States Meeting Transcript - 21/10/2010

STATES OF JERSEY OFFICIAL REPORT THURSDAY, 21st OCTOBER 2010

PUBLIC BUSINESS – resumption ...............................................................3

1. Jersey Finance Limited: matched funding...............................................3

1. Deputy G.P. Southern of St. Helier:......................................................3
2. Senator A.J.H. Maclean:.................................................................6
3. Deputy D.J.A. Wimberley of St. Mary:..................................................8
4. Deputy M.R. Higgins of St. Helier:.....................................................10
5. Deputy E.J. Noel of St. Lawrence:......................................................12
6. Deputy P.V.F. Le Claire: ...............................................................12
7. Senator F. du H. Le Gresley:............................................................14
8. Senator T.J. Le Main: ..................................................................14
9. Deputy J.A. Martin of St. Helier:.......................................................15
10. Deputy M. Tadier :......................................................................16
11. Senator P.F.C. Ozouf :..................................................................19
12. Deputy P.J. Rondel of St. John : ........................................................20
13. Connétable L. Norman of St. Clement:.................................................21
14. Senator S.C. Ferguson:.................................................................22
15. Connétable M.K. Jackson of St. Brelade:...............................................23
16. Deputy G.P. Southern :..................................................................23

2. States Members' remuneration: reconsideration of 2011 increase and repeal of Article 44 of the States of Jersey Law 2005 (P.127/2010) ..............................27

1. Senator B.E. Shenton:..................................................................27

2. States Members' remuneration: reconsideration of 2011 increase and repeal of Article 44 of the States of Jersey Law 2005 (P.127/2010) - second amendment................28

1. The Deputy of St. Mary:................................................................28
2. Senator B.E. Shenton:..................................................................29

3. States Members' remuneration: reconsideration of 2011 increase and repeal of Article 44 of the States of Jersey Law 2005 (P.127/2010) - amendment........................29

1. Deputy J.A. Martin:....................................................................30
2. Senator B.E. Shenton:..................................................................32
3. Deputy M. Tadier :......................................................................32

4. Deputy P.V.F. Le Claire: ...............................................................32
5. Deputy T.M.Pitman:...................................................................34
6. Senator P.F.C. Ozouf :..................................................................35
7. Deputy R.C. Duhamel of St. Saviour:..................................................36
8. Deputy R.G. Le Hérissier of St. Saviour:...............................................36
9. Senator A. Breckon: ....................................................................36
10. Deputy G.P. Southern : ..............................................................37

11. The Deputy of St. Mary:.............................................................37

LUNCHEON ADJOURNMENT PROPOSED..................................................38 LUNCHEON ADJOURNMENT................................................................38

PUBLIC BUSINESS - resumption..............................................................38

12. Deputy J.A. Martin: .................................................................38
13. Connétable J. Gallichan of St. Mary:................................................41
14. Deputy S. Power of St. Brelade:.....................................................41

4. States Members' remuneration: reconsideration of 2011 increase and repeal of Article 44 of the States of Jersey Law 2005 (P.127/2010).......................................42

1. Deputy T.M.Pitman:...................................................................42
2. Deputy J.M. Maçon:....................................................................45
3. Senator P.F. Routier: ...................................................................48
4. Senator S.C. Ferguson:.................................................................48
5. Deputy R.G. Le Hérissier: ..............................................................49
6. Connétable J.M. Refault of St. Peter:...................................................49
7. Connétable J. Gallichan of St. Mary : ...................................................50
8. Senator T.A. Le Sueur:.................................................................53
9. Connétable K.P. Vibert of St. Ouen:....................................................54
10. Deputy R.C. Duhamel:..............................................................54
11. Deputy M. Tadier :...................................................................54
12. The Deputy of St. Martin : ...........................................................56
13. Deputy G.P. Southern : ..............................................................57
14. The Deputy of St. Mary:.............................................................58
15. Senator B.E. Shenton: ...............................................................60

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS ....................63

3. The Connétable of St. Mary (Chairman of the Privileges and Procedures Committee): .63

ADJOURNMENT................................................................................64

The Roll was called and the Dean led the Assembly in Prayer. [09:36]

PUBLIC BUSINESS – resumption

1. Jersey Finance Limited: matched funding

The Deputy Bailiff :

We now come to P.126/2010 - Jersey Finance Limited: matched funding - lodged by Deputy Southern and I ask the Greffier to read the proposition.

The Greffier of the States:

The States are asked to decide whether they are of opinion: (a) to express their support for the principle of matched funding for Jersey Finance Limited on a pound for pound basis, excluding any allowance for pro bono' work, between the States of Jersey and the private sector; and (b) to request the Minister for Economic Development to apply that principle to the 2012 grant to the company.

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

What I have brought before the House today is a very straightforward and simple proposition. It is one that has a principle behind it and a principle that is being used increasingly by the Minister for Treasury and Resources and Economic Development to apply to grants to outside bodies. If Members will turn to page 3 of my proposition, they will see that principle clearly enunciated where the Minister for Economic Development, in front of the Economic Affairs Scrutiny Panel, stated the following: "I think that is really a point that needs to be emphasised because in all respects what we are trying to do and what we are attempting to do as we go forward into years 2 and 3 of the Comprehensive Spending Review is to work more closely with organisations that receive grants to ensure there is a better return on the investment we use and [listen carefully] allow the individual organisations to be more effective both in raising private sector-sourced funding themselves and being more effective in what they spend to get a better return." So the principle that underlies this proposition is that we should be encouraging outside bodies that receive a States grant to stand on their own feet. Subsidy is out and entrepreneurial fundraising is in. However, in one single exception to that rule .. and that applies to all sorts of bodies, whether it is the organisers of the Battle of Flowers or the Air Display or the providers of medical services at home, all sorts of services are being asked to do that. They are being asked to take cuts in their funding and to stand on their feet, raise some more funding themselves. That is the principle and it is here because we are told we are in recessionary and very tight fiscal times. That is the thrust. The exception is Jersey Finance Limited. If Members will examine page 4 of my proposition, they will see the table there which charts the inexorable rise of funding for J.F.L. (Jersey Finance Limited) over the past decade. One can see clearly that initially there was matched funding more or less. In 2003, for example, £400,000 came from the States and £379,000 came from the subscriptions from the members of Jersey Finance Limited. As we go through the decade, you can see that the funding has grown. It always does and subscriptions have grown to approximately double that amount over the 10 years to £650,000. In the meantime, though, the States grant has grown not by a factor of 2 but by a factor of something like 5 and now stands at £2.2 million. So we are funding in the ratio of 3 to 1, States money going in to subsidise this activity to the industry itself paying its own way, 3 to 1 approximately. My argument is that that should not be happening. Why should it not be happening? Because of the way in which this body was set up to promote finance and financial business on the Island. Back in 2000, a working party set up by Senator Walker no less - that is its origin - and they said clearly what became Jersey Finance Limited would only work effectively if

