States Meeting Transcript - 14/09/2010

STATES OF JERSEY OFFICIAL REPORT

TUESDAY, 14th SEPTEMBER 2010

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

1. Draft Annual Business Plan 2011 (P.99/2010) - paragraph (a)..........................4

1. Senator T.A. Le Sueur (The Chief Minister):............................................4

2. Draft Annual Business Plan 2011 (P.99/2010): ninth amendment, paragraph 1

(£5 million reduction) (P.99/2010 Amd.(9))..............................................6

1. Deputy T.A. Vallois of St. Saviour:......................................................7
2. Connétable D.J. Murphy of Grouville :...................................................8
3. Senator B.E. Shenton:....................................................................8
4. Deputy P.V.F. Le Claire of St. Helier : ...................................................8
5. Deputy T.M. Pitman of St. Helier:......................................................10
6. Senator P.F.C. Ozouf :..................................................................10
7. Deputy J.A. Hilton of St. Helier:........................................................12
8. Deputy D.J. De Sousa of St. Helier:....................................................13
9. Deputy J.B. Fox of St. Helier:..........................................................13
10. Senator B.I. Le Marquand:..........................................................13
11. Deputy D.J.A. Wimberley of St. Mary : ..............................................15
12. Deputy M. Tadier :...................................................................20
13. Connétable J.M. Refault of St. Peter:................................................22
14. Deputy A.K.F. Green of St. Helier : ..................................................23
15. Connétable D.W. Mezbourian of St. Lawrence:......................................24
16. Senator A.J.H. Maclean:.............................................................25
17. Deputy P.J. Rondel of St. John:......................................................26
18. Senator S.C. Ferguson:..............................................................28
19. Deputy A.E. Pryke of Trinity : .......................................................32
20. Deputy G.P. Southern : ..............................................................33
21. Connétable A.S. Crowcroft of St. Helier : ............................................35

LUNCHEON ADJOURNMENT PROPOSED..................................................37

LUNCHEON ADJOURNMENT................................................................37 Deputy C.H. Egré of St. Peter:................................................................37

22. Deputy J.A. Martin of St. Helier:....................................................37
23. The Deputy of St. Peter:.............................................................38
24. Senator F. du H. Le Gresley:........................................................39
25. Deputy A.E. Jeune of St. Brelade:...................................................40
26. Connétable M.K. Jackson of St. Brelade : ............................................40
27. Deputy S. Power of St. Brelade:.....................................................41
28. Senator T.A. Le Sueur:..............................................................42
29. Connétable K.P. Vibert of St. Ouen:.................................................43

30. Senator T.J. Le Main:................................................................43
31. Deputy J.G. Reed of St. Ouen : ......................................................44
32. Senator A. Breckon:.................................................................45
33. Senator F.E. Cohen: .................................................................47
34. Senator J.L. Perchard: ...............................................................47
35. Deputy M.R. Higgins of St. Helier:..................................................48
36. Senator P.F. Routier:................................................................49
37. Deputy T.A. Vallois:................................................................50

3. Draft Annual Business Plan 2011 (P.99/2010) - thirteenth amendment (P.99/2010 Amd.(13))................................................................................52

1. The Deputy of St. Mary:................................................................53
2. Deputy J.A.N. Le Fondré:..............................................................54
3. Senator P.F.C. Ozouf :..................................................................54
4. The Connétable of St. Ouen:............................................................55
5. Deputy J.A. Hilton:.....................................................................55
6. The Deputy of St. Mary:................................................................56

4. Draft Annual Business Plan 2011 (P.99/2010) - fourteenth amendment (P.99/2010 Amd.(14))................................................................................56

1. The Deputy of St. Mary:................................................................56
2. Senator A.J.H. Maclean:................................................................57
3. Deputy J.A. Martin:....................................................................57
4. Connétable P.F.M. Hanning of St. Saviour : ............................................58
5. Deputy P.V.F. Le Claire: ...............................................................58
6. Deputy G.P. Southern :..................................................................59
7. The Deputy of St. Mary:................................................................60

5. Draft Annual Business Plan 2011 (P.99/2010) - fifteenth amendment (P.99/2010 Amd.(15))................................................................................60

1. The Deputy of St. Mary:................................................................60
2. The Connétable of St. Peter:............................................................63
3. Senator A.J.H. Maclean:................................................................63
4. Deputy M. Tadier :......................................................................65

5. Senator P.F. Routier: ...................................................................66
6. Senator S.C. Ferguson:.................................................................66
7. Deputy P.V.F. Le Claire: ...............................................................67
8. Deputy M.R.Higgins:..................................................................68
9. Deputy T.M.Pitman:...................................................................68
10. Senator P.F.C. Ozouf : ...............................................................69
11. Deputy G.P. Southern : ..............................................................70
12. Deputy A.T. Dupre of St. Clement:..................................................70
13. Senator J.L. Perchard: ...............................................................71
14. Connétable L. Norman of St. Clement:..............................................71
15. The Deputy of St. Mary:.............................................................71

6. Draft Annual Business Plan 2011 (P.99/2010)- fourth amendment, paragraph 1 (P.99/2010 Amd.(4)) .....................................................................74

1. Deputy G.P. Southern :..................................................................75
2. Deputy M. Tadier :......................................................................77
3. Senator A.J.H. Maclean:................................................................78
4. The Connétable of St. Helier:...........................................................79

5. Deputy P.V.F. Le Claire: ...............................................................80
6. Deputy F.J. Hill of St. Martin : ..........................................................80

7. Deputy A.E. Jeune :.....................................................................81
8. The Deputy of St. Mary:................................................................82
9. Senator J.L. Perchard:..................................................................82
10. The Connétable of St. Peter:.........................................................83
11. Deputy G.P. Southern : ..............................................................83

7. Draft Annual Business Plan 2011 (P.99/2010) - fourth amendment, paragraph 3 (P.99/2010 Amd.(4)) .....................................................................85

1. Deputy G.P. Southern :..................................................................85
2. The Connétable of St. Clement:........................................................86
3. The Deputy of St. John:................................................................87
4. Senator P.F.C. Ozouf :..................................................................87
5. Deputy M. Tadier :......................................................................88
6. The Connétable of St. Ouen:............................................................89
7. Deputy A.T. Dupre:....................................................................89
8. Senator A. Breckon: ....................................................................89

ADJOURNMENT................................................................................90

The Roll was called and the Dean led the Assembly in Prayer. [09:38]

PUBLIC BUSINESS - resumption

1. Draft Annual Business Plan 2011 (P.99/2010) - paragraph (a) The Bailiff :

We come to the Annual Business Plan and I will ask the Greffier, I think at this stage, simply to read paragraph (a) and I will get the Greffier to read each paragraph as we come to it in due course. So the Greffier will read out paragraph (a) of the proposition of the Chief Minister.

The Greffier of the States:

The States are asked to decide whether they are of opinion to receive the Draft Annual Business Plan 2011 and (a) to approve the summary set out in Summary Table A, page 53, being the gross revenue expenditure of each States funded body, including depreciation and the additional provisions of net revenue expenditure for central reserves of £9 million and restructuring costs of £6 million as part of the total net revenue expenditure of the Treasury and Resources Department and, having taken into account any income due to each of the States funded bodies, the total net revenue expenditure of £652,881,000 to be withdrawn from the Consolidated Fund in 2011; with any increase above this figure compensated by appropriate measures within the draft Budget 2011 to enable the Minister for Treasury and Resources to present a draft budget within the proposed deficit of £50 million as set out in Figure 3.4.

