States Meeting Transcript - 21st May 2014

STATES OF JERSEY OFFICIAL REPORT WEDNESDAY, 21st MAY 2014

PUBLIC BUSINESS – resumption ...............................................................5

1. Draft Public Elections (Expenditure and Donations) (Jersey) Law 201- (P.36/2014)...5

1. Deputy J.M. Maçon of St. Saviour (Chairman, Privileges and Procedures Committee): ..5

1. Senator A. Breckon: .....................................................................6
2. Deputy N.B. Le Cornu of St. Helier:.....................................................6

2. Deputy J.M. Maçon:.....................................................................7
3. Deputy J.M. Maçon:.....................................................................7
4. Deputy J.M. Maçon:.....................................................................8
5. Deputy J.M. Maçon:.....................................................................8

1. Deputy R.G. Le Hérissier of St. Saviour:................................................9
2. Deputy J.M. Maçon:.....................................................................9

6. Deputy J.M. Maçon:....................................................................11

1. Senator L.J. Farnham :..................................................................11
2. Senator A. Breckon: ....................................................................11
3. Deputy R.G. Le Hérissier: ..............................................................11
4. Deputy J.M. Maçon:....................................................................12

2. Draft Public Employees (Pensions) (Jersey) Law 201- (P.28/2014) ......................12

1. Senator I.J. Gorst (The Chief Minister):................................................12

1. Deputy J.H. Young:....................................................................17
2. The Deputy of St. Ouen:................................................................19
3. Deputy R.G. Le Hérissier: ..............................................................20
4. Deputy A.K.F. Green of St. Helier:.....................................................21
5. Deputy S.G. Luce of St. Martin : ........................................................22
6. Deputy S. Pinel of St. Clement : ........................................................23
7. Deputy A.E. Pryke of Trinity :..........................................................23
8. Deputy M. Tadier St. Brelade:..........................................................23
9. Senator I.J. Gorst :......................................................................24

2. Senator I.J. Gorst :......................................................................26

1. The Deputy of St. Ouen:................................................................27
2. Deputy J.H. Young:....................................................................27
3. Senator I.J. Gorst :......................................................................27

3. Draft Public Employees (Pensions) (Jersey) Law 201- (P.28/2014): amendment (P.28/2014 Amd.)........................................................................28

2.3.1 Senator I.J. Gorst :......................................................................28

4. Draft Public Employees (Pensions) (Jersey) Law 201- (P.28/2014): amendment (P.28/2014 Amd.) – amendment (P.28/2014 Amd.Amd.)...............................29

1. Deputy E.J. Noel of St. Lawrence:......................................................29
2. Senator L.J. Farnham :..................................................................31
3. Senator I.J. Gorst :......................................................................31
4. Senator F. du H. Le Gresley:............................................................33
5. Deputy A.K.F. Green:..................................................................33
6. The Deputy of St. Ouen:................................................................34
7. Senator P.F.C. Ozouf :..................................................................34
8. Deputy R.G. Le Hérissier: ..............................................................35
9. Deputy J.A. Martin of St. Helier:.......................................................35
10. Deputy M. Tadier :...................................................................36
11. The Deputy of St. Martin : ...........................................................37
12. Deputy G.P. Southern of St. Helier:..................................................38
13. Deputy T.A. Vallois of St. Saviour:..................................................38
14. Deputy E.J. Noel:....................................................................38

5. Draft Public Employees (Pensions) (Jersey) Law 201- (P.28/2014): amendment (P.28/2014 Amd.) – resumption .........................................................40

1. The Deputy of St. Ouen:................................................................40
2. The Deputy of St. Martin:..............................................................40
3. Deputy J.H. Young:....................................................................41
4. Senator I.J. Gorst :......................................................................41

6. Senator I.J. Gorst :......................................................................42

1. The Deputy of St. Ouen:................................................................42
2. Deputy G.C.L. Baudains of St. Clement : ...............................................43
3. The Deputy of St. Martin:..............................................................43
4. Deputy J.H. Young:....................................................................43
5. Senator I.J. Gorst :......................................................................43 Mr. T.J. Le Cocq Q.C., The Attorney General:................................................44 The Deputy of St. Ouen:......................................................................44

7. Senator I.J. Gorst :......................................................................46

1. The Deputy of St. Ouen:................................................................46
2. Senator I.J. Gorst :......................................................................46

LUNCHEON ADJOURNMENT PROPOSED..................................................47 LUNCHEON ADJOURNMENT................................................................47

3. Draft Freedom of Information and Data Protection (Amendments) (Jersey) Law 201- (P.40/2014)...............................................................................48

1. Senator I.J. Gorst :......................................................................49

1. Deputy M.R. Higgins of St. Helier:.....................................................49
2. The Deputy of St. Ouen:................................................................49
3. Senator I.J. Gorst :......................................................................50 The Attorney General:........................................................................50

2. Senator I.J. Gorst :......................................................................51

1. Connétable J. Gallichan of St. Mary : ...................................................52
2. Senator I.J. Gorst :......................................................................52
   3. Senator I.J. Gorst :......................................................................53

4. Draft Companies (Amendment No.11) (Jersey) Law 201- (P.41/2014)................54

1. Senator P.F.C. Ozouf (Assistant Chief Minister - rapporteur):..........................54
2. Senator P.F.C. Ozouf :..................................................................56

1. Deputy R.G. Le Hérissier: ..............................................................57
2. Deputy J.H. Young:....................................................................57
3. Deputy M. Tadier :......................................................................57
4. Senator P.F.C. Ozouf :..................................................................58 The Attorney General:........................................................................58

5. Draft Public Elections (Amendment No. 5) (Jersey) Law 201- (P.46/2014)............62

1. Deputy J.M. Maçon (Chairman, Privileges and Procedures Committee): ...............62
2. Deputy J.M. Maçon:....................................................................63
3. Deputy J.M. Maçon:....................................................................63

4. Draft Public Elections (Amendment No. 5) (Jersey) Law 201- (P.46/2014): amendment (P.46/2014 Amd.)........................................................................64

5.4.1 Connétable J.L.S. of Gallichan of Trinity (Chairman, Comité des Connétable s):........64

5. Draft Public Elections (Amendment No. 5) (Jersey) Law 201- (P.46/2014) as amended

- resumption .............................................................................64

1. Deputy M. Tadier :......................................................................64
2. The Connétable of Trinity :..............................................................64
3. Deputy J.M. Maçon:....................................................................65

6. Deputy J.M. Maçon:....................................................................66

1. Connétable P.J. Rondel of St. John : ....................................................66
2. Deputy G.P. Southern :..................................................................67
3. Deputy G.C.L. Baudains:...............................................................67
4. Senator P.M. Bailhache : ................................................................67
5. Deputy M. Tadier :......................................................................67
6. Senator P.F.C. Ozouf :..................................................................68
7. The Deputy of St. Martin:..............................................................69
8. Deputy R.G. Le Hérissier: ..............................................................69

9. Senator L.J. Farnham :..................................................................69
10. Deputy S.Y. Mézec of St. Helier:....................................................69
11. Deputy J.M. Maçon:.................................................................70 The Attorney General:........................................................................71

