States Meeting Transcript - 07/10/2009

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 7th OCTOBER 2009

PUBLIC BUSINESS - resumption................................................................4

1. Vote of No Confidence: States Employment Board (P.142/2009)........................4

1.1 Deputy G.P. Southern of St. Helier:......................................................4

1. Senator T.A. Le Sueur:.................................................................11
2. Connétable M.K. Jackson of St. Brelade:...............................................13
3. Deputy D.J.A. Wimberley of St. Mary:.................................................14
4. Senator P.F.C. Ozouf :..................................................................17
5. Deputy J.M. Maçon of St. Saviour:.....................................................20
6. Deputy M. Tadier of St. Brelade:.......................................................21 Senator J.L. Perchard:........................................................................25
7. Deputy F.J. Hill of St. Martin : ..........................................................25
8. Senator B.I. Le Marquand:..............................................................26
9. Senator S.C. Ferguson:.................................................................27
10. Deputy T.M. Pitman of St. Helier:...................................................28 Senator J.L. Perchard:........................................................................32
11. Deputy A.E. Pryke of Trinity : .......................................................33
12. Deputy A.K.F. Green of St. Helier : ..................................................33
13. Senator S. Syvret:....................................................................34
14. The Deputy of St. John:..............................................................36
15. Deputy G.P. Southern : ..............................................................37

LUNCHEON ADJOURNMENT PROPOSED..................................................39

LUNCHEON ADJOURNMENT................................................................39

2. Draft Marriage and Civil Status (Amendment No. 3) (Jersey) Law 200- (P.123/2009) ...........................................................................................39

1. Senator B.I. Le Marquand (The Minister for Home Affairs): ...........................39

1. The Deputy of St. Martin:..............................................................39 Deputy R.G. Le Hérissier (Chairman, Education and Home Affairs Scrutiny Panel):.........40
   2. Senator B.I. Le Marquand:..............................................................41
   3. Senator B.I. Le Marquand:..............................................................42

2.3.1 The Deputy of St. John:................................................................42

3. Draft Public Employees (Contributory Retirement Scheme) (General) (Amendment No. 10) (Jersey) 200- (P.126/2009) ......................................................43

3.1 Deputy J.A.N. Le Fondré of St. Lawrence (Assistant Minister, Chief Minister's Department - rapporteur):..............................................................44

1. Senator J.L. Perchard:..................................................................45
2. Deputy R.G. Le Hérissier: ..............................................................45
3. The Connétable of St. Helier:...........................................................45

4. Senator S.C. Ferguson:.................................................................46
5. Senator T.A. Le Sueur:.................................................................46
6. Deputy J.A.N. Le Fondré:..............................................................46 Senator S.C. Ferguson (Chairman, Corporate Services Scrutiny Panel):......................47

4. Draft Road Traffic (No. 59) (Jersey) Regulations 200- (P.128/2009)...................48

1. Senator B.I. Le Marquand (The Minister for Home Affairs): ...........................48

1. The Deputy of St. Martin:..............................................................49
2. Senator B.I. Le Marquand:..............................................................49

Deputy R.G. Le Hérissier (Chairman, Education and Home Affairs Scrutiny Panel):.........49

2. Senator B.I. Le Marquand:..............................................................49
3. Senator B.I. Le Marquand:..............................................................50
4. Senator B.I. Le Marquand:..............................................................50

1. The Deputy of St. John:................................................................50
2. The Deputy of St. Martin:..............................................................51
3. Senator B.I. Le Marquand:..............................................................51

5. Senator B.I. Le Marquand:..............................................................52
6. Senator B.I. Le Marquand:..............................................................53

1. Connétable K.P. Vibert of St. Ouen:....................................................53
2. Senator B.I. Le Marquand:..............................................................53

5 Rental Deposit Scheme to Protect Tenants' Deposits (P.130/2009)....................54

5.1 Deputy G.P. Southern :..................................................................55

1. Deputy D.J. De Sousa of St. Helier:....................................................57
2. Senator A. Breckon: ....................................................................57
3. The Deputy of St. Martin:..............................................................59
4. Deputy S.Power:.......................................................................59
5. The Deputy of St. Mary:................................................................62
6. Deputy T.A. Vallois of St. Saviour:....................................................63
7. Deputy M. Tadier :......................................................................64
8. Senator T.A. Le Sueur:.................................................................65
9. Deputy J.A. Martin of St. Helier:.......................................................66
10. Deputy T.M.Pitman:................................................................67
11. Senator P.F.C. Ozouf : ...............................................................68
12. Senator B.E. Shenton: ...............................................................69
13. Deputy G.P. Southern : ..............................................................69

6. Draft Sex Offenders (Jersey) Law 200- (P.132/2009)...................................71

6.1 Senator B.I. Le Marquand (The Minister for Home Affairs): ...........................71

1. Deputy D.J. De Sousa:..................................................................74
2. Deputy A.E. Jeune :.....................................................................74
3. The Deputy of St. Mary:................................................................74
4. Deputy R.G. Le Hérissier: ..............................................................75
5. Deputy M. Tadier :......................................................................75
6. The Deputy of St. John:................................................................76
7. The Deputy of Trinity :..................................................................76
8. Mr. W.J. Bailhache Q.C., H.M. Attorney General:......................................76
9. Deputy R.G. Le Hérissier: ..............................................................78
10. Connétable D.W. Mezbourian of St. Lawrence:......................................78
11. Deputy T.M.Pitman:................................................................79
12. Deputy J.A. Hilton of St. Helier : ....................................................79
13. Deputy J.B. Fox:....................................................................79

14. Senator B.I. Le Marquand:..........................................................80

ADJOURNMENT................................................................................83

The Roll was called and the Dean led the Assembly in Prayer.

PUBLIC BUSINESS - resumption

1. Vote of No Confidence: States Employment Board (P.142/2009) The Bailiff :

So we return then to the Order Paper, P.142/2009 lodged by Deputy Southern , Vote of No Confidence: States Employment Board. I will ask the Greffier to read the proposition.

The Deputy Greffier of the States:

The States are asked to decide whether they are of opinion that they have no confidence in the States Employment Board.

Connétable A.S. Crowcroft of St. Helier :

Could I, before we start, just take your guidance on conflicts of interest? This is a no confidence vote in my wife's employer and I just wondered whether there is a conflict of interest of States Members who are in a similar situation.

The Bailiff :

I take the view that there is not a direct financial interest that requires anyone to withdraw. This is not a debate on whether there should be an increase or not in pay. It is whether there is confidence in the Board, although, of course, the issues are closely related. Nevertheless, my view is that anyone who has a spouse who is in the employment of the States ought to declare it. But it is an interest, which, having declared, they remain for. [Interests declared] I think, in fairness to other Members, any Member who has declared an interest who rises to speaks should remind Members at the time he or she stands to speak of his interest. So if Members could take that into account.

Deputy P.J. Rondel of St. John :

Given that my daughter and the like, other members of my family, work within the States, do I declare the interest also?

The Bailiff :

No, it only relates normally to the spouse, I think, Greffier, does it not?

The Deputy Greffier of the States: Yes.

