FACT: WHETHER A PROPOSITION SUCCEEDS OR FAILS...

FACT: WHETHER A PROPOSITION SUCCEEDS OR FAILS REGULARLY HAS VERY LITTLE TO DO WITH THE QUALITY OR RIGHTNESS OF THE ARGUMENT BEING MADE...
 
Below you will find an internal  e-mail that was sent to all States Members from Senator Alan Breckon, who was Chairman of the Scrutiny sub-panel further made up of myself and Deputies Geoff Southern and Roy Le Herissier. As some readers might recollect the four of us, along with our excellent Scrutiny officer, Sam Le Quesne, worked flat out right through last summer - a period of some 18 + weeks overall as I recall - producing a review that concluded quite unequivocally that a fully independent Committee of Inquiry into the Management of the Health & Social Services Department was urgently needed. It was, of course, rejected by most of the usual crew as the attached States vote demonstrates.
 
The content of Senator Breckon's email was written in the aftermath of the final report revelations at yesterday's press conference. A press conference and later statement from the Minister where we hear yet again that regardless of the horrific findings in this particular case no-one will be held accountable. Once again it is apparently all about 'learning lessons for the future'. according to the Minister  Incredible but true. Still, having been a member of the Scrutiny sub-panel that put so much work into the review that had concluded an independent Committee of Inquiry was essential I did initially feel that I should make some observations on this issue. But reading Alan's e-mail last night I came to the opinion that actually, by and large, he had said just about everything of importance that needed to be said. Thus, rather than simply risk repeating his words I obtained Alan's permission to make his thoughts publicly available on the JDA's website.
 
I believe the content of the e-mail speaks for itself; as does the original proposition and States Assembly vote attached. I will leave readers to make up their own mind and ask the questions that result. Comments on the website are welcome as always. Equally, maybe these questions should be directed to the 30 States Members who chose not to support the proposition that Alan, Geoff, Roy and myself worked so very hard on in coming to our conclusions.
 
All I would add personally is the following. Until propositions - ALL propositions - are debated and voted upon according to their need and merit, rather than which States Members are behind them, or what damage to the image of Corporate Brand Jersey might occur if they were supported and passed government will never do the job that it should within a so-called democracy. Senior civil servants and employees who get things wrong, fail or simply do not do their jobs will never be made accountable as they should be. More serious than either of these two points, of course, in instances of this nature some of the most vulnerable within our society will never have the protection and security that should be theirs by right.
 
As for the Chapman Report...maybe we should be asking for a refund.
 
Deputy Trevor Pitman
 


From: Alan Breckon
Sent: 26 March 2010 17:35
To: All States Members (including ex officio members)
Subject:
Dear Colleague FYI I have attached the Proposition & Vote on whether to hold a Committee of Inquiry Into the Management of the Health & Social Services Department this is self explanatory.
 
All the existing Ministers + two former Health Ministers voted against!
 
However I wish Members to be mindful of the following;
on one hand I was accused of being mates with Civil Servants and therefore willing to move on without proper attention to detail where faults may have been found;
on the other hand I was accused of making mischief and not having any evidence of any malpractice;
if you re-read the short Report attached you will see that neither of the above is true;
I did not have another agenda, however I knew there were issues that went beyond the scope of the Panel's ability to investigate fully - hence the Committee of Inquiry;
In the Chapman Report Into Health & Safety issues on bullying, harassment, blogs etc he says this at para 10.19
"As it was put to me on more than one occasion: "people are keeping their heads down." To an outsider that is a critical concern as if action is not taken to address the problem it will firstly lead to inertia in the decision making process and ultimately a potential breakdown in normal day to day government. For example I understand that the States will in due course be required to decide whether to set up a Committee of Inquiry to investigate allegations of misconduct and incompetence within the management of Health & Social Services. I am aware from my own research for the purposes of this investigation that there have already been seven independent investigations and reviews covering much of the same ground. In the course of my research I read four of those documents either in whole or in part. It was quite clear that no evidence had been found in any of those reviews to justify any of the allegations made and the call for a further Inquiry appeared to me as an external observer to indicate an inability to move on and manage the present." (my emphasis)
 
so this Chapman bloke was telling us to "move on manage the present" - wonder who told him that? (the extract is attached below) How much was he paid for these little gems of wisdom? "wool" & "eyes" are words that spring to mind! 
the Scrutiny Panel became aware, through family situations with the Court that children had been returned to abusive situations over long periods of time.
this is proven by PUBLISHED case judgements and prosecutions - one for rape of a child
the Jersey Child Protection Committee (until most recently) had never held one Serious Case Review - we wondered how this could be? - we got 10 years of their minutes?
 
I hope this clarifies the situation for those 30 of you who voted against a Committee of Inquiry - this was not a point scoring exercise it came from an uneasy feeling that the Sub Panel of Roy, Geoff, Trevor and myself had for the situation we found.
 
So while the recent Report on the JCPC may be uncomfortable for some it was where sadly the Sub Panel knew somebody had to go - so well done to the JCPC.
 
Finally The Sub Panel & Officers worked very hard over about a 20 week period to produce a significant Report in a very sensitive area with lots to commend it - the cost - although I do not have figures to hand was about £15,000 and we did get some outside advice, however the Report was our own - the only lesson is that we all must learn is to open our minds to some of this stuff and NOT adopt the opposition stance or personalise issues - its too important for that!
 
