Deputies want more time to discuss £500m. loan
PLANS to agree up to £500m. of borrowing are meeting resistance from some deputies who are worried that the large debt is being rail-roaded through too quickly and will leave generations of young people to shoulder the huge burden.
The island’s most senior politician, Deputy Gavin St Pier, announced on Monday that he would be seeking permission from the entire States to borrow half a billion pounds – the biggest budget deficit in the island’s history – in order to help the island through the coronavirus pandemic.
Yesterday, civil servants were scrambling to finish writing up the policy letter and it is expected to be released today and debated by deputies tomorrow.
The timescale for politicians to read, scrutinise and get advice on the document is extremely tight.
Deputy John Gollop believes borrowing may be the lesser of other evils, but said the matter needed at least a few more days of consideration.
‘I think it is completely unreasonable for P&R to expect the 39 members of the States to absorb this kind of information that may run to 20 or more highly technical pages in a day when they are also attending the tiresome nature of an online States meeting.
‘I think such a major endeavour shouldn’t be hurried and should at least wait until the beginning of next week.’
Policy & Resources is also seeking permission to use £100m. from the island’s rainy day fund, and Deputy Gollop suggested that should be enough to tide them over in the short-term.
The senior committee needs the cash in order to finance the myriad of measures it has introduced to try to keep businesses afloat during the pandemic and avoid permanent damage to the economy.
When Guernsey is free of the lockdown there will be a need to pump money into restarting the economy.
Deputy Andrea Dudley-Owen commended the leadership team for their handling of the emergency phase, but thought that the half-a-billion pound policy letter should be discussed at an extra States meeting next Monday.
‘Even the emergency phase was planned, so there’s no reason why States members should be asked to make such big decisions on behalf of the island with so little information available to them and such little notice.’
The last time the States borrowed money was in 2014 for the £330m. bond, and that move attracted a lot of criticism because of the rates and the fees of over £10m. just to set it up.
One of the strongest critics of States borrowing has been Deputy Laurie Queripel.
In the era of Covid-19 he said some borrowing may be needed, but hoped the island would live within its means as much as possible.
‘It will not be a gift which is why if the States choose to borrow, great discipline will have to be demonstrated in regard to what policies are agreed and what expenditure is approved in the future. This should always be the case anyway but it will be especially relevant in the coming years.’
