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Statement by the President of the Policy & Resources Committee

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Wednesday 30 March 2022

General Update

Madam,

As always, I am pleased to be able to provide an update on behalf of Policy & Resources Committee.

We have much, and important, domestic business.  It will always ever be thus, but on the occasion of this sitting of the States Assembly we have something more important.  We have the opportunity, as a parliamentary body, to issue a clear view on behalf of our community in respect of the Russian invasion of Ukraine.  I fully expect that our support today, and in the future, to the brave people of Ukraine will be unreserved and unequivocal.

Those horrible events wholly caused by a man and his troops, an evil would-be emperor seeking to create an evil empire, reminds us of our values and the importance of us standing side by side with our friends, the good people of the Ukraine, and providing, as has been provided to these Islands in the past, help and assistance.

Those Members who have attended the recent States Members' briefings will know the significant work done by officers and politicians across a wide range of areas in respect of the many issues arising from the invasion of Ukraine.  That work will continue, and at a pace.

I hope that Members are assured by the work that is being done and their invaluable input is welcomed at all times.  This should not in any way become a political issue in this Assembly.  I also fulsomely acknowledge the contribution already made by our community.

At the beginning of this term I said, with the full support of my colleagues on the Policy & Resources Committee, that we would seek to work with the wider States Assembly.  We have sought to maintain that approach, albeit we can only work with those States Members that want to work collaboratively.

Led, and most ably, by Deputy Helyar, the Committee has worked collaboratively on the Tax Review.  We are grateful for the contributions already made by States Members and will continue to invite their further thoughts.  States Members have been involved in the working groups, in meetings, and in workshops.

Let me say this loudly and clearly.  There is no silver bullet.  There is no white charger that will make our decisions painless.  The decisions that will have to be made will be difficult but must not be shirked from.  As I have said, all contributions have been welcome.  I would also say this, if some Members believe that solutions exist in just cutting costs, then please provide a detailed analysis.  If some Members believe in smaller government, please provide practical and costed details as to how this could work.  Whether on those viewpoints or otherwise, mere generalities will not suffice.

What we will not do is just look at one or two tax levers in isolation.  The whole tax system needs to be considered.  That is what we are doing.  We have also increased the focus on corporate income tax as part of this process.  We are grateful for the thoughtful paper prepared by Deputy Parkinson.  The Committee has commissioned external expertise to look independently and without prejudice at corporate income tax.  Amongst other things, the paper from Deputy Parkinson will be considered.  When we receive that report, which is anticipated by the end of April, it will be carefully considered as part of the overall strategy.

Our finances were severely affected by the Pandemic.  Our reserves had to be utilised to keep people in work and the economy functioning as best as possible.  It cost the people of the Bailiwick a lot of money.  That said, our economy has bounced back well.  Members will have seen the provisional financial results for 2021 - which are still subject to audit - which were released last week.  It is very pleasing that our economy bounced back so well with the overall position improving against budget by £46 million, and a budgeted deficit of £33 million turning into a surplus of £13 million.  This was further improved by the income earned on our reserves in what was a good year for investments.  This is good news, but does not fully translate into an ongoing improvement in our baseline position, and most certainly does not address our structural deficit.

So, what conclusion can be reached as to what happened?  Well, 2021 was a much better year than anticipated and planned when assembling the budget shortly after the Lockdown in 2020.  Again, another that said - we are still spending more than we are bringing in.  We still have a significant funding gap to close.  Again, I stress there is no single solution to closing that gap.  At no stage has the Policy & Resources Committee said that there is.  So let us remember that, while we should and will look at all options, we must be realistic and responsible.  So, when we make statements about such matters, including corporate tax, let us bear in mind that we need to remain competitive, we need sustainability in the tax system, and we need to be cognisant of international developments.  Our main industry is an International Industry competing with many other jurisdictions.  Let us, as requested by the Industry, be judicious in how we approach this important debate because our economy and our competitors are listening.

We also worked collaboratively on the Government Work Plan, under the energetic and able leadership of Deputy Soulsby, the Vice President of the Policy & Resources Committee.  As we quickly approach the update of that Work Plan, all Committees have had the opportunity to provide input into that process.

What is clear is that collectively the Plan is still asking the States to do too much.  There is much more work than there is the money or people to do it.  Resources are being stretched far too thinly.  We need to focus on the enablers in the Plan - what will make the most difference to our recovery from Covid, to the effective delivery of public services to a stronger economy and to the quality of life these Islands enjoy.

