste ensure the groups that have been excluded for arbitrary reasons will be included? Will more than €250 million be allocated for restart grants? That money is clearly not enough. Will a debt management plan be included in the July stimulus?

12:30 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Is the Tánaiste in a position to respond to some of Deputy Munster's questions?

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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I seek clarification. There has been a bit of confusion about speaking slots. Do I still have an opportunity to speak?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Yes, we will accommodate Deputy Collins in a minute but we will let the Tánaiste respond to Deputy Munster's questions.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I will respond to as many of the Deputy's questions as I can now and perhaps revert to her other queries by correspondence. I am two days in the job and I am not across everything just yet but I promise I will get there very soon.

With regard to the supports that are in place for businesses, there is a very long list of them but they really fall into four major categories, one being the wage subsidy scheme whereby the Government is paying the wages of the best part of 500,000 staff, the restart grant, the rates waiver and the various loan schemes that help businesses with working capital and to restructure their debts.

Nearly 500,000 people's jobs are being sustained by the wage subsidy scheme.

12:35 pm

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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I sent the Tánaiste-----

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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If the Deputy wants to go over the details of the restart grant, which have been provided to her, 34,000 businesses have claimed it so far but only €61 million has been drawn down. This Estimate, if passed today, will provide €250 million. That still leaves the best part of €180 million to be drawn down.

We are not dealing with the July stimulus plan today. That will require a further Estimate down the road. We are examining matters such as an extension to the wage subsidy scheme, an extension of the rates waiver, improvements to the existing loan schemes - and I know some people understandably feel that the terms are too short-----

Photo of Imelda MunsterImelda Munster (Louth, Sinn Fein)
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My question is on the restart grants and on those who have been excluded from applying for some for arbitrary reasons. Will the Tánaiste extend the restart grants application process to those many small businesses that have been excluded from it and have no supports whatsoever? Private bus and coach drivers in particular have no supports.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The Deputy has made her point. We will hear the Tánaiste's response. He indicated that he would correspond with the Deputy on this.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I am afraid I do not know what the Deputy means by "arbitrary" in this context. The way the restart grant works is that a business has its rates refunded. If a business did not pay rates, then it is not arbitrary for that business to not get a rates rebate. It is a common sense approach but that is not to say there are not other schemes that might help businesses. For example, there is a scheme for people who are sole traders or are self-employed and who do not pay rates but they can get a grant of about €1,000 if they are coming off the pandemic unemployment payment, PUP. A fund was announced last week for sports clubs, for example. Some of those sports clubs can claim from that but there is no arbitrary removal.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The Tánaiste will correspond with Deputy Munster on the other questions. We will go back to Fianna Fáil and Deputy Niall Collins.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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I apologise for the confusion earlier and I thank the Ceann Comhairle for his indulgence. I wish the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Varadkar, well in his brief. We face very challenging times and the business sector is very worried.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputy Troy is gesticulating furiously from the Gallery.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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Where is he?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Do not fall over Deputy Troy.

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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If you acknowledge me-----

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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We have spotted you. Do not worry.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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Do I have to share time?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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You are supposed to make your own arrangements. It is not my job to arrange the slots for you but in the circumstances I take it that you are sharing time.

Photo of Niall CollinsNiall Collins (Limerick County, Fianna Fail)
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I will take about five minutes and then I will pass over to my colleague, Deputy Troy, if that is in order.

I echo the point that the business sector is very worried and the July stimulus will have to have a real and meaningful impact to allow the business sector to plan with confidence. We have to ensure that is enshrined in the July stimulus.

Businesses have opened in recent weeks and this week in particular. I want to mention the temporary wage subsidy scheme, which has been a huge help. Businesses in Limerick and the mid-west are saying to me that they want to see it continue for as long as possible. They realise it cannot go on forever and are saying that when a decision is taken in a number of months' time, which I am sure it will be, the scheme should be tapered off and not just come to a shuddering end. There has been mention of the warehousing of tax liabilities, which is an imperative measure that is going to have to be made available to the business sector. Going forward, we will have to ensure that all businesses have the ability under tax code and legislation to carry back the losses they incurred in the financial year of 2020 against last year's tax liability and possibly against the previous year's tax liability, rather than just allowing them to carry forward losses.

For some businesses, only the carry forward of losses is permitted, and the Minister for Finance will have to look at that.

I am particularly keen for the Tánaiste to take an interest in how the insurance industry has been conducting itself, particularly in the wake of the issues surrounding business interruption insurance and the declining of valid, legitimate claims, by FBD particularly, across the hospitality sector. We know that our insurance industry has been operating in a cartel-like environment and manner in recent years. Some measures have been and are being brought to bear in the programme for Government to deal with these issues, to try to lessen the cost of insurance premia to businesses and to bring more regulation and transparency to the industry. It is vital, however, that a strong message is sent from every Minister and from Government that the conduct of FBD in particular simply cannot be countenanced.

Regarding business restart grants, the issues which have been brought to the fore, particularly in the context of businesses having to be ratepayers, need to be addressed in the July stimulus. Many businesses, new-start enterprises and operations are operated by sole traders and new micro startups that do not have commercial rate numbers or rate accounts. Every measure has to be carried out to ensure that such businesses are fundamentally incorporated into the July stimulus.

It has long been a bugbear of many businesses that, given what people pay for their commercial rates, they do not feel they get a good enough service from our local authorities. Despite all the chaos the pandemic has brought upon us, there is now a great opportunity to carry out a fundamental root-and-branch reform of our commercial rates system. The Government should seize this opportunity. Many ratepayers have had their rates liability suspended during the pandemic and will have it suspended for another indefinite period, I presume, but the opportunity now exists to look at our whole commercial rates structure sector by sector. In some sectors there could be, for example, a turnover-based system. The old valuation-based system we have is simply archaic, punitive and arbitrary and adopts a one-size-fits-all approach which is simply not fit for purpose.

Finally, access to finance in this country for small and medium-sized businesses is so difficult. It is shrouded in red tape. The hoops businesses have to go through to avail of finance are onerous. As for the cost of finance, we can get finance at 0% cost from the European Union and the other funders providing finance to the State. By the time this gets through the pillar banks to SMEs in the form of an overdraft facility or a loan, the charge of 4.5% or 5% is simply price-gouging. We need to call it out for what it is. We have to find a way to get that finance, which we are getting at zero cost, to our SMEs at zero cost. That is a very important point. There is also an opportunity now for our main pillar banks to refinance a large portion of our mortgage loan books and commercial loan books at a lower rate. We have had a huge issue with the variable mortgage interest rates charged in this country. They are a couple of percentage points above comparable charges right across Europe. There is an opportunity now for our banks to refinance entirely their loan books at this 0% charge, take their small margin - and they are entitled to take some margin - and refinance mortgage and commercial loan books up and down the country to help business.

12:45 pm

Photo of Robert TroyRobert Troy (Longford-Westmeath, Fianna Fail)
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It is quite hard to make sure we are seen when we are so far away from one another.

I welcome the opportunity to contribute to this debate. We are supporting the increase in the Estimates. Clearly, SMEs have suffered greatly in the last number of months. Our SME sector is the backbone of this economy. It is a sector which employs in the region of 1 million people. The forced closure of the economy and our SMEs for the sake of public health has left them in a precarious situation. It is so important that the July stimulus gets the support measures correct because if we do not do that, we run the risk of viable businesses going out of business. If that happens, we will see job losses throughout the length and breadth of this country. That is something we have to prevent. That is why it is welcome to have an opportunity to contribute to this debate and to highlight some of the issues I feel need to be addressed in the July stimulus. I acknowledge that many proposals in the programme for Government will help to address that, if and when they are enacted.

Previous speakers have alluded to the temporary wage subsidy scheme. It has been a lifeline to so many businesses. As previous speakers have said, it is important that certainty is given to businesses that this will continue for a number of months and will be tapered off as their turnover improves. We need to look at extending it beyond the number of people who are currently accessing it. Many people, particularly in the hospitality sector, take on seasonal workers and those workers cannot avail of the temporary wage subsidy. We need to look at extending it to seasonal workers.

I wish the Tánaiste luck in his new role. I was interested to listen to him speaking about how much of the restart grant fund has been drawn down so far. As I mentioned to his predecessor, I think the restart grant is too restrictive because it is solely based on businesses' rates in 2019 and takes no account of the costs associated with reopening a business, such as providing PPE gear and screens and doing whatever work needs to be done. In Westmeath, the median rates of our businesses in 2019 was €1,800. That means 50% of the businesses in Westmeath were paying €1,800. At best, they will now get €2,000. It is not a lot of money for businesses that have been closed for 14 weeks and have large expenses in reopening.

I brought it to the previous Minister's attention that I have been contacted by a number of viable businesses that have gone through the SBCI and received approval but, having received such approval, have gone back to their pillar banks to be told they will not lend. What will be done for businesses that cannot access liquidity? That is why it is so important that, as a priority in the coming weeks, the credit guarantee scheme is enacted with favourable rates and with very little bureaucracy in terms of how businesses can avail of it. We should not have a situation where we charge businesses who have been through so much 4% or 4.5% interest rates at a time when the State is borrowing at less than 0.25%. We need to ensure viable businesses can access liquidity at favourable interest rates, just like the rest of our EU counterparts are doing for their businesses.

I have engaged with many of our representative bodies regarding commercial leases. Commercial landlords are dealing with their tenants on a case-by-case basis. In some instances, it must be acknowledged, they are dealing with them favourably; in other instances, they are not dealing with them favourably at all.

We need to ensure a code of conduct is put in place so that people know exactly what is expected of them in dealing with their commercial leases.

Regarding the restart grants, I was interested that the Tánaiste said there is a payment of €1,000 available for people who do not pay commercial rates. For somebody who has been out of business for 14 or 16 weeks, €1,000 is not adequate. There is a golf club in Mullingar whose owner pays commercial rates every year but has been told that the club does not qualify for sports capital funding because it is a business. We should extend the restart grant to businesses such as that.

Finally, as alluded to earlier, we must ensure that the new Government makes insurance reform a top priority. The manner in which insurance companies have been dealing with their customers is simply appalling. We have a situation where businesses in the hospitality sector are having to go to the High Court to get what they are entitled to. FBD Insurance, for example, had previously written to business customers telling them they were covered for business interruption, but the company is now resisting all attempts to pay out on those policies. It is not good enough. If we look across the water, the Financial Conduct Authority in the UK has instigated a test case on behalf of customers. It is representing 17 or 18 customers and bringing their cases to court. Where is the Central Bank in all of this? It has issued letters and said what it would like to be done but where is it in terms of enforcement? It is not good enough that people who have paid excess premiums to have a policy in place are being forced into the courts system to get what they deserve. I hope and believe, based on the commitments in the programme for Government, that the insurance reform that has been promised for so many years will be delivered very early in the lifetime of the new Government.

12:55 pm

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I wish the Tánaiste well in his new role and congratulate him on his stunning performance in his previous role. I also wish the Taoiseach and the various Ministers well in their roles. We find ourselves at a very important juncture in regard to the future of business and industry in this country. The issues that are unfolding before us are part of what must be a new agenda. We are facing new challenges and more will emerge on a daily basis. Previous speakers have noted that we are in a situation now where we are required to monitor what is happening in the business sector as time goes by. Challenges will emerge in various aspects of the sector, whether in manufacturing or, in particular, the services sector, which is very vulnerable to whims and changes in the marketplace. We also must have regard to how other European countries are treating the issues that are arising. We must recognise that the pandemic was a Europe-wide issue that affected everybody and will continue to affect everybody, and that we had no control over its visitation or when it is likely to leave. Great efforts have been made to contain it and we are thankful that they have been successful thus far.

The issue I want to emphasise is that we are in a new business environment. Other speakers referred to credit and the availability of credit. This is hugely important because the challenges that are facing the various sectors are unique. They have not been touched upon before other than during the financial crisis. Many people in industry and in the small business sector are just emerging from the challenges of the financial collapse only to find there are new challenges coming before them and trying to beat them back to where they came from.

The availability of credit is vital for businesses, along with the grants and all the other assistance that has been referred to. During the financial collapse, credit disappeared overnight and remained gone for a very long time. As every day passed, more and more damage was done to the business sector, particularly the small and medium-sized enterprises. People have raised questions and said that if businesses are really successful they should be able to re-emerge in any event. That is not so because that is not the way business works. Business requires credit. It cannot work without it. I ask the Tánaiste to pay special attention to the request from the sector regarding the availability of credit because that is what will revive the business sector.

I also want to say a few words about the EU and how it deals with the recovery. People will say that we are a wealthy country and that we are net contributors to the EU. That may well be the case but we are affected by the pandemic in the same way as every other European country and our economy is equally affected by it. We must recognise the urgent need to ensure we avail of whatever is coming from the eurozone, and from European countries in general, from the substantial budget that has already been put in place. It is of critical importance that we avail of it insofar as we can and for as much as is possible because we will get no credit whatsoever for being the cool heroes and saying we will leave this to others who are less well off. Despite our recovery from the financial crash, we are not so well off that we can afford to say we do not want any further assistance. We do and we need to avail of it as it becomes available.

I have used most of my five minutes and any of my colleagues who wish to speak can do so now.

1:00 pm

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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I will be brief as I will be taking the Chair in a moment. I congratulate the Tánaiste on his new role and wish him and the Cabinet well. I reiterate what has been said by a number of colleagues regarding liquidity and the importance of simplifying the process of availing of such loans through the State mechanisms that have already been provided. Among all the reading that I have no doubt Ministers will be doing in the coming days and weeks, it is worth considering the potential for a business-led simplification of the likes of the SBCI, Strategic Banking Corporation of Ireland, process, among other things. There are opportunities to recognise the complexity of the existing processes and there is room for improvement in that overall process.

