IT’S the age old story repeated time after time.
The small business with flagging sales and high overheads decides the only way to stay solvent is to put up prices. And what do you know, things get even worse and it leads to en etat de desastre. Luckily, Guernsey isn’t a business, because that’s the cunning plan P&R have for our future.
The budget proposals are a throwing in of the towel by a group of politicians in the main part elected for their financial savvy with the promise they could keep Guernsey as a going concern. They are like a group of accountants advising the above-mentioned small business that in the interests of fiscal responsibility, the only wise move is to put up prices.
Yes, folks, it’s all over for us. Not today, not tomorrow but at some unspecified time in the future the last person leaving Guernsey will be asked to turn off the lights. Which assumes that the lights will still be running.
Perhaps I’m being too full of doom and gloom about the Doom and Gloom Budget? After all, the island coped with austerity during the Occupation. All right there was a bit of actual starvation but it wasn’t all bad, eh?
I wonder if the Vega is still afloat.
Still at least our P&R doesn’t come up with stupid ideas about growth in the manner of Liz Truss and her chancellor. She has this ridiculous idea of setting up investment zones in the UK with low tax, simplified planning, no red tape and no growth-limiting over-regulation. That’s never going to work. Show me one place on Earth where such a stupid strategy ever worked.
Now I come to think about it, I seem to remember some place that grew like topsy on that sort of plan. It’s on the tip of my tongue, but I’ll have to come back to that later if I recall it.
No, P&R have got it right. What we need to do is consolidate and consider how we can continue to fund an ever-increasing and ever-more expensive public service. And the easiest option is to redistribute more of the money the taxpayer earns into the public sector. That’s not for now, but it is the direction of travel and we will find out more about that in January. By pushing it back to January, P&R is being kind and letting us enjoy possibly the last austerity-free Christmas.
Oh, it’s just come back to me which place did incredibly well from having all the characteristics of the proposed new UK investment zones. Of course, it was us. It was Guernsey, back in the bad old days when we believed in growth more than restrictive planning, so much red tape I’m surprised there isn’t a red tape shortage and light touch regulation of a silver standard just enough to open the doors of commerce. Not to forget, of course, low tax.
It’s no wonder Liz Truss is getting laughed at for even considering reverting back to those terrible old days. And I’m somewhat surprised to see sterling ticking up against the United States dollar and the euro, plus the Bank of England didn’t have to spend £65bn to bail out over-stretched and under-funded defined benefit pension schemes like our own public servants’ scheme.
Of course our scheme isn’t under-funded, indeed we can actually reduce our contributions to it because we had overestimated how much it needed in the past. That was a stroke of luck, eh? Imagine our DB scheme is possibly the only well-funded one with no need to adopt a risky liability defined investment strategy like all the others. It would really have impacted our budget if it turned out we really shouldn’t have cut contributions by £9m. a year.
No, accepting that we have achieved peak Guernsey and managing our decline is the fiscally responsible thing to do. This budget will be fondly remembered in the future as the one where a little bit of money was put back into everyone’s pocket to help with the cost of living crisis. That £170 of income tax saving will make so much difference next year as inflation kicks in hard.
Everyone will, in nominal terms, be better off. Everyone but me of course, who will see my TRP whacked up by an eye-watering over-inflationary rate to whittle away my tax saving and my pension.
I suppose if Liz Truss was our chief minister she would have some cockamamie scheme to make us attractive for growth by reducing tax, simplifying planning, cutting red tape and reducing regulation for businesses. And then pretend to be ‘fiscally responsible’ by cutting the cost of government with reviews on how to best provide free at the point of use services by, say, adopting European approaches to health services rather than continuing to copy the failing NHS model. That would be as silly as Liz Truss thinking that the government’s aim should be to leave the taxpayer with as much of the income they actually earn in their pockets to spend as they think fit.
Accept the inevitable and realise that if you haven’t sold your house already then you are significantly poorer now and probably can’t afford to relocate somewhere with a future. Hopefully your children will find a more optimistic home for themselves, perhaps in a UK investment zone?
I’m old enough to remember the secret of Guernsey’s success – we were cheap, we were flexible and we could respond quickly. But those were bad days when people had zero rights and the island was an out-of-control terror zone. We never want to see those days return again, do we?
I realise how out of touch I am. I was a professional business developer and growth was my only reason for being employed. To me giving up on growth and adopting a bunker mentality means we are throwing in the towel. We all probably thought Ukraine had no hope of standing up to Russia and defeat was inevitable. But now the Russians are on the run and at least some of that success is down to the Ukrainian people not accepting that defeat was inevitable. Do you see where this analogy is going?
Please, please, please don’t let them grind us into the ground with the tax review in January, at least not without a fight. I want to hear us shouting ‘Dieu Aix’ louder than they shout ‘Slava Ukraini’.