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Ibec tells Taoiseach cutting wage subsidy amid restrictions ‘doesn’t make sense’

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Ibec chief executive Danny McCoy said it was not fair to withdraw supports while adding restrictions. Photo: Conor O'Riordan

Ibec chief executive Danny McCoy said it was not fair to withdraw supports while adding restrictions. Photo: Conor O'Riordan

Ibec chief executive Danny McCoy said it was not fair to withdraw supports while adding restrictions. Photo: Conor O'Riordan

Business lobby group Ibec has said the Government’s plan to cut wage subsidies while imposing Covid restrictions has “no logic” and the supports should be fully restored.

In a sharply critical letter to Taoiseach Micheál Martin Monday, Ibec CEO Danny McCoy said the hospitality sector had taken a “heavy hit” to bookings for Christmas and the loss of business was having a negative effect throughout the supply chain.

He said the Government’s plan to repurpose the Covid Restrictions Support Scheme (CRSS) was insufficient as a response and that the most effective policy response would be to reinstate the Employer Wage Subsidy Scheme (EWSS) on full rates.

“We know from our experience of working with business over the past 21 months of the Covid crisis, that the EWSS support is highly effective in targeting supports at firms experiencing significant turnover collapse, of at least 30pc, across every sector of the economy,” Mr McCoy wrote.

“It doesn’t make sense at this stage of the crisis to attempt to start from scratch by redesigning schemes which may ultimately fail to support firms, in whatever sector, which continue to carry the burden of Covid restrictions.”

Mr McCoy said the EWSS had successfully delivered liquidity to struggling companies and helped them retain workers throughout the economic disruption caused by the pandemic.

“[W]e see no logic, fiscal or otherwise, for curtailing these supports at a time when additional restrictions have been introduced,” he said.

He added that Ibec supported the phased withdrawal of State subsidies for businesses when the restrictions on economic and social activity have been removed, “but that time is not now”.

The EWSS was supporting more than 275,000 jobs in 23,600 firms in November, the last month for which it was available at a maximum rate of €350 per employee per week.

As of December 1, companies on the scheme can receive up to €203 per worker if their revenue remains at least 30pc below the comparable period in 2019.

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However, businesses in the restaurant, pub, café, accommodation and entertainment sectors have argued the tapering of wage supports has come at the wrong time, with public health rules limiting the number of indoor customers and work-from-home advice keeping customers away.

The CRSS will replace up €5,000 in weekly revenue for businesses that suffer a 50pc decline in turnover this month.


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