I echo some of the comments made by members of the business community at the Covid-19 committee this morning. They provided estimates of upwards of €15 billion to stave off the closure of thousands of businesses across this State in the coming weeks and months. While I accept that is an extremely difficult ask, there are steps we should take to provide as much of a stimulus as we can as part of the July package on which the Minister, the Tánaiste and the Taoiseach are working. It will be a very interesting process to go through that in this Chamber over the coming weeks.

My final remarks relate to a question that has been asked by a number of individuals and the Tánaiste might consider it in the coming days. While local authority rates are not a huge amount of money for the vast majority of businesses, are we storing up problems by deferring rates rather than waiving or partially waiving them for certain small to medium-sized enterprises? They are the ones that are going to struggle the most when attempting to reopen, regardless of whether they started doing so yesterday or will start in the coming days. It is an exceedingly difficult task to restart having been closed for two or three months.

Then there is the probability that the rates bill will present itself at a later date, so perhaps some consideration can be given to that. I am grateful for the opportunity to address this important Estimate.

1:05 pm

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I am sharing time with Deputy Higgins. I wish the Tánaiste well in what is a crucial role for the country as we face the rebooting and reopening phase for the country after what has been a traumatic few months for everybody, not only from a public health perspective but also from the perspective of business, people's livelihoods and employment. When I hear much of the analysis and the calls for different levels of support, I am a little wary of the specific figures being put forward on what different areas of the business sector need. The truth is that as businesses reopen it is only then that we will learn what the consumer wants and how consumer patterns will change. In tourism, retail and other areas of the service industry, we will not continue to live our lives in the same way. People will go about their lives differently. From a public health perspective, we need them to do that to a certain extent with social distancing and the important etiquette to which we need them to adhere. In addition, their fear still exists, and in view of the risk of a second surge and the health warnings from the World Health Organization, the Chief Medical Officer and others, we need them to have that fear. While it is healthy that it is there, it means we cannot tell exactly what the impact on business will be and exactly what the requirements of business will be with regard to liquidity, credit and supports for employees.

The measures taken to date, which were effectively introduced overnight, have been crucial. Supporting the link between the employer and employee, as the wage subsidy scheme has done, the restart grant and the rates measure are not perfect systems. They were designed at very short notice and anomalies will arise. I believe the July stimulus package is a good opportunity to address some areas, such as bed and breakfast accommodation in the hospitality sector and the bus sector, which have challenges but do not pay rates. I and my family are looking at holiday homes in Ireland to book a week or two in August but it is almost impossible to get anything now. That is great. It is a very good sign that many people are deciding to have a staycation at home. However, I wonder if it is also a sign that perhaps the hotels are not opening at full capacity or do not plan to do so. One hears stories that family-run hotels in tourism areas are not taking back their part-time seasonal workers. They are retaining their permanent staff whom they have employed all year, but the other jobs are critical to rural communities as well as urban areas and for students who are on their summer holidays but cannot now use the J1 visa. One can quickly see the knock-on implications for the economy if we do not get this right and continue the supports in the July stimulus package. I am aware the Tánaiste has taken that on board.

One can look at a number of areas but I will conclude with one point. I have read some academic arguments which say that the State must be careful about who it bails out, and that some businesses were in trouble before Covid-19 arrived and we should only direct the money and supports to certain areas. I offer a word of caution and a counterargument to that. Even if a business was struggling and its model was not perfect, it can always have the opportunity to adapt and learn. We must give it every chance. However, even if it is a doomed model in whatever scenario, it might owe money to another business that has done everything right. It might owe €30,000, €40,000 or €50,000 to that company. If we let companies fail on that basis, there can be knock-on implications for second-tier and third-tier companies that are suppliers in that industry or sector. I do not believe the Government should be playing God in that and picking who survives and who does not.

We should give every business the opportunity to rebound. Irish businesses and Irish entrepreneurs are remarkably resilient and I believe Irish people are ready to support their local businesses. There are many challenges, but one can see the take-up for the online token which was greatly oversubscribed. The Tánaiste's predecessor, the Minister, Deputy Humphreys, had to put an extra €12 million into it. These are the things we should bear in mind and these are the challenges the Tánaiste faces. I wish him very well in that endeavour.

Emer Higgins (Dublin Mid West, Fine Gael)
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Yesterday marked a milestone for many businesses across the country. It was fantastic to see businesses opening their doors after so much time and being available to their customers. Certainty is being brought back into their lives.

I have visited many of my local businesses and it was stark to see people being served by staff who were behind visors or having treatments delivered by people wearing face masks. It is a visual reminder of how much society has changed in recent months and how much our businesses have had to adapt and pivot to maintain their profits, but also to maintain jobs.

The grants and the business support schemes put in place by the outgoing Government have made a significant difference. They have been able to provide the certainty for businesses and employees that was needed during these exceptionally uncertain times. Some of the feedback I got from local businesses that I visited in recent days, such as pubs in Rathcoole, the jewellers in Lucan and some of the cafés in Lucan village, is that, as entrepreneurs and small businesses, they are finding it difficult to cut through the paperwork and the red tape to access some of those grants. In particular, the restart grant in my own local authority area has a six to ten-week turnaround time but businesses have not been given that information and have not been told they are in a queue and that the local authority will get back to them in six to ten weeks. What can be done to provide certainty? How can people be given access to that level of information? How can we make their lives, as small businesses and entrepreneurs, a little easier during this very difficult time?

I thank the Tánaiste for everything he has done to lead Ireland through the crisis in recent months. I am very pleased he has taken on this brief because it will be the most critical brief at the Cabinet table in the coming months as we get the economy back on track, so we can make sure people have money in their pockets and that we can return to normality in our society.

1:15 pm

Neasa Hourigan (Dublin Central, Green Party)
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I have a number of questions. I know we would normally go back and forth but, given the nature of the convention centre room and the fact we are only two days in the job, I might go through as many questions as I can before hearing the replies.

There is some worry among consumers that businesses are in a vulnerable state and, obviously, it is incredibly important that we support local businesses by booking where we can and by shopping local. I agree with the previous speaker that it is lovely to see businesses start to open up again. The issue is that consumers need to know businesses are supported by the State as much as possible, in particular where advance booking is required, and that future support and stimulus packages for businesses are on the horizon. Perhaps we should look for more widespread attention on that issue because we need to increase not only business confidence but also consumer confidence in those businesses.

As the global recovery picks up, global warming will not slow down, unfortunately. Ireland faces emissions challenges but we now have an opportunity to ensure that our investment strategy supports a just transition, reduces emissions and rebuilds a fair and circular economy. Has the Tánaiste plans to ensure that the most carbon intensive sectors of our economy that currently or in the future might be in receipt of public money will increase their contributions to emissions reduction targets? Have “strings attached” supports been considered that may require emissions reduction business plans, environmental management strategies or certifications such as ISO 14001, which is very effective in achieving that?

We must also ensure we get those on low incomes back to work as soon as possible and that we support labour intensive work, particularly in the building industry, rather than what we tended to do in past recessions, which was to focus on large-scale investment projects. To facilitate this, we need to ensure we are giving people training in new industries, such as renewable energy, insulating homes and rewilding projects. Properly insulating homes will be vital for meeting existing targets and is very labour intensive, and it would also create additional jobs in supply chains and help those most affected by fuel poverty. Will the Tánaiste outline his plans to support the labour intensive SME energy retrofitting industry to create jobs in every town, cut fuel poverty and avoid climate change penalties?

As the Tánaiste will be aware, the Future Jobs Ireland initiative was published last year. It highlighted the need for public policy to be directed to the enhancement of the quality of jobs in Ireland, given we have a high level of precarious work, to allow for a better standard of living.

Crucial in this will be the need to provide incentives and supports for SMEs, particularly for those businesses that provide local employment, which tends to be immune to offshoring, and for those businesses that pay the living wage. What are the Tánaiste's plans to ensure Government support will be used to keep the quality of jobs created and retained a central concern, as any failure to do so many only further the job quality divide in Ireland?

Given the potential for both a global recession and an increase in protectionism such as we see emerging in certain countries, there is a chance that new foreign direct investment may reduce and existing foreign direct investment may be scaled back. Has the Department modelled scenarios in which there is more of a focus on growing indigenous business rather than continuing to rely on foreign direct investment?

I will talk for a moment about community solidarity, which is the opposite of foreign direct investment in some ways. There is a number of fantastic businesses in the central Dublin area. I am particularly thinking of a zero-waste whole foods business in Drumcondra in my constituency. This business has started to help out adjacent businesses such as cafés and restaurants by allowing them to set up concessions on its own premises, which are now emptier as the Covid requirements force businesses to space things out more. This business is helping small businesses to set up concession stands. It is a small way in which businesses in the community can support each other. It is marvellous to watch it happen. Will the Department consider the supports that could be offered to such initiatives through LEOs or Microfinance Ireland? As circumstances change, there may be ways to innovate within our SME sector.

We are still at an early stage in our recovery and in our experience of living with the Covid pandemic and operating our economy within it. We were already grappling with a crisis in the insurance industry, which presents its own challenges to the business sector. If there is an outbreak or Covid cluster in a business such as a café or restaurant, will the owners face any insurance liability? Has the Department considered this or how it might support businesses experiencing such impacts?

Businesses are struggling with cash flow. The collapse in consumer spending and the resulting cash flow problems for businesses were not, however, the result of instability in our financial system or a collapse in the property bubble but rather the result of the social distancing restrictions, the lockdown and the consequent closing of our retailers and hospitality businesses. Over this time, consumers have saved a large amount so there is capacity in our financial system. We propose that advantage be taken of that situation and that we look to co-operative business models and promote community-based economic organisations. This, again, speaks to the issue of community solidarity. This will not just provide a place for Irish savers to invest their money and allow employees to take a stake in the businesses they want to hold on to and support but will also provide a new source of finance. The co-operative business should be an integral part of rebuilding our economy post Covid-19. Co-operatives are guided by principles of solidarity and economic democracy and are rooted within their local communities. They are run according to the interests of their members rather than those of unknown stakeholders.

How could the Tánaiste develop a supportive financial ecosystem for co-operatives? Currently, the legal, regulatory, auditing and financial institutions of our economy are designed for private companies and tailored to their needs. We see this done better elsewhere. In economies such as that of the UK, there are much clearer supports for co-operative systems. By contrast, co-operatives in the country operate under a framework that disadvantages them and burdens them with a layer of rules and regulations equivalent conventional firms do not face. Can something be done to address the competitive disadvantage faced by co-operatives?

Studies in the UK, where the system is more supportive, have shown that employees of co-operatives report higher levels of jobs satisfaction and economic well-being and higher rates of productivity. Compared with conventional businesses, co-operatives also have lower staff turnover, which represents a major cost for SMEs, as well as lower rates of pay inequality and absenteeism. Will the Minister consider introducing right-to-own legislation to support employee buyouts and the co-operativization of existing businesses?

1:20 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I thank the Deputy for her contribution. I may be able to answer a few of her points but I will have to come back to her on others. As things stand, the grants and loans offered, including the restart grant, the wage subsidy scheme and the various loan schemes, are not tied to any particular environmental or social obligations. That may well be the case in the future. Down the line, we might decide not to bail out polluting industries, for example. For the moment, we have taken a blanket approach to try to support every job and every business rather than establishing mechanisms to discriminate between the jobs and businesses we want to save and those we do not. We have taken a blanket approach to date, which has been necessary given the blanket impact the pandemic has had on all sorts of businesses and employment.

With regard to the consideration of labour-intensive options for the July stimulus package, the Deputy has made a very valid point. For July, we need to consider Government investment in labour-intensive sectors in which we can get people back to work quickly. I agree that retrofitting, insulation and rewilding may be among those sectors. Even though construction activity has been under way for six weeks and we are told that 80% of sites are now open, 45,000 construction workers are still in receipt of the pandemic unemployment payment. There is something not right there. I do not know what it is but we need to dig down into that and get people back on site. We also need to provide alternative construction employment for those who cannot return to sites for various reasons. Retrofitting would certainly be top of the list of such alternative jobs.

With regard to Covid insurance, I am not sure whether the Deputy was asking whether employers are liable for people who get Covid on their premises or whether she was asking about business disruption insurance. All of these issues have yet to be sorted out in the courts. I am not of the view, however, that a business is liable for somebody contracting Covid on its premises unless it was somehow grossly negligent or responsible for it. To my knowledge, nobody has every successfully sued a business or crèche because they or their kid got chickenpox or the flu on its premises. I do not see why that would apply to Covid but stranger things have happened in the courts with regard to compensation claims.

The issue of business disruption insurance will play out with the Financial Services and Pensions Ombudsman and in the courts in the coming weeks and months. Some businesses are arguing that they should be paid for disruptions to business, while some insurers are saying that such claims are not covered. That will need to be teased out.

On co-operatives, I have visited many of them but I do not know much about their business model. I am not really au faitwith the competitive disadvantages they face that traditional companies do not. I am keen to find out more about the area and to learn a bit more about it. If there are ways to rebalance the system and the law in their favour to give them a fair crack of the whip, I am very much open to doing so.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I congratulate the Tánaiste on his appointment at this very important time for our society and our economy. On behalf of the Labour Party, I wish him well. He, and the new Government in its entirety, can be assure of robust but constructive opposition from myself and my Labour Party colleagues at this critical time for our economy and our society. Where we disagree with the Tánaiste, we will tell him why in robust terms but we will also seek to provide workable solutions and alternatives to any of his plans that we oppose or critique.

