States Minutes 20th May 1997

STATES MINUTES 2 0 t h M  a y 1 997

T HE STATES assembled on Tuesday, 2 0th May 1997 at 9.30 a.m. under

t h e Presidency of the Bailiff ,

S ir P  hilip Bailhache

    _ _ _ _ _ _ ______

His Excellency the Lieutenant Governor,

 General Sir Michael Wilkes, K.C.B., C.B.E, w a s p r e sent.

_ _ _ _ _ _ ______

All members were present with the exception of -

S enator Pierre François Horsfall - out of t he Island

 P aul Francis Routier, Deputy of St.

H elier - out of the Island

 I mogen Stephanie Nicholls, Deputy of

G rouville - ill

_ _ _ _ _ _ ______

P r a y e rs

_ _ _ _ _ _ ______

Distinguished visitors from Malaysia - welcome

The Bailiff welcomed to the Island Mr. Abd Halim bin Aman, the Official Assignee of Malaysia, and Mr. Abdul Halim Shah bin Abdul Murad, the Director General of the Legal Affairs Division

of Malaysia.

Subordinate legislation tabled

The following enactment was laid before the States, namely -

S t. Clement Fête (Jersey) Order 1 997. R & O 9086.

Matters presented

The following matters were presented to the States -

 1 .  Nuclear shipments: petition

( P .1 02/95) - report - P.76/97.

P r e sented by the Policy and

R e s ources Committee.

T H  E STATES ordered that the said report b e p rinted and distributed.

 2 .  States of Jersey Fire Service: r e p ort for 1996.

P r e sented by the Defence

C o m mittee.

Matters noted - land transactions

THE STATES noted an Act of the Finance and Economics Committee, dated 12th May 1997, recording the following decisions of the Treasurer of the States under delegated powers, in pursuance of Standing Orders relating to certain transactions in land -

 ( a) as recommended by the Harbours and

A  ir port Committee, an amendment of the e x is ting lease to Island Yachts of

W  o rkshop Unit LF9A at La Folie, St.

H  el ier Harbour, for a period of nine

y e a rs from 1st March 1995, at a

c o m mencing annual rent of £5,427.02,

s u b ject to annual review, so as to

p l ac e the lease in the registered name

o f the company, namely Bernard Amy

( 1 9 85) Limited;

 ( b) as recommended by the Harbours and

A  ir port Committee, the renewal of the

l e as e to Mr. Augusto Alberto De Aguiar M  a tos of the Sailors Rest Café (N9),

N ew North Quay, St. Helier Harbour, for a p e riod of one year from 1st April

1 9 9 7, at an annual rent of £9,659.66,

p a y able quarterly in advance;

 ( c) as recommended by the Planning and E n v ironment Committee, a Deed of

A  rr angement with Garaview Holdings L i m ited in respect of Gorseland, La

L a n de du Ouest, Corbière, St. Brelade, t o c ancel in their entirety all

p r e viously agreed contractual

b o u ndaries between the property West V  ie w and the Gorseland land, including a l l relevant servitudes in relation

t h er eto; and to set new boundaries

f o ll owing the erection of a wall

b e tw een the two properties, on the

b a s is that each party would be

r e sp onsible for its own legal costs

i n cu rred in this transaction;

 ( d) as recommended by the Education

C o m mittee, a Deed of Arrangement with M a rk House (Jersey) Limited in order to c l ar ify the boundary of its property,

k n o wn as Mark House, Le Breton Lane, S t . Helier, with the adjoining St.

J a m es' Centre and to grant rights of

a c c ess (as detailed in the Committee's

A  ct No. 5, dated 9th April 1997), on

t h e basis that the company would be

r e sp onsible for the payment of the

l e ga l costs incurred by both parties;

 ( e) as recommended by the Health and Social S e r vices Committee, the renewal of the

l e as e from Mr. Robert Charles Hamon of

t h e three-bedroom bungalow Little Arch,

P i g neaux, Maufant, St. Saviour , for the

p u r pose of accommodating a Consultant

P h y sician, for a further period of one

y e a r from 25th March 1997 at an annual

r e n t of £11,500, with an option to

r e n ew for a further year, and with all

o t h er terms and conditions to remain as

i n t he existing lease;

 ( f) as recommended by the Education

C o m mittee, in relation to the

t ra n saction in respect of the

e s ta blishment of wayleaves over land at C r a bbé, St. Mary (Fields Nos. 332, 333, 3 3 4 and 335), in order to provide mains w  at er to the Silver Jubilee Activity

