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Information and public services for the Island of Jersey

L'înformâtion et les sèrvices publyis pouor I'Île dé Jèrri

Chief Minister's Chamber of Commerce Speech 2016

​It’s a pleasure to be here again speaking to so many members of this, the oldest Chamber in the English speaking world. The last time I spoke to you, a year ago, I highlighted what we had already achieved. Since then:

  • we have seen the highest ever number of people in paid work
  • we have pumped more money into the economy – spending more on services and capital projects than we take out in tax 
  • anti-discrimination legislation has come into force
  • freedom of Information is firmly established
  • we created a place-of-safety for vulnerable young people as part of the refurbishment of Robin Ward
  • we have improved public health through the Eat Safe food grading, and by banning smoking in vehicles carrying under 18s
  • and we have been developing a new Mental Health Law, a Capacity and Self-Determination Law, and a new Mental Health Strategy for Jersey

We are working to bring our staff together, to enable better cooperation between departments. We have already consolidated at Maritime House. The reformed Home Affairs Department has moved into Cyril Le Marquand House, freeing their old offices for alternative use. We have co-located Financial Services, External Relations and Economic Development to improve liaison between these important functions.

And let’s not forget since becoming Chief Minister in November 2011, through the Comprehensive Spending Review, successive budgets and public sector reform, £85 million has been taken out of department budgets.

Economic downturn

During that time this government has dealt with the effects of the world’s worst financial crisis since the 1930s. Without firm action that crisis could have brought down the main pillar to our economy. But in fact we are now seeing our financial services sector growing, and growing strongly.

We also had to deal with what could have been a devastating blow – the end of Low Value Consigment Relief – which saw the loss of 1000 jobs. But with hard work and concerted action we tackled that. Unemployment did not reach the level expected and is now falling.

We are turning around the long term underinvestment in our essential infrastructure. And we have transformed a social housing model that accepted the continuing existence of estates like Le Squez. There is, of course, more to do, as is evidenced by yesterday’s housing needs survey. But we have changed the system, provided investment, and already hundreds of islanders are now living in better homes.

Social Security

And we are looking to the future. The Social Security Minister spoke at last month’s Chamber lunch about a review of the social security fund.  The fund has served us well over the last forty years and I'm pleased the Minister is making sure that its success continues over the next challenging forty years. 

In previous decades the cost of each pension was met by contributions from four or five workers. Now we are living longer and there will only be two or three workers funding the pension that we all hope to claim in the future.

The fund holds reserves of about £1.3 billion so we have time to consider our options. This is the beginning of a review that will take a number of years to complete and nothing has been decided.

I am sure you will pleased to hear  that one of the first subjects the review will tackle in detail is the thorny issue of Class 2 contributions.  It is in all our interests that we look into these matters in detail and then agree, as a community,  the way forward for the social security system.

Stability

Last year I spoke to you about continued instability in the global economy.
Sadly that instability continues and we are now seeing new risks:

  • continued stagnation of major European economies
  • a slowdown in the economies of China and Brazil
  • uncertainty about the UK referendum
  • plunging oil and commodity prices which are destabilising economies around the world, especially in the Middle East

Our economy is inextricably linked to other economies across the world – as one would expect from an island whose services are in demand from so many jurisdictions. That means that when other markets slow down, we feel the effects.
The best antidote to those external economic risks is making sure that our economy is healthy enough to withstand them.

Our Strategic Plan set out a clear economic direction that supports the economy, keeps spending under control and allocates investment for priority areas of Health, education and Infrastructure.

This investment is, of course, paid for by taxpayers. It’s islanders who pay the taxes we allocate and it’s ultimately islanders to whom we are accountable. Spending that money wisely is one of the most important aspects of political service. It is easy to get buffeted by populism and short-termis, but I believe in long term politics and in keeping our public finances in good order.

Economy

Our panel of independent economists have just updated their economic forecasts, and despite the global situation they still expect our economy to grow this year and next by about 1.5%. We have a very positive suite of economic indicators that demonstrate this improvement:

  • the economy grew by nearly 5% in 2014
  • GDP per head went up 3%
  • average earnings are up by 0.8% more than inflation
  • housing market activity is up 5%
  • house prices in 2015 were 4% higher than a year before
  • business activity is up by 18 percentage points
  • all this activity is supported by low inflation at 0.9%
  • if we look at the jobs market - latest figures show total employment at an all time high of 59,080
  • and last month the seasonally adjusted figures showed there were 110 fewer people looking for work than a year earlier

These figures show evidence of steady improvement and growing optimism. I’m proud of these economic achievements and I think you should all be proud too.
Because much of the success of our economy is down to you – you’re the job creators, the innovators, the providers of opportunity.