The plight of our country is far too serious for us to resort to politics as usual but, sadly, it seems it is business as usual in the Department of Business, Enterprise and Innovation with regard to the schemes for which we are today asked to provide additional support. As a House, we all agree that businesses, particularly our microenterprises and our small and medium firms, which employ more than 1 million people, need urgent support. In fact, they needed it three months ago but the response of the previous Government in providing well designed, accessible liquidity supports was tone deaf. Instead of loans at near zero interest and grants, such as were provided by other EU states, the Government packaged up existing commercial rates of 4% to 6%, which I remind the Tánaiste is double the EU average, and termed them a support.

This is despite the fact that 0% interest rates are available from the ECB for us to provide better and cheaper supports to businesses. It appears that this Government is still hell-bent on prioritising the profits and the margins of the banks, partly-State owned banks of course, over direct cash grant-aid supports for community businesses. This strategy is akin to handing a drowning person an anchor instead of a lifebuoy; he or she will simply sink.

The first thing I would expect from the Minister is to re-examine the design of the current business supports that are available, many of which in my view are completely unfit for purpose. This should include a fit-for-purpose 100% credit guarantee scheme, along with direct grant aid, as we have seen in countries such as Switzerland. I have used that example time and again in the House. The Revised Estimates indicate that much of the additional resources the Minister is asking us to allocate to the Department today will go to various Enterprise Ireland schemes and that is to be welcomed. Everything that can be done should be done to rescue viable firms and to support jobs.

Before the Dáil gives the green light to this additional expenditure, it is important we know how many jobs Enterprise Ireland and the IDA believe we may lose this year and therefore the number of jobs this additional funding will help to maintain and support. I hope the Minister is in a position to provide the Dáil with those figures today. This need for urgent business supports does not discount the need for social and environmental conditionality to be attached to them, in particular for large and already profitable companies. We must ensure that we, the taxpayers, are not subsidising the profits of tax-dodging firms to funnel their profits through tax havens, for example. When I raised this particular point with the Secretary General of the Department in the Covid-19 committee earlier this month I was told it was "not on the radar". Sadly, this country has a less than proud history of providing no-strings-attached bailouts and we are living with the consequences since. This is despite the fact that countries as diverse as Denmark, Scotland, Poland, France and Italy have attached such conditions, so why should Ireland be any different? It is good public policy and normal practice in civilised western European democracies that we would see attached to taxpayer-funded bailouts positive public policy goals. It is important that we use the levers that we have available to achieve a different kind of Ireland. The Minister mentioned it in his response to Deputy Hourigan, and I ask him to make this a priority and to ensure that the taxpayer does not just get value for money but that a range of economic, social and environmental performance indicators and benefits attach to the enormous State funding he is proposing to provide to businesses across the country to rescue them and to support and sustain jobs.

I am concerned that under the regulation heading the Revised Estimate suggests a mere 8% of additional funding on top of what is already allocated for that purpose. On Monday, we entered phase 3 with thousands more businesses reopening and workers returning to their workplace. It is essential that we embed a culture of compliance with health and safety measures that are designed to prevent a second surge of Covid-19 at this early stage. The prominence of Health and Safety Authority, HSA, inspections will be key in this regard, yet the Department does not seem to have revised the output target for inspections. The same number of inspections have been provided for this year as last year, and the number of inspectors in the field does not seem to match the increased need for regulation. In the Covid committee interrogation of these issues a couple of weeks ago the Secretary General of the Department suggested that there would be approximately 500 HSA inspectors on the ground in the coming period. Could the Minister take the opportunity provided to him this afternoon to confirm the number of inspections planned this year compared to last year in the context of the coronavirus? How many inspectors are there currently in the field? What additional cost does that entail and is it accounted for in the Revised Estimate the Minister is asking us to support today?

1:30 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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It is not business as usual in the Department of Enterprise, Trade and Employment. We have the wage subsidy scheme, which is a massive and unprecedented scheme such as I have never seen in my lifetime. The State is essentially paying the wages of the best part of 500,000 employees in private sector firms so that they have retained their jobs. Nearly €2 billion has been paid out to date. It is one of the better schemes internationally, and that is not the case with every scheme we have introduced. It is money that is paid to companies to pay their staff so it is very much a bailout for the workers rather than for business.

A total of 34,000 businesses have availed already of the restart grant. Approximately €110 million has been approved out of the €250 million, so there is still €140 million to allocate. I am totally open to examining the scheme to see if we can improve it, make it better, more generous and open to more companies and to recognise the high costs the hospitality sector in particular has in reopening. That can be part of the work that we do in advance of the July jobs stimulus.

In terms of various loan schemes, I heard a few people speaking about the fact that money can be borrowed from the ECB at 0% or 0.5% and they asked why businesses have to pay 3% or 4%. The main reason is not due to the banks' margins, it is due to default. The nature of loans means that some businesses do not or cannot pay back their loans. We have a relatively high rate of default and a very low rate of repossession. That is also the reason we have somewhat higher mortgage interest rates in Ireland than other European countries. When a person or business does not pay back their loan, the cost of that is socialised in terms of higher interest rates on other businesses. When somebody does not pay back their mortgage the cost of that is socialised in terms of people who pay back their mortgage having to pay more. That is why it is such an unfair thing to do, not to pay one's bills and not to pay one's debts because one just passes on the cost to other people. In terms of what we can do in that regard, perhaps we can do better, for example, we will definitely look at introducing longer terms for the loans or a lower interest rate but we need to bear in mind that one always has to factor the default rate into any interest rate.

The question to be considered is who should bear the cost of that. Should it be other businesses or the taxpayer? That is never an easy question to answer. Again, that speaks to Deputy Nash's other proposal, which was to have a 100% loan guarantee. That puts 100% of the risk on the taxpayer, on society, ordinary people and workers. The last time we provided a 100% guarantee it did not work out so well, so we need to think about these things. The concept of a 100% guarantee sounds great. It means low interest rates for businesses, but somebody is paying for that guarantee, and it turns out to be the ordinary person, the taxpayer. That is why I am always a little bit cautious around 100% guarantees. To paraphrase a former banker, I think the bank should have skin in the game, but a 100% guarantee means it has no skin in the game and the taxpayer picks up the bill. I am not so keen on that. I am a little surprised to hear it being proposed by the Labour Party but strange things have been happening in politics of late.

In terms of the HSA inspections for Covid, 5,000 have been carried out so far. I am told we have approximately 500 inspectors but they are not all HSA inspectors. The number includes environmental health officers and people who have been seconded from other areas to help out with the inspections.

In terms of bailouts, to the best of my knowledge we have not yet had to bail out any big companies in Ireland but if we get into that space, as other countries have done, in particular on continental Europe, for airlines or other big industries, then I think in such circumstances there should be social and environmental obligations.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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At the outset I congratulate the Tánaiste on his new post in what is a very critical Department at any time but especially in the current circumstances. I wish him well in his work there.

We are considering the Revised Estimates in the context of three very major challenges. I refer to what has happened already this year in the context of an unprecedented shock to the economy. The second is the ongoing threat from the pandemic and the third is Brexit. The fact is that the backstop was dropped, we are likely to be facing a no-deal Brexit, and we must consider all of the implications of that. Ostensibly, what we are considering today is a supplementary budget for an additional €480 million for the Department of Enterprise, Trade and Employment.

To a large extent, it is considering this Estimate after the event. There are many reasons we are just doing it at this stage and the Social Democrats support this Supplementary Estimate.

It is also important, however, to look at some of the criticism of how the Department has actually been dealing with Estimates. Much good work has been done by the Parliamentary Budget Office. There are two key points made by that office that need to be taken on board. I am not looking for a response from the Tánaiste and Minister for Enterprise, Trade and Employment today but he should note and respond to them at an early stage. It is accepted by everybody that the current circumstances are extremely challenging. However, the Parliamentary Budget Office stated it is regrettable that output targets have not been updated to reflect the new and expanded schemes aimed at responding to the impact of the pandemic. It further stated that, without such indicators, the performance of the additional spending may be difficult to assess. There is no doubt about that. We all accept that everything had to be done very quickly but these are important points. It is assumed that some unit in the Department would be tracking that spending very closely.

The other point that was made by the office is that the Department should consider providing updated performance metrics to the relevant Dáil committee. That is an important point too. Irrespective of the scale and the unprecedented nature of what we are dealing with at the moment, we have to bear in mind that there is a responsibility on the Dáil to ensure all public moneys are spent in a way that gets value for money. Those are two important points that could easily be lost in the context of this debate but need to be taken on board.

Covid is a dynamic situation. Up to last week, the view was that we have got on top of the virus and we need to now move on to dealing with the economy. It is not one thing and then the next, however, because we still live with the threat of the virus and the significant likelihood that there will be another wave or an upsurge at least. From listening to the Chief Medical Officer, we have to be very cautious in that respect.

A measure of that is that IBEC presented recently to the Covid committee. It has good plans and proposals for rebooting and reimagining the economy. One of its three immediate demands is to remove the quarantine restrictions. That is an indication of how, just in the space of two weeks, the thinking on that has changed and the dynamic involved. We all accept the urgency of reopening the economy, but it is so dependent on getting the response to the virus right, however. That means having a quick response to any outbreak and being back in a position where we can do the necessary testing and tracing, as well as the asymptomatic testing and tracing in high-risk areas. All of these issues are connected.

SME Recovery Ireland, a new umbrella organisation, is presenting today to the Covid committee. It is a pity that we are not doing this in a more co-ordinated way but that organisation made several good points. It calls for a €15 billion recovery plan with €6 billion of that being released immediately to deal with liquidity problems. The current supports in Ireland are based primarily on debt-based lending whereas other European countries have introduced more grant supports which in turn encourages take up. It is really important to get that balance right, not just domestically but in the approach taken at European level as well. SME Recovery Ireland cites, for example, Northern Ireland where grants to the value of €25,000 were made available to the retail and hospitality sector in mid-April. Germany also has invested over 25% of GDP to support businesses, while Denmark has a €6 billion compensation fund.

SME Recovery Ireland also points to the European Central Bank proposals for a predominantly grant-based approach rather than loans. Most of the business support schemes, it points out, were originally based on a hard-Brexit scenario. In many ways, it was fortuitous that the schemes were drawn up but they are now needed to be re-examined. We had the schemes when Covid struck, which was good, but those schemes do not exactly fit the bill at this point. They need to be re-examined and restructured with purpose to fit the current crisis.

Brexit has been a long lead-in issue, whereas Covid has been a massive sudden shock to the economy. When restructuring these schemes, there needs to be serious debate about the cost benefits of grant aid versus debt-based lending. It is important to recognise the challenges involved in that. I agree with the Tánaiste and Minister for Enterprise, Trade and Employment, that it is not a matter of signing a blank cheque and giving a 100% guarantee. A real difficulty will be the ability to identify those companies which are not viable and, unfortunately, will not survive.

It is important to be in a position to identify any attempt at gaming the system. Inevitably, there will be an element of that. We need to have very clear criteria set down and clarification on who exactly or what body is going to take those key decisions.

SMEs point out the contribution that they make to the economy both in terms of the fact that they employ the vast number of workers in this country but also how they put back in so much money into the economy through PRSI, tax and so on.

I support and commend what the previous Government did in its rapid response. The question is where we go from here and how we fund that. Several weeks ago, I raised with the Tánaiste and Minister for Enterprise, Trade and Employment the need to ensure that we draw down as much support as we possibly can at EU level. He told me that borrowing substantial amounts of money long term is Venezuela. It is not actually. Austria, Germany and many central European countries are doing that. For example, last Wednesday Austria raised €2 billion in a bond auction with a maturity of 100 years which was priced at below 1%. The auction was more than ten times oversubscribed. That is not Venezuela; it is Austria. We should be learning from what other European countries are doing because there is huge support.

In the recovery, it is important we use the potential of and build public services to ensure we have good quality employment. We must also ensure we are more competitive. If our public services are available on the universal basis, it takes the pressure out of wage demands and the green agenda.

It seems the Department of Enterprise, Trade and Employment is taking over responsibility for employment, employment rights and so forth. The Tánaiste and Minister for Enterprise, Trade and Employment must bear in mind that it was the youngest workers who paid the biggest price in the crisis created by Covid. They are the people who have been struggling with low pay and precarious work in the main. They must be given priority when it comes to identifying those employment areas that have the greatest potential to get that younger generation back to work. They have been locked out, to a large extent, and they need to be prioritised, as we, hopefully, work our way back to recovery.

1:40 pm

Photo of Bríd SmithBríd Smith (Dublin South Central, People Before Profit Alliance)
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I am sharing time with Deputy Paul Murphy.

I want to start by saying something positive to and about the Tánaiste's new Ministry. I recall the zeal and the scrutiny he had in a previous Ministry. We all remember the campaign he launched to account for every penny spent in the then Department of Social Protection when it came to social welfare recipients and welfare cheats who cheat us all.

I look forward to a campaign of real zeal in the Minister's analysis and scrutiny of the grants and funding to businesses, especially to large firms and to multinationals. I want to be absolutely clear that we fully support the grants, aid and help being given to small and medium size firms, but we have a problem that it is difficult from the information we get to decipher who is getting what and for what purpose. We would appreciate more clarification on this.

The largest increase of funding is allocated to Enterprise Ireland for capital spending, which is fine, but who is getting it and what is the breakdown in size and sector for the disbursement of these additional supports?

It would also be useful if we could actually make sure that the current supports have worked and were targeted at the right areas. I would like to see, for example, very targeted policies to relieve the demands for rents on local shops, cafes etc. in our local communities, many of which now seem to be facing a renewed onslaught from banks and landlords. We need - and needed - a blanket policy on a rent amnesty during the Covid-19 crisis.