1. Senator T.A. Le Sueur (The Chief Minister):

I approach the debate today with a variety of thoughts in my head. There is a thought, which I suspect many Members have, regarding the time this debate could potentially take. I am sanguine about this. We have faced similar concerns before but it does encourage me to keep my remarks relatively brief, notwithstanding the important nature of the topic we are discussing. I hope that other speakers also accept the need for brevity. There is a lot to cover and key decisions should not have to be taken when we are all tired and perhaps frustrated. But more importantly I am thinking about the reason for having this debate this week. I am not questioning the need for it: on the contrary, I am stressing the importance of it. We need this debate in order to set a clear direction for the years ahead. We need to be clear about the challenges we face and we need to be resolute in our desire to resolve those challenges. We approach the next few years in a relatively strong position. Thanks to good forward planning and with the encouragement of the Fiscal Policy Panel we have a Stabilisation Fund which is planned to see us through the current recession, indeed the Fiscal Policy Panel itself is a strength in that its members can give us independent, informed and objective advice. I hope that Members have heeded their latest words of wisdom. We have a general policy of avoiding borrowing and we should not forget the thanks to the forward thinking of our predecessors. We also have a worthwhile strategic reserve to be used in the event of a real catastrophe which we could not solve unaided. Previous generations saw the wisdom of not letting our spending exceed our income. We must follow that good example. That is why the Council of Ministers is putting forward its vision for the future based on a business plan which can ensure - indeed which must ensure - that we have balanced budgets by 2013. But there is one thing that worries me; because we have done so well and have come through this recession relatively unscathed, there are some who do not believe that we can possibly be facing a deficit of £100 million a year in 2013 and beyond. There are, perhaps, others who do not want to believe this even though they accept that the figures do stack up. Perhaps they hope that the Minister for Treasury and Resources has some magic solution, perhaps some hidden funds or some unspecified change in tax revenues which will suddenly make all our problems disappear. To all those people I have got 2 slightly unprofessional words of advice: "Get real." The actual figure in 2013 may not be exactly £100 million, it may be .. it very certainly will not be, but whether it is £90 million or

£100 million or £110 million the fact remains that we have a problem, a problem which we have to address, which we have to address without delay and which we have begun to address. It arises, for various reasons, which have already been spelt out, but whatever the reasons the issue today is how to regain that balance. This week's debate is therefore vital if we are to maintain our policy, our very successful policy, of facing up to problems early and finding the best solution for Jersey. I say the best solution for Jersey, because while we can learn from other countries we also have to accept that we have many differences from other countries. The best solution for them may not be the best solution for us. An 80/20 balance may work in some places; it may not work in others. However, that is a debate for later. What I am saying is we have to find our own solution and the quicker we can find it the quicker we can start to implement it, and I say "start to implement it" because the changes which are needed cannot take place overnight. They will need months of careful preparation and months, perhaps even years, to implement. We start from a relatively strong base but we can erode that base very quickly if we do not take decisive action now. Decisive action by itself is not enough. It is also necessary to evaluate the consequences of any such actions, whether decisive or impulsive but for this reason I have to express my concern at some of the amendments before us today because I am not convinced that people have thought through the consequences of them.

[09:45]

We have spent months on the comprehensive spending review process and we have not yet evaluated the outcomes of the second phase, which will deliver the required £50 million of savings. So while the Business Plan before us today is well planned, co-ordinated and reviewed, in order that Ministers can be satisfied that it works, any changes that we make could have unforeseen consequences, and I do urge Members that where there are any doubts they should stick with the status quo of the plan, the carefully prepared plan which we have lodged. There are those who complain that we are not cutting spending quickly enough but this Business Plan is part of a structured transition from global downturn to economic growth. It is the first step in a 3-year plan and should not be looked at in isolation. For those who question whether or not Jersey has seen any impact from the recession I can say very definitely that we have. For instance, the profitability of our financial services sector fell by almost half in 2009 and even excluding any large one-off fluctuations the fall was still 25 per cent. There were 400 fewer people employed in the finance sector last year. Unemployment has reached over 1,000 people with younger people feeling the effects more severely and retail sales, especially non-food items, have fallen. Although we can hope that the tentative signs of recovery continue to grow we must prepare for a future in which tax receipts do not bounce back to their previous levels. This Business Plan proposes a £12 million reduction in spending for 2011. This is a year in which we are still using a Stabilisation Fund to maintain jobs and keep our economy in balance. We sometimes seem to forget how valuable the Stabilisation Fund has been in keeping our economy on an even keel. But from 2012 the Stabilisation Fund will be running out and we shall need to make significant inroads then into Government spending. To start with I am proposing a £25 million reduction in spending for 2012 and £50 million by 2013. Some will say that we should cut more than that and indeed the Council of Ministers does not necessarily see the £50 million as the end of the road. What we do see is that £50 million of savings is a realistic target to meet by the end of 2013. That has to be the first objective, not just for Ministers but for all of us. Not only is it a realistic target it is an achievable target. But it is clear that a reduction in spending at this level cannot be achieved without both changing the way we provide services and moving some services to outside agencies. These kind of structural changes need time and upfront investments to work properly, and we have had to factor this into the figures for our 3-year plan. Members who question the need for this investment in reconfiguring our public sector are putting at risk the ability of the States to make the

fundamental changes that are needed. If we are to create an efficient public sector run by well- motivated staff, whose potential is fully utilised, we need to invest in making those changes. It is easy to think short term and reduce the budgets being set aside for restructuring the organisation but if Members do this we will not be able to create the streamlined organisation that will see us into a successful future. We have the opportunity to look at all our services, to reconfigure them, to develop an efficient slimmed-down States. If we do not go ahead now we will fail to cut costs, we will face increasing amounts of unsustainable public finances and we will risk spiralling  into ongoing deficits and debt. The changes which need to be made, if we are to significantly reduce our spending, not just in 2011 but in future years as well, will require us to make a one-off investment in restructuring the organisation. If we try to chip bits off that restructuring budget we will not achieve our long term objective. We would be guilty of choosing short term solutions over long term financial stability. Can we find £50 million in savings by 2013? The fact is that we have to. I cannot condone the alternative of resorting to higher levels of taxation. I am realistic enough to know that reaching this target will require an initial investment, not just of money but of time and of staff. Well managed change takes considerable planning and I would sooner manage a few changes well and achieve real benefits rather than promise a raft of changes which we cannot deliver properly. This Business Plan is the culmination of work that began in January, a process which began with an assessment of all the financial issues that the Island faced. That assessment concluded with the need for a comprehensive review of the way we spend public money, not the kind of review undertaken every year but a comprehensive detailed review of all spending across the whole of the States organisation. Taking the best advice from both individuals, from the I.M.F. (International Monetary Fund)  and  independent people who  are successfully running overseas spending reviews in other places, the Council have set out a 2-stage process. The first part of that review is detailed in this Business Plan and the work is ongoing for the second stage, and as the outcomes of the major reviews, forming parts of the second part of the review, start to come together the Council will produce a more detailed way ahead for 2012 and 2013 and beyond, and this work will begin to take shape in the next few weeks. The Council's 6 months' work aims to have produced a clear plan for public finances for the next 3 years. It is a well-thought-out plan and it is realistic. It puts money where money needs to be spent and it cuts spending elsewhere. It acknowledges the pressures we face but it is realistic about the way we need to address the future. I urge Members to endorse the proposal of the Council of Ministers and to support this important first step in reforming our public services, balancing our public finances within 3 years in the way

which we have proposed. Sir, I propose part (a). [Approbation] The Bailiff :