the industry considered it to be its own creation and essentially accountable to it. If it were wholly- funded from the States, it would become yet another government body to be criticised from a safe distance. So it is about ownership and it is about accountability. Now a ratio of 3 to 1 in States funding to industry funding, I suggest, is the wrong balance for accountability. Then they said, and this is the key to the funding: "The States would be invited to make a commitment to match industry funding pound-for-pound." So initially the idea was to make sure that the industry itself is paying a large proportion of its activity. Thereby, Jersey Finance Limited will be accountable and will be held to account by the industry itself in whose interests it is working and that the States would very generously match that funding pound for pound. It is now matching that funding £3 per pound. That cannot be correct, especially in these fiscally straitened times. Now, a scrutiny report way back in 2008 - S.R.6 by the then Economic Affairs Scrutiny Panel - recommended exactly that as one of its recommendations that matched funding should be applied to Jersey Finance Limited. It is also conveniently the opinion of the Comptroller and Auditor General who suggested on page 35 of that report then back in 2008, he said: "A long-term reduction of £250,000 in States funding to J.F.L. noting that at present Jersey Finance is financed partly by the States and partly by the financial services area. The option for reducing spending could lead to a balancing of the direct and in-kind contributions made by these 2 parties so that the States and the industry make equivalent contributions." So the Comptroller and Auditor General was arguing back in 2008 that if we were to make cuts anywhere, this was a suitable area to cut funding because it would be simply a rebalancing of the contributions from industry and the States.

[09:45]

He mentions there "direct and in-kind contributions". Now, if Members will turn to the comments of the Minister for Economic Development, they will see a schedule, shall I call it, sketched in an estimate of the pro bono in-kind contributions made by the industry itself and, lo and behold, that appears to work out in 2010 to around £2 million. But, as we have seen in a previous debate, the Deputy of St. Mary has clearly shown that if we were to examine a balanced budget here, we are taking direct input, contributions, and pro bono, then if it is in-kind, then the total of the States contribution in-kind - the work done on financial services legislation,  et cetera - what we are talking about is not £2 million but something of the order, I think, although I may have lost count when the Deputy of St. Mary was doing it, of around £11 million. He might tell me it is more but certainly if we were to balance the pro bono as well as the direct contributions, we would find a similar weighting worse in terms of the effort that we are putting in compared to the effort that the industry itself is putting in. One of the things that I want to do just briefly is to look at the way in which this imbalance has arrived. I have pointed to the growth of the funding on the part of the States over the decade. It has just gone up and up but we also look at the most recent rise in their funding, and in the hearing of the current Economic Affairs Scrutiny Panel, the Chief Executive Officer for Economic Development had the following to say: "Well, the initial funding to pump- prime that came from fiscal stimulus and within the successful fiscal stimulus bid, E.D.D. (Economic Development Department) committed to make the recurring element of that funding, that is from 2012 onwards, available from our budget because if you set up a third representative office, the very worst thing you can do is set it up then close it down 18 months later," and I could not agree more. The most recent increase in funding to £2.2 million went towards the establishment of a third office for Jersey Finance in the Middle East but note its funding came from fiscal stimulus. Fiscal stimulus funding should be 3 T's: timed, targeted and temporary. Thank you, Deputy , timed, targeted and temporary. Yet this increase in funding, the most recent one was obviously not going to be temporary. It was to set up an office that would have ongoing costs and

yet we committed to that increase in perpetuity, for ever. Deputy P.V.F. Le Claire of St. Helier :

I am sorry, how much was the amount, may I ask? Deputy G.P. Southern :

The most recent rise was £400,000. We passed it quite recently after quite a lengthy and arduous and strongly fought debate.

Deputy P.V.F. Le Claire:

I am sorry, I do not mean to interrupt the speaker. I do appreciate that. I just wondered what the office costs were in relation to that part of the fiscal stimulus that he is referring to.

Deputy G.P. Southern :

In response to the question, I do not know, but it is ongoing. One has to assume it is of that order. Nonetheless, the funding has gone up to £2.2 million and the last step was £400,000. Now, obviously, it does not pay to open an office and close it down 18 months later and I am not proposing that that should happen at all. I am not proposing that the funding for Jersey Finance should be reduced in any way or that its activities should be curtailed in any way in promoting Jersey financial affairs throughout the world. What I am proposing instead is that the industry itself pays its fair share. One only has to look at the circumstances that we find ourselves in and that the industry finds itself in. Now we are in the middle of a recession and our tax returns are reduced. That is a reality. In the financial sector, it has to be said they are in the middle of a recession and their profits are reduced. Their profits are reduced to £809 million in 2009. Now, I keep asking the Minister for Treasury and Resources where the signs of recovery are in the economy and he keeps telling me that there are signs of recovery in the business expectation survey, the business survey, what is going to happen next, and he keeps telling me that that is positive and is moving upwards. Nothing else is but that is. So he can have it one way or the other. Either we are in a recession and it is recessionary times and it is going to continue, in which case our cuts are a bit dodgy because they endanger the recovery at all or there is some recovery. Now, time and time again, he said there are signs of recovery. Yes, financial business especially is looking forward to better times. It is expecting better things to come soon. The rest of business is not. It is flat; but financial services are looking upwards. The signs are positive. If that is the case, then 2010 profits should be up on 2009. Profits may well be returning. Absolutely appropriate then that we say: "Pay your fair way and pay your contribution. Yes, the Island benefits from your activities but so do you; 2009, £809 million." Now, the comments of the Minister for Economic Development do not really add much, I do not think, to the argument but they do say that of course everybody else is promoting and spending more than we are. It is a very competitive market. Yet, at the same time, they say: "But every year Jersey Finance Limited does a business plan and we are content with it. We think it is excellent value for money." Great. I hope it is excellent value for money and I hope the people who are running the industry equally appreciate that it is excellent value for money. Because when they put in their pound-for-pound matching and hold Jersey Finance Limited to account, they can look at the books and say: "What excellent work is happening. We are getting money for our contribution." If this proposition were to be carried, then that situation would still exist except that the industry itself would have a greater stake in what was happening and what was being delivered than they do now. In terms of that rival spend, the Chief Executive Officer of Jersey Finance had this to say in 2008 when he was talking to my Economic Affairs Scrutiny Panel of the day. He said the following: "Middle Eastern jurisdictions such as Dubai [that was the question asked of him] clearly have deep pockets and their spend is bigger." He continued: "But Jersey has some attributes that they do not have. It is very, very important to get out there and do not allow them to, if you like, occupy our space. We are seen reasonably in other areas, a very strong legal and judicial system that is respected around the world. These are things you cannot create. You cannot spend your way to those." So in terms of the mismatch, the fact that Dubai has deep pockets and can throw money at getting some of our business and attempt it, he says there are other things in the argument - that is not the only argument - it is the argument of the Minister for Economic Development to say that is the measure. The Chief Executive Officer of J.F.L. says you cannot spend your way to those things, you cannot create strong legal and judicial system that is respected around the world. So we are competing and we are competing on grounds that are not necessarily financial but which is our reputation which is well established. The fact is that if we return to the vision that was Senator Walker 's vision for this body, that it would be chiefly accountable to the industry. That is the way to make it work properly; therefore, it should receive

matched funding. If we return to that principle that matched funding would mean that our contribution went down by £875,000 in 2012 and one would hope that it was matched by equal contributions balancing from the industry itself to show its faith and its trust in Jersey Finance Limited and the work that it does. That is the case I put. I make that case.

