Everyday the international news indicates that the world is becoming an increasingly dangerous environment. British passport holders who have visited the Middle East could be aid workers or suicide bombers.
Jersey must respond to these potential threats by keeping a tighter check on who is coming to the Island.
Vetting procedures could include the re-introduction of work permits and limits on length of stay for various nationals, although a “light touch” must be retained for genuine holiday makers..
Tighter immigration controls should also work hand in hand with concerted policies to reduce the Island’s population.
To date no serious action has been taken, which means that solutions are going to get progressively tougher.
One potential avenue is reducing the scope for receiving child benefit linked to preferential treatment for housing accommodation.
To avoid hardship, any new measures would not be imposed upon current families.
For as long as I can remember, our local utility companies have generally been profitable and have regularly paid large amounts of money into the Treasury, to then be spent by the States of Jersey.
To take an example, when I joined the States Assembly in 2002, Jersey Telecom (JT) was annually paying around £14 Million per year into States coffers. Over a decade later, the public have become increasingly critical of States’ spending, so I pose the question – “Should we continue the practice of our public utilities paying in big dividend cheques for the States to “waste” OR should the benefits be transferred to the local customers?”
Taking the broad economic overview, would a better response to the global recession that commenced in 2008 have been to reduce consumer prices, instead of pursuing utility profits? There are arguments both ways. Clearly Jersey has seen the benefit of new fibre optic installations after JT profits were diverted into establishing a local broadband network and the Jersey Electricity Company (JEC) has spent millions safeguarding our cable links to France with the associated use of nuclear power.
Alternatively, could a different approach have boosted the local economy by reducing prices for local businesses and residents.
The main utilities are either wholly or partly owned by the public of the Island, but the shareholdings are held by the Treasurer of the States on their behalf.
Unfortunately, this gets more complicated, because the individual companies are run by a Board of Directors and NOT the Treasurer of the States or the Treasury Minister. There are practical advantages to this relationship, but also drawbacks. Consequently, the major shareholder (Public/ States/ Treasury) exercises a general, but fairly inert, level of influence via Memorandums of Understanding (MOUs). For example two MOUs applied to JT are – maximise dividend payment and maximise long term shareholder value. These appear totally sensible until one understands that these instructions require JT to make as much profit from its customers as possible – the irony being that the customers (Jersey businesses and residents) are also the owners of the company.
Consider an alternative JT MOU, such as – provide customers with the cheapest reasonably achievable call and data charges.
I have no doubt that the public preference between giving a £10 Million cheque to the Treasury Minister OR having local telephone bills reduced by £10 Million would favour the cheaper price option. Such a shift of profit allocation also begs the question as to whether cheaper prices across utility services might significantly boost the local economy? I consider that it would and right now is a good time to test the theory.
Let’s take a hypothetical example. JT might have roughly 100,000 business and residential fixed line customers. The previous year’s declared dividend amounts to (conveniently!!) £10 Million, which could provide a rebate of £100 per customer. In the current economic and political climate I suggest that JT customers would prefer to spend that £100 themselves, rather than “pool it” in order to secure some States project. Of course, reduced charges are preferential to rebates as cheaper prices tend to stimulate demand and produce increased profits – perhaps customers should decide?
I hold no criticism of any of our utilities, their Boards of Directors or their executive management. They are simply doing what they have been asked to do. However, this sector of the economy needs a wholesale review to ensure that our major public entities are providing best value for Islanders and I intend to provoke that change in thinking.
I have always believed that taxation should be fair and easy to understand and I am currently disappointed with the growing number of “stealth taxes” that our government is stacking up, masquerading as various additional charges and levies.
For many years the States Assembly has struggled over the details of stamp duty applied to property transactions. The need to acquire tax to balance public expenditure regularly clashed against the desire to encourage “first time buyers”. The tax had a level of merit as a local and fairly specifically applied variant of “capital gains tax” and it helps to underpin the administrative costs of conveyancing, such as maintaining a public register of property holdings. Exemptions were regularly granted to first time buyers, but there were always lengthy debates in the States when determining at what point and at what rate would the duty be subsequently applied.
Since I have left the States, it occurred to me that Jersey has the entire process back to front.
Prior to the culmination of a property transaction in the regular Friday afternoon Royal Court sitting it is usually the purchaser who has been obliged to jump through the most hurdles, such as engaging estate agents and lawyers, acquiring surveyor’s reports and, most significantly, generally committing to the biggest loan of a lifetime. It then really comes as quite a blow to conclude the entire process with the payment of yet more money in the form of stamp duty.
This is especially unfair when one considers which of the two parties to any property transaction is normally in the best financial position. It is clearly the person left holding the big cheque at the end of proceedings, in short the property seller. Consequently, I suggest that it is a much fairer tax if stamp duty is removed from all property purchasers and instead applied to the party to the transaction who holds the most money – the seller.
