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Level 5 would have been 'catastrophic' for Irish businesses

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Adrian Cummins, CEO of the Restaurants Association, made the warning about a move to Level 5 restrictions

Adrian Cummins, CEO of the Restaurants Association, made the warning about a move to Level 5 restrictions

Adrian Cummins, CEO of the Restaurants Association, made the warning about a move to Level 5 restrictions

A Level 5 lockdown of the economy would cost the State an extra €250m a week on social welfare if it includes a return to full pandemic wage supports.

That direct cost does not take into account losses that businesses will be hit with or their ongoing spending commitments, said Dermot O'Leary, chief economist at Goodbody Stockbrokers.

Budget

The Government last night rejected Nphet's push for nationwide Level 5 restrictions for the next four weeks. The recommendation looked like a "disproportionate response", Mr O'Leary said.

He estimates a cost to Government of €1bn over a four-week period if the Pandemic Unemployment Payment (PUP) and Employment Wage Subsidy Scheme (EWSS) payment rates that applied during the spring lockdown were restored.

Even with PUP and EWSS at the current reduced rates, a return to Level 5 would cost the Government around €650m over the four weeks.

Compared with measures taken by other countries and with the situation at the time of the first lockdown in March, Mr O'Leary said "it looks like a disproportionate response to close all non-essential businesses".

Under Level 5, people would be asked to stay at home and all businesses other than those deemed essential would close.

Nphet's advice comes just over a week before the announcement of Budget 2021.

The State's deficit this year is expected to be more than €20bn, down from a previous expectation of €30bn.

Massive government spending to support the economy through the pandemic has put the Exchequer balance €9.4bn in the red for the first nine months of the year.

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A quiet rush hour near Heuston Station yesterday evening

A quiet rush hour near Heuston Station yesterday evening

A quiet rush hour near Heuston Station yesterday evening

However, strong corporate and income tax receipts have offset the spending somewhat.

Most of those who have lost their jobs due to the pandemic are on lower salaries and fall outside the income tax net, according to the Department of Finance.

Commenting on the recommendation from Nphet, Retail Ireland said any move to close significant swathes of retail as part of new Covid restrictions would have a "devastating impact on thousands of businesses and jobs".

"This must be avoided," director Arnold Dillon said.

"No evidence has been presented that retail settings are a significant cause of Covid transmission.

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"In fact, the sector has radically transformed how it operates, with face masks, social distancing and other hygiene measures, to ensure a safe and highly controlled environment for customers and staff."

Adrian Cummins, CEO of the Restaurants Association of Ireland, said a move to Level 5 lockdown would be "catastrophic for the hospitality industry".

"If we go back to Level 5, that's 180,000 jobs gone, businesses that will never return. The industry is on the edge of collapse," he said.

"There's now huge pressure and focus on the Budget to come up with a survival package for the industry."

Dublin city businesses have said the capital can avoid Level 5 restrictions by continuing to adhere to "best practices".

"We understand that very few grocery workers, transport workers or frontline gardaí fell ill at the height of the pandemic," a spokesperson for Dublin Town said.

"Dublin Town members have reported negligible cases among retail or hospitality workers since the lifting of restrictions in June.

"If this is correct, clearly something is being done right in these environments, particularly when considering that many are classed as high-risk by Nphet.

"If the data suggests otherwise, let's all study it to ascertain how we can improve and so reduce infection.

"All of society can learn from experience in reducing risk. Working together, we can save lives by promoting best practice.

"We can all benefit where these practices are brought into our homes and on-street interactions.

"But we need to get beyond endless rounds of openings and closures. Further lockdowns may require decades to recover for our society and economy and for our collective mental and physical health."