UK budget

But we cannot afford to take things for granted. The UK Chancellor announced this week that the Office for Budget Responsibility has revised down the UK’s GDP growth. This was blamed largely on global headwinds - the slowdown in China, fragility in euro zone, geopolitical tensions, and more recent stock market volatility.

These are the very issues that our Fiscal Policy Panel highlighted in their latest analysis. It is global uncertainty and increased regulatory demands that prompted Standard & Poor’s to amend our credit rating. Our AA rating is still one of the highest available and reflects the enduring strengths of our finance industry and our economy.

I have every confidence that our economy will continue to recover. The FPP have supported the approach we set out in the MTFP:

  • supporting the economy in the short-term
  • investing in key services and infrastructure that support growth in the medium-term
  • balancing our books at the right time

Using our reserves to achieve this is sound economics. The panel has highlighted that our economic recovery depends on the stability of the global economy, the competitiveness of financial services and the availability of the right skills.

Competitiveness

The need to maintain a competitive financial services industry emphasises the importance of promoting Jersey as a world-class, responsible jurisdiction. We don’t deliver sustained growth by becoming insular and isolated. We protect ourselves by reaching out to the world and broadening our links.

We have a clear strategy to develop business in new areas and new jurisdictions.
That’s why we are travelling to areas of the globe identified by our jurisdictional review as the best options for future business development.

Last year we dealt with 131 new business relocation enquiries. Thirty-four new business licences were approved. That created 361 potential job opportunities with more than 80% of those jobs for entitled people – in areas as diverse as corporate services, natural resources and digital.

Competition framework

Competition affects our whole economy – containing living costs and improving the everyday lives of islanders. That’s why we commissioned a review of our Regulatory and Competition Framework Review by the economics consultancy Oxera – overseen by renowned expert Sir John Vickers.

As Sir John said “conducting competition and regulatory policy well is hard, but the economic benefits can be substantial”. ​The report sets out twenty-three recommendations and we have published an action plan that explains how we will address these recommendations. We are now discussing the timescale with stakeholders and will revise the plan based on any feedback we receive.

Innovation

Another area of our economy that we are focusing on is innovation. As business people you understand its importance, but it’s important in government too. We launched an Innovation Review in September last year, led by expert and FPP member Tera Allas, and I am looking forward to implementing its recommendations.

Some clear themes have emerged from the work. Boosting spending on innovation is essential for funding early stage ideas, so Jersey Business and Digital Jersey are discussing how to provide small amounts of support for both start-ups and existing firms.

Jersey Business is redeveloping its website to sign-post all funding and finance options in Jersey. It will also update business support information and direct users to Skills Development information
We have had initial discussions with Innovate UK to see if Jersey companies could access some its programmes. Successful innovation will help us deliver the jobs, growth and productivity our economy needs. Innovation matters - and I hope it is at the top of your agendas.

We are doing everything we can to spark the innovative Jersey spirit, as great new ideas will ultimately help us to boost the economy. And we’re instilling long term thinking into all our policy planning, taking the important issues that will affect us for many years to come out of the day-to-day political maelstrom.

I know some of you have attended the briefings we have been running to explain our new long term planning process. My team will be offering a more detailed briefing to members of your executive council in the near future so I hope you will take up that offer.

Savings

I believe that some say government is better at talking about reducing government spending than we are at delivering it - well let me tell you about our achievements so far. £38 million was removed from budgets in 2015 and 2016.
In 2015 we saw a net reduction of 165 full time equivalent posts, achieved through vacancy management, service redesign and voluntary redundancy.

It’s not easy taking funds from services that people are used to, and of course every government budget has its pressure groups who will go on TV and radio to defend every pound we spend. But we are persevering in the patient work of saving money and changing the way we do things.

I know you understand there`s no security unless we can live within our means. And economic security is a foundation that every working person and every company operating in our island gains from. Sound public finances and a sound financial system don’t happen by accident. They require hard decisions, persistence and action, and that’s what we are doing - keeping government costs under control, investing in health, education, infrastructure and economic growth, and regenerating our capital, St Helier.

Reform

Every department is doing its bit for Jersey - by reprioritising, finding efficiencies, making sure our organisation is working as well as it can for our long term future:

  • the Housing Minister is about to publish a new housing strategy, so everyone can enjoy more secure, stable, and affordable housing
  • crime continues to fall
  • we are continuing to get islanders back into work - with Jobs Fest, the Community Jobs fund, apprenticeships and industry training schemes

We know people are demanding better services, more quickly, so one of our e-government projects is now providing official government notices online as well as being published in the Jersey Gazette. The information on gov.je is also available via Twitter, and RSS. This is just one small example of many of the e-government projects that are coming through the pipeline.