The Deputy Bailiff :

The proposition is made. Is it seconded? [Seconded] Thank you. It is now open for debate.

2. Senator A.J.H. Maclean:

Members will have seen my written comments not surprisingly opposing this particular proposition. We only recently debated the subject of increased funding for Jersey Finance, a sum of £400,000, during the recent Business Plan debate. That was, of course, a difficult debate at a time when Members were being asked to approve cuts to most other budgets. The Members will recall that the increased funding for Jersey Finance was not new funding from central sources. It was, in fact, a reprioritisation from within my department's existing budget for 2011. Furthermore, it was achieved after we had delivered our 2 per cent efficiency savings as part of the 2011 Comprehensive Spending Review. I have already said that for the 2012 and 2013 Comprehensive Spending Review, Jersey Finance budget will not be immune to cuts as indeed all other areas of the department are being closely scrutinised, but this process will, of course, be managed in an appropriate way. But I have no wish this morning to re-ignite the arguments put forward during the Business Plan debate. What this proposition seeks is very different and potentially very damaging for Jersey. I am very disappointed and indeed concerned that the proposition has even been lodged, especially in this challenging economic climate. The mere lodging of such a proposition is damaging to Jersey's reputation as a leading international finance centre. It questions in a very public way this Assembly's commitment to our most valuable industry. We need to retain the businesses we have and encourage new inward investment. This is essential if we are going to deliver the future economic growth needed to balance our public finances. We need to appreciate that we are living in an extremely uncertain and a very competitive world. Many businesses are not multi-jurisdictional and can easily move, and they are. Make no mistake, our competitors are working hard to attract new business and they want the businesses that we have. This proposition will give our competitors like Guernsey great encouragement and potentially opportunity but it is not just Guernsey, the Isle of Man or Switzerland. There are 42 competing finance centres. Some, like Malta, are looking to double the size of their finance industry and the majority of these finance areas are investing now in exactly that aim. Now, turning to the proposition itself, the proposition contains a number of fundamental inaccuracies about how it claims Jersey Finance was set up and funded. Having thoroughly researched the history about how and why Jersey Finance was set up, I hope in the next few minutes to lay the facts before Members. Jersey Finance was incorporated in 2000 and began promoting and representing the finance industry in 2001. It is important to note that before Jersey Finance was set up, it was the Jersey Financial Services Commission that

fulfilled the dual role of regulator and promoter of the finance industry. [10:00]

It was the Edwards Report of 1998 that concluded, in common with international best practice, that this was not an appropriate position to hold, a dual role of regulator and promoter. In the year 2000, the J.F.S.C. (Jersey Financial Services Commission) transferred £3.3 million from its income to the States. This is clear evidence that it was collecting fees at that time significantly above that required just to maintain its regulatory oversight of the industry. Key parties such as former Senator Pierre Horsfall, and Geoffrey Grime who was the first Chairman of Jersey Finance, have confirmed that while the principle of matched funding was tabled and discussed, it was not agreed. All the evidence supports this view. It should be noted at this point that the fees paid by the finance industry to the Jersey Financial Services Commission reflected the dual role that it undertook at that time. When Jersey Finance was established, the finance industry had asked for an element of the

Jersey Financial Services Commission fees to be used for the set-up and running of Jersey Finance, but instead States representatives at the time elected to make a separate grant of £150,000 in 2000 and a further £500,000 in 2001. It is important to note that the fee structure of the J.F.S.C. was not adjusted after they stopped their activities in promoting the finance industry. A further £250,000 was promised to Jersey Finance by the States for 2002, but at this stage the States asked for a reciprocal commitment from the finance industry. This request was in addition to the significant financial contribution still being paid to the J.F.S.C. by the industry for the promotional work that they were no longer doing. Notwithstanding this, members of the finance industry still agreed to contribute a further £336,000 to the work and operation of Jersey Finance in 2002, a sum that was not matched by the States. Therefore, the industry at that time paid more than the States into Jersey Finance. In the following years, funding was assessed by successive administrations on the submission of annual business plans with no reference to matched funding. Since 2005, the funding of Jersey Finance by the States has been governed by a formal partnership agreement. It has been subject to external audit and for many years has operated with States representatives on the board of Jersey Finance. Jersey Finance has to provide detailed business plans, which are scrutinised and evaluated thoroughly before any funding is allocated. I am confident that nobody in receipt of States funding operates such a detailed and timely reporting result against agreed objectives. But there is clearly a balance to be reached between States and industry funding. As far as the current funding balance is concerned, favourable comparison can be made with other jurisdictions. In 2009, Jersey Finance outperformed its equivalent bodies in the Isle of Man and Guernsey despite their governments investing even more in recent times. £5 million was injected by the Isle of Man into promotional work for their finance industry; £1.1 million was injected by Guernsey for discretional promotional work above and beyond the core grant. Now, on the historical basis, there are extracts which indeed Deputy Southern has mentioned from Senator Walker 's working group of 2000. They are set out in Deputy Southern 's report and they suggest that there was an intention from the start to restrict government funding to a matched basis. This was clearly not the case as I have partly outlined. But this issue was further researched in 2008 by the Economic Affairs Scrutiny Panel which was, as Members will probably be aware, chaired by Deputy Southern himself. That Scrutiny Panel looked in detail at what had been concluded by Senator Walker 's working group of 2000. They found that there was no evidence of any clear decision as to how Jersey Finance was to be funded. That is probably one of the reasons why Deputy Southern did nothing further at that time other than make some recommendations. The Scrutiny Panel recommended a restoration of the principle but save, perhaps, for the funding position maintained in 2002, there is little by way of historical precedent to restore. There is currently no compelling or peculiar reason given for why Jersey Finance should be singled out among other grant recipients for matched funding. On the subject of pro bono contribution, even if there were some formal requirement for the matched funding, the in-kind contribution of industry cannot simply be ignored. Much as some may wish to conveniently diminish, indeed extinguish, the importance of that contribution, it is a vital part of the equation. Industry provides expertise in

the form of legal, accountancy and tax advice as well as providing an absolutely invaluable steer on the direction of legislative reform. This helps to place Jersey in an optimum position with regard to our competitors. Offshore finance has changed markedly in the last 10 years since Jersey Finance was incorporated. The professional service infrastructure supporting the industry has also changed. Medium-sized local businesses have grown and merged to become themselves multi-jurisdictional entities. Local allegiances have been diluted. The continued input of professionals working and advising in these multi-jurisdictions is a key requirement in ensuring that Jersey remains at the forefront of the industry. I previously confirmed that pro bono contributions from industry through Jersey Finance amounted to around £2 million for 2010. The Economic Affairs Scrutiny Panel was given the same figure of approximately £2 million back in 2008 by the Jersey Finance then Technical Director. Deputy Southern 's own Scrutiny Panel did not share his sceptical views of the value of pro bono work. Instead his panel reported and I quote: "The panel appreciates the high level of commitment shown by industry members to the development of the finance sector and

