‘Finance sector may need government assistance’
THE finance sector is not immune to the coronavirus crisis, says the Guernsey Chamber of Commerce, which has heard of a number of redundancies, pay cuts and restrictions to working hours.
Elaine Gray, vice-president of the Guernsey Chamber of Commerce, said the business group knew of companies across the island’s financial sector that had ‘suffered an immediate drop in cash flow’ as clients and markets have been affected by coronavirus-related restrictions.
While many finance businesses were able to operate some of their functions from home, it was not ‘business as usual’ – with working parents in particular finding it hard to work effectively from home.
‘All of this means that business is disrupted. We are unsurprised therefore to hear of a number of redundancies across all parts of the finance sector, as well as pay cuts and restrictions to working hours being imposed by large and small employers across the full spectrum of financial services businesses,’ she added.
Recent research on the impact of Covid-19 on work and business in Guernsey, Jersey and the Isle of Man has found that across the three islands, 49% of professional services workers who took part in the survey reported a fall in demand or closure. Some 12% reported increased demand.
Among finance workers, 15% said there was a fall in demand or closure while 14% said there was a rise in demand, according to the study by Island Global Research.
Government assistance might also need to be considered for the finance sector if the situation worsened, added the Chamber vice-president.
‘A key difference between the position in the UK and the position in Guernsey is that the government aid in the UK is available across the board to all businesses.
‘In Guernsey, the finance sector has been completely excluded from any of the government support measures such as payroll co-sharing.
‘This seems to be predicated on the assumption that the finance sector is holding up well to the outbreak and will have adequate reserves.
‘While this may be true for some businesses in the sector, it appears that it is not true for all. Just as in other sectors, finance businesses are unlikely to have sufficient reserves to let them carry on in operation throughout an extended period of lockdown as if nothing has changed,’ she added.
‘The finance sector is at the heart of Guernsey’s economic activity. If the situation continues much longer, the States may need to consider extending some form of essential support to businesses in need in this sector.’
n The survey by Island Global Research has also reported an increase in respondents experiencing a negative impact in terms of employment as a result of Covid-19 over several weeks.
In Guernsey, 29% of respondents who were economically active had experienced a loss of work or had worked fewer hours due to Covid-19 in the week commencing 6 April. This was 1% higher than in Jersey or the Isle of Man for the same period. It’s a picture that appears to have worsened in Guernsey, according to the research. In the week commencing 30 March, 23% of those respondents reported a loss of work or fewer hours due to Covid-19, while it was 16% in the week commencing 23 March. Overall, the report also highlighted impacts on household incomes while half of all respondents thought the pandemic posed a high or very high threat to their job or their business.
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