‘Delay could reduce backing for “Guernsey Together” bond’

Deputy Peter Roffey produced the amendment which led to plans to establish a ‘Guernsey Together’ bond of up to £50m., which would allow the public to invest.

He was disappointed that Policy & Resources has decided to delay the planned January launch.

P&R has said it was waiting until it was clear what the money would be used for.

It also decided not to put any money into the capital reserve next year as it looks to keep the deficit down.

‘The States have had a truly dreadful record of capital investment over the past decade, really the waste transfer station has been the only major project, and this desperately needs to be addressed very soon or we will see the results in the form of a deterioration of our infrastructure,’ said Deputy Roffey.

He said he was shocked and disappointed to learn there is only £125m. in the capital reserve.

‘We have had to make a zero transfer to the capital reserve this year to balance the books – this may have been necessary but it is deeply regrettable and an unsustainable strategy going forward,’ he said.

‘I am aware of some really pressing capital requirements such as ports, schools, Dairy and hospital – to name just four – which alone amount to far more than we apparently have in the capital reserve.’

He argued that the pandemic meant that large-scale borrowing was unavoidable.

‘Any attempt to balance the books over the next few years by further neglecting the obvious need for capital investment will only lead to greater degradation of Guernsey’s infrastructure, a failure to provide the economy with the boost it so obviously requires, and will create a cycle of decline,’ he said.

‘So the question is not whether to borrow but rather where to borrow from.

‘I am aware that large-scale institutional borrowing is probably available at historically cheap prices at the moment but then so are the returns available to individual islanders looking for somewhere to put their savings.

‘So I suspect that a “Guernsey Together” bond would be well subscribed, even if it only offered very modest rates of return.’

He liked the idea that any interest on such borrowings will be paid to local investors and therefore be likely to be spent in the local economy.

‘I am not naive enough to think such a bond could attract sufficient funds to meet all of our pressing needs but I think it could make a really welcome contribution.

‘While I am convinced such a bond could be launched successfully at any time I really worry that through delay we risk missing the tide of enhanced community feeling and solidarity created by the Covid-19 emergency and thereby reducing the possible uptake if we had tapped into that tide at the flood.’