Delay to secondary pension scheme could see provider ‘walk away’

The eleventh-hour sursis by Deputies Carl Meerveld and Andrea Dudley-Owen found favour among the Assembly after several speeches claiming that it was necessary due to current economic uncertainty and an anticipated big rise in the cost of living.

Deputy Dudley-Owen quoted from PwC’s April outlook and its reference to the Ukraine conflict’s impact on ‘advanced economies’, how it was going to slow growth and lead to higher commodity prices having a big impact on the UK economy.

There were other massive cost implications for local businesses and it made sense to leave the matter to be debated at the same time as the tax review, said Deputy John Dyke. He supported the scheme, but said this was not the right time to approve it.

Deputy Lester Queripel feared that the sursis would equal a delay of more like a year than the six months outlined. Delay was completely unrealistic, he said.

This was a ‘particularly dangerous and disruptive sursis’ said Deputy Lindsay de Sausmarez. She said Deputy Meerveld had previously spoken of the risks of last-minute amendments and this was a classic example of making policy ‘on the hoof’.

Deputy Bob Murray was keen to hold delay at six months and no more.

‘I want that six months to be used to determine what our response to the economic climate that’s been forced on us is going to be,’ he said.

One or two members had suggested that small businesses were looking forward to the new scheme coming in, but Deputy Marc Leadbeater called this view ‘nonsense’ and claimed, in fact, that they were terrified of it.

‘They do not want this, it is going to be onerous and burdensome,’ he said.

Listen to our 'Six-minute States' round-up of the debate, with James Falla and Mark Ogier:

It was disingenuous of those behind the sursis saying that there would be no immediate financial implications, said Deputy Heidi Soulsby, and the delay would have an impact on employers who would be unable to learn more about it. Employment & Social Security would be unable to do anything to promote the scheme because they did not know where it was going.

Policy & Resources’ treasury lead Deputy Mark Helyar said there was no harm in a delay and told members that there was very little the States could do to impact the impending hike in the cost of living. He said delaying was a sensible option.

Deputy Simon Vermeuelen said he had spoken to businesses small and large, who had told him that if they did not see something positive from the States they would not be investing on-island.

The head of the World Bank had only the day before warned of a global recession due to the invasion of Ukraine, warned Deputy Nick Moakes, and the States needed to do everything it could to help businesses across all sectors. So he supported the sursis.

Approving the sursis would be ‘a pathetic abdication of its responsibility to long-term planning for the community’ said Deputy Gavin St Pier, as well as to the 60% of the working population who did not have a secondary pension.

But saving was not always a good thing, argued Deputy Lyndon Trott.

He said that encouraging people to spend was better for stimulating the economy.

The situation would definitely be clearer in six months’ time.

In a passionate response to the debate, Employment and Social Security president Peter Roffey urged members to reject the sursis.

He said that if providers Sovereign had said it could probably stand by its fee offer for a year, but only if there was certainty that the scheme was going to be introduced in 12 months, and if the sursis was approved, that certainty would not exist.

The sursis was approved by 20 votes to 17.