Friday, 27 June 2014

Guest Post on Plemont by Michael du Pre

Michael responded to my blog by email, and has kindly agreed to make public this response for a wider audience. My original blog is here - to see the points A-C which he comments upon below.

While I think the proposition (as it stands) has some flaws, notably about guarantees to the States on ownership should the National Trust run into financial difficulties (on which his comments are also pertinent), there is also a deadline to all of this, as Michael reminded me.

Because of that, I think one would have to accept the proposition, flawed though it is - the second flawed on Plemont, but not quite as flawed as before (as it does not involve compulsory purchase or a "blank cheque" approach which was really unacceptable). This is a chance which will be unlikely to come our way again.

And Michael also makes some very good points below in favour in as well. Please read his response carefully.

Guest Post by Michael du Pre, chairman, Save Our Shoreline

As you will know, we are in favour of the States purchase so I have only addressed the objections that you listed.

My comments:

(a) GST: Assuming that next year, or the year after, there would be no need to raise GST  for other reasons, the purchase of Plemont at this knock down price would mean that the GST rate would have to be raised for one year only to 5.2%.

But this is (unlike GST which is a revenue item) a Capital item.

To explain the difference, this means that the Income and expenditure budget in future years should only be charged, not with £3.5m, but with the cost of the annual usage of the asset. (e.g. office furniture, one tenth; a building, one fiftieth etc). If we assumed that Plemont's 'use' to the island would disappear after 100 years we would have to charge this years Income and Expenditure account with 1/100th of £3.5m, that is £35,000, which is hardly a worrying figure. In actuality it has an infinite number of years use so even that figure is overstated.

Of course, we might have to go out and borrow the £3.5m. This would cost 3.5% of the capital sum which would amount to an interest charge of £122,000 but, against these (in States terms relatively tiny) costs one has to take into account the tourism, education, and health and well being etc invisible benefits.

(b) surely it is the urban residents who stand to gain most by having an additional recreational facility which will become more accessible by the introduction of more car parking facilities and a more attractive 'joined up' coast line away from the hustle and pollution of the town?

As for the 'class' argument; I have walked with many different walking clubs in my past and know that such activity cuts right across class barriers. Similarly, with opera, where I have met many new recruits to this form of music from all classes. Again accessibility is the thing and of course if there is no facility, a wide range of people will never get the chance to try it out and grow to appreciate and like it.

(c) Having examined the Nation Trust's accounts, I tend not to agree with their Treasurer's view that they are in such a 'parlous state'. They have £5m of investments and £1m of land and Buildings. Their recent revenue losses are tiny in comparison and they could in theory continue to make such annual losses of similar amount well into the future without running into problems. (Not that I am suggesting that they should mind you!). However, a large part of their annual income comes from donations and, after having scraped the barrel in respect of agreeing to put up the first £3.5m, they need to be very cautious for a few years to come. Therefore, I do not think that the proposal that they take on a loan in respect of the second tranche is a good one.


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