States Meeting Transcript - 15/09/2011

STATES OF JERSEY OFFICIAL REPORT

THURSDAY, 15th SEPTEMBER 2011

PUBLIC BUSINESS – resumption ...............................................................4

1. Draft Annual Business Plan 2012 (P.123/2011): fourteenth amendment (P.123/2011 Amd.(14))..................................................................................4

1. Deputy D.J.A. Wimberley of St. Mary:..................................................4

1. Deputy T.M. Pitman of St. Helier:......................................................15
2. Senator P.F.C. Ozouf :..................................................................15
3. Deputy G.P. Southern of St. Helier:....................................................16
4. Senator S. C. Ferguson: ................................................................20
5. Deputy P.V.F. Le Claire: ...............................................................20
6. Deputy M Tadier :......................................................................21
7. Deputy R.C. Duhamel of St. Saviour:..................................................26
8. Senator T.A. Le Sueur:.................................................................28
9. Senator B.I. Le Marquand:..............................................................29
10. Connétable M.K. Jackson of St. Brelade : ............................................30
11. Deputy M.R. Higgins of St. Helier:..................................................30
12. Deputy A.E. Pryke of Trinity : .......................................................31
13. Deputy R.G. Le Hérissier of St. Saviour:............................................31
14. Deputy C.F. Labey of Grouville :....................................................33
15. Deputy K.C. Lewis : .................................................................33
16. Deputy F.J. Hill of St. Martin:.......................................................33
17. The Deputy of St. Mary:.............................................................34

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

2. Draft Annual Business Plan 2012 (P.123/2011) - paragraph (e) - resumption.........37

1.2.1 Senator T.A. Le Sueur:.................................................................37

3. Draft Annual Business Plan 2012 (P.123/2011) - paragraph (f) ........................39

1. Senator T.A. Le Sueur (The Chief Minister):...........................................39
2. Deputy J.A. Hilton of St. Helier:........................................................39
3. Deputy P.V.F. Le Claire: ...............................................................39
4. The Deputy of St. Martin:..............................................................39
5. Senator A. Breckon: ....................................................................39
6. Deputy T.A. Vallois of St. Saviour:....................................................41
7. Connétable D.W. Mezbourian of St. Lawrence:........................................41
8. Deputy I.J. Gorst of St. Clement:.......................................................41

9. Senator P.F. Routier: ...................................................................41
10. Deputy M.R.Higgins:...............................................................41
11. The Connétable of St. Brelade:......................................................42
12. Deputy R.G. Le Hérissier:...........................................................42

13. Senator T.A. Le Sueur:..............................................................42

2. Draft Sea Fisheries (Amendment No. 2) (Jersey) Law 201- (P.119/2011)..............46

2.1 Connétable L. Norman of St. Clement (Assistant Minister for Economic Development - rapporteur):.............................................................................47

1. Deputy P.J. Rondel of St. John : ........................................................47
2. The Connétable of St. Brelade:.........................................................47
3. The Connétable of St. Clement:........................................................48 Deputy J.M. Maçon of St. Saviour (Vice-Chairman, Economic Affairs Scrutiny Panel):......48

STATEMENT ON A MATTER OF OFFICIAL RESPONSIBILITY.........................50

3. Statement by the Minister for Economic Development regarding Jersey Airport and Jersey Harbours.........................................................................50

3.1 Senator A.J.H. Maclean (The Minister for Economic Development):...................50

1. Deputy P.V.F. Le Claire: ...............................................................51
2. The Deputy of St. Mary:................................................................51
3. Deputy J.A. Martin of St. Helier:.......................................................52
4. Deputy M.R.Higgins:..................................................................52

5. The Deputy of St. John:................................................................53
6. Senator S.C. Ferguson:.................................................................53

ARRANGEMENT OF PUBLIC BUSINESS....................................................54 The Connétable of St. Mary:..................................................................54

PUBLIC BUSINESS - resumption..............................................................56

4. Draft Amendment (No. 16) of the Standing Orders of the States of Jersey (P.153/2011) ...........................................................................................56

4.1 The Connétable of St. Mary (Chairman, Privileges and Procedures Committee):.......57

5. Draft The Law Society of Jersey (Amendment No. 3) Law 201- (P.122/2011).........59

5.1 Senator T.A. Le Sueur (The Chief Minister):...........................................59

6. Chief Minister: election by an open ballot (P.126/2011)................................60

6.1 Deputy T.M. Pitman:...................................................................60

1. Senator P.F.C. Ozouf :..................................................................63
2. Deputy P.V.F. Le Claire: ...............................................................64
3. The Deputy of St. Martin:..............................................................66
4. Deputy M. Tadier :......................................................................67
5. Senator B.I. Le Marquand:..............................................................68
6. Deputy J.A. Martin:....................................................................69
7. Deputy M.R.Higgins:..................................................................70
8. Senator F.E. Cohen:....................................................................71
9. Deputy J.M. Maçon:....................................................................71
10. Deputy G.P. Southern : ..............................................................71
11. The Deputy of St. Mary:.............................................................72
12. Deputy J.G. Reed of St. Ouen : ......................................................74
13. Deputy A.E. Jeune of St. Brelade:...................................................74
14. Deputy R.G. Le Hérissier:...........................................................75
15. Connétable J.L.S. Gallichan of Trinity : ..............................................76
16. Senator T.A. Le Sueur:..............................................................76
17. Deputy I.J. Gorst :....................................................................76

18. Deputy J.A.N. Le Fondré of St. Lawrence:..........................................78
19. Connétable P.F.M. Hanning of St. Saviour:..........................................78
20. The Deputy of St. John:..............................................................78
21. Deputy A.T. Dupre of St. Clement:..................................................79
22. The Connétable of St. Mary : ........................................................79
23. Deputy S. Power of St. Brelade:.....................................................79
24. Deputy T.M.Pitman:................................................................79

7. Gambling (Jersey) Law 201-: 25% of Fines to go to Jersey Charities (P.124/2011)...82

7.1 Deputy P.V.F. Le Claire: ...............................................................82

1. Senator A.J.H. Maclean:................................................................82
2. The Deputy of St. Mary:................................................................83
3. Senator A. Breckon: ....................................................................83
4. Deputy A.K.F. Green St. Helier:........................................................84
5. Senator P.F.C. Ozouf :..................................................................84 Mr. T.J. Le Cocq Q.C., H.M. Attorney General: ..............................................84
6. Deputy T.M.Pitman:...................................................................84

7. The Connétable of St. Brelade:.........................................................85
8. Deputy M. Tadier :......................................................................85

9. Deputy P.V.F. Le Claire: ...............................................................85

ARRANGEMENT OF PUBLIC BUSINESS....................................................87 Senator S.C. Ferguson: ........................................................................87

ADJOURNMENT................................................................................89

[9:30]

The Roll was called and the Dean led the Assembly in Prayer. PUBLIC BUSINESS – resumption

The Bailiff :

There is one matter to notify Members of. A report has been lodged by the Minister for Home Affairs, R.113, entitled "Importation of Fireworks in 2007 for a Charity Event: investigation", combined report by the Minister for Home Affairs, Planning and Environment and Economic Development. We then return to the debate on the Business Plan.