Connétable G.F. Butcher of St. John :

Just before we start, I just wonder if I can seek some guidance from the Chair again. It is not a conflict where I am concerned. I am wondering whether the Deputy has a conflict in that his wife is very active in the teachers' union.

1.1 Deputy G.P. Southern of St. Helier :

I was going to start with that. If I could start my speech, Sir. Right. That is that item dealt with. I think no conflict there. Although my wife is in the negotiation team on behalf of the N.U.T. (National Union of Teachers), she is a retired teacher and can in no way benefit at all from any pay rise or change in conditions of service for her and therefore myself. There is no conflict of interest for me. But I am reminded how close a community we have and how many people are related to people who work in the public sector, and perhaps Members should bear that in mind when they come to debate this issue. So here we are, and on the warmest night, October night, for many, many years, how ironic that we should be facing such a winter of discontent, thanks to the actions of the States Employment Board, because, as I shall attempt to demonstrate, that is what we face.

Now this issue, I suppose, concerns 2 things essentially: the establishment of a pay freeze, the reasons for a pay freeze and the way in which it was done, and the handling of the negotiations. Now, the third item that comes in is the way in which the reasons were presented for the need for a pay freeze. Let us start with the reasons for a pay freeze. We are told we are really responding to economic conditions. It is fascinating to recognise that yesterday we were on our feet for an hour or so and then in the previous meeting we were on our feet for 4 and a half hours or so, debating how best to cope with the recession. We were discussing a fiscal stimulus, how to put money into the economy so the economy stays buoyant when we are in recession. Fundamental to that is the issue of pay.  What better way to prop up the economy in recession and to make sure people have money in their pockets and that money gets spent and circulated in the community? That is the fundamental logic of economic theory and action to be taken in recession. The public sector props up the economy until the good times get back. That is the reality. Yet what has happened here? Our States Employment Board, our Ministers, our Council of Ministers and our Government has decided to impose, arbitrarily, a pay freeze.  How have they done that? Well, let us have a look at how convenient the timeline, the timetable given in annex B of the comments produced by the Chief Minister, no less, on page 7 of his comments. So 28th March: "The States Employment Board resolves that because of the deteriorating position in the local economy and significantly falling retail price index, it was minded to pursue a pay freeze of all public sector workers this year. It sought the endorsement of the Council of Ministers for this proposal." Note "of the Council of Ministers." So 4 Ministers sought the approval of the rest of the Ministers. Did they come to the States? They did not. The Council of Ministers, 23rd April: "Supports the proposal for a pay freeze in the public sector this year in view of the prevailing economic climate and pressure on public finances in the medium term. 27th April, the Chief Executive of the Council of Ministers, head of the Public Service,  meets with senior representatives of all the main pay groups and informs them of the S.E.B.'s (States Employment Board) proposal to have a pay freeze this year. It is intended to ensure the unions could consider their pay claims in the full knowledge of the imposed position of not being in a position to fund a pay increase." The first question I ask is where is the scope for negotiation in that? Because normally pay claims are negotiated. There is give and take and a solution acceptable to all, if you like, a win-win or win and enough of a loss but still to be reasonably content with, comes away from the negotiating table. In this case, absolutely no negotiation whatsoever. As a result of this, 2 Members bring proposals to change the way or change the amount in which we negotiate. Give us something to negotiate over, an offer of some sort of pay deal, one as a flat rate of £400, the Deputy of St. Ouen, and my own for the equivalent of 2 per cent across the board, £1,000 and £250, again, across the board, to try and alleviate increasing pay gaps. The only thing that came to the States here, the Minister for Treasury and Resources lodges a proposition proposing the withdrawal of the 2 per cent previously inscribed in the Annual Business Plan for pay awards this year. So the only thing the States has debated is a proposition to take the money away. The decision was made. It has not debated, in principle, the establishment of a pay freeze. 24th July, trade unions and staff groups write collectively to the S.E.B. asking for a meeting to discuss cuts and services and the pay freeze. S.E.B. and other Ministers meet senior representatives of all main pay groups. The latter are assured, reassured that negotiations on a pay award this year may continue, provided that the overall pay bill does not increase. Yes, by all means, you can come in and negotiate but there is not one penny in the pot for

2009 because we have decided and that is our fixed position and we are not moving, no negotiation. The timeline stops there. But the meeting last month saw something like 1,500 members of the public sector meeting en masse and they proposed a motion of no confidence and expressed it, no confidence in the States Employment Board. We come right up to present time. Last night, unprecedented in my experience since 1986, all the teachers' unions got together; 200-plus members met, around about a little over a quarter of the total teaching force met and decided unanimously to declare a dispute and to proceed with a ballot for action. Teachers, amazingly, a very conservative group of people, very reluctant ever to even talk about or consider striking, voted that the ballot should say: action up to strike action but not including strike action, and the second box to tick: action including strike action. For the first time in my memory, certainly, we face the possibility of, say, a half-day strike, a one-day strike, closing down our schools. I know teachers are reluctant to do that but they are prepared to ballot on it at this stage. I have never seen that before in my days. That is the state we have got to. That is the first of our public sector pay groups that have met and got organised, declared a dispute and are going to ballot. The manual workers will do simply likewise. I suspect the nurses are engaged in organising that as well. Fire service, I do not know. But pay groups throughout the public sector will be organising. That is just the first; that is just the tip of the iceberg. Why has that been brought about? Because of the actions of their employers, the States Employment Board. Before I go any further, can I just say that although this is a motion of no confidence, the most serious motion of condemnation that can be brought to a House by a Member, one has to bear in mind that, as I have put in my paper, in my report, the structure that we are dealing with, the motion of no confidence is, indeed, serious. But if Members will turn to page 3 of my proposal and examine the rules around the States Employment Board and the membership of the States Employment Board, you will notice that the Chief Minister is solely responsible for the States Employment Board. He appoints Ministers from his Ministers to the States Employment Board. There is nothing the States can do about it as to whatever happens, apart from a motion of no confidence. But that motion of no confidence does not necessarily mean that everybody has to resign. What it is, is a slap of the wrist. The Minister can look because there is no power of the State to do anything. It cannot say: "Put this person on the States Employment Board. Take this person off." All you do is a motion of no confidence. Effectively, it is a slap on the wrist. It says: "Your policy is wrong. You might want to change some of the membership of the States Employment Board, just to show that you are listening." Or you might want to we can reconsider our policy but we will maintain the same Ministers on the States Employment Board. In that sense it is a slap over the wrist. It is not the "no confidence" compulsory, you must resign. So it is possible for Members, without provoking an enormous crisis, it will not be the end of the world to vote for this proposition if they are persuaded to do so. That is the timeline.

Secondly, why the reasons for a pay freeze. The material that was presented to us was presented in response to the propositions for a pay increase of £400 from the Deputy of St. Ouen and the £1,000 plus from me, presented in comments to P.68 from the Chief Minister. On that there is a table which shows salary comparisons with the Jersey private sector. I will just go through it. It compares lowest grade and highest grade because one of the arguments was that lowest grades, relative to the private sector, are paid relatively better than high grades. High grades in the public sector are paid relatively less well, the average and the overall lowest grade, on average, 25 per cent better than the private sector in the public sector. At the highest grade they were something like 12 per cent less well off than the high executives of the top end of the high grades. The average 3 per cent public sector better off than their counterparts in the private sector. But it then goes down the list. Police, 22 per cent better off; fire officers, 27 per cent better off; prison officers, 37 per cent better off; teachers, 6 per cent worse off; manual workers, 12 per cent better off than their equivalents in the private sector; civil service 4 and a half per cent better off; nurses, 1 per cent better off; on average, 3 per cent better off than their equivalent in the private sector. What, out of that, did the Chief Minister choose to highlight? For example: "The lowest grade of public sector manual worker is paid 30 per cent higher than a similar sized job in the private sector. A civil servant is paid 20 per cent higher than a similar sized job in the private sector. On average, the lowest paid grades are paid 25 per cent more than the private sector." They have gone right to the low end and I will examine that in a little while. So they have picked the worst case of data that they have given of a cross-spread. Not the average figures but the worst case: 25 per cent better off in the public sector than the private sector. Wow. What a big margin. No, that is the worst case. On average, 3 per cent better off. But the Chief Minister and the Council of Ministers chose not to focus on that. I ask Members: is that a way to present your data? I ask them also further to consider: this data was taken in 2006. It was performed by Hay on comparable jobs. That is about half of the Hay Report. That is summed up in one paragraph and one table. Where was the detail? Where was the real information we needed to validly compare one with another. It wasn't there, and, where it was, to be honest, it was misleading. It was misleading, as I shall show. So a shoddy presentation of the so-called facts. But let us consider what is happening there. We are seeing, for

example, teachers 6 per cent worse off, on average, than their comparative equivalents in the private sector, nurses only 1 per cent better off than the average equivalent in the private sector. We have got comparison with private sector for fire, prison and police. Where is the real case? Where is the privatised fire services on this Island? But no, when challenged, where is the private police force? Where is the private prison? It does not exist in Jersey. Yet we have got comparative figures with their equivalent in the private sector. Ah, we were told, when challenged by the Chief Minister: "But they were comparable pay grids in terms of responsibility, size and, et cetera, et cetera." Comparable pay groups with a police officer? Where is the equivalent? Who else in the private sector goes out on duty with a stab vest? A pay comparison would indeed be different if it was the Honorary Police. But I am surprised they did not put it in there and say: "Look how much more they get paid than the Honoraries." No, I must not jest like that because they will. They will. Where is the equivalent of the fire service? It does not exist. No. Who is likely to be going out, as part of their job, running into a burning building as part of their job? Where is the equivalent? So I question the equivalence, especially when I look at the figures. But returning: teachers and nurses significantly fairly on a par or worse off than their equivalents in the private sector. Now, why is that significant? It is significant because we need 2 things in terms of our pay levels in the public sector. One, and indeed you might argue that we have to compete with the private sector in order to attract a good quality work force locally, but also we need to maintain comparisons with the U.K. (United Kingdom) because in many areas, and we have noticed it straight away we were debating yesterday: a nursing shortage, teachers, civil servants, ditto. We need to be able to regroup. We need equivalence with the U.K. So there are 2 valid things you can do to look at the comparison with the U.K. What do the Chief Minister and the Council of Ministers do? They brought out the best statistic that, on average, the public sector in Jersey is paid 39 per cent better than the private sector in the U.K. - 39 per cent margin. The beauty of that is absolutely zero unless you examine whether the cost of living in Jersey is equally different to the cost of living in the U.K. Yet, where is the comparator? It was not there. Why, for example, were Hay commissioned to produce this report in 2006 to form the basis of pay negotiations for the

future without doing a comparable cost of living comparison so we can get something to judge by. Apparently on average we are 30 per cent better off than the U.K. It sounds significant. How much more or less is our cost of living? What does that mean? What does that pound note buy in Jersey? That is the question that needs to be asked. Why were Hay not commissioned to do that? I do not know. I hope the Chief Minister can answer it because in answer to a question yesterday he said: "Although it is difficult to make the comparison, and it takes some work, it can be done." He says: "Over the coming year the Statistics Unit is endeavouring to undertake an exercise which aims to compare a minimum income standard for Jersey with that in the U.K." So it is being done now. It was not done then. Why not? I choose the only example we have: the household expenditure survey, 2004/05 reveals that our expenditure, which may or may not be an accurate reflection of costs but is indicative, is 46 per cent higher than the U.K. Now, that puts the context of 39 per cent better off into context in a serious way. So comparisons with the U.K. need to be done because we have to attract workers from the U.K. for our professionals, and comparisons with the private sector in Jersey. Let us look at that comparison with the private sector and, again, what information was given to us: that one table and one paragraph. Let us have a look at merely the executive summary, which could have been summarised for us quite easily, so we could have a vote on a pay freeze with some information, instead of which, no, we got these figures: 25 per cent better off in the public sector than the private sector in Jersey.

Deputy R.G. Le Hérissier of St. Saviour :

Sir, can I ask a point of clarification? Is the speaker saying our cost of living is 46 per cent higher or the expenditure of individuals is 46 per cent higher? That is a fundamentally different concept.

Deputy G.P. Southern :

I accept that there are differences. What I am saying is the only marker we have, because we have not done the work, the States Employment Board has not done the work, the Chief Minister has not done the work, would be a proper comparison. The only marker we have is a household expenditure survey where we have some figures. That is 46 per cent. Now, I said "with reservations". With reservations is the only marker we have got of how much it costs and how much is spent to maintain families in Jersey, right? I am not saying it is gold standards by any means. But it is the only comparator we have got because the work has not been done. It could be done and it was not done. The opportunity was there in 2006 to do it. We did not do it because it would have given us an accurate proper marker by which we can judge the actions of the States Employment Board. That is why it was not done. So what does this, in summary, suggest? The pay market in Jersey can clearly be divided into 3 main sectors: the public sector, the private finance sector and the private industrial and service sector. Overall, the private finance sector, a quarter of our work force, half of our economy, the private finance sector is the highest paying sector in Jersey with, on average, 21 per cent higher than the private industrial and service sector. In total earnings, let us look at the bonus culture which also does not get captured by lots of figures but is there nonetheless, there is a substantial difference in the total earnings. The earnings gap, on average, is 28 per cent between the finance sector and the rest of the private sector. Listen carefully: "The industrial and service sector appears to be some way behind the finance sector, particularly at the graduate and professional levels. These levels in the finance sector tend to be more specialised and therefore attract a larger salary." So skill levels, academic qualifications in the private non-finance sector are lower than the finance sector and substantially lower than the public sector. Where is the best trained workforce on this Island? Where is the best qualified workforce on this Island? In the public sector. So any comparisons between public and private sector must bear that in mind. Then it says: "The public sector is 10 per cent ahead of the market median when compared to all organisations in the private sector. The public sector is 21 per cent - not 28 per cent but 21 per cent - ahead of the market median in total earnings in the non-finance sector." So there is the comparison. Is that a valid comparison to say: "Public sector this, private sector; here is the comparison, therefore a pay rise is not justified"? It is not. I will quote from some U.K. figures. But it is marked here in the Hay Report that the level of qualification and training and academic qualification is markedly lower in the private sector than in the public sector. It says here: "There are 5 times more unskilled workers in the private than the public sector. The Office of National Statistics Labour Force Survey shows that only 8.6 per cent of people in the private sector are in professional grades compared with 24.5 per cent of all public employers who are professionals." All the way up the scale: managers, professionals and skilled trades are taking, it says here, a 70p pay cut in working for the state in the U.K. So what you have to bear in mind is comparative qualifications and skill levels, if you are going to do that comparison. What does that say about that comparison? Well, that comparison then is not particularly valid unless you take these other factors into consideration. The broad crude 3 per cent better off - and that is on average

