Covid-19 costs States of Guernsey £120m in 2020

Up to £17m has been allocated for spending on business support, border testing and vaccine roll out in 2021

The coronavirus pandemic has cost the States of Guernsey more than £120m in 2020, according to the latest budget.

The overall economy reduced by between 6% to 8% over this period, in a year it was expected to grow by up to 1.5%.

The "unprecedented" cost includes £52m in business support, £28m in tax losses and £40m of other costs, including States-owned airline Aurigny losses.

In non-Covid news, the States will raise the personal tax allowance by £300 to £11,875.

The States have also proposed a 1.5% increase on duties levied on tobacco, alcohol, fuel and property tax, in line with inflation - which equates to less than 1p on a pint and about 1p on a litre of fuel.

The 2020 deficit is estimated at £59m, with projections indicating this will fall to £23m in 2021.

It means there will be no transfer to the States capital reserve in either year.

The States has allocated up to £17m for further business support, border testing and vaccine roll-out in 2021, the budget also lays out.

'Difficult questions'

President of the Policy and Resources Committee (P&R) Peter Ferbrache said the States was in a "far better" position than expected.

He said: "Nonetheless, we cannot downplay how devastating the impact of Covid-19 has been on public finances."

Of the £40m cost to States Trading Assets, £24m are losses from Aurigny and £12m from Guernsey Ports.

The impact of the pandemic on Aurigny and the ports is expected to spill over into 2021, with £14m and £7m in expected losses.

Deputy Mark Helyar from P&R argued the public needed to be "realistic" about spending, given the "big, difficult questions" brought about by the pandemic.

He said: "First and foremost, what level of public services should be provided and how much tax are we prepared to take from the economy and community in order to fund these?"