Opinion: ‘No decision is the best possible outcome’

I am penning this on Tuesday at the start of the GST debate. I’m hoping that the States doesn’t move out of low gear on this one and reach a decision before you get to read this. Based on their previous record of swimming through molasses, I’m fairly confident I will be able to give the 38 deputies and two Alderney representatives the benefit of my not inconsiderable wisdom before they take THE vote.

Basically there were three options being presented to the States: GST and borrow, with Granny being a fiver a week better off, which will be useful with her TRP going up £10 a week; the Fairer Alternative, which was shot down on Tuesday; and Lyndon’s 23% income tax.

There are a couple of other options but they are there to be seen as worse than ‘GST and borrow’, to make it the least worst of P&R’s options. If I were to accept the problem they see and tried to imagine it through their uncreative eyes, then P&R wins hands down. Of course, I don’t accept the problem is what they think it is, and nor do I think GST will fix it.

The problem is that mostly we run our island on policies that were introduced when this was a rural economy and our people had an entirely different view of the world. Change came slowly here because we looked at England and were not convinced that things were done better there. Over time, outside pressure and an increasing demographic of people who had grown up the English way led to us adopting some interesting social policies.

I think it wasn’t until the 1990s that we thought it would be a good idea for the States to pay for hospital procedures. The island was flush with money and the policy proposers were very concerned that Mrs Le Page from Torteval would have to sell her house to pay for life-saving treatment. Healthcare was relatively cheap compared to today and lots of people with experience of the NHS couldn’t believe it wasn’t ‘free’. It was passed. Fortunately an amendment to include GP primary care in the policy was defeated. Think of the mess we would be in now if the States was picking up that tab as well. Plus, I imagine we would have had to find the money to build and upgrade their surgeries.

To soften the blow, the States agreed to pay £12 of the visit cost, which was a fair sum in 1995 and a fair proportion of the total charge. It is still £12 nearly 30 years later. If I had a time machine and went back to the 1990s and before the debate told the deputies of the mess they were going to make for us in 2023, I wonder if they would have voted it in?

The 500 words above are purely to put in your mind that what we decided to do long ago may not be the best option for our changing times, and perhaps it’s time to have a good old look and see what we could do better.

I’m no expert and I have no access to most of the facts and figures, with even the ones on the gov.gg website probably impossible to find anyway. So please take the following as big picture thinking just to make you wonder if indeed Option 3 is the only possible option to save us from Carey Street.

We are sort of short of cash to build things that possibly don’t need to be built anyway. Let’s start with the buildings.

Take the hospital. After phase two and because of medical diagnosis inflation, we will need more doctors and nurses. I never read we can’t recruit doctors but I constantly read that we can’t recruit nurses. And if we do, we pay them to come here, we pay them a higher salary than their UK one, we help them financially with housing and even plan to build them new houses. If we struggle to get nurses here, then why don’t we take our patients to where the nurses are? Our patient costs must be pretty high, given our high labour cost base, the cost of equipment and if we build a great big annexe then the cost of replacing it in 20 years’ time when a window starts leaking has to be added to the patient care cost.

Patients might moan, but it could be cheaper and reduce the demand on housing, especially when instead of building essential worker accommodation, we could build homes for non-essential workers, aka locals.

Now schools. We have lots of schools and a reducing number of children. Which is why we need to add to the estate? Millions of pounds to replace a 20-year-old, purpose-built sixth form centre. Why, does it have a leaky window? Or is it overcrowded because ESC jumped the gun and so wanted to eradicate all memories of the Grammar School that it filled it up with children to make it completely unusable for its purpose?

We often talk of vanity projects but this one certainly seems contrived enough to appear to be one.

Now we may actually need money. P&R has been advised we could safely borrow £1 billion. Yes, you read that right.

Now, being the sensible folk they are, they are only considering taking our borrowing to a bit under £700m. But I bet you are thinking if they don’t take it up to the billion, then the next States will. The strangest thing is that P&R says it has to borrow, even though it has savings. This is because Standard and Poor’s says it should.

Do you know our current bond is trading in the market below the price we issued it? If we bought it back with our savings and repaid it, it would cost us less than we borrowed and we could tell Standard and Poor’s to sling its hook.

But we have no money? The pension pots for States pensioners have about £2bn. in them. It is unusual for such pensions to be funded by a pot because all of the pension obligations are guaranteed by the States and we taxpayers. That’s £2bn. extracted from our economy and invested overseas.

The UK operates its pensions unfunded. It nets off pension payments with contributions and then makes up any difference.

If the UK had schemes funded as well as ours, they would need £2 trillion. But instead they have £2 trillion of borrowed money at 0% interest. If I wanted a cheap £350m. loan, which I don’t, and I wanted to repay my existing loan at 80p in the pound, which I do, I think I would have my eye on those pension funds.

I’ve run out of my quota of words and I have many more alternative ideas for balancing our books. They may be ridiculous, they may be genius, but I wonder if P&R really has investigated every option?

The worst possible outcome for this debate is that Option 3 is voted in. GST will not be implemented before 2026 but we have an election in 2025. Because of the lack of popular support, the 2025 election will be won on a single issue – scrap GST. A basically newbie Assembly will do just that, and then be faced with a complete mess that they will not have the ability to solve.

I say to deputies, throw out every option. Don’t be tempted to go with Deputy Trott’s 23% tax because you think any decision is better than no decision.

In this case, no decision is the best possible outcome. Forget Deputy Helyar’s Project Fear for now – he isn’t wrong, but we can wait a few years.

PS. Just in case my editor has forgotten that this is my 200th column and will not be throwing a party to celebrate, I’m taking this opportunity to thank you for taking this long ride together with me.