Friday, 13 March 2015

Political Quacks

Fireworks on BBC Radio Guernsey

Kevin Stewart @kevinstewartgsy
On @BBCGuernsey just after 8 dealing with telcos that want our spectrum for free. It's our property right owned by all taxpayers.

“A heated debate between two Channel Islands ministers over whether a proposed fee for mobile phone companies in Guernsey is a tax or a charge has taken place. Jersey's Assistant Chief Minister Philip Ozouf referred to the plans as a tax in the interview on Jim Cathcart's BBC Radio Guernsey programme. But Deputy Kevin Stewart, Guernsey's Commerce and Employment Minister, argued it was not a tax but a charge. The States of Guernsey is considering a radio spectrum charge for mobile phone operators at the end of March.” (1)

I heard this on the radio – it was a wonderful piece of drama. Clearly the Guernsey Deputy has no vested interest in working alongside Philip Ozouf, and there was a very vocal clash between the two on the radio. It reminded me a bit of the Heath / Wilson debates in the 1970s.

Incidentally, the "arms length" independence position between the States and Jersey Telecom, cited by the Senator, did not prevent the States voting (as majority shareholder) to increase their dividend. As Treasury Minister, he requested a £6m dividend from the Telco to help the States plug a £31m budget deficit for 2014, and the money being paid in a dividend to the States had been earmarked for rolling out fibre optic cable, causing delays. A puppeteer can be arms length from the puppet, but they can still pull the strings, as Philip Ozouf did.

Philip Ozouf was adamant that it was a tax, not a property right for which a charge could be made. If it looks like a tax, I apply the “duck test”, he said. If it looks like a duck, walks like a duck, quacks like a duck, then it is a duck. 

Strangely, when the Long Term Care scheme came in, and was strongly based on the income tax paid, and also collected via the tax ITIS system, it was not deemed to be an increased tax, but a charge! The States ducked that issue.

“Taxpayers in Jersey will make a compulsory contribution towards the cost of long term care, after a vote by politicians.”

The photo which graces this blog has the blurb - “It looks like a tax hike. It walks and talks like a tax hike. It has been seen associating with other tax hikes. But, it is not a tax hike.”

Clearly, for the Senator, Guernsey mobile radio ducks are ducks, while Jersey long term care ducks are not. There is an inconsistency here, and I think Philip Ozouf came off the worse – indeed, he sounded rather like a lame duck.

Listen to part of the exchange at

Dirty Tricks at the Waterfront

Dandara have come out and said the States plans for an International Finance Centre on the Waterfront are not viable.

“Jersey's biggest private developer Dandara says taxpayers are in for a shock if the States go ahead with plans to build an International Finance Centre. They say the development is set to lose more than £70 Million. Dandara say it "represents a huge risk, in financial terms, to the Public Good".” (2)

Now the Jersey Development Company, the Quango charged with making the centre a reality (and justifying their considerable expenses) had hit back, revealing that – horror of horrors – Dandara were in the bidding for the development back in 2008. That was, of course, the scheme which was taken on for a while by Harcourt Developments.

But what would be viable in 2008 is very different from today. The States made their decisions, and the plans were approved before the major recession came and the banks teetered on the edge of the abyss. Post-recession, the picture was very different – which is why Harcourt could not secure a high enough bond to guarantee no loss to the States if they went out of business.

The States, of course, have not had problems securing loans to get the enterprise off the ground, but banks will cheerfully take on the risk that the Jersey economy is not going to collapse. Effectively, the taxpayer is the guarantor. So it is rather different when loans are guaranteed by the States, rather than being guaranteed by a private developer.

And if Lee Henry is digging up the dirt in the archived correspondence, perhaps he can also find where it was minuted to change from a mixed office and residential development, with retail outlets on the ground, and winter gardens, to the somewhat stark cubist style office blocks now on offer.

I can think of a name for the development though – Bleak House. This would be appropriate because for one thing, it will be very stark and bare – and the trees put in the drawings are put there by architects, not horticulturalists, who would know better that it takes many years to grow trees that high.

And rather like Bleak House, this saga, will I feat, not lead to a great return to the States, any more than the court case of Jarndyce and Jarndyce. The Jersey Development Company manages a good deal of property on the waterfront, but the return to the States is pitifully small; most of its income is consumed by salaries, including a rather high one for Mr Henry, and all kinds of consultancy and legal stuff. If the return to the States is so slender now, what hope for the future?

How the Scales of Justice are Weighted

“People who lost thousands in a property scheme will not get compensation, the Jersey Council of Ministers has ruled. Investors lost hundreds of thousands of pounds nearly 10 years ago when a group of financial advisors used the money to pay debts instead of buying property.” (3)

Remarkably, although Ian Christmas was ordered to repay the £100,000 he convinced Marie Cotrel to invest in a property scheme, he managed to appeal this and saw the amount reduced to £30,000 paid at the rate of £500 per month. As the BBC reported:

“Mr Christmas's lawyer argued any compensation order would be oppressive and a burden for the former magistrate as it could force him into bankruptcy” (4)

He can, however, live with his wife in the property in Reading which is in her name.

Meanwhile, as the BBC notes:

“Jenny Sandall, who lost her retirement funds in the fraud, said she would fight on for compensation and to recover the money lost, as it had a devastating affect on her and her family. She said: "I have worked like everyone to make sure when you retire you receive a pension and comfortable living, I have worked since I was 15 years old and at the end of it somebody has just taken everything.” (3)

I rather feel that Mr Christmas got off rather more lightly with the compensation which he had to pay than the victims of the scheme. What do you think?

RIP: Terry Pratchett

And finally, it is sad to learn of the death of Terry Pratchett. As this is a political blog today, and there is a general election coming up in the UK, and we had one here last year, this quote is, I feel, rather appropriate:

"The Ephebians believed that every man should have the vote. Every five years someone was elected to be Tyrant, provided he could prove that he was honest, intelligent, sensible, and trustworthy. Immediately after he was elected, of course, it was obvious to everyone that he was a criminal madman and totally out of touch with the view of ordinary philosopher in the streets looking for a towel. And then five years later they elected another one just like him, and really it was amazing how intelligent people kept on making the same mistakes.”

Our political systems are nothing at all like that – are they?




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