Equally, many small business are finding themselves unable to get the wage subsidy scheme they had because post-lockdown they have a different workforce to pre-lockdown. We need to create a level playing field for all local small businesses.

I want to make a general point on the wage subsidy scheme. In other jurisdictions there are provisos around state support for bigger industries. They cannot have avoided tax, cannot have off-loaded their profits offshore and if they are profitable they cannot avail of the scheme or at least there would be a clawback when the companies return to profitability. We do not seem to have those conditions imposed here. We do, however, see companies such as Aer Lingus and Ryanair cutting their work force and cutting pay while at the same time having their hands out to the State.

I will end by asking the Minister a direct question. Last week a High Court sent shockwaves across the construction industry in particular when it decided on the unconstitutionality of the sectoral employment order, SEO. This judgment may also affect many other sectoral employment orders and employment regulation orders, EROs. Indeed, it could be very important in the contract cleaning industry and in the difficult sector of security. It affects hundreds of thousands of workers. This is why it is important that we have something to say about it. The conclusion of the High Court was that competition and the rights of employers trumps the desire to ensure decent wages and conditions. It is beyond belief that a court might say the Dáil does not have the right to legislate for the protection of workers in any sector in the country. We do not want to see a race to the bottom in workers' pay, terms and conditions. This is an opportunity for the new Minister to surprise us all and to defend our right as legislators to legislate to protect workers' pay and conditions. Will the Minister commit to appealing the High Court decision and to defending robustly the SEOs?

1:50 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I am aware of the High Court judgment. My officials and the Attorney General's office are currently studying it. We will make a decision in the next couple of days on whether or not to appeal it. We have until 14 July to appeal. I say to anyone who works in those sectors, be it in construction, contract cleaning, electrical contracting or anyone covered by an SEO or an ERO, that their employer does not have the right to change the terms and conditions on foot of this judgment. There is a stay on its execution. We will make a decision between now and 14 July as to whether or not we will appeal it. It depends on if we believe we have a strong case to appeal it. If we have a strong case to appeal then we will and I look forward to updating Deputies on that once it the decision is made.

Photo of Paul MurphyPaul Murphy (Dublin South West, RISE)
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I will start by saying that we need more support for small and micro businesses, such as arts workers, small coffee shops, restaurants, tradespeople and taxi drivers. They need more support at this time be it grant aid, which is preferable, or easy access to very low interest loans. I am, however, opposed to the utilisation of the stories of those small, family-run coffee shops being put to the forefront to cover up for a substantial amount of corporate welfare in the State. We need to shine a light on the amounts of money going into very big businesses. We are talking here primarily about the wage subsidy scheme and how some of the most profitable companies in Ireland are getting huge, no-strings-attached bailouts from the State. Deputy Smith drew a very appropriate comparison between the zeal with which the Minister, Deputy Varadkar, previously pursued mostly imaginary social welfare cheats, and the approach to this current situation when he said, in a blasé manner, that it is a blanket approach. For "blanket approach" we can read blank cheque approach, whereby the Government is willing to hand over huge amounts of public money to profitable companies and not ask for a living wage of €15 per hour for those workers, not ask for basic environmental conditions as called for by Extinction Rebellion, not ask for a share since we are giving all this money, and not saying looking for worker access to trade unions for any company in receipt of this money. Instead, the money is simply given over to major businesses that are entitled to continue to operate in whatever way they want. I shall give an example. Pat McDonagh, the Supermac's millionaire was on the radio complaining about people getting €350 per week, did not mention that Supermac's was in receipt of a much larger amount on a weekly basis of corporate welfare through the wage subsidy scheme. Other companies such as Ryanair, Aramark, Cement Roadstone Holdings, CRH, and other big construction companies are also getting huge public money with no requirement that they actually pay decent wages or recognise trade unions. I have been contacted by one group of workers employed by the major international Aramark and who are working on the front line at University Hospital Galway throughout this crisis. These workers were paid minimum wage, plus 10%, and the company has been claiming the wage subsidy for that. The workers have now been cut back to just the minimum wage. These are front-line workers, the workers for whom we clap each week. They are working in our hospitals for minimum wage and the company is getting paid on the double. The State is paying the cost of the contract and also covering most of the wage bill through the wage subsidy scheme. We need to see the figures, particularly for the wage subsidy scheme, for the top companies getting these supports. We also need to attach strings to these supports.

I want to talk about one company in particular, which is Aer Lingus, and if I have time at the end I will ask the Minister to respond. Aer Lingus has been receiving huge support from public funds - more than €1 million per week from the State over recent months - while engaging in very antisocial behaviour. Aer Lingus is a company with almost €1 billion in cash reserves. It is part of a multinational that has only recently made more than €3 billion in profits. Now it is in receipt of €1 million per week in corporate welfare. One would think that being in receipt of such public money might make Aer Lingus a little more humble or social, but it is proceeding with a series of antisocial and anti-worker policies. It wants to slash 500 jobs, it wants to cut wages by an incredible 70% and it wants to ban its workers from taking industrial action. The same workers who were applauded only a few weeks ago for flying much needed personal protective equipment, PPE, from China are now being told to make do on 30%, less than one third of their wages. Perhaps the CEO of Aer Lingus would be able to live on 30% of his previous income but for an ordinary worker it is simply not possible and would result in many people losing their homes. Cabin crew have rejected the rotten deal and others should be given a vote on it too. Aer Lingus should not be allowed to get away with this slash and burn agenda. It underlines again what a failure privatisation is and the need for re-nationalisation. Does the Minister believe it is acceptable that companies like Aer Lingus are in receipt of such massive amounts of money but treat workers in such a fashion?

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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The Minister has a very small window of opportunity in which to answer.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I believe that fraud is fraud, be it welfare fraud, tax fraud or companies gaming Government grants. I take the same dim view of fraud, whether it is committed by an individual or by a company. I do not take the view, as I have seen some Deputies to my left do, that some forms of fraud are okay because of the social class of the person committing that fraud. That is a rather perverse way of thinking. Fraud is wrong, whether it is welfare fraud, tax fraud or corporate fraud, and it should be treated just the same.

Regarding the TWSS, I do not have any detail or breakdown as to which companies received money from the scheme or how much they received. I will seek that, as it is something that I have an interest in knowing. The scheme is open to all businesses, big and small. For a company to qualify, it has to have seen a major reduction in its revenues. Aer Lingus was one of the companies mentioned. It may well be the case that Aer Lingus was doing well a few months ago and had billions of euro in reserves, but that has fundamentally changed in the past couple of months. I do not know the details of that company's business operations, but I would say that it is burning through those reserves quickly. If it was not for the TWSS, the workers in Aer Lingus would be facing something much worse than they are now. I am surprised that the Deputy would want to impose that on them.

2:00 pm

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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We now move to the Regional Independent Group's slot, for which I see two members present. Deputies Fitzpatrick and Verona Murphy are on their feet at the same time. The latter has given way to the former, but are they sharing their time?

Photo of Peter FitzpatrickPeter Fitzpatrick (Louth, Independent)
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No. I am taking the full ten minutes.

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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It is a matter for the group.

Photo of Peter FitzpatrickPeter Fitzpatrick (Louth, Independent)
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I welcome the opportunity to take part in this debate. I wish to offer my sincere condolences to the families and friends of those who lost their lives due to Covid over the past week. I also offer my best wishes to those who continue to fight this terrible disease, be they in hospital or isolating at home.

It is clear that we are winning this battle, but we must not become complacent. I urge the public, particularly the younger generation, to continue following the guidelines as laid out by the Chief Medical Officer. I also appeal to the younger generation to consider that it is the elderly who are most vulnerable to this virus. That includes their grandparents and parents. While younger people might believe that the virus will not affect them, they must consider the health and safety of their grandparents and parents.

Every Deputy will undoubtedly agree with me that the crisis facing the people of Ireland is unprecedented and could not have been forecast. We are in the midst of a crisis created by Covid and every single business and worker has been affected in one way or another. To make matters worse, we have a no-deal Brexit coming down the tracks.

Regarding this Vote, it is vital that the House support all the additional funding for the business sector as detailed today. In fact, I would go further and say that we should consider increasing that funding. We are in unprecedented times that call for unprecedented action. During the banking crisis, austerity was the approach taken. Although I was a member of that Government and voted in line with its policies at the time, it is clear in hindsight that that approach was wrong and inflicted far too much pain on the working people of Ireland. We must never return to austerity measures and I ask the incoming Government to state on the record that austerity measures will not form any part of the economic rescue plan.

Of the amount we are voting on, €250 million relates to business restart grants. While welcome, that amount does not go far enough. The business sector has suffered greatly since the lockdown. It must be fully supported as it reopens and be given as much financial support as required. We must not forget that the majority of people work for small firms that employ fewer than 50 people. These businesses are the heartbeat of the economy and they need our full support.

I have spoken to many business owners in my home town of Dundalk and the surrounding area. Many of them employ fewer than 15 workers. They have used their resources, which many had built up over a number of years, to keep their businesses afloat during the crisis. They have used everything they have earned in recent years to ensure that those jobs will still be there when they reopen. In one case, a family-run business that employs 16 local people took out a credit union loan to ensure its employees continued to be paid during the lockdown. The Government supports put in place were a great source of help to that business and many others around the country. Had we taken the same approach now as we did during the previous crisis, businesses like them would not have survived.

The lesson to be learned is that we must throw the rule book out and think outside the box. The ECB has made money available at an interest rate of 0% and has been clear that this money is available to Ireland. Germany and France have decided to support this stimulus. We must take advantage of it and borrow that money. Now is the time to keep the economy stimulated. In that respect, I appeal to the Government to be bold and adventurous in its July stimulus package. That package must be generous and target the sectors of the economy that will drive growth.

We must get our tourism sector back up and running. We must assume that this year's tourism numbers will be a disaster in respect of foreign visitors. This is an ideal time to support our tourism sector and strongly encourage people to holiday in Ireland this year and next year. My constituency of Louth and east Meath has some of the best tourism areas in the country, including the Cooley Peninsula and the Boyne Valley. We need to support our economy, and one of the best ways of supporting the tourism sector is to holiday in Ireland.

We also need to support local restaurants, bars and coffee shops. It was great to see many restaurants, bars and coffee shops preparing to reopen in Dundalk this week. I know it was the same in many other parts of the county, such as Drogheda, Ardee, Dunleer and Carlingford.

The €250 million set aside for the business restart grant is not enough. Businesses need help to ensure that their premises are safe for customers and staff. I say this because, although we are dealing with Covid-19 currently, it is becoming clear that this pandemic might only be the start of a cycle. The new reality is that we might have to face a different coronavirus next year and beyond. As such, we must put measures in place that limit the effect of these viruses. We must plan for a new reality.

I have spoken to many business owners. The one point they all make is that they need support and advice on how to make their premises safe for staff and customers. They not only need financial support, but guidelines. Many innovative companies are offering solutions to make business premises Covid-safe and we must help and support them. I know of a local business that has come up with an innovative solution using a traditional process. It can cover door handles and other areas that are in contact with staff and customers with copper. Covid and other viruses cannot survive on copper and, therefore, cannot be spread on these surfaces. This is one of many innovative ways that businesses could be supported in making their premises safe not only for the current pandemic, but for any future Covid pandemic. The business restart grant should be utilised to make businesses safe and future-proof them against any new virus that might appear over the coming years.

While I support the increased allocation under this Vote, it does not go far enough. We must not hold back at this crucial point. We must borrow now when we have the opportunity and support our economy. We cannot go back to the austerity years when many businesses went to the wall because of the policies we pursued. Now is the time to keep the economy safe and support it as it recovers from Covid. If we do not have a strong economy, the Government will not be in a position to fulfil many of the promises made in the programme for Government. I urge the Government once more to confirm to the people of Ireland that austerity is not an option being considered at this time. The country could not stomach another period of austerity.

We must think outside the box. Coming from a business background, I know what it is like to do that when times are tough. I once ran one of those small businesses and employed upwards of 15 people at any one time. I know what it is like to ensure that all staff are paid every week and all suppliers are paid on time. Believe me - when running one's own business, one needs to think outside the box on occasion.

I will conclude by asking the Government to consider all stimulus measures when supporting our economy and not to forget that the majority of workers in the country are employed by SMEs. It is those businesses that need our support.

I wish the Tánaiste the best in his new role and I look forward to his replies.

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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There were some questions. Does the Tánaiste wish to respond to them?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Just a brief response. I thank the Deputy for his contribution and his support for the Revised Estimates. He made a point that I agree with absolutely, namely, that what is being done today is not enough. He is right. These are Revised Estimates to allow us to pay for what has already been announced, but we will make further announcements as part of the July stimulus package. That will require a further Supplementary Estimate from the House for us to provide additional grants, supports and loan guarantees to business. We will revert to the House on that matter in a few weeks.

Regarding austerity, I have been in a Government during boom and bust and have been around for both austerity and times in which we were able to provide record levels of spending.

I know, and I hope the House knows, that austerity is never a policy choice. It is what is done when one has no choice because one either loses the confidence of the markets or of the European institutions. This country ten or 12 years ago lost the confidence of both the money markets and the European Central Bank. That is why the country at the time, and I was not in government at the time, ended up in a bailout and ended up in austerity. We are pursuing the right course now by increasing spending and by stimulating the economy. It is definitely the right thing to do, but that is only sustainable for as long as we maintain the confidence of the European institutions and the money markets. That is why we need to make sure we do not go too far, that we have a deficit that is in the mid range of European countries and that we do not become the country with the highest deficit and highest debt. That is where one starts to lose the confidence of the markets and that is where things go wrong again. They are really the parameters we must be aware of over the next couple of years.

