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Government Plan: Ministers’ Comments on Amendments

Nov 22, 2019

Ministers have now carefully considered all the Government Plan amendments and tabled comments on all those amendments which they are not amending.

23 amendments were lodged for consideration by the States Assembly, and Ministers have already tabled five modifications to amendments they want to support, going as far as possible to meet the objectives of these amendments in a way that is sustainable and affordable.

However, there are several amendments which Ministers cannot support, either because they would direct funding away from priority areas agreed by the States Assembly, because they create spending commitments that cannot be sustained, or because they remove efficiencies to create a deficit when one of the core principles of the Government Plan is to balance income and spending.

Amendment 1 – (Deputy Geoff Southern) asks for an extra £0.9 million to subsidise the cost of GP appointments for certain groups.

Ministers’ comment – Ministers want to reduce the cost of primary care for vulnerable groups, but supporting people aged 65+, young children, pregnant women and Income Support recipients may not be targeting those in most need of support – eg those of working age with a chronic health condition.

Surgeries already offer discounted fees for children, and subsidising pensioners irrespective of their income would not be a good use of public money.

The Government Plan will improve access to primary care for financially vulnerable people as part of the new, sustainable model of care.

Amendment 3 – (Environment, Housing and Infrastructure Scrutiny Panel) proposes to use money from the Strategic Reserve, rather than from the Consolidated Fund, to establish the Climate Emergency Fund

Ministers’ comment – The Strategic Reserve is to insulate the island’s economy from severe structural decline, like the collapse of a major industry, and the Fiscal Policy Panel has advised Government that the Reserve should be larger. Recognised policy challenges should be financed from current revenue.

Amendment 4 – (Environment, Housing and Infrastructure Scrutiny Panel) proposes to increase road fuel duty by 4p per litre rather than by 6p. This would reduce the transfer to the Climate Emergency Fund by £1 million.

Ministers’ comment – This would avoid a polluter-pays tax and limit Government’s ability to start work on tackling climate change. The extra duty is intended to change islanders’ behaviour, reduce air pollution and traffic congestion.

Amendment 6 – (Environment, Housing and Infrastructure Scrutiny Panel) proposes not to establish the Financial Stability Board, saving £150,000.

Ministers’ comment - Jersey needs a Financial Stability Board to help protect the Island from the underlying threats to our economy that resulted in the 2008 global financial crisis. The Board can help to understand the total indebtedness of our economy, check our institutions can withstand extreme financial shocks, and protect Jersey against anything that might destabilise the economy.

Amendment 7 – (Government Plan Review Panel) proposes to remove the Efficiencies Plan from the Government Plan and debate it separately at a later date.

Ministers’ comment – It is important to maintain the Government Plan as a combined package of spending, investment, efficiency and modernisation proposals for the coming four years. Ministers share an ambition to invest in the long-term, sustainable wellbeing of all Islanders, but must do so in a responsible and fiscally prudent way.

Delivering efficiencies helps to fund the spending plans set out in the Government Plan, without commensurate increases in taxes.

Amendment 9 – (Deputy Carina Alves) proposes to increase the contributions paid on earnings and self-employed income above £53,000 a year and to increase the duration and value of parental benefits, over and above the proposals put forward in the Government Plan.

Ministers’ comment – These significantly higher contribution rates could add to the cost of doing business, adversely affect Jersey’s international competitiveness and not raise the expected revenue.  The money could be better spent in other ways to help all low-income households with children or babies.

Amendment 10 – (Deputy Rob Ward) proposes to increase GST on luxury cars and transfer the resulting income into the Climate Emergency Fund. He also asks for an estimate of the impact of reducing GST on solar panels, electric vehicles and heating, insulation and double glazing, with a view to zero-rating them from 2021.

Ministers’ comment – Measures to vary GST for particular goods and services should only be considered if there is very strong evidence to support them, and that evidence has not been provided. The Tax Policy Unit is working on a programme of tax policy projects and it would be a better use of resources to consider GST as part of the Government’s overall Climate Emergency work.

Amendment 12 – (Senator Kristina Moore) proposes to give £350,000 in sponsorship to OceansLab – Race to Zero Emissions

Ministers’ comment - This proposed sponsorship does not deliver immediate on-island reductions in carbon emissions. The climate emergency fund could include an innovation or community fund from which community projects could bid for funding, but there are no criteria agreed and no governance yet established for project selection.

Amendment 13 – (Deputy of St Peter) proposes to restrict impot duties on alcohol to RPI (2.7%)

Ministers’ comment – This amendment is not funded and would reduce States income by around £1.05 million per year.

The Government’s policy is to use duty to reduce alcohol consumption. Affordability, availability and advertising are the three strongest policy levers. Tax on alcohol is recognised internationally as an effective way to deal with alcohol use and there is no reason to suggest Jersey is different.

Also - evidence shows that young people are particularly sensitive to price. This age group is known to drink in a more hazardous way before the adult brain is fully developed. There is evidence from our school survey of a reducing trend of alcohol consumption over the previous decade.

