Recession? What recession?
DO YOU know what’s really bothering me about this current economic slump? Apart from it being man-made and the worst since the Great Depression of the 1930s I mean? Simply that for most islanders it’s invisible.
The effects of the coronavirus lockdown weren’t, obviously, and the closed border is both a public health safeguard, a massive inconvenience and financial drain – around £1m. a month for the airport alone.
But what brought it home most was Guernsey’s unemployment figure rising to 1,631 at the end of May with scarcely a ripple of interest. Three pages in this newspaper on the weekend’s Black Lives Matter protest yet a few paragraphs downpage on the island’s worst post-war jobless total.
I don’t mean that in a critical way. It accurately reflects current public engagement and where post-lockdown priorities lie. But it does illustrate the curious never-never land feel this crisis has. Recession? What recession?
To put this into context, Guernsey’s worst previous unemployment figure was around 1,200 in the slump of 1981/82, which was triggered by high interest rates as the UK attempted to tame inflation approaching 17%.
In turn, that sparked a massive job creation programme here – the States paying to demolish derelict glasshouses, introducing vegetable farming and land clearance schemes. That’s when L’Islet Common lost its crowning glory of lupins as what were then called relief workers stripped the area.
Earlier, in the 1930s, jobless Guernsey labourers were put to work building sea defences and roads. Four years after they started, Le Val des Terres was opened to traffic and officially named by the Prince of Wales, watched by 6,000 cheering schoolkids as he cut a ribbon with a pair of golden scissors.
Enough of the history lesson. My point is that this is savage, off-the-scale unemployment for Guernsey. The sort that highlights the divisions in our society and will require a government response. It also masks the reality that hundreds of households have been plunged into hardship – remember, unemployment benefit at £163.80 a week is around half the minimum wage.
And at risk of labouring the point, the true cost of joblessness is compounded by the loss of income tax, which is why Policy & Resources calculates that the hole in public finances is heading towards £190m. That’s before the £40m. or so this Assembly wanted to spend before Covid-19 struck, on inclusivity packages, secondary pensions and the like.
Across the world, governments facing identical problems are seeking ‘shovel ready’ projects to kickstart their economies or flexing their planning regimes to get things moving again.
So does this mean the island will finally harness the potential of the eastern seaboard and invest in the Hydroport concept of a tidal reservoir generating ‘green’ hydroelectricity, improving the harbours, creating revenue-producing opportunities and putting Guernsey on the map as a ‘go to’ destination?
Alas, from my Zoom discussions with the principals last week, not any time soon. Asked by government last year to put more financial flesh on the bones of the proposals, which included up to 100 gigawatts of power a year, flood defences for St Sampson’s and St Peter Port, a new passenger terminal and a double cruise liner berth in Town, Hydroport offered to do it for £604,624, using five expert consultants, including Royal Haskoning.
Instead, government’s about to spend £1.3m. replicating the work Hydroport’s already carried out but, crucially, without a cost-benefit analysis. To be honest, I find this puzzling, especially since we’re supposed to be operating at ‘covid speed’ now instead of the States’ usual glacial pace.
For the record, I have no vested interest in the project and can’t say whether better ones exist. But – columnist’s perks – I have met with and spoken to some of those involved and their backgrounds and construction track records strongly suggest that they could deliver.
More importantly, it’s fully funded, a far more telling indication of viability. A local High Street bank is in for £250m. of the estimated £350m. cost and other impact investors are also on board for the financial, environmental and social benefits.
Since I wrote about this a year ago, the proposals have been further refined and a not-for-profit organisation called IDRIS, a Resilience Impact Group*, has become involved. Its supporters, who include former Welsh Secretary of State Alun Cairns, focus on sustainability.
So one of the newer proposals for the eastern seaboard project include ‘digital farming’ or controlled environment agriculture based on carbon-free energy, such as floating solar panels protected inside Belle Greve’s tidal reservoir.
Another benefit of producing hydroelectricity there is providing visiting cruise liners with ‘cold ironing’ docking facilities – the ability to turn off main engines, minimise pollution and buy ‘green’ Guernsey electricity to meet power needs while in port.
Whether all or any of this is right for Guernsey depends on your point of view I suppose. If lockdown has been a pleasant experience and we’re just fine as we are, then possibly not.
If you accept P&R’s Survive and Thrive document, that stimulus is necessary to reduce unemployment levels, improve household income, reduce fiscal stress on families and reduce reliance on means-tested benefits, then maybe yes.
All I’m suggesting is that if the island does want to invest in its economic future, there are projects and people readily available to do that if we want to be bold and creative and take some risks. They can also happen quickly.
Hydroport estimates completing the bulk of its scheme within two years of receiving full permissions to start – that’s half the time Guernseymen with picks and shovels took to dig Le Val de Terres the last time we had a recession this bad.
*IDRIS is a part of a developing national Resilience Impact Group network. The RIG’s prime objective is to identify and attract solution providers, investors and financial strategic partners to support infrastructure, manufacturing, technological and social environmental project portfolios. It aims to manage these portfolios to create long-term sustainable employment and prosperity and also to contribute to the improvement of health, education, citizenship and wellbeing of people. Supported portfolios are ones that use sustainable energy, locally natural resources and environmentally-friendly methodologies to generate economic growth and stimulate innovation as part of a modern industry 4.0 low carbon economy.