Fiscal Policy Panel’s Brexit update
The Treasury and Resources Minister, Senator Alan Maclean, has welcomed an update report published today (15 July 2016) by the Fiscal Policy Panel (FPP), an independent body established in 2007 to advise States Members on future fiscal policy.
The report was undertaken at the Minister’s request immediately following the result of the UK’s referendum on EU membership. The Panel was asked to determine whether the referendum result would affect its advice to support the Island’s economy in the short term and balance the books by 2018/19.
The Panel have stated that a sensible approach would be to maintain course until there are clearer indications of how the Jersey economy is being affected, and to not make ad hoc changes to the path set out by the Medium Term Financial Plan (MTFP).
Senator Maclean said “I warmly welcome this advice from our independent economic experts. This is an important juncture in UK politics, which is why I felt it necessary to commission an update report without delay. The Panel highlight that while there is significant economic uncertainty about the impact of the referendum result on the UK economy, the Jersey economy is not likely to be immune to any impacts. However, the Panel are clear that at this stage their advice has not changed and that we should still be looking to support the economy in the near term and balance our books in 2018/19.”
The Panel also stated in their report that it is important that the MTFP retains sufficient flexibility to be able to adapt to changes in economic conditions.
Senator Maclean added “We have already acknowledged in the MTFP Addition that the Council of Ministers is ready to respond if the external economic environment starts to deteriorate as a result of the UK referendum. There are a number of options open to us – we can place funding in the Stabilisation Fund if needed, from contingencies or reserves, to be used to help support the economy. In addition, the Economic and Productivity Growth Drawdown Provision is in place to support policies that can help bolster economic growth.”