- 3 per cent better off in the public sector than in the private sector needs to be balanced by that given, in the light of the differences in qualifications and training and skills. Then you come to examine the detail of some of the charts that they produce. This is where it gets really, I believe, underhand. For example, for nurses, you have got a column that says: "Nurses maximum basic salary" - let us not say what it is at a certain grade - and that is compared with private sector, all

organisations basic salary. What is missing? Maximum.

Deputy K.C. Lewis of St. Saviour :

Apologies for interrupting the Deputy . We will very shortly, I believe, be going inquorate. There are several Members here who are en défaut at the moment. May I raise the défaut on the Deputy of Trinity , Senator Ozouf and Senator Cohen?

The Bailiff :

Does the Assembly agree to raise the défaut on Senator Cohen, Senator Ozouf and the Deputy of Trinity ? The défaut is raised.

Deputy G.P. Southern :

If we are about to go inquorate I had better speed up. I can see the Constable of Trinity looking at me. But, anyway, where was I? Nurses, nurse grades: maximum basic salary compared with private sector organisations basic salary median, a median figure. Maximum basic salary compared with basic salary, the median that is paid in comparable grades. Well, of course, the maximum salary is going to be larger than the median. That is the structure of a median. But that is what is presented and it looks like: "Oh, gosh, nursing auxiliaries are 34 per cent better off than their equivalents in the private sector." Really? No. Their maximum is 34 per cent above the median pay in the equivalent in the private sector. But then you look down the chart and that sounds significant. Qualified nurses - S.E.Ns (State Enrolled Nurses) 5 per cent behind the market median; staff nurse 2 per cent above the market median on basic wages; second grade sister 6 per cent above the market median; first grade sister 2 per cent behind the market median. So even with that maximum compared with median, we have got nurses paid behind the median balance. Is that public sector pay falling behind? Is that public sector justification for a pay freeze given the dire problems we have recruiting nurses? It is not. Was any of that presented to the States in order to debate whether we take this money out of the pockets of nurses? It was not. Shameful. When you look at overall earnings, what you get is S.E.Ns 10 per cent behind the mark; staff nurses 3 per cent behind the mark; sister 2, 2 per cent behind the mark, overall earnings; and sister 1, first class sister, 12 per cent behind the mark. So we are even underpaying our nurses in comparison with a comparator in the private sector. If you take out the auxiliaries where comparison is with, effectively, people who clean and do basic duties, bottom grades, where we know there is marked difference in the public sector and the private sector, if you take out those, then for qualified nurses they are worse off, far worse off in the public sector than they might otherwise be doing in another job in the private sector. Moving on to teachers, and, again, the comparator is between maximum basic salary. But only one grade of teacher is compared: the grade of teacher on the main professional grade, when you come into teaching. So it is no promoted grades. Why is that? Well, one has to ask why because it is easy to find, the rest of the day, so when you are promoted it is posted. It is not hard to find publicly. You could go to the website now and get it. Only the main

professional grade was compared. Again it was maximum basic salary, maximum top of the grade. Why? Because teaching salaries  have been deliberately weighted to the bottom end because employer and employee in negotiation have said: "There is the problem. We have a problem getting graduates into the teaching profession. We must weight it towards the bottom end and reduce the differentials for promoted post." That has always been the case. It has been long held. That is what we try to do. The comparator says that the maximum basic salary for a teacher is 2 per cent ahead of the equivalent in the private sector, and remember that that is maximum compared with median, a completely false comparison. When we look at total earnings compared to the private sector, and, again, we are back to bonuses and overtime and things like that, then we are talking about 6 per cent behind. Again, was that data presented? It was not. It was there. It was not. Why not? Because I believe the States Employment Board did not want a fully-fledged debate on the need for a pay freeze. So what do we know about earnings in the private sector? It has been suggested yesterday that a survey from the Chamber of Commerce revealed that 50 to 60 per cent of employees in the private sector have had their pay frozen this year and that therefore 40 to 50 per cent of employees in the private sector have achieved some pay rise. Now, my information says that, certainly in the finance sector, bonuses continue to be paid. Christmas parties appear to be free still and that in many sectors, and I know because I have spoken to the T.&G. (Transport and General Workers Union), pay rises of the order of 2 per cent, the R.P.I. (Retail Price Index), have been negotiated successfully in the private sector and in some cases the mark has been far higher; it has been on 3 and a half per cent. So do we have to show a lead in this? No, we do not. The figures that we do have, the average earnings index, show that earnings in June 2009 have gone up on average 3 per cent. Now, this covers 59 per cent of all workers in Jersey. They are in the survey. We are 3 per cent higher. The private sector overall increased by 3.3 per cent. Where is that increase in average earnings coming from? E-earnings in the finance sector up by 3.5 per cent. When we compare with the U.K. the other marker that we need to attract highly-skilled workers to the Island, what we see is that average earnings, Jersey, in all sectors, 3 per cent; in the U.K., it has gone up by 2.1 per cent. In the private sector it has gone up by 3.3 per cent compared to 1.6 per cent in the U.K. So the differential is getting bigger in the private sector. In the public sector it is going up by 1 per cent and in the U.K. 3.7 per cent. So the public sector in the U.K. is negotiating successfully because it has not had its negotiation rights taken away. Yet its pay rises. So comparison with the U.K. again, we are making our public sector less attractive for those people in comparison with the private sector. In Jersey, again, our wages are slipping in the public sector. But then one has to look at the way in which the representatives of the unions have been dealt with. It says in my report: "In the course of several attempts to convince public sector workers to acquiesce to the imposition of a wage freeze imposed by the S.E.B. and sanctioned by the Council of Ministers, the S.E.B. have resorted to a series of less than honest arguments." Early on the States Chief Officer tried to persuade representatives that the money saved from their pay award would go to fund apprenticeships and other stimulus measures. We know that is not true. We know where that money has come from. It has come from the Stabilisation Fund and it was in the pot already. Later on the Chief Minister tried the line, and I think he has repeated recently, that savings would go to funding services at the hospital. Well, we know that is not true because the savings have been diverted to nothing more than the bottom line: balancing the accounts. So the public sector have been treated, I believe, shabbily and shoddily by the States Employment Board. I believe they need to be condemned for their actions. Finally, I come to their own words on pages 3 and 4 of their own comments accompanying this. It says: "While it might be regrettable that the S.E.B. and the Council of Ministers found it necessary to recommend to the States a significant change from that budgeted in the 2009 plan " So what are they worried about? Are they worried about the standard of living of their public sector? They are worried about: "We have to change our Business Plan, take some more money out of it." At a time of such unprecedented world economic change, a balance had to be struck that protected both employees' jobs and the Island's prosperity in the longer term. The S.E.B. considered that the relative positions of Jersey's public sector workers in relation to the private sector counterparts - and we have seen what a shabby and incomplete and inaccurate comparison that is - relative balance. "The S.E.B. has stated it and will continue to make clear its full support of public sector workers who deliver good public services and show a very high level of commitment to the public." Well, look out. That level of commitment is about to get a lot weaker because the public sector workers are sick and tired of being treated the way they have been. The reality is, and we will move on to this in a minute.