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

I wonder if I might, as a courtesy to Members, let them know that I may consider the other 2 but I am certainly going to be putting back my proposition, if I may, on the inquiry for the issues in relation to the Committee of Inquiry until after the election. The Connétable of St. Peter is not here. It is P.142, Sir.

The Bailiff :

So P.142, thank you. So we can remove that from today's session? Deputy P.V.F. Le Claire:

Yes, Sir.

Deputy M. Tadier of St. Brelade :

May I do a similar thing, P.121, which relates to the petition for Clos de Sables? I would like to defer that. Although it is important, it is not urgent and I do need some more time to consult with representatives and residents of the area.

1. Draft Annual Business Plan 2012 (P.123/2011): fourteenth amendment (P.123/2011 Amd.(14))

The Bailiff :

Very well, thank you, Deputy . That is Projet 121, thank you. So then we return to the debate on the Business Plan and we come next to Amendment No. 14 lodged by the Deputy of St. Mary and I will ask the Greffier to read the amendment.

The Greffier of the States:

Page 2, paragraph (e). After the words "for 2013 and 2014" insert the words "except that the indicative total of net revenue expenditure for 2013 set out in Summary Table E on page 73 shall be increased by £14,801,800."

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

Last amendment to the Business Plan. We have just in our prayers used the words: "au bien et au soulagement du peuple" - for the good and the protection or the relief of the people - and I think that is what this amendment is about. It is about how we interpret those words, what the correct balance is between public expenditure and private expenditure. On a personal note, this is effectively my swansong. Members may be glad to hear this, that this is probably the last time I shall be standing and introducing a major amendment or proposition and I do hope that Members will be nice enough to me to hear me out. [Laughter]

The Bailiff :

I expect that may depend, Deputy , on how long you take. [Laughter] The Deputy of St. Mary :

I thank you for that intervention and I am well aware of this issue. [Aside] I do assure Members that this speech will not damage your health [Laughter] apart from the fact that your backsides may be glued to the seat but that is a hazard of the seats that we have in the Assembly, but it may change your mind and that is, I suppose, a health warning. I was encouraged by 3 speeches yesterday. The Chief Minister said that the Business Plan belongs to all of us in saying that effectively we had to approve it but we could amend it and he said there may be amendments which will succeed. I have not been keeping a running tally but I am not sure how many did succeed apart from the one from the Minister for Treasury and Resources himself. But nevertheless, I take encouragement from that; there may be amendments which will succeed. The second speech that gave me hope is the Minister for Treasury and Resources saying the debate on Clinique Pinel and talking about capital expenditure in general, we have got to do more. So the Minister for Treasury and Resources also, as well as all of us, I think, after that debate, are aware of the shortfalls of the need to spend more in some way or other. Now, that was about capital expenditure. What I am saying is that it applies to revenue expenditure as well. The third speech that gave me encouragement was Senator Le Main with his passionate plea for Health, for support for Health, for more oversight for Health, a root and branch top to toe review. That implies, of course, resources. So I am confident of the support of at least the Minister for Treasury and Resources and Senator Le Main in this matter and, hopefully, of others. This is not an election speech but the aim is to change the way we look at issues around tax and spending. Will Islanders get good medical treatment? Are the streets safe? Is our environment properly protected and are we ambitious for Jersey or are we despondent, are we saying we cannot do these things? The Chief Minister used the phrase can do' yesterday, how we can do'. What I want to see is a mature debate around public spending among States Members and the public. We have a good track record on consultation; 1,000, I think, responded to the Health consultation, maybe the Minister can correct me if I have got that wrong but I think it was more than 1,000 responses; 1,300 to the Transport consultation. I was talking yesterday to someone who is visiting from Germany and we were talking about that consultation record and I compared it mentally to the U.K. (United Kingdom). That would mean 500,000 responses going to the U.K. Government on a Health Review, 500,000, can you imagine it? Yet we routinely have that kind of involvement from the public in the way we are going but this issue, tax and spend, what is the right balance is a no-go area and Members might want to ask themselves why that is so. I say it is a no-go area. I asked a written question to the Minister for Treasury and Resources in October last year and I asked what specific consultation was undertaken with regard to the 50/50 split between tax increases and spending cuts. What form did the consultation take, what documents were published as part of the consultation, how were the benefits of public expenditure of different types explained and how were all sections of society reached? The answer was that there was no formal consultation on the C.S.R. (Comprehensive Spending Review) proposals. Now, there were qualifications to that, of course, and ways round it but the fact is there was no formal consultation on this most important of issues. In this speech, I am to look at 2 myths. The first is that public spending is out of control, that the States are wasting public money and so on and we hear that all the time from certain sources. The second myth is that keeping public spending low is key to economic success and, again, we hear that from many sources also. The problem is that if you look at the evidence, you find that both myths are untrue and yet they have a profound influence on the debate and, indeed, the public has absorbed particularly the first one as a matter of fact. That is how you undermine a public debate. You cannot have an involvement of the people, a collective vision for the future, if you set out to distort the facts, deceive the public and so avoid having that proper debate. I am not saying that we all do

this. I am just saying that that is the effect of what has happened and I will show that later. [9:45]

The other strand of this speech, apart from the honesty and the public debate, is what the appropriate balance is between public expenditure and private expenditure. That brings me to the addendum, item 1, and I have printed this addendum so that Members can see that I am not taking quotations out of context. They can look at the graphs that I will be explaining and exploding, as I say, the myths that many of us believe and certainly many of the public believe. Item 1, Jersey General Hospital, and what a starting point that is. In the J.E.P. (Jersey Evening Post) on 2nd August, the front page headline read: "Hospital in urgent need of upgrade" and the text underneath said: "The building has a lack of fire evacuation procedures, raw sewage leaks, a maternity unit with facilities behind those of a developing country and practices still in place which were stopped in the N.H.S. (National Health Service) over 20 years ago." That was on the front page of our local newspaper. "The system is so poor that raw sewage leaks out into the hospital every couple of weeks," said the Hospital Director. That really has to pose serious questions for this Assembly and, indeed, the J.E.P. ran an editorial the next day and I think they were right to do so and that is item 2 and I will just pick out a couple of phrases. "The problems that have now been identified have not emerged over a few weeks, months or even years. It is reasonably clear that they have developed over a very lengthy period as a result of a chronic lack of investment." If you do not remember much else of what I say, remember the Jersey General Hospital and remember those comments of the J.E.P. editorial: "The problems that have now been identified have not emerged over a few weeks, months or even years a chronic lack of investment." That is the situation or was the situation. At the hospital, of course, it has been addressed or is being addressed. Think of what that headline means for your constituents or, closer to home, for your relatives, and Deputy Green said very potently yesterday, talking about Clinique Pinel, think, is this good enough for one of mine, for one of my relatives or friends? I think that is the question. So we have a public sector where I believe we see false economies. We are not reaching civilised standards in some areas; it has failed in others; it is under strain. There are clear and present backlogs and there is a lack of ambition. The question is, I suppose, what is the correct balance on public spending, social wage and I just ask a few questions and ask you to think whether these things are right. Do the public want environmental protection and all these things have been added to budgets over the years? So

