No pain-free answers to hard questions

Even with fair warning, the figures released yesterday are shocking. The island has not so much dipped into the red as taken a dive from the top board.

But there is no point dwelling on the change in fortunes brought about by the pandemic. As the Economic Development minister put it so graphically: ‘If you sit there being miserable, eating worms all day, your life is going to be fairly miserable.’

Turning resolutely to the future, something has to give. Policy & Resources says that big, difficult, questions must be asked and answered.

Chief among these is whether islanders are prepared to accept cuts in the quality/number of States services, or increased taxes.

Or, more likely, both.

For the moment it is neither. We are eating into our savings. No more millions going into the rainy day funds. Storms are lashing us both metaphorically and literally.

But that cannot go on for long before the pot is empty, especially if the island wants to invest to reinvigorate the economy.

And while Covid-19 can be blamed for much of this trouble, there was already a looming black hole in revenues of up to £130m. identified in January to fund an ageing population and the rising cost of healthcare. Covid just adds to that burden.

So what are the solutions? A tax review agreed by the last States has faltered. The new Policy & Resources has now made it a key priority.

The results will be challenging, especially for those members of The Guernsey Party who stood on a platform of ‘no tax increases during this four-year term, no GST, maintain low taxation to be internationally competitive’.

Other members have argued against borrowing. That just shifts the load onto the next generations, who already have a tough enough future.

But there are no pain-free choices. Some vanity projects can be binned, some costs can be stripped out of the public sector and the economy might recover more quickly than expected.

But those answers alone do not answer the hard questions.