B a s e and communications to the rifle

r a n ge, from Mr. Gordon John Hervé for t h e sum of £6,000, the payment by the

S t a tes of Mr. Hervé's reasonable legal

c o s ts arising from the transaction,

a m o unting to a sum of £250. (The

C o m mittee rescinded the appropriate

p a r t of Act No.  7(c) of 9th December

1 9 9 6 of the Committee as previously

c o n stituted, accordingly);

( g) as recommended by the Public Services

C o m mittee, the acquisition free of

c h a rge from Pontins (Jersey) Limited of 5 , 3 69.13 square feet of land at the

P o n tins Holiday Camp Complex, Plémont P o i nt, Plémont, St. Ouen, required in

c o n nexion with the construction of a

p u m ping station, with the company

r e ta ining a right of way for access and

e g r ess across an agreed part of the

s it e for its guests and employees, on

t h e basis that each party would be

r e sp onsible for its own legal costs

a r is ing from the transaction;

( h) as recommended by the Public Services C o m mittee, the acquisition from La

S o l itude Farm Limited of 34.77 square

f e et of land in Field No. 441, St.

M a rtin, for a consideration of £35,

r e q uired in connexion with the highway i m p rovement works to improve visibility a t t he foot of St. Catherine's Hill, on

t h e basis that the Committee would be

r e sp onsible for all reasonable legal

c o s ts arising from the transaction.

Matter lodged

The following matter was lodged au Greffe'' -

D raft The Lloyds TSB (Jersey) Law 1 99  - P.77/97.

P resented by Senator V.A. Tomes.

Arrangement of public business for the present meeting

THE STATES acceded to the request of the Vice- President of the Policy and Resources Committee that consideration of the draft States of Jersey

Law (Amendment No. 6) Law 199 (P.74/97 - lodged au Greffe'' on 6th May 1997) be deferred from

the present meeting to a later date.

THE STATES acceded to the request of the President of the Education Committee that consideration of the proposition regarding Haut de la Garenne, St. Martin: conversion and redevelopment (P.64/97 - lodged au Greffe'' on 22nd April 1997) be deferred from the present meeting to a later date.

Members present voted as follows -

P o u r'' (28) Senators

R othwell, Stein, Bailhache , Tomes, Norman, W alker, Kinnard.

Connétable s

S t. Mary, St. Brelade, St. Peter, St.

H elier, St. Saviour, St. Martin , Trinity .

Deputies

S . Baudains(H), Le Geyt(S), Trinity ,

J ohns(H), Breckon(S), St. Martin, St. John, L e Main(H), Blampied(H), Rabet(H),

V ibert(B), de la Haye(B), Le Cornu(C),

S t. Ouen.

C o n tre'' (21) Senators

 S henton, Le Maistre, Quérée, Syvret. Connétable s

S t. Clement, St. Lawrence, Grouville , St. J ohn.

Deputies

W avell(S), H. Baudains(C), Le Sueur(H),

C outanche(L), St. Mary, Pullin(S),

D uhamel(S), Dorey(H), Layzell(B), Huet(H), C rowcroft(H), S. Pierre, Dubras(L).

Arrangement of public business for the next meeting on 3rd June 1997

THE STATES confirmed that the following matters lodged au Greffe'' would be considered at the meeting on 3rd June 1997 -

D raft Policing of Parks (Amendment No. 12) ( Jersey) Regulations 199  - P.68/97.

L odged: 13th May 1997.

P ublic Services Committee.

1 00 Halkett Place, St. Helier : sale -

P .69/97.

L odged: 13th May 1997.

P lanning and Environment Committee. C ontract lease properties: sale of f reehold - P.70/97.

L odged: 13th May 1997.

H ousing Committee.

B equest of the late Mr. H.E. Le

S eelleur - P.71/97.

L odged: 13th May 1997.

H ealth and Social Services Committee.

D raft States of Jersey (Amendment N o. 6) Law 199  - P.74/97.

L odged: 6th May 1997.

P olicy and Resources

C ommittee.

States' employees - questions and answers (Tape No. 392)

Senator Richard Joseph Shenton asked Deputy David Leon Crespel of Trinity , President of the Establishment Committee, the following questions -

1.  W ill the President inform the

A s s em  bly of the total number of

S ta t e s' employees; this figure to

in c l u d e full-time, part-time,

se a s o n al, contract appointments

an d T r ading Committees' staff and

o f th e total wage bill for States'

em  p l o yees at the present time?

