Decidedly undecided

WE ARE nearly two years into this political term.

In any normal States Assembly that would mean we were approaching the halfway point. But in this instance the term has been extended by eight months because of the way Covid-19 messed up our election cycle.

So what have we learned about this States after 23 months? And what haven’t we learned?

I’ll return to what we have learned in my next column, but in this one I’m going to concentrate on the second question. I suppose the biggest doubt that I still harbour is over its ability to take the really big decisions. You know the sort of thing – tax reforms, population policy and how to provide for Guernsey’s future commercial ports requirements.

Certainly there has been no firm evidence so far of the sort of resolution needed to bite significant bullets. The first debate over the ports issue was a real fiasco.

By which I don’t mean that I necessarily expected members to agree with the STSB’s recommendation, but some sort of decision – any sort of decision – would have been good.

That issue is due back before the States by the end of this year – this time led by P&R. I will be fascinated to see if we get any closer to a resolution this time around.

To be fair I suppose that with the commercial ports the issue was fraught with controversy, but my real doubts over this Assembly’s decision making credentials came with the debate over secondary pensions. An issue which had generated no public opposition and which seems to have the universal support of Guernsey’s pension providers. An initiative which has proved highly successful in other territories which have brought in similar schemes. A policy letter which P&R stated they were fulsomely behind not long before the debate.

What happens on the floor of the States?

Too many deputies – including members of P&R – get a dose of the collywobbles and decide they would rather defer the debate for six months. Odd and not encouraging when it comes to gauging this Assembly’s ability to take big decisions.

One reason given was that they wanted to see how the world economy panned out over the months ahead. The thing is that such a scheme, if introduced, would be in place for very many decades. It would be there through mega-booms and dire recessions. Through periods of high and low inflation. Through all economic weathers.

So waiting six months to read the economic runes made no sense at all and smacked of a lack of any real resolution. Anyway, that six-month delay is now nearly over. The secondary pensions policy letter is due back before the States in November. Hopefully this time around they will make a decision. I am not sure I can take another few hours of every member saying how much they support the idea but can’t bring themselves to vote for it just now. Certainly any further delay will really set the alarm bells going over this States’ ability to take decisions.

Would that matter? Well, yes – and for reasons that go far beyond the limited issue of secondary pensions. There are lots of other big decisions which need to be taken, of which Guernsey’s future tax structure/levels is probably the biggest of all. And one of the most urgent.

Right at the beginning of this term, nearly two years ago, P&R flagged this up as being absolutely urgent. Guernsey was heading for a structural deficit of the best part of £100m. per year. If something big wasn’t done we would find ourselves deeply in the red. And that ‘something’ really had to be either raising more revenues, or slashing public spending, or both.

So we faced a choice between two of the most unpopular political agendas on planet earth. Not a nice position to be in, but the truth is the truth even when it is ‘inconvenient’.

Anyway, the 38 deputies elected in October 2020 can hardly pretend that they didn’t realise the challenges facing Guernsey’s public finances. Not unless they took the extraordinary decision to stand for public office without even a modicum of research into what issues they would be expected to resolve if elected.

Anyway, here we are. As I say, nearly two years into this term. And so far, zilch has been decided over how to balance the books in the medium term. I very much hope that will change very soon, and I will do my best to ensure it does, but I have a growing sense of cynicism.

Surely we can’t go into the second half of this term without any decisions over taxation? Particularly when whatever we decide will probably take two to three years to fully implement. Particularly when the issue was flagged up as a top priority from day one. And yet – sorry to say this – I have a growing feeling that this Assembly is pathologically incapable of voting for anything unpopular. And raising taxes is certainly unpopular.

So is the impact of slashing spending, of course, but in that case it won’t be fully felt for a few years yet. And we can always put off that pain for a few more years by indulging in some irresponsible borrowing. Anyone for a game of ‘kick the can’, chaps?

Perhaps the first really big decision the States will be asked to make is over population policy. It is tricky. Aim for growth and you create all sorts of problems. Inadequate infrastructure. Not enough housing – yes I know we are already there, but population growth will make it much worse. Greater pressure on our roads and the inevitable loss of even more green space. What’s worse is that the ‘go for growth approach’ really puts you on an escalator which it will be very hard to step off.

On the other hand, with our changing demographic, if there is no population growth your natural workforce contracts. Personally I am convinced that far more can be done to encourage greater economic participation from our current population through affordable child care and encouraging pensioners to remain economically active. But I accept such initiatives only go so far.

Anyway, in the context of this column I am less interested in what the decision will be over Guernsey’s population policy than over whether we will get any clear policy direction at all.

Or will it be a typical States fudge?

Watch this space – we should know soon enough.