Monday, 25 April 2011

Whither Jersey? Jersey and GST

Jersey has one of the highest incomes per head of any jurisdiction in the world. But that also means it has one of the highest disparities in income. Substantial numbers of people in Jersey suffer from relative poverty, most obviously inflicted on them through the cost of housing. But more important still are those living in absolute poverty, of whom there are far too many in a community of Jersey's size. As unemployment rises, this problem will only get worse.

Care for the poor should be an issue for all in politics, in society, in churches and faith groups and beyond: it is the symbol of the ability of people to work in community. Arguing against provision for those who are in need indicates a lack of that compassion and indicates a failure of society.

It is a minor inconvenience to decide whether a Jaffa cake is subject to GST or not compared to the importance of being able to put food on the table before hungry children. It is an indication of moral failure that the former appears for some more important than the latter. (1)

As the debate comes back again, and some politicians groan that we've been here before, and it is time to accept GST on food and domestic fuel, and never mind that food prices are increasing rapidly and fuel costs are rocketing sky-high, with prices increasing weekly.

What are the fundamental consequences of maintaining this model of GST for the future, and it rising beyond 5%? Here are some speculations for  how Jersey society may change:

a) At time point, Jersey will become too expensive a place to live for casual labour, or the cheapest labour. That kind of immigration will slow down and may even cease. Traditionally, most of this was in the hospitality industry and farm working. And I think we have already begun to see this, with the move to shift the unemployed into hospitality, which is already suffering from a dearth of numbers.

b) Jersey will still see immigration, but this will be into well paid sectors like finance, where the prospects are still sufficiently good to mitigate against the rise in the cost of living. These are the people who can afford to send their children to private schools, and there will be, as we have seen, sharp political pressure against any attempt to seriously damage private education. That's not to say a squeeze won't come, but it will squeeze those on the margins, not the better off, and will have to come in more gradually.  Meantime, the economic downturn means that the finance sector may well contract, so that immigration here too will fall. The time for housing qualifications may be further reduced, to encourage people to come and work in Jersey without excessive rental demands, and also to encourage those who want to work in the finance sector with the promise of qualifications in a shorter time.

c) The public sector will continue to pay outrageously high wages for "the best people", as this ensures that the top jobs will be filled regardless of cost, and unlike the private sector, there is not the same pressure for restraint. Politicians will attempt to introduce vetoes, but the caveats surrounding such restrictions will make them very difficult to operate in practice.

d) The ageing population will have to work longer to ensure less of a burden on the social security pension fund. This will not, however, prevent richer residents from retiring up to two years earlier, and taking money from the fund which will take around 16 years to catch up with (or never if they die before that). As a result of the increase in working age, more of the wealthy will choose to retire early.

e) The "captive population", those who have invested personally in living in Jersey, but who do not have wealthier jobs, will find the cost of living and the burden of indirect taxes increasing hard to cope with. Some may choose to leave. Those who have lived here for many years will find this harder to do so, and the degree to which people require income support will rise, prompting resentment from wealthier taxpayers who resent paying their taxes to support the less well off. This will play out into the political arena, where rhetoric will attack those who argue for compassion for the poorer.

f) Politics will become even more polarised that it has at present, with a political elite seeking any means it can to cling on to power. Kinds of gerrymandering, such as election deposits, will return to be debated, further disenfranchising the poorer members of the population. The length of speeches will be shorted so that opposition politicians have less of a public forum in the States to make their constituents views known. A "lean government" party will emerge, fueled by the resentment against high salaries and high departmental expenditure, and this will seek to reduce the income burden by making income support more difficult and with higher thresholds.

g) The health of the poorer members of society will become increasingly worse as prescription charges are re-introduced, and it becomes harder to face the burden of medical costs, especially for emergency call-outs. As a result, mild epidemics will become more severe.

Jersey doesn't have to change like this - these are just "what if" speculations. But sometimes it is as well to have the unexpected consequences of actions in mind before they occur, and while they are still preventable. Rather than thinking, in "Imagine Jersey" fashion, along pre-programmed lines of action, which will (it is assumed) produce particular results, and which is still behind the thinking of some politicians on GST, it is worth considering the worst that may happen, and seeking ways to actively prevent that. As Karl Popper memorably notes:

Whenever we are faced with a moral decision of a more abstract kind, it is most helpful to analyse carefully the consequences which are likely to result from the alternatives between which we have to choose. For only if we can visualize these consequences in a concrete and practical way, do we really know what our decision is about; otherwise we decide blindly. In order to illustrate this point, I may quote a passage from Shaw's Saint Joan. The speaker is the Chaplain; he has stubbornly demanded Joan's death; but when he sees her at the stake, he breaks down : 'I meant no harm. I did not know what it would be like .. I did not know what I was doing .. If I had known, I would have torn her from their hands. You don't know. You haven't seen : it is so easy to talk when you don't know. You madden yourself with words .. But when it is brought home to you; when you see the thing you have done; when it is blinding your eyes, stifling your nostrils, tearing your heart, then-then-O God, take away this sight from me!' There were, of course, other figures in Shaw's play who knew exactly what they were doing, and yet decided to do it; and who did not regret it afterwards. Some people dislike seeing their fellow men burning at the stake and others do not. This point (which was neglected by many Victorian optimists) is analysis of the concrete consequences, and their clear realization in what we call our 'imagination', makes the difference between a blind decision and a decision made with open eyes; and since we use our imagination very little, we only too often decide blindly." (The Open Society and Its Enemies, Karl Popper)

Richard Murphy, Letter to JEP


rico sorda said...

Hi Tony

I love it when you do these Blog Postings. They are always well thought out and written. I believe you have described Jersey as it is now.

"Care for the poor should be an issue for all in politics, in society, in churches and faith groups and beyond: it is the symbol of the ability of people to work in community. Arguing against provision for those who are in need indicates a lack of that compassion and indicates a failure of society"

Tony, when I chat with people about the 'Jersey Child Abuse disaster' the above quote always comes into play. I have always believed that our society is failing. Look how the majority of our politicians have acted concerning the 'JCAD' zero compassion for the victims.

Be it Child Abuse or any other issue the same applies; this lot just don't care. Protect Jersey and her money god at all times and stuff anyone else. We are morally and socially bankrupt. Like an old biblical story we sold our sold to the devil yet I see plenty of Churches and faith in the Island.

Tony, why and how did Jersey end up like this. I speak to more and more people about these issues.

The leadership of Jersey is dire.

"Arguing against provision for those who are in need indicates a lack of that compassion and indicates a failure of society."


Anonymous said...

There's some comment on senator Ozouf's blog about inflation and senator Breckon's proposal.


Ian Evans said...

Written with a very certain knowledge....Thanks Tony