7. Deputy J.M. Maçon:....................................................................72

8. Draft Public Elections (Amendment No. 5) (Jersey) Law 201- (P.46/2014): amendment (P.46/2014 Amd.)........................................................................73

5.8.1 The Connétable of Trinity :..............................................................73

9. Draft Public Elections (Amendment No. 5) (Jersey) Law 201- (P.46/2014) as amended

- resumption .............................................................................74

1. Senator P.F.C. Ozouf :..................................................................74
2. The Connétable of St. Mary:............................................................74
3. Deputy J.M. Maçon:....................................................................74

10. Deputy J.M. Maçon:....................................................................76

1. The Connétable of Trinity :..........................................................76
2. Deputy N.B. Le Cornu:..............................................................76
3. Senator P.F.C. Ozouf : ...............................................................76
4. The Connétable of St. Mary : ........................................................77
5. Deputy J.M. Maçon:.................................................................77

11. Deputy J.M. Maçon:....................................................................78

1. Senator P.F.C. Ozouf : ...............................................................79
2. Deputy G.C.L. Baudains: ............................................................79
3. Deputy M. Tadier :...................................................................79
4. Senator L.J. Farnham : ...............................................................80
5. Deputy J.A. Martin: .................................................................80
6. Deputy J.M. Maçon:.................................................................80

12. Deputy J.M. Maçon:....................................................................80

1. The Deputy of St. Martin : ...........................................................81
2. Deputy N.B. Le Cornu:..............................................................81
3. Deputy M. Tadier :...................................................................81
4. Deputy S.Y. Mézec :.................................................................82
5. The Connétable of Trinity :..........................................................82
6. Deputy G.C.L. Baudains: ............................................................82
7. Deputy J.M. Maçon:.................................................................82

6. Residential rental property: minimum standards and a register of landlords (P.42/2014)...............................................................................83

1. Deputy M. Tadier :......................................................................84

2. Residential rental property: minimum standards and a register of landlords (P.42/2014): amendment (P.42/2014 Amd.).............................................87

1. Deputy A.K.F. Green (The Minister for Housing):......................................87
2. Deputy M. Tadier :......................................................................89
3. The Deputy of St. Ouen:................................................................90
4. The Deputy of Trinity :..................................................................91
5. Deputy G.P. Southern :..................................................................92
6. Deputy G.C.L. Baudains:...............................................................93
7. Connétable J.M. Refault of St. Peter:...................................................93
8. Deputy R.C. Duhamel: .................................................................94
9. Senator P.F.C. Ozouf :..................................................................96
10. Senator F. du H. Le Gresley:........................................................96
11. Senator P.F. Routier:................................................................97
12. Deputy A.K.F. Green................................................................97

ADJOURNMENT................................................................................99

[9:30]

The Roll was called and the Greffier of the States led the Assembly in Prayer. PUBLIC BUSINESS – resumption

1. Draft Public Elections (Expenditure and Donations) (Jersey) Law 201- (P.36/2014) The Bailiff :

So, we come back to the Order Paper and the next matter is P.36: Draft Public Elections (Expenditure and Donations) (Jersey) Law, lodged by the Privileges and Procedures Committee. I will ask the Greffier to read the citation.

Senator P.F.C. Ozouf :

May I just confirm one thing? Can I just confirm that the order of business that we are now taking is P.36, P.28, P.40 and P.41?

The Bailiff :

And P.46.

Senator P.F.C. Ozouf :

And 46. Thank you very much. The Bailiff :

Then we return to P.42. Senator P.F.C. Ozouf :

Thank you.

The Greffier of the States:

Draft Public Elections (Expenditure and Donations) (Jersey) Law. A Law to regulate the expenditure of and donations towards the election expenses of a candidate in a public election. The States, subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law.

1. Deputy J.M. Maçon of St. Saviour (Chairman, Privileges and Procedures Committee):

This draft law with a few amendments that I will identify as the Assembly goes through the Articles, re-enacts the 2 sets of Triennial Regulations on election expenses that were approved in 2008 and 2011. The 2011 Regulations expire in July and it is important that replacement provisions are put in place before the elections in this autumn. Before 2008 there were no regulations of election expenses and I hope there is a general consensus that the system put in place in 2008 has worked successfully. The P.P.C. (Privileges and Procedures Committee) is not aware of any significant difficulties that have been identified with the system and it has undoubtedly prevented candidates spending excessive amounts on their campaign as occasionally happened in the past. The legislation has also introduced regulation of third party spending although P.P.C. is not aware of any significant spending by third parties in Jersey elections. I hope that all Members agree that it would be quite unacceptable to allow the Triennial Regulations to expire and not be renewed. I trust that Members will support this draft law today and I will summarise the revision as the Assembly deals with the Articles. I propose the principle.

The Bailiff :

Are the principles seconded? [Seconded] Does any Member wish to speak on the principles? Yes, Senator Breckon.

1. Senator A. Breckon:

Some Members may wonder why this is necessary at all but I can say in 2002 I witnessed a Senatorial election where expenses were getting out of hand. We talked yesterday about whether Members may be paid a sum of money but there were some very, very serious amounts of money being spent. We are talking about an Island-wide mail shot in an envelope addressed with electoral roll numbers on, and there was a considerable amount of work went on behind the scenes to produce that and it was delivered by the Post Office on the Saturday before the election, to individualised to electors and they were very, very expensive combined with that. The reason I say that is because following on from that in 2005 there was another amount of money thrown at publicity and other things. What it was doing was if the ordinary person wanted to stand, and I am not saying necessarily that the electorate would believe all the publicity that was showered on them, but then an ordinary person may have taken the view that: "Well, I cannot compete with that. I am working, I do not have the time to do whatever else it is and I do not have the money to spend." At the time, I think, in 2002, the sum that was rumoured was £20,000 was spent on a campaign in a Senatorial election. That was getting to the stage where something had to be done and that is to remind Members of why this is in place because it restricts you. You do not have to spend anything like that at all, you do not have to spend anything at all if you do not want to, and P.P.C., not just this one but previous ones, have stepped in and ensured that whatever candidates have to say gets distributed throughout the Island without them having to go to a great deal of expense and some trouble in preparing that. So, I would just remind Members of that because, as I say, things were not in place. The other thing that was not in place was, I think it was called "Elect Jersey 2005" which is something that emerged. I think there was a meeting in a carnation nursery somewhere and some people threw some money in the pot to set up their website and do publicity for that, and again, none of this needed to be declared; who they were, what they were doing and whatever else. So it is good in some respects that this is now regulated because it was getting silly, you could not get past some roundabouts for posters the size of a furniture van. It needed to calm down a bit from where it was. I hope, bearing this in mind, that Members will also take this into consideration because the general public are not that stupid; with leaflets and being bombarded with stuff and adverts, perhaps they would just like to speak to you instead. So maybe Members would consider some of that as we run towards the end of the year and bear this in mind; although amounts are in there, in the various Articles, you do not have to spend that, you do not have to spend any, you can do it fairly basically and maybe there is an argument for not just giving it to others to have this publicity machine and to get back to basics. It used to be that family and friends

used to go around and distribute stuff like that, and hopefully Members will bear that in mind and we will get back to where we were because I think it is wrong if Members who can afford it and other people who are standing throw money at the elections because that is not the way, I do not believe, it should be done. It should be back to basics. So I think this is worthwhile but I hope Members find that useful. That is the reason we have got here because it was getting silly. We had people with lots of money who were to prepared to spend it which was, in my opinion, wrong. So these things are very necessary. Thank you.

