After being in various forms of lockdown since 9th March people in West Cork are struggling to envisage what Ireland and West Cork will look like after Lock Down and when that will happen?
We have already said goodbye to summer 2020: All mass gathering are banned until at least August. Under existing definition an indoor 'mass gathering' is 100+ people while an outdoor one is 500+. If those figures remain then weddings, sports and festivals are all off, while funerals will be limited. The Government is bracing for unemployment rates of 22% this year and only getting back to a more manageable rate below 10% sometime next year. The main measure of how an economy performs, the GDP (Gross Domestic Product) is projected to fall by 10.5% this year. Senior source says Government remains “hopeful” that sporting events, concerts or events like the Ploughing Championships can go ahead on a limited basis from September, but a decision on that is not likely for a few weeks.
The Restaurants Association of Ireland (RAI) has warned 120,000 businesses are at risk of permanent closure in the coming months. Some 90% of restaurants are currently closed due to Covid-19 restrictions, with most facing an uncertain future. Even if they are in a position to reopen in the coming months, many are likely to face severe restrictions such as physical distancing, putting further pressure on the sector.
Chief among its recommendations is the call for a 0% VAT rate for tourism and hospitality businesses for the period of the crisis and the 12 months thereafter. This would revert to 9% for a period of five years. It also calls for a commercial rates write-off for restaurants until a Covid-19 vaccine is found, and the introduction of rent supports similar to those in place in France, where government would supplement rent by 60%, the landlord reduces rent by 20% and the tenant pays the remaining 20%.
The RAI recommends the removal of banking fees, a moratorium on existing loan repayments, continued wage supports for the sector until a vaccine is found, and a specific Government grants scheme to cover outgoings in the first six months after the return of normal trading. In addition, it is seeking a waiver on licences for use of outdoor tables and chairs, currently paid to local authorities, and a ban on utility providers cutting off services. Finally, the RAI document identifies insurance as an issue, particularly companies not paying out for business interruptions.
There is increasing concern in West Cork that Covid-19 will destroy the viability of employment and of the small independent businesses which give the area much of its character and attract visitors in better days. Many of the things we love about the area - its producer markets, restaurants, Cork City, beaches, Hotels, Festivals, music and arts scene, independent shops, etc: are closed or cancelled and may never reopen. These small businesses already suffered from the fragile seasonal tourist economy of the area and now realistically they will not open in 2020 for any length of time. There is no Government policy to support and recapitalise them other than for already indebted businesses to borrow from Ireland's predatory banks.
The timing of the Covid-19 Pandemic could not have been worse for the Tourism and Hospitality industry in West Cork. Bookings will simply not happen from North America, the UK and Continental Europe, including the many "regulars" who return year after year. America has banned cruise ships from sailing for 100 days so the 142 ships scheduled to visit Cobh this year simply will not happen. Ballymaloe has closed and suspended its famous cookery courses. What is happening abroad gives further clues to the future. Spain is planning to reopen hotels in August but only for Spanish visitors, foreign visitors will "maybe" allowed visit in October.
We already have a problem in Ireland that business owners make less than employees. The Government taxes small businesses to death, creates programmes whereby the only way to get a grant or loan is to pay an accountant thousands to certify your returns (non economical for most small businesses); rates are high; services are low and regulatory compliance is seen as another revenue stream for Government (same as a tax).
Freedom of movement in the European Union is also going to impact on Ireland as EU countries don't want to throw away the hard earned gains in controlling the virus and protecting public health as they come out of Lockdown. German Foreign Minister Heiko Maas on Sunday urged European countries not to reopen tourism destinations too early, or risk another wave of coronavirus contagion. “A European race to see who will allow tourist travel first will lead to unacceptable risks,” he told German outlet Bild am Sonntag. Maas said European countries would have to agree on common criteria on freedom of travel “as quickly as possible, but as responsibly as necessary." Earlier this week, Internal Market Commissioner Thierry Breton told French media that restarting touristic activity would require "harmonization of best practices, in particular regarding border crossings and seasonal workers."
So, in West Cork, as in all of Ireland hard times are ahead. The Covid 19 payment schemes and subsidies have already highlighted how low wages are in West Cork with many actually earning around €20k or less and many more "under the radar" in the cash economy, living from week to week. Businesses will have been bled dry by the shutdown and will not have cash to reopen. Many marginal businesses will go to the wall as consumers get into the habit of making do with less, not going out and shopping on the internet as our town and village centres stay shut. And then there is the practical. Does a hotel want to gear up, recruit staff and restock for a short season. Is this even possible? Or take the business owner on the Beara I was talking to who is in her early 70's and has run a B&B and restaurant for 20 years and doesn't want to reopen as Covid "could kill me."
It is clear in West Cork with businesses cannot be left on their own and the old policies, old bureaucracies and old mind sets will need to change. We will be left with an economic wasteland if the burden is on businesses and their owners to accept the loss caused by the Pandemic. Banks we bailed out will have to share that loss, Government will have to provide no strings cash to recapitalise without the unnecessary ceremony, bureaucracy, legal and professional fees the Irish State seems to specialise in. And Government and local authorities will have to stop using their position with taxes, charges and levies to see businesses and taxpayers as cash cows to be milked. Insurance companies will have to act with the "utmost good faith" they expect from policy holders and pay out on Business Interruption policies instead of squirming into torturous small print.
All this and more will be required to ensure West Corks lost Summer does not become a hard and cold economic Winter with no Spring to follow.
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