Cost of fuel, tobacco and alcohol to go up in Guernsey as part of the government's budget

People in Guernsey will have to pay more for fuel, cigarettes and alcohol as the government battles to balance its books in the latest budget. It says there will be a 1.5% increase for these items, in line with inflation.

It means a packet of 20 cigarettes will now be 9p more expensive, fuel will increase by 1.1p a litre and a pint of beer will go up by 0.6p.

Tax on Real Property (TRP) will also be part of the increase. However, personal income tax allowances will go up by £300 to £11,875 .

The budget is the first major policy development of the new administration in Guernsey, which formed after the election in October. It says the coronavirus pandemic has had a "serious impact" on the government's finances and is expecting a budget deficit of £59m for this year.

It is attributing that to the impact caused by border restrictions and the ongoing cost of things like the current border testing regime and the vaccination programme.

A £23m hole in the government's purse strings is being forecast for next year.

The Policy & Resources Committee says they have tried to prepare a budget that allows government departments to continue providing services and they want to avoid any immediate new taxes or major tax increases for the island.

The government says under the budget proposals, £82m from the Core Investment and General Reserves will be used to fund the 2020 and 2021 deficits and no transfers will be made to the Capital Reserve.

Hamish Auskerry has the latest: