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Statement by the President of the Policy & Resources Committee

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Wednesday 07 September 2022

General Update

Sir, I am grateful for the opportunity to update the Assembly.

In the months that have elapsed since the last update we have enjoyed a truly marvelous spring and summer but like so many other places have had to wrestle with increased costs and the pressures on our services.

I say for no reason of political gain but because it is true various States Assemblies have spent little on our infrastructure.  We in P&R are also met with requests for increase in financial provision to simply keep the services that the States provides on the road.  Budgets are drained.  The demand for services is voracious.  The expectations of our citizens are high.

All of the services and all of those demands have to be paid for.  Our real reserves - that is those that we can properly have access to are limited.  We will in reality run very short of money - our deficit is growing.  It is clear from the budget setting process for this year that demands for increased expenditure far outstrip our expectations. We will be faced with some difficult decisions about funding public services if we want to limit the growth in that deficit.

We appreciate there can be no putting off of making difficult decisions and one of those - if not the most difficult is the forthcoming tax review.  The increase in taxation is not something any sensible politician ever welcomes. 

There has thus been an extensive public communication and consultation exercise I am grateful to all of those who have contributed all views are welcome.  A wide range of taxes have been explored.  We have, I believe, been detailed in our task - a task which has involved exploring many contingencies.

We need to balance what we can realistically raise from corporates, visitors and individuals. Part of that work has involved commissioning external expertise to look at opportunities for corporate tax. This has now reported back to P&R. Those findings will be shared with States Members later this month, and I hope every single States Member will attend. 

The Committee is now working on finalising its proposals which will focus not simply just on raising revenue but also ensuring those least able to pay actually are protected in a practical manner.

The Committee recognises the significant inflation pressures and the not yet finished rise in interest rates - which makes this a very challenging time for so many.  The need to adjust our tax bases will not go away though and we need to debate it seriously.

There are a few, and in any event relative, crumbs of comfort.  Although undoubtedly the forecasts that RPIX will increase further before the end of the year it is not expected to reach the levels being forecast for the UK, and while energy prices have increased in Guernsey in at least parts of the sector, we are not yet facing the kind of crisis which is unfolding elsewhere. But we must ensure we are taking to steps to mitigate against that in the future.

Work has been undertaken to explore the options available to Government in alleviating the impact on households.  Indeed, at this meeting we will be debating proposals to assist some of those needing help now.

On a wider point and not necessarily for today, I would again ask - and I have not been deluged with responses from colleagues - for solutions and suggestions with how we can help middle Guernsey who are aspirational and self reliant.

I now turn to MoneyVal.  Our finance sector is the dominant sector in our economy.  The Committee recognises the strategic significance of financial crime and misbehaviour and the negative impact it can have on our community and on our reputation - richly deserved - as a mature and well regulated international finance centre.  Preparations continue apace for the evaluation of our AML/CFT framework by MoneyVal in 2024.  These preparations recognise that international expectations continually become stronger and the necessity for us to meet those expectations- in this case those of the Financial Action Task Force.

The relevant bodies are working together to secure the best possible outcome and the legislative process to assist that continues, and much work is being undertaken by the Committee for Home Affairs on this area.

The programme includes putting in place anti criminality standards for Estate Agents and Accountants and enhancing those in place for Lawyers.   The Policy Letter for Estate Agents has been approved by the States and the equivalent Policy Letter for Accountants will soon be published for consideration by the States.

I update you now to where we are with the Development Agency.  The political oversight  group comprising Deputies Inder, De Sausmarez and I selected Mr Stuart Falla CBE to chair the Agency.  This followed a rigorous and competitive process.  Mr Falla will work with officers and the political oversight group to properly develop further the Agency.  An open recruitment process for members of the Board will follow in early 2023 and the States will have the opportunity to approve those appointments including that of Mr Falla.

In the meantime, officers have been directed to draft a revised future harbours requirements Policy Letter to be submitted to the States by the year end.

I now turn to Condor.   With Jersey's election now out of the way, Deputy Inder and I look forward to meeting Deputy Morel next week to get discussions moving again on a formal long-term agreement.   I can only see benefits from a fair, flexible and commercial long term agreement.  It would give security, certainty and confidence.

It has had various names and is now called the MyGOV programme and is the next matter worthy of mention.

We have been working with Agilisys across two main areas - those being core hardware and software infrastructure and transformation to support Public Service Reform.

The MyGOV programme is one of the programme of transformation to support such reform and importantly increase efficiency and improve customer service.

Property services across the States have been reorganised including the rationalisation of the number of properties used and available and work is also progressing relating to procurement, finance and HR.

A  Customer Hub has been created within Edward T Wheadon House.  The vision is for a number of services to operate out of the Hub and for the public to have digital access to services at times that suit them.  Of course - face to face services will be available for those that prefer or need them.

Progress has been slower than I would have liked.  When I became President of P&R I was surprised at the lack of detail behind such transformation and at the monies already expended.  That said, reform/transformation is required and the Head of the Public Service and other senior officers are keeping the Committee informed about all aspects of the programme.

External Relations are important to us.  I have nothing but admiration for our small but dedicated and able team.  I now refer to certain aspects of their work.

Members will be aware that all three Bailiwick Parliaments approved participation in the Reciprocal Health Agreement with the UK.  I signed, in London, the Agreement on 31 August - together with the Minister of State and in the presence of the Secretary of State.  The RHA commences in early 2023.

The Committee continues to provide ongoing support to Alderney and Sark - at their request - including working on strategic projects such as the model of primary health care and electricity supply.  We are further discussing with Alderney and Sark how we can continue to strengthen our relationships in the future.

In respect of the Bailiwicks' ongoing involvement in trade agreements a Policy Letter will soon be forthcoming on CPTPP and ongoing negotiations on other Free Trade Agreements. 

We have also commenced negotiations with the European Commission to implement the final parts of the fisheries aspects of the UK/EU TCA (extent and nature).

Time pressures mean I can only cover part of our work - which is always challenging and changing.

I would just say this though - Resources are stretched to the extreme.   We need to be realistic as to what can be achieved.  There is always a vast amount of day to day work that needs to be done.

We must though address our housing constraints as these permeate every part of our economy and daily life.  We must devote resources to that core issue.  Work is being done but wider solutions must be sought.

Sir, if time permitted I would say more but I invite questions.

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