Is paragraph (a) seconded? [Seconded] Before we come to the amendments perhaps I can just say this from the Chair, as the Chief Minister said this is indeed an important debate to set the Island's course for many years and of course it is right, therefore, Members consider it very thoroughly. On the other hand, as the Greffier has pointed out in his document that he circulated to you, the sheer number of amendments means that the Assembly is going to be hard pressed to complete its work on this within a reasonable period, and I understand similar concerns were raised by Members yesterday. All I wish to say from the Chair really is this, it is of course entirely for Members to choose whether they speak on particular amendments or not, but I do invite Members to consider exercising self-restraint; first of all in deciding which amendments you feel that you must speak on and, secondly, if you do choose to speak, to keep your remarks as concise and brief as you think is possible. [Approbation]

2. Draft Annual Business Plan 2011 (P.99/2010): ninth amendment, paragraph 1 (£5 million reduction) (P.99/2010 Amd.(9))

The Bailiff :

Very well then, we come to the first amendment and that is the ninth amendment, paragraph 1, lodged by the Corporate Services Scrutiny Panel and I will ask the Greffier to read the amendment.

The Greffier of the States:

Page 2, paragraph (a); after the words "withdrawn from the Consolidated Fund in 2011" insert the words "except that the proposed total net revenue expenditure of £652,881,000 shall be reduced to £647,881,000 and that the net revenue expenditure of the ministerial departments, as set out in the said Summary Table A, shall be reduced on a pro-rata basis to achieve this £5 million reduction as shown in the Summary Table A amended in the Ministerial departments (excluding grant to the Overseas Aid Commission and the Central Allocations for Treasury and Resources) set out below" and there follows a revised Summary Table A with the revised figures.

Senator S.C. Ferguson (Chairman, Corporate Services Scrutiny Panel): Deputy Tracey Vallois will act as rapporteur for this, Sir.

The Bailiff :

Very well. Deputy Vallois.

1. Deputy T.A. Vallois of St. Saviour :

The overarching reason for bringing this amendment was to bring to the Assembly finally whether we should be considering more savings rather than more taxes to tackle the £100 million deficit that is set before us. The panel are of the belief, from the evidence that we have seen, that the Council of Ministers would be able to take a more holistic approach to the way that they are tackling the savings going ahead. The arguments for taxes and savings are, of course, of a various nature and need to be discussed by each one of us as 53 elected representatives of the States of Jersey so that the public are at least fully aware that we can at least consider this as an option. The difficulty that we have before us is that by only pro-rata cuts of the £5 million this has caused difficulty for some Ministers. The Corporate Services are of the impression that by putting the £5 million across the 10 departments is to focus the Ministers' minds and look at a more holistic approach at working together because we are of the view that if cultural and fundamental changes are to be made to the States of Jersey, and the way that we run our public services, it needs to start from somewhere and we believe it needs to start from the States Assembly by us setting the budget for the Ministers to be able to provide the services within those amounts. The Council of Ministers have stated themselves that it should be the Assembly that set the envelope for States expenditure, therefore it is the Council of Ministers that is responsible for ensuring that the public service that we have all agreed on, through the strategic plan, is delivered within that envelope. Although this is not particularly a problem to the first amendment, we are aware that the full savings that we are asking for within our amendment does not total the £30 million as set out in our report and we will address that when it comes to paragraph (e). However, the £5 million that is coming up to this amendment here is set out for us, as an Assembly, to discuss the way forward and the way we think that savings are more appropriate going forward and the public have been crying out for more savings. Everybody believes that there is wastage within the States and I do not believe there is one person in this Assembly that thinks that we cannot make savings, however, we all think that it can come from different areas and this is about working together. This is not about the Council of Ministers versus the non-Executive. This is not about Scrutiny versus the Council of Ministers. This is about us looking at the Island as a whole and supporting the people of Jersey who want to see savings. We are not just talking about the likes of big society. We are not just talking about the likes of businesses. We are talking about the ordinary person on the street as well. We are talking about every single person and that is who we represent as an Assembly. We want to set the envelope and we believe that the Council of Ministers will be able to make more savings in 2011 of £5 million. I would therefore recommend this proposition to the House and ask for everybody to lay their cards on the table as to where they wish to make the savings, whether they want it higher savings or

whether they want higher taxes.

The Bailiff :

Is the amendment seconded? [Seconded] Yes, Connétable of Grouville .

2. Connétable D.J. Murphy of Grouville :

As a member of the Corporate Services Scrutiny Panel I wholly support the proposition. In our report we have drawn attention to the weaknesses in the Business Plan. The main one I would highlight is a lack of accountability and responsibility in bringing forward the savings. If I could draw Members' attention to the actual report, the C.S.R. (Comprehensive Spending Review) report, which I hope you have all read. At paragraph 2.3 we say: "With the machinery of government nobody is in charge and nobody is responsible for the outcome of the C.S.R., there being no mechanism to ensure that £50 million savings will be achieved." Also at paragraph 2.11: "This leaves the obvious question hanging, what happens to Ministers who fail?" We have, during our investigations, heard many excuses and reasons for not doing something.

[10:00]

It is also true to say that we have received heartening support for the proposals from several departments and they must be encouraged in their efforts to bring forward savings. However, there is no mechanism to ensure they have to punish those who have not wholeheartedly supported the savings plan. This proposition has been brought to concentrate the minds of the reluctant groups within the machinery of government and pour encourager les autres. Thank you.

The Bailiff :

Does any Member wish to speak on this amendment? Senator Shenton.

3. Senator B.E. Shenton:

This amendment is quite similar to a P.A.C. (Public Accounts Committee) proposition that we brought a few months back where we asked the Chamber to speed up the level of cuts that we should undertake as a government so that we can be slightly ahead of the curve moving into the new era of fiscal deficit. As chairman of the P.A.C. we ended up withdrawing that proposition because we found that the mood of the House was such that they did not want to move that fast. What became increasingly clear is this House is very much split in 3 ways. There is a small minority of us that believe that the cuts should come quicker and harder now in order to save pain in the future. The vast majority of this House, I believe, consider the cuts are necessary but it should be done in a structured and co-ordinated way and a cohesive way, and I think this is basically what the Council of Ministers have tried to achieve within their Business Plan. I am one of those in minority that will support this proposition because I think that it would be better to be ahead of the curve. Then we have a small minority that think that if you stick your head in the sand the whole thing will go away and what will happen if you do that is the cuts, in 2015 and 2016, will be much, much deeper and much, much more severe and hit the very people that they say that they are trying to protect. I applaud the Corporate Services Scrutiny Panel for bringing this amendment but quite frankly I do not think it does have much of a chance to get through in this House today, simply for the very reason that I think that because of the way we debate the Business Plan and because of the fact that we are now in September and these cuts will have to take effect from 1st January, it is very, very difficult for departments to act in such a manner. It may be okay for a small business to do so but what we are dealing with here is public services where we are providing services to the public, and some of those services are very needy and effective. With my economist businessman's hat on, yes, we should do this. With my sort of social heart I wonder whether it is correct. I will be withdrawing most of my amendments and giving the reasons for that over the

lunch hour but I ask Members to support this if you want to avoid further pain in the future.