Health

I don’t need to remind you that one of our main priorities is health and social care:

  • we have put in extra funds to kick-start a transformation that will see more services provided out in the community
  • we have launched ‘out-of-hospital’ services to avoid unnecessary admissions and enable faster patient discharge
  • we have a new antenatal clinic and refurbished operating theatres
  • a third intake of local Nursing Degree students has started training – filling staff vacancies with ‘home-grown’ nurses
  • we are allocating £96 million of extra funding for health and social services over the 4 years of our plan

Mental health

£4 million will be spent to improve our mental health services. The number of people who suffer from poor mental health is larger than you might think. Across Britain one in 5 new mothers develop a mental health problem around the time of the birth of their child. Up to one in 4 of us will have a problem – perhaps a form of depression or anxiety – this year alone. Suicide has become the leading cause of death for men under 50.

We will continue to prioritise early intervention for those suffering from poor mental health so we can stop problems escalating

1001 days

The same goes for giving our young people the best start in life. In this week’s budget speech the UK Chancellor had a theme - ‘a Budget that puts the next generation first’. The same can be said for our plan for Jersey.

We know how a safe, stimulating, loving family environment can make a positive difference. That’s why strengthening families is so important. The Minister for Home Affairs has special responsibility for the 1001 Critical Days agenda
and is overseeing the Taskforce to ensure that the early years are prioritised.

Her team has been analysing need, identifying gaps in services and ensuring that investment in services delivers the right outcomes for children and families. We have to support the early years of life so all our young people can look forward to a future that fulfills their potential.

Education

Investing in Education is another of our priorities. We need highly skilled people in our key sectors so we are starting with education and skills. Over the four years of our plan Education will receive an extra £27 million. The Education Minister is working to ensure our young people have the skills that businesses need. We are setting up new apprenticeships, giving young people the chance to learn a trade, so we can provide rewarding employment for islanders and also reduce the need to import skilled staff.

Infrastructure

The Infrastructure Minister will have access to an extra £168 million for capital projects over the next four years. That includes:

  • £55m for new and improved school buildings at Les Quennevais, St Mary and Grainville
  • and through Andium – more than £200 million of spending is planned for the coming years, much of it transforming areas of St Helier

Society

Benjamin Franklin said “I am for doing good to the poor, but... I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it.”

Work is – and always will be – the best route out of poverty. I believe a well-regulated free market is the best tool for generating prosperity and improving everyone’s living standards. And applying principles of more choice and competition to our public services will, I believe, help the most disadvantaged.

We will never defeat poverty unless we manage the economy responsibly because it’s the poorest who suffer most when governments lose control of the public finances. And we will never defeat poverty unless we back businesses to create jobs.

If we take the right action to support families, creating an education system that is fit for the 21st century, investing in social services to help those who suffer with alcoholism, with drug addiction, with poor mental health, with disability and with disadvantage... and if we combine that support with all we are doing to bring our economy back to balance, then we can make a significant impact on islanders’ futures.

For me, one of the many interesting aspects of George Osborne’s budget was the fact that his difficult fiscal balancing act has got harder because productivity is expected to grow more slowly. This is a timely reminder of why improving our productivity is critical to achieving our objectives. 

As successful business people you understand that there are no easy shortcuts.
I want to thank you for your support and commitment to the difficult choices we`re taking to reprioritise our spending and reform the public sector. Government can play its role but cannot achieve this alone. It has to be a collective effort – and that includes Chamber members and the wider community.  

We support local firms like yours because we believe that the business community demonstrates the values we share – of self-reliance, of building for the future, of innovating to solve problems. We know that without your success there are no jobs, no resources for public services, no sustainable future. This government is a government that is making decisions for the benefit of future generations

Earlier on I referred to the challenge that politicians have – focusing on the short term while aiming for a long term vision. I’d like to finish by painting a picture of what our actions will achieve by the end of our term of office in 2018:

  • a public service that is respected and valued because the services they provide are delivered efficiently, effectively and with a focus on the people that matter
  • a healthcare system that is regarded, just like our social security system is today, as a model of efficiency around the world - a model that is forward thinking and fit for the long term
  • a hospital, under construction, on an agreed site with an affordable budget, that will meet the challenges of the exciting world where people will have so many opportunities to live longer
  • a St Helier that is the powerhouse of a growing economy, a digital centre of business excellence, a smart, proud, safe St Helier where people aspire to work, live and visit
  • a tourism industry that’s resurging – not least because of the care we take of our beautiful coast and countryside
  • a brilliant education system that prepares our young people for rewarding, highly skilled work
  • a job market with one of the lowest unemployment rates in the world with real, exciting employment opportunities in a knowledge-based service economy
  • a housing market that meets the accommodation needs of all our island community 
  • an island with strong public finances that knows its place in the world
  • an island that other people regard as a model of respect and inclusivity
    and that island residents are proud to call home

Madame president – that is the vision that I and my Council of Ministers are trying to deliver. To create a better Jersey today, for tomorrow.

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