Right, okay, let us move there: "A much greater spirit of partnership should be engendered between the States as employer and its work force." Well, that is a lovely sentiment and we can quote that all day. But it is not there. It has not been performed. There has been no attempt to engender a greater spirit of partnership between the States employer and its workforce. How could there be? The States Employment Board have taken away negotiating rights from the very people it employs and is currently making the case with the manual workers that it is your pay rise, chaps, boys, or your jobs. There is no safeguarding in there from the States Employment Board, I do not believe. They go on: "The unions have a fundamentally important role to play in industrial relations. But the current system has too many opportunities for adversarial negotiation." Well, who started the fight? The States Employment Board started the fight. They are the adversaries. They said: "We are not talking to you. You are out of our game. We take away your negotiating rights. We are establishing a pay freeze." Is that the way to encourage a greater spirit of partnership? It is not. "The S.E.B. will be seeking to reconfirm this commitment and to reopen discussions on establishing those formal partnership agreements. These discussions will need to be addressed: address the separation of agreeing overall cash limits [it is in the Business Plan] to the pay negotiating process to bring greater clarity in the future." Fine words butter no parsnips. The

reality is, as the teachers demonstrated last night, public sector workers are the unanimity demonstrated by the teachers was absolutely shocking. This is teachers prepared to take strike action, a ballot for strike action on this Island, as a direct result and top of the list is: "You have taken away our negotiating rights as a result of the actions of this Board." I believe this House should condemn this Board, the actions of the Chief Minister and his States Employment Board and vote for this motion of no confidence. Thank you.

The Bailiff :

Is the proposition seconded? [Seconded]

1. Senator T.A. Le Sueur :

Members will be relieved to know that I am not going to speak at such length. Indeed, I rather wonder why we are debating this at all. I am not sure what Deputy Southern is trying to achieve with this amendment, so that makes it difficult for me to know how best to begin to address it. But I think I will begin, as indeed did the Deputy in his report, by explaining the role of the States Employment Board. The States Employment Board is a body set up under the Employment of States of Jersey Employees law.

The Bailiff :

Deputy Southern if you go we will be inquorate. Sorry.

Senator T.A. Le Sueur :

As I was saying, it is set up under the law of 2005 and by law its composition is made up of 3 or more Members of the Council of Ministers, normally including the Chief Minister. It is not possible to appoint Assistant Ministers or, indeed, any other States Members to the Board. Its primary function is to determine policy in relation to the employment and terms and conditions of public sector employees. But within that remit it is also empowered to negotiate with employer representatives on matters such as collective agreements, training and development and terms and conditions of employment. Furthermore, it has the power to delegate any of its functions to any one of its members or the Chief Executive Officer of the States or any other person approved by the Board. So I mention those matters just as a preamble because I want to make it quite clear that the policies and procedures carried out on behalf of the Board throughout 2009 and earlier were entirely within the parameters of that law. The Deputy suggests that this vote of no confidence would be no more than a slap on the wrist for the 4 existing members of the Board. Now, either he is naïve or he is not really understanding the nature of this law because a vote of no confidence against the States Employment Board is, effectively, a vote of no confidence against me, as Chief Minister, because I am the person responsible for creating and setting up and nominating Members to that Employment Board. So, while the Deputy may regard it as a slap on the wrist, I certainly do not, Ministers do not, and I am sure any thinking Member would appreciate that that could not possibly be the case. The States Employment Board aims to follow good employment practice and we do value our workforce and recognise the services they provide and the commitment that they show. But at the same time we have to recognise the current exceptional economic climate which it is posing and will continue to pose challenging problems. Those, in return, require challenging solutions and exceptional measures. When the States Employment Board first mooted the idea of a pay freeze back in March, we did not do so lightly. Indeed, although composed of Ministers who were fully empowered to make decisions, we nevertheless considered it so important that we took it back to the Council of Ministers for consideration. So the States Employment Board does clearly recognise the impact that the pay freeze will have on all our staff. Despite that, we believe that it still remains the right decision today, just as it was in March of this year when the Board discussed it, and indeed just as it was in July of this year when States Members overwhelmingly endorsed the

policy by 31 votes to 10. The Deputy seems to suggest that we were not debating the principle of a pay freeze then but simply the financial implications. There, again, I think he is naïve. I think the debate was quite clear what a pay freeze and the financial implications of a pay freeze would imply. But this debate is not or should not be just about pay but also the financial health of the Island. We do have a duty towards our workforce, but we have also got a duty towards the population to govern in a responsible way. A pay freeze at this time is a responsible decision, although I appreciate that it may not seem that way for some of our employees. I wonder, though, how it seems to employees in the private sector, many of whom are facing a pay freeze or worse and with far less job security. In his concluding comments Deputy Southern alleges that the money saved by applying a pay freeze has not helped Health, or, indeed, any other department, but has simply added to the accountant's bottom line. Again, that is, I am afraid, just a distortion of the truth. The Council of Ministers made it clear at the start of the year and reiterated in the Strategic Plan that any additional resources offered to the States departments had to be matched by equivalent savings elsewhere in the organisation. Consequently, it is only because we were able to save £6 million over next year's budget on the pay freeze that we were able to fund £6 million worth of expenditure somewhere else. In total we have secured a funding to deliver an additional £17 million worth of expenditure, all matched by equivalent savings. Much of that expenditure does, indeed, relate to Health and I am sure all of us appreciate that that was the right allocation. If we had not reallocated that £6 million but just added it to the Consolidated Fund, then Deputy Southern would have more justification in saying it had been added to the bottom line. But, equally, if we had allocated funds to Health or anyone else without matched funding, we would have been in contravention of the States agreed Strategic Plan. So the plain fact is that without the pay freeze, monies would not have been available for Health and other departments to face the pressures that they are currently having to deal with. It may have been a tough decision but it was and is the right one. The Board will not shirk from making tough decisions when it believes that they are the right ones. In this case, I remind the Deputy and others yet again, that it was the majority of States Members themselves who believed it was the right decision when they endorsed the pay freeze 31 votes to 10. So I think, really, rather than debating all this today, if the Deputy really wants to pursue it he could always have his opportunity when we come to debate Deputy Shona Pitman's proposition in a couple of weeks' time, when we have the same argument all over again. But as a responsible employer, as soon as the decision to set a cap on pay for the coming year had been made, we felt it only correct to tell and immediately communicate that fact to the employee representatives, so that they knew where they stood and that they could formulate their proposals on a fully informed basis. Indeed, it would have been dishonest of us not to tell them and to allow discussion to proceed without the unions or their members being aware of our intentions. There is no intention to circumvent the working of normal industrial relations. The S.E.B. has not sought to deny the normal collective bargaining process, a fact which I made clear to the employer representatives when I met them at their request in August of this year. It is worth remembering that what happened next was a proposition from the Deputy of St. John and then an amendment to that proposition from Deputy Southern which effectively took pay negotiations out of the hands of the union and the board and into the States Chamber. The States Employment Board remains committed to talking to staff and union representatives and working with them and through them in working through these negotiations and indeed we have another meeting with those representatives this coming Friday morning. At this stage I might just interpose in my speech some of the comments that Deputy Southern made in relation to a meeting of teaching unions yesterday afternoon. I may have misheard the representative of the teachers on the radio this morning, a Mrs. Southern , when she, I thought, said that the teachers would await the meeting on Friday before deciding which action to take. I think that is a reasonable and realistic attitude to take. The Deputy also said that the teachers had decided unanimously to declare a dispute. Again I think he is wrong there. The words I heard were that if they were not satisfied with the outcome of Friday's meeting that then they would declare a dispute. So I think it is important in a situation like this that the Deputy gets his facts absolutely clear and that the Members are not confused or misled, as he accuses me of misleading Members, and I would hate to think that he is doing the same thing. I also find it rather odd that the teachers are on the one hand saying they are going to declare a