Regards
Alan

View Vote P145/2009/(re-issue) 

Committee of Inquiry into the management of the Health and Social Services Department.   05 November 2009



POUR: 20    CONTRE: 30    ABSTAINED: 1   ILL: 1    EN DEFAUT: 1


Senator Alan Breckon
POUR

Senator Sarah Craig Ferguson
POUR

Connétable Alan Simon Crowcroft
POUR

Connétable Silvanus Arthur Yates
POUR

Deputy Frederick John Hill, B.E.M.
POUR

Deputy Roy George Le Hérissier
POUR

Deputy Geoffrey Peter Southern
POUR

Deputy Carolyn Fiona Labey
POUR

Deputy Collin Hedley Egré
POUR

Deputy Jacqueline Ann Hilton
POUR

Deputy Paul Vincent Francis Le Claire
POUR

Deputy Shona Pitman
POUR

Deputy Montfort Tadier
POUR

Deputy Angela Elizabeth Jeune
POUR

Deputy Trevor Mark Pitman
POUR

Deputy Tracey Anne Vallois
POUR

Deputy Michael Roderick Higgins
POUR

Deputy Andrew Kenneth Francis Green M.B.E.
POUR

Deputy Deborah Jane De Sousa
POUR

Deputy Jeremy Martin Maçon
POUR


Senator Terence Augustine Le Sueur
CONTRE


Senator Paul Francis Routier
CONTRE


Senator Philip Francis Cyril Ozouf
CONTRE


Senator Terence John Le Main
CONTRE


Senator Ben Edward Shenton
CONTRE


Senator Frederick Ellyer Cohen
CONTRE


Senator James Leslie Perchard
CONTRE




Senator Alan John Henry Maclean
CONTRE


Senator Bryan Ian Le Marquand
CONTRE


Connétable Kenneth Priaulx Vibert
CONTRE



Connétable John Le Sueur Gallichan
CONTRE


Connétable Daniel Joseph Murphy
CONTRE


Connétable Michael Keith Jackson
CONTRE



Connétable Graeme Frank Butcher
CONTRE


Connétable Peter Frederick Maurice Hanning
CONTRE


Connétable Leonard Norman
CONTRE


Connétable John Martin Refault
CONTRE



Connétable Juliette Gallichan
CONTRE


Deputy Robert Charles Duhamel
CONTRE




Deputy John Benjamin Fox
CONTRE


Deputy Judith Ann Martin
CONTRE



Deputy James Gordon Reed
CONTRE






Deputy John Alexander Nicholas Le Fondré
CONTRE


Deputy Anne Enid Pryke
CONTRE


Deputy Sean Power
CONTRE



Deputy Kevin Charles Lewis
CONTRE


Deputy Ian Joseph Gorst
CONTRE


Deputy Philip John Rondel
CONTRE



Deputy Daniel John Arabin Wimberley
CONTRE




Deputy Edward James Noel
CONTRE


Connétable Deidre Wendy Mezbourian
ABSTAINED


Deputy Anne Teresa Dupre
ILL


Senator Stuart Syvret
EN DEFAUT

SHONA'S ORAL QUESTIONS FOR MARCH 23rd 2010.

Question One: to The Chief Minister

"Following on from the rejection of P9/2010 on 23rd of February 2010, when he stated that he would be appointing an independent expert in the shortest possible timeframe to undertake a review as to whether procedures with the suspension of the Chief (Police) Officer were correctly followed, will the Chief Minister inform Members whether the expert has been appointed and when the findings will be published?"



Question Two: To the Minister for Social Security

"Would the Minister inform Members, since the implementation of Income Support, how many recipients under 25 have applied for the Housing Component and how many have been refused?"

TREVOR’S ORAL QUESTIONS FOR TUESDAY 23rd MARCH 2010

Always at the forefront of endeavouring to ensure the losses of ordinary workers’ jobs – public sector or private - really are the last resort after all other possibilities have been explored, Trevor’s oral question to the Minister for Economic Development raises this issue once again. Readers of the website will have their own views, of course, but as the JDA ask here, laudable though it is, viewed within the present economic climate is the maintenance of the ‘top 500 banks only’ mantra really more important than protecting 30 finance jobs that could have been saved?

Trevor’s oral question to the Home Affairs Minister, reference the spectacularly invisible Metropolitan Police ‘Interim Report’ raise issues that anyone remotely committed to ensuring transparency and natural justice surely agree must be answered – and without further delay.

Just who did produce it? What is really in it? Who has actually seen it – and more to the point who can verify this? Not surprisingly, given what with the best will in the world can only be described as the truly shambolic, strung-out process by which the island’s Chief Police Officer has found himself suspended (for what is now rapidly approaching 18 months), the question really can even understandably be asked: does the Metropolitan Police ‘Interim Report’ actually exist as a physical, written document at all?

Hopefully come next Tuesday we might actually begin to get some answers. If not then suspicions that all really isn’t as it should be can only be given more credence.



Deputy T.M. Pitman of St. Helier will ask the following question of the Minister for Economic Development ­

“With 30 jobs being lost at Kleinwort Benson due to the Regulator's refusal to grant a licence to a non-top 500 bank, will the Minister advise what support, if any, is being offered by his Department to the staff affected to try and help them find other employment in the sector; further still, does the Minister concede that the Regulator’s decision may actually be counter-productive?”


