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Doubt cast over effectiveness of tax and public services investigations

Doubt cast over effectiveness of tax and public services investigations

Thursday 06 April 2023

Doubt cast over effectiveness of tax and public services investigations

Thursday 06 April 2023

Fears that poor corporate governance will not deliver the best outcomes in raising more tax from corporates and reforming public services have been raised by deputies

The Policy & Resources Committee has tasked two of its members to head up new sub groups in the wake of the stalemate tax debate, in which no meaningful revenue raising or cost cutting measures were agreed.

One group is being led by Deputy David Mahoney and comprises Deputies Carl Meerveld, Sasha Kazantseva-Miller and Simon Vermeulen, along with non-States member Dave Beausire. They will investigate ways to reform the delivery of public services, cutting costs and seeing how the private sector can help.

The States agreed in February that up to £16m worth of savings needs to be found in five years.

The other, led by treasury-lead Deputy Mark Helyar, will carry out consultations with the Jersey and the Isle of Man before the end of the year to find a new way to raise tax revenue from corporations. 

It comprises Deputies Lydon Trott, a former Chief Minister and current chair of Guernsey Finance, Nick Moakes, Economic Development’s finance-lead, and non-States member Andrew Niles.

But there are concerns these groups have not been formed in a suitable way, or with the most appropriate individuals. 

Deputy Charles Parkinson

Pictured: Deputy Parkinson won little support from States’ member when he proposed torpedoing P&R’s tax package and replacing it with Corporate Income Tax.

Deputy Charles Parkinson, a former treasury minister who unsuccessfully attempted to steer a territorial corporate tax system through the States instead of a GST, said he did not apply to be on the corporate tax subgroup and he “wasn’t aware of any application process”.

He added that he was “disappointed” to not have been invited to join the group, and fears that “no fundamental change” to the corporate tax regime will ultimately be proposed.

“The chosen group will deliver the answer that P&R wants.”

But Deputy Parkinson believes the appetite for a change may be growing in Jersey and the Isle of Man: “I think that opinions are changing in the other Crown Dependencies, and some politicians in those jurisdictions see the sense in replacing zero-10."

Deputy Heidi Soulsby

Pictured: Deputy Soulsby also took aim at the selection process.

Policy & Resources’ former Vice-President, Deputy Heidi Soulsby also criticised the lack of competition in the selection process during States question time last week, asking why the non-States member was invited onto the subgroup.

Deputy Peter Ferbrache, President of P&R, replied: “We just wanted to get on with something. I've worked with these people for the last two and a half years or so."

Later on Twitter Deputy Soulsby said: “It’s poor governance, but then we heard Deputy Ferbrache say governance came below ‘substance’, whatever that means, and went on about Alf Ramsey choosing football teams."

Deputy Adrian Gabriel queried why a member from Health & Social Care, the States’ most cash-hungry committee, did not feature in the cost-cutting subgroup, as well as what the governance arrangements for each group would be.

Deputy Ferbrache said: “Governance is important - substance is more important, getting things done is more important. I'd rather they hit the ground running. They'll work their own rules of governance, they'll act properly."

Former Chief Minister, Deputy Gavin St Pier, also questioned on Twitter: “Why does it have to be governance vs substance? Can't we have both? Certainly that would be preferable to neither."

The public services group will report back with recommendations by March 2024, while the corporate tax investigations will be presented in November.

Any new measures will be on top of real-terms budget cuts from all States departments, bar Health & Social Care, of between 2.5% and 3%, which, if found, will kick in from next year. 


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