4. Deputy P.V.F. Le Claire of St. Helier :

Senator Shenton made a point that I think was well received by people that there are 3 groups within the Assembly. Perhaps there are 4. I certainly do not feel that I fell into any of the 3 that were clearly identified by the Senator and maybe this fourth leg of the stool is only me. I could be blamed for not attending all of the meetings. I could be blamed for not attending all of the "let us groupthink this decision" but I certainly have had, in 10 years' experience, the same sort of feeling at the state of the Business Plan, unless I was involved in the committee when the committee brought its proposals like when we were on the Health Committee, for example, and they needed money, that was the only time (when I was on the committees) that I felt that I had an understanding of the departments and the needs that those departments had. As a Back-Bench Member I have tried to ask on a few occasions what the structures are of the States, what the duties and responsibilities of those structures are. It was something I learnt in the marines that if you had duties and responsibilities and if you failed in those duties and responsibilities then you would be accountable for those failures. I think that is one of the big things that the public have been calling for, that we fail to acknowledge. It is that there is no accountability and until we and unless we set out clearly duties from responsibilities there will never be any accountability. There will only be sideways promotion and ongoing investigations until the investigations themselves die a slow death. I do not think this debate is any different than most of the debates that we have had in the past because we have always had a difficult situation in the States. I think the problem has been this budget that we are doing today has, for the first time, been challenged by people that have got economic backgrounds such as that of Senator Shenton and those that have got environmental and social backgrounds such as those from Deputy Wimberley, who is a new Member, and the traditional now, over the last few years, challenges by Deputy Southern who has got social consciences. But all too often in the past, many Members would sit here, and this is now the distant past, and they would let things go through  en bloc because they would be voting with their colleagues and that was the done thing. I am going through this Business Plan and many of these debates this week in attempting to try to say as very little as possible. This is probably the only speech I hope to make, warmly received by the Ministerial benches. But while I am on my feet, and while this is probably my only speech, I would like to bring faster cuts but I am concerned that bringing faster cuts without clear evidence as to how they will be implemented is irresponsible. I would like to see less people employed at £1,000 a day or £2,000 a day or £3,000 a day and I would like to see services maintained. I would like to see hydrotherapy pools maintained. I would like to see children's lawyers appointed in cases where severe abuse and failure has occurred within the home and within the Government of this Island. But instead of being able to analyse that as a Back-Bench Member, all I am able to analyse is the mantra and the scaremongering and the: "Oh, woe are we" calls from the Ministerial benches. There is little appetite to do any real inclusive management of this Island on a regular basis. There is little appetite for any clarity and openness within this Assembly, despite the Strategic Plan saying that we should be more open and transparent. You see any agenda of the Council of Ministers. The entire Part A' agenda is on the Part B' agenda. The Freedom of Information law is no longer even in the near future. So I think that in order to set out my store quite clearly, if maybe I am the only one, I would like to congratulate the Corporate Services Panel on doing what I think is the right thing to do and try to

hold this Council of Ministers to greater account. But unfortunately while this government is not as inclusive as it should be and I hope that we do support the future changes, I am not able to support more radical cuts like this - which I think we do need to start to do - until I can satisfy myself that those sorts of cuts are going to be in the areas where they need to occur in my view. The trouble with the system at the moment is we will agree all of this money and then we will give it to the departments and they will spend it any way they want regardless of what we say and do in here for this week, no matter how many arguments we have with each other and no matter how many good or bad speeches we have and no matter how long our ties are. The money, once approved, will go

to the Ministerial departments and they will spend it like they want to, when they want to, as they have done in the past. We are merely a rubber stamp. I cannot rubber-stamp this proposal because I am concerned that it will affect services on the ground. However, I do not believe in sticking my head in the sand so I will not be slavishly following this line and I will be supporting in certain debates and in certain amendments greater cuts where I believe that those cuts should be because I do recognise we are in a changed world. I just wish to God that some people in the Ministerial benches would start to be a little bit more open and honest about the fact that they are not open and they may not be as honest about the facts and sharing those facts with us as they might be. It is no good bringing us to this stage

The Bailiff :

Deputy , I am sorry, you cannot allege that other Members have not been honest. Deputy P.V.F. Le Claire:

Did I not say "as they might be", Sir, because that may be I will withdraw it, Sir, because I have never wanted to challenge your ruling. I will withdraw that and apologise unreservedly. So I made a mistake. So they are not as open with us as they might be. [Laughter] [Aside] That is for certain. I am not apologising for that. They are certainly not as open with us and I hope to God - I have used God's name twice now - that we can get on and give them this money and they can spend it whatever way they want because that is what we always do, and then we will be applauded for having dealt with the budget in a meaningful and responsible way as long as we vote with the Council of Ministers.

5. Deputy T.M. Pitman of St. Helier :

Like Deputy Le Claire, I do not recognise myself in any of the groups Senator Shenton talked of. Members will never hear me say no cuts on principle because as one of the few Members in this House who has recently been a States employee, I know that cuts can be made, as do many frontline staff who unfortunately are regularly sacrificed while the true surplus fat of little empires - if I can put it that way - goes untouched because, in the end, they are the people asked to do the cutting and that is how we end up with these false economies. Nevertheless, sympathise as I do with the amendment and what the Corporate Services Panel are trying to achieve, I find I cannot support this. To take up what Senator Shenton said again, I think there is another small group in the Chamber who will not remove their heads from the sand and see the damage and the consequence of not being able to marry up the socio and the economic. I think perhaps some Members are unable or unwilling to see what happens when you cut too hard and too fast. Perhaps some people think that the people thrown on the scrap heap without proper consideration will miraculously just go away because it will not be people who are leaving the Island, people who are non-residents. It will be people who have contributed and been the backbone of this Island's success, and I think this is a step too far. I do sympathise but I cannot support it I am afraid.

6. Senator P.F.C. Ozouf :

I was not going to speak early on in the debate because I get the sense that I am not sure where this debate is going. We have not really almost started [Laughter] [Aside] in terms of the this is the really quite important amendment, I think, in terms of this whole debate. I probably should start by saying that I have enjoyed a good and constructive working relationship with the Corporate Affairs Scrutiny Panel. Certainly their work on the fiscal stimulus programme and, indeed, the comprehensive spending review has been considerable and helpful. They are, in fact, in the fairly unique position, I think, of being the only body that has independently examined and interviewed both Chief Officers from, I think, all departments and all Ministers. Their overview of the comprehensive spending review process is therefore important. While their report was uncomfortable, I was not depressed in reading it. I did not take it to heart. It was uncomfortable for some people to a greater extent than others. I concluded my reading for the second time of the report with the conclusion that I agreed with much of what they were fundamentally trying to achieve. Corporate Affairs and I and, indeed, I think, the whole of the Council of Ministers, share the view that States spending must be cut, to do so to avoid higher tax increases, than I am afraid is going to be necessary in some cases.