It is clear that we will need to prioritise more vigorously and the Committee will share with States Members its proposals for doing that in the near future.  We will need to de-prioritise and we will need to prioritise, and we will need all Committees to stop thinking about what they want to deliver - we all want to deliver much - and to focus on their role in helping the whole of the States to deliver.

There is no point beating our chests and thinking we have done well in having a Plan that we cannot deliver and cannot afford.  In the next few weeks every Member of this Assembly will have the opportunity to act responsibly and play their part in making sure that we have a workable Plan.

As well as working collaboratively across the States, the Committee remains committed to working with partners and parties who can bring required expertise to projects.  That is part of the Government Work Plan.

During this meeting this Assembly will have the opportunity to demonstrate whether it remains of that view.  I will not rehearse the arguments for the establishment of a Development Agency now though - that is something for later in our Agenda.

But what I will say is that now, almost eighteen months in, the community is looking at us very closely - and rightly so.  I make a personal comment now for which I make no apology.  So far, like our predecessor States, we have woefully failed to meet the concerns of the bedrock of our community - those who work, do not have a bank of mum and dad, and who want to advance themselves and improve the lives of their families. 

To achieve our goals I say this, do we really work in collaboration with partners outside of the States as is the norm in many other similar jurisdictions around the World?  Or do we continue with the view that in Guernsey only the States can deliver?  I would suggest with confidence that our recent track record shows us the latter is not true, and the former is a commitment we must now come good on.

I can say though over the past few months significant progress on important matters has been made.

The previous States prevaricated over broadband.  This Policy & Resources Committee, working with the support of Economic Development, chose to move quickly.  We now have spades in the ground - literally - improving the digital infrastructure and connectivity of the Island.  The President of the Economic Development Committee advises me that by the end of February Sure and its partners had already passed over 1,600 properties on their way to a target of 7,000 premises this year. 

We also are continuing to facilitate dialogue that will enable Condor to invest in an additional vessel.  Work with Economic Development on an operating agreement is progressing, albeit more slowly than we wish, and the impending general election in Jersey is unlikely to speed that up.  Notwithstanding, the States set out its objectives for sea links in December 2018, and they remain relevant and ambitious. Our intention is to deliver an operating agreement that meets those objectives.  These conversations are of course commercial, and at this stage I would prefer not to say any more in order to protect our interests.

The Trade Policy Forum that we established with the support of the Committees for Economic Development and Home Affairs has brought together government, regulatory and industry expertise.  The Committee is grateful that Mr Tony Mancini, a non-voting member of the Committee for Economic Development, has agreed to chair it pro bono, and we are grateful for the way he has undertaken that task.  I am also grateful for the external relations expertise Deputy Le Tocq brings to the role, and for the contributions of Deputies Prow, Moakes and Inder.

Last week, following a meeting of the Trade Policy Forum, the Committee formally communicated to the UK Government Guernsey's desire and readiness to be part of the UK's request to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or CPTPP, which is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.  The fact that we are in a position to do so demonstrates how we have quietly and effectively gone about the task of building our position to enter into the network of free trade agreements, that will hardwire us into the mainstream global economy for the long term.  There will be obligations that we will need to meet and these will be put forward as part of the GWP in due course.

In respect of its work on international agreements, the Committee has agreed: extension of the Trademark Law Treaty; participation in the UK-Australia Free Trade Agreement; various Universal Postal Union decisions; technical amendments to the UK-Swiss Free Trade Agreement and the UK-Turkey Free Trade Agreement; since the last statement was provided. An agreement in principle was reached at COP26 to extended the Paris Agreement.

Finally, I want to reference one or two areas that as President of the Policy & Resources Committee I am sighted on and where clear progress is being made.

Deputy Soulsby is leading on the review of government, supported by Deputy Le Tocq, as well as Deputies Meerveld and McKenna and HM Procureur.  Work has been undertaken with States Members, the community and the Civil Service to understand the issues and opportunities, and I know Deputy Soulsby is very keen to ensure progress is made swiftly to support the need for more consistently effective government and governance.

Deputy Mahoney continues to lead the work on property rationalisation and the commercialisation of the approach of the States Property Service.  A number of positive developments are underway to sweat the value of our significant property assets, and I would strongly encourage any committee that is considering proposals relating to the building in which their service areas operate to engage as soon as possible with Deputy Mahoney.

So, in conclusion, much has been done or is being done, but much, much more needs to be done.

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