Vice President's Speech at Chamber Lunch 25th February 2016
Thursday 25 February 13:30
What is our Burning Bridge?
I am delighted to be able to stand here as your Chamber Vice President and welcome you to another sell-out lunch. We have been delighted with the support that you our members - and I see a few prospective members do I not - have shown us.
After lunch we will be hearing from Susie Pinel, our Social Security Minister who will be speaking to us on the subject of "Getting On With Business."
But first, I'd like to speak for a few minutes on Change.
Change comes in many forms, change to help businesses compete, change to help businesses improve productivity and profits, change to fix other problems.
In my experience there is a key thing beyond most other things that makes for effective change
And that is a burning bridge
Picture that. The bridge you are standing on is burning. You're going to make damn sure you are not on that bridge for long.
And that is a key thing that we do not seem to have in Jersey
Sure we have lots to do, lots of directions to go, lots of things to fix… but where is our burning bridge? What is the deadline or the key thing that's going to happen that drives us to action today?
We hear about the so called Black Hole, a £145m annual deficit in our economy - and the Fiscal Policy Panel who are independent believe it is probably structural. But there is some debate regarding how much of that is the real deficit and how much is investment in the future? We hear about user pays charges, but what does that mean to the average Chamber member or the man on the street. And when does this become unsolvable?
The perception seems to be that our bridge isn't so much burning as mildly smouldering. How long can it smoulder?
Perhaps because we have plenty of assets and perhaps a perception from some that we have plenty of capacity to tax more, perhaps that is what is taking the urgency away?
There are costs to cut, there are savings to make, but without the bridge being on fire, how deep and how wide ranging will our cuts really be?
I'm looking forward to seeing MTFP 2 which is due out in June, setting out detailed departmental spending 2017 to 2019 - what do we want to see in here?
I echo some of Kevin Keen's words who spoke at the IoD Lunch on Tuesday. He called for the States to concentrate on its core activity and get rid of those things that get in the way. Car parks, abattoirs, incinerators, sports centres… important and necessary yes, but things that can be run by commercial organisations that can be held to account on SLAs and budgets.
Do what you do best and outsource the rest.
I offer Chamber's support in this. We recognise that this is a difficult debate to have, that there is a 4 year cycle in which popularity is important, we understand that, but we can work with the States to help navigate this.
Tough decisions need to be made, but these can be done in partnership with us.
The first step to solving a problem is to recognise there is a problem. Do we have a deficit or not? Are we able to identify and make the cuts we need?
We have come through a difficult time the last few years. Winston Churchill said "Never let a good crisis go to waste" - Jersey's pretty much tried to ignore the recession and expect it to go away, and in that time our Net revenue expenditure has gone from £480m in 2007 to an expected Net revenue expenditure as detailed in the current MTFP in 2016 of £740m - even adjusting for inflation, that's a 30.7% increase in spending versus a 2.2% increase in income. During that time, many commercial businesses in Jersey and the UK have tightened their belts and got used to trading meaner, leaner and more productively, they've had to, they've had the burning bridge…
We also welcome the move towards innovation, investing in local businesses to raise our creative and innovative solutions to the problems of today and tomorrow. Madness, as they say, is doing the same things and expecting something different. If we are to truly believe that we can attract inward investment for reasons of innovation, then we by definition must take more risk. One of the things that has stood Jersey in good stead over the last few decades is our stability and aversion to risk - a key reason why the finance industry is here after all. However innovation cannot be done in a risk free environment. Our attitude to risk and innovation must change. We commend the commissioning of the report by Terra Allas and the ongoing action plan, but we must see actions and outputs that align with our drive to push Jersey's innovation forward. When do we need to start to see some signs of success - today, tomorrow, next year, when? What is our burning bridge?
So what does Chamber want?
We want acknowledgement of the issues so that we can work together to fix them
We want to see a smaller, more focussed government, concentrating on what it is good at, working with us all to navigate Jersey through the tough times.
We want to see a true drive to innovation within Jersey, taking the first few steps towards taking some calculated risks in order to develop our international innovation credentials. Doing things differently.
Jersey has a great future ahead of us, but only if we are prepared for significant change.
That's not to say that some change isn’t happening… The Social Security Department has certainly been making some changes recently.
After lunch we will be hearing from Susie who is herself no stranger to public comment. Some changes have been made that have been beneficial to our Island
New legislation relating to sex discrimination and age discrimination, revisions to benefit regimes, grappling with Minimum Wage reviews among other matters that Susie and her Department have tackled.
Of course Chamber wants the less fortunate to get a hand up, but this can only be paid for by a healthy economy. Chamber members know that if you want your business to do well you need the best people so you have to treat them well, that said we must have flexibility if we are to have the confidence to create new jobs and help deliver the change that Jersey needs to deliver our island safely and prosperously into the hands of future generations.
But first, enjoy your lunch.