Coronavirus: Guernsey approves £650m economic recovery package

Plans to commit up to £650m to support Guernsey's economy during the Covid-19 pandemic have received States backing.

The proposal permits the Committee for Policy and Resources (P&R) to take £100m from States emergency reserves and to borrow up to £550m.

Vice President of P&R Lyndon Trott said the government must "take calculated risk" to rescue the economy.

Deputy Trott emphasised the measures would not leave the island with "permanent debt".

The borrowing is designed to cover the States' immediate financial needs and future recovery measures.

Mr Trott said the money was essential to "invest in our Bailiwick recovery".

While the full amount may not be taken, it could also "not be enough", he said.

"We must take calculated risks, we cannot wait until we know the detail before we must invest in our future."

Mr Trott added Guernsey had always been "fiscally prudent" and they will not leave "permanent debt for future generations".

"But we must be confident and ambitious now," he said.

External borrowing will be split into two phases, starting with £250m to cover current spending requirements, the terms of which will be limited to two to three years.

A second phase of up to £250m to fund future stimulus will be dependent on approval of a recovery plan.

The £100m from the States Core Investment Reserve, about half of Guernsey's "rainy day fund", will pay for existing business relief.

An amendment instructed P&R to create a local investment opportunity, allowing islanders to invest in the "future of their own community".

The committee can raise up to £50m from this.

In addition, the States have instructed P&R to establish a means to review the delivery of the recovery, initially on a six-monthly basis.

Deputies also approved the commission of an independent fiscal policy review panel to conduct additional "regular" evaluations.