public spending; and I have referred to the hospital and the appalling situation that our new Medical Director found there and that is the transition from capital expenditure, which is what he was saying. The hospital has been neglected and the fact that we now have a new Medical Director, which is revenue expenditure. A lot of the comment about his salary was all fine and dandy and it is in the past but the fact is that the first recommendation of Verita was a Hospital Director and because we have a Hospital Director, which is revenue expenditure, which is what I am asking for, we find these shortcomings highlighted and we take action. He has also saved I had a conversation with the Minister for Health and Social Services yesterday and she explained in more detail about the Oncology Unit and so on and how he has moved space around the hospital to save us millions of pounds because we spent a bit more on revenue. So that is an aside linking these issues at the hospital with the fact that if you spend more on revenue, sometimes you get huge benefit. Moving on to Clinique Pinel. We were told yesterday by a couple of speakers not to look back. What is the point of looking back? Nobody can resist having a dig but we are where we are but the whole point is that if we do not understand how we came to these situations, then how can we put them right? On Clinique Pinel, it is item 4. I do not need to go through the press release but item 4 is the written question I asked. I am not going to go through that again after yesterday but the problems were first highlighted in 2000 and Clinique Pinel's refurbishment was needed. It was twice programmed, twice postponed, and now we have an emergency amendment to the Business Plan. Now, what I am interested in, what I want to bring Members' attention to, is the last paragraph on the addendum page 5 which is the comment of the Directorate Manager of Mental Health in 2009. "Although the care offered at the wards is of a high standard, the building needs work." He went on to say: "We are able to provide good nursing care within a safe environment. However, the environment does not provide the best possible standards that we should be striving for. Patients are not at risk here at this moment in time." So they are not at risk but we are falling short of the best possible standards. We are not at risk but we are falling short of the best possible standards. So we should do something but it is not really urgent. Then we look at the amendment that was brought on Clinique Pinel. I just want you to note the contrast between what the civil

servant reported back 2 years ago and what the amendment brought by the Minister for Treasury and Resources yesterday said. "Consequences of non-approval. Should the States not approve this proposition [this is for the extra £1.5 million] then the environment for people over the age of 65 years with significant mental health issues will continue to be not fit for purpose" and I am now on the Tenth Amendment to the Business Plan, page 5, because we got this recently. "Will continue to be not fit for purpose. This will result in increased risks to clients, staff, visitors and the organisation." He then goes on to say that evidence-based modern treatment would not be possible and patients will not respond to treatment as speedily and the environmental impact will continue to be negative. So that is the version 2 years later when we are asked for another £1.5 million and the interesting thing is that to me, when the civil servant says: "We cannot provide the best possible standards but there is no risk", he is indulging in self-censorship. He knows that if he speaks out and says: "We have to change this," then the climate is not conducive to him saying that, to him or her putting his or her head above the parapet. I wonder how many other situations there are where someone has just modified what he or she would really like to say about a service for needs of self- preservation. How many other grave situations are there? How much other self-censoring is there? Moving on away from the Health Service to the Prison and, once again, it was an emergency reaction. Item 5 in the addendum page 6 and I am only going to pick out the most salient points but I have printed a lot of the Chief Inspector of Prisons' comments so that Members can see I am not taking out of context. "This inspection in 2005 [this is the inspection of our own prison at La Moye] found some serious defects in the processes and procedures needed to support our varied group of prisoners. Few of the recommendations in our previous report in 2001 had been actioned 4 years later." Exactly the same as Clinique Pinel. "As a consequence, the safety and security of prisoners and staff and the likelihood of prisoners' rehabilitation were compromised." Then she points out that on admission, men and women felt unsafe on their first night and there is a whole paragraph on bullying. The third paragraph: "Crucially, the prison had no reliable prisoner database. As a result, it was unable to assess prisoners' needs or seek to meet them." On page 7, going on to education: "There was very little by way of educational training to try to provide prisoners with the skills they might need to gain employment on release and to reduce the likelihood of re-offending." The second paragraph on that page is about women and the third about children, both groups being failed by our prison. It was a damning report. I remember reading about it in the J.E.P. and being shocked. The States, to their credit, reacted but, again, it was a reaction and on page 8, I will not go through it in detail, but you can see the reaction of the States. They found money for a major capital investment. They said that the uncertainty surrounding the budget had to be tackled and finally they said that the Council of Ministers had accepted the key elements of the improvement plan leading to an increase in funding for 2007 and future years. Then: "The overall performance of the prison should reach acceptable international standards" acceptable international standards. We found the money when the finger was pointed at us by Her Majesty's Chief Inspector of Prisons. So that is 3 cases of where we waited and waited and waited because we did not have the money. We did not wish to tackle these issues. Her Majesty's Inspector of Prisons reported in 2001 we did next to nothing. She came back in 2005 and she said: "This is not acceptable" and then we acted. Now, if it was just those 3 cases, we could perhaps settle back in our chairs and say that those are isolated incidents. Can anyone think of other examples where we have majorly failed? Before anyone says I only see the glass half-empty - and I will just take a sip - and I never see it half-full, I would point out that a lot of our public services are perfectly adequate. They trundle along, they do the job, the streets get swept, and the children get taught. I am not saying that across the board everything is awful but I am saying that there is an issue with funding. Another example, Children's Services. Oh, dear, one report after another and finally the States were moved to invest in Children's Services and children's protection to the tune of over £3 million. Environmental protection. Bellozanne, I think I just have to say the word, Bellozanne, and I remember the emails that I had earlier. Now, thank goodness, it runs no longer. The woman with her child worrying about the clothes, the windows, the teacher whose life was ruined probably because of what came out of the chimney and I was so angry and I am still angry

that the States failed its people for so many years by not putting in scrubbers in certainly the second stream and the sewage sludge issue. Now, we learned about that in Environmental Scrutiny and we found out that we have been putting sewage sludge on land - and that is a reasonable thing to do - for many, many years but we have not analysed it for many, many years.

[10:00]

My goodness. What are the effects? We do not know. Is it in our food? We do not know. Does it run off to sea? We do not know. I should just remind Members that it is a public health issue; it is an issue about how we regard our environment, whether we treasure the soil that gives us our food but it is also an economic issue and just think of the words "Spanish cucumbers" and what happened when there was a bad batch or there was suspected to be a bad batch. The market simply went to nothing in Germany in a week. We take the greatest care to protect our finance industry and its reputation. That is perfectly in order. Where is the care to protecting our environment and our international reputation and our tourism industry and our aquaculture industry? So those are a series of failures and moving on now to the backlog. The backlog is listed on the Annual Business Plan page 43 and I will not go through the familiar list of the elderly and the property maintenance and so on, but I will mention 2 of them. It is a long list. There are 7 major items where we have to find - even according to the Ministers - major resources in the future. Property maintenance, £125 million backlog. We have over £1 billion of assets but we cannot find the money to look after them. Among those assets are assets donated to the States, and I wonder what the legal and moral position is on the Le Seelleur building given to us and then allowed to rot. Housing maintenance, £75 million adrift. Now, with the fiscal stimulus package, £64 million adrift and is it not ironic that it takes a recession for a stimulus package to come along and do some of the housing maintenance. Then we spend; then we find that public spending is justified. Moving on from the backlog, what is the kind of ambition that we have for Jersey or do we sit in this kind of blocked state where we fail to achieve our potential and the Deputy of St. Ouen mentioned Fort Regent yesterday, I think, and the potential and the fact that we will have to find some investment to unleash the potential of that building. I will mention just a few examples of the negativity that is also due to: "Oh, we have not got the resources." The Tourism Development Fund, which is on page 12 for those who wish to refer to it of the addendum. We voted £10 million for the Tourism Development Fund. So far, they have had £2.2 million and that is the level of support for our major, what is called legacy industry but the fact is it adds an enormous amount to this Island and it adds diversification, of course. But we just cannot find the way to support them adequately and I am reminded of the fantastic gardens of La Chaire and I know that is controversial but the fact is that if any golden goose passed this House by, that was it because Tim Smith was exactly right but we fumbled - I