Deputy T.M. Pitman of St. Helier will ask the following question of the Minister for Home Affairs ­


“Will the Minister inform Members on what date in 2008 the Metropolitan Police were requested to forward an Interim Report, who requested it, whether it was used in connection with the suspension of the Chief Officer of the States of Jersey Police and whether the Minister will make the report available to States Members?”

Cuts must be Surgery, not Butchery.

The JDA have always taken the position that there is more that could be done to fill the looming “black hole” in Jersey's public finances by a range of fairly gentle alternative taxes, each raising a few million towards the necessary total. However, alternative taxation may no longer be enough, and it is time to look at expenditure, as well as revenue. The ordinary Jersey people we formed to represent are becoming increasingly concerned by the conspicuous bloat and the rising tax bills to pay for it, and, if we are to stay in touch and relevant as a party, we need to be turning our thinking to the subject. Most of the current JDA Council have worked in the public sector for at least part of our working lives, and should know the score. Speaking for myself, I would like to add my general agreement to the various calls for some trimming of public sector spending, to suit the harsh reality that we are both locally and globally entering the backstroke of the boom-bust cycle.

I also share the suspicion with others, that there is more dispensable surplus to be found at the shoulders of the States organisation than at the base. Thus, I would not endorse crude, untargetted pro-rata cuts across the board, but I would like to see our elected representatives defending the effective provision of public services, facilities and benefits, and letting go of otiose fripperies and side-tracks. Therefore, I would point out something that seems to have been overlooked, so far.

There is a balance to be struck in the administrative burden on front-line staff. It is plainly unacceptable for the operational workers of all types to be left to carry on without any supervision of how they work, nor accounting for what they have worked on. However, the insidious big inefficiencies are to introduce excessive supervision that makes no useful contribution to the task, and to collect unnecessary information on the off-chance that someone wants to know. (The latter is a personal bugbear of mine, as I used to be a UK Civil Servant spending around 45% of my time compiling statistics about our actual work, just in case some MP ever asked a question.) Before middle-management can be reduced, there must be a radical culture change in the public sector. If we are not to have unproductive support clerks churning out sheaves of never-to-be-read paperwork, then the front-line staff have to do it themselves. And if the front-line staff are taking time out of their real work to do their own admin, then that admin needs to be reduced to the bare minimum. Both private business and public service alike use “Due Diligence” as an excuse to waste time and money on unthinkingly gathering all sorts of useless data, these days. If shareholders of private businesses are content to let their management do this, that is their privilege. We are all shareholders of the state, though, and we should be demanding that judgement be applied with diligence, not just filing.

So, we need to develop a general policy of evaluating all procedures and structures by the question “Does this help or hinder getting the job done?”. The obvious targets are Assistant Directors and Managers. In some cases, I would expect that they actually do assist with an otherwise impossible workload. But, it can so easily happen that supervisors nearer the front line report in detail to them, for the Assistant to report in summary to the Chief Director or Manager, when the supervisors could have spent less time reporting in summary directly to the Chief, freeing 100% of the Assistant Manager's time for a more productive alternative position. Then there are forms with ill-considered boxes, that time must be spent completing and processing, to supply irrelevant information. If it is not something that needs to be known to manage effectively, it is not worth the bother.

There is a part for opposition politicians in this, too. When asking ministers to admit embarrassing statistics, they should give a thought to how much Civil Service time is going to be absorbed in compiling those figures, and how much more is going to be absorbed in future as the civil servants prepare for the chance of being asked again next year. Is it always worth £100 of clerical time to score a little point, that doesn't make the news anyway, at Question Time.

To sum up, we can fairly painlessly trim a lot of waste through a case-by-case examination of which management posts are effectively side-tracks, and an end to amassing statistics from habit instead of to a purpose. Only then, if still necessary, should we be scaling back the services and facilities that it is government's purpose to provide, and that in a prioritised way, not slashing by numbers.

David Rotherham

TREVOR’S WRITTEN QUESTIONS FOR 23RD MARCH 2010

Trevor’s written questions for next week’s States sitting take in three different ministries – Treasury & Resources, Home Affairs and Social Security. The first question to Home Affairs Minister, Senator Ian Le Marquand relates to the timescale for setting up an Independent Jersey Police Authority. The second relates to a proposition Trevor lodged late last year regarding the need to formulise an all-encompassing strategy to finally tackle youth offending.

Having agreed to put this on hold until 20th April to allow time for the unfolding of work being undertaken by Professor Andrew Williamson, Trevor tells us that with just a month to go he hopes the answer will give an adequate ‘progress report’ which will indicate whether to proceed with the debate or delay a little longer.

Trevor says that his questions to the Ministers for both Social Security and Treasury & Resources have their root in the need to identify any individuals ‘playing the system, whether this be at the top or bottom of the economic ladder’.

The question to the Minister for Social Security follows on from Deputy Gorst’s statement, quoted in the media last week, about benefit fraud. Given the department’s spend of £93.8 million, specifically it seeks clarification of the total amount of monies involved with the nine cases prosecuted by the department in 2009.