2. Deputy N.B. Le Cornu of St. Helier :

I would hope, at the nominations, that it is indicated to candidates exactly how much they are allowed to spend and that these Regulations are brought to their notice. I think it is very important that perhaps a letter is handed to the individuals so that they know that that is very, very clear and then there will be no possible breach. Thank you.

The Bailiff :

Does any other Member wish to speak on the principles? No, then I invite the Chairman to reply.

3. Deputy J.M. Maçon:

Can I begin by thanking Senator Breckon for providing some of the background to these Regulations and that is welcome. As for the request from Deputy Le Cornu, it is my understanding that normally most candidates are advised about what the election expenses are but I am quite happy to go back and double-check and make sure that that is the case in the future. But I am certain that is probably the case as it is.

The Bailiff :

Very well. All those in favour of adopting the principles, please show? Those against? They are adopted. This is a matter for the Corporate Services Scrutiny Panel, the Chairman of which is Senator Ferguson. Is there a Vice-Chairman?

The Deputy of St. Ouen (Vice-Chairman, Corporate Services Scrutiny Panel): On behalf of the Corporate Services Panel, we do not wish to scrutinise this.

The Bailiff :

Thank you, Deputy . Then, Chairman, how do you wish to propose the Articles?

2. Deputy J.M. Maçon:

Can we start with Articles 1 and 2 and the schedule, please?

The Bailiff :

Yes.

Deputy J.M. Maçon:

Thank you. Article 1 sets out the definition and it should be noted in particular that the legislation only applies to election for Members of the States and not for public elections for Centeniers or Procureurs du Bien Public, for example. Article 2 gives effect to the schedule and the schedule defines donations and expenses. There are no changes of substance in the 2011 Regulations, and I would just point out a few key points. Goods and services provided at below market value are treated as a donation and must be assessed as part of the candidate's expenses. It is nevertheless worth noting that paragraph 6 of the schedule allows volunteers to continue to provide assistance for candidates to preserve the long tradition of this assistance provided to candidates. In addition, if a candidate reuses material that was declared in an earlier election, there is no need to declare these again as part of the expenses for election when they are reused. I would like to propose those parts.

[9:45]

The Bailiff :

Very well. Are Articles 1 and 2 in the schedule seconded? [Seconded] Does any Member wish to speak on those Articles? All those in favour of adopting Articles 1 and 2 in the schedule, please show? Against? They are adopted.

3. Deputy J.M. Maçon:

If I can take Articles 3 to 8 now. Thank you. These Articles define election expenses as any expenditure to promote the candidate's own election or to prejudice the chances of other candidates. The actual monetary limits in Article 4 have been increased in line with inflation from the 2011 amounts. There is a new regulation-making power that will enable the amounts to be uprated at regular intervals, no doubt before every general election. This part of the law also sets out the requirements to make a declaration of expenses after the election so that expenses incurred by candidates are in the public domain and can be verified if necessary. Thank you. I would like to propose Articles 3 to 8.

The Bailiff :

Are they seconded? [Seconded] Does any Member wish to speak on any of those Articles? Very well. All those in favour of adopting Articles 3 to 8, please show? Those against? They are adopted.

4. Deputy J.M. Maçon:

If I can then take Articles 9 to 13. These Articles mirror the provisions for candidates but in relation to third parties. It is important to explain the definition of a third party. If a person gives money or help to a candidate with the candidate's knowledge, the expenditure in those cases is part of the candidate's expenses and not a third party spending. Third party spending only occurs when a third party spends money to promote the chance of a candidate or prejudice the chance of another without the knowledge of the candidates concerned. There is, in practice, no evidence of any significant spending of this nature in Jersey in the past elections but failure to regulate third party spending would leave a significant loophole in the legislation. Article 10 indicates that third parties can spend up to 50 per cent of the amounts that candidates in the election concerned are allowed to spend. As with candidates, a declaration of third party spending must be made to the Judicial Greffier. I propose Articles 9 to 13.

The Bailiff :

Are they seconded? [Seconded] Does anyone wish to speak on Articles 9 to 13? Very well. All those in favour of adopting Articles 9 to 13, kindly show? Those against? They are adopted.

5. Deputy J.M. Maçon:

If we can now take Articles 14 to 20. These Articles contain provisions about offences and also set out in Article 16 that the Judicial Greffier must make the declarations available for public inspection so there is transparency in the system. Article 17 sets out the arrangements that P.P.C. must make to circulate manifestos and I can confirm that this will be done again in 2014, and through the website - and I hope those listening will take this down - of the www.vote.je website which we hope will become a centre for people trying to find out about election information. Though I again just remind that a hard copy as usual will be delivered to all households as is the normal practice. Article 18 contains important new provision about the consequences of conviction. This provision could not be included in the Triennial Regulations but is included in this draft law. As can be seen, a person who has been elected but who is convicted of an offence of breaching this law will be disqualified from office. P.P.C. considered whether a discretion should be given to the courts to judge the seriousness of the offence but concluded this would not be

appropriate and would put the court in a difficult position as it would be given the power to determine whether or not a person should remain a States Member which could be seen as drawing the court into the political arena. On balance, P.P.C. concluded that it would be better to make the disqualification automatic but to include the provisions in Article 18(3), that a person disqualified can stand again in the subsequent election. This would allow the electorate to judge the seriousness of the offence committed. P.P.C. is confident that, if approved today, this law will be sanctioned by the Privy Council in July and be in force this autumn but the commensurate provision will fall back to the provision in case there is a delay. If this happened, P.P.C. would ask the Assembly to renew the Triennial Regulations in September to ensure that the regulations of expenses remain in place for the elections. I propose the remaining Articles.

The Bailiff :

Are they seconded? [Seconded] Does any Member wish to speak on any of Articles 14 to 20? Deputy Le Hérissier.

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

I would like to speak about Article 18. I find one of the most excruciating parts of the current process is where people are - not invited - but are basically asked to state their criminal convictions in front of the electorate which then becomes some kind of quasi-jury in deciding - assuming it is not a totally forbidding proposition - whether that person is suitable. I have always had doubts about that although I was involved in the Legislation Committee when that was originally suggested, and it strikes me that Article 18 has resonance in that respect. I think, quite frankly, it is very wrong. Either the breaking of the law in that respect is seen as absolutely wrong in terms of running for election or it is not. But to give the discretion, in a sense, to a public meeting to make up their mind whether or not a person, having been forbidden to run .. sorry, having been expelled and then having provoked a by-election by that expulsion, to then say: "Well, you can get another chance and put yourself forward to see whether the public feel, as some kind of quasi-jury, you are okay to run again." I think is very wrong and I think we should be up front with people and say one way or the other and not lead to this, quite frankly, excruciating public kind of debate. Thank you.

The Bailiff :

Does any other Member wish to speak on these Articles? Senator L.J. Farnham :

Are we not dealing with the schedule now?

