States plan to support businesses

Friday 13 March 2020

A 'hardship fund' could be introduced to support local businesses, as Guernsey faces the "most significant public health challenge since the end of the Second World War".

The States are looking into a number of options to keep companies afloat throughout the coronavirus pandemic.

"What we have to recognise is that our economy is going to be impacted in the same way as the economies elsewhere," said Policy & Resources President, Deputy Gavin St Pier. "It will largely be a demand-side shock to the economy in terms of the loss of demand, as people are no longer coming to visit or doing less of what they might otherwise have done. It may also have a supply side effect - probably less so given the nature of what we do as an economy.

"That, inevitably, is going to have a knock on impact on individuals' incomes, particularly for smaller businesses and sole traders. As soon as they've got an impact on incomes, of course, it's going to impact on cash flow. That's when we're talking about long term damage to the economic infrastructure.

Pictured: The Policy & Resources Committee.

"What we're looking to do is understand the scale of that risk. We're engaging with industry representatives and we'll design something that enables us to respond. We need to develop something that's appropriate for our community and the business sector, but also flexible because this is clearly a rapidly dynamic and changing situation."

Deputy St Pier has been holding meetings to understand local businesses' concerns and how the States could address them.

"There are several different sources of potential funding," he explained. "There is, of course, the Budget Reserve to support in year spending but there are other sources of funding available as well. The Core Investment Reserve which is, for all intents and purposes, our Sovereign Wealth Fund - the rules around that are designed to deal with significant events that impact the island and I think we can categorise this as being one of those."

The P&R President has also begun discussions with the Bank of England to confirm whether small and medium enterprises in Guernsey will benefit from its funding.

Pictured: Director of Public Health, Dr Nicola Brink.

"Over recent days, we've had a number of different meetings and dialogue with business leaders in the island and I think it's fair to say they have been extremely supportive," added Chief Operating Officer of the States of Guernsey. "Dr Nicola Brink [Director of Public Health] has taken the time to explain where we are and some of the measures that have been taken, and unanimously they have been supportive. They understand that, if there need to be measures that are perhaps more conservative in the short term, hopefully they will mitigate potential longer term implications."

Following Public Health's updated advice, advising against all non-essential travel and asking anyone with flu-like symptoms to self isolate, Deputy St Pier is urging businesses to take note.

"The community need to understand that they need to follow the advice, because that's the best way to avoid more measures," he said. "This is the most significant public health challenge since the end of the Second World War. This is for real. This is not anybody overreacting, so they need to follow the advice in order to mitigate the challenge.

"All the different individuals and the corporate sector need to pull together. You can't simply rely on government and the Public Health Services to tackle this. It is much bigger than that and it requires all of us to take that personal responsibility."

More information and advice on COVID-19 is available here.

Pictured top Deputy Gavin St Pier.