No 'dramatic changes': Withdrawal of Covid supports to be phased in from late in year

Covid welfare and business supports will not be scaled back until the autumn at the earliest, senior Government figures said on Wednesday, suggesting that the multi-billion euro expenditure on the schemes could continue until the end of the year.

Tánaiste Leo Varadkar told the Fine Gael parliamentary party on Wednesday night there would be no "dramatic changes" in the third quarter of the year but added that the Government would next week outline how it intended to phase out the payments from the fourth quarter.

Speaking at the Institute of Directors on Wednesday, Minister for Finance Paschal Donohoe said "continued support could be necessary out to the end of 2021 to help maintain viable businesses and employment, and to provide businesses with certainty".

However, he added that “while there will be no cliff-edge, there must be an end to them at the right point”.

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The three main Covid support schemes – the wage subsidy scheme, the PUP and the Covid Restrictions Support Scheme, which gives cash to businesses forced to close – are all due to lapse on June 30th. However, the Government will announce next week that all three are to be extended when it unveils its plan for economic recovery in the post-Covid era. The schemes have cost more than €14 billion to date. The cabinet economic committee will meet today to discuss next week’s plan.

The signal that the schemes will be extended comes amid a sense in Government that the country is entering the final phase of the acute Covid crisis. Removing these supports now, Mr Donohoe said on Wednesday, “would be akin to falling at the final hurdle”.

Officials and Ministers are engaged in detailed preparations for the announcement of the next, extensive phase of the reopening of commercial and social life on Friday.

Final approval

The National Public Health Emergency Team (Nphet) met on Wednesday to discuss issues relating to the reopening plan. On Thursday, the Cabinet sub-committee on Covid-19 will meet senior public health and health service officials for discussions on the plan, while the three leaders of the Coalition parties will also meet to consider the plans. The Cabinet will then meet on Friday to give final approval of the plan, after which Taoiseach Micheál Martin will announce the reopening measures.

Minister for Health Stephen Donnelly met the chief medical officer, Dr Tony Holohan, on Wednesday evening following the Nphet meeting and sources reported that the two men had a positive and constructive meeting.

Nphet has concerns about the risks presented by the Indian variant and also discussed the intensity of some local outbreaks. These concerns are likely to form part of Nphet’s advice to Government, though it is understood the outlook from the body remains broadly positive.

Easing of restrictions

On Wednesday night Mr Donnelly indicated that Nphet had cleared the way for the further easing of restrictions.

“I’m very happy to report, and I’m sure members will be aware, that Nphet’s view is that the trajectory is positive thanks to the Irish people getting behind the measures day after day after day and keeping those case numbers and hospitalisations low,” he told the Dáil.

While Mr Varadkar on Wednesday night warned of the danger of a fourth wave of the virus – telling Fine Gael TDs the country is “not out of the woods yet” – Friday’s announcement is likely to proceed along expected lines, according to sources involved in the process.

Mr Martin will emphasise the need for people to exercise personal responsibility and give the go-ahead for outdoor dining and hospitality, while also announcing the timetable for the recommencement of international travel, crowds at sporting events, cinemas and theatres. He will also signal the reopening of indoor pubs and restaurants in July, subject to guidelines published on Wednesday. However, there was criticism of the guidelines and of continuing restrictions at both Fine Gael and Fianna Fáil parliamentary parties on Wednesday night.