Amendment 14 – (Connétable of St Helier) proposes that decisions on spending from the Climate Emergency Fund should be decided by a Committee of States Members elected by the States Assembly.

Ministers’ comment - The Minister for Environment only has authority to approve disbursements in line with expenditure proposals approved by the Assembly. The structure, governance and accountability framework for the Climate Emergency Fund are sound and transparent and will ensure that all States Members can contribute to Jersey’s response to the global climate emergency.    

Amendment 15 – (Connétable of St Helier) proposes to allocate £15,000 to set up a Policy Development Board to consider which activities, responsibilities and services could be delivered by a Conseil Municipal of St Helier.

Ministers’ comment – There is no clear mandate for a Conseil Municipal. While a St Helier Parish Assembly recently supported the idea, the States Assembly rejected a similar proposal in 2015, and has not yet considered the new proposal. A Conseil would be a fundamental change for the parish system and could run counter to current attempts to co-locate and cluster services, by adding complexity and slowing the pace of change.

Amendment 16 – (Corporate Services Scrutiny Panel) proposes to reduce the increase in contributions to the Long Term Care (LTC) charge to 0.5%

Ministers’ comment - This amendment would mean the rate will need to increase in future, which will place an unfair burden on younger people. Increasing the rate now creates a fairer balance between the generations.  About 30% of people do not pay LTC contributions because their income is below the income tax threshold.  Most of the extra contributions will be paid by people with high, or very high, incomes.

Amendment 17 – (Corporate Services Scrutiny Panel) proposes to increase Child Allowances and Child Care Tax Relief.

Ministers’ comment – While this is a well-intentioned proposal, it is premature to make these changes while reviews of personal tax and nursery education funding are still underway.  Also - tax allowances and reliefs may not be the most effective way to provide support to those who are most in need.

Amendment 19 – (Corporate Services Scrutiny Panel) proposes to move £5 million into an Assisted Home Ownership Scheme

Ministers’ comment - The Housing Policy Development Board will report early 2020 with a comprehensive package of policies to address the challenges in Jersey’s housing market. It is premature to re-introduce the 2013 loan scheme in isolation. Introducing a deposit loan scheme to increase the demand for homeownership without increasing the supply of affordable housing is likely to heat the market and increase house prices. We must adopt a consistent approach to assisted and affordable housing ownership schemes.

Amendment 20 – (Corporate Services Scrutiny Panel) proposes to increase stamp duty on properties that sell for more than £1 million, raising an extra £1.06 million.

Ministers’ comment - The Housing Policy Development Board will report early 2020 with a comprehensive package of policies to address the challenges in Jersey’s housing market.  Any consideration of changes to stamp duty must be considered in the context of these proposals. Increasing stamp duty is likely to discourage house moving, slow down the housing market, increase house prices and reduce affordability.

Amendment 21 – (Senator Sam Mézec) proposes to remove the income ceiling on long-term care (LTC) contributions instead of increasing the LTC contribution rate by 1% in 2020.

Ministers’ comment – This proposal would not create a sustainable LTC scheme for future generations and could lead to Jersey becoming less competitive at attracting highly skilled and wealthy people who make an important contribution to our society and economy, and to government’s overall income.

Amendment 23 – (Deputy Louise Doublet) proposes to allocate an extra £91,000 to employ an Infant Feeding Lead and two part-time peer supporters to help mothers to breastfeed.

Ministers’ comment – Ministers share Deputy Doublet’s commitment to supporting breastfeeding, however we already provide the support proposed in this amendment:

  • Nutrition Strategy and Young People’s Plan prioritise the UNICEF Baby Friendly Initiative
  • Family Nursing and Home Care (FNHC) have achieved the first level accreditation in the Baby Friendly Initiative and Health and Community Services (HCS) anticipate reaching the same accreditation in 2020
  • Breastfeeding is supported by the HCS midwifery team, FNHC, and independently by the National Childbirth Trust

Chief Minister, Senator John Le Fondré, said: “The Government Plan presents a combined package of spending, investment, efficiency and modernisation proposals for the coming four years.

“We have proposed targeted increases in alcohol, tobacco and road fuel duty, raising around £6 million in 2020, to encourage Islanders to drink and smoke less, and to consider how they travel. This figure is balanced by increases in income tax allowances worth around £6 million in 2020, so taxpayers will pay similar amounts in extra duty as they save through allowances.

“While we support many of the aims of these amendments, we are concerned that some are premature, and others do not provide a means of funding. We have various reviews underway – for instance into nursery funding and Jersey’s housing market – which need to consider provision holistically before discussing specific support options like tax allowances and assisted ownership schemes.

“We want to invest in the long-term, sustainable wellbeing of all Islanders, but we must do so in a responsible, evidence-based and fiscally prudent way.”

The States debate on the Government plan starts on 26 November.

Government of Jersey News Release.

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