Finally, Trevor states that his questions to the Treasury & Resources Minister will provide further detailed background information in support of on-going discussions on taxation between the JDA and a number of other progressive politicians. He added:

‘Like the question to Social Services, the question put to T& R about the very lowest levels of tax payment amongst 1.1.K residents will help build up the true overall picture in order to achieve a full and fair perspective. With provision of both sets of figures it will enable us to move away from spin and hearsay in two, highly emotive areas of politics to examine cold, hard fact.’




WRITTEN QUESTION TO THE MINISTER FOR HOME AFFAIRS
BY DEPUTY T.M. PITMAN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd MARCH 2010

Question

“Having agreed to defer my proposition P.201/2009 ('Strategy for dealing with young offenders: establishment of a working group') to await any developments arising from related work being undertaken under Mr. Andrew Williamson relating to the creation of a ‘Children’s Plan for Jersey’, will the Minister advise as to what stage this work has now reached and when he expects it to be concluded?”



WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES
BY DEPUTY T.M. PITMAN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd MARCH 2010

Question

“Given that with 123 such residents there is no possibility whatsoever of any individual being able to be identified will the Minister clarify the number of 1(1)(k) residents, if any, by year for the period 2005 to 2008 inclusive, who paid tax within the following brackets:

(a) less than £5,000

(b) between £5,000 and £10,000”


WRITTEN QUESTION TO THE MINISTER FOR SOCIAL SECURITY
BY DEPUTY T.M. PITMAN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd MARCH 2010

Question

“Given that Social Security recently highlighted the fact that there had been just nine prosecutions for benefit fraud in 2009 would the Minister clarify the collective total amount of the de-frauded monies involved?”


WRITTEN QUESTION TO THE MINISTER FOR HOME AFFAIRS
BY DEPUTY T.M. PITMAN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd MARCH 2010

Question

“Will the Minister advise what progress has been made regarding plans for the creation of an Independent Jersey Police Authority and further still, at what date does he believe the necessary preparation work will be completed and the Authority launched?”




WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES
BY DEPUTY T.M. PITMAN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd MARCH 2010

Question

“At present those 1(1)(k) residents granted such status after 1st January 2005 are taxed at the following rates:

The first £1m of foreign income at 20%
The next £500,000 of foreign income at 10%
The balance of foreign income at 1%
All Jersey source income at 20%

The Minister has further advised the Assembly recently that the taxation percentage of all 1(1)(k) residents can be legally increased/enhanced. This being accepted, will the Minister advise what increase in tax revenues could be expected if all 1(1)(k) residents were to be taxed instead at:

the increased rates of 25%, 12.5%, 2% and 25% respectively; or (b) alternatively by a straight-forward 1% increase in all four categories?”

Geoff's Written Questions for 23rd March 2010

1.to Treasury and Resources Minister

When the minister points out that public spending has risen by 30% over the past 5 years as evidence for the need to make drastic cuts in public services will he confirm that during this period:

a)half of that increase has come in the last 2 years, under his stewardship of the public purse;
b)when the control of inflation was his, and his predecessor’s, number 1 target, RPI(X) a measure of non-staff inflation totalled 17.7%;
c)wage increases, according to the AEI, totalled 22%, and
d)these figures do not include the decision to spend £103m on the EFW plant in 2008

Will the minister also give members details of the additional 190 public sector posts employed during this period, so that members can assess how many were front-line employees directly concerned with service delivery?

Will the minister also give members details of the 10 positions, along with the salaries, that he wishes to create to better monitor spending in his department?

2.to Treasury and Resources Minister

Will the minister condemn the approach taken by the Corporate Services Scrutiny Panel in requesting the CAG to produce figures for prospective GST rates required to eliminate budget deficits on the unlikely assumptions that:

a)no action was to be taken to curb public spending to below 6% annual increases, and
b)no attempt was to be made to raise further income from other taxes?

Does the minister accept that to project a 12% GST rate by 2014 is unnecessary scaremongering, and will he confirm that he has no intention of following any such misguided strategy.

Will he further confirm that he has no intention of raising the GST rate in the short term?

3.to Social Security Minister

Does the minister accept that the 3 levels of impairment component in Income Support are there to compensate those with an illness or disability for the increased costs of their condition and that successful applicants for these components should not have their benefits reduced through consequent reductions in other components?
What actions, if any, and in what timescale, will he take to correct this anomaly in the system which does not act in the best interests of those with a disability and, if none, why not ?


4. to Social Security Minister
In response to question 5133 about the Education Allowance (approximately around £30 per week available to less well off families of 16-19 year olds to encourage them to stay in education) the ESC minister had the following to say:

“It is my understanding that the form and extent of support available is unchanged, despite the fact that it is now available via Social Security rather than Education.”

Will the Minister inform members whether this allowance is still directed to 16-19 year olds in education and, if not, how and to whom is it now directed?

What structural differences currently exist in IS for 16-19 year olds in work and in education?

What action, if any, and in what timescale, will the minister take to create incentives to 16-19 year olds to stay in education, and if none, why not?

5. To Health and Social Services Minister

Will the minister inform members what budget provision, if any, she has made, or has under consideration, to fund payments for unpaid overtime or other additional hours to cover for understaffed services for:

4.nurses, and
5.other medical staff?

Will she further inform members of the extent to which any such payments are required for each of these groups by giving:

6.the number of staff affected
7.the total of additional days (or shifts) worked
the total sums required?