dispute by the end of this week when last week they came to the States Employment Board and asked to go to mediation and the Employment Board accepted the offer of mediation, as the spokesman said on the radio this morning. So on the one hand they are asking us for mediation and on the other hand they are threatening a dispute and I wonder what negotiations we are supposed to carry out. But that is by the by. All I can say is that, contrary to what the Deputy suggests, this vote of no confidence is a serious vote. It is not just a slap on the wrist. It is something that I take and my Board and my Ministers take very seriously. In his arguments the Deputy also suggests that the fiscal stimulus was the answer to pay and we should have used that. I would remind Members that all these matters were discussed in July when we debated the pay freeze. The same arguments came out then, the same arguments are coming out again today. We decided then nothing has changed. So, as I was saying, we are continuing discussions with the trade unions and staff representatives. Pay claims are being submitted in the usual way albeit with the constraints that we have already spoken about. The policy we have set in March was the right policy. The policy we agreed and confirmed in July is the right policy. The latest information I have, which I accept came out after that debate, but the information from the more recent pay survey and the information from the labour market survey presented today which shows that employment levels have gone down for the first time in years and unemployment levels are the highest for many years, do indicate a change in climate. I make these points really to demonstrate that the States Employment Board has acted entirely properly over the past 9 months but I do not want to spend my entire speech looking backwards. I also want to assure Members of the approach we are taking looking forwards to next year and beyond. When the Board was set up in late 2005 the employers' side was keen to establish a better and more formal partnership approach with trade unions and staff representatives and it did achieve this with some pay groups but others were less comfortable at that time to go along that line. We remain committed to that approach and that can be evidenced by a letter that I wrote to Unite the Union, in February of this year when I responded to their

concerns about job security, a letter incidentally to which I have not yet received a formal reply. As I  say, we remain committed and I  would  hope that that commitment  is echoed by those employee representatives. I am also committed to working with the unions on a thorough review of terms and conditions of service in 2010 to address many of the issues raised by both sides. I can only urge union representatives to join in that process which I am sure would lead to the 2010 results being a better outcome for everyone. But, I conclude by reminding Members that what the Employment Board have been doing over the last year is what Members have asked us to do. If we had not carried out those wishes then we could rightly be criticised by Deputy Southern or others. But to be criticised for doing what we were asked to do strikes me as being absolute lunacy just as I regard this proposition by Deputy Southern as absolutely out of order. Words begin to fail me. I do suggest that we should despatch this one as rapidly as possible and do some more productive business.

The Bailiff :

Does any other Member wish to speak?

2. Connétable M.K. Jackson of St. Brelade :

The Strategic Plan approved by the States on 10th June this year stated that the economic downturn would put significant pressures on government revenues and spending if we were to maintain a core public service at an acceptable level and that savings would need to be made. It goes on to say why we should do this. We must respond to external pressures, it says, and in particular the possibility of reduced income as a result of worldwide recession. Public sector staff costs have a significant impact on overall expenditure and controlling these costs has a significant impact on the overall expenditure and it sets a benchmark for the private sector and has an impact on control of inflation. The taxpayer, who pays for the public service, expects it. The States Employment Board have and are responding to the Strategic Plan. It goes without question that the States Employment Board respects and values all staff for whom it is responsible and as such we carry responsibility for not

only their pay but also conditions and, of course, job security within the parameters of the present employment laws. To my way of thinking, job security is of paramount importance and in an unprecedented world economic crisis where jobs are at risk and States employees are not immune from this the employer, the States Employment Board, must do all it can to avoid the sort of redundancies which have taken place elsewhere. A Jersey Evening Post article only last night described how the Jersey Advisory and Conciliation Service had dealt with a record number of inquiries from people who faced being laid off and from businesses intent on reducing staff numbers. They have had, we read, 870 contacts regarding redundancy this year, some 16 per cent of their workload, and while larger companies can clearly manage change and restructuring more easily, smaller companies have shed staff numbers so they can pay the wages. I heard on the radio only this morning that numbers employed in the wholesale and retail sector are on average some 350 down. Those jobs have gone. I suggest that if we can retain our present public sector jobs we will be doing pretty well. I was quite flabbergasted, I have to say, when I attended a meeting on 10th August last with senior representatives of all main pay groups that not once was the private sector even mentioned. It is absolutely essentially that pay levels between the private and public sectors are comparable otherwise the obvious happens. Work gets outsourced. This is not a course of action that I favour when we have good staff that we have trained to do a better job. I suggest that the majority of the thinking public sector workers are more than well aware of the current economic situation and the risks to society in general and in turn their jobs. I see a restriction on pay as an essential tool of job retention, and contend that Deputy Southern is simply bringing in his old-fashioned industrial north tactics to Jersey and fails to understand the consequences of his actions. The Deputy is a good mathematician and I respect him for it but he uses his figures every which way he can to debate and win his case. There is nothing wrong with that but I read them with a little bit of cynicism. I think that the States Employment Board have been prudent to react in

the way they have and it would have been irresponsible of them to have done otherwise. I tend to apply a commonsense approach in my contributions to the S.E.B. and use some 35 years' experience of being an employer in the private sector. I sometimes get concerned that should differentials between sectors be allowed to develop we run the risk of creating an elitist social sector completely out of kilter with the remainder of Island society. I would add, by hoping that the world economic recession will improve and that the States Employment Board will be able to react in the appropriate way when it comes to next year's pay discussions and I would conclude that I stand by the decisions I have made on the States Employment Board and leave Members to judge accordingly. Thank you.

