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The States have announced an initial set of financial plans to support businesses and individuals during the developing corona virus crisis, including a new £5million 'hardship' fund.
A number of payments will be deferred, while some new schemes are formed to help people through these times of uncertainty.
Those measures include:
Pictured: Deputy Gavin St Pier, speaking at a press conference yesterday.
"In economic terms, this is the biggest demand shock to our economy since the quadrupling of oil prices in the crisis of 1973 - but is even faster than that one," said Policy & Resources President, Deputy Gavin St Pier as he addressed the States Assembly this morning . "If we do nothing, perfectly decent businesses will go the wall. We must not let that happen. Whilst I cannot overpromise that no jobs and no bankruptcies will occur as a result of this crisis, it is a reasonable objective to say, as far as possible, no business should be lost simply as a result of this crisis.
"Although the duration and magnitude of the economic shock is highly uncertain, it will challenge cash flows and increase demand for short-term credit for households and working capital for businesses. The economic and fiscal policy response must focus on preventing unnecessary job losses and business failures, through the flexible use of the government's balance sheet."
Pictured: Members of the Policy & Resources committee, Deputies Jonathan Le Tocq, Lyndon Trott and Gavin St Pier. (File image)
£5m hardship fund
While most of the measures are being put in place to support businesses, the hardship fund will be aimed at individuals who are struggling financially, but aren't eligible for income support or sickness benefit.
It will be administered via Social Security and could benefit the tourism, hospitality and construction sectors, among others, by enabling workers who have been laid off to secure short-term funds.
Social insurance
P&R and the Committee for Employment & Social Security are offering an option to defer payments for the first two quarters of this year, with plans to further extend this later on.
This suspension only applies to 'employer' contributions and not those of 'employees'. This is also the case for ETI receipts, which have been excluded.
However, the suspension does apply to self-employed people and, with the higher rates applicable, it is hoped this will make a favourable impact on cashflows.
Commercial TRP
The collection of commercial TRP for 2020 will be deferred until further notice. Any companies who have already paid theirs can request a reimbursement if they are having cashflow difficulties.
TRP is payable by landlords and it is hoped any deferral of payment is passed on to tenants.
States of Guernsey as landlord to external business tenants
The States will consider deferring rent for local businesses.
Suspension of morning fees for commercial fishermen
Covid-19 has already caused significant issues for local fishermen, who currently may not be able to land catch in either France or the UK.
At the moment, this is the only measure that is focused on a particular industry.
Establishment of a scheme to support banks in providing liquidity to businesses
The States have already begun conversations with the island's clearing banks, with further talks needed before a firm proposal can be put in place. However, the States have agreed to entering into such a scheme, with details to follow.
The anticipated way forward is for a scheme to give a guarantee of 80% of the amount borrowed with a cap on individual lending.
Any businesses which are able to comply with their current bank lending criteria, and therefore don't need access to the scheme, will not be eligible for support.
P&R is hoping to extend this into a pan-island scheme with Jersey and the Isle of Man.
Payment terms
The States standard payment terms are 30 days and payments are usually processed and held to be released as they are due. However, in order to improve cashflow for States suppliers, payments will be released as soon as possible.
It is hoped this will set an example for the wider commercial industry.
Pictured: Director of Public Health, Dr Nicola Brink.
"I have spent 8 years seeking to repair our fiscal position and return us to balanced budgets and surplus," Deputy St Pier added. "A week ago, I was confidently expecting that by the end of this term, I could safely say that the public finances would be considerably stronger than they were in 2012. But that is out the window for now - at least for this year.
"Opening the financial sluice gates does not come naturally to me, but that is exactly what we must now do. Let me make it very clear that we can and will make available whatever resources are needed to support the measures I am announcing today. This is intended to be a financial firehose to put out the Covid-19 induced economic inferno and meet the needs of our business community and those it employs."
While the new measures do seek to keep businesses afloat during the crisis, Deputy St Pier is still encouraging people to make the most of the businesses the island has to offer, if it is safe for them to do so.
Pictured: Today's States Meeting is being held at St James so deputies can distance themselves from one another.
"We are not locking down our community or economy, because we do not need to - or not yet anyway," he said. "We may not be leaving the island unless absolutely essential over coming weeks, but we can continue to safely educate our children and still support our local economy by shopping locally and going out, provided we rigidly adhere to the public health advice in relation to personal hygiene and social distancing, particularly for those in vulnerable groups.
"Our economy has not and does not need to come to a complete halt and, while government is playing its part with the measures I have outlined today, the community can also continue to keep our economy going, and maintain a semblance of the new-normal daily life until the crisis is over.
"We will get through this. As a community, we have the spirit to survive what we are about to endure. And we also have the financial strength to do so too."
Deputy St Pier's statement is available to read in full here.
More information and advice on the virus can be found here.
Pictured top: Guernsey's High Street.
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