Sark: A Failed State?
The problems in Sark can be traced back to at last as far ago as 2013. As BBC News Reported:
“A move to appoint a full-time civil servant in Sark has been lost by a 13-14 vote in Chief Pleas. The General Purposes and Advisory Committee called for the post to reduce the workload of politicians. The move was also suggested by Colin Kniveton, who was hired for four months to refine the recommendations made in an independent review of government. Some also said the cost, with a salary of £35,000 to £45,000 plus expenses, was too high. The move to create a small civil service was first recommended in the independent review of Sark's government carried out by Belinda Crowe, a former UK senior civil servant.”
“Conseiller Charles Maitland, the chairman of the committee, said: ‘Despite that we usually run at quite a considerable surplus in Sark you only have to mention spending money and everyone gets really alarmed. Somebody who knew what they were doing coming in to help us run Sark would actually pay for themselves quickly.’ He said: ‘I think the island desperately needs to begin the process of reform.’”
In 2014, matters worsened, when four of the six hotels were closed. An announcement was made that
“The four Sark hotels owned by the Barclay brothers will stay closed next year due to a lack of visitors.”
As BBC News reported in 2015:
“The Aval du Creux and Petit Champ have been closed since the start of 2014, while Dixcart Bay and La Moinerie closed ahead of the 2015 season. The closures were blamed on the lack of a customs post on Sark denying it access to the French tourism market.”
In 2017, the Barclay Brothers vineyards closed, “Sark Vineyards says it has invested millions in the project since 2010 - but claims it is being "attacked" by an alcohol production tax.”
As BBC News reported:
"The decision of 5 October 2016 to introduce taxation of alcohol production itself, amounting to a tax on one industry only on Sark, severely undermines the future financial viability of the business,"
In 2018, a technical problem with the ferry services meant further woes. As Bailiwick Express noted:
“Sark Chamber of Commerce has said it is concerned about the recent ‘multiple cancellations of the ferry link from France/Jersey provided by Manche Iles.’ The statement released by the Chamber of Commerce said people wanting to visit Sark are being treated as a lesser priority than those wanting to travel between Guernsey and Jersey.”
"We are currently running at 5-6% below last year's numbers on passengers from Guernsey. Our very fragile visitor economy cannot sustain losing the passenger numbers from France/Jerseyt without businesses suffering greatly.”
"One of our major hotels has suffered many thousands of pounds in cancellations and subsequent late arrivals. Guest houses and self catering establishments have also suffered revenue starving cancellations.”
Lower numbers meant the benefits of scale of numbers for the economy suffered, and electricity prices went up. These were referred to Anthony White, the Sark Electricity Price Control Commissioner who said:
“On 21 May 2018 I made a Determination under the 2016 Law that the price of 66p/kWh charged by Sark Electricity Limited to its customers was not “fair and reasonable”. This price is in fact, as far as I have been able to discover, one of the highest in the world charged by any electricity supply company.”
“On 3 August 2018, I went on to make a Price Control Order under the 2016 Law, requiring a two stage reduction in the prices charged by Sark Electricity Limited. The company has made two unsuccessful applications to the Court for an interim ruling against these decisions, and currently has brought an Appeal and judicial review which is due to be heard by the Seneschal Court sitting in Guernsey in December.”
“If this Appeal goes ahead, it will consider whether the decisions taken were reasonable and justified; whether the impacts on Sark Electricity Limited taken together with its holding company Sark Electricity Holdings Limited are as stated; and whether the company has considered other options in the way that it operates and charges for electricity from its diesel generators.”
But Sark Electricity has been losing money, and stated in October:
“October 2018: We have received a report from our independent auditors that shows that the 52p price forced on us by the Electricity Price Control commissioner will result in the company running at a loss in excess of £20,000 per month. We cannot withstand this for long, nor can we afford the £250,000 estimated for the legal appeal, we have applied to the government for a £250,000 grant to fund the legal appeal.”
And they did not mince words:
“You do not honestly think that after Sark lost 40 percent of its population and SEL lost the identical 40 percent of its revenue, that your appointee should cut our revenue an additional 21 percent as though we alone should carry the burden of the economic disaster that has enveloped Sark?”
It would be interesting to know where they got their statistics from, and how much the population has declined over the last 4 years since the hotels started closing. Obviously the closure of hotels and vineyards, as well as reducing numbers of islanders, would also have a knock on effect on the general economy.
The company has said it will cease to supply electricity after the end of November unless something is done. It reported a financial loss of £80,000 over the past four months.
The Island’s Chamber of Commerce says Chief Pleas (the Government) has ‘bullied’ Sark Electricity ‘to its knees’ in order to take over: “‘The misuse of power in order to nationalise a utility company sends a worrying message to existing and potential businesses alike and we call upon our government to halt this divisive behaviour and properly and fairly resolve their issues with the company.”’
Some kind of nationalisation is what looks like happening. As BBC News reports:
“Guernsey's government will power Sark should the island's electricity be cut off next month, a politician has said. Sark Electricity - which powers about 300 properties - maintains it will close after initial negotiations to save the cash-strapped firm failed. The utility company was offered to Sark's government for a nominal sum, thought to be £1, yesterday. Chief Pleas rejected the offer, with both parties now welcoming possible assistance from Guernsey.”
But are the Islanders of Guernsey prepared to subsidise electricity costs for Sark? And what else is happening on Sark? According to Bailiwick Express:
“The next Chief Pleas election which is due to be held next month is likely to see no one standing again, after the previous elections, due to be held earlier this year, had to be postponed for the same reason.”
