The big story of this week centres on States plans to meet the ongoing cost of defending the Island. With expenditure on the Militia mobilisation approaching £2,000 per week, there was a need for swift action in order to avoid the Island becoming insolvent.
In peacetime, the law capped the maximum annual cost for maintaining the Militia at £6,500 per annum. On the outbreak of the present war, however, the States loyally agreed to meet the expenses of Militia mobilisation. A subsequent decision to pay militiamen while on duty increased the annual bill to over £80,000 – far more than the Island’s normal revenues can meet.
After the British government turned down a plea in January for help with meeting militia expenses, the Finance Committee has been urgently considering alternative options. Their decision is to raise £100,000 through the issuing of another war bond, the second required since August 1914.
To help defray the cost of interest payments, the States have agreed to raise additional taxes. There will be a rise in harbour duties, and, more controversially, a two pence increase in the duty paid on tea.