Jersey's £40m capital fund to boost economy 'must be used'

The treasury minister wants to make sure £40m allocated to help Jersey through the recession is used

Jersey's treasury minister is urging that £40m in government funds to help Jersey through the recession must be used.

Senator Philip Ozouf wants to make sure the cash for capital projects, from the Fiscal Stimulus Fund, is spent in 2012.

With high unemployment and the economy shrinking by 5% in 2010, the minister said it would be a boost for business.

Projects include renovating the Opera House and a training scheme to improve young people's job prospects.

Senator Ozouf said: "Jersey has made the responsible decisions in terms of dealing with our deficit, making the difficult decisions on tax and spending which means that perhaps unlike other governments we have got the ability to react in order to keep people in work like we did previously.

"I am not proposing any new money, what I am proposing is to ensure the money that's already been allocated is actually spent."

VAT loophole

The minister said Jersey companies must get help during the downturn.

He said: "I was hoping at this stage of the economic cycle things would be beginning to get moving again and certainly globally we'd be starting to see growth.

"Jersey is active in the areas of the world that are growing, in Asia Pacific and the GCC [Gulf Cooperation Council] but clearly the domestic economy is still struggling and where we can act we will."

The minister also wants to help Jersey's online retailers who were told a VAT loophole could close.

Low Value Consignment Relief (LVCR) means companies in the Channel Islands can sell items such as CDs and DVDs under £18 VAT-free.

From November the threshold is being lowered to £15, but Jersey's government is concerned the loophole could close altogether as part of measures introduced by the UK government to clamp down on tax avoidance.

Senator Ozouf said: "I am in discussion, there is no firm announcements yet, but a potentially quite large project which would invest in the island's IT infrastructure which could position Jersey to create a new sector of the economy in terms of ICT.

"Clearly we are all concerned about the online retailing business and LVCR."