Meanwhile, as the JEP reports;
“Lord Keen sent the letter to Sark’s government and Guernsey’s Lieutenant-Governor Vice-Admiral Sir Ian Corder following the island’s failure last month to pass a Budget. The collapse of the planned tax and spending plan led to the resignation of the island’s Finance and Resources Committee and its only civil servant.”
He said: ‘It has been six years since a properly contested election in Sark. In light of the many significant challenges facing the island, it is now a matter of urgency that your forthcoming elections deliver a strong mandate to government going forward.’
The next general election is due to take place on Wednesday 12 December.
As BBC News reported in 2015:
“The Aval du Creux and Petit Champ have been closed since the start of 2014, while Dixcart Bay and La Moinerie closed ahead of the 2015 season. The closures were blamed on the lack of a customs post on Sark denying it access to the French tourism market.”
In 2017, the Barclay Brothers vineyards closed, “Sark Vineyards says it has invested millions in the project since 2010 - but claims it is being "attacked" by an alcohol production tax.”
As BBC News reported:
"The decision of 5 October 2016 to introduce taxation of alcohol production itself, amounting to a tax on one industry only on Sark, severely undermines the future financial viability of the business,"
In 2018, a technical problem with the ferry services meant further woes. As Bailiwick Express noted:
“Sark Chamber of Commerce has said it is concerned about the recent ‘multiple cancellations of the ferry link from France/Jersey provided by Manche Iles.’ The statement released by the Chamber of Commerce said people wanting to visit Sark are being treated as a lesser priority than those wanting to travel between Guernsey and Jersey.”
"We are currently running at 5-6% below last year's numbers on passengers from Guernsey. Our very fragile visitor economy cannot sustain losing the passenger numbers from France/Jerseyt without businesses suffering greatly.”
"One of our major hotels has suffered many thousands of pounds in cancellations and subsequent late arrivals. Guest houses and self catering establishments have also suffered revenue starving cancellations.”
Lower numbers meant the benefits of scale of numbers for the economy suffered, and electricity prices went up. These were referred to Anthony White, the Sark Electricity Price Control Commissioner who said:
“On 21 May 2018 I made a Determination under the 2016 Law that the price of 66p/kWh charged by Sark Electricity Limited to its customers was not “fair and reasonable”. This price is in fact, as far as I have been able to discover, one of the highest in the world charged by any electricity supply company.”
“On 3 August 2018, I went on to make a Price Control Order under the 2016 Law, requiring a two stage reduction in the prices charged by Sark Electricity Limited. The company has made two unsuccessful applications to the Court for an interim ruling against these decisions, and currently has brought an Appeal and judicial review which is due to be heard by the Seneschal Court sitting in Guernsey in December.”
“If this Appeal goes ahead, it will consider whether the decisions taken were reasonable and justified; whether the impacts on Sark Electricity Limited taken together with its holding company Sark Electricity Holdings Limited are as stated; and whether the company has considered other options in the way that it operates and charges for electricity from its diesel generators.”
But Sark Electricity has been losing money, and stated in October:
“October 2018: We have received a report from our independent auditors that shows that the 52p price forced on us by the Electricity Price Control commissioner will result in the company running at a loss in excess of £20,000 per month. We cannot withstand this for long, nor can we afford the £250,000 estimated for the legal appeal, we have applied to the government for a £250,000 grant to fund the legal appeal.”
And they did not mince words:
“You do not honestly think that after Sark lost 40 percent of its population and SEL lost the identical 40 percent of its revenue, that your appointee should cut our revenue an additional 21 percent as though we alone should carry the burden of the economic disaster that has enveloped Sark?”
It would be interesting to know where they got their statistics from, and how much the population has declined over the last 4 years since the hotels started closing. Obviously the closure of hotels and vineyards, as well as reducing numbers of islanders, would also have a knock on effect on the general economy.
The company has said it will cease to supply electricity after the end of November unless something is done. It reported a financial loss of £80,000 over the past four months.
The Island’s Chamber of Commerce says Chief Pleas (the Government) has ‘bullied’ Sark Electricity ‘to its knees’ in order to take over: “‘The misuse of power in order to nationalise a utility company sends a worrying message to existing and potential businesses alike and we call upon our government to halt this divisive behaviour and properly and fairly resolve their issues with the company.”’
Some kind of nationalisation is what looks like happening. As BBC News reports:
“Guernsey's government will power Sark should the island's electricity be cut off next month, a politician has said. Sark Electricity - which powers about 300 properties - maintains it will close after initial negotiations to save the cash-strapped firm failed. The utility company was offered to Sark's government for a nominal sum, thought to be £1, yesterday. Chief Pleas rejected the offer, with both parties now welcoming possible assistance from Guernsey.”
But are the Islanders of Guernsey prepared to subsidise electricity costs for Sark? And what else is happening on Sark? According to Bailiwick Express:
“The next Chief Pleas election which is due to be held next month is likely to see no one standing again, after the previous elections, due to be held earlier this year, had to be postponed for the same reason.”
Meanwhile, as the JEP reports;
“Lord Keen sent the letter to Sark’s government and Guernsey’s Lieutenant-Governor Vice-Admiral Sir Ian Corder following the island’s failure last month to pass a Budget. The collapse of the planned tax and spending plan led to the resignation of the island’s Finance and Resources Committee and its only civil servant.”
He said: ‘It has been six years since a properly contested election in Sark. In light of the many significant challenges facing the island, it is now a matter of urgency that your forthcoming elections deliver a strong mandate to government going forward.’
The next general election is due to take place on Wednesday 12 December.
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