"All our priorities have changed"

Monday 30 March 2020

Everything that was a priority for the States a fortnight ago is no longer a priority, the President of P&R said as he underlined the "financial firepower" government has at its disposal in the fight against corona virus.

Policy & Resources announced support schemes last week that will see up to £41m ploughed into businesses over the next three months. That followed a multi million pound injection into the economy and a States-backed agreement to defer social insurance payments amid a host of emergency measures as the crisis started to unfold.

Those measures were the start of the States' economic response to covid-19, and it may yet be necessary to draw upon the States' core financial reserve before the crisis is over.

"We are in a very strong position financially compared to many other jurisdictions because we do have reserves to call upon, including the Core Investment Reserve with just under £200m available in it," said Deputy Gavin St Pier.

"Clearly the Medium Term Financial Plan [The States' financial plan for 2017 - 2021] was not written with any assumption that it would be drawn down, we didn’t begin this financial year and to be honest we probably didn’t even begin the month assuming it would be drawn down or that we would need to call upon it, but that is the reality and I have said publicly that that reserve is funds put aside over a considerable amount of time to meet an unspecified emergency.

"I think this falls into that category fairly and squarely, so that is the port of call we will be looking to go to and obviously we would need the sanction of the States in due course if we go that far."

The States will need to use its funds "wisely", he said, if the island is to bounce back from this crisis economically. 

"The reality is that we don’t know how long this will go on for or what the economic consequences will be, but we know that it will end and we need to make some wise decisions about the deployment of our financial firepower to support the economy in the most effective way to aid that recovery and that is really what the planning has been so far.

"We have learnt in the last two weeks how to re-prioritise. Everything that was a priority two weeks ago is no longer a priority and the whole of the machinery of government is focussed on and mobilised to deal with this challenge and that will change the order of everything when we emerge from it.

"I can’t provide too much detail on how exactly that will shake down but it’s safe to say that it has put the cat amongst the pigeons as far the Policy & Resource Plan and the priorities that were set out in that so we will have to carefully look at that in due course."