Blog: Why a ‘fiscal stimulus’ is really about a roof over your head and food in your tummy

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Today is a big deal.

Jersey’s government sets out details of its £100million fiscal stimulus to help get the economy out of the coronavirus doldrums and on some kind of path to recovery.

And given latest forecasts show a £100million+ hole in the government’s own finances and a potential 6% fall in the size of the economy by the end of this year, they’ve a big job on their hands.

On Wednesday of this week we saw the UK Chancellor set out the next stage of his own plans to stabilise the ship, including £1,000 bonuses for employers who keep their previously-furloughed staff in jobs, a kickstarter scheme to fund under 25s back to work, a huge cut in VAT for hospitality and tourism, a raise in the stamp duty exemption threshold, and even up to £10 off a meal out on Mondays, Tuesday and Wednesdays in August (with a few strings attached).

So what does Jersey’s government need to do?

It points out it has done a lot already, including wage co-funding that it claims has “safeguarded” 16,000 jobs. That cost £40million across April and May, and continued through June (and likely beyond).

It also pledged to underwrite up to £50million of loans to businesses, though only £2.3million has actually been borrowed by firms.

And, in a sign of how mad things are, more than 10% of the population was reliant on the benefits system during the pandemic, including 260 people who’ve lived in Jersey for less than five years and would have previously fallen through the cracks. Overall, some 11,800 people claimed Income Support.

So what happens next?

Well, today we’ll get some more meat on the bone, but the big thinking will come via a new Economic Council, made up of industry and union representatives, which will then present their thoughts to a Political Oversight Group, which will in turn present thoughts to the Council of Ministers, which in turn will present a final report to the States Assembly.

That, alone, shows you how such a cumbersome system means it’ll be months before what the Economic Council recommends today becomes actual policy.

Boris Johnson has spoken about ‘build, build, build’ being his new mantra. Shovel-ready infrastructure projects both look good and get people working.

In Jersey there’s a new hospital to build, there’s a tatty Fort Regent needing love, and there’s a shortage of affordable housing. Oh, and probably a need for more schools or, at least, classrooms.

Overlay an appetite to embed some smart thinking when it comes to making use of emerging technology to drive up productivity, and a policy of reaching carbon neutrality by 2030, and there are lots of plates spinning.

Of course, in the meantime, people just want to know if they’ve a job, and enough money to keep a roof over their head and food in their tummies.

Let’s see if this government can step up and respond with ambition and scale.

Today matters.