2:10 pm

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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Thank you, Tánaiste. We move to the Rural Independent Group. Deputy Michael Healy-Rae is sharing time with Deputies Nolan, McGrath and Danny Healy-Rae.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I believe Deputy Mattie McGrath is not attending.

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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Very well.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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Do we have three minutes each?

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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The Deputies will have three and a half minutes each.

Photo of Michael Healy-RaeMichael Healy-Rae (Kerry, Independent)
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I am glad to speak on this important issue of Revised Estimates. I will say first that I wish the Tánaiste every good luck and success in his new role.

It is important, as the Tánaiste has rightly pointed out, that we retain and continue to have the confidence of the markets and that we have access to what I would call "affordable money", because money needs to be pumped into the economy to try to get us over the crisis. Billions of euro have been wiped off our businesses' turnover, particularly if one looks at the tourism and hospitality sectors. They have been impacted. One might think the constituency I represent is bulletproof and that businesses in places like Killarney town are bulletproof and cannot be hurt or knocked down, but, unfortunately, they can. We have see that happen during the recent lockdown. I know personally that many of these businesses, even in a big place like Killarney, the capital of tourism in the world, will struggle to get back up and running. I wish each and every one of them well, all around County Kerry and throughout the country. I wish everybody who is opening their doors for the first time and everybody who will do so over the coming days and weeks nothing but success. It will be a struggle. I know it myself as a very small employer and as an operator of small businesses over many years. I know how difficult it is to pay people on a Friday evening.

I have, for instance, been in discussions with our vintners association and our hoteliers federation in Kerry over the last number of weeks and particularly the last number of days. A reduction in VAT is urgently required. It is important to bring our VAT rate down and that VAT be reduced on alcohol. Of course, responsible drinking is terribly important, but we must get the message out there now that there is nothing wrong with wanting to go out and visit one's local pub. There is nothing wrong with having a sociable drink with family, friends or neighbours and with people going out in the way they did in the past. To try and get that up and going again is important for local employment.

It is important that our banks work together and in conjunction with their customers. In particular, I want to say to people in AIB and Bank of Ireland to treat their customers and people who have mortgages with respect. I know of so many couples, young boys and young girls, who are being told that perhaps because one of them is not going back into employment until July or August, they cannot draw down their mortgage until both are back in employment and even have a number of weeks' payments put behind them. It is important that the banks understand they have to work with those people.

I want to ensure that the Government will back our small businesses in every way possible. It is so important, because these are the people who are going to create employment in the future and get our economy back up on its feet. I represented the people in the Ring of Kerry gladly for many years in Kerry County Council before being elected to the Dáil, and we have many small businesses there. I will support each and every one of them and I want the Government to support them, not through grants but through loans.

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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I call Deputy Nolan.

Photo of Carol NolanCarol Nolan (Laois-Offally, Independent)
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Go raibh maith agat, a Chathaoirligh. I wish all of the businesses which opened their doors this week the very best of luck. No doubt they will face many challenges, but I am hopeful this new Government will step up to the mark and realise how important our businesses are in terms of driving the local and national economies.

I also point out that the pandemic, and we continue to see the effects of it every day on our lives, brought home how bleak our towns and villages would have been without these business. They are essential, and it is only at times like this one sees how important our businesses really are. They need to be valued and given every support possible. Those are my opening remarks.

The Tánaiste is clearly aware there is a significant need for a substantial series of measures to provide stimulus to the SME sector, and indeed almost every other sector in our society. At the height of this pandemic, more than 54,000 employers had registered with Revenue for the wage subsidy scheme with more than 500,000 people receiving the payment under this scheme. The total cost was approximately €936 million and this points to the scale of the challenge we face. I note that the EU is willing to offer us access to recovery funds of approximately €2 billion in addition to other loans to stimulate business and enterprise. I welcome that, but the stark and alarming news is that Ireland's contribution repayments to the EU recovery package from 2028 to 2058 amounts to an unbelievable €18.7 billion, according to the European Commission. This will make Ireland the second highest net contributor in the EU after Luxemburg. Clearly, this must have some impact on long-term planning. It also adds significantly to our debts, which in turn decreases our capacity to borrow and create jobs in the real economy.

I welcomed the Tánaiste's predecessor's plan to create a €180 million sustaining enterprise fund for small businesses. This fund will provide between 25,000 and 50,000 short-term funding injections to eligible small companies to strengthen their ability to return to growth. Again, the problem is that many businesses cannot take up these schemes and grants, however good they may be, because the criteria is too restrictive. I have spoken to many businesses and because they do not employ the numbers to qualify for the supports they cannot get the supports. That is wrong and it needs to be looked at. We need to support as many businesses as possible and make sure that nobody is left out.

Will the Tánaiste commit to reviewing the issue in terms of businesses being locked out of schemes and grants with a specific view to increasing participation?

I also want to outline here today the serious problem with insurance companies. Many businesses closed their doors in good faith and are being left high and dry by insurance companies. Will the Tánaiste please engage with the insurance companies and with the Central Bank to put an onus on the insurance companies to play their rightful part in supporting our businesses?

Photo of Alan FarrellAlan Farrell (Dublin Fingal, Fine Gael)
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I call Deputy Danny Healy-Rae.

Photo of Danny Healy-RaeDanny Healy-Rae (Kerry, Independent)
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I too will be voting for the measures later today. I am only sorry there are not a lot more, because people out there need more help and more funding.

I am hopeful the July stimulus package will include such things as a positive reduction in rates or a waiver where people have accounts showing they did not make any money at all. A suspension is out of order because that is only kicking the can further down the road. A waiver or a reduction is the proper way. Small and medium businesses will have to get grants and interest-free loans. I was glad that some businesses in Killarney and around the Ring of Kerry started to reopen yesterday and today.

I look forward to more of them doing so in the coming days and weeks ahead. As Deputy Michael Healy-Rae has already said, when we see nothing happening in places such as Killarney, Castleisland, Dingle, Cahersiveen, the Ring of Kerry, Sneem and Kenmare it will take a massive effort to get them up and running again and they will need every help and assistance they can get.

The temporary wage subsidy and the pandemic payment are being used by AIB and other banks to deprive couples of the mortgages for which they have worked so hard to put a roof over their heads. We also hear these banks state they will disallow commission payments or overtime payments. I call on the Government, the new Taoiseach and the Minister for Finance to deal with these fellows. We bailed them out when they were in trouble.

I hope there will be funding for the seasonal workers, bus drivers and hotel workers who did not get the pandemic payment and were left behind. Those aged over 66 who employed people were also left behind. This was wrong and I ask the Tánaiste to address it in the July stimulus package. These people were left behind. Their stamps have run out and they will not qualify for jobseeker's payments or any other benefits. This has to be addressed in the July stimulus package because they have been desperately wronged and they have been left behind. I appeal to the Tánaiste to do this.

2:20 pm

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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I have a number of questions and I ask the Tánaiste to answer them. If there is time I will come back in again. Everybody is speaking about businesses and the supports they need. It is true that businesses need support. It is interesting that when things were going well businesses were telling us that the State did not need to do anything for them and that the State should have no involvement in business, but when businesses get into trouble the first thing they look for is the State to bail them out and make sure they can stay in business. This is very interesting and something we need to keep in mind.

Earlier, the Tánaiste said he is proposing radical and far-reaching supports for business through this period, and rightly so, but the entire debate today has been about the benefits that businesses bring to our community and society. There is a quid pro quofor this. If we support and save businesses by putting in place support measures, and I am thinking in particular about the temporary wage subsidy, businesses should pay this back and support us at the same time. By this I mean they should ensure workers are maintained and paid for the work they do. At present, many businesses throughout the country, particularly in Donegal, are looking for a 10% wage deduction from the workers they are keeping on. These are the workers we are paying the businesses to keep on through the temporary wage subsidy scheme. This is wrong and we should tell businesses that if we are bailing them out they have to play their part and ensure their workers are kept on for as long as possible, which means not cutting their wages. They are using the crisis we are in at present to increase their profitability. This is what they are doing.

There is no doubt many businesses face difficulties at present, and there is an uncertain future, but we are facilitating businesses so they can maintain employment and get back to work. If, six months or a year down the road, they can show they are not viable then they can look at reducing numbers, in partnership with their workers because they know exactly whether a business can survive. It is very important that we tie everything we do into making sure businesses treat their workers properly. A sustainable business is a business that treats its workers properly. The fact is that most small businesses would not be viable without workers. Workers make a business work.

Does the Tánaiste think it is reasonable that businesses should be looking to cut wages at this time for the workers they are keeping on, particularly those workers we support through the wage subsidy scheme? Does the Tánaiste think the July scheme should be made conditional on businesses supporting their workers? This is not about small employers. It is big businesses that are doing this. We hear all about Aer Lingus and Ryanair trying to do it. Big hotel businesses and big businesses in rural Ireland are all doing this. They are all looking to cut wages while benefiting from the State's supports. Does the Tánaiste feel it is reasonable that businesses should be reducing wages while benefiting from the wage subsidy scheme and what will he do about it?

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I do not like to see any business cutting people's pay and I know the Deputy does not either and nor does anyone in the House. The reason a company qualifies for the wage subsidy scheme is because it cannot afford to pay the wages. While most companies are topping up the wage subsidy scheme, some cannot even afford to do so. This is the situation we are in. We have had an enormous shock to our economy and the reason these companies, many of which used to be very successful and profitable, qualify at all for the wage subsidy scheme is because they cannot afford to pay the wages anymore. Were it not for the wage subsidy scheme, we would not be speaking about pay cuts for the workers about whom the Deputy has spoken because they would probably be redundant already.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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As far as the Government is concerned, it is reasonable that employers should be making these demands. These are employers who have already reduced their workforce and now they are reducing the income of the remaining workers. These workers spend money in the local community and support businesses throughout the towns and villages we are speaking about. Reducing their incomes will make them unable to support other businesses. I do not believe that any business should be reducing its wages at this stage - it is too early to say. There could be an argument in six months or a year that they are unsustainable and cannot continue, but they do not know for certain at present. Many businesses, particularly in the hospitality sector, will be looking at an increase in wedding functions next year, which will increase their income and revenue. They will be getting the business they have lost out on this year. I do not believe it is reasonable that companies should reduce wages at this point in time. As far as I know, it is not legal for them to reduce wages unilaterally. The companies have a responsibility to their workers. I do not believe it is legal for them to do this. What should be done is that the supports we are putting in place for those businesses should be made contingent on them maintaining the workforce at the income levels they had. If the business is not viable, they can make changes but many businesses are doing this now to profiteer from the situation and benefit from the largesse of the State. It is right that we are subsidising them but now we are subsidising them to cut wages and that is wrong.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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The Deputy and I appreciate that every business is different. In speaking about them in the way we are, we are very much generalising. I would not use the term "reasonable". I would say it is regrettable if any company has to reduce the pay of staff. It should only do so if it genuinely has to and we both agree on that. Certainly it is preferable to see reductions in pay rather than having people laid off altogether and I believe the Deputy would agree with this also. Earlier, the Deputy suggested that companies should wait until they become unviable to do this. I do not think this is the right approach because if they wait until they are unviable they may end up having to lay off all of their staff rather than seeking reductions in pay, which could be restored next year if they get through this difficult period.

I am advised by my officials that of the companies receiving the wage subsidy scheme, 88% of them are topping up the wages of their employees. That is an important fact to get on the record. Back in March that figure was only 58%. These are companies that are in serious trouble and have had a big hit to their revenues. They are taking the wage subsidy scheme, which is why they qualify for it, and close to 90% of them are topping up the money being paid out under the wage subsidy scheme.

2:30 pm

Photo of John LahartJohn Lahart (Dublin South West, Fianna Fail)
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I want to respond to some of the previous comments because this is a varied debate with contributions coming from either end of the spectrum in relation to businesses and business people. I hear much judgment in the Chamber on how businesses operate. I am familiar with businesses in this city for which it is, and has been, costing them €80,000 to €100,000 per month to remain shut. I do not know of many business people who set out to abuse their staff or to take advantage of the situation we are in to save themselves having to spend money on their staff's wages in the way that has been described. Every person who goes into business does so out of good motives. There are bad apples in every profession but the predominant feeling among businesses in Ireland is that they want to survive and to be given a way to survive.

I congratulate the Tánaiste on his new role and wish him the best. It is an onerous position and a responsibility that is hugely burdensome and will remain so for the foreseeable future. It is dawning on the business sector and people at large that this pandemic is here in some shape or form for the foreseeable future. We can only pray for a vaccine.

I echo the comments made by some of my colleagues about the reopening of some businesses yesterday. It was good to see a queue on my way in here this morning outside one of the local barbershops. It has been a struggle for business people in recent months. In other countries and jurisdictions we have seen that when furlough payments ceased, as they have in some countries and states that are ahead of us, some businesses did not reopen because they were unable to do so. I hope we do not face that here but it seems to be the reality in some other countries.

I want to throw out some ideas for exploration to the Tánaiste in his capacity as Minister for Enterprise, Trade and Employment. There are some suggestions the Tánaiste could look at with Dublin City Council. I had many dealings with Dublin local authorities in recent months in terms of the needs of businesses. Hospitality is one of the areas that faces great challenges. There is much scope in that area. I know from Dublin City Council that traders in the hospitality sector are pushing an open door with it in terms of facilitating street trade but we need to push that. As many structures as possible need to be put in place to facilitate our hospitality businesses in being able to operate and provide their services to the public. That is particularly true for outdoor trading because people feel safer outdoors. I know that when South Korea was reopening its economy after the first wave, one of the diktats the authorities were setting down aside from the usual hand washing and 2 m distancing was that people should eat fast. We must try to create as many open space environments as possible for people where they feel they can be safe. I saw some local pubs in my constituency do that last night where people feel they can stay, eat and socialise to a certain degree. The vast majority of people are responsible.