The Bailiff :

No, the schedule has already been dealt with. Does any other Member wish to speak on any of those Articles? No, then I invite the Chairman to reply.

2. Deputy J.M. Maçon:

With regards to the comments of Deputy Le Hérissier, just to be clear that the actual announcing of a conviction at a public meeting is under the Public Elections Law and is not under this particular law, although I appreciate I think the Deputy did know that but I just wanted to clarify that for Members. Again, it is a very difficult situation to decide in order to make sure that these Regulations have teeth and have some effect to hold candidates to behave in a proper manner, and there has to be some sort of consequence. After consideration, P.P.C. came to this particular mechanism. If Members disagree with this particular mechanism, they do have the opportunity to vote against it. But again, through it all I think it is very difficult to come up with a better model unless you particularly want to debar someone, when it can be the case that perhaps they have only spent 50 pence over the maximum limit.

Male Speaker:

Why charge them? Deputy J.M. Maçon:

Why charge them? Again, because we discussed this and if you were to leave some sort of discretionary amount, say for example there would be a discretion of perhaps plus 10 per cent, then the new threshold will just become plus 10 per cent, and therefore all you are doing is increasing the overall amount. On the other hand, if you were to leave it in the court's discretion, as I tried to outline, again, you could be dragging the court into a political arena which is why P.P.C. came to the decision that have a fixed amount and if .. I would also like to draw Members' attention that under Article 15, with defences to that in Article 14, it does point out that there is a defence. So, for example, if a candidate did everything reasonable, so, for example, got an estimate of how much their posters would cost and put that down as their election expenses, and subsequent to the election that came to over the amount, then there is a defence to say reasonably, the candidate did everything reasonable in order to prevent that. So there is a defence, it is not entirely a guillotine motion in that regard. So, this is what P.P.C. is proposing and I ask Members to adopt it. I maintain the Articles.

The Bailiff :

Do you wish to have Article 18 voted on separately? Deputy R.G. Le Hérissier:

Yes, please, Sir.

The Bailiff :

Yes. Very well. Well, then, we will take, first of all, Articles 14 to 17 inclusive. All those in favour of adopting those Articles, please show? Those against? They are adopted.  Then we come to Article 18 which is the matter upon which Deputy Le Hérissier spoke. All those in favour of adopting Article .. the appel is called for then in relation to Article 18. I invite Members to return to their seats and the Greffier will open the voting.

The Bailiff :

Then Articles 19 and 20 we will take together. All those in favour of adopting those 2 Articles, kindly show? Those against? They are adopted. Do you propose the Bill in Third Reading, Chairman?

6. Deputy J.M. Maçon:

Yes. I would just like to thank all of the offers of support that have been put in to bring this all together, from the Greffier to the Law Officers' Department. I maintain the proposition and ask the Members to support it in Third Reading.

The Bailiff :

Seconded in Third Reading? [Seconded] Does any Member wish to speak in Third Reading?

1. Senator L.J. Farnham :

I am not sure if I am just going slightly off the beaten track but while welcoming these changes I was wondering if the P.P.C. were planning on bringing similar in to govern the expenses in relation to referenda.

2. Senator A. Breckon:

Just to congratulate the Privileges and Procedures Committee. Obviously there is a lot of work gone into this to bring it to where it is, and it is good and sensible to have that framework because generally people play by the rules, as it were. But I hope we are not moving away from some of the traditional things where family and friends help with candidates running around and whatever they are doing, but what has crept in is the public relations, the PR, the spin, the technology and things like that and it would be a shame if that took over. It is not always easy to identify, if somebody provides some support like that to someone, what it is worth. But I think it is probably better to keep it to basics. Finally, the Privileges and Procedures Committee, through gov.je, do provide basic facilities for candidates to get their information out there, and the thing about that is it is a level playing field. Candidates do not have to pay for it and each gets the same opportunity whether it is a picture or a number of words or whatever they want to say. That comes back to where I started from about not throwing money at the elections, and there are some restrictions in there, but those are maximums of course, nobody has to spend anything like that amount although it is there. Perhaps sitting Members of this Assembly could set an example with that; good rather than bad, and hold that up as a beacon to other candidates to say: "Well, if you want to stand you do not need to have thousands of pounds to be able to do so, you can do with your own endeavour, as it were, and be on a fairly equal basis." So I think this is welcome and it will be on the statute and it is something that will move forward. But I would ask Members to bear in mind what I have said because I think that is the sensible way to proceed. Thank you.

3. Deputy R.G. Le Hérissier:

Just a minor point and I am breaking the rules again. I notice you can reuse rosettes and election literature. Is the Committee going to outlaw the use of old photographs? [Laughter]

The Bailiff :

Does any other Member wish to speak? Yes, then I invite the Chairman to reply.

4. Deputy J.M. Maçon:

With regard to Senator Farnham 's question, the Committee is undertaking work of reviewing and looking at the Referendum Law at the moment, however we do not have any proposals to regulate the spending at this time, though I am thankful to the Senator for raising that point and I will go back to the Committee and ask them to consider that aspect. Again, I thank Senator Breckon for his comments, and with regard to Deputy Le Hérissier, again I think it is down to the public to decide how accurate a photograph is or is not, and therefore, I propose in Third Reading these Articles of the law.

[10:00] The Bailiff :

All those in favour of adopting the Bill in Third Reading, please show? Those against? The Bill is adopted in Third Reading.

2. Draft Public Employees (Pensions) (Jersey) Law 201- (P.28/2014) The Bailiff :

So we come next to P.28: Draft Public Employees (Pensions) (Jersey) Law, lodged by the States Employment Board, and I will ask the Greffier to read the citation.

The Greffier of the States:

Draft Public Employees (Pensions) (Jersey) Law. A Law to make new provision in relation to pensions and other benefits payable to or in respect of certain employees and for collective purposes. The States, subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law.

1. Senator I.J. Gorst (The Chief Minister):

I will start with some good news and then I am afraid the rest of my speech is not so positive. Today, more of us can expect to live into our 80s and 90s. In case you were wondering, that is the good news. [Laughter]

Male Speaker:

Not if we have to be here. Senator I.J. Gorst :

