Thursday, 26 September 2013

Rose Tinted Spectacles

There are bad times just around the corner
There are dark clouds hurtling through the sky
And it's no good whining
About a silver lining
For we know from experience they won't roll by
With a scowl and a frown we'll keep our peckers down
And prepare for depression and doom and dread
We're going to unpack our troubles from our old kit bag
And wait until we drop down dead
(Noel Coward)

Where do politicians buy their rose tinted glasses from? The world that they view seems very different from the somewhat gloomier one that the rest of us inhabit. A case in point is the report just out on economic performance of the Island. The BBC reports that:

"The 2012 figures, published earlier, show economic activity decreased for the fifth year in a row. Finance was still the main contributor to the measure of Gross Value Added (40.2%) but even this sector had shrunk by almost a third since 2008. The report from the States' statistics unit showed the "real terms" measure of GVA (allowing for the underlying rate of inflation) decreased by 4% to £2.78bn during 2012..Each separately-listed sector saw a drop, apart from hotels, restaurants and bars, which rose by 3%." (1)

Alan Maclean, however, is putting his own spin on this rather gloomy news. It is the 2012 figures, and he says that doesn't take into account the fact that this year matters have improved. He dismisses the figures as historical. A year is a long time in politics, to coin a phase. And he talked up on BBC Radio Jersey how the figures were better for tourism, so it is not all bad!

"Senator Alan MacLean, the economic development minister, said the outlook for 2013 looked more positive and that recovery was imminent." (1)

As my correspondent Adam Gardiner says: "certain sectors are showing some recovery, but it's the total economy we should ALWAYS focus upon."

Jersey Finance is also talking up the economy:

"Responding to the figures, Jersey Finance said: "It must be remembered that Jersey has fared better than almost all developed economies in terms of government borrowing (Jersey has no net debt) and employment levels (which remain far higher across all sectors than in the UK and many other G8 nations)." (2)

Only commentator John Boothman seems to give a realistic appraisal of the situation:

"Most of us were looking to see either a small improvement or a small decline but a decline on this scale, coming on top of several years of decline, is very disappointing indeed and it seems to be widely spread around the economy" (1)

Adam Gardiner, who corresponds with me, thinks that there is simply too much spin, when the decline in the economy is painfully obvious. He writes:

"You would think from the way Philip Ozouf and @Ringbinder (on twitter) have been talking over the last few months, the Jersey economy was 'well on track, 'beating the recession', 'showing signs of recovery' etc etc."

"And now we know the truth - not that we already didn't, Jersey not only still firmly in the doldrums but the little breeze we can feel is blowing us in the wrong direction. I am no economist or financial pundit, but I do have a sixth sense and its telling me that the island has a long, long way yet to go before it can genuinely claim to be 'on the road to recovery'."

"We have the retail sector in quite obvious trouble with shops closing almost daily. CI Bakery baked their last loaf only 5 days ago and we have recently lost the second largest shipping company serving the islands. That in addition to the dozens of business failures and job losses in parts of the finance sector of the last 18 months - yet all the time the civil service grows and grows and grows."

I also think there has been a knock on "domino effect" that we are still facing from the loss of Low Value Consignment Relief. The LVCR industry led to a considerable expansion of business before the recession and the removal of that caused major fallout, which we are still seeing today with postal and freight services.

But it is not just the prerogative of Jersey politicians and their supporters to talk up the economy, the same happens in the UK.

As the Huffington Post reports on the latest survey:

"Town centre shops closed at a rate of 18 a day over the first half of the year, despite signs of improvement in the wider economy, research has shown. The rate fell from more than 20 during the same period last year, but it was charity stores, betting shops and cheque cashing outlets that picked up the slack. This comes after research earlier this month found that the number of empty shops on British high streets has stayed roughly the same over the last year." (3)

"Betting shops, coffee outlets and supermarket branches were increasing on British high streets, according to the research. This comes as Chancellor George Osborne welcomed the fact last week that the economy was "turning a corner" and "looking better"" (3)

And if we try to compare like for like, the situation in Jersey does not improve. Adam Gardiner has provided me with the following rough calculation, which is certainly on the right lines (although the UK figures are only for high street outlets):

"18 closures a day in the UK, but given its geographical size and population suggests to me we are faring rather badly in comparison. As I understand Jersey has lost circa around 12 companies in last 12 months (i.e.: one per month) in a support population of 100,000. That extrapolates to the UK with a population of circa 50 million to something in the order of over 50,000 business failures last year. But 18 x 365 = 6,570 not 50,000!"

And he concludes: "We have to face it, Jersey has some serious problems. If only our politicians would admit that!"

At least Noel Coward got it right:

There are bad times just around the corner
The horizon is gloomy as can be
There are black birds over
The greyish cliffs of Dover
And the rats are preparing to leave the BBC
We're unhappy breed and very bored indeed
When reminded of something that Nelson said
While the press and the politicians nag, nag, nag
We'll wait until we drop down dead


1 comment:

James said...

Senator Toothpaste has to talk up the economy. If the plans go through for the latest gerrymander of the States as was suggested this morning, there will be ten senators scrambling for six seats... and the odds on him winning up against Paddington, Gorst etc look very slim indeed.