I estimate that the overall impact on the property market will, in practice, be marginal – but it will relieve a significant burden for the buyer. Although an early response to the measure may be a temptation for the seller to demand a higher sale price to compensate for the shifted tax commitment. I think this would be unlikely to prevail for long, with market forces being a far stronger feature. In overall terms, the switch will move the burden of taxation toward the better off – owners of higher value property – who will themselves benefit if they then move on up the property ladder.
Importantly, the change will extend the reliefs currently awarded to “first time buyers” to ALL property purchasers.
The response I have already received from leading experts in local conveyancing has been to welcome the innovation with the observation that this approach reflects the system in France. As a lot of our local law is based on French concepts I am substantially encouraged and I cannot visualise many States Members campaigning to retain our currently flawed system.
I was astonished recently by statistics indicating that Jersey had over 7,000 public service employees. This was around a thousand more personnel when compared to the total numbers that were States employees when I was a Minister. To date, efforts by the Council of Ministers and senior civil servants to reduce these numbers have produced limited results.
However, alongside spending on public sector salaries, Jersey is facing other serious financial commitments. The new hospital will cost at least £450 Million, which should be linked to a minimum of £200 Million in loans that have been taken out to support Andium (the new Housing Department quango). Add in another £100 Million or so for the outcome of the Liquid Waste Strategy and the approximate £20/30 Million spent on a new police station begins to appear minor spending by comparison. Then there are the States pension funds where, when I last investigated, payments in were not expected to come into balance with outgoings until 2080.
In the light of this massive expenditure, it is hardly surprising that the States of Jersey regularly wastes smaller amounts in the tens and hundreds of thousands of pounds on failed projects or projects that simply don’t happen. Not to mention the recent mistaken “double payment” of £1 Million pounds due to one electronic invoice duplicated by a hard copy invoice. No harm done, but tax payers will be left wondering how many other mistakes have gone undetected!
Back in 2014, a highly placed source told me that Jersey’s debts exceed £1,000 Million and, since that estimation, the States has yet to resolve the outstanding structural debt in annual revenues.
It is increasingly obvious that we cannot continue to fiddle at the margins, as previously. Our current economic growth model appears to be dysfunctional and I want to be at the forefront of developing a new approach.
One of the most persistent questions during the course of our hustings meetings has been the candidate’s view of how to pay for young Jersey students seeking to attend university.
In short, my proposal is – Full grant scholarship awards for bright children of less well off parents & tax breaks for graduates returning to live and work in Jersey.
The obvious and easy answer for any politician seeking support from voters is to claim that they consider that all students capable of winning a place in “tertiary education” should have all their tuition fees, study requirements and living costs met by a grant from the States of Jersey.
Unfortunately, life is not so simple, especially after the UK Labour Government of Prime Ministers Blair and then Brown attempted to ensure that 50% of all sixth form students would get a place at university. This well intentioned policy actually succeeded in massively devaluing university degrees in the eyes of potential employers and monetised them at the same time, with additional fees be charged to cope with the dramatic increase in student numbers.
Additionally, I can find no good reason why Jersey tax payers should be paying to support university education for the daughters and sons of the wealthy, especially when Jersey is facing economic difficulty.
What I do say, however, is that no Jersey student should be prevented from taking up a place at university because their parent or parents cannot afford to support them.
I say that with the experience of being a double scholarship boy in Jersey (States and Senior Open) and also benefiting from a full tuition fee and maintenance grant to study law at Kingston University. My entire education was thanks to the States of Jersey policies on education prevailing at that time, but time has moved on.
Consequently, I would propose setting up a “university scholarship scheme”, which places the emphasis on educational ability.
An annual fund, say £2 Million, would be set aside each year (adjusted over time for inflation) and funds for all fees and maintenance would be allocated for students with university placements on the basis of exam results. Monies would be awarded according to exam success, such that 3 A’s, beat “2 A’s and a B, beats A and 2 B’s etc. until the fund is exhausted. Irrespective of the amount left in the fund, the very last claim would be met in full.
Inevitably and unfortunately a number of students will not make the cut off point. This group would be welcome to re-apply at any future time, either on the basis of successful exam retakes or with additional qualifying points being awarded for international work experience or maturity acquired over time.
I consider such a system to be effective and fair in the way it respects the use of tax payers money, by contrast to a straightforward loan scheme, which does not.
Experience demonstrates that just under half of our local graduates do not return to work in Jersey, which places no pressure on those students to repay “a student loan”, as they are no longer within Jersey’s jurisdiction. Call that level of response by what might be appropriate, but it means that many loans will be treated as “grants”, so this approach will not set up a “rolling loan fund” for use over the years, as it will face constant and significant “leakage”.
However, by way of compensation to all those graduates who return to the Island to give Jersey the benefits of their acquired skills and knowledge, I would propose that they should receive a series of tax breaks on their local salaries amounting to the sum total of the tuition and course fees they were obliged to pay, with an additional agreed figure to recompense the student’s living and maintenance costs over the time of their relevant studies. This approach allows tax payers to repay all those who use their improved education to support their Island home.
The global economy remains extremely unstable and the recent recession made life a real struggle for many Islanders.
