‘Things can only get worse’
The island is running out of money, prices are rising and taxes are on the up – it’s about time we helped the pressed middle, says Horace Camp.
PEOPLE of Guernsey, remember this fine summer and the good times you have had because this is as good as it’s going to get, both weather-wise and economically, for a very long time.
Yes, although it’s hard to believe that you are probably better off now than you will be this time next year, having listened to our chief minister’s update I’m 90% certain that things can only get worse.
I know he is a very cautious man but his very words sent a chill down my spine. Look away now if you are of a sensitive disposition. These are his very words: ‘Budgets are drained. The demand for services is voracious. The expectations of our citizens are high. All of the services and all of those demands have to be paid for. Our real reserves – that is those that we can properly have access to – are limited. We will in reality run very short of money – our deficit is growing.’
Frightening, eh? You may need to pour yourself a nice cup of tea before you continue after such a shock.
What is he preparing us for? Well, it will come as no surprise to hear that he immediately moved on to the tax review. It looks pretty clear to me that taxes are on the up and up and who pays those taxes? Yes, it’s us.
Just at a time when the money in our wallets and purses seems too little to get us through the month, the likelihood is that these are the good times we will be looking back at fondly.
On the mainland, the new prime minister is talking about putting more money in her people’s pockets, as well as helping them to pay their electricity bills. Here, taxes are likely to go up and we have been told categorically that there is no money to soften any blow if we get hit by rogue super inflation.
Deputy Inder, who I must say performed exceedingly well in the Assembly on Wednesday, even if his language wasn’t suitable for a maiden aunt or the Bailiff, made an excellent comment. He reminded us (and I’m using my own words, not his) that the poor and the rich will always be with us but the great majority of our people in the middle will get up and go if things get too rough. And we all have anecdotal evidence of that happening.
Isn’t it about time that the Assembly spent some time on protecting the middle, which has been ignored by Assembly after Assembly by focusing on the poor and the rich as well as myriad other minorities? There are times, surely, when the majority deserve a tiny bit of tender loving care?
What a mess we have got ourselves into.
So far, what has the States done to help? Mostly raising the prices of everything it has control over. That’s a big help. And of course by helping the 5,000 or so of our worst-off fellow islanders. Which in itself is laudable.
But what about the rest? What about the pressed middle which carries the burden of this island upon its back and is the only hope for our future?
In the words of the song, ‘Absolutely Nothing’. Quite the opposite in fact.
As was raised in the Assembly, there has been an enormous focus on Guernsey Housing Association housing, as well as key worker housing. Again very laudable. But a complete absence of any help for the middle to buy their little bit of Guernsey – you know, the little bit that in Deputy Inder’s words anchors them to this island when the storm winds blow.
And those winds are blowing and getting stronger day by day. And no matter how many politicians tell us that any rumour of a hurricane hitting us is totally spurious, we know that weather forecasters aren’t always right.
I would have more sympathy with the States if it had had no part in making the bleak place we find ourselves in, but when it comes to the housing crisis it is 100% culpable. It throttled the supply of development land, it insisted developers effectively donate building land to the GHA, it made it almost impossible for the builder-free plot in granny’s back garden and it skewed the market so much that the profit is in the expensive house market.
Meanwhile all the visionaries in the States missed the fact that every household contains fewer people but the population isn’t declining means a massive house building programme is required. Possibly because those visionaries were focused on more fashionable and woke future plans?
The States completely missed the point of a local market deliberately denied great capital inflows from outside the island to keep the houses affordable for locals. Instead, it relaxed key worker access to the local market and opened the door to those external capital flows. More money in a market with no growth in things to buy means only one thing. The prices go up and up.
And then, of course, as the supply of high end houses dries up, then cheaper houses are bought, extended and super renovated, pushing them into the higher end bracket, taking them even further away from the reach of locals competing with colleagues who actually get financial help from the same employer.
And as pointed out by the in-top-form Deputy Inder, the key workers rotate out after five years and sell their house, which can only be afforded by a new key worker with States financial support.
I have no desire to be a Jeremiah and I’m usually the last to advocate government intervention, but in this case they caused the mess and they need to sort it out. I fear the plan is to tax us more and that just will not work. Already the average middler is worse off than their UK equivalent. The cost of living here is much higher, we have no low-end bargain supermarkets, we can’t decide to live 30 miles away where houses are cheaper and commute to work.
To survive in Guernsey, those in the middle need to retain a greater proportion of their earnings. The grand plan of shrinking the public service by 200 staff has been consigned to the dustbin, which to me means any attempt to shrink the government has now been abandoned.
People of Guernsey, you expect too much from the government. People who live on a small island cannot expect the same level of nanny state care as in the sixth largest economy in the world and one which can just print money.
At the time of the tax review consultation, I urge you to call for a complete review of States services as well. Individual responsibility is required in small islands. We cannot afford the cradle to grave services our government attempts to provide to us.
Enjoy your weekend. It’s only going to get worse.