Government of Guernsey must change – before it's too late

One asks why this is happening? As a locally based businessman, running an international trading company with its head office in Guernsey, I think I do see only too well what has happened. It distils down to a manifestly dislocated and dysfunctional government. A States with 47 separate agendas that has led to years of stasis and this is having the effect of suffocating the life blood out of Guernsey. On the altar of local 'democracy' many well-meaning but completely unsuitable people are elected and the damage to the common weal continues unabated. I think this has to stop and some urgent changes need to happen before it is too late.

At the moment I detect a sense of entitlement that runs through the island community. New schools? Yes please, and make them more expensive than any taxpayer-funded school that has ever been built in the UK, and it must be designed and appointed with every conceivable luxury because that is 'my right'.

New airport and runway? Again, yes, the terminal building must be large, impressive and expensive, and when we spend £80m. on the runway why not leave it too short to take other possible airlines that may wish to fly standard jets in to Guernsey? Meanwhile the demographic time bomb ticks on with an ageing population, there is a housing crisis for the young and low-paid, and the public sector pension saga remains unresolved – an issue that will, as night follows day, bankrupt the island and our children's generation in the years ahead will have to pick up the bill and will have an impossible burden to carry.

Where a knife should have been taken in recent years to both public sector pay (especially at the top end, where Civil Service salaries and pensions are wholly out of kilter with where they should be and what is affordable for the island) and to the numbers employed (because by any international, comparable measure, there are far too many on the public payroll), nothing has happened to rein in this extravagance and there are no meaningful efficiencies being demanded, or as far as I can detect, even attempted. In fact, nothing much of a positive nature seems to happen because rigid vested interests win out every time, and there is apparently no collective determination within the States to address these and so many other pressing issues.

As the ship of state on this small, increasingly fragile island economy sails on blithely towards the rocks, the finance sector – the main financial lifeblood in taxes paid that feeds the ongoing feast for islanders – is being slowly strangled by the GFSC, or as some people refer to it, 'the enemy within'. This is the message I hear time and again from people I know who work in senior positions in the finance sector. The GFSC has large, expensive and impressive offices and many highly paid employees and their regulatory powers and interference in the activities of finance-related businesses have now become so oppressive, and the restrictions placed on companies under their regulatory control so burdensome, that many are being forced into dismissing many opportunities, and dispensing with existing business.

Local companies then look at other jurisdictions in Europe and beyond who actively welcome them, and they migrate business to other jurisdictions. I have no doubt that there is a sense of satisfaction in the cosy world of the regulators that this is all excellent news, and they are delighted that everything is seen to be 'whiter than white' – but we must be careful not to 'kill the goose that lays the golden egg'.

If Guernsey's USP is damaged and if many of the advantages that people saw for using the services of our finance sector are removed or seriously curtailed, then the ultimate outcome of the GFSC's zeal is self-defeating. It will lead (as is happening already) to a diminution of financial related activity here, with lower profits accumulated by many of the companies that do remain, fewer employees in the industry to pay income tax, and so an ever-shrinking tax base.

If things continue as they are now, then at some point many banks and other financial institutions employing large numbers of people may decide to relocate elsewhere to more welcoming places and when this happens that will be the 'tipping point'.

Sadly, the States, as a collective group are not addressing this critical issue and there is no plan 'B' if this all leads to massive job losses. There are, of course, a number of successful companies operating out of Guernsey that are outside the finance sector, and those companies, as well as individual taxpayers, will no doubt be asked to shoulder more of the burden as taxes elsewhere in our economy dry up, but as taxes increase to compensate (and no doubt the population will continue to demand as of right ever higher spending on everything from education to welfare), those companies and wealthy individuals (people who are normally very mobile) may well start to question why they should remain here at all.

I believe that it could end up being a chain reaction with catastrophic results, and the sooner people realise this and start to deal with it, the better it will be for everyone who cares about the future of Guernsey.

Guernsey also risks losing out to Jersey if the process of accelerating decline takes root, because although they also have their problems, they do seem to have a much more 'open for business' attitude, and they have other sectors in their economy that contribute to the exchequer in a meaningful way, including the tourist industry – something that has been allowed to become a side show in Guernsey in terms of what it now contributes.

Jersey also boasts air transport links that are key to the long-term sustainability of any island community and economy, and we simply don't have these anymore in a way that makes us as attractive a destination for business or tourists.

It is simply ridiculous that we find ourselves today in a position that is far worse than it has ever been before – with just two airlines operating any sort of regular service from here to the UK, and one of these is government-owned and with one jet, and the other flies some rather old propeller planes. What message does this all convey to those who are looking at Guernsey from the outside? I can tell you, it's not a good look. The destinations we can fly to from here are limited, and the airfares are sky high. Compare that with Jersey where they have a suitable runway (ours is too short to take the most popular short-haul jets), regular flights to many more destinations in the UK and into Europe, and they have a number of mainstream airlines servicing their island, including Easy Jet, with fares apparently half or less than the price we all pay to fly to Gatwick with Aurigny.

Does anyone really believe that as things stand now, with such obstructions to growth and continued prosperity, Guernsey has any realistic hope of maintaining the status quo, let alone growing its economy in the years ahead? The answer is a resounding no. When, for example, I travel to the Far East and to other countries on business, time and again those I meet have heard of Jersey but have little or no idea of where Guernsey is or what it does. And remember this, if there is someone interested in setting up offshore structures or a new business in the Channel Islands – with no initial preference for one island or the other – there is a high probability that the hard-headed commercial decision will come down in favour of Jersey because it has inmeasurably better transport links, and that all-important hunger to try to attract enterprising people and business. Where, for example, Jersey is engaged in marketing the island to high net worth potential residents, Guernsey appears to do very little to market itself to such people.