SHONA'S ORAL QUESTIONS FOR TUESDAY 9th MARCH 2010

Deputy Shona Pitman will ask the following question of the Minister for Housing ­

“In view of the heavy rainfall during the last weekend of February, would the Minister inform Members what action, if any, his Department have taken to prevent the regular flooding of houses at Nicholson Close?”

And she will ask the following question of the Minister for Economic Development ­

“Would the Minister inform Members whether any funding has been allocated to the tourism industry as part of the Economic Stimulus Package and, if so, how much and to what specific projects?”

DEBBIE'S ORAL QUESTION FOR TUESDAY 9th MARCH 2010

Deputy D. de Sousa of St. Helier will ask the following question of the Minister for Economic Development ­

“Can the Minister inform members what steps, if any, the Economic Development Department is taking to address the buy-out of Kleinwort Benson, in view of the fact that Jersey prides itself on only allowing the top 500 banks on the Island?”

TREVOR’S ORAL QUESTIONS FOR MARCH 9TH 2010

The first of Trevor’s two oral questions for next week’s States sitting has been necessary due to “the not unexpected” move by the Chief Minister, Senator Terry Le Sueur to keep details of any additional payments outside of contractual entitlements relating to the recently resigned Chief Officer of Health & Social Services out of the public domain.

Trevor says that whilst the obvious response for the Chief Minister should have been to simply either confirm or deny that any such payments had been included, Senator Le Sueur had instead attempted to hide behind claimed ‘confidentiality’ and effectively refused to answer.

‘Any additional payments of taxpayers’ money outside of contractual agreements – agreements that all States employees must have under law – are not covered under blanket confidentiality’ says Trevor. ‘The response last month was, as I say, not unexpected, but it does once again show complete contempt for both transparency and the general public who are fully entitled to know what went on here.’

As a consequence Trevor says he decided to take advice from the Data Protection office before attempting to lodge a re-worded oral version of the question in order that he didn’t fall foul of getting it knocked back by the Bailiff due to any ‘loopholes’ as he says has happened before.

‘I’m pleased to say that Data Protection confirmed that in their view the entitlement in the ‘public interest’ that details of any possible payments outside of contractual ones should be made available was very strong. As was said, this was a top civil servant and any monies would come directly from the public purse. If politicians are not to be able to get answers on such fundamental issues then we really should drop any pretence to claiming that we are a democracy, let alone a government that is accountable to its people. It really is that black and white.’


Question One - Deputy T.M. Pitman of St. Helier will ask the following question of the Chief Minister –

“Given that any additional monies/severance payments outside of the contractual entitlement paid to the former Chief Officer of Health and Social Services would have been made from public funds, what justification can the Chief Minister give for not divulging the contents of the agreement to the Assembly in his written response on 23rd February, particularly in the interests of accountability and transparency (as outlined in the Ministerial Code of Conduct)?


Question Two of Trevor’s follows on from his written question on the 23rd of February that revealed the remarkable and eye-opening figures relating to the real amounts of tax actually paid by some of the island’s 1.1.(K) residents (details of which can be viewed on this site in an article below).

Given that Assistant Minister for Treasury & Resources, Deputy Eddie Noel had previously told the States that he was of the opinion that 1.1.(K) residents could not have their tax rates re-evaluated, and possibly increased like the general public, Trevor says it is absolutely essential that this be clarified.

‘With the much-trumpeted review of taxation being promised by the Treasury & Resources Minister this issue cannot simply be left to later be used as an excuse to actually do nothing at all in this area,’ Trevor told us; ‘worse, to actually use this as an excuse to instead increase taxation levels on ordinary working people. Not just so-called ‘middle Jersey’ residents, but those who can afford any increase, whether this be via increased GST or anything else, the least. Hence my question as to the legal standing of agreements made; particularly those dating back to before the current regulations from 2005.

Question Two - Deputy T. Pitman of St. Helier will ask the following question of the Minister for Treasury and Resources ­

“Would the Minister clarify under which aspect of Jersey’s tax legislation individuals were deemed able to be legally granted 1(1)(k) status and thus negotiate their own tax contributions with the Comptroller of Income Tax prior to 2005; and advise whether 1(1)(k) status also means individual tax rates cannot be increased by government in line with a changing economic climate?”

We all look forward to hearing the answers…

Geoff's Proposal for a Long-term Improvement in Relative Minmum Wage Levels

The States are asked to decide whether they are of the opinion:
 
a).        that the minimum wage should be set at 45% of average earnings, to be achieved over a period of not less than 5 years and not greater than 15 years from April 2011 ; and
 
(b) to request the Employment Forum to have regard to this objective when making its recommendation on the level of the minimum wage to the Minister for Social Security.

Deputy G P Southern


REPORT

In summing up the debate of P212 / 2009 which followed extensive debate on P14 /2010, the Minister of Social Security had the following to say:

“.. it has been difficult for me to bring forward a recommendation… because it has been a slight step back from the percentage of the previous year, and I strongly believe that they (Employment Forum)should be bringing forward recommendations which increase the level towards the 45%”.


Minimum wage level - principles

The Employment Forum recommended in 2006 that the minimum wage for April 2008 should be set by reference to 40% of the overall average weekly earnings, as released in the June 2007 average earnings statistics. This was based on evidence that minimum wages in other jurisdictions are generally around 40% of the average wage of those jurisdictions.