was not there at the time - fumbled that because it was just beyond the horizon of this Assembly. We cannot do exciting things like that. Second example of negativity, this cloud of despondency which means that you cannot really do anything. Liability over potholes. Okay, it is a big issue. It means that we the States cannot guarantee our people that the roads they travel on every day are safe for them to do so. They cannot sue us; we will not accept responsibility. So if someone on 2 wheels swerves to avoid a pothole or a manhole cover that is deformed and they get hit, they cannot sue us because we will not accept the responsibility. Quite extraordinary and we had a debate about that recently. My third example of this cloud of not doing, this cloud of not can do' despondency is the cessation of the Urban Improvement Programme. At one point, we had a rolling programme £400,000 a year, quite right, to improve our capital's environment and the results are astounding and then it was cut because we cannot afford to do it. We cannot afford for our capital town to begin to match the standards elsewhere. So that is a picture of where we are in the public sector and I think it is salutary to have a look at that and I now move on to the second strand of this speech which is, why cuts? I do find it very hard sometimes to understand why there is this almost philosophy, this drive, to assume that cuts are the answer, cuts are automatically somehow a good thing. What is it that brings us to this ideology, if you like, of cuts? The first underpinning argument for the cuts is that we must get public expenditure under control because it

is out of control. The most extreme version of this and this might make Members laugh, it might make them weep, but this is a body funded by us and it is a newsletter from the Director of Jersey Finance Limited circulated in July 2010, and I am sorry this is not in the addendum because when I began, I had temporarily lost a bit of paper but I have found it. This is what the Director of J.F.L. (Jersey Finance Limited) in his newsletter wrote to all of Jersey Finance. This gets wide distribution. This is what he wrote about us and the heading of the paragraph is: "How is it that States expenditure has consistently outpaced inflation over many years?" and he quotes the 6.6 per cent figure, which is wrong but I will come to that in a minute. "Without further in-depth analysis, which is beyond the scope of this article, it is difficult to determine the detailed root causes of the rise in public expenditure but I hope to return to this subject in future articles." Here comes the sentence I want to bring your attention to. "The most obvious explanation is simply that the money was there to be spent" and someone said that yesterday as well. The most obvious explanation is that the money was there to be spent. Yes, it was the Chief Minister. Ministers have a temptation to spend it for the sake of spending it. How insulting is that? We have the Director of Jersey Finance telling the entire industry that we spend money for the sake of it. So that is the most extreme version of the myth that we are just barmy. Right, the second example is the Comptroller and Auditor General, page 12 of the addendum, and this is worth turning to because, after all, it is the Comptroller and Auditor General. The opening words of this page in his report on February 2010: "Although the rate of growth in spending has varied over the past 10 years, in recent years it has exceeded 6 per cent per annum" and there is a table there where he shows the growth in total spending, net revenue and capital net revenue and the capital allocation added together and he shows the annual increase. So there we have the Comptroller and Auditor General, over 6 per cent a year; the Comptroller and Auditor General telling us that we are spending more, 6 per cent a year. That then found its way into a Corporate Services Scrutiny Panel amendment on page 13 where they reproduce his table with no qualifications and the rider: "The table illustrates that the rise in spending since 2001 has been significant. It must be brought under control." So we must have failing despondent public services. It must be brought under control. But the thing is that they reproduced the table with no qualifications. Page 13, P.A.C. (Public Accounts Committee) get in on the act. "Growth in States spending. In 2004, there was a Fundamental Spending Review to a fanfare of we will cut spending'" says the Chairman's foreword. Senator Shenton, 2010. The review was in some respects an abject failure. Expenditure increased significantly in the following years despite the rhetoric. Turning to the next page, we have the Small Society group getting in on the act. First a letter sent by a member of the Small Society sent this email to all of us September last year: "States spending has doubled in 10 years." Doubled. Do Members remember the advert in the paper, the full-page advert of Small Society? I think it was even the main headline: "States spending has doubled in the last 10 years." Even the Small Society came back away from that 100 per cent because it was blatantly untrue and when they sent a big paper called The Big Solution for a Small Society to all of us prior to a big debate in 2010, they had brought the figure down to 75 per cent, and this is on page 14 of the addendum. "The States of Jersey net revenue expenditure has increased by almost 75 per cent between 2000 and 2009." Finally, Senator Ozouf on page 14: "States spending has risen by 30 per cent over the last 5 years, 6.7 per cent in 2009, a further 6 per cent in 2010." So there we have it. A constant drip, drip, drip, we are spending more each year than the previous year. We are spending a lot more. We are spending 6 per cent more. How strange this is. How can it be that we have these catastrophic failings in Children's Services, the prison, the hospital, Bellozanne, and yet we have been spending money as if it has gone out of fashion? Very strange. The truth of the matter is that the statement that our expenditure is out of control and that it is going up by 6 per cent a year is simply untrue and that is why there is this inexplicable contrast between the notion that we are spending and spending and spending and the fact that we cannot even afford £400,000 a year for St. Helier . I would refer Members now to the chart on page 18 and this is the truth about our public spending increases. It is the growth in States

spending in real terms. The Minister for Treasury and Resources is fond of praising the F.P.P., the Fiscal Policy Panel, and he is right to do so. When you read their reports, you see something solid. You see the caveats and the qualifications. You see the footnotes. You see proper economists writing to inform the public debate and, on page 18, there is the graph I have reproduced of the growth in States spending in real terms, which is the red line which rose up to 2001 on a slightly steeper line and then from 2001 to 2007, it increased, as their text says, by less than 1 per cent a year in real terms. Less than 1 per cent a year in real terms. Since 2007, it has grown more rapidly at around 3.3 per cent a year. When I add 1 per cent, 1 per cent, 1 per cent, 1 per cent, 1 per cent, 1 per cent, 3.3, 3.3, I do not get to 100 per cent. I do not get to a doubling. I do not even get to 75 per cent.