I will ignore the comments to the side of me. Some of us may feel we are approaching that age, the length of time we have been sitting in here. But we are living longer, and of course while that is positive, it is putting funding pressures on our pension schemes. I believe that we need to face up to how these demographic pressures are impacting pensions and our public services, and today this law looks at how those demographic pressures are impacting the Public Employees Contributory Retirement Scheme, which I will refer hereto as P.E.C.R.S. (Public Employees Contributory Retirement Scheme). The States Employment Board - again, I will refer to them hereto as S.E.B. (States Employment Board) - have considered the issue and it is clear that urgent action needs to be taken to address an underfunding situation which sadly is getting worse. In August 2012, the S.E.B. established a technical working group to develop options for change to P.E.C.R.S. We requested that any proposal should be sustainable, affordable and fair for the longer term. For 2 years work has been ongoing to develop, negotiate and bring forward proposals that were intended to address these issues. The proposals developed have wide implications for employees, for the States and of course thereby for taxpayers. This Pension Law that we are debating today is an

enabling law which will enable the issues affecting the pension scheme to be addressed within future Regulations. As I have said, the remit was that any changes need to be sustainable, provide proper risk sharing arrangements and a fixed contribution cap for the employer, and I believe and S.E.B. believe that this law will achieve just that. I hope that Members will forgive me for speaking longer than usual because these are important changes. It is important that Members and the public and staff understand them. So what is the problem? Well, P.E.C.R.S. is no longer sustainable in its current form. Over the last 30 years the cost of providing pensions has increased by around 30 per cent. In 1980 the average 60 year-old man could expect to live to be 76. Today the same man could expect to live to be 87, an extra 11 years in retirement, and from that simple example we see that people are spending much longer in retirement, yet this scheme and the contributions into the scheme have not changed over this time. This is no longer, therefore, sustainable. There is a contribution shortfall for every new member joining the scheme. The problem is growing and needs to be addressed, and, we believe, needs to be addressed urgently. In 2011 the shortfall was estimated to be 1 per cent of pensionable salaries for every new entrant. It is now estimated to have grown to 4 per cent of pensionable salaries. Pension benefits are being promised which are not being paid for and this is unsustainable, and this new scheme addresses that unsustainability. So what process have we gone through over those 2 years? In 2011, the then S.E.B. asked the Treasurer of the States to establish a technical working group to develop options for change. Through joint working of representatives of the P.E.C.R.S. Committee of Management and the Treasury, these  proposals  have  been developed,  of course,  with the steer  and policy direction from S.E.B. So, this morning I would like to take this opportunity to thank the retiring Chairman of P.E.C.R.S. Committee of Management. He has overseen the development of these proposals and he has contributed in that role to this scheme over the last 24 years, and I have had the pleasure of working alongside him on the Committee of Management. I know that we are grateful for his knowledge and expertise which have been invaluable over this period. I would also like to thank the Treasurer of the States and the Chair of the Joint Negotiating Group together with the contributions of the members of the Technical Working Group who have led us to this point today. So the Technical Working Group proposals were brought back to S.E.B. in November 2012, and over the last year positive negotiations have been ongoing with that group, with the Joint Negotiating Group, offering changes and refinement of that benefit package until we arrive at the final proposals within the cost envelope which was initially set by S.E.B. Members might be aware that trade unions are currently balloting on the final offer. So, to the law. Pensions are currently linked to final salary. What we are proposing today is to link public servants' pensions, that is all States employees, with the exception of teachers, to the actual average earnings over their career, and this scheme is called a Career Average Revalued Earnings scheme. This law provides for the introduction of that scheme and the protection of accrued rights earned up to the date of change. As

I have said, it is an enabling law. The benefits to be provided will be specified in the Regulations, which we hope will be lodged in July, and we hope to debate those in September. However, that is, as I have said to Scrutiny, a challenging timeline and we will see how that goes. We need to progress with the law at this time so that we can deal with the growing funding pressures, as I have said, with some urgency. The introduction of a career average scheme will not, on its own, deliver an affordable pension scheme; other things need to change, and of course there are implications for staff from those changes and for the States, and therefore, by default, the taxpayer. As people are now living longer it is necessary for retirement ages to increase. In future, the retirement age for non-uniform members in the scheme will be linked to the State retirement age, which is due to rise to 67 years, and the law provides for these changes to be linked to that age increase. Currently over 3,500 scheme members can retire at age 60 with unreduced benefits. This needs to change. In future, the earliest retirement age at which non-uniform members will be able to receive unreduced benefits will be 65, and over 4,100 current employees will have their retirement age increased to 67. The scheme was designed in an era when most people came to work full-time for the States on leaving school and stayed working for the States often getting promotional increases until the day they retired. That is the existing P.E.C.R.S. scheme. It was designed in a time, of course, when more people got married and more people stayed married. Today people have more varied lives and careers, working part-time or term-time, taking career breaks and moving jobs between the private and public sectors. Also, not everyone gets married these days and more people get married after retirement. The pension scheme therefore needs to adapt to the way people live and work today. We believe the proposed changes will modernise the scheme in many ways so that cohabiting partners and marriages after retirement will be recognised, and the Career Average Pension Scheme will better be able to deal with this wide range of employment patterns and wide range of social living that we see today. The cost of providing pensions has increased and it is necessary for scheme members to contribute more towards the benefits that they will receive in later life. Under the detailed proposals, non-uniform employees will see their contribution increase from 5 per cent of pensionable pay to 8 per cent, and uniform members from 5 per cent currently to over 10 per cent. Increases will be phased-in over a period of between 3 and 5 years for existing staff, and new staff employed after 1 January 2015 will pay the higher contribution rates immediately. That obviously means that we need to do the other work that I talked about earlier. Employees will pay more, work for longer and receive a pension based on their career average salary. It is right that employees are asked to contribute in these ways; we need to do this now to address the affordability issues that the scheme faces. As I have said, of course, these changes will also need to be affordable to the States and to taxpayers. The employer is currently committed to paying 15.6 per cent of pensionable salaries to fund public service pensions. At present, 2 per cent of this is being used to repay something that we call the pre-1987 debt, but the intention has always been that this would go to funding benefits once that debt had been repaid. At the time of that agreement the arrangement was affordable. This, as I have said, is no longer the case. The full 15.6 per cent of pensionable salaries is now required to fund the benefits package. In fact, 16 per cent is required for the C.A.R.E. (Career Average Revalued Earnings) proposals. This is an additional 0.4 per cent of pensionable salaries. A further 2 per cent of pensionable salaries is required to fund the existing States commitment to repay the pre-1987 debt. In total, therefore, an additional £6 million per annum is required under the proposals. This, we have agreed with departments, will be funded by corresponding departmental savings, and therefore there will be no additional cost to the taxpayer from the proposals. Of course, there will be the opportunity cost of those saving amounts. New risk sharing arrangements will be introduced which, for the first time, put a formal cap on the employer contribution. The employer contribution, it is intended, will not rise above this cap. The employer cost cap will be 16.5 per cent of pensionable earnings, and I have an amendment and Deputy Noel has a subsequent amendment to the law to give effect to that so I will not speak about that now. The proposals include in-built mechanisms to deal with the risks of managing the pension scheme. These risk sharing arrangements have been carefully planned and work as a package to provide a sustainable scheme. In future, surpluses will be retained to provide a buffer against future deficit and the scheme will be able to reduce the inflationary increase to pensioners and the future benefits could be reduced to maintain affordability. These are useful tools to keep the scheme sustainable. A wide range of professionals are covered by the scheme, including engineers, police officers, hospital consultants, nurses, doctors, allied health professionals and many others but not teachers, as I have said. The Island relies on the ability to attract staff from the U.K. (United Kingdom) for healthcare provision. This law will change the public service pension scheme in Jersey in a way that is consistent with the changes being implemented in the U.K. It will enable the Island to continue to attract the workers it needs to provide key public services. We need to provide decent public service pensions. The scheme, of course, as well is of macroeconomic significance for the Island as around one in 3 households in Jersey have some reliance on a public service pension scheme. The median pension paid from P.E.C.R.S. last year was around £8,700 per annum. If we do not provide decent public

service pensions, of course, costs may raise in other areas of public service provision. I am very grateful to the work that Scrutiny have undertaken in reviewing these proposals. I know that they have a very busy workload and I am, as I have said, extremely grateful for the way that they have reviewed these proposals, for the work of their expert advisers and the way that they have done it in a very timely manner. I am very grateful for that. I know that the Chairman is not here but the Vice-Chairman is and I wish to thank him for the way that they have led that review and supported these proposals. Of course, I expect they will be saying something during the course of this debate, so if I can paraphrase their extensive, detailed and good report, I think it says we should accept this law but they will have something to say and they will be keeping a very close watching eye on the Regulations in due course when they come forward where most of the detail is contained.