Jersey's fiscal legislation reforms evidenced by the volume of donated time and expertise." Industry professionals continue to engage with Jersey Finance to provide an abundance of technical knowledge which the States would otherwise be forced to fund. If strict pound-for-pound matched funding were to be imposed, it is eminently possible that this contribution would be provided only on an on terms basis or, worse still, would wither away altogether. Such an outcome would severely compromise Jersey Finance's ability to carry out its remit. The correct funding balance for Jersey Finance should not be shoehorned into an arbitrary formula. It should remain as it is, subject to rigorous and continuing objective assessment procedures. The current arrangements work and deliver value for money; more than just value for money, though. Funding Jersey Finance, without doubt, is a good investment. Jersey Finance members pay £650,000 in cash and £2 million, as I have mentioned, in pro bono contributions. In addition - and this should not be forgotten - Jersey Finance have created positive editorial coverage for Jersey valued at an estimated £1.4 million in the last year; all in all, a verifiable accurate direct contribution from industry and Jersey Finance of over £4 million. Government invests £2.2 million in Jersey Finance and gets a good return from a finance industry that represents around £350 million in taxation as Members will be aware; that is about 65 per cent of tax revenues; an industry that spends a further £380 million in the local economy on products and services; an industry including its clients that gives an estimated £100 million or so in charitable donations to good causes. In conclusion, there is no historic binding commitment to ongoing matched funding between the States and Jersey Finance. A reduction of the magnitude suggested in this proposition in support of Jersey Finance and, by extension, our finance industry will send a very dangerous and negative message into an already increasingly competitive marketplace. It would literally hand business to our competitors at this time. I therefore urge Members to continue to show their support for our most valuable industry by strongly rejecting this proposition and sending a clear message of our continuing

support.

Deputy T.M. Pitman of St. Helier :

The Minister gave a lot of figures I was trying to scribble down. Among all that, did I hear him say that the industry made £809 million profit last year, which as we know was a bad year? Was that in there somewhere?

Senator A.J.H. Maclean:

I think the Deputy knows full well that in fact it was the Deputy on his left-hand side who used that figure. He is absolutely correct. That is the profitability last year, which is about half what it was the previous year. As I have said, we are in a very competitive market. Other jurisdictions are investing far more heavily than we are in supporting our finance industry and it is all about supporting jobs and ensuring that we maintain our tax revenues.

Deputy J.M. Maçon:

On a point of clarification, I wonder if the Minister is able to answer Deputy Le Claire's question which is from the fiscal stimulus bid from his department, how much remained?

Senator A.J.H. Maclean:

I am more than happy to come back with an exact breakdown - although Deputy Le Claire is not here, I see - on the exact contribution to the office space at opening up in Asia. What I can say is it is a small amount of the overall sum that was invested. The majority of it goes into promotional work and other activities. The reason for that is that office space is quite often shared. That is the way that these facilities are delivered at the lowest possible cost.

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

I am only going to look at one particular point principally, which is the Minster for Economic Development's insistence that the pro bono work is somehow to be taken into account in this debate. In his comments, the Minister writes at the bottom of page 2 that: "The industry is aiding legislative development and reform in doing their pro bono work." Well, yes, and I have to say that certainly from my personal experience when I did work within the Tourism Department promoting things like cycle routes, I certainly did not think that that would be totted-up somehow. It was for the good of the Island. It was for the good of my own business as well, and I did not make a distinction between those 2. I find it sort of odd that I put "weird" in the margin that the £2 million  pro bono contribution which the finance industry is reported to make is somehow counted in this particular equation as the Minister would have us believe. He said pro bono cannot be put out of the equation. Well, I would suggest that it can because it seems to me that if industry members are engaged in technically developing specifications for laws or even partly writing them, the laws are products effectively in this particular sector which is unlike other sectors. The legislation becomes a product in pretty short order and so I just find the basis of what the Minister is saying there very questionable indeed. Of course, the other aspect which was referred to in the speech of the proposer was he was not quite sure about the contribution that the States makes to the finance industry and that, too, does have to be put into the equation. We are looking at a £1.8 million grant which we increased in the Business Plan to £2.2 million, but I would remind Members there are also the full-time equivalents within the Chief Minister's Department which he said in a written answer to my question in June of this year. In the Chief Minister's Department, there are 3 F.T.E. assistants to work on this area is one F.T.E. and the Law Draftsmen are 2 F.T.E.s. That is 6 full-time equivalents and I would reckon those jobs are £200,000 each. If you add in the administrative support and the pension rights and all the rest of it, it would be certainly over £1 million. Then the court and case costs and that is the Law Officers dealing with fraud cases, £3.7 million, and that was in the court and case costs proposition that we put through, the Article 11(8) proposition, and if you looked at the figures for Home Affairs, the amount they spend on difficult cases including financial cases, £1.7 million. I have allocated £1 million of that to the finance industry, Judicial Greffe again £2 million, £6.7 million in total just within the legal set-up

that is all due to the fact that expenditure would not be there if the finance industry was not there. [10:15]

I am not saying we should not do it. I am not saying we should not have a legal set-up to deal with these cases but they are all occasioned by the finance industry so that is, in effect, support for the industry from the government. Then Home Affairs had a request of £1 million which we passed for financial crimes and specialist crime, all to do again with finance, and that total is £11 million, including the £1.8 million or £2.2 million grant to J.F.L. So the total support of this House roughly is £11 million. Now, I just think that needs to be made clear when we are weighing-up the balance. On the one hand, the industry working in effect for its own good and I question whether that goes into the equation at all, and then incidental costs which the government has to face in providing for the needs of the industry and picking up the damage to the industry when there are these huge cases and so on, £11 million on the other side of the equation. I just wanted Members to be clear about those figures.

Senator S.C. Ferguson:

On a point of clarification. The Deputy of St. Mary has attributed all the court and case costs to fraud and the finance industry. I wonder if he would like to break the figures down a little more.

The Deputy Bailiff :

Do you need to clarify that, Deputy ? The Deputy of St. Mary :

The figures are in the Article 11(8) report, the proposition which was P.64. They are on page 4 and the Law Officers .. it was specifically listed as fraud cases, £3.7 million. Well, if the Minister for Treasury and Resources got his figures wrong, then tough, but I assumed that those figures were right.

4. Deputy M.R. Higgins of St. Helier :

I have just got a number of comments on a number of different areas. First of all, let us address the pro bono work. It is mentioned by the Minister in his comments that the industry puts in a lot of pro bono work. Yes, they do but they also did before Jersey Finance was created. When I was at the Financial Services Commission, I worked in the legal and policy area. We worked hand in glove with the industry and we received tremendous amounts of pro bono support from them. It is in the interests of the industry itself to provide that support and to work with the regulators and also when we are formulating laws and legislation for the Island. Whether Jersey Finance exists or not, that work would be done because it is in their self-interest. So that is the first point about pro bono work. Also, it is forgotten in terms of some of the other costs that the States are putting into this work that there are at least 3 people at the Financial Services Commission who are working full time on legislation and policy and regulation and they are working hand in glove with the industry. One of the problems with the industry taking over a lot of the research and doing this

Deputy I.J. Gorst of St. Clement :

I am sorry, I wonder if the Deputy would give way. I know he is not in a position to give names. I wonder if he could give the titles of those 3 roles that he claims are purely working in this fashion.