[10:15]

It is an outright distortion of what is happening. States expenditure has been creeping slowly upwards and from 2007, slightly more rapidly. In 2007, we started to address the prison. Is anyone saying we should not have done that? So where do these modest increases come from? I have already mentioned the prison. There is a constant need to bring in new items of expenditure and it puzzles me when Senator Shenton, for example, can bring in propositions saying: "Slash straight away. Do not even wait 2 years; just do it now," and Senator Ferguson has also brought propositions saying: "Do it now, cut." Do we want the environment to be protected? We have introduced environmental protection or do we think the public prefers the risk? Do we want counselling or support for alcohol and drug users or not? It is not do "we" want: do they want, does the public want this because we have introduced that? Does the public want income support to be boosted for the poorest in society to protect them from the effects of G.S.T. (Goods and Services Tax) which would otherwise be regressive? This Assembly decided that those poorest people should be protected. Was that right or was that wrong? Does the public want prisoners not to have any education beyond the barest minimum, which was the case in 2005? Do they want them to have no chance of getting out the cycle so they go back out and bounce back in again, or do we have a serious attempt at rehabilitation? What did we vote for? We voted for rehabilitation. There is now an extensive education service in the prison. Were we wrong or were we right? What would the public say about it if they were asked? This is slightly more controversial. Do we want to lose money due to an understaffed Treasury Department which cannot do its job adequately? I refer to the euro question and I am not pointing fingers but I am saying that the Chief Minister in evidence to the Public Accounts Committee said that there was an issue with capacity at the Treasury and since then, we have seen the numbers of clever people put into the Treasury to financially manage the affairs of the States better boosted. Do we want that or not? So that is where some of the increase has gone. That is what we mean by emerging pressures. Were we wrong to make those increases or not? On page 15, I reproduced what the Minister for Treasury and Resources said when I questioned his 6 per cent claim. He said: "In the last 5 years, expenditure has gone up 6 per cent a year, 30 per cent in 5 years." How shocking is that? I may remind Members when I am talking about this that the way this translates into the media is: "The States are still wasting money" on the front page of the J.E.P. 15th December 2010, ha, and then we have a leader on a few days later: "Lessons to learn on spending. The Government is, in spite of a litany of promises to put its house in order, continuing to waste money. What can be done

about this lamentable state of affairs?" The trouble is, it is not a lamentable state of affairs because it does not exist. It is a myth. Who puts this myth about? Why can we not have an honest public discussion based on facts, the facts 1 per cent increase a year, this is where it went, we responded to more people walking through the door at the hospital for outpatients, we responded to more cancer patients, we provided the resources because we had to and then the Prison Inspector told us we had to make the prison better. So that is why the spending has gone up a little bit. I say a little bit, I will come back to that in a minute. So the Minister for Treasury and Resources then explained his 30 per cent figure, oh, gosh, and we find that a lot of it is due to inflation. Out of the £146 million, £68 million is due to inflation: the pay awards, non-pay inflation and increases in social security uprating to cope with inflation. There is transfer from capital to revenue, which is an accounting thing. There are the effects of the credit crunch. Did we really not want to increase support in income support for unemployed people due to the credit crunch? So it goes on, the list is there for Members to see. So the claim of 6 per cent is simply wrong because inflation accounts for most of it. I welcome the speech of Senator Shenton later. The third point about this myth that our spending is out of control. The first point was inflation, the second point is that the modest increases that the F.P.P. point out that we have made are justified, we are not mad spendthrift daft people, and the third point is efficiency. The implication behind saying: "They are spending it like water, they are throwing it away, they are wasting our money," is that somehow inefficiency is built in to the way the public sector runs. The public civil servants want to run things inefficiently. I do not believe that is true. It just does not match the facts and I quoted yesterday from the Environmental Services Department and it is on page 9 and 10 of the addendum, what they said in their evidence to Environmental Scrutiny. You could see there a department working at being more efficient, working at matching very small resources, tight resources, to a huge workload of protecting our environment and constantly reviewing their processes. I suspect that that is

happening all the time anyway and yet we have this myth that somehow we can take an axe, walk into the woods and find some trees that need a bit of pruning. Of course, there are cases where it is a big organisation where things can be improved and certainly on a big scale where whole processes can be re-engineered and I do not doubt that for a minute but when benchmarking was done benchmarking you see, this is interesting, is it not, benchmarking. How efficient are we? P.A.C. Report 2, 2010 and I am sorry, this is not in the addendum. "Recommendation 2.7" on page 5. This is the Public Accounts Committee. "A robust system of benchmarking should be put in place where appropriate. It should be possible to demonstrate the efficiency of departments through the use of appropriate benchmarking." So if we stand there and make sure that they are being efficient, then they will become more efficient. How odd that P.A.C. should be recommending that we do a study into benchmarking. I have the study here. Benchmarking. Performance benchmarking. Final report. 10th February 2004, KPMG running to 180 pages, department by department finding that some were a bit better, some were a bit not so good but basically a clean bill of health. That is the first point that they make in 180 pages, which cost us a fortune, by the way. The second point they make, because I have had a dip into this, is that it is very difficult to do benchmarking, very difficult to compare Jersey with anywhere really because of the scale of the operation. We are a tiny jurisdiction. To compare us to the U.K. is almost impossible. You have a hospital that does everything for 90,000 people and so on so it is a difficult exercise to do but it is being done and our public sector are not sitting around chewing their pencils. The fourth point is we must not raise taxes and I think this is the nub, if you like, of the amendment, is it not? Let us find another £15 million for 2013 and yes, of course, that raises the issue of taxes. But I do not believe that this is a show-stopper. The first thing is that we have to anyway. We have heard the signals from the Minister for Treasury and Resources yesterday. It is absolutely clear that we are going to have to increase charges or taxes somehow to pay for the drains which need completely replacing, to pay for the new sewage works, to pay for housing maintenance, to pay for this, to pay for that, to pay for the hospital, Clinique Pinel, nurses' housing, whatever. So charges and taxes are going to have to go up anyway. The question is the balance between corporate and individual, which of course we have talked about in other debates. We have just as an Assembly 2 months ago put back £9 million. We said: "Oh, we do not need that money." We will have that later because of refusing to implement the increase which had been put forward by the Council of Ministers in Social Security above the threshold. We could put a tax on land development on the increase in value of land when it is zoned for development and that was pushed off with a nice little shimmy by the Council of Ministers - whoops, bang, long grass - because we do not wish to talk about it. It has been pushed off again recently because we do not want to talk about that before the election and 1(1)(k)s, of course, which we will be talking about later. Could we not just have a little bit more please, just a little bit more? Even the Minister for Treasury and Resources is talking about a little bit more from the finance industry reference G.S.T. So that is the practicalities. I believe it is practical, feasible, to raise a little bit more if we have to. Now for the theory of raising taxes. The argument against doing it is quite consistent and it is expressed on page 17 of the addendum by guess who, the Small Society, but they represent a lot of thinking in the Island. The Chamber of Commerce certainly think the same as this and what they say in their Big Solution, which they sent to us all last year: "The aim." The second sentence of the aim: "Our Island can no longer support continued growth in government spending and at the same time remain competitive and successful. If the economy is jeopardised, the security and benefits we all enjoy will be lost." That is the fundamental position underlying the view that we dare not cut taxes. The thinking goes if we spend too much on public goods and services, then the economy will suffer and if the economy suffers, then we all suffer. The problem is that it is not true and I invite Members to go to page 20. Now, this is not playing about with figures, this is not irrelevant. If we get this right, then, my goodness, it is important. The view put about by Ministers and certainly by their supporters in the Chamber of Commerce and the I.o.D. (Institute of Directors) and so on is that if you want economic success, you have to hold down public spending. That is the mantra and I have not bothered to find 6 examples of people saying that because I know that that is what they say but it is in the Chamber of Commerce newsletter every month. So I invite Members, as I say, to look at page 20 and this is the G.V.A. (Gross Value Added) of Jersey in real terms. How handy it is that we have a Statistics Unit who unpack these things for us. What is the real story of the Jersey economy in recent years?

