Government mulls full pandemic payments for hospitality sector

'We'll lose a whole sector if we don't plan for the next six months in the budget,' said Labour leader Alan Kelly
Government mulls full pandemic payments for hospitality sector

Micheál Martin: We will have to look again at more sector-specific approaches. Picture: Julien Behal

The Taoiseach says the Government is examining the restoration of full pandemic payments and other subsidies for the hospitality sector.

The sector, which includes musicians, actors, and theatre, bar, restaurant, and hotel staff, is widely expected to be the last to return to pre-Covid practice.

The unemployment rate for the year is expected to be about 16%, which is worse than during the financial crisis a decade ago, falling to 10.7% in 2021.

Labour leader Alan Kelly, speaking during Leaders' Questions, predicted that the State will see continuous local lockdowns. 

Dublin and Donegal are currently under localised restrictions with the same expected for other counties, throwing hospitality staff into unemployment just weeks after returning to work. The pandemic unemployment payment (PUP) rates were cut this month, with many charities warning it could lead to increased poverty.

"Will you consider the sector for full restoration of the PUP?," Mr Kelly asked Taoiseach Micheál Martin. 

"It will have a huge impact on these sectors because, from day to day, week to week, and month to month, people working in hospitality, including in pubs and restaurants, people driving tour buses, accommodation providers, and those working all across the tourism sector, will not know if they are going to have an income.

"If you look at food and beverage in level three, we can't serve food outside in November, December, January. We have to plan ahead because I don't believe we can get through the winter, we'll lose a whole sector if we don't plan for the next six months in the budget."

Mr Kelly suggested a social insurance programme similar to Germany's short-term work scheme. 

Employers reduce their employees’ working hours instead of laying them off. The government normally provides an income “replacement rate” of 60%.

The Taoiseach said: "We will have to look again at more sector-specific approaches, or look at how we can keep as many businesses and enterprises in the tourism sector viable and intact over the medium term.

"We are reflecting on how best to do that across the board to see what is the most effective way of retaining viability so that when Covid is over businesses can re-emerge, get going again in creating employment in the tourism and hospitality sector.

"The scheme referred to by Deputy Kelly is being looked at. There is also the broader issue of how we sustain our hospitality sector over the medium term, acknowledging and accepting that Covid-19 will have a significant impact on our economy for the full 12 months of 2021."

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