Let’s keep life wonderful

IT HAS me in tears every time.

The final scene of It’s a Wonderful Life, the heart-warming 1946 Christmas film starring James Stewart, brings together everyone our hero George Bailey has ever helped. They literally throw their life savings at him to ensure the ‘Bailey Building and Loan’ community bank stays afloat. He put himself at the heart of his community, lending them money to buy their own homes when banks wouldn’t, and so his community rallied when he needed them.

If you haven’t seen the film, I strongly recommend it. The story follows the life of George Bailey, a man destined to give up on his dreams of travelling the world in order to deliver a happy life for his friends and family in his small town of Bedford Falls. His character is set against that of the greedy financier Mr Potter, who charges residents extortionate rents for poor quality housing and seizes any opportunity he can to try to bring down the ‘Building and Loan’. George misses out on the financial riches his brother and friends accumulate, but gains much more by becoming the beating heart of his community.

The film is very much of its time, with lots to critique, but the messages of warmth and kindness are timeless. Far more than just a festive treat, it tackles issues such as grief, love, sacrifice, family, the role of the finance industry and what it means to succeed in life. It also highlights how close we all are every day to making a life-altering mistake and how listening to those around us can guide us to safety.

I believe this is the kind of community we live in here in Guernsey.

I regularly read of groups of islanders pulling together to help one another in their time of need. Asking for help isn’t seen as a sign of weakness here, we all understand that anyone can need help at any time and one day it might be you. It’s one of Guernsey’s best kept secrets, the kindness of Guerns.

Guerns really do undersell themselves. This is a beautiful island. Free of much of the cynicism and red-tape that exists in the UK, creativity abounds. Everyone I have encountered is committed to delivering well above expectations in so many fields. We really are a pretty contented bunch on the whole, and anyone moving here is lucky to do so. Our rich history, which even includes our own beautiful and unique language, is peppered with innovation as we have adapted to changes and opportunities in the global market place. From smuggling to marmalade and our beloved tomatoes, we’ve been quick to seize the chance to trade and play to our strengths. Not everyone has bounced back when the tide has turned but we have embraced change as best we can.

It’s with this in mind that I reflect on the current proposals to dramatically change the island’s tax regime by introducing a seemingly unpopular goods and services tax, or GST.

It’s not appropriate for me to comment on policies proposed by the States. I take as given the fact that research has gone into this proposal and that this is the best of many options considered, but I would love to see a broader consideration of how we got here and how we might move forward positively.

First of all, we don’t really know how bad the island’s finances are. The level of structural deficit (an economic term for government expenses exceeding income from taxes in a given period) has been estimated at many different levels, depending on who you ask. Costs for healthcare in particular, especially with an ageing population, are rising at a rate that far outpaces our income growth. Everyone agrees there is a problem.

How we fix this depends on what kind of Guernsey we want. We could remain a low tax environment and adapt our expenditure accordingly. Many deputies openly favour this approach and it means we don’t run the risk of losing our attraction for our hugely valuable and largely very generous open market residents. This would mean, however, if we take healthcare as an example, fewer expensive drugs and innovative health treatments, but should mean that everyone’s basic needs are met without an increase in taxes. You would need insurance or to pay your own way if you wanted anything that the States doesn’t cover. We would need to shift towards a preventative healthcare model to help facilitate such a change and we would need creative external partnerships to fill the gaps. This looks like the kind of model the UK will be forced to consider over time too – deeper pockets notwithstanding.

We could change tack entirely and follow Denmark’s lead, increasing income taxes significantly across the board and using these to provide a comprehensive healthcare offering, universal childcare and many other benefits for everyone. This is unlikely to be popular but it is always an option.

The reality is that the world is changing. We can no longer guarantee that my generation (Generation X, after the fascinating novel by Douglas Coupland) will have the same state retirement benefits as our parents, nor that we will have universal healthcare by the time we retire. Secondary pensions (not yet in action here but soon to be) will become critical for us and younger generations and we will need to accept that we can’t rely on anyone to look after us longer term. This is a hard pill to swallow. It’s a huge shift from what we have grown up with and it will hurt, but there is time to mitigate the damage and to prepare ourselves. What do they say, the first and most important step is admitting you have a problem?

Back to Bedford Falls, it’s easy to demonise those pushing GST right now as ‘Mr Potters’, squeezing those who can’t afford it just before Christmas until they are forced to admit defeat. The George Baileys in our community are standing up and expressing their concerns. Yet I don’t envy our politicians just now.

Not only do we expect more and more of them, while they suffer the same external pressures as us, but also they have to deal with the impact of decisions made, in most cases, before they were even elected.

Is it wise just to try to fill the income gap before deciding what we want the economy to look like and what we want to deliver?

Have we considered all potential sources of revenue?

So many of us have skills we are keen to share for the benefit of the island – this is a characteristic of islanders which I have been consistently impressed by since I moved here. We all care about creating a better future for everyone and are happy to do what we can to get there – so why aren’t we being asked?

It might be that the model we decide we want requires more income than we are currently receiving but at that stage, with a majority buying into the plan, any changes are much more likely to be accepted and supported as we know why we are doing it and we know what we stand to gain in return.

Right now, in the panic to fix things (which I understand), it feels that an opportunity to truly connect with the population has been missed. We can effect change quickly in a small community and this is exactly the time to be using that benefit.

None of us want to end up determining who we vote for in 2025 on the basis of whether they will reverse or maintain a plan for GST. We will miss out on great candidates and the noise will drown out the innovation and cohesive thinking that we really need.

As for asking for help, we have huge amounts of expertise on-island. Islanders have run ports, managed global businesses, sit on national and international boards and policy units here, in the UK and elsewhere and have a wealth of experience and expertise of navigating difficult environments. Why aren’t we putting together a board of these experienced and willing residents to offer impartial and expert advice and support in the areas we need it most? It would take the pressure off those in charge and provide checks and balances as we find ways to engage everyone in the changes that are then proposed. We need to remain open-minded to the potential solutions and who might be able to help. We want as broad a consensus as possible for the best possible outcome.

It’s a wonderful life here in Guernsey. Let’s help each other to keep it that way.

u Hayley North is a chartered financial planner and is involved in many areas of local life.