Andy Sloan: Public wailing and gnashing of teeth, anyone?

Many of the economic opinions that I’ve shared in these pages are now conventional wisdom.

So much so, I’m getting T shirts printed. ‘The folly of the QE years’ (and the subsequently poor interest rate policy of the Bank of England). In my lighter moments I’ve suggested that policy is centred around the consensus of a bureaucratic elite, dangerous groupthink.

On the domestic front, many economic issues I’ve raised have too become mainstream concerns. Public expenditure growth, lack of economic growth, a shrinking finance sector. No T-shirts though – it’s all a bit painfully close to home. It’s Moneyval inspection time too, so best steer clear of commenting on ballooning compliance costs, but it’s had a major impact on competitiveness.

When I joined the States many years ago, one of the projects under consideration was developing a review of competitiveness in line with the World Economic Forum’s competitiveness framework. Competitiveness is quite an ethereal concept and can reflect many things, but economists generally agree it is key to improving long-term economic performance. So, it’s a bit of a concern that it has zero mentions in the current economic development strategy. I checked.

The WEF project never went anywhere, but I’m going to go out on a limb and suggest if it had it would have tracked a fall in competitiveness of our economy over the intervening years – one that feels like its accelerating.

It concerns me that, while there are one or two notable exceptions, other than a handful of lonely Guernsey Press commentators talking to each other on X, there’s little debate or discussion nowadays about the state of the economy.

‘Are things on the right track?’ The litmus test question of American political pollsters. In recent weeks and months, most of the chewing the cud conversations I have had with friends, colleagues and acquaintances have centred on the fact that things feel anything but. Sloan’s law, my personal favourite obviously, is that things can be unsustainable for a very, very long time and my sense is that there’s a consensus out there that things need to change.

Just to be clear, this isn’t just a Guernsey phenomenon. I pointed out last month how western European economies have generally stagnated since the global financial crisis. But in the latest Global Financial Centres Index – a survey of finance centre competitiveness – published last week, Guernsey’s ranking fell to 29 places lower than Jersey. Yes. Twenty-nine. Time was we were neck and neck. No surprise that Guernsey Finance didn’t think this one should be shouted from the rooftops. It’s frankly concerning stuff, and it’s not something to be just ignored.

Now I’m not suggesting that the GFCI Index is the most robust, definitive cardinal measure of the competitiveness of our finance sector but a wedge of such size between ourselves and our closest competitor is significant and a cause for concern. Time was when such a result would be cause for public wailing and gnashing of teeth.

Not so today.

But if this is a genuine reflection of the performance of our finance sector, it’s little wonder there was such little outcry from business groups about losing Aurigny’s jet. Bought with fanfare to replace Flybe’s lost peak-time capacity on the Gatwick route, it would seem from the muted business reaction that such capacity is no longer needed. Even recognising post-Covid business travel habits are much changed, underlying demand must be a shadow of its former self. Time was when the loss of the jet would have been the cause for public wailing and gnashing of teeth. Not so today.

On the topic of travel, if you’ve tried to get around anywhere on the roads recently, it’s difficult not to start suspecting that someone somewhere is deriving a sadistic pleasure from designing the current set of road closures.

It says much that there’s so little public outrage, but to me it says more that there’s no public recognition that there’s an economic cost to the chaos of our road closures.

Time was the costs of such chaos would have been the cause for public wailing and gnashing of teeth.

OK, so I think I’ve made my point now.

Being a member of the States’ Fiscal Policy Panel, I need to ensure I stay the right side of the line, making fair points objectively and restricting myself to just slight pulling of legs. Our lack of political parties means the slightest critique of policy is prone to be mistakenly taken personally, which is never the intent. It’s a fine line to tread.

Given the current situation, when a lot of things don’t feel quite right, and people are lacking confidence in our economic future, it’s little wonder that when someone comes along with a big positive idea, there’s an excited and receptive audience. It’s only natural, isn’t it?

Yes, I am thinking of Connect 3 Million and this idea of a tunnel to Jersey and France. I’m not getting into the detail today; others have done it to death. Personally, I understand how the idea is quite seductive. I’m a fan of the ‘grand projet’ approach myself and I can see the appeal of becoming a dormer town of Jersey, for that’s its logical endgame.

The protagonists behind the tunnel explain they are motivated by the same concerns I’ve identified – that our competitiveness is going south, our economy isn’t sustainable on its present path, and something needs to be done. Sadly, I just don’t think the financials pass even a cursory sense check. But one has to applaud the ambition.

But if we’re going to be thinking of a large-scale infrastructure project for economic benefit, my preference would be on a tidal barrage across the Little Russell.

For comparative context, La Rance cost just a billion in today’s money, paid for itself in 20 years, and generates 600m kWh of power annually. And there’s a reasonable chance it’s feasible. After all, it was just a few years ago that Hydroport was offering to build one for us across Belle Greve Bay.

How do you like them apples? As our American allies say.

I know that many will object on environmental grounds, and not wishing to sound blase, but Mother Nature will recover, she always does. In my mind a barrage makes too much sense on the climate change front and in terms of boosting economic competitiveness for us not to be looking seriously at it.

I’d like to end this month on a note of congratulations again to Elliot and everyone at Forest School for their climate march last week. It was really pleasing to be able to go and lend moral support. As I keep saying, it’s down to the younger generation to keep up the pressure.

I know I go on about climate action and the need to keep lobbying policymakers. The climate cause has been undone by some seriously rose-tinted policy decisions and some real sugar-coating of the costs of sorting the problem.

It’s been the root cause of a loss of popular support for climate action, but the problem is not going to be wished away.

Time was, when it too was cause for public wailing and gnashing of teeth.