[10:15]

After their interviews and having interviewed all Chief Officers, Corporate Affairs believe that savings reductions can be made across all States departments and they also think - this is not the subject of this debate we are going to be coming on to that debate - but they think that the Council is being too modest in only targeting £50 million. Since becoming the Minister for Treasury and Resources, I have focused on spending. This is not a criticism of the past. I recognise that I said when I stood for the position that the world has changed. We needed to strengthen and improve financial management across the States. Over the last few months, we have been working to do just that by strengthening financial management across the whole of the States organisation and it is against that strengthened financial management that the Council is running the comprehensive spending review. Now, this review was always going to be challenging and that is why we split the C.S.R. into 2 stages, the first stage to deliver 2 per cent in 2011 and, yes, some of those discussions and some of those debates at the Council of Ministers have been very difficult. It has been important to change the mindset of departments that they cannot simply live in a world where their budget is going to go up year on year. Savings have to be made. The Council was also realistic that if we want to make meaningful change - change that is going to be lasting and not simply salami slicing - we needed to go through a proper, longer process in terms of looking ahead to 2012 and 2013. That work, that longer process, that C.S.R. Stage 2, as we discussed yesterday in question time, that work is underway. Now, Corporate Affairs are arguing in their report that for next year we should be targeting an extra £5 million. That is over and above the £12 million which is set out in the Business Plan. If I am absolutely honest, I would say that I have some sympathy with their objective. I want to say to the Assembly that as a result of the second stage of the comprehensive spending review, there may well be opportunities from all of the submissions from different departments to make greater savings earlier than those planned in 2012 and 2013. In other words, proposals that will be discussed by the Council of Ministers over the next month could be brought forward into 2011 from those originally planned in 2012 and 2013. I would also say to Members that good financial management is not just an annual process. Financial management is about setting an appropriate budget but then also putting in the appropriate in-year financial controls. Just because you are given a budget does not mean that you should spend it or, indeed, in a strengthened Treasury function, does not mean that you necessarily will be encouraged to spend it if there are greater controls. I hope that we will deliver a greater target in 2011. I hope that we will make further savings throughout 2011 and that that money should not be spent, and that is going to be perhaps easier next year because we do have appropriate contingencies, built-in budgets, so we will not have, I hope, the annual carry on carry forward discussions that are well known by Members. I do want to be in the position of not over-promising and under-delivering. We have a process, a 2-stage process, for the comprehensive spending review and the Council is arguing that we need to stick to that. Corporate Affairs and I have had lengthy discussions about the whole of the C.S.R. process. I give the panel an absolute commitment, and after the very constructive discussions that the Council has had in the last couple of weeks, I believe that this is a commitment that all Ministers give to the Assembly that we will, wherever possible, and after the Budget debate in December, accelerate measures that are planned for 2011 and 2012. The reality is that the amendment puts a pro rata cut across all the departments with the exception of the non-Ministerials and overseas aid. Yesterday, we debated in question time, I think it was the Deputy of St. Mary, we said that there were going to be some departments that are going to be capable of delivering greater efficiencies than others. The difficulty with the Corporate Affairs amendment is that it cuts the £5 million across all States departments and it removes that money from individual departments on a pro rata basis. For Social Security, that would mean a budget reduction of in the region of £1.3 million over and above what they are proposing. We are going to come to Senator Shenton's amendment later on. Maybe that is one of the ones he is going to withdraw, maybe not. We are going to be discussing at that time the issues of Social Security. Now, Social Security is a very good example. Their budget consists of 2 very large amounts of money, income support in the region of £99 million and supplementation of £66 million. It is not possible in order to make reductions in, for example, supplementation immediately in that way. It is impossible for Social Security to be put into a position that they will have to simply cut pro rata across their whole budget. It is not possible, I regret to say, that it is possible to deliver a cut of £1.3 million for Social

7. Deputy J.A. Hilton of St. Helier :

I think it is very, very good that we are having this debate today because it will give Members an opportunity to give other Members their thoughts surrounding the whole issue of making savings. I will not be able to support the proposition of the Corporate Affairs Scrutiny Panel simply because, for all the reasons that Senator Ozouf has laid out in his speech, I do not believe it is possible to impose pro rata cuts across all the departments. My own particular feeling with regard to the cuts is I do believe that we can make greater savings. I am comforted by the fact that Senator Ozouf has said that the Council of Ministers will go away and will accelerate measures to bring forward some of those cuts already proposed for 2012 and 2013 because I think they can be there. But I think what the Council of Ministers needs to do, if it has not already done so, is to decide among themselves what are essential services and what are nice to have' services. Certainly, as far as Home Affairs is concerned, a great part of our revenue budget is taken up in pay costs. Currently, the Fire Service pay cost out of the budget that they have is 86 per cent. The States of Jersey Police is 82 per cent. Customs and Immigration is 77 per cent. So it is difficult for Home Affairs to be making cuts and for frontline services not to be directly affected. I think really what I am saying to the Council of Ministers is I would like you to go away, look at some of the services that you are providing, and a couple that I would like to mention, one being tourism. From the heyday of the seventies and eighties, I get the impression that our Tourism Department is still the same size as it was 20 years ago and I question why is that? Why have we not adjusted the number of staff we have in that department to reflect a much smaller business, and I just simply do not understand that and talking to various members of the public in the past week about the proposed cuts, that has been raised by several. I do not quite understand why the public-private initiative has been put back. I would like to understand that a little bit better. I am sure there are people involved in the tourism industry who could do the job much, much better of marketing this Island with the budget [Approbation] that has been allocated than is currently being done. I would question staffing at the airport. Again, I was talking to somebody over the weekend about the heyday of the seventies and eighties when certainly at the height of the tourism season, we would have aircraft landing and taking off every 3 minutes. I would be very, very interested to know whether the staffing levels are greater now than they were back in the seventies or eighties. It is these sorts of problems I think the Council of Ministers have got to tackle before we start cutting essential services that are really going to harm the people of this Island. So really that is the message that I would like to get across to the Council of Ministers. Go away and have a good, hard look at the services you are providing and do not cut those services that are directly going to affect either the health, education or safety of

the people in this Island.

8. Deputy D.J. De Sousa of St. Helier :

I too, like Deputy Hilton, Deputy Le Claire and Deputy Pitman, struggle with accepting this amendment. The Chief Minister said in his speech: "We have to find these savings." I am sure Members will remember recently the Minister for Treasury and Resources' Article 11(8) request that he brought to the House. I stated then that I am no mathematician but I am a housewife and I was a small business holder before I came into the States. I know how to add and subtract. With the Article 11(8) item, we inflated next year's budget to £15 million so we ruled out the £12 point- whatever million we are supposed to be saving here. What are we doing? We are telling the public we are going to make savings but we have already ruled that out by inflating our budget to make it look good, to make it look as though we are making cuts. In fact, we are spending £3 million more than we are cutting. I know that Deputy Vallois believes this debate needs to be had and I am sure most Members will agree. It does need to be had. We all know we need to balance the books for the future and for the future of our children. We also need to make cuts in order to prevent tax increases. We need to start at the top and work down, not the bottom up. With the 2 per cent, I feel we have started at the bottom and worked up. This has caused problems for future savings that we will make. Departments have proposed cuts and they have also inflated their budgets by applying for extra spending. I cannot support this amendment and I struggle to find a way of seeing how we will make any real savings.

