Time to switch track?

Mr Dorey’s assessment of the need to improve the economy was bleak: we don’t have much time left and confidence in it is at an all-time low.

Clive McMinn, who chairs the Confederation of Guernsey Industry, was similarly quizzed and similarly direct: we don’t need distractions like a resignation when Guernsey’s crying out for growth and a plan for stimulus.

Many will agree – and the starting point when this column began back in January was how dire things were and how little debate there had been during the general election the previous March about the state of the economy.

But what if things are actually worse than we realise? That the island really is in decline and has been for a number of years?

Forget the Budget for a moment. Gavin St Pier was able to release some positive figures and we’re back in the black and deficit-free, which is something to cheer.

But not even Deputy St Pier knows how we’re truly performing because we don’t have the GDP figures. And gross domestic product is important because the island’s economic output is calculated by adding up wages, profits and other local income from capital.

So what GDP is and how it varies year on year is a vital bit of the political toolkit so that deputies can create the right policies to keep islanders in jobs, paying the bills and contributing to a rising tax take to fund public services and looking after our rapidly ageing population.

Yet there are two problems with it. The first is the GDP data is chronically out of date. For instance, 2012’s was only confirmed in August 2016. The second is we can’t really believe the figures anyway.

Government knows this, which is why the mechanics of calculating it are being updated and validated by an external auditor. Odd this hasn’t been sorted out before, I know, but there we are.

Anyway, from what I gather, the revised figures – delayed but expected shortly – will indicate that the size of the economy is, thanks to some jiggery-pokery we won’t understand, bigger than expected.

That’s the good news, I suppose, and will be presented as such. More importantly, if I’ve got this right, what’s really significant is that the data shows GDP is in decline and has been for some time.

That would be completely at odds with the official States of Guernsey line that we’re experiencing low but positive growth, that we’re nicely on track, and it’s just that things don’t feel too buoyant.

Shortly, however, we should learn that, yes, we are trending downwards and by how much.

Don’t get me wrong. The underlying economy is still strong, I’m not trying to talk anything down, and there are some pockets of excellence in all the sectors contributing to the island’s prosperity.

A small example, but one that shows how we can help master our own destiny, is that Guernsey Finance has just announced that China accounts for more than 5.5% of new personal wealth business coming here.

Six new captive insurance companies have been established here plus a large private investment fund so far this year via the China office.

It’s also generated a fair amount of aircraft registry and related fiduciary work which amounts to millions of pounds in revenue, hundreds of thousands in tax and created tens of jobs.

So these things can be done, but government needs the correct information on which to base sound policies. In the absence of which, our collectively complacent Assembly has been ignoring folk like the IoD, CGi, Chamber of Commerce, Guy Hands and Doug Perkins when they were saying that we really aren’t recovering from the 2008 crash.

I know it’s unfashionable to say this, but falling house prices benefit no one. However, I can’t remember one States member criticising his or her colleagues for allowing islanders’ biggest asset to slump in value by 10-15%.

Yet that and the continuing decline is largely self-made. As far as I know, the Co-op Bank, one of our bigger mortgage lenders, didn’t decide it had had enough of the island when its parent collapsed in the UK.

If I’m correct, the regulator encouraged it to consider its position – and by doing so promptly chased away a big chunk of financing for those wanting to buy their own property and helped to depress demand.

Not content with that, the Assembly then went on to fiddle with the open market – look how prices, values and sales have crashed there – AND took steps to restrict population growth.

A triple whammy and all because government hadn’t checked its own figures. Well, they are finally being revised, but it’s how the Assembly responds to them – and how quickly – that will be the true measure of this States.

For many of us, I guess, the most fascinating thing to come out of Deputy Peter Ferbrache’s shock resignation from Economic Development is his disclosure in this newspaper that he has to get by on £685,741 a year.

He didn’t put it quite that way, just that his £48,000 from the States was merely 7% of his annual income, so he clearly wasn’t in it for the money.

Well, thanks for clarifying, Pete, but not many of us thought you were. We were pretty certain that you’d gone back after an absence of what, 16 years or so?, to help improve the way things are run.

Admittedly, it would have been more exciting – especially from a media perspective – had you got chief minister but Gavin’s probably a safer bet just now.

Anyway, Economic Development is where the real action is (or should be) so having you there was spot on, in my view, especially having had a chance to read your committee’s Vision document.

So resigning instead of standing aside is a considerable concern, especially since there is so much to be done to try to rescue Guernsey’s ailing economy, unsatisfactory transport options and moribund growth.

That said, I can see it’s very unsatisfactory for you, an officer of the Royal Court, to feel that your integrity has been questioned.

Equally, the Public Trustee would have been well aware of the need to get any expenditure above £20,000 signed off by your department before racking up costs of £300,000 with the firm that shares your name.

So the internal auditor’s report on who she spoke to and how or why she believed she had obtained clearance should finally lay matters to rest.

Meanwhile, I can’t help wondering what the case involving the trust at issue is and who’s behind it that warrants spending £300,000 pursuing it. Assuming, that is, no similar or even larger amounts have been spent with other barristers or specialists. I’m not sure that question’s been asked yet, has it?

Anyway, the other thing bothering me is the resignation of the Public Trustee who, by law, is still holding office until a replacement can be appointed by the States.

You see, this sort of implies to me that your ex-department encouraged her to resign. Since the department could get rid of her only on grounds of permanent incapacity, misbehaviour or gross incompetence – none of which we can assume apply here – it also suggests to me that a negotiated settlement might have been needed to obtain her farewell signature.

So far, then, more questions than answers – just when we’re all desperate to see you back in harness and delivering on the economic plan.

I think the rest of us just hope some of your colleagues are wrong when they say this incident might be all a disillusioned and frustrated Peter Ferbrache needs to tip him out of politics entirely.

u Richard Digard is a freelance writer,

consultant and a former editor of the Guernsey Press.

richarddigard@guernseypress.com