Plans for public asset sales to plug covid debt approved

Thursday 17 December 2020

A plan to consider selling off some public assets to help plug Jersey’s £400m covid debt has been approved by States Members.

Earlier this year, the Government agreed a £500m ‘revolving credit facility’ – referred to at the time as a “super overdraft” – with a number of local banks.

Currently, the Government is looking at drawing a total of £385m to finance the costs of dealing with covid. That borrowing, in turn, is expected to cost £29m.

In an amendment to the Government Plan debated yesterday, External Relations Minister Ian Gorst suggested that Ministers should draw up a list of potential asset sales ahead of next year’s Government Plan as part of plans to pay off the debt.

Senator Gorst, who maintained it was right that States Members began to think about how the borrowing would be repaid, noted in his speech that the States Assembly would have to agree to any asset sales before they go ahead. 

Pictured: The idea was put forward by Senator Ian Gorst.

The move was approved by 41 States Members to seven – one of which was Environment Minister, Deputy John Young, who likened the plan to “selling the family silver.”

Meanwhile, former Children and Housing Minister Senator Sam Mézec, who voted against alongside his Reform Jersey colleagues, raised concerns that the Government would “flog off land to the highest bidder.”

Deputy Mike Higgins also voted against.

Members of Scrutiny had previously suggested that the Government explore the idea of selling bonds to investors, as an alternative to drawing down its overdraft with banks. However, they withdrew those proposals earlier this week in favour of backing Senator Gorst's plan.

Pictured: Scrutiny had previously suggested that the Government explore the idea of selling bonds to investors to plug its covid debt.

Yesterday also saw the States Assembly approve a £50,000 review into how parishes fund public services to ensure taxpayers of certain parishes do not end up paying higher maintenance costs. This followed a proposal by St. Helier Constable Simon Crowcroft, which was amended by the Council of Ministers. 

States Members also agreed to Deputy Montfort Tadier’s bid to ensure that funding for arts, heritage and culture organisations continue to encompass 1% of overall Government spending from 2024 onwards.

Senator Mézec, however, was not successful in gaining the Assembly’s approval for his tax plan. 

He had suggested that, from 2022, the 20% personal income tax rate should be removed and all ordinary taxpayers put on a marginal relief calculation, at a reduced rate of 25%, and with access to marginal relief allowances. 

Pictured: Deputy Tadier's proposal ensure that the 1% funding for arts, culture and heritage would continue.

38 States Members voted against, while Reform Jersey’s five politicians, as well as Deputies Louise Doublet, Mike Higgins and Kevin Pamplin voted in favour. 

The States Assembly is now discussing whether to approve the Government Plan in its final, amended form. A vote is expected to be taken later today.