Cork business owners and managers have sharply criticised the decision to go ahead with the reduction of the employment wage subsidy scheme (EWSS) despite high rates of Covid-19 and current public health advice asking people to limit their contacts.
The rates for the EWSS have been reduced from yesterday, as part of Government plans to wind the scheme down.
Cork City chairperson of the Vintners Federation of Ireland (VFI) Michael O’Donovan fears the move will result in job losses in the new year.
“It is very disappointing,” he said.
“It is a real blow because over the last number of weeks we have heard of businesses really struggling, with Christmas parties being cancelled.
“It is really surprising they have cut the support in this present time when we have asked them to continue it for the next number of months which would bring a bit of certainty. Lots of businesses we are hearing from are struggling to make ends meet and this will add to the burden.
“It may cost jobs in a few weeks’ time as businesses may not be able to pay wages. Between now and Christmas I would imagine most businesses will hold their staff.
“Once we get to the first week of January when business does taper down, people will have a big decision to make on staffing levels.”
The general manager of the Celtic Ross Hotel in Rosscarbery, Neil Grant, said the cuts could not be occurring at a worse time for the industry.
“It is a disaster and it can’t happen,” he told The Echo.
“We have less business probably at any point of the pandemic except when we were completely closed. We have less Government support and we have rising costs.
“I know of hoteliers who have lost conferences and weddings are being cancelled. At this moment in time the revenue you take in some days during the week barely covers the wages.
“Quite often it doesn’t, so you are reliant on your weekend being strong, your wedding numbers being OK, and people deciding to have a bite to eat.
“Business has almost dropped off a cliff in the last week.”
Mr Grant said if the EWSS rates are not restored, businesses in hospitality face serious difficulties with cash flow in the coming months.
“We are in a situation which is like a lockdown of sorts but without the official line,” he said.
“From our perspective, I had a weekend just passed which was sold out weeks ago and I ended up with 12 rooms to sell one night and 18 the following night. That is thousands of euros in one weekend.
“We have four months in a rural hotel which are more or less loss-making. What you make in the rest of the year sustains November, December, January, and February. November has gone from looking OK to being a disaster. The business has dropped off.
“None of the business which makes December a busy month is gone. It is four grim months that are worse than they would ever be. The cash flow come March and April if we do not get the EWSS maintained for many businesses will be disastrous.”
Mr Grant also foresees jobs losses if the decision is not reversed.
“If your wage bill is higher than the revenue you take in before the associated costs of being open then it doesn’t make sense,” he said.
“If we don’t have business and EWSS, how do you justify keeping staff going? The right thing to do would be to maintain the levels of EWSS and allow businesses to keep their staff on the books to keep them off the live register.
“We are in the time of the year when there is no guarantee of that bounceback. The cash escapes very quickly as nobody is reducing costs at this time.”