Licence & court fees waivers – 60% of Government’s pub ‘package’
According to the LVA 59% of the Government’s €16 million ‘package’ or €9.4 million will go towards its waiving of the licence and court fees for pubs, restaurants and hotels this September.
While the banks provided a six month moratorium to pubs across the country at the beginning of the Covid crisis, that will come to a close at the end of September so that the Government and the National Public Health Emergency Team’s decision to further delay the re-opening of pubs will drive thousands into mortgage default, according to the Licensed Vintners Association.
The LVA has discussed this issue with the banks and they’ve confirmed that these breaks can’t be further extended and that borrowers who cannot make repayments at that point will be in default.
This means that Government policy will directly damage the credit rating of mortgaged pubs still closed through no fault of their own.
The LVA has also criticised the €16 million ‘package’ announced by the Government last week, saying the majority of closed pubs will receive no more than €1,600 grant aid.
Small pubs in the lowest licensing bracket comprise most of the pubs still closed and they will have been shut by order of the Government for 25 weeks by next Sunday. The figures announced mean they will only be due an extra payment of €64 per week of forced closure, an average which gets smaller for each additional week they’re unable to open.
The level of grant-aid provided to these pubs who will have been closed for a minimum of six months is the same as was announced for businesses in Kildare, who were closed for just four weeks.
What’s more, according to the LVA, 59% of the Government’s €16 million ‘package’ or €9.4 million will go towards its waiving of the licence and court fees for pubs, restaurants and hotels this September.
While the LVA believes it would have been “grossly unfair” to apply this levy given the restrictions imposed on the hospitality trade, the waiver will apply to all hospitality businesses, including those who’ve been open and trading since June.
“We’re massively concerned that the decisions made by the Government and NPHET last week are going to drive thousands of pubs across the country into mortgage default,” explained LVA Chief Executive Donall O’Keeffe, “Firstly the Government and NPHET has once again stopped these pubs from opening their doors so they have no income coming into the business. On top of that they announced a paltry token gesture of a package which offers next to no support to these businesses.
“With these pubs being unable to trade, effectively the Government and NPHET are driving them into mortgage default.
“The so-called ‘package’ announced by the Government was nothing more than a hollow gesture,” he continued, “It was spin pure and simple, but it exposed how little they care about protecting the pub sector in this country.
“Most of these are small pubs who are in the lowest licensing band and they will be due a total of an extra €1,600 in grants. By next Sunday, when they will have been closed for 25 weeks, that will be an average of €64 extra per week of closure. It does not come near to covering the costs facing these businesses who are closed by order of the Government. Even with the doors closed they still have overheads, mortgage payments, rent, electricity bills, insurance bills, security and other costs.
“To put the level of aid announced in perspective, businesses in Kildare were provided with the same level of grants when they were closed for four weeks. It seems Government simply does not care about the future of pubs.
“Basically every action the Government is taking at the moment is driving the pub industry in this country into the ground. They have given the industry next to no support and possibly even worse, they’ve also taken away all hope for the pubs still closed, the 25,000 members of staff they employ and all their families,” he concluded.
Government measures questioned
The Government has been circulating a range of measures it suggests are there to help pubs.
It says it is ‘waiving’ commercial rates for six months.
“How would it be fair to impose commercial rates on businesses which the Government won’t allow to trade?” asks the LVA, adding, “It’s also worth noting this ‘waiver’ is for a period of six months – and it now looks very likely that pubs will be closed for longer than that.”
The VAT rate cut from 23% to 21% is “completely useless for businesses who are not allowed to trade”.
The Government has suggested it has put forward ‘Liquidity Supports’.
“That means loans,” explained the Association, “Pubs do not want more debt at a time like this, so this is another hollow measure.”
The extension of the wage subsidy scheme won’t help pubs which go out of business or their employees.
“We’re forecasting a spike in unemployment in the pub sector during September when the new Employment Wage Subsidy Scheme rates take effect.”
Under the provisions announced for the EWSS, any workers earning less than €151.20 per week will not be paid this subsidy. This will have a massive impact on those staff who previously worked one or two days a week, primarily on Friday and/or Saturday nights who’d have been earning approximately €10.50 an hour. Many of the cleaners only work short working weeks too, the LVA explained.
“Anyone working 14 hours a week or less at that rate will not be covered by this scheme. That will immediately raise questions as to whether it will be financially viable for pubs operating at 50% capacity or less to utilise these members of staff. The LVA estimates approximately 20%-30% of staff could be impacted.”
Finally, the ‘Stay and Spend’ initiative does not apply to alcohol.
“It is of zero help to pubs,” concluded the Association.