 2 .  Will the President state the cost to

t h e public of the maintenance of the

P u b lic Employees' Pension Schemes and i n fo rm the Assembly of the total cost

t o d ate in respect of employees who

h a v e retired under the Voluntary Early

R e t irement Scheme and the Voluntary

R e d undancy Scheme?

 3 .  Following the recent award to Grade A O  ff icers as set out in R & O 9077, will t h e President inform members of the

a n n ual increases that this group has

r e ce ived in the past three years?

 4 .  Will the President inform the Assembly i f h e is satisfied with the States'

r e co rd with regard to the employment of d i sa bled residents?''

The President of the Establishment Committee replied as follows -

1.  T he total number of States'

em  p l o yees employed as at the end

o f D e c ember 1996, was 7,048. This

fi g u re includes full-time, part-

ti m e , seasonal and temporary

co n t r a ct appointments, employees

em  p l o yed under the Public Sector

D i sa b l ed Scheme and Trading

C o m m  ittees' staff. The number of

fu l l- t im e equivalent, established

p o st s w as 6,260.

O  f the difference of 788 between total s ta f f employed and full-time

e q u ivalent, established posts, 425 are p a r t-time staff employed against full- t im  e, permanent posts, for example,

c l ea ners, teachers and education

s u p port staff, etc. These posts are,

t h er efore, included in the figure of

6 , 2 60 established posts.

T h e balance of 363 posts consist of the f o ll owing -

C o n t r acts less than one year  4 7

S e a s o nal 1 5 3 T e m  p s 1 3 4  P u b l ic Sector Disabled Scheme  29

T h e se are, therefore, in addition to t h e 6260 established posts.

G  iv en that Trading Committees make

p r o fits, and their employees contribute

t o t hese profits, my Committee

c o n centrates its efforts on the numbers

i n t he non-trading Committees. I can

a d v ise that at the end of December

1 9 9 6, 5,855 employees were employed by t h e non-trading Committees, and there

w  er e 5,221 full-time equivalent,

p e r manent posts.

T h e paybill for 1996 for the non-

t ra d ing Committees was £140,121,937, a n d £29,531,197 for the Trading

C o m mittees - giving a total of

£1 6 9,653,134. These figures include

p e n sion and social security

c o n tributions.

S i n ce my own Committee took office in D ec ember 1996, we have approved only f iv e new permanent posts - four of

w  h ich were for the extremely important l a w drafting area. We are facing

p o t ential requests for an additional 77

p o s ts in 1997. Further, we have

r e ce ived indications through some

C o m mittee Business Plans that we can e x p ect requests for at least 62 new

p o s ts in 1998; at least 28 in 1999; and

a t l east 14 in the year 2000. We are

d e te rmined to take a very strong stance w  h en dealing with Committees' requests f o r extra staff in accordance with

S t a tes' policy in this respect. Only in

t h e most exceptional circumstances will n e w posts be approved.

 2 .  The total States' payments made into

a l l public sector pension schemes in

1 9 9 6 were £17.6m. An additional £1.15m w as paid in respect of pension

i n cr eases to retired members of the

T e a chers' Superannuation Scheme, such

i n cr eases not currently being a

l ia b ility of the Scheme itself. In

a d d ition £550,000 was paid to retired

m em bers of certain unfunded pension

a r ra ngements which are now closed to

    n e w entrants.

S i n ce the inception of the Voluntary

E a r ly Retirement arrangements in 1991

a n d Voluntary Redundancy arrangements i n 1 994, total expenditure of £5.58m

h a s been incurred.

S a v ings from the use of those

a r ra ngements of £3.07m have been

a c h ieved by the end of 1996, with a

f u rt her estimated £1.77m for 1997 and

£1 . 91m estimated for 1998.

W h ereas the expenditure of £5.58m

c o n sists of one-off payments, the

s a v ings referred to are ongoing. This m  ea ns, therefore, that before the end

o f 1 998, the expenditure will have been r e co vered, and there will then be

o n g oing annual savings of just under

£2 m a year.

 3 .  The awards to Grade A Chief Officers, r e p resented by the Chief Officers'

A  ss ociation, over the last three years

i s a s follows -

1 st J u ne 1 9 9 4 0 per cent 1 st J u ne 1 9 9 5 3 per cent 1 st J a nuary 1 9 9 6  0 .6  per cent 1 st J u ne 1 9 9 6  7 .6 per cent

I n a ddition, the officers concerned w il l receive a further two per cent f ro m 1st June 1997, as part of the 1 9 9 6/7 award.

