Proposed Budget (Government Plan) 2025-2028 (P.51/2024): ninth amendment (P.51/2024 Amd.(9)) – amendment

STATES OF JERSEY

PROPOSED BUDGET (GOVERNMENT PLAN) 2025-2028 (P.51/2024): NINTH AMENDMENT (P.51/2024 AMD.(9)) – AMENDMENT

Lodged au Greffe on 19th November 2024 by the Council of Ministers

Earliest date for debate: 26th November 2024

STATES GREFFE

2024  P.51 Amd.(9) Amd.

PROPOSED BUDGET (GOVERNMENT PLAN) 2025-2028  (P.51/2024): NINTH AMENDMENT (P.51/2024 AMD.(9)) – AMENDMENT ____________

1  PAGE 2 –

Delete the words "funding the".

COUNCIL OF MINISTERS

Note:  After this amendment, the amendment would read as follows –

After the words "as set out in the Appendix of the accompanying Report" insert the words –

", except that, on page 38 –

1. after the words "improve the competitiveness of the Island" there should be inserted the words "with a specific focus on funding the delivery of the Sustainable Finance Action Plan and supporting the transition to a net-zero economy";
2. after the words "ease of doing business here." there should be inserted the words "Ensuring that funding is made available to support the transition to a  net-zero  economy  and  towards  promoting  Sustainable  Finance  will support these goals and provide a clear action plan and delivery framework, embedding sustainability into all financial practices."; and
3. after  the  words  "seeking to  reduce  operating  costs."  there  should  be inserted the words "Specifically, making funding available for drivers to a net-zero economy and the delivery of the Sustainable Finance Action Plan which  will  embed  sustainability  into  financial  practices  and  business practices and support the decarbonisation of the finance industry."

Note: After this amendment, the proposition would read as follows – THE STATES are asked to decide whether they are of opinion –

to receive the Government Plan 2025 – 2028 (entitled "Budget 2025-2028") specified in Article 9(1) of the Public Finances (Jersey) Law 2019 ("the Law") and specifically –

1. to approve the estimate of total States income to be paid into the Consolidated Fund in 2025 as set out in Appendix 2 – Summary Table 1 to the Report, which is inclusive of the proposed taxation and impôts duties changes outlined in the Government Plan, in line with Article 9(2)(a) of the Law.
2. to approve the proposed Changes to Approval for financing/borrowing for 2025, as shown in Appendix 2 – Summary Table 2 to the Report, which may be obtained

by the Minister for Treasury and Resources, as and when required, in line with Article 9 (2)(c) of the Law, of up to those revised approval amounts.

3. to approve the transfers from one States fund to another for 2025 of up to and including the amounts set in Appendix 2 – Summary Table 3 in line with Article 9(2)(b) of the Law.
4. to approve a transfer from the Consolidated Fund to the Stabilisation Fund in 2025 of up to £25 million, subject to a decision of the Minister for Treasury and Resources based on the availability of funds in the Consolidated Fund as at 31st December 2024 in excess of the estimates provided in this plan, or from budgeted underspends identified before 31st December 2025.
5. to approve a transfer from the Consolidated Fund to the Agricultural Loans Fund in 2025 of up to £2 million, subject to a decision of the Minister for Treasury and Resources based on availability of funds in the Consolidated Fund as at 31st December 2024 in excess of estimates provided in this plan, or from budgeted underspends identified before 31st December 2025;
6. to approve each major project that is to be started or continued in 2025 and the total cost of each such project and any amendments to the proposed total cost of a major project under a previously approved Government Plan, in line with Article 9(2)(d),
   5. and (f) of the Law and as set out in Appendix 2 – Summary Table 4 to the Report.
7. to approve the proposed amount to be appropriated from the Consolidated Fund for 2025, for each head of expenditure, being gross expenditure less estimated income (if any), in line with Articles 9(2)(g), 10(1) and 10(2) of the Law, and set out in Appendix 2 – Summary Tables 5(i) and (ii) of the Report.
8. to approve the estimated income, being estimated gross income less expenditure, that each States trading operation will pay into its trading fund in 2025 in line with Article 9(2)(h) of the Law and set out in Appendix 2 – Summary Table 6 to the Report.
9. to approve the proposed amount to be appropriated from each States trading operation's trading fund for 2025 for each head of expenditure in line with Article 9(2)(i) of the Law and set out in Appendix 2 – Summary Table 7 to the Report.
10. to  approve  the  estimated  income  and  expenditure  proposals  for  the  Climate Emergency Fund for 2025 as set out in Appendix 2 – Summary Table 8 to the Report.
11. to approve an updated and consolidated policy of the Strategic Reserve Fund as follows:  "The  Strategic  Reserve  Fund,  established  in  accordance  with  the provisions of Article 4 of the Public Finances (Jersey) Law 2005, is a permanent reserve only to be used:

1. in exceptional circumstances to insulate the Island's economy from severe structural decline such as the sudden collapse of a major Island industry or from major natural disaster.