The Tánaiste might comment on what kind of planning has taken place, what we have learned and what structures we have in place to learn from other jurisdictions that required a further lockdown or require further lockdowns. Nobody can envisage a repeat of the mass lockdown we experienced here in late March. What are we learning from the experiences of other cities that have had to isolate or enforce localised lockdowns?

Internal tourism is significant and has been referred to by others. The importance of hospitality and event management will not be lost on the Tánaiste. We are sitting in a 2,000-seater auditorium. I searched it on Google last night just to see what the capacity of this place was and it accommodates 160 of us, using the proper and appropriate physical distancing measures. That is a catastrophic sign for the event and conference management sector, which is worth hundreds of millions of euro to the country and involves bringing people from outside of the jurisdiction in here. The immediate outlook for that area looks quite pessimistic. The Tánaiste might comment on that. I know from reading in the media that the Cabinet is to make some decisions on travel into the country but the fact that we can only fit 160 people into an auditorium that holds 2,000 captures the reality of the crisis that is facing what is a huge industry.

The Tánaiste might also comment on the food supply chain, which we have taken for granted. I am not seeking to raise alarm but I would like the Tánaiste to comment on it to see exactly where we are on that. The food supply chain has been incredibly solid and I thank the wholesalers, importers, retailers and everyone who stocked the shelves and who continues to stock the shelves. They are another section of the unsung heroes and I know the Tánaiste acknowledged that in his previous role as Taoiseach.

There has been an interesting McKinsey report analysing the impact of Covid-19 on businesses. It suggests that some small businesses may close because they are in industries such as accommodation, food services and educational services that are affected by changed customer behaviour. I do not know what we can do to help with that, especially considering the physical distancing and mandated operational restrictions that were in effect during the pandemic. Other small businesses, and the Tánaiste has alluded to this, may close because they were already at financial risk. If there is one lesson we can learn, and McKinsey points to this, it is that some retailers such as the local supermarkets and retail outlets thrived during the pandemic but then the rules insisted that some retailers closed, such as those providing clothing and homeware. The great paradox was that the businesses that were allowed to remain open began stocking these kind of products, which they had never sold before. The McKinsey report says that we embedded a behaviour by closing down some retail outlets and reversing that embedded behaviour and the pattern of not allowing the public to use those clothes and homeware shops has embedded a behaviour that will be difficult to reverse and we may need to look at that. The McKinsey report said that within retail, for example, three quarters of clothing stores reported a large negative impact on their businesses as of 23 May. This is not in Ireland but in a different economic context. However, only one third of food and beverage stores reported a large negative impact. The report makes the connection that food and beverage stores remained open but clothing and apparel stores were closed for the bulk of the period of Covid-19. In restoring people's confidence, it has gotten into the psyche of people that these are places one does not go to. We need to do something to regenerate public confidence in those stores. The report states:

This disparity probably reflects differences in which businesses were classified as essential and therefore allowed to continue operating. In other sectors, short-term lapses in demand may affect differences among subsectors.

In my constituency, I talked to South Dublin Chamber representatives this morning, and they said businesses need to be able to trade with the confidence that they can buy supplies and services and have the ability to pay. They made the key point - I know the Tánaiste will be aware of this, but it has to be reinforced and re-emphasised - that loans work for some companies, and the reduced rate loans that are available are very much appreciated in the business and commercial sector, but if a business has been closed for three months, another debt is not what it needs; likewise with deferred payments. The Tánaiste might comment on that. What South Dublin Chamber is saying is that some SMEs need cash injections that will allow them reopen with confidence, and that confidence will be repaid through VAT returns and PRSI contributions from employers and employees.

As for delays in payments, South Dublin Chamber acknowledges the huge contribution of the public sector in facilitating and processing the payments to the business sector during Covid but also that it should be remembered that many small businesses cannot pay themselves and other staff and that if there are delays in those payments, that has significant impacts. What it suggests is that this work could be prioritised in the allocation of resources, ensuring that waiting times for these payments are reduced.

The business continuity voucher of €2,500 was very welcome in south Dublin, and it would be good if it could be reinstated or if something similar could be brought in. The trading online voucher finishes today, according to South Dublin Chamber. It would be great to continue it. The LEOs offered mentoring for free. That was also appreciated. South Dublin Chamber is looking for those two schemes to be made available again. That would be good in our constituency.

Finally, just to give context, at this time of the year in south Dublin, there would normally be approximately 8,000 Spanish students. They would spend six weeks in the constituency, paying fees, making contributions of approximately €1,200 per student and then spending between €1,000 and €1,500 each. The host families, education, tuition fees, etc., amount to approximately €16 million. There are no Spanish students in Dublin now and this is having an impact on a micro area of the economy.

2:40 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I thank the Deputy for his contribution. Something he mentioned that I strongly identify and agree with is the extent to which our food supply chains proved to be very robust. I recall the earliest part of this crisis, during which one of the things we were worried about as a Government was supply chains and, in particular, food supply chains. They turned out to be really robust, and that is a credit to everyone involved. Whether in our ports or warehouses, logistics or haulage, everybody has managed to make sure that those supply chains remained robust and in place, and they deserve a lot of credit for that.

The sector that was first hit and hardest hit and will be longest hit, unfortunately, is the tourism, hospitality, events and accommodation sector. As the Deputy pointed out, here we are in this massive auditorium, with room for 2,000 people, but those people are not here, nor are they in our hotels, on our airplanes or coming through our airports. This sector will really struggle to recover and will need additional and special support to allow those businesses that can continue to adapt to do so. We also need to recognise, however, that some will not be able to do so.

Photo of Jennifer Murnane O'ConnorJennifer Murnane O'Connor (Carlow-Kilkenny, Fianna Fail)
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I congratulate the Tánaiste on his new role. First, can a timeframe be given as to when or if any guidelines that will be required to be put in place for those businesses in the hospitality industry that do not serve food will be issued? Will those businesses be given notice to implement such requirements as they prepare to reopen their businesses?

Second, I wish to ask the Tánaiste about redundancies. Currently, anyone who is to be made redundant cannot claim for the redundancy prior to 10 August. Is this to be extended, and can guidelines be made available to employees as to what their liability is in this regard? I understand that businesses that close cannot have their employees on wage subsidies prior to a redundancy claim. Can we get confirmation on this? It is so important, now that businesses are reopened, that we all shop local and support our businesses, particularly our smaller ones. It is also important that we all work together to make sure that all the small rural areas, such as in my home county of Carlow, including Tullow and Bagenalstown, survive this because it has had an effect on all of us. Perhaps the Tánaiste could come back to me on those two questions.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Regarding guidelines for pubs, nightclubs and other businesses that do not serve food, they will be allowed to reopen, all things going to plan, in phase 4, which is due to begin on 20 July. Usually we have the guidelines out a week or two before the start date of a new phase - I do not know for sure, but that is generally when one would expect to see them - to give people the opportunity to prepare.

On the issue of redundancies, that is a matter for the Minister, Deputy Humphreys, rather than me and my Department but, obviously, it impacts my Department. I do not have an answer to the Deputy's question but I will check it out and get back to her.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Tá sé deacair na Teachtaí a fheiceáil. Bogfaimid ar aghaidh chuig Sinn Féin agus Deputy Violet-Anne Wynne.

Violet Wynne (Clare, Sinn Fein)
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I am sharing time with Deputies Kerrane and Andrews, each of us taking five minutes.

I send my condolences to the family and friends of our comrade, Bobby Storey, who will be laid to rest today. Bobby epitomised republicanism in Ireland and will be dearly missed. I have no doubt but that he would be happy in the knowledge of the strides our party has taken in recent years to get to where we are.

Looking at these figures, I would like to ensure certainties for the small and medium-sized business sector in particular. In my constituency of Clare the past couple of months have been particularly tough on the region. We have seen the reduction in the number of flights into Shannon and the lack of tourism has placed many jobs in the Clare region in a precarious position. West Clare, in particular, should be bustling with the tourism season but it instead faces concern and worry about the future of approximately 6,500 jobs. I have been contacted by many business owners in the region who depend mainly on the summer tourism industry. They have openly expressed concerns about the lack of support for their business in accessing the TWSS. The problem is that the scheme calculates an employee's earnings only over the months of January and February of this year. The issue is that many of these businesses are mainly seasonal, and employees would have been either temporarily laid off or on reduced working weeks at that time. This matter has also been raised by my colleague, Deputy Pa Daly. This issue within the wage subsidy scheme needs to be addressed and amended in order that as many workers who can return to work do so; otherwise, small and medium-sized businesses will be the most affected. Will the Tánaiste address this issue within the TWSS?

I also refer to the recent decision by Shannon Group to close some sites from the end of August. This decision is wrong, premature and needs to be revised. The Chief Medical Officer is calling on the Irish people to have staycations, and that is for two simple reasons: first, to stop the spread of Covid-19 and, second, to kick-start the economy. I fully agree with the CMO's suggestion and believe that the decision by Shannon Group contradicts the sensible, smart suggestion by him. What measures can the Tánaiste's Department implement to incentivise or support Shannon Group sites in order that they can remain open after August, and will he intervene in the matter?

I welcome the recent announcement of funding to the tune of €6.1 million for Shannon Airport but I would like confirmation on this. Can the Tánaiste reaffirm that this money is safe? The recent announcement by Aer Lingus and United Airlines to withdraw services from Shannon has only added more threats to the future of the airport.

Will the Government ensure ongoing funding for Shannon Airport will be made available should it be required? What supports does the Tánaiste's Department intend to put in place to ensure the tourism sector in Clare can weather this storm and come out on the other side? What supports will be put in place to ensure rural Ireland, and the west in particular, can bounce back post-Covid-19?

2:50 pm

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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I thank the Deputy. The Tánaiste has one minute, if he likes.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I thank the Acting Cathaoirleach.

Violet Wynne (Clare, Sinn Fein)
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Sorry-----

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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There is one minute left so I thought the Deputy would like her questions answered. I will move on if she likes.

Violet Wynne (Clare, Sinn Fein)
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Yes, no problem.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I will be very quick. The €6 million for Shannon Airport was approved by Cabinet last week. It is mainly for infrastructure works. I think the airport will need additional state aid and support in the coming months because of the unprecedented situation we are in. I will study the potential anomalies in the wage subsidy scheme.

I really regret that Shannon Heritage has chosen to close some of those sites. I have been in touch with Deputy Carey about this. What it has said to us is that it is largely dependent on North American tourists to keep those sites viable. In many ways that is the flip side of the staycation. By us staycationing in Ireland, flights are not going to and from western Europe and America. Tourists from Europe, Britain and America are not coming here. That is going to have an impact, unfortunately.

Photo of Chris AndrewsChris Andrews (Dublin Bay South, Sinn Fein)
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Being here is a bit like being at a cinema and at a poor movie, unfortunately. I would like to congratulate the Tánaiste on his appointment. It is a huge honour and a huge responsibility. I wish him success in his new role and his new Department. Trying to get the balance right between saving lives and opening up the economy will be very difficult and challenging. It is in all of our interests that he succeeds.

I heard John Moran on "Morning Ireland" today. He said that €6.5 billion in funding for SMEs was announced but only €1 billion has been drawn down. There is a big gap between the ability to make announcements and the ability to deliver. This is something the Minister's Department will need to address as a matter of urgency for the sake of all the SMEs in the country. Grants rather than loans need to be given to SMEs. There has been some discussion around that issue. Giving loans to SMEs at this point is like throwing a block of cement at a drowning man. They are on their knees, many will go out of business and they do not need extra weight. They need less weight and they need support.

I will give a specific example of the gap between the announcements of aid and the actual delivery. In early May there was an announcement of a rates waiver. I have been contacted by many small businesses in Dublin Bay South, which are all in the same boat. They have a serious shortage of cash flow, which is crucial to any small business. They have contacted Dublin City Council and have received replies similar to the following:

As you know, there was a Government announcement on 2 May 2020 of a potential three-month waiver of rates for certain businesses but unfortunately we have heard no more to date so the full 2020 charge is still on your account. You have two choices for the restart of your deductions. You can either start paying the current balance of the account from July and if you are entitled to a waiver we can reduce deductions for the remainder of the year, or we can temporarily ignore three-twelfths of the charge and start taking a lower amount from July. However, if you are not entitled to a waiver, that means that deductions will increase for the remainder of the year. Please let me know what you would prefer to do.

The reply mentioned the restart grant, which was mentioned previously. It stated:

Just an update in relation to the restart grant. I believe they started processing the applications last week with the first payments to be made this week. [That has not yet happened.] If you have not already applied for this grant, it may be worth your while to apply if you are eligible.

SMEs have been waiting for the rates waiver scheme for two months.Many businesses are on their knees, as the Tánaiste knows. Many may open and this funding will buy them some extra time and keep them in the game. Without this funding and these grants, they will have to close. It is that tight for many businesses which are balancing on a knife edge.

I appreciate Deputy Varadkar is new to the post of Minister for Enterprise, Trade and Employment but he was Taoiseach of the last Government. Can he say why, two months on, the Government has not informed Dublin City Council of the three-month rates waiver for SMEs? Why has the largest council in the country not been updated on a scheme announced two months ago? Will he confirm that there will be no rowing back on the waiver scheme and that SMEs will receive it? I would like a brief reply.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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We informed the world that rates were being waived for companies that had to close for that three-month period. We may have to consider extending that waiver. I do not know why Dublin City Council has not been formally informed but I will check that out.