3. Deputy D.J.A. Wimberley of St. Mary :

I must confess I had some doubts about this proposition, as the Chief Minister expressed it as well, at the next sitting we will be talking about rescinding the pay freeze. But Deputy Southern and indeed the last speaker have raised some interesting points and I think it is worth having a little look at some of what has been said because .. well I will go through what I have to say and Members will be able to judge. The line being taken by the S.E.B. and by the Chief Minister is that we are in an exceptional economic climate and I do not dispute that, but if we look at some of the argumentation, I will just pick on one particular concept which is inflation .. well 2 actually, one is inflation, and if we look at the Chief Minister's comments on page 5 there is a very odd paragraph about inflation, the sixth paragraph, and there is a lot of misunderstanding around inflation and I thought it had been nailed, and I thought that when I spoke to the Fiscal Policy Panel very briefly after their last presentation to States Members and I said: "Is it true that if you take money out of the private pocket and put it into the public pocket and it gets spent that that has no overall effect on inflation, assuming that you manage your expenditure by sector correctly?" and they said: "No, of course it does not. If the money is spent, whether it is private money or public money, makes no difference to inflation." But here we read in this sixth paragraph: "The purpose of G.S.T. (Goods and Services Tax) is to take money out of the economy and therefore from individuals' pockets. Only in this way will it have a downward effect on inflation." That is complete nonsense. If you

take money out of people's pockets in the form of G.S.T., put it into the government pot and then spend it it will have no effect on inflation either way, and yet this is part of these comments. It is an extract from the 2009 Annual Business Plan and it is used as part of the argumentation around pay negotiations and it just does not make any sense. The previous sentence is: "Higher inflation is bad for all Islanders." I quite agree, it is: "Higher inflation is bad for all Islanders and Island businesses and will undermine the fiscal strategy because it will reduce the scope for economic growth."

The Deputy Greffier of the States (In the Chair):

I am sorry, could we just pause for a moment please? We have only 26 Members that I can see and one Member that I cannot yet see. The défaut is to be raised on Deputy Le Fondré. Is everybody happy with that? The défaut is raised. Thank you. You may continue your speech, Deputy .

The Deputy of St. Mary :

Welcome, Deputy Le Fondré. [Interruption]

The Deputy Greffier of the States (In the Chair): You are quite right.

Senator P.F.C. Ozouf :

Madam, may I now raise the défaut on Deputy Le Fondré.

The Deputy Greffier of the States (in the Chair): Indeed, the défaut is now raised. Please continue.

The Deputy of St. Mary :

These procedural matters are wonderful. We have to be quorate in order to raise the défaut on someone who will make us quorate. Lovely, is it not? But anyway, to return to inflation: "Higher inflation is bad for all Islanders" says the previous sentence, and quite right too, but we had a chance to deal with higher inflation long ago, 20 years ago when it was seriously damaging the tourism industry. That is what did a lot of damage to the tourism industry, the fact that inflation in Jersey was running year on year above the rate in the U.K. The solution was to take more out of the private pocket, put it into the public pot and not spend it, to remove it from the economy. That was not done and that is part of the reason why we face these huge problems today. But that is just an aside on inflation and the way it is used to justify the thinking around the pay freeze when in fact it does not add up. I would then refer Members to page 7 which is the timeline produced by the Chief Minister and there are 3 statements about the R.P.I. On 23rd March we are told that: "The S.E.B. resolves that because of the deteriorating conditions in the local economy and significantly falling R.P.I." On 22nd April we are told: "March R.P.I. published showing an increase of 2.1 per cent nearly all of which was attributed to G.S.T." On 15th July: "June R.P.I. published showing a decrease of 9.4 per cent." I would just like someone from the S.E.B. or from the Council of Ministers to confirm the correctness of those 3 statements on the record because I do not believe them. I would just like to know that those 3 figures are correct because we were told in Deputy Southern 's proposition to give all States employees £450 as a flat rate increase. I remember the figures that Deputy Southern quoted which were quite different, and the R.P.I. he quoted was an increase I think of 2.5 per cent or 3 per cent without .. that was sort of the basic figure and 5 per cent the low income R.P.I. So those 2 figures do not match up and I just want someone from the Council of Ministers' side to confirm that all 3 are correct as they have been presented to the House today because I am not sure and I need that confirmation. The third thing I would like to say on this background of the exceptional economic climate and the justification for the pay freeze is the word "vital" and on page 2 of the comments of the Chief Minister we have in the third paragraph: "Was the pay freeze justified? Wages and salaries are the biggest proportion of the revenue budget

at over £300 million and freezing pay costs was vital in order to maintain our finances on a sound footing in the economic climate that prevailed early in 2009." Was the pay freeze as vital as not spending £5 million on preparing for the pandemic? Oh, but we did spend £5 million or we have earmarked £5 million. We have earmarked that money for .. well maybe somebody can correct me on that but my understanding was that we earmarked that money in case it was needed for the Minister for Health and Social Services to spend on .. as going of course to the Treasury but still the money has been earmarked and we have spent - my note here is £7 million, but I think it is probably more on of course the incinerator overspend in various forms, whether it is the euro or unauthorised expenditure. That money too was found out of various Ministerial decision pots. So I just wonder what this word "vital" here means. Is it vital because it is not top of the list or it is not near enough to the top of the list but it is not vital? What I mean is we are playing with words there. So that is the comments on the exceptional economic climate. I am not sure that it holds water or is as potent an argument as we have been made to think. My second comments are on the how. Now Deputy Southern has given us a very good picture of just how concerned our public sector workforce is and he described the meeting last night of the teachers and just how bad the situation is out there and I went to the mass meeting about a month ago. The reason is of course that it was a unilateral declaration and there was not any negotiation or compromise or talking down together. It was a declaration and this goes together with a not listening attitude which was referred to again and again at the Fort Regent meeting that this government does not listen, it does not take views on board, and that is a serious concern. Now if we look at the Chief Minister's comments at the foot of page 2 we have: "The S.E.B. decided to take the proposal for a pay freeze to the Council of Ministers for wider debate." So it went from 4 people to 10. I am not sure that that meets my definition of wider debate and they then go on: "But taking this tough line on public spending does not mean that public sector staff are not valued" and they repeat that point at the foot of page 3. You see if you tell people they are not getting any more money at all even though the