[10:15]

I am grateful for that because I know that we will get a better scheme as a result of that. The need for these changes has become urgent. During the last 2 years, as I have said, the contributions shortfall for  new entrants has widened, and widened significantly. The scheme is promising benefits which are not affordable and which are not being paid for. We must therefore deal with the issue and deal with it now to prevent further deficits, which, under the current Regulations, the States could be asked to pay for. It is only by modernising the scheme through a combination of introducing a more affordable and fairer career average pension scheme, raising retirement ages and increasing contributions that it can be sustainable, affordable and fair, and we believe that that is the sort of pension that we should be providing for our employees. I have said, of course, it has changed to reflect the way that we live and the way that we work today. I strongly recommend this law, and, of course when I get to it, our amendment in due course. Thank you.

The Bailiff :

Is the principle seconded? [Seconded] Deputy J.H. Young of St. Brelade :

Sir, may I ask your guidance on the issue of conflict of interest? Obviously myself as being a member of the existing scheme which there will be a transfer arrangement for. Do Members who have that ..

The Bailiff :

The position, as I understand it, is that there is no conflict of interest for those who are in receipt of a pension. They will not be affected by these changes at all. However, those who are still working and therefore accruing a pension contribution will be affected by the Regulations when they come into force, and it is clear from this law that the whole purpose of this law is to allow these Regulations to be made to change the system. So I consider that anyone who is still working and therefore earning, will be affected by these, therefore there is a direct financial interest either for somebody who themselves or their wife or co-habitee is a current employee of the States and paying into the pension scheme.

Deputy J.H. Young:

So just to clarify then. If a family member then is currently working within the scheme and paying pension contributions, then the Member has a conflict.

The Bailiff :

When you say "family member" the Standing Orders referred to a spouse or co-habitee. Deputy J.H. Young:

Yes, but if they are not actually paying pension contributions but might be in the scheme, do they have a conflict of interest? Not currently paying contributions, not in the scheme because of zero hours contracts, but then may come into the scheme.

The Bailiff :

It is very difficult to talk in the abstract there as to how likely it is, but in essence, anyone who is now in the scheme clearly has an interest. I cannot tell from your question how likely it is that such a person may go in the scheme in the future. I suppose anyone might take up employment with the States in the future; they clearly do not have an interest.

Senator L.J. Farnham :

Can I just check P.P.C. are not going to be lodging the proposition to put States Members in the scheme any time soon?

Senator I.J. Gorst :

It was remiss of me in light of Deputy Young's comment. My wife is on the Nursing Bank and so therefore may be affected by these changes should she do any future work there. Of course, this is worsening benefits and asking for staff to pay more.

The Bailiff :

Yes, but, Chief Minister, if I may say so, that is not the point because somebody might vote against the proposition for that reason. So there is a financial interest.

Senator I.J. Gorst :

I will not be one of those people. The Bailiff :

So I think that if you have a spouse or co-habitee who is currently in the scheme and contributing to the scheme, then there is a direct financial interest. Otherwise, it seems to me, there is not.

Senator L.J. Farnham :

To be clear, do Members just have to register that interest? The Bailiff :

No, they cannot vote they must, for the moment, withdraw. Senator A. Breckon:

Could I say that, I think we did exchange notes, I think I may possibly fall into that category and rather than be any grey areas I would rather not take part in this debate and declare that interest.

The Bailiff :

Very well. Senator I.J. Gorst :

Sorry, could I just ask you to restate your advice? Did you say that such a Member would need to withdraw?

The Bailiff :

If the spouse is currently a member of the scheme [Laughter] and is paying in, so that she, in your case, will be affected by any changes, then I think there is a direct financial interest. But from what you have told me at the moment, she is not.

Senator I.J. Gorst :

I just wondered if the Chair was a member of the scheme. The Bailiff :

The Chair, luckily, will not be affected by these changes. [Laughter] I did consider it but the Chair will  be in receipt of a pension,  he hopes, by the time these changes come into effect. [Laughter]

Senator I.J. Gorst :

I fear that your ruling gives me a slight difficulty because, although I do not wish to talk about my wife's personal circumstances, she has a contract of employment with another institution which is not the States and they are her, at this point, main employer, but her name does remain on the Nursing Bank at the hospital. So technically, they could call upon her to do a night shift this evening, for example, and I fear that part of that remuneration may go into a pension. I will have to find out because I do not know if that is the case or not. So if I could just refer to my officers, it may be that I need to call upon the Vice-Chair to act as rapporteur during the summing up but I will do my best to find that out.

The Bailiff :

Just to be clear, it is only where there may be a direct financial impact on a spouse or co-habitee as a result of these changes. Whether the changes are beneficial or not is beside the point because it may be perceived as affecting the way in which a Member votes.

Deputy R.G. Bryans of St. Helier :

Can I just clarify, because my wife is employed and would be in that circumstance. But as an ex- pension expert from my background, because I used to serve on the P.E.C.R.S. board as well, I was wondering if it is still possible to make comment as opposed to voting on the actual thing?

The Bailiff :

I fear not. It says you must withdraw where it is a direct financial interest. Deputy R.C. Duhamel of St. Saviour :

Could I declare an interest on behalf of my wife and withdraw?

The Bailiff :

Yes. Very well. Now, does any Member wish to speak on the principles?

1. Deputy J.H. Young:

Thank you for clearing that up. Just for the record, my wife does work but she is on a zero hours contract and, at the moment, tells me she has no intention of seeking a permanent one. But zero hours do not pay pensions. So I consider I can carry on under your ruling. I think this new scheme is an excellent plan. I think all of us have realised that the world has changed, and clearly the model is the exemplary model of the Hutton Report. I am not quite sure of Lord Hutton's history but clearly he is an expert and over a very long period of time ..

The Bailiff :

Sorry, we are not quorate, Deputy . I have asked the Usher to call back Members. We are now quorate, yes. Very well, please continue, Deputy .