In making its recommendation, the Forum had been influenced by the Economic Advisers advice regarding the States inflation policy and caution regarding the competitiveness of export driven industries. The Forum emphasized that if the States of Jersey wished to raise the bottom end of earnings, the minimum wage must equate to more than 40% of the average wage in future. Ideally, the Forum would aim to gradually increase the percentage of the average wage used in the formula towards 45% in the future. For example, 40.5% of the average wage would have given a minimum wage of £5.47 for April 2007. The Forum intends to take this into account in its 2007 internal review of the proposed uprating mechanism.

By 2008 the principle of raising the relative purchasing power of the minimum wage to over 40% of the average had been adopted.

“The Institute of Directors suggested that the minimum wage should be £6.08 per hour, based on a formula of 40.5% of the June 2008 average weekly earnings. Although a number of respondents said that the formula should not be increased beyond 40%, the Forum considers that this is based on an expectation that the 40% figure itself will be significantly above the average earnings figure.”


They concluded as follows –
“The Forum unanimously agreed to show a commitment to very gradually increasing the minimum wage above 40% of weekly average earnings (half a percent increase for 2009).
The Forum recommends a minimum wage of £6.08 to apply from 1st April 2009.”

Recent debate

On 25th March the States decided that it would not support either my proposition P14 / 2010 or Deputy Trevor Pitman’s amendment which maintained the 40.5% standard and raised the level to 41%, respectively. Given the impact of the recession, the Assembly decided instead chose to go along with the recommendation of the Forum.

The Social Security Minister, despite supporting the recommendation, appeared to lend his support to the principles outlined by the Forum above when he stated in his summing up on P212 / 2009:

“… I believe that there should be (a formula) and we should over time see it moving up”.

In the debate on this issue I pointed out that the level of the minimum wage, whilst clearly being an economic decision, was also one which was legitimately also a political one. In establishing a minimum wage the States have quite properly committed themselves to the protection of our lowest paid employees. I argued that this protection must be at least maintained and when possible raised along the lines suggested by the Forum. The Social Security Minister appeared to give support to this approach when he said:

“Sometimes this Assembly has not always felt itself able to make difficult decisions in times of good when we should have done … part of the role of government is to put pressure on business to do the right thing.”

As the minister made clear, politics (though not “politicking”) has a role to play in setting the minimum wage rate. He finally made his personal position on the minimum wage crystal clear, when he stated:

“I have made it clear to the Employment Forum that when we are out of recession, they should have the courage to come forward with increases because it is only right and proper that they do so.”

This proposition, I believe, allows the Assembly to put its weight behind the Minister’s obvious support for the principled approach adopted by the Forum, and sets the right political framework within which the Employment can feel supported in judging the pace at which the minimum wage rate can be improved.

There are no manpower or financial implications for the States in this proposition.

Geoff's Oral Questions - 9th March

Deputy Geoff Southern will be asking the following Oral Questions on 9th March, both to the Social Security Minister:

Given that his departmental budget consist overwhelmingly of benefit payments, will the minister assure members that in attempting to deliver up to 10% cuts required by the Comprehensive Spending Review by 2013, he will not reduce the index linking or otherwise cut the levels of individual benefits administered by his department, and if not will he state here which benefits may be targeted?



Will the minister identify which of how many the 118 IS recipients identified following review as losing over £90 from their weekly income were on transitional protection (TP) along with which element of TP was removed, the reasons for doing so and whether the phased protection designed to alleviate financial hardship outlined in the IS (TP) (Jersey) Order 2008 applies?

Geoff's Questions for 9th March

Deputy Geoff Southern will be submitting these written questions for the 9th March:-

1.To the Chairman of the Constables Committee:

Will the chairman inform members of the following figures relating to the electoral register:

the total number of those registered, by parish and overall

a). at the time of the October/November 2008 elections
b). in early 2009 following the elimination of those not registered for 3 years
c). currently

and state what measures if any have been considered in conjunction with PPC to improve these figures in time for a potential election this year?

2.To the Chief Minister:

Will the Chief Minister inform members of the estimated costs to States revenues over a 6-month period in lost income tax and indirect taxes, social security contributions, and Income Support payments of the redundancy of an employee on the average wage, in the absence of any redundancy payments, if that employee is:

a). single
b). married with 2 children, wife not working, and

i)in appropriate States social rental accommodation
ii)Owner/occupation with a mortgage of £200,000

3.To the Social Security Minister:

Following his answer to wq 5130 on 23rd February, will the minister now give the results of the losses and gains in the ranges requested of the “just over 800 reviews” of Income Support conducted this year and state how many of the 393 applicants whose payments were reduced were on Transitional Protection and have seen their payments reduced without the phasing provided by the IS (TP) (Jersey) Order 2008?

Will the minister explain under what circumstances such a reduction in income at short notice can be justified in the light of the clear intention of the IS (TP) Order to protect benefit recipients from such financial shocks?

4 to the Treasury and Resources Minister

Can the minister confirm that the Comprehensive Spending Review (CSR) has a target to deliver savings in States expenditure across departments through gross expenditure savings targets of 2% by 2011, 5% by 2012 and 10% by 2013?

Can the minister state how such large targets can be met without cuts in services and job losses?