cost of living is rising and then you say: "But we do value you" it just does not wash, does it? Because as Deputy Southern has pointed out the normal pattern of talking with people and saying: "Times are hard" and making the case but in a proper discussion has not been followed. So the how is really important and the how seems to have gone missing and the how is what we are really talking about. There may be an argument about whether the money is there or not or whether the private sector should stump up a little bit extra in taxes and so on and so on, there is an argument to be had, but it is the how. It is how this S.E.B. goes about its business. Now we are told, interestingly, on page 4 of the Chief Minister's comments that there is going to be a new look. There is going to be a new approach and a much greater spirit of partnership, and the current approach to pay negotiations and remuneration needs to be carefully reviewed. Well amen to that. At the end of that paragraph on their page 4: "These issues suggest that it is necessary to develop a system of pay settlement and remuneration which better recognises the major contribution that public sector workers make to the community of Jersey." "Which better recognises the major contribution that public sector workers make to the community of Jersey." Well there you have it. That we are going to reform. We are going to make the system better. But then of course the question arises why was it not better before? The other question of course is how much credence can we give to this new look and that raises the question on which I will end, which is honesty and this whole question of trust. We do have obviously serious issues in this area. We have heard in this debate that the idea that there is a pay freeze across the private sector is unsubstantiated. It just is not true. It is true in part but it is not true. There has been no mention, or serious mention, I cannot say there has been no mention, very difficult to prove a negative, but as far as I am aware there has been no serious mention of the 46 per cent difference in purchasing power when presenting pay comparisons. That is quite an important fact and when we hear that our workers are paid 39 per cent more than in the U.K. well and good but what is the difference in the purchasing power? That is a clear must have piece of information round which we talk about what effect that has on the pay negotiations and we have not been told. The presentation of information has been misleading and, of course, in the third place about misleading is the famous table in proposition whichever it was .. sorry, the comments of the Council of Ministers on Deputy Southern 's proposition about the £1,250 flat rate increase where we had this amazing table comparing jobs to other jobs that did not exist and Deputy Southern has gone into that in great detail. So when the previous speaker, the Constable of St. Brelade, said that the public sector was completely out of kilter with the private sector that statement needs to be justified. It may be true but I do not think it is on the evidence we have heard today from Deputy Southern . But either way it needs to be justified and it has not been and that is what we are talking about. We are talking about the credibility of the S.E.B. and by extension of the States when they deal with their own workforce. That is the nub of this debate. Are we credible? Does the S.E.B. behave on our behalf in a proper way when dealing with the very workers who deliver our policies and programmes on our behalf and on behalf of the people of Jersey? So those I think are the key issues and I look forward to the rest.

4. Senator P.F.C. Ozouf :

I have no doubt that this vote is in effect a vote of no confidence in the Chief Minister. I have no doubt that this is the kind of vote which has the highest sanction available to States Members and if it would be successful it is effectively a vote of no confidence in both him and the Council of Ministers as well. In fact I think it is almost a vote of no confidence in the Assembly itself because as the Chief Minister has said, this Assembly has already discussed a number of the matters which Deputy Southern raised in his speech. In fact most of his speech was concerned around the whole issue of the pay freeze. He referred to a number of groups but he particularly focused on teachers, and I am sure that I am not the only person in this Assembly who is somewhat uncomfortable with comments in relation to the teachers particularly having heard the comments of the president of the Teachers' Association on the radio this morning. I very much express the hope that we are not going to use our public sector workers in party political politics, but whether anything is the case, whether or not .. I am not giving way.

Deputy G.P. Southern :

I believe that impugns my integrity. You cannot imply that. The Minister should not be implying that somehow I am manipulating or using my wife's position in any way whatsoever. That is impugning my integrity and hers.

Senator P.F.C. Ozouf :

I do not believe it was impugning. I just expressed the hope that we are not going to engage in party political use of our public sector workers. What I was going to go on to say is that whether it be teachers, whether it be nurses, whether it be paramedics, whether it be policemen, whether it be Treasury officials, whether it be parks and gardens employees, incinerator workers, liquid waste workers, I care perhaps just like Deputy Southern about our public sector workforce. I care about the whole of our community and of course our public sector is an important part of that. I know that all Members of this Assembly, and indeed most Islanders, are concerned about our economy and they are concerned about our public finances and particularly the Island's future. It is only with a strong, vibrant economy that we have the availability and the resources available to fund properly our public sector and to make wage settlements in future. Tonight Senator Maclean and Deputy Ferguson and Deputy Higgins and I are all attending a Chamber of Commerce briefing on fiscal stimulus. I am expecting that the Chamber of Commerce is going to recount to us some of the real difficulties that businesses are experiencing in the Island. I am sure that we are going to hear that businesses have been through very difficult economic times and I have to take responsibility to ensure that our public finances respond to some of those difficulties, particularly responding where necessary to making investment in order to keep the economy going over the next few months and particularly in relation to matters of the fiscal stimulus plan, et cetera. I fully accept the Deputy of St. Mary 's point - he did not quite make this point - but I fully accept the point that I as Minister for Treasury and Resources have been potentially at risk of sending out mixed messages; on the one hand investing in the economy, investing in fiscal stimulus is a one-off, on the other hand having to put in place budgets over the next year which are realistic in the backdrop of our public finances. The Business Plan it has to be said has been, in my experience, and having been involved in 10 of them, it has been the most difficult that we have had for 10 years and the envelope of wages and staff costs are the biggest costs in that overall Business Plan process. We have had to respond to some very real and serious issues in the Health Department and we have had to make some decisions which balance our books in the appropriate way. So, we have to make responsible decisions and we have to make responsible decisions in relation to the public sector pay envelope and the suggestion that somehow the S.E.B. is deserving of a vote of no confidence because we have set envelopes for public sector pay I find extremely curious. I need to remind Deputy Southern that it is this Assembly that decides on the envelope for public sector pay. This Assembly decides annually what the envelope is for public sector pay and I do not understand why there is action which merits the support of a vote of no confidence in going back and revisiting the wage envelope available for the public sector. That is exactly what we did in the proposal last year, but it was not the Council of Ministers that started the discussions about a pay freeze, it was other Members who responded to some of the thoughts that were being made, particularly the Deputy of St. John. I think that this Assembly has got a responsibility to set the envelope for public sector pay and that is exactly what we did last year. This Assembly has been concerned about the economy. This Assembly has been engaged in numerous debates about the real threats to our economic future. Inflation fell in the last few months to the lowest level for years. Wage rates in the private sector, something that I am sure we are going to hear from the Chamber of Commerce this evening, are for 60 per cent of businesses surveyed either flat or falling. Vacancies that are published today are at the lowest level they have been for 10 years. Employment levels have fallen for the first time in 5 years. Most importantly our revised economic forecasts show that the Island has the possibility, maybe even the probability, of a structural deficit. I have challenged Deputy Southern and others previously about how he would deal with such matters and how he would deal with increased spending. Because at the end of the day it seems that this vote of no confidence is based entirely upon this issue of the pay freeze. I have to say to Deputy Southern that there are

only 2 choices. If he wants to put £6 million in relation to a reversing of the pay freeze, which is at the heart of this discussion on the vote of no confidence, there are only 2 choices. We either cut services, which he also stands implacably against, or we raise taxes. Tax rises and cuts in services on top of the structural deficit that we need are very real and I have to say to Deputy Southern will he please come clean and say if the vote of no confidence in the States Employment Board is successful and there is a new States Employment Board put in place maybe chaired by him or chaired by another Member, it would be a curious state of affairs if there were changes going forward in relation to the fact that there would be a disconnect between the Council of Ministers and the States Employment Board, I find that a very curious state of affairs. But I challenge him how is he going to find the £6 million and to the Deputy of St. Mary it is not just £6 million one- off, it is £6 million every year and rising for the next few years. Because Deputy Southern , I have heard, wants to shut down the finance industry, he wants no G.S.T., he wants ..

Deputy G.P. Southern :

That is absolutely outrageous.  I have never said that in my born days.