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Statement by the President of the Committee for Employment & Social Security

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Wednesday 16 December 2020

General Update

Sir, I'm delighted to deliver my first general update statement as president of ESS.  Time constraints mean I'll only be able to touch on a few elements of the Committee's vast mandate.

ESS is committed to improving social housing and pursuing solutions to Guernsey's affordable housing needs.

I'm pleased that this seems to have the full backing of both P&R and the wider Assembly.  If we all see through on this commitment then we can start to make a real difference.

This will involve a wide range of measures, from revitalising social housing estates, increasing Guernsey's social housing stock and providing more opportunities for first time buyers to get on the property ladder.

ESS also continues to work on a housing strategy for key workers as well as on the Youth Housing Project, to protect young people at risk of becoming homeless.  

Work is being done to collect and apply data about Guernsey's exact housing requirements. We know there is a demand not only for more accommodation but also for different types of accommodation and we want to ensure that people's needs are met appropriately.

Key to all of this work is securing the land on which to develop affordable housing and to avoid any further increases in the waiting lists for affordable housing. 

Moving on to Secondary Pensions

The previous assembly overwhelmingly passed the detailed proposals for the establishment of 'Your Island Pension'. This followed approval, in principle, by the assembly before, back in 2015.  It's been a long road and now we must turn the concept into reality as soon as possible.

The scheme will help islanders to support themselves in later life and enjoy a more comfortable retirement.  Of course, it will also reduce reliance on income support. 

So ensuring that the scheme is implemented in 2022 remains a top priority for my Committee.

The drafting of the legislation for approval by this Assembly next year is now key. As is the appointment of a Governing Board to oversee the 'Your Island Pension' scheme under a statutory trust.  

We will also be returning to the States early next year regarding the requirement for employers to auto-enrol their employees into the scheme.

Members, I can't stress strongly enough the overwhelming and urgent need to make both the Guernsey Insurance and Long-term Care Insurance Funds sustainable. 

Allowing them to become completely depleted is unthinkable. It would represent a complete abandonment of this assembly's long tradition of financial prudence.

The latest five-yearly actuarial reviews of both funds are being finalised and will be laid before the States very soon.

Those reviews will confirm what ESS has been repeatedly reporting to the States for more than a decade - that the current contribution rates are not sufficient to keep the funds solvent and to pay the required benefits.

We, the States, have been constantly avoiding dealing with this issue, always finding a reason not to address it.

Back in 2009, a major public engagement and policy piece was undertaken under the banner of 'The Pension Puzzle'. My predecessor, Deputy Mark Dorey, put forward a package of proposals for sustainability.

An increase in pension age was approved with a 10 year notice period. But a proposal for an increase in the employers' contribution rate was rejected.

Allegedly it was too soon after the financial crisis, and too soon after zero-10 when we were hoping to grow our way out of the loss of company tax that policy entailed.  Over the last 5 years or so, the reasons given for postponement have moved on to looking at things in the round, as part of the review of taxation and benefits or as part of the fiscal strategy or whatever.

I'm sorry to say that when the actuarial reviews are published, we will see the consequences of burying our heads in the sand on this one. 

The results of the actuarial review of the Guernsey Insurance Fund are particularly alarming. The Government Actuary has calculated that if nothing is done it will be exhausted by 2039 - that's less than 20 years away from now. 

Moving on to the long-term care scheme.

In August this year the previous States agreed to approve increases in long-term care benefit rates, but also to decline to investigate a deferred property loans scheme. That outcome must be respected but a key challenge for my Committee in this political term is to work with P&R to find new ways to ensure the sustainability of the Fund. 

I can tell members that if the current rates of contribution are maintained, the Government Actuary has projected that the balance in the Long-term Care Fund will fall to zero in 2053. And that is before taking into account the decision in principle, taken by this Assembly a few months ago, to use the fund for care delivered in the home.

The Government Actuary calculates that the contribution rate needs to increase by 1% to make the Fund sustainable in the long-term if this policy change is pursued.  Even if it's not pursued, the contribution rate will need to increase by approximately 0.4%.

These matters need addressing, and quickly. Even if a solution for the Guernsey Insurance Fund is applied gradually, over the next five years, or even more, we need to identify that solution now and at least start its implementation.

Mr Bailiff - my Committee is very eager to work on these matters with Policy & Resources as part of the Review of Taxation and Fiscal Framework.

Entitlement to long-term care is currently residence-based. Everyone who has lived in Guernsey for five years is entitled to the full benefit.  As I mentioned in my pitch for the Presidency, I would at least like to look at whether this could instead be changed to a contributory footing.

Alternatively it could be based on a more rigorous set of residential qualification criteria.

Some initial investigations into this have commenced and we will keep the States posted on that work.

Turning now to my Committee's very top priority - the Disability, Equality and Inclusion Strategy

That strategy is broad in scope, and much work has been done to promote awareness raising, facilitate disability awareness training, review the accessibility of key locations around the island, and begin initial preparations for a prejudice and discrimination survey. 

We are also pleased to work alongside the Committee for Health & Social Care to develop adult safeguarding measures and frameworks for people with learning disabilities and for those with speech, language, and communication needs.

But, of course, sitting at the very heart of the disability, equality and inclusion strategy is the new anti-discrimination legislation.

The States made a landmark decision in August of this year, giving overwhelming - indeed unanimous - approval for the drafting of legislation to protect people from discrimination on the grounds of disability, carer status, and race.

In fact the States went even further than the original ESS proposals by agreeing to broaden the scope of the work stream to include sexual orientation and religious belief in this first phase of anti-discrimination measures.

A targeted consultation on these additional grounds has been undertaken, with a range of responses received from local groups. These will help inform a new Policy Letter to be brought to this Assembly by my Committee early next year.

As to the law itself I am delighted to report that St. James's Chambers has confirmed that so long as the new Policy & Resources Committee retains this legislation as a top drafting priority - as their predecessors did - then the law can be up and running by 2022, as originally planned.

 

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