Fiscal Policy Panel: appointment of member

STATES OF JERSEY

FISCAL POLICY PANEL: APPOINTMENT OF MEMBER

Presented to the States on 12th April 2018 by the Minister for Treasury and Resources

STATES GREFFE

2018  R.53

REPORT

Background

The Fiscal Policy Panel was established as part of a new Fiscal Framework when the States adopted proposition  P.133/2006  (Establishment of a Stabilisation Fund and Policy for Strategic Reserve) on 5th December 2006. The objectives of the Framework are to create a more transparent and credible process for making tax and spending decisions in the  Island. In addition, to ensure that fiscal policy is set in a more countercyclical way that supports economic growth and low inflation.

The Framework incorporates the Stabilisation Fund, with the Minister for Treasury and Resources being responsible for its operation, but having regard to the advice of the independent Fiscal Policy Panel ("FPP"). The States agreed that the FPP would be made up of leading independent economists that can bring together the right mix of experience and skills.

In September 2013 the FPP was put on a statutory basis, with their main purpose to continue to publish an annual report on the state of the economy in Jersey and States finances, with particular reference to –

• the strength of the economy in Jersey;
• the outlook for the economy in Jersey and, generally, world economies and financial markets;
• the economic cycle in Jersey;
• the medium- and long-term sustainability of the States' finances, having regard to the foregoing matters; and
• transfers to or from, the Strategic Reserve Fund and Stabilisation Fund, having regard to the foregoing matters.

In  September  2015  the  Council  of  Ministers  set  out  (in  R.107/2015) the  fiscal framework for the Medium Term Financial Plan 2016 – 2019 and beyond. It recognised that, now the role and responsibilities of the FPP are on a statutory basis, the FPP's Annual Report will remain the cornerstone of fiscal framework. Through independent, expert and transparent advice, the FPP is the most important check and balance to help the States set fiscal policy in keeping with the States' economic and fiscal objectives and medium-term fiscal sustainability. As part of the new framework, the FPP agreed to consider and assess what the appropriate economic assumptions should be for income forecasting purposes.

The independence of the FPP remains critical for its role in advising on fiscal policy matters. The framework emphasized the need for a transparent process through which the Minister for Treasury and Resources appoints Panel members in keeping with the legal requirement for the Minister to "seek the views of the Appointments Commission" before making an appointment.

Remuneration

The remuneration for the new member will be £18,000 per annum from April 2018 for a period of 5 years.

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Existing Fiscal Policy Panel members

Two of the Panel members (Ms. Tera Allas, and Dame Kate Barker, C.B.E.) were appointed in March 2014 for a period of 5 years. Professor Francis Breedon was appointed in March 2016 for a period of 5 years. Ms. Allas informed the Minister for Treasury and Resources of her decision to resign before the end of her term of office, which has resulted in this recruitment.

Appointment process

There  was  open  competition  for  the  new  appointment,  in  line  with  the  Jersey Appointments Commission's Guidelines. The whole recruitment process was conducted under the supervision of the Jersey Appointments Commission, who have confirmed that they are content that the recruitment process has been conducted appropriately, meeting the standards required in openness of competition, impartiality, equality and selection based on merit.

Adverts were placed during December 2017 and January 2018 in The Economist, the Sunday Times, the Jersey Evening Post, and on the States of Jersey recruitment website. The recruitment process was very successful in attracting high-calibre candidates. Twenty-nine  applications  were  received,  and  4 candidates  were  shortlisted  for interview.

All shortlisted candidates were interviewed by an Appointments Panel, which was chaired  by  Dame  Janet  Paraskeva,  D.B.E.,  Chair  of  the  Jersey  Appointments Commission.  The  Panel  included  Dame  Kate  Barker,  C.B.E.,  Chair  of  the  FPP, Mr. Charlie Parker, Chief Executive of the States of Jersey, and Mr. Dougie Peedle, Chief Economic Adviser.

In making the recommendation for appointment, the Appointments Panel carefully considered  the  merits  of  all  the  candidates  and  their  professional  and  academic backgrounds, with the aim of complementing the experience and background of the other members of the FPP.

As a result, the Minister proposes to appoint Mr. Richard Davies to the FPP, 2 weeks from the presentation date of this report.

Biographical details

Mr. Richard Davies is a British economist and a Fellow at the Centre for Economic Performance, part of the London School of Economics ("LSE"). He is also Chief of Staff and Research Director of the LSE's Growth Commission. Before this, he held various roles in economic policy, research, journalism and the voluntary sector.

Between 2015 and 2016, he was Economics Adviser to the Chancellor of the Exchequer, George Osborne, at H.M. Treasury. Other policy roles have included working at the Bank  of  England  between  2006  and  2012,  where  he  managed  teams  covering international macro-economics and the financial sector. He was a lead author of the Bank's Financial Stability Report. He also worked on secondment at the Bank of Canada in  Ottawa.  He  began  his  career  as  a  micro-economist,  working  in  private  sector consultancy, and then as a government antitrust economist at the UK Competition Commission.

R.53/2018

As a journalist, Mr. Davies has written for The Economist (where he was Economics Editor until 2015), The Times, and 1843 Magazine. He edited The Economist's guide to economics – Making Sense of the Modern Economy – published by Profile in 2015.

Mr. Davies' research has been published in the Journal of Money, Credit and Banking and the Journal of Financial Stability, and he previously held a lectureship at Lincoln College, Oxford, where he taught macro-economics, and money and banking. He has studied economics at Oxford and the London School of Economics.

Mr. Davies volunteers for a number of economics-related charities. He is a founding trustee and director of CORE Economics Education, and gives talks about economics and journalism in state schools for Speakers for Schools. He has previously worked with Pro Bono Economics to help charities estimate the impact of their work.