September 2016 Chamber of Commerce Lunch – Vice President's Speech
Tuesday 6 September 14:00
Welcome to September's Chamber of Commerce Lunch, our first one after the summer break and 111 days left to Christmas(!). We only found out on Sunday that our President Kristina Le Feuvre was going to be unable to welcome you today as advertised, but I am honoured to step in as is my job as your Vice President and address you today.
So It's been a pretty interesting few months for Jersey and the UK.
There I was on the morning of the 24th June knowing I had a raft of interviews that day to give, detailing Chamber's opinion of the result of the Brexit vote.
We knew it would be close, but as 4am rolled by and the sun started to rise, it was clear we would be looking at a very different result that we were expecting. Scratch the notes I'd done indicating the result was as expected and that we could not get back to some sort of normality and started to work out what was likely to happen post Brexit vote and what it means for Jersey.
And here we are 10 weeks later and still asking the same question.
What does Brexit mean for Jersey?
The recent Medium Term Financial Plan (MTFP) was lodged at the end of June and is due to be debated by our politicians at the end of this month. This MTFP sets out the income and expenditure plan for the States from 2017 to 2019.
The Fiscal Policy Panel (FPP) was established to provide Jersey's Treasury and Resources Minister and States members with independent economic advice on matters relating to tax and spending policy, and the use of the Stabilisation Fund.
In their report released last week into the latest MTFP (and I quote);
"The Fiscal Policy Panel has lowered its economic growth forecasts for Jersey for 2016 and 2017. The economy is now expected to grow by just below 0.5% in real terms in 2016 and be largely flat in 2017 and 2018, although there is an even larger band of uncertainty around these forecasts than previously. "
In fact, the word "uncertain" appears 19 times in that report and that is a key characteristic of the impact of Brexit over last 10 weeks and our journey into the end of 2016 and beyond.
This is highlighted as a key risk in the FPP report, that external economic volatility means that the range of future oncomes is wider than normal. It is the FPP's recommendation that during the term of this MTFP that any shortfall be drawn from our reserves rather than knee-jerking a change to the fiscal policy. We shall have to watch on with interest as the future unfolds.
So what is Chamber's impression of the MTFP report?
We are concerned about the methods that would be employed to measure the new liquid waste charge. Seemingly the method used will be related to the use of water which is likely to mean a significant increase in charges for some sectors over others, such as the hospitality industry.
We are also concerned over the increase in taxation - be that explicitly or implicitly through the tax by any other name which is the new health charge.
We welcome the efficiency savings proposed in the MTFP and welcome Deputy Wickenden's appointment as Assistant Minister for eGov as this is a key programme of work to drive efficiency through the States. We look forward to hearing about progress here soon.
On a different note, this week will see the polls open for the Senatorial By-Election. Unfortunately it seems that the engagement with islanders has been less than fantastic, with low turn-outs at the Hustings. During these uncertain times, it is imperative that our Government and any newly elected politicians find ways to engage with us - but we must ensure that we participate in the polling tomorrow. We are all busy, but please find time in your busy schedule to exercise your democratic right and get yourself to your polling station, and do what you can to ensure that your friends, families and work colleagues do the same.
After lunch we will welcome Stephen Boyle, RBS Group Economist, as guest speaker. Stephen will discuss topical matters affecting both the UK and Jersey’s economies.
But for now, please enjoy your lunch.