Pension row points out the obvious
When the Commerce and Employment minister told this newspaper last week that 'I would prefer the pension to be set at a lower rate, perhaps kept at annual RPI increases only...', she may have alarmed countless OAPs but she has also curiously done them a favour.
When the Commerce and Employment minister told this newspaper last week that 'I would prefer the pension to be set at a lower rate, perhaps kept at annual RPI increases only...', she may have alarmed countless OAPs but she has also curiously done them a favour.
For no sooner had her email comments been reported on page one than she turned a large number of States members and islanders – possibly a majority – into committed champions of the elderly and determined to maintain the value of the old age pension.
That resolve will be tested next month when Social Security publishes its recommendations for benefit rates next year but it will be surprising indeed if there is not an above RPI increase for the over 65s.
The row over her remarks has also been beneficial in other ways.
As we report in detail on page 13, there are compelling reasons why RPI ought not to be the benchmark for pensions, not if we wish to keep senior citizens out of relative poverty, and there is a debate to be had on how that is to be funded.
It is also clear, however, that islanders are well aware that their contributions go towards a fully-funded system that was, until Treasury and Resources raided it, an insurance scheme.
Trying to ratchet up what individuals and businesses pay as a tax under another name won't wash because islanders' sense of fair play is starting to become outraged.
If Treasury wants to raise millions more to fund its free-spending department colleagues, it will have to come from elsewhere. Introduce a GST? It would take a brave deputy to do that in the current climate and, as the minister for C&E has demonstrated, there is a level of public opinion that cannot be ignored.
As the debate on contribution rates for the super wealthy has also highlighted, the only fair way of raising tax revenue is via income tax. Yet Guernsey cannot afford to hand its competitors a PR victory by being the first British offshore jurisdiction to breach the 20p in the £ rate.
Which brings us back to what this newspaper and others have been saying since before 2004 – the cost of government has to be reduced.