9. Deputy J.B. Fox of St. Helier :

I was interested to hear from the Minister for Treasury and Resources that, in fact, the Corporate Services Scrutiny Panel had gone and spoken to all the heads of departments and the Chief Officers, et cetera, which I found was very encouraging. The thing that I find that I still am asking questions about is £5 million sounds like a drop in the ocean but if you are a head of department or a Chief Officer, the proportion that would likely come out of your budget is going to be quite significant.

[10:30]

If you take Education, Sport and Culture with which I was involved for 9 years before this 3-year session, you think that is a very large budget but when you sit on 2 governing bodies, as I do, you recognise very quickly that it is easy to make the controversial nit-picking cuts that we all hear about, the popularity of doing away with school milk and music, et cetera, but now we have got to the stage that the cuts are hurting people and they are hurting hard. If you are looking at cuts when you have got an employment figure of some 60 to 80 per cent - mostly it is in the 80 per cent region - within the various departments, whether it is Education, Health, Social Security and its various support terms, Home Affairs, et cetera, then the only way that you are going to achieve this is by cutting out services, which involves redundancies. That cannot be done just like that. That has to be worked and that has to be processed, and that is what is going through in the background, which little glimmers of it can be seen at the moment but we do not know the details yet. But the other side of the coin is that on the 2 governing bodies that I am involved in, it is seriously looking at are you going to be able to continue with the quality of the education that we are so justly proud of and which we need for the future of our children because without it our finance world, and our other employees that require quality education for our future generations, will suffer. Therefore, if you are going to make changes, you have got to do them as well thought-out and that process takes a bit of time. I am not going to repeat all that has been said before. I am afraid that this is too quick to be able to do it and there is not enough detail. I support the principle but what I do not want is to have some ad hoc sudden removals because this has been thrust on us. I do not think it would do the Island any good in the longer term so, in the shorter term, I have got to say no but in the longer term, I can see where it is coming from and it was good that it was brought up today.

10. Senator B.I. Le Marquand:

We find ourselves in a difficult position with a structural budget deficit of around £100 million. The reality of the situation is that we face painful decisions. I sometimes somewhat darkly refer to these decisions as involving a balancing exercise which I call "a balance of pain". Which will be the more painful, tax increases, service cuts or changes to pay and terms and conditions of States employees? Although these decisions may be and will be painful, they are decisions which are made with a view to a positive outcome and that positive outcome at which we are firmly aiming is to balance the budget by 2013, thus putting ourselves in a stronger position for the future. There are also further issues which will need to be addressed on an ongoing basis. I see this as a project which will take place over perhaps the next 10 years or so and it is my opinion that we need to have a comprehensive and far-reaching review of all public services along these lines. Firstly, we need to decide what services the public sector should provide and to what level. Secondly, we need to decide how these services would best be provided. Is that through a States department or through a charitable organisation or through a contract with some outside commercial body? Now, as part of that process, there will need to be safeguards put in place, safeguards in terms of existing employees, safeguards in terms of ensuring employment for our lower paid people and so on, but nevertheless the exercise has to be done. A third stage of that kind of process will be tough decisions as to how we move from where we are to where we want to be. But all that has to happen in a proper structured way and over a period of time. Now I turn to the ninth amendment part 1. There are, in my view, a number of problems with this approach. Firstly, the approach of slashing £5 million across the board, as it were, cuts across the normal Business Plan process. The normal Business Plan process is that Ministers set out the main areas of savings so that Back-Benchers or others who may disagree with them have the ability to challenge these by seeking to reinstate them and, of course, that will be happening with certain items later on. This process which deals with unspecified cuts in relation to different departments means that Back-Benchers who might wish to challenge a particular cut will not know that it is going to happen at this stage. It is simply totally cutting across the normal process and I do not believe that that is fair to those particularly who might wish to reinstate items. Secondly, the process here is on a pro rata basis. I have on many occasions in many different venues explained why I am against a pro rata approach. That is firstly because it presupposes that all departments at all sections start on a level playing field, which we do not. It is harder for some departments - and my colleague, Deputy Hilton, has outlined this this morning again - to make savings, to make cuts than it is for others. Also, as I have said before, at different stages of the process, it may be more difficult for different departments. It may be relatively easy for a department to find the current cuts, the 2 per cent cuts, more difficult for them to find a 3 per cent and even yet more difficult to find a 5 per cent. On the other hand, there may be other departments where it works the other way around and, again, we have an arbitrary system here which cuts right across and does not take any account of the particular situation of individual departments. Thirdly, the work which is being done on the C.S.R. process is being done very seriously and professionally. Every department of the States as far as I am aware - I can only speak for my own departments - we are seriously committed to this process. I will not have anyone say other than that. My staff has worked very hard on this, very thoughtfully and very carefully. This kind of process takes time and it requires clear decisions and good judgment in terms of what can be cut and what cannot be cut. Arbitrary pro rata cuts cut right across that process. Fourthly, we are still sadly probably in a recessionary position in Jersey, hopefully coming out of it, but nevertheless, all the signs are we are still in a recessionary situation. Public spending cuts will have a deflationary effect and to increase those public spending cuts for next year will have a

deflationary effect on the economy at the very time when we are seeking to come out of the cycle. Fifthly, the existing target of £50 million over 3 years is going to be very challenging indeed and, indeed, the process although I am straying now on to a later debate, but I will do that very briefly. The process of arbitrarily increasing that to £80 million or £65 million without knowing what the social effects will be in relation to this could be very damaging indeed. Finally, I have some crumbs of comfort to offer to the Corporate Services Committee, 2 not insubstantial crumbs. The first crumb is my commitment to the longer term process, which I have outlined before, a

process which I believe will have to take place over a period of perhaps 10 years or so if it is going to be done properly. Secondly, the commitment of my own department that if we can find cuts, which have been outlined at the moment for 2012, which we can accelerate forward to 2011 without making material reductions in public services, then Home Affairs will seek to do that.

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

Deputy De Sousa said something which chimed with the way I think. She said we are going to struggle to make real savings. My reaction to that is that the fundamental savings and I think Senator Le Marquand was talking about those sorts of things where you look at how you deliver services over quite a long period of time to do that. You might get some real substantial savings and we are talking as if we want £50 million. That will not come from salami slicing because there is a limit to how many times you can slice salami. So the fundamental approach is definitely the way to go. That is the way to achieve real savings and I am glad in this regard that a number of Ministers have said: "Well, we will offer up the money but we do not know how yet." I think that is a promising sign. I know 3 Ministries that have said that either privately or publicly and that is to be commended. We cannot rush this process but on the other hand, salami slicing, which the Minister for Treasury and Resources eloquently denounced in this amendment, he said £5 million additional cuts across the board pro rata simply means more salami slicing and that is not the way to do it, but what we have here in this list of savings/cuts with a slightly dodgy division between the savings and the cuts, reams and reams by department, was exactly that. It was salami slicing. They were all told to find 2 per cent regardless of whether that department had a bit of fat or did not have a bit of fat. It was indiscriminate salami slicing. So I just wanted to make that point right at the beginning because it is so important that we focus on the medium and long term for the real savings. That is why this debate is going to be so long. That is why there are so many amendments in spite of Senator Shenton bravely withdrawing some of his. The fact is there are a lot of unhappy bunnies around because of this approach and that is why it is going to take so long, because that approach was flawed. When I first looked at this amendment when it popped on the doormat and I read it, I thought: "Crumbs, this is crazy, this is crazy." I could not believe the opening table where, without any explanation, we are just treated to a list from 2001 I think to 2009 of the rising expenditure of the States with no commentary at all about inflation or about special items, nothing, just this list saying: "Look how it is going up." Quite extraordinary, and then the £5 million across the board. But it is to be welcomed in a sense in the way that Deputy Hilton said because it does give us a chance right at the beginning of this whole marathon to look at the big questions and it does pose those questions, the £50 million or £80 million cuts. One thing that this amendment does - and I have a sneaking suspicion that that is what it might have been intended to do - was that what the debate is going to be framed as is on the one hand we have the mad, foaming left-wing Deputy Southern [Laughter] who wants to put all the money back in and the unions are baying and having demonstrations out in the Royal Square and there is going to be chaos unless we put it all

back in and so on.