[10:30]

If Members would like to look at the top line - the blue line - that is Jersey's total gross value added G.V.A. Members will notice first of all that if you look at the peak in 2000 and the peak in 2007, so that is the cycle - the business cycle - the boom and the bust; if you look at the 2 booms, you will notice that they are exactly on the same level. So the economy has not grown at all peak to peak. It has not grown at all. Then I invite Members to look at the finance sector which is the yellow line and the yellow line from peak to peak, 2000 to 2007, you will notice that there is a substantial drop between the 2 peaks. Then if you look at the red line, that is everything that is not finance and that steadily goes up. It does not wobble about; it steadily increases. The last line on that page, page 20, is - I am going to read out - it is from the Finance Policy Panel. Excluding financial service profits, G.V.A. grew by 1.5 per cent per annum (this is Jersey) in real terms over the economic cycle 2000 to 2007. So in Jersey, G.V.A. goes up by 1.5 per cent a year if you exclude finance. If you put finance in, then the economy is flat-lining, not going anywhere. Please turn to the next page and this is about population. The gross figures include the fact that our population has been increasing.

Deputy K.C. Lewis of St. Saviour :

I believe we are inquorate. May I raise the défaut on Deputy T. Pitman; then we become quorate. The Bailiff :

I think now that the Deputy has returned, we are now quorate. So, Deputy Lewis , you wish to raise the défaut on Deputy Pitman?

Deputy K.C. Lewis : Yes, please, Sir.

The Bailiff :

The Assembly agrees to raise the défaut on Deputy Pitman? The défaut is raised. Yes, Deputy of St. Mary , please continue. I was going to wait for one hour to elapse and then indicate that you had been speaking for one hour and wonder how much longer you were going to be because, as you know, there is a heavy agenda for the Assembly and the Assembly has hovered above being quorate and it is my experience that that is often an indication or a concern about the length of the speech. So, Deputy , perhaps you could bring yourself to move to a conclusion as soon as possible.

The Deputy of St. Mary :

I would comment that in my observation we hover above quorate throughout this debate on what is just only the Annual Business Plan of the States of Jersey, but I do take the point and in fact there is not far to go. It is important that we look at this myth which underlies cuts - the philosophy of cuts - because if we can undo the myth, then the road is clear to a modest increase in net revenue expenditure, which I believe is necessary. So if we look at the Jersey economy taking out population, it is even worse. Page 21 gives us our G.V.A. per head or per employee, and there look at the yellow line; finance. Obviously the profits have been declining for years. Once again, the interesting line is the red line and it gives a pointer to why the Minister for Economic Development is so keen to see diversification because the non-finance sectors are basically what is keeping this Island afloat. It is increasing year by year, very slowly, 1.5 per cent a year. Now I would like Members to turn to the following page and this is the chart of Government spending. You see, we are told that Jersey is a low-tax jurisdiction. That is fantastic. It is really good for us. Let us see how low-tax we really are before we look at other countries and their economic performance. So on page 22, there is the famous chart which the Corporate Services Panel had in their appendix written by Dr. Harkness and here we see the public spending of different nations, wealthy nations, as a proportion of national income. Jersey is not on this chart. Jersey is 17 per cent. So I invite you to run your eye along the bottom where the markers go 10 per cent, 20 per cent, 30 per cent, 40 per cent, and imagine Jersey at 17. Just put a dot where Jersey is on your chart and you will see that no other country spends as little as we do. Then I invite Members to run to 34, which is double, and put a little dot at 34 on that bottom axis and then run your eye upward. Slovakia spends twice as much as we do as a percentage of G.N.I. (Gross National Income). Japan, even the United States, more than twice as much as we do. Canada, Norway, Spain, Luxembourg, more than twice. Luxembourg, more than twice what we do. Then I invite Members to imagine a line at 51 per cent, 3 times Jersey's public spending, and run your eye upward and you find that the countries that spend 3 times more than we do are Iceland, France, Sweden and Denmark. Just less than 3 times, Belgium, Hungary, Italy, Austria, Finland and the U.K. Then I invite Members to

turn to the next chart, which is the one with all the colours on. This shows growth rates. What I did was I took the top spending countries. I said: "Well, okay, let us take the top 9 out of that previous chart, all the way down to the United Kingdom." To fit them on, I had to leave out Sweden. I just chose Sweden randomly but I can assure you I checked; it is in line with all the others. Look at this chart and look at the year 2000, which is the boom year. That is the peak of the economic cycle and you will see that all the countries are on 3.5 per cent growth and one or 2 reaching up to 5 per cent. So that is how you look at this chart and then there is 2001, 2002 and so on. I invite Members to compare the performance of these high-spending countries on page 23 with Jersey's performance on page 25, which is the next page. You can see both at once just by flipping over,  which  is  handy. By the way, I  do thank the Greffe  for  producing this really wonderful addendum in glorious technicolour. We do owe them a lot. If Members would like to look and compare those 2 charts, 2000, we were on 4 per cent growth. The top spending countries were on 3.5, some of them on 4 and so on, so roughly the same; 2001, flip over, we go minus 3 per cent. Minus 3 per cent. Flip back to the other countries. None of them are negative. The lowest is half per cent and they range from 1.5 up to 3 per cent. Then just do that again for the following 2 years, minus 3, minus 4, minus 1, and none of the other countries are negative or anywhere near it. They are all way above plus, to different degrees. That is total G.V.A. Now go back to the coloured chart and think of Jersey's growth without finance because finance is now dragging us down. Run your eye across the 1.5 per cent line, all the way across. Remember these are the top spending countries. Jersey is on 1.5 per cent a year growth, year on year. That is what these figures are: year-on-year growth. Run your eye across 1.5 per cent and ask whether the other countries are above or below that. Some of them occasionally are lower, most of them are higher and some of them a lot higher. The evidence does not support the belief that if you spend a lot on your public sector, you face economic disaster. So, coming to the amendment, I am proposing an increase of £15 million to the net revenue expenditure of the States in 2013. This is an indicative amount. I am sure we will be reminded that in this Business Plan debate we are talking about an

indicative sum, but I know very well the Minister for Treasury and Resources likes to jump up and say: "This is what you voted for. You voted for that sum." So I am proposing that we increase net revenue expenditure. Helpfully, the Council of Ministers have produced some comments and they first of all have a table which explains the increases in total States net expenditure. That is all very fine and dandy. I am proposing net revenue expenditure go up. I am not talking about capital and it will influence, of course, the figures and the totals. Their comment in the first paragraph under the word "comment" says that: "The Deputy [me] concludes that 2013 expenditure should be increased, presuming that items such as inflation have not been provided." That is not what I said at all. The reason for proposing a £15 million increase on their suggested sum is that what I did was I took 2012, I added 2.5 per cent and came to the figure. What I am suggesting is that the net revenue expenditure allocation for 2013 is, in real terms, the same as 2012. I am not proposing an increase; I am proposing the same. It is just that with inflation, which the C.A.G. (Comptroller and Auditor General), Corporate Services, P.A.C., Minister for Treasury and Resources and Small Society do not know exists, but with inflation I am asking for the same. The same. A lot of what they say is confusing the issue, saying: "Well we are growing some things. Oh, but we are cutting other things." I am just saying: "Cut the cackle. What we need is for expenditure not to be cut." Indeed, they admit on page 2 and 3 that over the period of the C.S.R., States net expenditure has remained relatively flat but seen a significant reduction in real terms. I ask Members whether a reduction in revenue expenditure is appropriate in view of what I have said about our public sector. So, in conclusion, I believe that the 2 main myths supporting the policy which says we must cut, the 2 main myths are firstly that expenditure is out of control. That simply is not true, as the Fiscal Policy Panel's chart shows. The second myth is that if we increase public expenditure - and I am not even suggesting an increase - then somehow this has a bad effect on our economy, and the evidence is completely the opposite. What there is evidence for is our failure as a Government - repeatedly, in different areas - to protect our citizens and to provide the services that they need. We need, I believe, an honest debate. We need to get away from the silos and the spin. By "silos", I do not mean departmental silos because we talk about that a lot. Ideological silos. We just need to

talk on the basis of the facts and also on the basis of what the public might be telling us. [10:45]

