OPINION: The myth that’s Monaco

FORGET what you’ve been hearing about Monaco v. Cornwall. There really is only one choice. Cornwall is high tax, rammed with second home owners, miserable transport connections, quite nice scenery and locals who struggle with the cost of living there, many of whom rely of food banks to stretch the family budget. Just like Guernsey.

Monaco, by contrast, has no income tax for residents (unless they’re French, in which case serves them right), no tax on investment income, capital gains, dividends or directors’ fees and has no wealth or property taxes. In theory, anyone can move there, assuming they can find and afford suitable accommodation and have enough money in the bank. Again, a bit like Guernsey.

So the mini-debate about which we want to be is rather misleading as we already have a foot in both camps. At least, to a degree. And before you ask, no, it’s not about deciding which one we want to become more like. Instead, the real question – and it needs to dominate the remainder of this States’ term – is far more simple.

It’s how we intend to pay for the public services we currently have, and expand them in future as required.

Cornwall is one of the poorest areas of the UK with a GDP per capita of around £22,000, while Guernsey’s is £50,353 and Monaco’s is roughly £140,000. We and the Monegasques have to fund independently and from our own resources whatever services are provided by the state, while Cornwall, notwithstanding being on the bones of its proverbial, is subsidised by more prosperous parts of the UK.

Put more simply, average earnings in Cornwall are £28,400, compared with £43,224 in Monaco and £53,700 here. That last figure’s from a survey website while the States’ own figure is the mean, rather than average, which is £38,980 a year. But however you chop it, you’re unlikely to want to see your earnings decline to the level of those in the West Country.

The main reason I raise all this is because Guernsey enjoys (for the majority) high standards of living, incomes and public services. Those public services were largely expanded thanks to economic growth rather than tax increases and we’ve rather hit the buffers on that. Have we, in other words, reached peak earnings?

Even if we haven’t – although I’m doubtful – there’s still a funding issue to address, over and above the demands on the public purse built up by the last two States. And it’s not Covid, as Horace Camp suggested here last week (‘…everything else is fluff.’). Instead, it’s climate change.

Specifically, it’s Guernsey’s reaction to the emergency and how it transitions to meet net zero by 2050 or sooner.

It sounds a long way off but there’s a chunky old deadline to hit in just eight years – 57% of 1990’s levels by 2030 – and all of us clueless as to how that’s to happen.

Jersey has a much better roadmap than we have (I’m assuming the steps will be similar here) and it’s alarming – banning new oil, gas and coal boilers from 2026 and half of all existing fossil fuel home heating systems decarbonised in three years’ time.

Some 500 of the worst polluting vehicles will be scrapped by 2025 and registration of petrol and diesel cars and small vans will be ended by 2030.

I’m not saying these steps are unnecessary – far from it – but there are costs and consequences and who’s to front them up?

Jersey has already established a climate change fund and will top it up with increased duty rates on fuel.

They’ll be punitive.

Although internal combustion vehicles won’t become illegal, they’ll become too expensive to use.

Your beloved BMW’s about to be run off the road.

Jersey plans to offer electric vehicle inducements, a scrappage scheme, heating and insulation incentives and the awarding of 1,000 heating support packages by 2025. I’m not aware of anything similar locally and the clock is ticking.

Got a dodgy central heating boiler? What do you replace it with? When should landlords with multiple tenants relying on gas reboiler? Will Planning allow numerous external heat pumps on apartment blocks or listed buildings? Will the network cope with electric flow boilers being fitted instead?

When’s the best time to offload that cherished diesel Merc of yours? What to replace it with? Hybrid, to avoid the lack of charging points here (knowing fuel duty’s going to rise punitively), or fully electric if you can afford it? Who’s helping with these decisions or ensuring the skills – and labour availability – will be in place when the deadlines really start to bite?

Those deadlines, by the way, are real and being enshrined in law, so there’s no avoiding them. Which is why you should be nervous of the lack of official guidance on what’s to come.

Most Guernsey homes can’t easily be insulated to standards that make heat pumps viable, even if you can afford the high cost of buying and installing them.

My fear, in the absence of a detailed, costed and funded transition roadmap, is that government will do what it does best when the chips are down and simply dump the problem on its citizens. That’s what it tried to do when introducing zero-10 by proposing to swing the resulting £100m. fiscal black hole on to taxpayers.

My reading is also that some climate policies conflict – we’re supposed to have an open energy market with all suppliers having shared responsibility for security and to facilitate a competitive energy supply market using shared critical infrastructure as appropriate. But that’s not borne out by green competitors to Guernsey Electricity, who claim they’re being excluded from micro-generation plans.

It’s a huge and complex situation with multiple ramifications, including for employees, businesses and taxpayers, and Covid-like in the potential for societal disruption and cost.

So forget Cornwall v. Monaco, this is simply how Guernsey can best pay for the services it wants and needs. Suggestions welcomed – they’re not coming from government.