And then we have the fiasco of Condor operating a lifeline monopoly service under an agreement from the States. With great fanfare a new fast ferry was welcomed just weeks ago, but it turns out that it is difficult to manoeuvre in the confines of St Peter Port. The result is apparently that it will be unable to enter the harbour in even moderately windy conditions. So no service on many days. Where Condor had two high-speed vessels servicing the Guernsey-UK route they have replaced these vessels with one problematic boat that offers much less flexibility, and there is no back-up when it goes wrong – and it will go wrong because these things happen. Furthermore, where we (and any tourists who may still wish to come here) could travel last year on a direct fast ferry service to and from the UK, they now have to be routed via Jersey on their way home. So this is yet another retrograde step to add to the ever-lengthening list being inflicted on Guernsey.

It seems to me that at every step, and in every sphere, one sees little evidence of joined-up thinking and a great deal of evidence of bad decisions being taken on the most crucial policies relating to the long-term future of Guernsey as a sustainable self-funding economic model.

So what is to be done to stem the decline and bring Guernsey back from the brink where it can hope to survive for the next 50 years? It comes down to the government (States) and how this has operated (badly) here for too many years now, and what can be done to change course. At every election we end up with 47 deputies with very different abilities and levels of experience. A few do have wise voices and a world view, and the knowledge and experience that is required to deal with the multitude of problems and complex challenges we face, but many members of the States manifestly don't exhibit these attributes at all. Is it any wonder that successful and experienced people with a business background and others who would have so much to offer, don't tend to stand in elections for fear of being sucked into the soul-destroying imbroglio that is the States.

The scary reality is that the States we do have are in my view effectively running a large company (Guernsey) but many do not appear to have any of the essential skills or the knowledge and experience to do this effectively – and the result is, unsurprisingly, often ineptitude and muddle. It may have been just about possible to rub along like that in years gone by, but we are now in a more sophisticated and complicated world and we need very capable people who can understand the local and global issues we face and who have the ability to respond in a timely and decisive way, and not just kick the proverbial can still further down the road.

Guernsey is a minuscule island, both in terms of its physical size and its population, but it faces huge international competition and there are many people and governments out there in the big wide world who are distinctly unfriendly towards this island. There are also many other offshore and onshore jurisdictions who will take our finance-related business if we reject it or if we make it difficult for companies to operate in this island.

And be sure of one thing, if Guernsey sinks there will be no financial lifeline from anyone beyond our own shores.

I believe that the time has come to accept reality, review how Guernsey should be governed and change direction. The experiment with the current Machinery of Government has failed. It is not fit for purpose. We need radical change now if we are to ensure that Guernsey remains a sustainable, stand-alone economy that can finance itself and pay for all its grandiose projects. We cannot continue as we are because that is a recipe for lurching from one crisis to another and to experience slow death by a thousand cuts.

So what are the options? An unwieldy States with 47 deputies pursuing different agendas, and all or most of them at loggerheads most of the time, has been shown to be a recipe for inaction and muddle. I believe there are three workable alternatives that should be investigated.These are:

1) Recalibrate the States and reduce the number of deputies from 47 to maybe just 12, dispense with constituencies and make voting island-wide.

2) Reduce the number of deputies to no more than 20, introduce island-wide voting and encourage party politics. This would generate manifestos that would be presented to the electorate with clear policies to vote for, and the party elected could then move forward decisively, act together as a team and deliver policies that the majority have voted for.

3) And there is then the radical option which may well be the best of all and it is based on this premise: I think we should really see Guernsey as a large company, akin in size and scope to a FTSE 100 company. A company of that scale and stature with many thousands of employees is quite rightly managed by a board of directors, all suitably qualified and experienced, carefully recruited and working together towards agreed objectives and targets. There are non-executive directors (NEDs) to oversee their activities and to offer advice. The executive directors are very well remunerated in these large organisations, but they must perform and they are measured at all times.

I believe that Guernsey should seriously consider dispensing with the States as it is currently constituted, accept that 'democracy' as it is practised in Guernsey is shambolic and ineffective, and embark on a completely new course. This could involve electing (say) six local, in effect NEDs (experienced, knowledgeable and qualified in specific disciplines such as finance, economics, health and welfare, transport, marketing, etc) and tasking these people to recruit an executive 'board of directors' from outside the island to run Guernsey. They would be given clear objectives and parameters would be agreed and they would then be monitored by the NEDs, who would represent the interests of stakeholders (Guernsey residents). The executive directors would be expected to have all the core skills and professional expertise that one sees in a large, diverse, international FTSE company, and they would offer the immeasurable advantage of being independent from local politics and not hamstrung by vested interests or preconceived ideas about what can or cannot be done to secure a sustainable future for this island. The detail would of course need to be the subject of much debate locally, but if this blueprint were to be followed I believe that it could transform Guernsey, providing the leadership, vision, clarity of thought and direction of travel that has been absent for far too long.

Tim Chesney,

La Fontenelle Farm,

Rue du Felconte,

St Saviour's,

Guernsey, GY7 9QD.