G  iv en that the Senator has raised the

q u e stion of the recent award, I

c o n sider it necessary to advise members

o f t he background to this agreement in

t h at it is a vital one for my Committee

a n d the States. I apologise to those

m em bers who have already received this i n fo rmation at a recent meeting on the

1 9 9 8 budget, but would ask them to bear w  it h me on this important matter.

T h e terms of the award are as follows -

7 . 6 p er cent increase in pay from 1st J u n e 1996

t w o per cent increase in pay from 1st J u n e 1997.

T h e key feature of the Agreement for

t h e States is the change from

c o ll ective bargaining for Chief

O  ff icers, through the Chief Officers'

A  ss ociation, to a position where

i n d ividual Chief Officers will

h e n ceforth be on personal contracts. In r e tu rn for the award, Chief Officers

h a v e agreed to this change of status

a n d are prepared to take the risks

w  h ich go with this change. The

A  ss ociation will no longer be

r e co gnised by the States. Salary awards w  il l be made on a strictly individual

b a s is and in future Chief Officers will b e j udged on performance in a way that h a s not been possible in the past.

T h e existing Agreement recognising the C h i ef Officers Association has been

b o u ght out for a very reasonable sum. I c a n confidently suggest that no other

p a y group would have given up their c o ll ective negotiating rights for this f ig u re or for anything like it.

T h e cost of the award for the officers

c o n cerned is approximately £107,000 a y e a r (only 0.07 per cent of the States

p a y bill). The cost over and above an

a w a rd based on public sector pay norm f o r the period in question is £62,000

( o n ly 0.04 per cent of the total

p a y bill).

M  y Committee is very enthusiastic about t h e benefits the move to personal

c o n tracts will bring.

F i rs t, it will herald a change in

c u lt ure at the top of the public

s e rv ice, with Chief Officers' pay a w a rds in future based more on

i n d ividual performance than ever b e f ore.

S e c ond, we confidently predict that the A  g reement will help my Committee fulfil i ts o bligation to contain the States'

p a y bill, given that Chief Officers' pay

w  il l in future be more closely linked

t o i ndividual performance.

T h i rd, the Agreement reinforces the

r e ce nt introduction of individual

p e r formance review and appraisal for C h i ef Officers. The combination of the t w o will enable pay and performance to b e m ore closely linked than ever

b e f ore.

F o u rth, the new arrangements should

e n a ble my Committee to make more time- l im  ited Chief Officer appointments in

f u tu re.

P a r t of the award is in recognition of t h e fact that Chief Officers' pay has fa l len behind that of like-sized Chief E x e cutive posts in the private sector.

I n 1 994, the Chief Officers were the

f ir s t pay group to accept the pay

f re e ze advocated by the then

E s t ablishment Committee for that year. P a r t of the Agreement, however,

p r o vided that there would be a review c o m paring the pay of States Chief

O  ff icers with that of their

c o u nterparts in the private sector.

T h i s review was independently conducted a n d showed that on BASIC PAY alone, our C h i ef Officers are seven per cent

b e h ind the private sector. (The gap on

G  R OSS PAY and FRINGE BENEFITS is c o n siderably wider).

B e c ause circumstances are different in t h e private sector (e.g. there is less

s e c urity of employment in the private s e c tor), my Committee halved this

f ig u re of seven per cent, thereby

p r o ducing a figure of 3.5 per cent to ta k e account of the considerable gap w  h ich exists between Chief Officers' p a y and that which is paid for like-

s iz e d jobs in the private sector.

W  h en this figure of 3.5 per cent is

a d d ed to the public sector pay norm of 4 . 1 per cent it produces the award of 7 . 6 per cent effective from 1st June

1 9 9 6. The two per cent effective from 1 s t June 1997, is in recognition of the A  g reement to move to personal

c o n tracts.

I s h ould emphasise here that although C h i ef Officers have fallen behind the

p r iv ate sector in basic pay (let alone

g r o ss pay and fringe benefits), the

s a m e cannot be said of public sector

p a y groups generally. The basic pay of S t a tes' employees is generally above

t h at which applies in the private

s e c tor, and this is particularly true

o f m anual workers and the vast majority

o f c ivil servants.