If we had an honest, open discussion and the public said: "We want the castles to fall down, we do not really care", if that was really what they thought, fine, but we do not ask. We do not ask. I beg Members to put an end to the years of stagnation, to vote for acceptable standards across the board, to vote against unacceptable risk, to vote against cutting our noses off to spite our faces. This idea that you can always somehow save money but it ends up as more expense later. I urge Members to vote for a can do' Jersey, an end to this paralysis where we stagger from one problem to another, shuffling them around, using the word "prioritisation" and never putting down the scaffolding at St. James', never getting the job done, never holding out the possibility of a rejuvenated tourism .. well he is doing quite well at the moment .. but better tourism with more support. Instead we get cut, cut, cut on the basis of 2 myths. I want you to vote against economic danger. There is a danger in continuing to cut at a time of recession. I want you to vote for the morale of the public sector. What must it be like to work in a climate where the less you spend the better, all the time? Of course you want to be efficient, you want to get the job done. Are we saying that people want to waste taxpayers' money? I am sure Members would not be saying that, would they? The effect on morale of this attitude, this miasma of almost despair: "Just do not it. Deal with it as you can." The Environment Services quotes that I put in that addendum say it all. We try to do the job. We want to do the job. Please give us the resources. Please give us the resources. Do not go the way of the cuts. There is no basis in fact for them in evidence and I move the amendment.

The Bailiff :

Is the amendment seconded? [Seconded]

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

I will only be on my feet for a couple of minutes. Firstly, it is too late to do malade, but I wish to apologise to the House. Deputy Shona Pitman has gone home. We were up to the early hours last night after receiving threats. I am getting sick of the threats that I am getting and I have to say this Government disgusts me more and more. I have been to the police more than once recently. I will be saying more about this at another time. All I want to say is that is the best speech that I have ever heard in this House. It makes me ashamed when I listen to some of the rubbish coming from the Council of Ministers. What a great loss the Deputy of St. Mary will be. What a great loss he will be. Someone who looks and analyses and he looks at facts. He just does not go with the ideology. He just does not care about a certain section of society. He wants to do the best for everyone. To think the ridicule that he has had from some people in this house, it makes me emotional, it makes me angry. An absolute breath of fresh air, that man has been since I have been in the House. I have followed politics since I was 14 and he is certainly up there with anyone. People moan about his speech; well I have been sitting there waiting to come in for most of his speech but I am quite happy to sit there and I thank the Dean for letting me have his seat. When you listen to the speech and the quality of what is said, without this rhetoric, this rubbish that comes from the Council of Ministers with these right-wing policies, they are not based on fact, they are not based on doing what is best for society and I think I summed this up a few weeks ago and it fits in with what the Deputy said. When I was talking to the Minister for Treasury and Resources about world-famous economist Ha-Joon Chang, what did our Minister for Treasury and Resources, the great economist say? "I do not want to read that, I do not think. Sounds a bit whacky." This is a gentleman who has won awards, based at Cambridge University, and this is why we are in the mess we are. This is why we have seen, since I have been in the States, playing our public sector against the private, all because of the strange ideology of certain people who only want to look after the top tier of society. That makes me angry. That makes me disgusted. I felt very strongly a few weeks ago with what happened to Senator Cohen. I have been getting threats. I know who is doing it, some of it. Police have not done anything, and the Data Protection Commission. This all sums up with where the society is going. People only care about the top and greed. They do not want to listen, dismiss people like the Deputy of St. Mary as some kind of eccentric. Absolutely, should make everyone listening angry. I urge every Member to vote for his amendment and I give great credit to him. He is going to be gone and he will be sadly, sadly missed because he is one person who has the foresight that could save us from hitting the iceberg that sank the Titanic, because we are certainly going to hit it with most of those people sitting over there and I exclude people like

Senators Breckon and Le Gresley. Thank you, Sir.

2. Senator P.F.C. Ozouf :

We have got a heavy agenda and I am going to be brief in the arguments because I think that they are relatively straightforward and I will certainly attempt to respond in less than 5 minutes. This debate is about increasing spending in 2013 by £40 million. The turmoil that carried along in the global markets this morning is as a result of parliaments making spending decisions that they cannot afford. This Assembly has a track record of sound public finance. We have strong public finances. We are not paying taxes and we are not making any allocation in this Business Plan debate on paying interest on past Assemblies' decisions. We are significantly investing in public services but we are also making savings. We do not have a credit rating because we do not want to pay the £100,000 to get one, but if we do, we would certainly, I am confident, have a triple A star (AAA*) rating. I do appreciate that the debates in this Assembly are often about the difference between triple A star and triple A. So I believe our community wants us to be prudent in terms of our public finances and they want us to be continuing on the path of making savings and efficiencies. They do not want to see overspends. They do not want to see capital overspends of £8 million or not, I have to say, in relation to police stations. They want to see proper spending and the C.S.R. which the Deputy was very negative about is designed to deliver efficient public services and public services of a very high standard. I am confident that in 2013 we can deliver £65 million worth of savings because if we go with this amendment, that is certainly a signal to say that we are reneging on the undertaking that this Assembly has given and the contract between the public of asking more in taxes but delivering services more efficiently and delivering better services. I want to conclude by simply saying to Members and to the Deputy of St. Mary that within the 2013 budget allocations are the following additions in terms of spending because I do understand that the public want to see quality public services and they want to see an end to, for example, the fact that we have not invested and we have not dealt with issues such as the health service. In 2013, there is a new £5.5 million for health. There is £2 million for skills. There is an additional for the capital programme of £38 million, an increased capital programme planned for 2013. There is £500,000 additional money for overseas aid. On top of that, there is £6 million of unallocated growth which the future Council of Ministers and the next Assembly would allocate: £6 million of unallocated growth in all the dealing with spending priorities. I am confident of this Assembly's ability to make good decisions, to make the right balanced decisions and not to bequeath to our successors problems which our successors will have to deal with. We are a long way from Greece but it does not take a long way to undo prudent financial management built up over generations. The Deputy of St. Mary is inviting us to take a small but significant step into imprudence and I urge Members to vote against it.