Deputy M.R. Higgins:

Yes, there is a director of international policy, there is a deputy director and there is a senior manager working in that area, so it is regulation but they are also working with the industry necessarily. It is regulation but they also work you cannot have regulation without consulting with the industry and a lot of the laws we bring in are concerned with regulation Remember the industry are lobbying all the time for legislation which is friendly to the industry and not over- restrictive so they work hand in glove. In addition to that, one of the concerns that I have had and I know that others have had with the Financial Services Commission with the role of Jersey Finance is the fact that they filter the information. In the past when we were dealing with laws, we got the information direct from the industry. We could see the balance. Unfortunately now, a lot of the information is coming in a filtered form and I still wonder how much spin has been put on by senior people in the industry or Jersey Finance itself. So the raw material needs to be handed over, not just the interpretation, and equally the Financial Commission, if they are not, should be involved in all the consultations directly. The Minister also mentioned, too, about the fees that Jersey Financial Services used to receive from the industry and he made it very plain saying how it has not gone down and how really part of the grant is giving them something back. What you have to understand is the Financial Services Commission is now spending a great deal of money on compliance issues and enforcement. In fact, if you look at the staffing of the Financial Services Commission, the enforcement side has gone up considerably. So has compliance, partly to meet international standards and partly because there are some people out there who are not playing the game and, in a sense, at some time or other, some of them are going to end up in court. The industry is not whiter than white. We cannot say that everybody is following all the regulations and the rules and, therefore, you have to have an enforcement and compliance section. Another point that I would make is that Jersey Finance Limited mentions that they have in fact, I am reading a letter that they have sent to the current Economic Affairs Committee and they mention they have over 190 firms as members representing the vast majority of the finance industry. Well, why do all the finance industry not contribute to Jersey Finance? Is it that they are dissatisfied with what they are doing? Is it that they do not think it is worth promoting the Island? Do they not think they are getting any benefit? Well, perhaps the whole industry should be contributing. Great play was also made of the fact that Guernsey and the Isle of Man were contributing in 2009 a lot more money to the industry. I am not surprised. Remember, the Isle of Man had K.S.F., Kaupthing, Singer and Friedlander, an Icelandic Bank that failed and caused a lot of damage to the finance industry in the

Isle of Man. Guernsey had Landsbanki fail which again has done a lot of damage to their industry. So it is not surprising that they are trying to deal with the adverse publicity that they have received on that score. I must say right at the very beginning, one of the things I object to most strongly and I felt it again this morning, I resent Jersey Finance using taxpayers' money to put propaganda out and to lobby States Members. If their role is to promote the finance industry outside the Island, that is where they should be talking. The Chief Executive of Jersey Finance should not be trying to lobby States Members, criticise States Members for bringing propositions and so on. He should devote his activities to the Far East or wherever it is, not in this Island. Two-thirds, as we have already heard, of the funding of Jersey Finance comes from the States. Keep out of States business. As far as the industry is concerned, the Minister has mentioned a number of things. He has mentioned how, I think, in his comments: "Since 2001, the very nature of the finance industry has shifted away from business segregated by jurisdictions towards global offshore giants who promote the best and most developed jurisdiction rather than their original parent jurisdiction. In this global context, it is vital that the States invests appropriately in developing and promoting the finance industry, ensuring the important revenues are preserved and that further service cuts over and above those which we are already forced to make are prevented." The truth of the matter is global financial organisations are not loyal to any one centre and they play one centre off against another. For example, when we were looking at the Depositor Compensation Scheme, which, by the way, is another cost to the Island, we are the only jurisdiction where the States are putting in the contribution that they are if a bank fails. Every other centre is paid for by bank contributions. They are not even pulling their weight in that area. Now, the point here is when I went to the Isle of Man and to Guernsey and spoke with the regulators and the others that I have dealt with in the past in my previous career, we had the discussion about how they play us all off, one against the other. It is standard practice of the financial services industry and I can tell you if you think you give in on this one, fine, yes, do not make them pay any more money, what happens when we get to the budget next week? Will there be any taxes that affect the finance industry in any way whatsoever? No. Why? Because the industry will use the same threat they used with depositor compensation or they will use on this one or they will use on tax. You do this, you affect us, and we are moving and we are going to go to the Isle of Man, we are going to go to Guernsey or we are going to go elsewhere. Well, it is a threat. Maybe it is a real threat but they play-off one centre against another. I can tell you in the depositor compensation argument the banks were threatening the Isle of Man. They had had 2 bank failures and if they had well, in fact, if they had one, they would

not stay in the Island but they would go. Having had 2 failures I am surprised they are still there. They did not like Guernsey, did not like the structure of the banking system in Guernsey because they had building societies which they considered a higher risk than in Jersey, so they made the threat. Every one of you was lobbied by the industry and you backed down on that one. I am sure probably you are going to back down on this one and you will back down on tax as well. What you have to realise is we have now got to the stage where we have what is called jurisdiction capture. We have one dominant industry and it does not make any difference if it is banking or anything else. When you have a dominant industry, they use their  leverage and they will extract the maximum amount out of the States and pay the minimum into the States. So be aware of what the situation is. Yes, it may be 12,500 jobs but if you think those jobs are safe and they are going to be affected just by what we are doing, I can tell you what is going on in the world at the moment guarantees this Island no more security than anywhere else. What is happening is because of the global financial meltdown there is a tremendous rationalisation, oh yes, of banks. They are all looking at different centres. Each centre has its strengths and weaknesses and it is not just the amount of money that is put in. For example, we were talking about it going off to Dubai. Yes, Dubai is a rising finance centre. They have also got other problems but it is also not in the correct time zone. Time zones are important in terms of where work takes place. Equally, the fact that we have London as a major international finance centre is important and our location is important in that regard. So do not just think the money is going to drift out somewhere else. Yes, there is competition out there. I accept that. We will  lose business over time, the same as there is rationalisation going on. Different banks are putting business into the Isle of Man or Guernsey or elsewhere. Yes, it happens. Even if you do this, there is absolutely no guarantee whatsoever the banks are not going to move out of this Island and move anywhere else. So you can pour the money in, you can keep on supporting them, but they could leave tomorrow. I can also tell you as well that there is I know the Minister for Treasury and Resources is going to go on about all these jobs. I am sure he is going to come back on this as a great supporter of the finance industry and the Minister for Economic Development, but the truth of the matter is the industry can move at any time and this is one of the reasons why I have gone on since I came into the States about diversifying the economy. We have had all our eggs in one basket. I can also say to States Members if you think our economic recovery is going to be swift, you are sadly mistaken. A financially-induced recession takes time. Our dependence on the finance industry and remember I heard the Chief Executive of Jersey Finance this morning saying that interest rates are likely to remain low for some time and he also mentioned, too, that the largest part of our finance industry are deposits that come in from outside. So if deposits are not coming in on that level, it is going to take us years by the way to get back to the level of deposits that we used to have. Then our returns, the interest that is going to be earned on it, the profits made by those banks, is going to take some time to come back. What I am saying to you is we should have diversified before now. We should certainly be diversifying going forward. One other comment I will make as well is I do resent the fact that the Minister for Economic Development said: "Yes, I reprioritised my budget and I gave them the extra £400,000." Where did he take it from? Tourism, an industry that will probably recover faster than finance will. So it is a bit rambling but there are a number of points there. I would fully support the idea that the Jersey finance industry should be contributing more and should be matching what the States are putting in. If it is a genuine partnership, let us go up 50/50.