I do not see salaries in the private sector increasing any time soon, but I believe that lower and middle ranking wage earners need some relief. This can only come from easing the tax burden, albeit temporarily, which can assist in pump priming the local economy.
I favour a new introductory income tax rate of 10% and would favour, as an example, removing import duty on alcohol, where high prices are clearly adversely affecting the pub trade, the hospitality industry and tourism.
This is one of Jersey’s long standing problems and there can be few people in the Island who can have avoided sitting in a queue of traffic that seems to be making very slow or zero progress. Dutifully, various bodies have researched the problem in some detail and morning commuters are aware that during the school holidays the traffic “snarl ups” seem to miraculously disappear.
With that factor in mind, it was calculated that – during the school holidays – traffic flows eased by roughly 15%. Therefore it was reasoned that, if term time vehicle numbers could be reduced by 15%, then free flowing traffic would continue all year round. Unfortunately, this meant persuading around 2,000 car driving commuters to switch to travelling by bicycle, bus or on foot so, predictably, little progress has been made. Even if it had, the first sign of rain would tend to undermine even the most community minded intentions.
As Minister of Transport and Technical Services, I was never comfortable with this approach, which was one of the reasons I never signed off my long awaited Integrated Travel and Transport Strategy. So it was a little frustrating that it took another couple of years for me to “see the Light”.
In essence, prevailing traffic strategies were treating the symptoms of the problem, but doing nothing about the problem itself – the problem being that “Too many cars want to arrive in the same place, at the same time”. Once it becomes obvious that traffic congestion is all about timing, as opposed to road capacity or parking availability, the solutions become a little more apparent.
For example, do the States “over the counter” services, such as the Library and the Income Tax Office really have to open at 0900 hrs? Most town workers try to deal with this type of “public service interaction” during their lunch hour and, if given the opportunity, would probably prefer to do so after work – when the time pressures are different. Pushing government office start times back, would allow affected employees to come in to work after traffic congestion has cleared, ensuring that they are not part of the congestion problem and dramatically reducing their journey times.
Surprisingly, the key to solving our morning traffic jams on a permanent basis are a select group of Jersey’s youth.
Virtually all parents are familiar with the unresponsive, irritable and uncooperative early morning adolescent, both male and female, who tend to communicate on a very limited basis – often just grunts and sighs or an occasional vague word such as “whatever”. Scientific research has now cast some light on this issue by revealing that parental bio-rhythms (the human body’s internal clock) are not synchronous with adolescents. In practice the adolescent “wake up time” is two to three hours later than that of an adult. The morning school run actually acquires its “zombie like” characteristics because the adolescents are – in effect – still asleep.
In light of this “sleep deprivation”, schools in over 40 states in the United States of America have put their school start times back, usually by 45 minutes. Some surveys indicate that academic results have improved as a result, but evidence is so far inconclusive other than to generally confirm that pupil behaviour has improved and morning classes have higher attention and contribution levels.
It is important to emphasise that there is no intention to oblige any parent or pupil to vary their existing travel plans. All timing changes would initially only apply to Jersey’s Town based secondary schools, effectively extending the “arrival/ drop off time envelope”. This adjustment opens new options to parents who do the school run from home to school and back, as well as parents with flexi-time at work, giving them a chance to avoid peak time traffic and dramatically reduce their travel time to the relevant school.
Although no detailed study has been undertaken, a broad brush review indicates that – in combination – the suggested measures could “remove” the roughly 2,000 vehicles from morning peak time traffic and artificially generate the “permanent school holiday effect”. The combination broadly including several hundred later arriving teachers, around one thousand later arriving parents and several hundred States department employees.
It is hoped that when the sense of altering arrival times into Town is more fully understood, not just in terms of school start times and States of Jersey counter services, but also the wider business, commercial and retail community, the Island as a whole will adjust current behaviour in order to avoid the “in the same place, at the same time” scenario.
I consider that my proposal to “push back” school start times for Town secondary schools will prove to be a multiple win opportunity, finally solving traffic congestion, significantly reducing commuter stress, potentially enhancing education and academic results and – in the long run – perhaps seeing the retail environment extend into the early evening, when consumers are less pressured by work commitments.
This dramatic change can be brought about at very low cost – simply compare the proposal with existing public transport “solutions”. The capital expenditure of one new bus (well over £100,000) plus the running costs, which includes the driver’s salary, is a small example. Indeed, if one was to use environmental accounting, the reduction in wasted commercial and personal time taken up by traffic congestion is well worth the only anticipated cost of the few extra personnel required to supervise student arrivals at school over a wider time margin. Outside the education sector, I would suggest that most people would be delighted at any opportunity to avoid the morning traffic, especially when that is linked to savings in time and fuel costs.
I would suggest that the scheme is trialled over a significant period and, if considered successful, put on a more permanent basis – which may entail more intense discussions relating to employment contracts etc. Although I have already written the relevant proposition for presentation to the States, I do not anticipate immediate change – except by a widespread and enthusiastic response from morning commuters!!