P a y awards to Chief Officers in recent y e a rs have been less, in percentage

t e rm s, than those granted to other

p u b lic sector pay groups. For example, s in c e 1994 Chief Officers have received 1 1 . 5 per cent (excluding the two per

c e n t for personal contracts not due to

b e p aid until 1st June 1997). Over the

s a m e period, manual workers' pay and c o n ditions have increased by 13.68 per c e n t. This latter figure includes the

ef f ect of annual pay awards, an hour

o f f the working week and the factor

c o m parison job grading exercise. It

d o e s not include the very expensive l u m p sum payments made to manual w  o rkers in lieu of factor comparison b a c kdating to 1990 amounting to

a p p roximately £2.5m. Over the same p e r iod, civil servants have received a 1 0 . 47 per cent increase in pay, but I r e p eat that the evidence we have is

t h at base pay of civil servants is

g e n erally above that of the private

s e c tor.

I n s ummarising, I must re-emphasise the m aj or feature of this agreement - the

b u y ing out of the Chief Officers

A  ss ociation recognition Agreement and t h e creation of individual contracts in

f u tu re which my Committee is confident w  il l have the beneficial effects to

w  h ich I have referred namely Chief

O  ff icer accountability, culture change

a nd real control of paybill.

 4 .  I am uncertain from the question

w  h ether Senator Shenton is seeking a

c o m ment from me on the previous history

o f t he level of support that has been

p r o vided by the States in finding

e m p loyment for disabled people or

w  h ether he is asking me to comment on

t h e approach taken by my own Committee. I w  ill, however, trace the history of

t h e actions that have been taken by

s u c cessive Establishment Committees in

o r d er to provide members with a wider

p i ct ure.

U  p until 1990, the Establishment

C o m mittee was directly responsible for

p l ac ing disabled people in employment

i n t he public sector and was allocated

f u n ds to facilitate this process.

H  o wever in 1990, at the time when

S e n ator Shenton was President of the

E s t ablishment Committee, it was agreed t h at these funds and the primary

r e sp onsibility for assisting disabled

p e o ple into employment would be

t ra n sferred to the then Social Security

C o m mittee. At that time, the latter

C o m mittee had taken a much more active r o le in this area, with the appointment

o f a n officer dedicated to placing

d i sa bled people in suitable jobs.

S i n ce that time successive

E s t ablishment Committees have e n c ouraged States' departments to work c l os ely with the officers at Employment a n d Social Security to place people in

s u it able employment. This is indicated b y the statistics that were collated at

t h e end of last year which show that -

2 9 p eople were placed in employment u n d e r the Employment of the Disabled i n t h e Public Sector' scheme.

1 2 p eople were employed under the T h e rapeutic Work Scheme', and

8 0 p eople were placed in the Job S c o p e' scheme administered by the D  ep a rtment of Health and Social S e r v ices.

T h u s a total of 121 disabled people

w  er e working in the public sector under s p e cial employment schemes. Over and a b o ve that, however, I am sure that

S e n ator Shenton will appreciate that a n u m ber of people who suffer from one f o rm of disability or another are

w  o rking quite satisfactorily for the

S t a tes without the special assistance

p r o vided by Employment and Social

S e c urity.

F o r example, I am aware that an

e m p loyee with a serious sight

i m p airment is employed within the

S t a tes Personnel Department and is not r e co rded in these figures.

I n t he light of this history, I believe

t h at the States as an employer has

t a ke n a leading part in finding

s u it able employment opportunities for d i sa bled people in the Island. However, a s a large employer, I believe that it

w  o uld be entirely wrong of me to state

t h at the current Establishment

C o m mittee is complacent. As a result of t h e continuing need to review our

p e r formance in this area, my Committee h a s included in its 1997 Business Plan

a c o mmitment to review its Equal

O  p portunities policy, which, of course, c o v ers issues surrounding

d i sc rimination in connection with the

d i sa bled. In carrying out this review,

o f fi cers of the States Personnel

D  ep artment will liaise closely with

o f fi cers of Employment and Social S e c urity to ensure that the States

c o n tinues to play an active part in

h e lp ing to place disabled people into s u it able employment.

I w ill end, therefore, by confirming my C o m mittee's commitment to consider

c a re fully any recommendations that are m  ad e as a result of this review which w  il l improve still further the States'

a p p roach to employing disabled

p e o ple.''

Financial forecasts and income tax - questions and answers (Tape No. 392)

Senator Stuart Syvret asked Senator Frank Harris on Walker , President of the Finance and Economics Committee, the following questions -

1.  W ill the President provide members

w i th a full breakdown of the

re c e n tl y published financial

fo r e c a sts; and will he also

p ro v i d e members with a full

ex p l a n ation of the methodology

em  p l o yed in producing the

fo r e c a sts, including a complete

li st o f the assumptions upon which

th e fo r ecast are based?

