States of Jersey income to fall by £96m

The States of Jersey will receive £96m less in income in 2020 than previously predicted, a new report suggests.

The Income Forecasting Group has updated its estimates for the island's finances following new data published by the Fiscal Policy Panel.

It means the States is expected to collect £779m, rather than £875m, from income tax, GST, and other sources.

The forecast is said to remain "highly uncertain" due to the effects of the coronavirus pandemic and Brexit.

About half of 2020's reduction (£58m) is due to a fall in income tax, with £18m from lower GST, £6m from stamp duty, £1m from reduced import tax, £7m from "other income", and £6m from bad debts.

The report predicts States revenue will remain lower than expected throughout the government plan period from 2020-24.

In 2023, its income is set to be 8.7% lower than predicted, at £900m.

A government spokesperson said it had accounted for the new figures in its revised plan for the next four years.

The damage to States income has been attributed largely to the pandemic, including the risk of a second lockdown, the failure of key businesses in the island, and a shift towards online shopping for consumers.

The report said the crisis had made "an immediate and significant impact on Jersey's economy and therefore its public finances".

"While restrictions have been partially eased, the speed of the recovery and the timing and extent of any further easing or re-imposition of restrictions remains uncertain," it said.

In addition, the report points to longer-term risks such as the UK's trade negotiations as it prepares to leave the EU on 1 January, and the effects of an ageing population.