Regarding SMEs, the plan is a mix of grants and loans. Grants are available, such as the restart grant, which the Deputy mentioned, but I think we will need more grants. The biggest support for employers big and small has been the wage subsidy scheme and €2 billion has already been paid out to employers through that, which is very significant.

Claire Kerrane (Roscommon-Galway, Sinn Fein)
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No matter what this Government goes on to do, it will always be remembered as the Government that did not see fit, for the first time in the history of the State, to appoint a senior Minister from the western region, from Donegal right down to Limerick. As somebody from the west, who lives in the west and would live in nowhere other than the west, I think this has been a huge mistake. In the days to come, the junior Ministers will be appointed and I am sure many of them will be from the western region. There will be an attempt to overcompensate in this regard. However, the damage has been done, and every Government is remembered for something.

I raise the issue of future of the Aptar factory in Ballinasloe. Last week, the company announced that it would review its future in Ballinasloe. This has, of course, caused great uncertainty for workers, their families and the community. This is their livelihood. I emailed the Tánaiste on this matter today, having emailed the previous Minister, Deputy Humphreys. Where there is a possibility these jobs can be saved, we need to get the IDA, Enterprise Ireland and officials from the Tánaiste's Department around the table. If there are supports there that Aptar can avail of to save these jobs, they need to be availed of.

I welcome the restart grants but I want to raise a number of concerns in relation to them. The first relates to the delays in certain local authorities. I have heard from a number of companies which have applied for the restart grant but have still not received it. I ask that the Department check in with local authorities and see where they are up to in relation to these grants.

The second issue concerns the sole traders which do not pay rates. They are not eligible for restart grants. I wrote to the former Minister, Deputy Humphreys, about this. Given that this is a small number in the grand scheme of things, I ask that this funding be extended to assist those sole traders trying to get back on their feet following the Covid emergency that put them out of business.

I welcome the trading online voucher under the local enterprise office but there are a number of delays there and a number of companies have contacted me to say they have not been able to get the funding from the local enterprise office. I welcome the fact restaurants, which were exempt at the start, are no longer exempt.

I appreciate this is more for the Minister for Finance, but I want to mention another issue briefly. A number of people are in receipt of the wage subsidy scheme who have not lost their income, not lost their job and not lost any hours at work. They had approval for mortgages and that approval has been taken off the table, albeit temporarily. These people's lives are now on hold. I have been contacted by one couple who had emigrated a while ago to Australia, who came home, who have a young family and who want to build their home. They had the approval and have had no change in their income but now that mortgage approval is on hold.

Finally, while the Cabinet will not be regionally balanced, job creation and investment must be balanced across our island. Towns in my constituency, from Ballinasloe to Ballaghaderreen to Strokestown, need investment and jobs. There are many people who want to live in the west of Ireland and many who would live nowhere else. We need to support those people and their families and make sure the west of Ireland is a viable place in which to live and work.

3:00 pm

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I have a very strong view that every Minister should see himself or herself as having a national remit. As a Dublin-based politician, I am very aware of my responsibility to be a national Minister for Enterprise, Trade and Employment, and that is exactly what I will be. It is what I tried to do, as best as I could, as Taoiseach. When I was appointing my Cabinet three years ago, we had two senior members from the west. However, when there are three parties involved and, perhaps, not co-ordinating things as well as they should, it turns up unusual results. We will co-ordinate better when it comes to the appointment of Ministers of State in the next couple of days. It is very unusual for there not to be any senior Minister from Connacht, or west of the Shannon. I have no doubt that will be rectified at the reshuffle, if not before. In the meantime, the Ministers of State, Deputies Naughton and Calleary, although not senior Ministers, are full members of the Cabinet. People argue that those Ministers of State do not have a vote, but there has not been a vote at Cabinet since the 1970s or early 1980s. Their weight and voice will be equal to those of any other member of the Cabinet. I want people to know that.

In regard to Aptar, I am informed that there will be job losses at its plant in Ballinasloe, which is very bad news. I understand staff were informed of that today and while no final decision has been made, there will be redundancies this year. Our primary concern, of course, is for the workers and families affected. Every State support will be made available to those workers to help them to transition and find new employment opportunities should that assistance be needed. The Department has agreed a job loss response protocol with the Department of Employment Affairs and Social Protection and the Department of Education and Skills. The protocol, which will be led by the Department of Employment Affairs and Social Protection, puts in place all the efforts designed to assist workers. This includes making sure they know about their welfare entitlements, offering job search assistance and assessing upskilling needs and opportunities. IDA Ireland is in close contact with the company in question and has offered support to try to avert any potential job losses if that is at all possible.

Photo of Mick BarryMick Barry (Cork North Central, Solidarity)
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The July stimulus will be a multibillion euro package of supports to small and medium-sized enterprises impacted by Covid-19. Today's Revised Estimate is a smaller affair entirely but, to an extent, this debate is rehearsing certain lines of argument on these issues. In that sense, the debate, important in itself, has a greater or wider significance. A package of supports for SMEs is one thing but such a package without strong terms and conditions is rather different. For instance, should a company which refuses to recognise a trade union chosen by its workers to represent them receive grant aid without conditions, or should that grant aid be made conditional on the company recognising the union in question? I would say the latter. To take another example, Aer Lingus is a profitable company that has made profits in the ballpark of €1 billion in the past decade. It has been assisted with its wage bill to the tune of more than €18 million by the State in recent months, but now it wants to implement a programme of 500 redundancies. The State aid in question, namely, the temporary wage subsidy scheme, is not covered, as I understand it, from this particular Estimate, but the basic principle applies, which is the question of whether a company should receive State aid when it is carrying out redundancies on a massive scale. I would say that it should not.

The questions I have raised in respect of union recognition and redundancies might equally be raised in regard to other issues. I am not talking about any particular companies but in a general sense. Such issues would include tax avoidance, payment of large bonuses to managers, flouting of environmental regulations and other forms of anti-social behaviour. It is fair to say that State aid without strings attached is, broadly speaking, the Fine Gael approach. It has been defended publicly by the Minister for Finance, Deputy Donohoe, and I expect it is the approach that will be adopted by the Tánaiste in the preparation of the July stimulus package. I can only assume that Fianna Fáil and the Green Party are now signed up to the same approach. If not, they should say so and say it soon. It is not an approach that I support. My colleague, Deputy Paul Murphy, indicated earlier that he had been intending to call a vote on these Estimates but will not do so on the basis of assurances from the Tánaiste that the moneys we are discussing today will overwhelmingly be directed at small businesses. When it comes to larger businesses and the July stimulus package, it may be a different matter. I am putting down a marker in that regard.

I would also like to say that I would, in some cases, support nationalisation of businesses and injection of cash rather than providing State aid to private owners. This should apply in the case of big businesses and larger medium-sized enterprises when they are axing jobs. Aer Lingus is an example of a company that should be nationalised, or renationalised as is the case in that instance. Another issue of concern is what is happening with Debenhams, where 2,000 jobs were recently axed. The Tánaiste will be aware that three of the 11 stores closed in the Republic of Ireland, namely, at Mahon Point in Cork city, Blanchardstown in west Dublin and Newbridge in County Kildare, were profitable stores. Moreover, several of the other stores could be returned overnight to profitability if rents were cut to a reasonable level. One such example is the Debenhams store on St. Patrick's Street in Cork which was paying €3.25 million per annum to its landlord. The case for nationalising these Debenhams stores, renegotiating rents and saving jobs is very strong. I will be returning to this issue in the debate surrounding the July stimulus package.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The situation at Debenhams has demonstrated yet again that the introduction of legislation providing for a hierarchy of creditors in the case of liquidation needs to be prioritised. We saw the same thing with Clerys, at which time such legislation was put forward in the Dáil. It is not acceptable that this situation is repeating itself. In the case of Debenhams, 2,000 staff, many of whom worked loyally for the company for two or three decades, are being dumped on the scrapheap. The company has used a series of what are essentially shell companies to siphon off its assets so that there is nothing left for the workers in the end. All that is left to those workers is the leverage they have over the assets in the stores, which, quite rightly in my opinion, they are saying they will not allow to leave the premises. It is not acceptable that workers should be treated like this by being put to the bottom of the queue as part of a cynical liquidation that was clearly pre-planned and orchestrated by Debenhams, with the Covid crisis giving the company cover to execute the plan. The evidence that it was pre-planned is that the company set up these subsidiaries in order to siphon off the assets. This is a company that continues to make profits through online trading and continues to operate in the UK and Ireland. Tackling that type of situation is the first thing the Tánaiste should do.

I reiterate the call made earlier by Deputy Bríd Smith and others for urgency of action in appealing the court decision on sectoral employment orders. It is completely unacceptable that the Dáil's decision to protect minimum standards of pay and conditions for workers should be struck down, with a possible undermining of conditions, often for very vulnerable workers among the hundreds of thousands of workers affected.

On the issue of supports, as colleagues from our group have already said, we are very much in favour of giving a lifeline to small enterprises that need such support.

I reiterate that the banks' treatment of many of these small businesses is unacceptable, particularly for the banks in which we have a stake. We should tell those banks to lay off and give holidays on loans and so on, and we should do something similar with insurance companies, as well as whatever support measures we are providing. It is critically important that we weed out the companies that are taking advantage of this situation or that are not taking up the schemes for other cynical reasons. For example, instead of taking up the wage subsidy scheme to keep their crew employed during the crisis, some film producers, which get a lot of money through the section 481 tax relief, terminated their employment. It is incredible that, when Government policy is to maintain the relationship between employer and worker, film producers in receipt of public money make a cynical decision to sack everybody rather than take up the wage subsidy scheme. The same applies to companies that do not pay tax in this country or are using the crisis as an excuse to cut pay. For example, Newspread delivers for Independent News and Media and its staff were working as essential front-line workers throughout the crisis but it has now cut the pay of its employees by 5%. That should not be allowed.

3:10 pm

Verona Murphy (Wexford, Fine Gael)
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I congratulate the Tánaiste. It is all in a day's work to go from being Taoiseach to Tánaiste so we will get on with the business of the day. The pandemic has seen many SMEs close their doors for four months now. We hear daily about businesses across the country which have existed for decades, including family businesses, that are not reopening. Many of these businesses have struggled on since the last recession and closure as a result of the pandemic has simply been the final nail in the coffin for them. They have continued to incur fixed costs and overheads such as insurance, electricity, professional fees and many other invisible costs that most SMEs do not see until they do their end of year accounts. In regions and constituencies such as Wexford, SMEs are the main employers and so it is imperative that they have enough cash flow to reopen.

Many SMEs will not be able to meet the cash flow criteria set down by commercial banks to qualify for cash flow facilities. In this regard, the Government must step in and provide a sufficient restart grant radical and far-reaching enough, as the Tánaiste put it earlier, to re-grease the wheels for SMEs. In recent weeks insolvency experts have stated that the restart grant needs to be ten times what is proposed. The restart grant must be reassessed and must be based on the number of people employed, rather than the rates paid last year. Rates are an overhead but wages are a variable cost. We need to get people back to work. If businesses are expected to open their doors, a fixed-rate expense grant based on last year's rates will be of little use to many of them. While we acknowledge the helpfulness of the wage subsidy scheme, many businesses such as pubs, restaurants, garages, hotels and crèches simply do not have the cash flow to reopen while paying out the contribution to wages. That is clear today in the childcare sector, where many crèches have not reopened. Grants should be provided to SMEs based on the number of people they employ. It is better that people are in productive employment rather than in receipt of social welfare because the State will pay either way. In simple terms, businesses need cash to open but a mediocre restart grant does not cut the mustard. In most cases, thousands of euro will have been spent providing equipment to comply with Government requirements such as social distancing, providing hand sanitiser, Perspex screens, signage, PPE gear and so on. There is no one-size-fits-all business for the variants of the SME sector.

The eligibility requirements of the restart grant are capped at a turnover of €5 million. If one is in the car trade or commercial truck sales, that cap is exceeded readily but turnover is not the same as profit and eligibility for supports must be reviewed. If someone is in the retail trade such as ladies' fashion and has a clothes shop which closed in March, that person will have lost two seasons of sales in the last 16 weeks but is still carrying the stock. To stay open, he or she must pay for the stock purchased for the autumn and possibly even the winter season. Cash flow is king, which is a very frightening prospect for many businesses. Their decision to reopen is being based on the current supports available and that is not encouraging. Many such retailers are out of cash flow. Cash flow can only be generated through sales and many traders that have been established for years need much greater supports than are available through the restart grant. Many have credit terms of three months. They also have legal obligations, not just to creditors but to staff as well. To such a business, a restart grant based on rate payments is insignificant against the cost of carrying seasonal stock. In the fashion retail sector, seasons are to fashion what food is to Tesco and each season has a sell-by date. Hotels and restaurants do not need large numbers of staff returning if they do not have the footfall and the reopening of their premises is eating up their cash flow far in excess of the grant available. Businesses need supports that will assist them in weathering the storm until a calm arrives.

The talk of a possible resurgence of Covid-19 to crisis level, resulting in another lockdown, does not instil confidence and if people are not returning to work, there will be no consumer confidence to spend. The Government must ensure we do not aid a self-fulfilled prophecy of a recession. Businesses do not need large numbers of people to work if they do not have customers to serve. The associated cost for them to open will be a fraction of what their wage bill will be and the restart grant needs to be at least ten times what it is if we are to ensure people are to stay in the habit of work. We must not create a welfare state. We must assist businesses and ensure the supports are sufficient for their needs. The Government needs to make provision for that now. We do not need to wait around. Like all successful strategies, planning is key and we need to plan now for a revised restart grant that will be delivered through the July stimulus. The temporary wage subsidy scheme must continue, possibly until this time next year, if businesses continue to struggle. Certainty must be given to get momentum going and I implore the Tánaiste to assist businesses, not social welfare queues.