 2 .  Will the President confirm that the

c u r rent policy of allowing unlimited t a x relief on mortgage interest

p a y ments exerts inflationary pressure

o n the property market?

 3 .  Will the President inform the House how m  an y individuals and corporate bodies

w  er e in receipt of tax relief in the

t a x year 1994 on interest payments not

r e la ted to owner-occupier home

p u r chase, and advise the House what a

f u ll amount of such tax relief was in

1 9 9 4. Would he further advise the House w  h y his Committee sees fit to subsidise

t h e purchase of leisure yachts, motor

v e h icles, works of art, and other such

c o n sumer durables in this way?

 4 .  Will the President inform the House how m  an y of those wealthy immigrants who

h a v e secured residency in the Island

u n d er Regulation 1(1)(k) of the Housing L a w paid income tax in the Island in

1 9 9 4. Will he further inform the House

o f t he total value of that income tax

p a y ment? How many of those wealthy

i m m igrants paid less than £10,000 tax

i n 1 994, how many paid between £10,000 a n d £20,000, how many paid between

£2 0 ,000 and £30,000 ... and so on, by

£1 0 ,000 increments?''

The President of the Finance and Economics Committee replied as follows -

1.  I wish to preface my replies to

th e S e nator's questions by

m e n t io ning that the Finance and

E c o n o mics Committee has already in s ti g a ted a major review of

S ta t e s income assisted by the

C h ie f Officers Policy Group, and

th i s w i ll include a full review of

fi s ca l p olicy, the result of which

w i ll b e completed by the autumn of th i s y e ar.

I n o w turn to the Senator's question on t h e financial forecasts and the

i n fo rmation included within these. In

o r d er to assist in my response to the

q u e stion I have circulated three copies

o f r ecent financial forecasts. I will

t u rn to these later in my response and s h o uld point out that these forecasts

w  er e outlined to States members at the F i n ancial Presentation on 21st April

1 9 9 7.

T o address the issue of the methodology u s e d in the preparation of the forward

f o re casts I will cover each area in the

o r d er in which they appear in the

f o re casts -

I n c o me Tax

T h e s e figures are provided by the

C o m  ptroller of Income Tax and

p r e p ared in consultation with the

C h i e f Adviser. Tax estimates are

p r e p ared by firstly determining what i s th e probable income to tax in the c u r re nt year. These figures are then e x t ra polated forward and adjusted to r e fl e ct hard information derived from b u s in ess accounts submitted in

a d v a nce, estimates by the biggest

c o m  panies of their likely profits and

i n c re ases or decreases in the main

s o u r ces of income for example trading p r o fi ts, employment income and bank i n te r est as estimated in conjunction

w  it h the Chief Adviser. Updated

f ig u r es are provided in January and

A  u g ust each year.

I t a p pears that the economy has

t u rn e d the corner and on the basis

o f -  

(i ) i n cr eased trading profits from a m  o re b uoyant economy;

(i i) g ro wth in salaries/wages and

in th e numbers of people employed; an d

(i ii ) l a rgely unchanged rates of i n te r e st paid on mortgages and

d ep o s i t accounts

i t is anticipated that tax income w  il l grow by about five per cent a y e a r over the next five years.

I m p ô ts

T h e Agent of the Impôts is

r e sp o nsible for the preparation of

t h e se figures which are based on

p r o je cted consumption rates for fuel, t o b a cco and alcohol and are

c a lc u lated using current rates.

I n v e stment income

T h e s e figures are based on predicted c a s h flow projections. The States

i n v e sts unallocated cash on a short

t e rm basis, which can vary from £3 m il li on to in excess of £50 million

i n a n y one year, with local banking

i n st i tutions and receives income from t h is i nvestment.

A  s I outlined at the recent

p r e se ntation on the financial

p o s it ion of the States the average

l e v el of unallocated cash the States h a s a vailable has already fallen and i s p r edicted to fall even lower over t h e y ears of the current financial

f o re c asts.

T r a d ing Committee income

T h i s is the estimated total of the

p r o je cted financial returns (targets)

w  h ic h will be paid to the general

S t a te s revenues by the three States

T r a d ing Committees, being Postal,

T e l e coms and Harbours and Airport.

T he level of return is settled after

n e g o tiation between the Finance and

E c o n omics Committee and the Trading C o m  mittee concerned.

G  en e ral Reserve

T h e figures included are the annual a l lo c ations to this reserve.

T h e reserve is the States short-term r e se r ve and is used to meet

u n f o reseen and unbudgeted items of c a p it al and revenue expenditure.

