It is recognised that while the end of the core summer season brings a return to normal trading for many businesses, the absence of a positive summer period may bring financial strain over the coming months. The expectation for these businesses is to look to other sources to provide required financial support such as personal means or bank borrowing. A reminder that the Business Disruption Loan Guarantee Scheme (BLDGS) is available until the end of December which involves government guaranteeing 80% of the loan and thereby makes it easier for viable business to access borrowing at this time. Businesses at risk of failing and meeting the criteria set out above can have their position assessed on a case by case basis with States’ support expected to be seen as a last resort.
Earlier in the year, it had been expected that changes to travel restrictions that formed part of the move to Phase 5c may see an increase in travel activity. However the high prevalence rates of COVID-19 in other jurisdictions means this has not been the case and the Bailiwick continues to see very little travel and this has informed the decision to extend the scheme.
While it is unlikely, should the situation improve very quickly and more travel does resume in the short-term, the Policy & Resources Committee may review again if the support for businesses should continue. If it becomes the case that the support is no longer needed, the Committee will give business advance warning so they can plan accordingly.
It is likely that some behaviours and activity will not return to pre-COVID conditions for some considerable time or perhaps ever. An example of this is corporate travel whereby the greater use of technology is likely to see future levels of activity reduced. Clearly there is need, and expectation, for businesses to adapt to the new conditions as the taxpayer cannot be expected to financially support businesses who may never to return previous levels of profitability.