5. Deputy E.J. Noel of St. Lawrence :

I would just like to briefly thank Deputy Higgins for giving us several good reasons why we should be considering increasing the States funds to Jersey Finance.  [Approbation]

6. Deputy P.V.F. Le Claire:

It is a very interesting debate and, if nothing else, I thank Deputy Southern for allowing us the opportunity to at least start to focus in on this. It might be an idea to get the tapes out from the past debates and have them transcribed. I do not know if the Deputy has done that in his Scrutiny Panel reviews to see what was said. I certainly believe at the time Senator Walker , in one of his speeches, was talking about matched funding.

[10:30]

Now, I may be mistaken but I certainly believe there was that statement, and half of this, I feel, is being driven by the fact that there is an inkling or a belief on one side of the Chamber - on one side of the community - that the banking industry is not paying its way. On the other side of the argument, the Minister for Economic Development is arguing - quite rightly, that is what his job is - that the banking industry is more than paying its way and it is punching above its weight in relation to the finance industry. I received a note from one States Member in the time I was out of the Chamber just now - when I went to go and get my copy of the Jersey Financial Services Commission's annual report for 2009 - saying something along the lines of: "Are you with Jersey Finance on this one, Paul, because you should listen to my speech?"

Deputy M. Tadier of St. Brelade :

A point of clarification. I think it said: "Are you going to vote with the finance party on this one, Paul?"

The Deputy Bailiff :

May I  just say to Members that this interruption of other Members' speeches with points of clarification is, I think, unhelpful. [Approbation] Usually the clarification points can be raised at the end of the Member's speech if it is necessary but the interruption of the play is difficult. I am interrupting your play, Deputy . I am sorry about that but it is already interrupted. Please carry on.

Deputy P.V.F. Le Claire:

Thank you, Sir. I am sorry, I was not intending to and I had no intention of identifying who the person was that sent me the note and I do not want to linger on who it was, but what I was going to say to that individual was I am not with the finance party on this one. I am with Jersey on this one and we should all be with Jersey on this one. It is nothing to do with the finance party or Senator Ozouf 's party or Deputy Southern 's party or the one-man-band of whoever's party. It is nothing to do with parties and we have to raise our game above that. It is about Jersey. Members will have to forgive me, my flow has been a little interrupted, but I wanted to come into the debate and try to offer some alternative focus on what we are doing. It was premised by the speech of the Assistant Minister for Treasury and Resources, Deputy Noel, that there are several reasons why we should be supporting the finance industry. I appreciate where Deputy Higgins is coming from and he has a large degree of frustration in relation to what has been happening, but in order to maybe help us focus on some of these issues, first of all I listened to the speeches; I thought that was important. I took the points of the Minister for Economic Development and I was quite astounded to hear that the Isle of Man put £5 million into promoting their industry. Well, that is alarm bells for me if I was in business in competition with them. Guernsey put another £1.14 million on top of their core grants. That is serious support from their governments in the same business that we are in. That is not to say that I do not think there is a discussion here or there is an argument here, but I think that really what we needed to be focusing on was the fact that we used to receive money to fund Jersey Finance and then the regulations came along and said we need to strip-out our governance of these issues and we need to establish Jersey Finance Limited and it needs to regulate the marketplace and it needs to set the fees and everything else. We did that and that has been set up and that is all well and good. If you look at the annual report for 2009 of the Jersey Financial Services Commission there is a startling difference in some of the numbers: the bank deposits noticeably down; the

registry fees down by £4 million; the contribution to the States in 2008 was £4.4 million and the contribution to the States in 2009 was zero. When you look at the notes on the accounts the reason why the Jersey Financial Services Commission did not put that money in, it states under the accounting policies in 1(g) on page 54: "The contribution to the States of Jersey in 2008 was shown as a deduction from total income in order to reflect clearly the amount available to fund the activities of the Commission. Amendments to the Financial Services Commission (Jersey) Law 1998 have removed the Commission's obligation to make such annual financial contributions from 2009 onwards. The contribution has been replaced by a share of the registry income arising from companies' annual returns." So we have now changed the law to say that we do not require them to pay us money, we will get the money from the registry deposits. When you look at the registry deposits they are down enormously. What has happened in that period? The obligation for them to transfer money to the States has been removed by us; our legislation has been brought in. If we look back, we will see that it has been brought in by these Ministers, and it should have been made up by the registry fees, income derived from the operation of the Companies Registry, the Registry of Foundations, the Business Names Registry, the Registry of Limited Partnerships and the Registry of Limited Liability Partnerships. So I would say no matter which way this debate goes today I am certainly not with any party, I am with Jersey, and I think we have to raise our standards above this nonsense here. People are losing their jobs; there are shops all over the Island that are in serious trouble, there are other shops that have closed, other businesses have closed, taxes are increasing, subsidies are being removed. We have nothing else. I certainly 100 per cent support the emotion of Deputy Higgins in relation to diversification and we need to do that, but we need to do some stronger research and scrutiny. Deputy Southern said himself in his very entertaining speech yesterday and very good speech yesterday that because of the workload there was that final element that at times he maybe did not have the time or, who knows, the resources to follow through. I think we need to look at this and understand what has happened here. One thing is

undeniable though: the money the States has received and the money the banks themselves have received because of the economic climate, which is still wavering, has meant that deposits and the money returned on those deposits in Jersey especially and I said this a few months ago, where it relied heavily upon these incomes in relation to the deposits, you get nothing on your money nowadays. Everybody knows this. Well, everybody should know this that has money. I do not have money but I have been told it all the time by people that have money. We are in a position where we need to strengthen and we need to diversify and we need to go out and get emerging markets. I would say one criticism to the Minister for Economic Development. With the best of intentions I think it was wrong to curtail the tourism funding. I said that at the time, and the next day we heard the expert from tourism on the radio saying in order to attract inward investment from finance tourism was the best way to do it. I think we could have played a sharper game there but he cannot be right on everything and, conversely, I cannot be wrong on everything either. [Laughter]