T h e figures are based on the

a n t icipated demands which will be m  a d e on this reserve in the

i n d iv idual years.

A  s a point of note in recent years

t h e d emands on the reserve have far e x c e eded the annual allocations made t o i t, for example in 1996 £11

m il li on was allocated to the reserve w it h over £22 million allocated from t h e r eserve leaving a balance on the

r e se r ve of only £4.5 million at the

e n d o f 1996.

T r ansfer from Strategic Reserve

T h i s is an allocation from the

S t ra t egic Reserve which is made to e n s u re that annual budget deficits do n o t o ccur.

T h e policy of the Finance and

E c o n omics Committee is to ensure that t h e r eal value of the reserve is

m  a in tained.

T h e value of the reserve at 31st

D ec e mber 1996 was £249 million which i s e q uivalent of 90 per cent of S t a te s Non-trading Committee e x p e nditure.

N et R evenue Expenditure

T h i s is the annual allocation

a v a il able to cover the total net

r e v e nue expenditure of all the States n o n - trading Committees.

I w  o uld now ask members to turn to t h e t hree forecasts, which have been c i rc u lated in order that I can

e x p l ain the assumptions used in

p r e p aring these figures.

A  p p endix A  is the forecast approved b y t he States in the 1997 budget

d o c u ment.

T h e figures included here are

t a rg ets'' of net revenue

e x p e nditure for future years, and

s h o w no real growth although they h a v e been increased by an

i n fl a tionary allowance.

T h i s forecast reflected a balanced b u d g et which is current States

p o l ic y.

A  p p endix B  is the forecast as

u p d a ted to reflect revised income

f ig u res which my Committee received i n J a nuary of this year. These

r e fl e cted a predicted fall in income

t a x r eceipts of £26 million and £5

m  il li on less investment income for

t h e p eriod to 2001. The most

s ig n i ficant point of concern was an

i n c re ase in the annual deficit for

1 9 9 8 to £8 million.

A  p p endix C  is what my Committee is r e fe r ring to as its Indicative

F i n a ncial Forecast.

M y Committee is conscious that in

r e c en t times the forecasts that have

b e e n prepared show target' figures

f o r n et revenue expenditure and do

n o t s how a true indication of likely

e x p e nditure requests. The indicative f o re c ast addresses this matter. The

n e t r evenue expenditure shown in this f o re c ast at £253 million is some £15 m il li on more than the cash limit set

f o r 1 998. This forecast would result

i n a n nual deficits in excess of £20

m  il li on per annum from 1998 to 2001. T h i s forecast indicates the position

i f n o action was taken to deal with

t h e se expenditure requests and the

f o re c asted deficits. However, my

C o m  mittee will ensure that both its

p o l ic y and that of the States to

a c h ie ve balanced budgets will be

r ig o r ously adhered to.

C a p i tal receipts and repayments

T h i s is the projected net figure for r e p a yments to the Capital Fund for c a p it al projects which have been

v o t e d in previous years - very

s im  i lar to depreciation charges in c o m  mercial accounts.

C a p i tal expenditure

T h i s is the annual allocation

a v a il able to meet capital requests as a g r e ed by the States in the annual

S t ra t egic Policy Report.

C a p i tal Fund balance carried forward

T h i s is the amount of unallocated f u n d s remaining in the capital fund a t t h e end of each year.

( D e f icit)/surplus for the year

T h i s equates to the overall deficit

o r s u rplus for the States of Jersey's b u d g et in any one year.

 2 .  The position on tax relief on mortgage

i n te rest payments was fully set out in

a r e port presented to the States by the

p r e vious Finance and Economics

C o m mittee (P.91/95). My Committee has y e t to consider this issue but the

w  id er effects of tax relief on mortgage

i n te rest payments, including the effect

o n first time buyers of States loan

p r o perties will be included in its

r e v iew of fiscal policy which as I have

a l re ady stated is currently under way. U  n til that exercise has been completed I w  ould not wish to agree or disagree w  it h the Senator's statement.

 3 .  In the case of corporate bodies and

i n d ividuals carrying on a business it

i s n ot uncommon to find that they pay

i n te rest as an outgoing of the

b u s iness. Newly set up business and

e x p anding undertakings commonly rely on b a n k finance. In other cases, seasonal

c a s h flow fluctuations may lead to the

c o m pany or individual going overdrawn.

