Full text of letter from Geoff Southern to JEP

To letters editor, JEP

I have long thought that the introduction of ministerial government has done little to promote coherent joined-up thinking in our government, but the latest pronouncements from the Treasury Minister reveal that it is getting worse. Today we cannot even get consistency within one department. The right hand does not appear to know what the left hand is doing.

Senator Ozouf, no doubt sees himself as the saviour of the economy in these difficult times, when he announces that, thanks to prudent fiscal policies, shared with his predecessor, he can deliver £44 million to boost the economy in this financial year. He is reported to have said ‘There is a need to act quickly and decisively to support employment’ and ‘The sooner we can inject cash into the local economy, the more difference it will make’. He then singularly fails to apply this welcome initiative to the public sector.

Instead, he warns that there is no money for public sector workers pay, and that employees should prepare themselves for a pay freeze. ‘Nothing more than a pay freeze is going to be possible’, he says. However, the Council of Ministers have already offered 2% in the 2009 Business Plan, a figure that has already been stripped of the impact of GST on inflation. Now the Treasury minister proposes bringing it down to zero, taking £7.4 million out of the economy. The right hand giveth and the left hand taketh away.

In the meantime over at Economic Development, Senator McLean, his trusted friend, warns of redundancies in the public sector. ‘Job losses could not be ruled out,’ he told the Chamber of Commerce recently. Another brilliant idea. At a time when ‘we must act decisively to support employment’ he threatens to lay workers off. He can then spend some of the £44 m on redundancy payments, retraining packages, and Income Support, not to mention support for the mortgage payments of disposable civil servants.

For those at the lower end of the pay scales, such as the manual workers, and their private sector colleagues, the pay freeze formula offers only increased dependency on welfare. An additional £2 million is to be allocated to extending Income Support transitional protection for those in work on low pay, many of whom will be manual workers. Senators McLean and Ozouf deliver the opposite of what they promised at election time: A hand-out not a hand-up.
Furthermore, as both ministers must be aware, pay freezes do not work in the long term; they merely serve to delay the inevitable. They store up inflationary pressure in the economy. When the recession is over, perhaps in 2 or 3 years, then employees will raise their demands to compensate for the lean years, stoking inflation at the worst possible time.

Before this fiscal stimulus plan comes to the States in May, I suggest that ministers do some serious thinking and come up with a coherent plan to properly target help in recessionary times, rather than relying on instant, headline-grabbing soundbites.

Deputy Geoff Southern, La Rochelle, St Helier.