Geoff Challenges Water Redundancies

Deputy Geoff Southern has sent this self-explanatory open letter to Senator Alan Maclean, the Economic Development Minister:-

To: Economic Development Minister

18th November 2009

I was invited yesterday to put in writing my complaint as a consumer of the services of the JNWW Co Ltd about the actions of this States owned monopoly utility. You suggest that the receipt of a complaint is a necessary requisite for you to request under Article 6 (4) of the Competition Regulatory Authority (Jersey) Law 2001 a report from the JCRA.

My complaint rests on the following issues, which I believe fall within the remit of the JCRA in its role as regulator of utilities and a requirement to report to the States through you as the minister responsible:

1.Is a profit of over £4 million on a turnover of only £14.3 million an appropriate return from its monopoly position or could it be excessive?

2.Is the decision to outsource or privatize this mains engineering activity, with the loss of 20 jobs, solely to further increase profits and dividends in the best interests of the island and the economy overall?

3.What skill levels exist among the JAYEN employees by comparison with the current highly skilled and experienced workforce? Is there a risk to standards of service provision?

4.Is the States conflicted? Many would consider that is acting against its own best interests and against its policies in allowing these redundancies, which will further depress the economy at a time when the Economic Stimulus policy attempts to maintain and stimulate the economy through the recession.

5.Is the States fundamentally conflicted as majority and controlling shareholder in balancing its interest in pursuing higher dividend (currently £1.6 million) against its interest in reducing prices to residents?

I look forward to your prompt response.

Deputy Geoff Southern
La Rochelle
St Helier

Geoff holds ministers to account on Water redundancies et al

Deputy Geoff Southern has hatched a whole clutch of written questions regarding the implications of the proposed redundancies at Jersey Water. He also will be challenging Terry le Sueur's complacency about the Foot Report.
Here is a preview of his questions:-


To Treasury & Resources min

1. As the representative of the States majority and controlling shareholding in the JNWCo ltd (holding 100% of the issued “A” ordinary shares, 50% of the issued ordinary shares and 100% of the 7.5 – 10% cumulative fifth preference shares), will the minister inform members of his position on the following aspects of the JNWC ltd announcement of the company’s intention to make 20 of its employees redundant?

Given that the company announced a profit of £4,034,000 for 2008, an increase of 14% on the previous year, and a dividend of 194 pence per share (up by 15%) on the ordinary and “A” ordinary shares of the company, does the minister accept that the States in condoning the actions of the company, appears to put potential increased dividend above its support for employment?

Will the minister inform members how much the States received in dividend on its shareholding in 2008 and what additional dividend might be generated by these redundancies in 2009? Will he further produce an estimate of the likely impact of these redundancies on States revenues in lost tax and social security collected and additional Income Support payments?

T&R
2. Will the Minister use his powers to act in the public interest contained in article 23 of the Water (Jersey) Law 1972 to reduce water rates across the island in the light of the Water company’s actions in exploiting its monopoly position to pursue increased profits and dividends at any cost?

Economic Development
3. Will the minister use his powers under the competition law to request the JCRA to investigate the level water rates and charges of the JNWC ltd and to act to reduce the level of profits produced by its monopoly position?

Social Security
4. Will the minister inform members whether the “redundancies” recently announced by JNWC ltd fail to meet the conditions set out in Article 2 of the Employment (Jersey) Law 2003?

Chief Minister
5. Will the CM accept that the Deloitte estimate of lost tax to HMRC through the activities of offshore centres given in the Foot Report as £2 billion is a gross underestimate which cannot be relied on, differing as is does from the figure of over £11 billion derived from the TUC investigation, for the following reasons:


The Deloitte estimate:
a) used one amazingly aberrant year - 2008 - as their sample base when a lot of companies - especially banks made losses

b) Used a different definition of profit

c) On some occasions used a different definition of tax

d) Consciously turned a blind eye to a lot of avoidance saying it was 'officially sanctioned' ?

Not Enough Birds of the Right Feather

Today, our old friend Monty Tadier was on the radio announcing the formation of a Reform group amongst the States Members – a long-held tactical objective of the JDA, too.

Disappointingly, though, he put the number at a maximum of fifteen. Fifteen swallows do not a summer make, when there are still nearly forty turkeys not wanting to vote for Christmas.

To achieve anything, the aspiring reformers must convince as many more again that they will be able to deliver their political objectives better in a reformed House. And the catch to that will be that some of them seem to have political objectives that are best served by a dysfunctional institution.

Anyway, good on them for trying. I just think the odds of success are very poor, and so we must not judge the probable failure harshly.

David Rotherham