Lockdown debts threaten viability of businesses

Chambers Ireland has called for the Irish Government to concentrate on a sustainable reopening plan for businesses and local economies.

When a full reopening finally occurs, many businesses will see pandemic lockdown debts threaten their long-term viability, Chambers Ireland  has warned.

Ireland’s largest business network warned that as restrictions ease, the Irish Government should waste no time planning for a sustainable reopening of towns and businesses.

“We know that the business community cannot face another brief reopening, followed by spike in infections, and a further lockdown”

The warning comes as some restrictions are relaxed such as an extension of the 5km restriction to county-wide or 20km limit and a gradual easing of restrictions on outdoor activities from 12 April.

Construction will restart with a partial return of 14,000 workers to build homes and childcare facilities from 12 April with a possible wider reopening of the industry from early May. Outdoor attractions will be allowed to reopen from 26 April.

Sustainable reopening

In a nutshell: Ireland’s business community cannot face another brief reopening.

Chief executives from around Ireland have called on the State to consider a number of measures including suppressing the virus locally, embracing ambition for urban centres, greater ventilation guidance and supports to reduce Covid-19 transmission in homes and shared spaces and for clear guidance on the duration of financial supports.

The executives point out that too few businesses qualify for support and that their availability will need to be expanded because debts are mounting for many businesses.

They warn that where available the supports rarely offset the cost of the lockdown given the scale of the economic shock facing the most vulnerable sectors and the length of time they have been impacted.

Areas that need to be extended include wage supports, commercial rates and debt warehousing.

Executives warn that vulnerable sectors will need to have confidence that they will be supported in the reopening and the hoped-for recovery.

“With this lockdown lasting much longer than anticipated, our members are experiencing many difficulties and justifiable frustrations,” said Chambers Ireland CEO Ian Talbot.

“Chambers Ireland appreciates how difficult it is to balance the reopening with virus suppression because we know that the business community cannot face another brief reopening, followed by spike in infections, and a further lockdown.

“But Government must recall that individuals, businesses, and local economies are all facing challenges too.”

What Irish chief executives want

  • Suppress the virus locally: “To get us through the summer, public health teams need resources to test, trace and isolate so that we can identify sources of infection. We have no time to waste and focused government action is required to suppress the virus in locations where transmission is still high.”
  • Embrace ambition in urban centres: “We need to see Government, local authorities and elected officials embrace ambition, by re-imagining our high street and urban centres. This will include everything from pedestrian-friendly reforms that incentivise ‘dwell-time’ to enabling businesses to use streets and footpaths for outdoor dining.”
  • Ventilate: “Communities also need more guidance and supports on how to reduce transmission in homes and shared space. New strains of the virus bring new challenges. Guidance on how to properly ventilate buildings is urgently needed.”
  • Clear guidance on duration of financial supports: “When a reopening finally occurs, many businesses will see their lockdown debts threaten their long-term viability, government must take action to ensure that those which can survive, do survive.”

By John Kennedy (john.kennedy3@boi.com)

Published: 31 March 2021