7. Senator F. du H. Le Gresley:

I think the proposition is one that we should reject outright and the reason for that is that it is proposing to reduce the funding of Jersey Finance, who promote the finance industry, our biggest industry, by £875,000 in 2012. If there was any one message that I would say was going to put the death knell to our finance industry it would be reduce its funding by such a substantial amount. When we discussed the 2011 Business Plan I was one of the people who voted that the £400,000 extra money should not be given to the industry at a time where we were making cuts in other areas. This is a totally different situation. Here we are talking about making a substantial cut to the funding of the one body that promotes our biggest industry. Also, this is totally out of place to be discussing it now. The proposer should have brought this as an amendment to the 2012 Business Plan if he is convinced that the industry and this body should have reduced funding. I think that Members need to take great note of what the Minister said, and I am quoting him: "This proposition is very damaging for Jersey." I think he is absolutely correct and I would ask Members to put aside their like or dislike of the finance industry, which is something I am doing when I am going to vote on this. We have to be responsible. This industry has already created 12,500 jobs, it pays for nearly half of all our services and we could not at this time, when we are trying to stimulate the economy as one of the measures for dealing with the downturn, take money away from Jersey Finance which promotes the one industry that is likely to get us out of a mess. So I would urge Members not to vote for this proposition.

8. Senator T.J. Le Main:

I would like to follow the last speaker and I would like to follow Deputy Le Claire. I also believe this proposition is ill-founded and should be rejected. I would like to say that Deputy Higgins, our resident financial expert,  just spoke about doom and gloom. He spoke about regulation, the industry can move, eggs in one basket and all that. All I heard from Deputy Higgins was running down the finance industry which, as quite ably said by Senator Le Gresley, employs over 12,000 highly qualified local residents, providing a highly qualified workforce which people all over the world can and do have confidence in. So this money is about promotion, it is about selling what we are good at doing, it is about selling the highly qualified workforce we have in the Island to provide financial services required from people, as I say, all over the world. This funding is to extend and promote our financial services as a premier place in the world to do business. It is well regulated; it has one of the best judiciaries and legal provisions of anywhere else in the world. We are top class and we should be shouting from the rooftops how wonderful Jersey is and the provision we provide, the thing we play, our place in the world as a well regulated, transparent place to do business. I dislike it when people like Deputy Higgins run Jersey down as usual. I compliment Deputy Le Claire. I do not always agree with what he says and I am sure he does not always agree with what I say, but this is about our people, this is about Jersey. I am going to continue to support Jersey Finance. I think the leadership of Jersey Finance at the moment is absolutely superb. I cannot wait when I get an invite to go to Jersey Finance when they give the annual promotion they give at Hotel de France. [Laughter] It always interests me. I like to know and understand what is going on. In fact, when I was at Housing it was a regular 3-monthly meeting with Jersey Finance and the industry to find out what was going on. As I say, this is about our industry at the moment. Yes, I agree there should be some diversification, as much as possible. When I was Minister for Housing I encouraged anyone that could come along and provide an alternative or a new kind of business which employed local people at decent salaries where everybody contributed to the economy. I am not going to support this proposition. I think it must be rejected and, as I say, I certainly am not happy about the way that Deputy Higgins always knows it all about financial expertise and keeps running down the Island. I want this Assembly today to give a vote of confidence to the finance industry which contributes so much to our economy and provides so much work for local people right through. I say: "Well done, Jersey Finance. I am going to support you and represent you."

9. Deputy J.A. Martin of St. Helier :

I am not going to be running-down the Jersey finance industry. My question is if the Jersey finance industry on the Island - I think is what the proposer was saying - is so confident in Jersey Finance Limited why are they not prepared to put more money in it? Why are they not all involved in it? [Approbation] I have a couple of questions. I wrote down: what is the definition of pro bono? I only have ever heard of this in lawyer speak.

[10:45]

I understand the basics of it and the Minister for Economic Development says it is lots of free time given by highly paid lawyers, accountants, trust managers, who talk to Jersey Finance Limited to tell them what regulations we need. Now, I have a problem and hopefully the Minister for Treasury and Resources will .. the contribution in 2007 was £1 million. Was that 20 people charging out at £50,000 each? Is it the same 20 people charging out at £100,000 each the same amount of hours? The Minister is shaking his head. I know how it is charged out because I used to charge out very highly paid accountants and legal fees to the poor people who were receiving their bills, but this is free time. I find it hard: is it the same amount of time, the same amount of people, but just the fees have increased? A very long time ago the former Senator Syvret said: "Yes, we have to respect Jersey Finance but do not be mistaken. We do get a lot back but what we get back in taxes is after.." He likened it to a bag opened and the seagulls have swooped and we get what is left. Over the last few years, yes, they have G.S.T. (Goods and Services Tax), they have done a deal with G.S.T. We do not know whether it equates to what the poor man in the corner shop is paying or everybody else when they go shopping, because basically it has never been explained. As Deputy Higgins said, I think he gets frustrated. We also now have Zero/Ten; again, a £100 million hole. It may not have been as big if we did not have the financial turndown but there comes a time when you have to say to yourself: "Yes, we have a very good industry here but are they paying enough?" At the moment I would say no and it comes back to my question: if Jersey Finance Limited .. we are talking about a - and I dare to use the word - quango that we set up to promote Jersey against the Jersey Financial Commission because we were told that we had to separate and I fully understand that. Deputy Le Claire is not wrong, he did not misremember: we started off and it was going to be matched pound for pound. For some reason the industry or some of the industry do not want to entertain Jersey Finance Limited and they are not even in the circle. So that is the big question and that is why it is not matched pound for pound. Senator Le Gresley said he did not support the £400,000, and I suppose Deputy Southern will maybe bring this back because he cannot now affect the 2011 budget but he wants to affect the 2012. I really think the next time this does come back - the Deputy does have a lot of confidence - I would really like to understand the

charge-out of the pro bono. As my understanding, and it comes back to Deputy Higgins, pro bono means: "I will do something for nothing and if we win, so if we get the legislation, it will put money in my pocket", because a pro bono lawyer works for you and if he wins your case he gets the money. So do not, please, tell me this is all done out of goodness of the heart. It absolutely

affects the industry. They want the laws passed and they do not really want to give too much money. That is my understanding of pro bono work. It is so that at the end of the day somebody gets something. If they lose they do not get the legislation or they lose the case they do not any money. This is not costed out right to me and it is certainly an imbalance. So I think at the moment I will be supporting Deputy Southern .

The Deputy Bailiff :

Deputy , are you asking the Minister for Economic Development to clarify what he meant by pro bono?

Deputy J.A. Martin:

Yes. It would be very useful for me to exactly know where he got these figures and how they are calculated out.

The Deputy Bailiff :

Minister, are you able to help on that? Senator A.J.H. Maclean:

Yes. Effectively it is an in-kind contribution. A pro bono contribution of the professionals is in kind. Just to clarify the other element that the Deputy asked, I think she asked the question as to why the industry were not paying more in terms of their contribution of membership fees towards Jersey Finance. We have to remember that many businesses are in multiple jurisdictions. Other jurisdictions are not charging that sort of level and businesses can quite simply move their business elsewhere. That is the reason why it has to be competitive. It is a competitive world we live in and that is why the fees are set, although they have increased significantly, at the level they are at.

