Deputies keen to give STSB a steer on incorporation

Bob Murray accepted that it was ‘likely’ that they would be better off incorporated and run on more commercial lines, but his sursis – a delaying motion – called for more analysis of the pros and cons before making a decision.

‘We must ensure that commercialisation would actually provide benefits to all stakeholders, and to the ultimate shareholders, the people of Guernsey, before we commit to it in principle,’ he said.

‘I do not intend to prevent the examination of commercialisation. I wish us to go forward with that work, but not with the presumption that incorporation is the outcome we are expecting.’

He argued that the loss-making experience of many of the existing States-owned companies indicated that commercialisation was not ‘a silver bullet’ and claimed the States’ Trading Supervisory Board was trying to extend the model to other trading bodies prematurely.

The board agreed with Deputy Murray that further incorporations would require years of work, including how to deal with the transfer of land, funding major capital investment, staff terms and conditions, and the trading bodies’ balance sheets.

But STSB president Peter Roffey wanted ‘a steer’ from the Assembly on the policy of commercialisation before that work was carried out.

‘If the detailed work reveals that the in principle decision to commercialise is clearly flawed, the decision can be undone.

‘But when you are going to embark on quite an expensive piece of detailed work, it is useful to know from the Assembly whether or not in principle commercialisation is a destination it wants us to get to,’ he said.

Several members, including Deputies John Gollop and Yvonne Burford, saw little point in asking the outgoing Assembly whether it supported the principle of commercialisation when the project was worth undertaking only if the next Assembly was in favour.

Gavin St Pier dismissed that argument as ‘completely flawed’. Deputy Victoria Oliver had earlier made a similar point.

‘There is so much business that any States considers at any stage in its life which will appear in some form in the following States, so we would be completely paralysed and unable to make a decision on anything,’ said Deputy St Pier.

‘I can’t possibly support this sursis. I think it’s an appalling, pointless delay.’

The seconder of the motion, Jonathan Le Tocq, said he was not opposed to commercialisation generally, but felt now was the wrong time.

‘Where we are in our economic cycle, I do not believe this is a good time to be making this sort of in principle decision, and I think there are far more important things we should be concentrating on,’ said Deputy Le Tocq.

‘I really don’t think we want to assume that commercialisation in every instance is immediately good news, because it isn’t.’

Deputy Steve Falla had initially thought he would support incorporating more of the States’ trading boards. But he had more concerns after reading the board’s policy letter and was unconvinced that customers would get a good deal from incorporation.

‘If the risk is that they prioritise service delivery over commercial consideration, what would the reverse of that approach look like, in terms of standards of service delivery and cost to users?’ he asked.

Deputy Al Brouard warned that commercialising Guernsey Water in particular would be ‘a road to privatising it later’ and Deputy Aidan Matthews had ‘some concerns around the regulation of water quality’ if the utility was run with greater independence from other parts of the States.

Marc Leadbeater reminded the Assembly that Guernsey Post and Guernsey Electricity were commercialised more than 20 years ago and had not been privatised since. He also pointed out that the STSB did not anticipate incorporating Guernsey Water for nearly three years, following further States debates.

‘There is a long way to go and all the sursis will do is delay it. We need to crack on with it now and the next Assembly will have another bite of the cherry because this is going to be returning then,’ said Deputy Leadbeater.

Deputy Sasha Kazantseva-Miller challenged supporters of the sursis to explain how the utilities could be run more efficiently while remaining unincorporated.

‘Unfortunately, I see no evidence whatsoever,’ she said.

‘Deputy Roffey has given some good examples of how Guernsey Post, being more independent, has been able to adapt and innovate and acquire businesses, and look at what Ports of Jersey has been able to do by being more independent.’

The sursis was defeated by 13 votes to 23.