Deputy J.H. Young:

Thank you very much. Just to say, the principles of the Hutton Report, which are set out in page 6 of the proposition, are clearly exemplary ones. Obviously the entire purpose is to make sure that there is a long-term fund for the long-term funding of people in retirement and provide for benefits for those people whose circumstances in life where personal disasters strike down and people unfortunately die in service, or find themselves unable to work through ill health, the scheme makes provisions for those exceptional cases. I think Jersey has been well ahead of this under the existing pensions rules.  Of course it has been a member of the transfer club which is this body of pension providers, principally, I think, in the public sector, I do not know whether it is exclusive to the public sector, in fact I remind myself it is not, where the idea of transferability is really important. That people can travel through life, take up different employments and take their benefits with them in a serious way, and that is very important because I think statistics show that people that do not do that, who travel through life, do not have pension transfer arrangements, end up with less than half the benefits of those where proper arrangements apply. So, I think some people may have a view: "Well, all this is being done at public expense." I would argue, not so, because if there are failures in occupational health schemes, what that means is that the final costs of supporting people in retirement falls on the taxpayer. Falls on the taxpayer and, in our case, the Social Security Fund. So I think everybody has a vested interest whichever part of life they are employed in, whether in the public sector or the private sector, to take up occupational pension schemes. Of course, in Jersey, the public sector and the various bodies which are listed in the appendix, including a number of the companies and so on that we have created, wholly-owned businesses to take on public services, including those, they are all .. it is much bigger than the public sector elsewhere. So it is a very, very significant thing economically. But I have got to make a comment here. I think it is very important that in this coming forward that we do recognise the desperate need to have in place some sort of occupational arrangements for those who do not fall within the scope of this scheme. I know I have raised that several times with the Minister for Social Security. I think he accepts that on principle but he tells me it is down the list, at the moment it is not a priority. We have a fantastic hard working Minister for Social Security but I really hope that when this is adopted, which I feel sure it will be, that the next Minister for Social Security will bring it up the priorities because we need decent occupational health schemes in Jersey for those people who are

not in the public sector. The Bailiff :

I am so sorry, Deputy , I think we have just gone inquorate again. Very well, I think we are quorate again if the Chief Minister thinks he can stay. If I may just say to Members, I am sure that all the States employees would regard this as a pretty important debate [Approbation] and I would have thought they would be a little disappointed if States Members did not show more interest by being here.

Deputy J.H. Young:

Thank you. Perhaps I ought to apologise for the House. It seems every time I start to speak the House goes inquorate. But I do think this is a desperately important subject. There are millions of pounds involved here. There are thousands of people involved in the scheme, and their families and their dependents all depend on it. What I am saying is that we have got an excellent model here and I am trying to celebrate that, I think. We have to adjust it through the changed circumstances, there is no question, because the final salary scheme, of which I personally, in my life, have benefited from, is unsustainable. We all have to accept that now, and therefore the change to a career average scheme is absolutely vital for the future.

[10:30]

So that in the future, those principles that I have spoken about, about benefit availability and all those things, all are there for future generations. Of course, the great thing in here under the Hutton Report, this is not being done by disadvantaging those people who have carried through their working life in the expectation that there would be final salary schemes, or final salary benefits. Those accrued benefits are clearly protected under the Hutton principles, and in my understanding of this law, they are going to be protected under this scheme. So we have people under these rules, as I understand it, what will happen is that once the Regulations are passed, on the operative day, those current employees will start to accrue pensions on the basis of a career average scheme and the pensions that they have accrued on final salary will be in the bank. They will get 2 pensions. So I have made my point that I think this needs to be mirrored in some way by some occupational pension scheme for those people who are not in the public sector and that can only come from Social Security. I know that because in my time in the private sector in Jersey I obviously discovered that it is really difficult to find pension schemes in Jersey, private sector cash contribution schemes, that pay a decent rate. I have a real question mark here. We all know we get a quarter of a per cent bank interest. When you get your statements on those cash contribution pension schemes the results look very poor, and yet when we look at the States accounts we find, oh, we can get investments on the Strategic Reserve. I do not know what it is, 11, 12, 14, 20 per cent. So the world seems to have created a situation where corporate players can get big gains and, of course, where is it coming from? It is people's money. It is coming from people's money.

The Bailiff :

Are we drifting a little? Deputy J.H. Young:

Yes, sorry, okay. Sorry, Sir, I will get back on track. There is a problem with private schemes so it is another reason why the principles of this scheme have wider application. Focusing in on a particular issue, this question of this scheme and risk caps, I would like the Chief Minister when he responds to tell us why is it that we need a contributions cap on members? Now, I can see the argument and we are obviously going to have that when we get to the amendments under Article 7.. sorry, I do not want to break the rules. I will talk generally. There is a contributions cap in here and clearly the Chief Minister has told us that there needs to be a contribution cap to protect the States' public cost. Of course, what we are also seeing here, this draft also includes a cap on members' contributions. Why have that, I ask. I would like the Chief Minister to explain that because I do believe that people should be able to put higher contribution levels into the scheme according to their circumstances. For example, under the tax rules, I cannot remember, over 50 or 55, you can put 50 per cent of your income into a scheme. You can do that on the cash contribution system and get tax relief on it. So I really want to be clearer about this question of this members' cap. Why do we need it? Is the Minister going to make sure that if it is approved the Regulations that come allow an arrangement that allows members to adjust their contributions to their own circumstances? I think really this is an excellent scheme and obviously its purpose is to make sure that the scheme continues for the future. I am 100 per cent behind it. The devil I think will be when we get to the Regulations. Obviously, we may have those this year, we may not, from the Chief Minister, but nonetheless I support the law.

2. The Deputy of St. Ouen :

First of all, I think as you have rightly said, Sir, you have already highlighted the importance of this particular proposition and, indeed, the debate because this is possibly one of the most significant pension reforms that the States has considered for many, many years. It is all credit to the States Employment Board and all of those involved, including employee representatives, to have been able to come to an agreement about how to deal with this particular issue. I would also like to thank the Chief Minister for his comments regarding the Corporate Services Scrutiny Panel and the work that we have undertaken. I think it is just worth reminding Members that this proposition was lodged on 11th March. A decision was taken very quickly by the Corporate Services Scrutiny Panel that this was a matter that should be the subject of a review. An adviser was appointed on 4th April. A number of public meetings were held with key stakeholders and, indeed, the review was completed and a report published on 12th May. That was really very difficult to achieve and my thanks must go to not only the scrutiny officers but, indeed, the expert adviser that we engaged to

help us review the matter and, indeed, also the individuals who contributed towards the review and attended public hearings. I hope Members have had time to consider the report that we produced, but the first thing I must say is we believe that the rationale behind the adoption of the draft law is compelling and, indeed, it would effectively provide in principle approval if this is agreed for the move from a final salary scheme to a career average revalued earnings scheme. I think the one problem we had, and I do not believe it was necessarily because of the limited time that we were able to undertake this review, but there was certain evidence that we sought that was not there or that we could not lay our hands on. One of the issues, which we will possibly discuss in more detail later, is around the proposed employer's contribution cap and what the impact may or may not be in the long term. Also, we identified that further clarity is required around Article 8(1) and I will again try and restrict my comments until we debate the Article on that particular matter. I think, more importantly, there is an issue about when the Regulations will be considered by this Assembly. I acknowledge the desire to move forward quickly and be able to implement the new scheme on 1st January 2015. However, as the Chief Minister has already said, unions are in