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

We have just heard once again the siren voice of big business communicating to us through the Minister for Treasury and Resources. Make no doubt about it; that was the voice of the laughingly called Small Society which is big business. It is a reaction to the business lobby which gets heard loud and clear by our Council of Ministers and by the Minister for Treasury and Resources in particular. When he talks about: "We do not have a credit rating", we do not have a credit rating why? Because we do not need to borrow, although we could. We have chosen not ever to borrow. If we were to obtain a credit rating, it would be right at the top of the range. We have got a track record that is fine and we would be able to borrow at very low rates, even in that global market that is in turmoil. The fact is, politically - got nothing to do with economics - we have decided not to borrow, full stop, and to impose savage cuts to the standard of living of our ordinary workers on the Island. That is what we are doing. We have chosen a way which, as has been pointed out .. and here I will just take a minute to praise once again the Deputy of St. Mary; he will be sorely missed in this House when he goes. The most intelligent analyst of what is going on and the best presenter, in many ways. I know it sometimes takes the best part of an hour but so be it. What we had today was a fine example of what this Business Plan debate should have been all the way through: principles, practice, what is the evidence, holding people to account, not just in little sound bites. Why have we not heard from every Minister today, justifying exactly what is on their particular pages of this Business Plan? Now we have heard an analysis which points out to the error, the fundamental error which - I do not know, D'Artagnan to the Deputy of St. Mary's Porthos, Athos and Aramis all rolled into one - in my own small way I pointed out from the very beginning, the path we have taken is a miserable and wrong path, but nevertheless we will not hear anybody say there are other ways. We are going to the cliff edge at full pelt and we will not be diverted. This Council of Ministers will not be diverted. Nevertheless, that was the ring of truth and yet we barely had 27 people in the room. Why was that? Because people do not want to listen. They have shut their ears. This response: "People out there want us to cut", no, they want a full explanation of what these cuts will mean because they are all hidden, they are fudged over. "There will be no cuts to front line services." Already the physiotherapy service waiting lists are lengthening. Prime, front-level cuts already happening. What we have to realise is that this is the first step of a package. We always do it this way. Heaven knows why, but we do. Business Plan, there is less to spend so that later on we can set the tax raising measures. The Deputy of St. Mary has said: "In 2013, we should spend a very tiny, moderate, little more than we are planning to. In fact, if we take inflation into account, it is the same, as he clearly pointed out and I did not hear him properly. Such is my inadequacy.

[11:00]

We are talking about spending and then raising the money to spend on services for our people. Make no mistake, that economy is not just the private sector. It is public sector spending as well that keeps the economy going. When the private sector is in the doldrums, as it clearly is, there is no sign of the end to recession, there is no sign of recovery in any of the indicators yet. Then you have to use your public sector to prop up the economy and this is a very moderate amount to prop up the economy in 2013 to help. If we want to look a bit further forward to examining ways in which we might raise some additional money to afford this by 2013, may I suggest we open our eyes and look at some of the elephants in the room that we keep ignoring year after year after year after year, and that is the minimum wage. Have we got the minimum wage at the right level? No. How do we know? I will tell you why: because, with supplementation running at £65 million, we are propping-up all of those low wage earners on the minimum wage and slightly above, and there are plenty of them in the "and slightly above" with £65 million. We are further spending around £90 million on income support. Why? That is a good thing, that is an excellent thing but if you want to balance public spending with private spending, business with Government, and if you are determined to cut down, as you say, on the spending then what is income support doing? It is propping-up the minimum wage because people on the minimum wage and above it cannot afford to live. It is propping-up landlords and rents; that is what it is doing. Now, there is £90 million in that and there is £65 million in supplementation. If you want to do something about that and the minimum wage between now and 2013 then we could find that £14 million quite easily. So it is not impossible but I just want to illustrate what that means in terms of this Business Plan, such as it is. Looking ahead to 2012 and appropriately to 2013, and I just want to examine the proposals that are there on pages 184 and 185 of the Annual Business Plan come from Home Affairs, not my specialist area but let us examine what it is proposing. These are the C.S.R. savings proposals, and before I start on C.S.R., the other fundamental mistake, and the Deputy of St. Mary I do not think mentioned it or I may have missed it early on, was this idea that we can do this Comprehensive Spending Review and we can change fundamental services in a 3-year period. Wrong, wrong, wrong and wrong again. Three years is a very tight plan scale as we saw in the scramble for last year's changes, and we are still seeing today I think, in this Annual Business Plan. If we have said 5 years and beyond and that is the timescale then we might have got some rational sensible changes to our workforce and to the delivery of our services but attempting to do it in 3 years, and we have seen the chaos, we have seen the chaos, we had one hit list come out of Health and Social Services, which was just a shroud-waver. That was completely scrapped. We had another list done by the chief officers of various departments and that all went through. This year we have had a 9-man team working on it and they have not yet delivered all the scoping for their cuts by September of 2011. We are starting in 2012. It is a nonsense. If we had have said 5 years to restructure what we are doing, to reorganise, then perhaps we might have had some faith in it and we could believe it and it might be a rational and sensible approach but 3 years, never, 5 or 7 years, that is a sensible time in which to reorganise. The business editor of the J.E.P. keeps telling us that and he is right. So we are in a mess I think, and I just want to point out that if some of this £14 million extra revenue goes in the direction of Home Affairs then that is well and good because I just want to point out some of the risks and targets that Home Affairs, in particular - and I would love to hear from the Minister for Home Affairs later - has set out. So here we are on page 184: "Savings will be achieved by a review of non-staff savings and a review of internal services and processes."

Excellent, sounds brilliant, I think they could do that. "Including the loss of 2 posts perhaps and the reduction in terms and conditions." This is supposed to be delivering in 2012. "Reduction in terms and conditions for policemen." Starting the negotiating when? In September? In fact yesterday, September of 2011 for 2012? You are not going to do it. For 2013? Possibly. You might be able to reach an agreement, because you have to negotiate it. The last thing you want is upsetting your

policemen. "As well as reviewing medical contracts." Okay so we will pull one of their benefits; that is about £184,000 I think. "Training budgets, recruitment advertising" oh, interesting: "C.C.T.V. (Closed Circuit Television)"? That sounds like a front line service, keeping ourselves secure. "Policing of events" that sounds like a front line service. "Core security and prisoner transport" blow me, that one again. Well, we can do that; Group 4 will do it. They lost prisoners when they started out doing it; they lost one only 2 months ago, famously. Let us privatise it; that is an excellent procedure. "The States Police is currently undertaking a number of in-depth reviews, internal services, et cetera. The savings will offset a reduction in staff numbers, which could critically affect the capacity and capability of the States of Jersey Police." Now, listen to the impact. You would think the impact of that might be there is a risk with privatising transport, there is a risk with shutting down C.C.T.V. and not doing it. There are risks, what is the balance? Impact. It starts of: "If these savings are not deliverable there will be a need to be a reduction in the police posts in order to deliver compensatory savings and contraction of capability of the services provided to communities will erode." So if we cannot do this, and remember renegotiating the whole pay structure of the police is involved in that, then the services may well erode. Not the risks yet the business case for any of those changes, just, if we cannot do this we will have to sack policemen, we will get rid.

The Bailiff :

Deputy , I am sorry to interrupt. This is all 2012, is it not, which is dealt with already? Deputy G.P. Southern :

2012 and 2013, Sir.