My colleague, Deputy Denis Naughten, who is unavoidably detained today, requested that I ask the Tánaiste about the steps that are now being taken to secure jobs at Aptar in Ballinasloe. I heard the Tánaiste speak about this earlier, but Deputy Naughten is requesting that the Tánaiste consider bringing all State agencies and the two local authorities in Galway and Roscommon together to implement a co-ordinated strategy for the town and the surrounding communities. I understand that Deputy Naughten has written to the Tánaiste directly and he might furnish him with a response.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I know Deputy Naughten has a particular interest in the matter of Aptar and he has been in touch with my office directly, as has Senator Dolan. We do not yet know how many job losses there will be but IDA Ireland and my office will get involved to see what we might be able to do to protect as many of those jobs as we can and see what alternatives can be found, if at all possible.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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We will move on to the Rural Independent Group. Members have two minutes each, beginning with Deputy Mattie McGrath.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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Tá mé liom féin. I am on my own.

Photo of Catherine ConnollyCatherine Connolly (Galway West, Independent)
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Tá ocht nóiméad aige, mar sin.

Photo of Mattie McGrathMattie McGrath (Tipperary, Independent)
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Beidh na Teachtaí eile isteach ar ball. I too congratulate the Tánaiste and wish him all the best in his new position. We need a dynamic Department for Enterprise, Trade and Employment. I am supporting the fund today but it obviously will not be enough because it is minuscule in comparison with the health budget. It must cover everything, including small self-employed coach owners and so on. Some of the ones that were contracted to Bus Éireann have been supported by 50% funding but the others did not get a penny. Many people over 66 years of age are self-employed, such as shopkeepers, bus owners and funeral undertakers. There is a wide range. I welcome the fact that na gruagairí and the barbers were back open yesterday and the queues outside William Walsh Barbers in Irishtown, Clonmel and many others was amazing. That is an art and it is a cultural event as well. The social distancing was impeccable and the people taking bookings and everything else was great.

All the way along, business is what makes us tick. Take any business. I was just thinking about this when I walked in and saw how few people were here in the spacious surroundings and the ambience.

I said last week that we should not be here unless the full Dáil was sitting. If a business had an A option or an option of a place like this, it would not be considered because the business could not afford it. We cut our cloth according to measure. That is what every business must do. Many self-employed people and their staff, where some have them, have a great relationship. It is not like what happened in Debenhams, or what happened with The Nationalistin Clonmel and the Tipperary Star where conglomerates took over, sacked many staff and then got Covid payments for the rest of them. What is going on in big business is disgusting. It is now taking over everything. Many small businessmen or women started with a dream after school. Many of them did not even go to college. Some of them have been working for up to 60 years. A woman from Roscrea was in contact with me several times. She lost her husband early in the year and was devastated that she could not open her shop. It is her life to open the shop gach maidin and to meet and serve the customers. There is an interaction and a loyalty. I should declare I am a self-employed business person, and the loyalty of all our customers is valued and respected. It is a two-way street.

There is great difficulty with tying the grants to rates. The council is doing its best but it told me only last week that it had not received a penny from the Government to match the funding it wishes to give where it is giving the holiday or break. Many people in the towns of Tipperary ranging from Carrick-on-Suir to Clonmel, Cahir, Tipperary town, Cashel, Nenagh, Templemore and Roscrea are getting bills for the second moiety of rates in July. Some of the rates were doubled or trebled since last year under the review. They do not have a hope. At one time one got something for paying rates. It might be a wheelbarrow of salt if there was frost and ice or the refuse was collected. One got different services from the local authority, but now one gets zilch. We need to help them.

There are huge areas involved in this. The arts industry is on its knees, including country music and Irish music. I love the céilí, the rince seit and rudaí mar sin. The dancing schools need support and help. It is not that they are looking for help. They will come back and flourish. They pay taxes, PRSI, rates, VAT and all the other taxes and will continue to do so, but they cannot at present. If one has no money coming in, one cannot pay it out. We should get them started. Tús maith leath na hoibre. I worry about the pubs, especially the small pubs and small shops. Will they ever start again? They want to start; it is their owners' life. However, there are the costs involved, including the added costs now. Fáilte Ireland is drawing up a 22 or 23 page document. I do not know why. I support Fáilte Ireland and a céad míle fáilte isteach in Éire an bhliain seo. We have the staycation this year. People cannot dream of attempting to go abroad. People should spend the holiday locally and I ask people in the business to be careful, not to increase prices and to look after people. Ní neart go cur le chéile. We are on our own, but we need supports.

Deputy Verona Murphy spoke about the hauliers. Let us consider the cost of their equipment and the cost of excavators, machines and plant hire. There is a wide spread. That is what Ireland is about, and it has been hammered for the past 20 years with regulation after regulation. We are not anti-regulation, but much of it is unnecessary and over-policed. We must turn these bodies, and the National Employment Rights Authority, NERA, is one of them, into a national support service for the self-employed. We must have self-employed people. We can secure the big conglomerates and foreign direct investment. There are many in my county and I value them. They are welcome and provide wonderful jobs. Merck has been there for almost 50 years. We also have Abbott, Boston Scientific and many others, including my local Clonmel Healthcare. However, we need small businesses, including taxis, especially in rural areas. Even members of the clergy need to be supported. They have been getting nothing during this time. They have had a very lonely time. They had to work and held funerals when families could not be there. They need support. We must allow worshippers back to worship as well.

I worry about this Government with regard to hunting, horse racing and coursing. These are all businesses that belong to people. People put their hands in their pockets for money they have paid tax on to buy their box, pick their stable, have their pony or horse there, buy their tackle, pay the veterinarian and so forth. That is all an industry in rural Ireland. I worry about that. I mean no disrespect to the Tánaiste and the Green Party, but do they understand that this is all part of our culture and heritage? The spirit of the meitheal is also part of it, whereby people start small with a one-man or one-woman business and grow it. However, they are cast away. Let us also consider the tourism industry and the tour coaches. J.J. Kavanagh & Sons in Tipperary and many smaller companies bring the tourists and move them around. The wonderful drivers and wonderful coaches win their respect and then they are well received in the hotels. I was delighted to see that Hotel Minella in Clonmel - the Tánaiste was there previously once or twice - and Cahir House Hotel, along with River House and The Lazy Bean Café in Cahir and other hostelries, have reopened. However, they must be supported. We all want to respect the social distance and to be careful, bí cúramach ar fad. We see what is happening elsewhere, but there must be meaningful and tangible supports.

The banks are not working. They might as well be closed, with a "Closed" sign up. Many people have mortgages and others have business loans, but they have all been pulled. That is the support from the banks. I saw this morning on Facebook that their quarterly charges are growing. During the pandemic they had no customers to deal with and no money to count. It was all done with cards, or 90% of it was. I worry that the banks are not functioning. There is nothing in the programme for Government about community banking, such as there is in Germany and Switzerland. The banks have the Government under the cosh. I do not know why the Government went with them. There is no regulation of them. The receiver and all the murky business is still happening and terrorising business people.

Business people do not have their hands out to beg. If they get back working, they will repay in spades. They will turn over the money, create jobs, pay VAT and taxes, pay the rates, insurance and so forth. Insurance was not touched either by the Government. It is afraid of the big concerns. Big is wonderful for the Government, but it is afraid of it. Being big is everything. The previous Government had no interest in the small people, na daoine beaga. I hope it will change now, but I do not see anything in the programme for Government that indicates it will change. We just need help to get back on our feet, dust ourselves down and to be able to develop, re-employ and re-engage. The costs associated with the Covid are too much, along with over-the-top regulation and paperwork. Mar fhocal scoir, I must mention paperwork and bureaucracy. They have mushroomed. If we could turn paperwork into money, we all would be rich. That is overdone and must be levelled and cleaned out.

3:20 pm

Photo of Michael FitzmauriceMichael Fitzmaurice (Roscommon-Galway, Independent)
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First, I wish the Tánaiste the best of luck in his new office. He has a tough job ahead with regard to the jobs issue, but by working together we can get through this. Last week, I spoke to the previous Minister, Deputy Humphreys, on the telephone about Aptar and, in fairness, she referred back to me about it. Can the Tánaiste confirm that the IDA is liaising with Aptar? Aptar highlighted that research and development is a problem in Ireland. It also spoke about insurance costs, electricity costs, rates and other matters. Some of those things can be fixed. Will the Tánaiste give an undertaking that the IDA will try to resolve these issues? The 120 jobs in Ballinasloe are equivalent to 12,000 jobs in Dublin.

There has been a huge uptake of the voucher scheme in the LEOs. In Roscommon and Galway last week, all the money was allocated, including the extra money that was provided. Can the Tánaiste confirm that more money will be provided to help those businesses?

In addition, a problem has arisen with the livestock marts. The marts had to adapt to many new ways of doing things. It depended on turnover. If the mart was over €2 million, to take the figure from the top of my head, it did not qualify. Most marts in the country make between €80,000 and €160,000 in profit in a year. That is when it is going well, to be frank, taking account of insurance and so forth. They were left out of the scheme. Can the Tánaiste confirm that somebody will examine that and try to help them?

My final question is on planning. We need jump leads to kick-start businesses again. When considering this, will the Government look at the Danish model? Many young people who are considering new ways of doing things might have a shed beside their house in a rural area. At present, they are being blocked from doing things in them. Can we look at the planning side to give incentives? I do not want to take up all my time so perhaps the Tánaiste can reply to those questions.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I am not familiar with the Danish example the Deputy mentioned, but I will be happy to learn more about it. I will check about the marts. I understand from what the Deputy said that they are not included in the scheme. We will examine that and see if it makes sense to include them as part of the July stimulus.

I know there are some other examples of companies and businesses that have been excluded, as mentioned by earlier speakers.

In regard to Aptar, IDA Ireland is in close contact with the company and has offered to support it to try to avert any potential job losses, if that is at all possible.

3:30 pm

Marian Harkin (Sligo-Leitrim, Independent)
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I congratulate the Tánaiste, Deputy Varadkar, on his appointment and wish him well. It is unusual to congratulate somebody on what could be seen as a demotion but, nonetheless, we wish him well because if he does a good job, that is good for the country.

I will vote for the Estimates today. The Tánaiste knows I have spoken across the floor with him on many occasions about the huge challenges our SME sector is facing. According to IBEC, the average debt for an SME due to the Covid crisis is €50,000, which is a substantial sum and has done significant damage to balance sheets. I think everybody agrees that more Government support is needed.

The last time I spoke to the Tánaiste in Dáil Éireann, I pointed to the €50 billion fund that Germany had put in place. He asked me to send him information, which I did. That sum has now increased to €130 billion, a significant amount of which is grant aid. For example, companies with fewer than five employees are getting a down payment of €10,000, and if they have up to ten employees, it is up to €15,000 to cover fixed costs. The position is similar in the UK, including Northern Ireland. Just a couple of kilometres from where I live, across the Border, the average grant aid to companies is around €10,000 and is higher if they are in retail or leisure.

We need to be ambitious. We need to look at the real needs of SMEs because many business owners are looking around and wondering whether they are going to open up, given the mountain of debt that has been building up over recent weeks and months. They will look at that and ask, "When am I going to be able to pay this back?". As they are not going to be in a position to make a profit for a period of time, unless the State is willing to step in many of those businesses will seriously consider whether they will open again. I do not need to tell the Tánaiste the hugely negative of implications of that.

This is what I have said from day one. Businesses need hope. They need to believe that in three and six months time, they will have an opportunity to break even or even just keep going, because that is what drives many businesses and entrepreneurs. They will keep going if they can see a future. We look forward to the July stimulus. I ask the Tánaiste to look at two things: scale and speed. It needs to be large enough to make a difference and we need to efficiently and effectively get that money to SMEs.

I have two brief further comments with regard to giving hope. I remember when the Tánaiste, in his then role as Taoiseach, came to Sligo to launch the 2040 plan. On that day, he designated Sligo as a growth centre. I looked carefully at the regional development part of the programme for Government, which sets out the Government's intention to "Develop the cities of Cork, Waterford, Limerick and Galway as viable alternatives to Dublin, and .... help regional towns prosper.” If we in the north-west knew that the Tánaiste's commitment to Sligo as a growth centre was still there, that would give people hope.

I accept that the final issue I am raising is not part of the Tánaiste's area. When there is an emergency in a constituency, it is very important to the people there. There has been a huge mudslide or bogslide on Shass mountain outside Drumkeeran in County Leitrim. People who have been there, and I have spoken to many of them, have described it as being like something we would see in a movie. They just could not believe it was happening in front of their eyes. It will fall to the county council initially to deal with this, but county councils have no revenue stream and their money is cut off. I ask that the Government would look at this emergency situation. It needs to be looked at right now and structures need to be put in place to try to alleviate the huge damage that has been caused and will continue in the event of further rainfall. I wanted to raise that issue. Perhaps the Tánaiste will reply to me in writing about the very important issue of Sligo as a growth centre.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I want to reassure Deputies Harkin and Feighan, and everybody in Sligo, that it remains Government policy that Sligo should develop as a major urban centre for the north-west. Project Ireland 2040 is alive and well and will continue to be implemented. The fact there is no specific mention of it in the programme for Government does not mean the policy has changed. It is something I am very committed to personally and I want to reassure the Deputy about that.

I apologise, but I had not heard about the mudslide. Perhaps it only happened today or yesterday. As is always the case when a disaster like that happens, the Government will want to help and assist, and I have no doubt I and my colleagues will take an interest in this and see what we can do.

Vote put and agreed to.

Sitting suspended at 3.25 p.m. and resumed at 3.45 p.m.