Coveney says Government will give businesses more supports before next budget 

Enterprise Minister Simon Coveney confirmed he was currently engaging with coalition ministers on options that could assist businesses to deal with increased operating costs. Picture: Sam Boal/Collins 

The Government will provide further supports for businesses impacted by high costs before the next budget, Enterprise Minister Simon Coveney has said.

In an interview with the Irish Examiner, Mr Coveney confirmed he was currently engaging with coalition ministers on options that could assist businesses to deal with increased operating costs.

“We're looking at other things that we could do to provide specific support for the sectors that are under most pressure,” Mr Coveney said, adding he believed the Government could do more.

However, Mr Coveney declined to detail what these options were, saying he needed to explore these with his Cabinet colleagues first.

It comes as he is preparing to publish a report that details the impacts of recent Government decisions on increased costs for businesses, including the rise in the minimum wage, statutory sick pay and the incoming auto-enrolment pension scheme.

Mr Coveney described the report as a “significant piece of work”, which shows the main sectors impacted are in hospitality and retail due to their high reliance on minimum wage workers.

“Many sectors, by the way, aren’t impacted at all. So the tech sector, the financial services sector, construction sector, they already have conditions of work that are well above any of these changes.

But hospitality and food retail in particular — so cafes and restaurants — and some other parts of retail that rely on a lot of people who are either on the minimum wage or people that are reasonably close to the minimum wage, you also push up wages.

“So we know that those sectors have been put under pressure in terms of cost.”

Mr Coveney said in the coming weeks these businesses would receive supports through an Increased Cost of Business Grant — totalling €257m — which was approved in last year’s budget.

“There are about 15,000 businesses that will get €5,000 of a grant upfront and all the others will be getting less than that,” Mr Coveney said.

The Enterprise Minister also said: “People are talking about the need to reduce Vat rates again for the hospitality sector and so on.

“There's an argument around that that is being made, but in order to apply a 9% VAT rate to the entire hospitality sector, as was the case before, that costs about €788m a year.

“So you don’t do that in between budgets.”

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Asked if he would be in favour of reducing the rates paid by businesses to local authorities, he said it was an “important form of revenue for the State”.

“It’s not perfect by any means, but we don’t have anything to replace it,” Mr Coveney said.

“I know that the Department of Housing is very anxious to maintain a strong rates base and the vast majority of businesses are now back paying rates again and that’s a good thing, so we shouldn’t undermine that in my view.

“So the challenge for us is what can we do to actually tailor supports to the sectors that are under most pressure and what tools do we have available to us in between budgets to do that.”