Real support finally provided to pub sector
Budget 2021 “very much the last chance saloon for whether many pubs would see out the year”.
However, along with the rest if the hospitality industry, it cautioned that the these measures will need to be extended if the period of restrictions is prolonged.
This was particularly true of the Covid Restrictions Support Scheme which will provide cash grants to businesses closed or impeded by Government restrictions.
The Association stated that while this is a positive programme which will finally provide real relief to pubs forced to keep their doors closed, it’s currently expected to run only until March 2021. With pubs and the rest of the hospitality sector potentially facing ongoing rolling public health restrictions into next year, the LVA says the programme may need to be reviewed and extended before March 2021.
Non-food pubs in Dublin have now been closed for 211 days and counting, the only pubs in the country who’ve not been able to trade in that time. The LVA also believes that the CRSS scheme should be made available retrospectively to those ‘wet’ pubs which have not traded since the 15th of March.
The LVA also welcomed the Government’s commitment to avoid a “cliff edge” ending to the Employment Wage Subsidy Scheme by extending it to the end of 2021, given the certainty it provides to publicans and their staff.
But the representative body for Dublin pubs believes this measure will need to be reviewed in early 2021 with a view to increasing the level of wage support back to TWSS levels and allowing for the programme to be extended in line with the ongoing restrictions facing the industry.
The reduction of the VAT rate to 9% will also help pubs who serve food and will benefit those businesses if and when they’re in a position to trade.
The commitment to waive commercial rates for 2020 is helpful but the implications of a return of commercial rates for 2021 will need urgent review before the end of this calendar year stated the Association which also looks forward to seeing the details for the Tourism Business Support Scheme.
“The importance of this Budget to the pub sector in Ireland can’t be overstated” said LVA Chief Executive Donall O’Keeffe, “it was very much the last chance saloon for whether many pubs would see out the year. Thankfully, based on initial review, it looks like real support has finally been provided to the pub sector which has been shut by order of the Government.
“This is the type of support our industry has been seeking for months and months so it will come as critical relief to pubs across Dublin and beyond that the despair they’ve been experiencing has finally been recognised.
“On the face of it the Government’s CRSS appears to be exactly the type of assistance that should have been forthcoming for pubs and other sectors of the economy who’ve been taking the hit due to the public health restrictions. We’ve long argued that if pubs and other businesses need to stay closed to protect the public good then these businesses and their employees should be properly compensated.
“The absence of meaningful relief has put massive pressure on pubs and the hospitality industry to reopen as livelihoods have been on the line for months now. Non-food pubs in Dublin haven’t been open for seven months.
“We would also encourage the Government to review and recognise the impact of these measures, particularly when it seems like pubs and the rest of the hospitality sector will be facing rolling restrictions well into 2021. It would be counterproductive if the restrictions were to last a lot longer than the current window outlined for some of these supports, particularly given how much strain these businesses have been placed under already this year,” he concluded.
New measures provide ‘degree of hope’ says VFI
The Budget measures to aid the sector will bring some degree of confidence to publicans who’re facing into a protracted period of uncertainty after enduring a near total shutdown for most of 2020, agreed the Vintners Federation of Ireland but it expressed disappointment that the Budget failed to reflect the fact that these outlets will have been closed for almost nine months with minimum support.
The CRSS, which will provide weekly cash grants to publicans based on 2019 turnover until March 2021, is welcomed by the VFI as a meaningful support for members attempting to keep their businesses alive.
“It’s clear pubs will be exposed to the full force of Social Distancing measures to suppress the spread of Covid-19 until a vaccine is found,” said VFI Chief Executive Padraig Cribben, “In that context the Budget needed to reflect the reality our members will face over the coming months.
“The CRSS provides a degree of hope in that it will supply much needed grant support to publicans for the next five months if we remain at Level Three or higher.
“The new scheme provides a bridge to the future where Covid is over and normal life resumes,” he continued, “Publicans have paid a huge price for closing their businesses so this announcement is the least they deserve. Government needs to address the fact these businesses have been closed for a protracted period and reflect that in the support package.
“The reduction in the hospitality VAT rate from 13.5% to 9% is a welcome development for the food and accommodation sector. At present it’s of little use to most hospitality businesses but hopefully they can avail of the full benefit in 2021.
“It was important that Government brought clarity to the issue of commercial rates for the remainder of 2020 so we welcome the news that rates will be waived for the final quarter. There will be a need to revisit this issue for next year as most pubs, when they reopen, will continue to trade at less than half capacity. There’s scope within the €3.4bn fund Government has set aside for 2021 which must be used in a targeted way for sectors most impacted by Covid.
“The Minister for Finance Paschal Donohoe says small businesses are the backbone of the economy,” he concluded, “While Budget 2021 is a positive start, the future remains extremely uncertain and it’s only when the end of the pandemic is in sight will we know if these measures have been enough.”
“Long hard months ahead” for Restaurant sector
The Restaurants Association of Ireland described this Budget as a vital step in supporting a struggling and flattened hospitality sector. However while welcoming the reduction in VAT to 9%, RAI Chief Executive Adrian Cummins has warned that the reduction is only a competitive driver if businesses are open and able to trade.
“This budget is a lifeline for the restaurant and hospitality industry,” he said, “We also are pleased to see the CRSS announced offering cash payments of up to €5,000 a week for firms forced to close due to Covid-19 restrictions. While these new measures announced today won’t fix everything, there’s now hope for many restaurant businesses who are struggling.
“The Restaurants Association of Ireland also welcomes the extension of the EWSS scheme until the end of 2021 but it’s disappointing that the EWSS and Pandemic Unemployment Payment wage supports were not restored to their previous rates, especially for the Restaurant and Hospitality sector which is essentially locked down again. We welcome the extension of the Commercial Rates waiver until the end of 2021.
“The €55 million announced for a tourism business support scheme and €5 million for tourism product development is welcome and specific details of how the scheme will impact restaurant and hospitality businesses are eagerly awaited.”
Emphasising that the sector would need ongoing support to trade out of this, he concluded, “Although the supports offered in today’s Budget are welcomed, there are still some long hard months ahead”.
Industry & Government must move to establish pathway for reopening
While welcoming the CRSS and the VAT reduction, the Drinks Industry Group of Ireland stressed that industry and government must now move to establish a pathway for the reopening and long-term recovery of this sector as this is ultimately what will save this industry.
“We’ve seen signs from Government in recent weeks that the magnitude and enormity of the challenges facing the drinks and hospitality industry are being realised and accepted,” said DIGI Chair Liam Reid, “Today’s Budget measures, coupled with the establishment of the hospitality forum, which convened for the first time last week, are necessary and essential first steps in addressing the grave challenges facing the sector.
“However the journey for Ireland’s drinks and hospitality industry has only begun and it will be a lengthy one. Today a significant portion of businesses in this industry across the country remain closed. Every week of closure makes it even more difficult and costly to reopen, to trade and to recover.
“Compounding that issue, Ireland’s excise tax on drinks remains the second-highest in the EU which means that the publicans, restauranteurs, hoteliers, brewers, distillers and other industry businesses are losing money that could be invested in recovery.
“We must move fast and the next step in this journey is the National Economic Plan, expected to be published next month. This plan, due to include long-term priorities and measures for economic sustainability, needs to focus on stimulating the key industries integral to economic recovery including Ireland’s drinks and hospitality industry.
“Targeted, long-term policy decisions need to be taken to help this industry recover, grow and – importantly – create and maintain jobs lost in Ireland over the course of 2020.”
The first payments under CRSS are likely to be made by Revenue around mid-November.