T h e recent economic downturn has left

m  an y firms indebted to their banks. The

i n te rest so incurred is included in the

p r o fit and loss account along with all

t h e other running expenses of the

b u s iness. The Income Tax Department

o n l y records the net profits of the

b u s iness so the amount of tax relief

a n d the number of recipients cannot be

e s ta blished. I think, however, I can

s a fe ly say that the great majority of

c o m panies and individuals carrying on a

b u s iness would be in receipt of tax

r e li ef for interest payments.

T h e income tax return does not ask the t a xp ayer to identify whether the

m  o rtgage is in respect of owner-

o c c upied property or otherwise and it

i s th erefore not possible to say how

m  u ch of that tax relief relates to

o w  ner-occupied property. My belief is t h at the greater part of the tax relief

d o e s indeed relate to individuals

b u y ing their own houses. The cost of

i n te rest paid other than as a trading

e x pense, in terms of tax, was some £13 m il lion, spread over 20,500 tax

a s s essments of which 11,500 relate to m  ar ried couples so, all told, about

3 3 , 000 individuals benefit. Of those

2 0 , 500 assessments, 14,500 (70 per

c e n t) were in respect of taxpayers with a n a nnual income of less than £30,000. T h e y enjoyed tax relief of about £6.5 m il lion, or half the total.

O  n the Senator's final point, the

I n c ome Tax Law has always allowed tax r e li ef for interest paid to banks and

o t h er lenders. The current Finance and E c o nomics Committee has not yet

f in a lised its policy and will not do so

u n t il the conclusion of the major

r e v iew I referred to in my opening r e m arks.

 4 .  There are three questions here and I s h a ll deal with them separately as

f o ll ows -

H o w many 1(1)(k)' immigrants paid i n c o me tax in the Island in 1994?'

T h e answer to this question has not

y e t b een established. The Housing

R e g u lations were introduced in late

1 9 7 0 . Identifying 1(1)(k)' residents

i n v o lves searching through the

r e c o rds of the Housing Department and t h e C hief Adviser and then checking

w  h ic h of those individuals paid tax

i n 1 9 94. The exercise has been

c o m  pleted back to 1980. I expect to

h a v e the answer by the next meeting

o f t h e States.

W h a t was the total tax they paid for 1 9 9 4 ?'

T h i s has proved impossible to

e s ta b lish with accuracy in the case

o f t h ose individuals identified so

f a r. T ax paid by 1(1)(k)' residents

i s n o t recorded separately, being

i n c lu ded in the wider category of

i n v e stment holders. Many 1(1)(k)'

r e si d ents contribute tax via

i n v e stment companies, the identities

o f which are not generally known to

t h e C omptroller and could only be

e s ta b lished by contacting these

r e si d ents or their professional

a d v i sers. That would be an intrusion

a n d t he whole exercise would place an u n a c ceptable demand on public sector r e so u rces.

H o w many paid less than £10,000 tax,

h o w many between £10,000 and £20,000

. .. a n d so on, by £10,000

i n c re ments?'

A  n important principle enshrined in t h e I ncome Tax Law is that the

C o m  ptroller shall not disclose any i n fo r mation which comes to his

k n o w  ledge in the course of his

d u t ie s. As an exception to that

g e n e ral principle he may give me, as

t h e P resident of the Finance and

E c o n omics Committee, statistical

i n fo r mation for, and I quote, any

p u r p ose affecting the revenue of the

S t a te s'. The Comptroller is not

c o n v inced that the statistical

i n fo r mation sought by the Senator via m  y se lf falls within that definition.

B e c a use we are here concerned with a r e la t ively small number of people the C o m  ptroller has concluded that their

r ig h t s to privacy and confidentiality

m  a y be compromised by the disclosure

o f t h is information in this form and,

a s a consequence, he would not be

p r e p ared to disclose it.

''    

Chartered Surveyors - questions and answers (Tape No. 392)

Deputy Michael Edward Vibert of St. Brelade asked Senator Nigel Lewis Quérée, President of the Planning and Environment Committee, the following questions -

1.  W ill the President inform the

A s s em  bly of the United Kingdom ch a r t er ed surveyors who have been in v o l v ed in States' projects since

1 9 9 1 , the projects in which they

h av e b een involved and the fees

p ai d fo r their professional

se r v ic e s?

 2 .  Does the President agree that local

c h a rtered surveyors should be employed

o n local projects where possible and

s ta t e what steps have, or are, being

t a ke n to ensure the use of United

K  in gdom chartered surveyors is

m  in imised in order that full use is

m  ad e of local skills and expertise?''

The President of the Planning and Environment Committee replied as follows -

1.  T he professional appointments for

S ta t e s' construction and

en g i n e ering contracts are

co n t r o lled by the Public Services