Does the minister not accept that these large targets, if met, may endanger any recovery from the economic recession?

In particular, how will he manage to achieve such targets in terms and conditions at a time when many services in the public sector such as medical and social work services are struggling with recruitment and retention rates?

5. Will the minister explain to members what measures are in place to protect those with severe disability, whether child or adult, previously eligible for Attendance Allowance, after July 2011 from any reduction in benefit under IS designed to cater for the additional living costs attached to such disability?

TOP & BOTTOM – ALL A QUESTION OF ‘BALANCE’…

In the same States sitting that government debated – and rejected – proposals from JDA Deputies Trevor Pitman and Geoff Southern, that would have brought increases to the minimum wage of between either 16 or 8 pence respectively above the proposal from the Social Security Minister, we were interested to also note the answer to Trevor’s written question No. 17 on 1.1.K taxation as indicated below.

“Given that 1(1)(k) classified residents fall into two categories; namely those who were granted residence before current regulations were put in place, and those who have been granted residency since, will the Minister list the number of individuals by year for the period 2005 to 2008 inclusive, who paid tax within the following brackets –

(a) less than £20,000;
(b) between £20,000 and £50,000;
(c) between £50,000 and £70,000; and,
(d) between £70,000 and £99,000?

If any 1(1)(k) classified residents do fall into these categories, would the Minister advise how this fits into the framework outlined within the relevant income tax legislation?”

Trevor has promised to write an article relating specifically to this subject in the next week or two.

In the meantime we publish the figures below for people’s comments. Whether one supports the concept of 1.1.K residents or not, the actual figures below teased out by Trevor’s question to the Minister for Treasury & Resources make interesting reading. Not least being that somehow the Minister managed to overlook answering the crucial aspect of just how some of these surprising figures actually fitted into what is written into the legislation.




For reference
the current regulations to which Trevor’s question refers are that of Article 135A of the Income Tax (Jersey) Law, 1961. It should also be noted, of course, that this Article applies only from 1st January 2005 to any person who is given consent under 1(1)( k) housing rules to acquire and occupy property in the Island.


Under this Legislation, those individuals granted 1(1)(k) status are meant to be taxed at the following rates:

The first £1m of foreign income at 20%
The next £500,000 of foreign income at 10%
The balance of foreign income at 1%
All Jersey source income at 20%

Those individuals who were granted such ‘status’ prior to the above date are not subject to the provision; but rather were able to arrange a ‘negotiated’ tax contribution. This presents a number of questions in itself as it has been argued that it is debatable whether or not any such possibilities actually existed within Jersey’s law at the time. One further question we know Trevor will be pursuing is whether there is any truth in the rumours of a small number of ‘high value’ residents actually paying tax that actually falls beneath the figure of £10.000.

With regular re-assurances that all 1.1.K residents contribute at least £100.000 in tax, many people in so-called ‘middle Jersey’, not to mention those on a minimum wage justified from within the likes of the Hospitality Association as being ‘offset by cheap food and accommodation’ (quoted on Channel Television) will be interested to say the least. After all, as so many States Members were happy to suggest during the debate on the minimum wage: it really is all a question of achieving ‘balance’…

Debbie's Questions for 23rd February

Deputy Debbie de Sousa has lodged this batch of related questions:



WRITTEN QUESTION TO THE MINISTER FOR TREASURY AND RESOURCES
BY DEPUTY D.J. DE SOUSA OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd FEBRUARY 2010


“Can the Minister inform members how many vehicles, if any, are hired annually from Motor Mall by the Treasury and Resources Department and the cost per annum?”


WRITTEN QUESTION TO THE MINISTER FOR ECONOMIC DEVELOPMENT


“Can the Minister inform members how many vehicles, if any, are hired annually from Motor Mall by the Economic Development Department and the cost per annum?”



WRITTEN QUESTION TO THE MINISTER FOR EDUCATION, SPORT AND CULTURE


“Can the Minister inform members how many vehicles, if any, are hired annually from Motor Mall by the Education, Sport and Culture Department and the cost per annum?”


WRITTEN QUESTION TO THE CHIEF MINISTER


“Can the Chief Minister inform members how many vehicles, if any, are hired annually from Motor Mall by his department and the cost per annum?”

Debbie has also lodged this one:

WRITTEN QUESTION TO THE MINISTER FOR HOUSING
BY DEPUTY D.J. DE SOUSA OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 23rd FEBRUARY 2010


“Can the Minister state why, after over 10 years as President or Minister of Housing, and 4 years after Housing Trust Regulation appeared as an aim in the States Strategic Plan, the States are still waiting for action to be taken on this matter.

And she will be asking this one:

ORAL QUESTION FOR TUESDAY 23rd FEBRUARY 2010


Deputy D.J. de Sousa of St. Helier will ask the following question of the Minister for Economic Development –

“What action, if any, has the Minister taken to combat ‘gazumping’ within the property market and will he be bringing proposals forward to regulate estate agents?”

A Different Angle On Minimum Wages

There is a consensus in modern Western civilisation, that there should be a minimum wage that anyone can reasonably be expected to work for. Moreover, there is generally a consistency of approach from place to place on how to calculate it. The benchmark is the national average wage. The fraction of that average that is taken as the minimum very much reflects the respective societies. In fairly egalitarian parts of the world, such as North-West Europe and Australasia it is around half, while nations more comfortable with extreme contrasts between rich and poor may set it at a third or a quarter.