2. if necessary, for the purposes of providing funding (up to £100 million) for the Bank Depositors Compensation Scheme established under the Banking  Business  (Depositors  Compensation)  (Jersey)  Regulations 2009, including to meet the States contribution to the Scheme and/or to meet any temporary cash flow funding requirements of the Scheme.
3. to  support  the  development  of  future  healthcare  facilities  and  the borrowing costs for such work, in line with a financing strategy agreed by the Assembly;
4. as a holding fund for any or all monies raised through external financing until required, and for any monies related to the repayment of debt raised through external financing used to offset the repayment of debt, as and when required; and
5. in accordance with Article 24 of the Public Finances (Jersey) Law 2019, where the Minister for Treasury and Resources is satisfied that there exists  an  immediate  threat  to  the  health  or  safety  of  any  of  the inhabitants of Jersey, to the stability of the economy in Jersey or to the environment, for which no other suitable funding is available."

12. to approve the transfer to the Strategic Reserve of the amounts due as a result of the move from prior-year basis taxation after 31st December 2025, as and when these payments are received (estimated at £280 million).
13. in relation to the new Government Headquarters (office), to approve;

1. the  exercising  of  the  option  to  acquire  the  new  Government Headquarters (estimated at £91 million), by the Public of the Island, in line with the pre-agreed terms; and
2. the acquisition of the new Government Headquarters as an investment of  the  Social  Security  (Reserve)  Fund  (including  authorising  the meeting of expenses incurred in connection with the acquisition); and
3. the subsequent leasing of the new Government Headquarters by the Public of the Island from the Social Security (Reserve) Fund, with commercial terms to be agreed between the Minister for Infrastructure (on behalf of the Public) and Minister for Social Security and the Minister for Treasury and Resources (both on behalf of the Fund); and

14. in relation to the new Government Headquarters,  to authorise H.M.  Attorney General, the Greffier of the States, the Ministers for Infrastructure, Social Security and Treasury and Resources, and the Public of the Island, to enter into such arrangements, including financing, and pass any contracts as are necessary to put into effect paragraph (m)
15. to approve, in accordance with Article 9(1) of the Law, the Government Plan 2025- 2028, as set out in the Appendix to the accompanying Report, except that, on page 38 –

1. after the words "improve the competitiveness of the Island" there should be inserted the words "with a specific focus on delivery of the Sustainable Finance Action Plan and supporting the transition to a net-zero economy";
2. after the words "ease of doing business here." there should be inserted the words "Ensuring that funding is made available to support the transition to a net-zero economy and towards promoting Sustainable Finance will support these goals and  provide  a  clear  action  plan  and  delivery  framework,  embedding sustainability into all financial practices."; and
3. after the words "seeking to reduce operating costs." there should be inserted the words  "Specifically,  making  funding  available  for  drivers  to  a  net-zero economy and the delivery of the Sustainable Finance Action Plan which will embed sustainability into financial practices and business practices and support the decarbonisation of the finance industry.".

REPORT

The Council of Ministers is sympathetic to the amendment; however, Ministers only support part (a), pending this minor amendment, and do not support parts (b) and (c).

The Council of Ministers wholly supportive of the Carbon Neutral Roadmap and the work being delivered to ensure a transition to net-zero. However, the Sustainable Finance Action Plan seeks to enable Jersey to meet international standards in this area, expand the size of our markets and services in sustainability, as a result, making our financial services industry more competitive and prosperous. It does not address the transition to net-zero, which sits squarely within the Carbon Neutral Roadmap.

Impact of Amendment 9

Amendment  9  uses  the  terms  "sustainable  finance"  and  "transition  to  net  zero" interchangeably. While the terms may seem connected, these are distinct areas.

Sustainable finance considers how money managed and administered through Jersey could help regions and communities meet their own sustainability needs. Opportunities arise for competitiveness through expansion of market share in services in sustainability. Decarbonisation of the financial services sector does not translate into business growth and is instead addressed under the Carbon Neutral Roadmap.

Recognising  the  importance  of  sustainable  finance  within  the  context  of  the competitiveness of the financial services industry in Jersey, the Council of Ministers propose an amendment to Amendment 9, as set out above. This is considered to strike the balance of ensuring that adequate focus and attention remains on the sustainable finance element of the competitiveness agenda without diverting funds away from the broader competitiveness needs of the Island.

The Sustainable Finance Action Plan does not address the matter of the financial services sector's transition to net zero and indeed this is not expected to be at cost to the Government of Jersey. Financial services businesses, like other businesses, will be taking steps in relation to their transition to net zero.

In light of the above, the Council of Ministers rejects paragraphs (b) and (c) of Amendment 9.  

Financial and staffing implications

There are no financial implications arising from this amendment. The amendment relates to allocations already proposed in the Proposed Budget (Government Plan) 2025- 2028.

Children's Rights Impact Assessment

A Children's Rights Impact Assessment (CRIA) has been prepared in relation to this proposition and is available to read on the States Assembly website.