Deputy G.P. Southern of St. Helier :

May I suggest that that may well be a gross misrepresentation of what I am saying. [Laughter] I am proposing £50 million worth of cuts over 5 years instead of 3, not opposing all cuts. I have individually put back about £1.2 million into the spend. It is a moderate policy I am proposing. Before we go any further [Laughter] [Aside] I stopped foaming at the mouth before Christmas. [Laughter]

The Bailiff :

I think that is enough clarification now, Deputy . The Deputy of St. Mary :

That was a splendid clarification, and on the other hand we have the rabid right-wingers of the Corporate Scrutiny Panel [Laughter]  who are baying for more cuts: "We will have another £30 million and we will have them now. Well, in 3 years' time, but we will have £5 million straight away just to get the knife sharp." [Aside]

[10:45]

In between, we have our nice cuddly Mr. Treasury Minister [Laughter] Senator Ozouf , who is sweet reason himself [Laughter] and declared yesterday: "I am firmly in the middle." [Aside] All he wants is 10 per cent cuts over 3 years so that is very moderate, is it not, and no one will suffer and we can all go home and sleep in our beds. But the problem is that it is not quite strictly accurate and if Members remember their childhoods and the story of Little Red Riding Hood, the nice grandmother in the little house in the woods turned out not to be very nice but to have big, big teeth. It is only a fairytale. [Laughter] Well, I thought it was time to wake people up. It is only a fairytale but it is real. It points to something real. It is more of a bad dream. Fairytales have elements of truth in them. Things are not what they seem and the consultation so-called that we have had - particularly at the beginning of the year but continuing up until the debate- has not been consultation, of course. It has simply been a barrage of propaganda in favour of a particular approach. Now, would that we had had a real public debate. Would that we had gone down the route that Senator Le Marquand outlined just now and said: "We will look at this over a longer period." The first thing is we define what the public would want in terms of services and how we would pay for them and would that we had gone down that route from the start in a genuine way. The other week, I was riding up the hill - well, not for long because you have to get off and walk past Bellozanne - up towards the school at the top and it just hit me, as I rode up that hill, and looked at the monster to my left, Bellozanne, and, of course, the name rings straight away sort of bad vibes, I think, in all of us and we have said that we admire the people who worked there for so long in bad conditions, but the people who live round about and past whose front doors I was riding, what have they put up with for so long? This House, this House and the policies of the past, which were what we are being asked to endorse again, which means that we could not even afford to put gas flue scrubbers on that chimney, even the new one which had good life in it. We could not even afford to do that. So the people living there were being polluted and poisoned by the responsibility of this House. That was down to an attitude to public expenditure, which we are seeing in this amendment, and which, in fact, we are seeing in the original cuts and we have to grasp this. If you have incinerators to burn your rubbish, which is of course another debate, then you have to protect people when you do it and that means employing people, P. and E. (Planning and Environment), to make sure that the new incinerator runs absolutely clean and that costs. Modern society costs. If you want the convenience, if you want all the new plastics, if you want your latest iPod, then you have to pay a price and some of that price is a social price. It gets paid

down at La Collette and the Government is the one that is going to have to provide that protection. Senator Shenton, in his report to his many amendments, many of which he is now going to withdraw, but interestingly he said in his overall comments before he introduced the individual amendments in relation to the spiralling costs of government in Jersey he said - and I paraphrase because it would take too long to find the actual quote - but he says: "If we do not get control of public expenditure and endorse real cuts, then the last one please turn out the lights. The last one to leave, please turn out the lights." By that, he is suggesting that if we do not cut, if we do not go down this fairly draconian route of £50 million or £80 million, which is what we are debating now, then the whole thing will just fall apart and people will leave in their droves but, of course, this is the opposite of the truth. The people who he is suggesting will leave want good provision for their children. They want a Youth Club for them to go to if they are so inclined. They want good schools and they want safety. Safety in terms of not being burgled or mugged has an implication on crime levels. Crime in turn depends largely on social exclusion and poverty. Those are the 2 big drivers of crime, but social exclusion and poverty come back to this Assembly in the form of the way we deal with income support, the way we deal with housing and so on. So "last one out, please turn out the lights" not, in fact if we provide properly for people then they will stay because Jersey is attractive, nice, safe and has good facilities for people to live in. I must say I have a different vision from the cuts brigade who are not sure whether they are to the right or behind the Minister for Treasury and Resources that the social who are they called, the Small Society and the Chamber of Commerce and all these people. My different vision is of inclusion and equality and social mobility which the Minister for Treasury and Resources himself subscribed to yesterday. He said: "I believe in equality and social mobility." Well, last night's paper I think it was, very recently anyway: "Free workshop to help youngsters hone musical skills." Now, that is an image in one headline of the sort of society I want to see. I want to see young people honing their musical skills, being encouraged to by the Government which says: "Sounds Workshops." Therefore you go along. When my father was Director of Education in long distant days, the Youth Service was founded. Would we be without it? There was a magnificent man who reminded me of Mitch Couriard now who strode around the office in Pier Road and he was the outdoor pursuits person who was introducing things like sailing and rock climbing to the youth of the Island. Would we reverse that? Would we say: "Close down St. Aubin's Fort."? I am sticking with the areas that in a sense I know best in terms of the history of these services that the States provide which are so important, the Outdoor Pursuits Centre at Crabbé. Would we be without these things? Do we really want to have a society that says: "Close the lot" because that is where we are headed with an £80 million cut over 3 years. Parenting skills, the absolute bedrock of the attack on crime, the attack on all sorts of things. It creates more rounded people. Parenting skills came top in the Mike Romeril process back in 1999 and 2000 where we had specialist working groups and I was on the social working group. One in 2, the top priority policy area, was parenting agreed by everybody there from all the different agencies. So are we going to pull out of that? Are we going to say it does not matter? Government protects its citizens and government helps to create better opportunities and more equality and I do not think we should row back from either of those things.