discussions with their members around the proposals and the draft law and everyone who has been involved with the development of this law also has asked for sufficient time that the Regulations can be considered before finally being debated in this Assembly. I think it is extremely important that although there is a pressure to start the scheme on 1st January 2015, that should not necessarily dictate how employees and others are involved in the discussions to ensure that the Regulations that are brought in to support this law are absolutely right and appropriate and will meet the needs of both the employer and the employee. As I say, because of the time constraints, what we have not benefited by is any Ministerial response to our review and the recommendations that were contained within it and also, equally, the States Members have not seen that response. One hopes and one draws from the comments made by the Chief Minister with regards to our review that he seems to be supportive of the work we have undertaken and hopefully in summing up he will comment on some of the findings and recommendations that are contained in the report. These are what I believe to be very constructive recommendations that have been not only produced and promoted by the panel but equally matters that the expert adviser that we engaged has raised, which we believe should be properly dealt with. Finally, the last comment that I would like to make is that when undertaking this review we came to identify that the P.E.C.R.S. and C.A.R.E. (career average revalued earnings) Scheme Committee of Management and the States Employment Board as the employer were receiving actuarial advice from the same actuarial firm, albeit that there was a suggestion that some Chinese walls were separating the different types of advice. Certainly, it is something that is not ideal and it is something that we highlight and suggest should be dealt with in pretty short order. Obviously, we all await the outcome of the ballot from the unions, but in the hope that they will support the views of the different groups that have been involved, then I do stand to support the principles.

3. Deputy R.G. Le Hérissier:

Yes, I think it is a significant moment and I think it reflects a fantastic amount of work for which the group ought to be praised. I think we have to bear in mind the kind of issues raised by Deputy Young. There is no doubt, and it was alluded to by Deputy Le Cornu when he referred to this book that has become very popular  at dinner parties by this French economist, Monsieur Picketty:

growing divisions in society. I think there is a real issue that we have a divided labour force and it is increasingly accelerating this tendency. People who are not in the pensionable sector, largely the private sector, the zero-hour contract people, they are increasingly going to find it difficult to put together a pension, let alone to put together a pension that represents different phases of their life. I think we have to be very careful if we are not to have a major growing division in society between those who are very well looked after in the public sector and those who are at the fragmented end of the labour market. That is growing in a big way and those are the people, remember, if they were earning enough are paying the taxes to pay for the public sector pensions in part. That could well lead to growing social resentment where you have this kind of division in society, and I think it has to be managed very carefully. That is why I am a great supporter - it is only a start; it will not stop the inequality totally growing - of schemes like auto enrolment, which I know in his very busy schedule the Minister for Social Security will, I am sure, before 15th October .. maybe he will not introduce it, but he will certainly, no doubt, study it very seriously. I really think we may have underestimated that because no one knows where the Jersey economy is going to go. It is in the nature of the kind of world that we live in now that it is a much riskier world. It is a world where there is not economic predictability as there used to be. You only have to look at countries like France which have wonderful welfare systems but there are real issues about how much longer they can keep paying for them. The next issue is I think there is another interesting issue within the provision itself. There is an assumption that manual workers, for example, can work longer and I do not think that is going to work. The notion that you can be digging trenches until you are 67 is just not on. There have to be other ways to manage that situation. We joke about T.T.S. (Transport and Technical Services) - not the Minister who we all know to be an exceptionally fine individual - but it is not on that kind of work people can keep up the same rate doing that kind of work. It is simply not on and we have to come up with innovative solutions. Similarly, there is no doubt and I have had constituents tell me that they worked in the emergency services and they are now spending more time on pension than they spent working in the service. That is illustrated in this

report. [10:45]

But again, the issue has to be looked at rather than cold turkey and people being told at 55 or 60: "It is now time to retire" because of this notion that you are no longer up to the physical challenge of the job, no longer up to the kinds of fights that were reflected in "Happy Valley" if anyone saw that police thriller last night where the sergeant got a real lambasting, the woman sergeant, several actually. It was all a bit compressed. So the idea that you cannot deal any longer with these physical challenges, again there has to be much more innovative thinking about the transitional jobs, the jobs as people move to retirement and move out of the front line. I do not think we have thought of that to the extent that we should have. We have simply said they are very generous pensions and we have to stop the cross-subsidies and so forth. As I said, there have to be more imaginative solutions. I do praise the group for this intense and immense amount of work, but I do hope they realise that there could be all sorts of consequences, foreseen and unforeseen.

4. Deputy A.K.F. Green of St. Helier :

Before I start, I would just like to, first of all, apologise but also correct the Deputy of St. Ouen because the S.E.B. sent out comments, albeit at the very last minute, last night. Well, yesterday afternoon, in fact. So we did make comments and I do apologise but Members do know that we have had a very, very hectic schedule. I am in a position, I think, to make several comments about the scheme, not only as a member of S.E.B. but also - and we have not heard this expression for a while because Deputy Fox used to use it a lot - in a former life I had experience of working with some excellent people in the public sector, for which the current scheme, the scheme that we are about to change, was not fair, is not fair and did not work. I refer to particularly ladies. I worked with a workforce of 400. The greater majority of people were ladies who worked, say, full-time up until they had their children and then went part-time. Their pension under the current scheme never reflected the contributions that they made while they were working full-time. It was only based on when they worked part-time because that was the last thing they were doing before they retired. So that was grossly unfair and this puts that right. It is interesting that Deputy Le Hérissier said something about people working in trenches until 67. Of course, the retirement age does change in line with longevity and all the rest of it, but this C.A.R.E. system, this new system, allows some more flexibility because people would have struggled on, if we can put it, in the trenches until retirement age. They could now legitimately choose to do something that pays a little bit less, a different job, or even go part-time, knowing full well that they have banked that money when they were working full-time that will be reflected in their pension. It is a career average, not a final salary. It is much, much fairer. Many of the rules that we have applying to the pension schemes go right back 200 years. I talk generally not just of Jersey but  in the U.K. They are just not appropriate today. This system is much fairer. It is much more affordable but, for me, it is the fairness that it gives. There are other unfairnesses being put right in this. For the best of intentions, when the pension scheme changed some time in the 1980s the existing employees were getting 60ths. For every year they worked, they got a 60th of their pension and the new employees got an 80th, and yet they were working alongside each other. It was down to the day you started work. You could have started work 2 days earlier and been receiving 60ths, and the person who started 2 days later was receiving 80ths. That was not fair. It was done with the best of intentions, it was not fair then, it is not fair now, and at least this new system puts everybody on the same accrual rate. I think that is another fairness. I would like to pick up also on whether we are creating inequity within the public sector versus the private sector. I think the public sector has to be a model employer and what we should be doing is encouraging the private sector employers, and there are some good ones who provide good schemes, to look at providing and assisting their staff in getting pensions into the future. I would like to pick up on a couple of other things as well. The comment from Scrutiny, I welcomed the Scrutiny report. It was an excellent report and I know that they are very positive overall about what we are doing. The fact that we had the same "company" advising us and the other group, there were not only Chinese walls in place. They were geographically separated by several hundred miles. This is a great improvement, but I would like Members to understand we are not giving our staff anything. This is part of their employment package. I saw my pension when I was contributing to it. I saw it as deferred pay. Lots of our public sector employees who work very hard decide to forego higher paid jobs sometimes outside because of that whole package. Now, I know there are all sorts of myths about people being overpaid,  but