The Deputy Bailiff :

I think she was also asking you to clarify whether there was the same number of people doing it at a notional double the rate.

Deputy J.A. Martin:

Yes, that was my question, about the pro bono work. I might be a bit thick but I do understand what pro bono is. I am saying is it the same amount of work but double the fees? It is very, very expensive in that industry.

Senator A.J.H. Maclean:

When the calculation, the £2 million, was established - in fact, it was just below £2 million, it was about £1,900,000-something, it was rounded up by a matter of £20,000-odd or £40,000-odd - quite simply, there are a significant number of meetings where you sometimes get 6, 8 or 10 people. What it has not included is the preparation work beforehand or any of the subsequent work afterwards. The estimate of cost was only for the meeting. The numbers of people vary per meeting but there are more meetings because there is more work being carried out.

10. Deputy M. Tadier :

I was going to say that Deputy Le Main could leave now, but he has already left. [Laughter] I am sure he can still hear me, wherever he is, up on high. I think the clarification about pro bono is welcome, but as far as I can see it is not directly relevant because Deputy Southern has made an exemption for that in there. So we are not saying that Jersey Finance does not do pro bono work and that that is not a good thing, but it is simply not relevant immediately to this debate, as far as I interpret it. I am going to make 3 main points here. The first one is to do with the confidence and the resilience of the finance industry, so the confidence that we have in it and the resilient nature of the finance industry in Jersey. The second one is the general point about means testing and about these hard times, and the last argument is about that £875,000 and whether that could be better used

going to other departments which maybe have more need of it. But I will start off by just prefacing the reason I interjected when Deputy Le Claire was speaking is that as the only other Member in the States Chamber who knew accurately what the contents of that note were, I thought it was important that when he was delivering that he give it accurately. I would also say, with respect to the Chair, that it is up to the individual who is speaking to ascertain whether or not they are willing to give way or not, although I do appreciate the general direction that interruptions are not helpful. So, first of all, it has been mentioned by Deputy Martin already, and I would say to the Minister for Economic Development that I have a lot more confidence in our finance industry than he seems to have, because I know that Jersey Finance and the industry in Jersey is a lot more resilient and is quite capable of marketing itself without interference or without handouts from government. It is a very profitable industry, we know that. It pays the taxes we have here and, quite frankly, they do not need the money. This is an argument that we heard I think from Senator Ferguson when she was bringing an amendment to the Business Plan. Jersey business should be left to itself, if we agree with a free market economy. Of course there are exceptions. We do have to put subsidies in somewhere but then again this is not what Deputy Southern is proposing. He is not saying: "Cut all funding for Jersey Finance." There are members of the public who do say that and who have said: "Why are we subsidising finance?" and any right-thinking States Member would say it is right to subsidise certain industries, dairy, agriculture, tourism and finance is not necessarily exempt from that either, but the bottom line is in these austere times finance I think can afford to pay a little bit more because it is still doing very well for itself. That is one industry in the world which as long as the capitalist model is still in existence will be making huge profits because the wealthy, whether it is in a recession or a boom time, are always going to be the ones who win. The money does not evaporate during a recession; it is just the ordinary people who have to tighten their belts. To do with means testing, last year I brought a proposition to the States to ask for TV licences to be given out free to all over 75 year-olds. I did this because I believed in the principle and also because it was in my manifesto and I think it is important to follow through on those kinds of things. One of the compelling arguments against, which we heard from Senator Le Main and other Members, is that: "I am not going to give out subsidies to millionaires. It is not right that somebody who earns millions a year should get a free TV licence but I would prefer just to give it to those who really most need it." Exactly. This is an argument which can be used in this context as well. In these times of austerity where we see, not just in Jersey .. but I will show Members a newspaper. Many Members on that side of the House will not have seen this newspaper before. It is called the Guardian [Laughter] and it talks about: "The axe falls on the poor" and that is exactly what happens during austere times, it is that the poor face the brunt of the costs and it is the middle earners as well, as we are seeing in Jersey currently with school fees. So I would simply ask, and I would appeal in particular to Deputy Le Claire, could you use that money if you had that £875,000 and allocate that better rather than giving it to an industry where between them they could afford to put up more levies and to pay for Jersey Finance, if indeed it is something they want to be part of, to market their own businesses, or could that money be used better somewhere else, perhaps at the hospital, perhaps in education or wherever? I suspect that the Deputy and any States Member could

find a better use for that £875,000.

Deputy P.V.F. Le Claire:

Sir, may I ask the speaker to give way, please? Deputy M. Tadier :

Yes, indeed.

Deputy P.V.F. Le Claire:

In relation to that question that he referred to me, I would merely refer him to page 48 of the Jersey Financial Services Commission's Annual Report 2009, where under the first paragraph it explains that the reduction of the registry income has come about because that money now as a proportion of the company fees annual returns comes to the States. It comes to the States. The States are already getting that money from the banking industry.

The Deputy Bailiff :

Is this a point of clarification? I do not see it myself. Deputy M. Tadier :

I have no idea what that means. It was a rhetorical question and it is simply I am beseeching each Member to search their ..

The Deputy Bailiff :

If I may say so, that intervention is a classic illustration. This comment is aimed not only at Deputy Le Claire because Members are increasingly doing it, interrupting to make a point and not interrupting to make a clarification. Please, Deputy Tadier , would you continue.

Deputy M. Tadier :

The point I am making is that each States Member I believe in these hard times has to search their souls and look in terms of fairness. We have heard the classic empty and hollow Tory words this week - those of us who watch the news - that those with broader shoulders should take the brunt of the burden. That is absolutely true. Of course it is not the case in the U.K. (United Kingdom) and it is not the case in Jersey either, but thankfully I think that there are certain States Members who will put up a resistance to this, and this is not about whether one supports Jersey Finance, the finance industry, or not. Senator Le Main has again made the classic mistake of using Jersey and the finance industry, which is one of the industries that happens to be in Jersey, synonymously so when he talks about Deputy Higgins talking down Jersey he is saying that Deputy Higgins is coming out with what he believes to be some valid criticisms that need to be taken in the round of one of the industries which happens to be operating in Jersey, which is finance. He is not running down Jersey. He is not saying that Jersey is an ugly place. He is not saying that the nurses, the doctors, the teachers who work here, the people who do our roads and work very hard, who are now going to face even more austere times and face their rents going up but their wages going down, are terrible people. He is not running down Jersey in that sense; in fact he is not running down Jersey at all. What he is doing is participating in robust debate which Senator Le Main and others have tried to facilely label as being anti-Jersey. That is an argument which is nonsense and which must stop. I thought that was something which was relegated to the Walker .. am I allowed to say that, the Walker era? Probably not, that is probably going to have to be crossed out from the Hansard, even though he was the previous Chief Minister. That is something I hoped was left in the past, these facile name-calling type arguments. So, just to recap, the first argument is do we have confidence in Jersey in the finance industry to be able to run itself? Are they asking for handouts?