Now, I do not mean that departments should be inefficient and bloated or whatever, but I do believe that that is a bit of a myth and, as I said, no doubt, over time, a complicated organisation like the States with departments that are themselves complicated will accrete and will grow in ways that are not maximally efficient and, every now and again, you have to do a fundamental review. That is fine but I just want to clear away some of the myths that lie behind this kind of approach that we see in this amendment and also, in fact, the overall approach of the Council of Ministers. These myths have been circulating. They have been circulated by the various allies out there, as I say, the Chamber of Commerce and the Small Society. We hear them. The first claim is the States, their expenditure is rising all the time. There are 2 sides to that. One is that a lot of that increase is legitimate and the other thing is that a lot of the rise is fictitious. We are being spun this idea that the States expenditure is out of control when it is not. If we just look a little bit closely at that famous 30 per cent claim of the Minister for Treasury and Resources, which he referred to repeatedly in question time after he had made it in March, he said: "6 per cent increase year on year 2009 and 2008. We have got a 30 per cent increase." He said it repeatedly, 30 per cent over 5 years and when you look at the figures, it just is not true. So we are being sold cuts of the order of what we are seeing in the Business Plan and then we are being sold, or attempting to be sold, even bigger cuts on the basis of these myths. When Deputy De Sousa said: "I think it is going to be very hard to achieve the cuts" she is right because there is not that much room for manoeuvre in terms of simple cuts. There may be fundamental rearrangements that are possible but in terms of salami slicing, it is very, very difficult as we can see from all the amendments. Of that 30 per cent increase that the Minister for Treasury and Resources referred to and made a big splash in the paper and was designed to make everybody out there think: "Gosh, are they not a shower in there." He was damaging our reputation by saying that in the media and by spreading that around. Of that 30 per cent increase, 40 per cent was inflation and of that, two-thirds was pay and a third was non- pay. So that is 40 per cent; £60 million of the £146 million was inflation. Then you go through capital to revenue, which was a simple accounting procedure to deal with G.A.A.P. (Generally Accepted Accounting Principles) accounting. He has put that into the £30 million; 6 per cent of it

was one-offs, the Haut de la Garenne inquiry and the flu pandemic and Williamson, which will not come again, and 7.5 per cent was welfare going from the Parishes to Social Security, £10 million, but he bundled that into the increase. It was not an increase; it was a transfer and so on. In fact, two-thirds of the 30 per cent was not normal growth at all and of the other third, I have totted up that a substantial amount was things like income support transition because of the introduction of income support. Some of it was the arrangements put in place to deal with the downturn and you just could not argue with those and that takes you down to residual, 12 per cent of the 30 per cent which was actual growth, 12 per cent; one-eighth of £146 million was growth and where was most of that growth? It was in Social Security. What did I just say about crime and poverty? If we do not increase those bottom levels of income, then we are risking an unsafe society. So 30 per cent? It was not 30 per cent and that is the kind of basis we have been proceeding on in this C.S.R., and it is very sad and I wish it had gone differently. Now, the second point about "the States spend more money all the time" is to consider what the new services are. Why is there that little bit of the 12 per cent of the 30 per cent? Why is that there? Why do we say: "I think we should do that, I think we should do that." Well, 2 examples. I was preparing for this whole debate and I was looking at some early financial reports and accounts of the States and I picked up the 2004 well, I did not pick it up, I got it off the Web, and there on the Health and Social Services page was a graph of Outpatients Department activity. Between 1999 and 2004, it was a straight line upwards and the increase was something like 40 per cent over the 5 years, and there was a similar graph for radiography activity.

[11:00]

I circulated an email to Members pointing out that oncology, the cancer treatment unit at the hospital, 8.5 per cent increase year on year for the last 5 years. So do we do this without more staff? Do they magically cope with 8 per cent more a year treatments and outpatients? No, they do not. So that might explain some of the increased manpower, might it not? It might explain some of the increase in expenditure. Then we have new issues like internet

The Bailiff :

Deputy , sorry, can I just bring you back to the paper. This is an amendment about whether there should be further cuts, not whether there should be any cuts at all.

The Deputy of St. Mary :

Yes, I can see what you are saying. I will try and stick narrowly to the amendment. The problem is, of course, that in all the other cuts, these same considerations apply; say it once, do it forever, and will not have to say it again.

The Bailiff :

If that is an assurance, Deputy , then perhaps we should [Laughter] The Deputy of St. Mary :

I am certainly not in the habit of repeating myself, I hope. [Laughter] Yes, and then what the Senator Shentons and Senator Fergusons of this world and this amendment would try to have us believe is that there are not new challenges, that, for instance, internet safety is not an issue for children, that we do not need any provision to help protect our children from that and I do not think parents can simply talk to each other and get it right. There is someone, I think, within the Police Service I have seen in the paper working with parent groups and so on to spread messages about how to protect children from internet dangers. The true story is that we have a lean public sector delivering fantastically well. Now, I take the point of Deputy Hilton who appears to know more about the Tourism Department than I do and says that there is a bit of fat there. In detail, I do not know but the fact is that we have a small public sector. That comes from the Corporate Services Scrutiny Panel's own expert adviser, or one of their 2 advisers, Dr. Harkness, and she says Jersey has a small public sector. There is also a chart, and I am looking for it. There is a chart in that appendix which shows that Jersey is the smallest spender of any jurisdiction. I think we are either at the bottom or next to the bottom of that table, way below most O.E. C.D . (Organisation for Economic Co-operation and Development) countries. So if we were to increase our public expenditure, the proportion of G.N.I. (Gross National Income) that we spend on public facilities and public services by a tiny bit, we would still be firmly on the bottom, firmly spending less than anyone else. So the issue is not that we are some sort of over-bloated, overloaded public sector. In fact, the opposite is true and when the benchmarking exercise was done, I think it was 2004, 2005, I associate it with Senator Walker so it goes back to "them there days", the benchmarking exercise went across all the departments, compared their efficiency with other jurisdictions and found not a lot. We were not out of line one way or the other. I think that we provide a fantastic range of services for very little and we should be proud of that and not this constant sniping at the people who deliver those services. Now, there are a couple of other myths I just want briefly to allude to because, again, these are what underlies this kind of approach: "Oh, well, chop another £30 million and no one will notice." Jersey is, I do not know, over-taxed. I have dealt with that. Everyone will leave. Really? I think that is a complete myth, that everyone will leave. It is stated in the tax document that if we overtax people, then they will go. There is no evidence for this. People in Luxembourg pay more tax than we do and I would not be at all surprised if you took the overall envelope of taxation, including G.S.T. (Goods and Services Tax), income tax and all the rest of it, that Jersey is not a very lightly taxed jurisdiction. The most important myth, I suppose, Jersey will not be competitive. Jersey will not be competitive and Small Society says that. If we spend one or 2 more percentage points of our G.D.P. (Gross Domestic Product) on public goods and services, will we be less competitive? I do not think so. As I said, we are so near the bottom of the table, one or 2 per cent is not going to make any difference at all. If competitiveness depends on how little you spend on your public sector, then we have won already. We are so far in the lead that we cannot lose the race. But, in fact, the opposite again is true. If we spend a bit more on infrastructure, if we do not flood our town every now and again, if we have an incinerator that is really safe, if we have a rational transport system that gets people from A to B quicker than it does now, if we invest in our young people, we will have a more competitive society. So to the actual detail of the amendment and the report accompanying it. First the good news. Page 6 paragraph 2 where they say how this process should have gone is spot on. They say there should have been real consultation. They say that they should have taken the employees with them. They say they should have taken States Members with them instead of having a debate that is going to last for a long time. They also call for fundamental change, that if you set out to make real savings then you have