Jersey takes a slightly lower fraction than the mainland UK as its chosen level. This is not unreasonable, as the average is not only skewed upwards by the relatively high proportion of well-paid professional jobs, but also inflated by the use of the mathematically inappropriate mean for the official average, instead of the usual median. However, there was a long-term strategy to progressively increase from 40% to 45%. The proposals from Deputies Pitman and Southern previously posted on this blog seek to insert suitable figures into the formula to continue, or at least defend the progress.

Personally, however, I am unconvinced that the methodology really approaches the issue from the right direction. There is a strand of left-wing thought that holds wealth distribution to be an end in itself, but it is too rooted in the primitive psychology of envy to lay credible claim to the moral high ground. Surely, the proper and decent basis of any scheme for minimum incomes is to apply our equally primitive, but far more decent human urge for looking after our weak and needy to the alleviation and preferable elimination of poverty.

The basic costs of an austerely sufficient lifestyle in our local economy are already calculated with some care for the purposes of Income Support and Old Age Pensions. Income Support then provides benefit to make earned income, if any, up to a minimum acceptable for the individual's general circumstances and responsibilities. A single adult will receive £92.12 to live on, for example, plus £106.75 for renting a bedsit. A total of £198.87 is therefore reckoned to be the bare minimum for independent existence without undue poverty, at current local cost of living.

Guaranteeing that minimum does bring the catch, that a £199pw full-time wage would attract no help, and yet bring in only 13p more for a whole week's work than sitting idle at home on benefits. Therefore it would not be worthwhile. The solution to this “poverty trap” is to give the minimum wage a significant premium to the benefit rate. I would suggest that working full-time needs to bring in at least a third as much again as total unemployment to be a viable choice. This would be 1/30 of the basic Income Support rate, assuming as usual a 40 hour working week. ( Obviously, benefit claimants with extra claims, such as dependent children, would still receive Income Support to cover their extra entitlements.)

1/30 of £198.87 comes to £6.63. This turns out to be a larger percentage of average wages than the direct calculation from them, a sign that the high local pay rates are more than offset by the even higher local cost of living.

There is a trade-off in all this: To be an economically viable job, the output must add more value than the pay rate. There is a ceiling to the market values of all goods, services and “solutions”, and if the pay rates of the providers rise too high, they simply price themselves out of work, whether the employer downsizes earlier or goes broke later. In hard times, the gap between the minimum legal wage and the maximum viable wage may become critically small, or even negative. However, to keep poor and demoralised workers from clogging and bleeding the benefit system, and more importantly, to maintain a just and prosperous society, the minimum wage must be upheld, even if it costs a few already marginal and insecure jobs.

David Rotherham

TREVOR'S WRITTEN QUESTIONS FOR 23RD FEBRUARY

Trevor's written questions for next week's States sitting focus on a number of different areas. Question One arises directly from concerns already expressed within the JDA Blog, that really the Chief Minister should play no role in the debate around the proposition being brought to the Assembly by Deputy Bob Hill of St. Martin.

Question Two poses issues that have been troubling many political observers recently and which really should warrant clear answers in the public interest following on from the Verita Report.

Question Three, Trevor tells us, is an issue that a number of the 'progressives' in the States have been discussing due to the regular disappearance/non-appearance of a number of senior politicians during sittings - not just from the Chamber but from the States building. Having rejected Trevor's move to increase the quorum from 27 to 35 we would have to say that it is surely only fair and proper that all unexplained absences from sittings are highlighted for the public.

In many ways Question Four follows on natuarally from the first. Given that we are consistently told that suspensions such as that of Mr. Power and Mr. Day are simply necessary 'nuetral acts' whilst serious allegations are investigated the fact that the same approach has not been applied to the States CEO cannot but help to raise eyebrows. Everyone is innocent until proven guilty but the States simply must have consistency in their approach. Following on from the still unresolved questions around the responsibility for setting up Operation Blast, the release into the public domain of the sworn affidavit from Mr. Power by Deputy Hill really does make this a question that demands an answer.

Finally, Question Five to the Minister for Treasury & Resources poses a question that should be answered fully in the light of the prmised review of taxation in the island; not to mention the storied now doing the rounds that GST may have to be rasied to 12%. Our 1.1.K system is in need of a complete overhaul not least because of the two tier structure that has been allowed to develop with individuals being accepted as residents either side of the current legislation. Having heard from the Chief Minister last year that taxing 1.1.K's would be 'immoral' and the claim from Assistant Treasury Minister Deputy Eddie Noel that individual tax agreements could not be renogiated, clarification of the sort Trevor is seeking will be interesting to say the least.







To Chief Minister



“Given that he is a central figure within the suspension of the Chief Officer of the States of Jersey Police, does the Chief Minister consider that he is conflicted in the matter and should therefore declare an interest and withdraw from the debate of the Deputy of St. Martin’s proposition to set up an independent Committee of Inquiry into the suspension and the way that it has been handled (P.9/2010)?”




To Chief Minister(as responsible for staffing matters -

“Will the Chief Minister clarify whether the recently departed Chief Officer of Health and Social Services received any additional monies/severance bonus payments outside of his contractual entitlement, and, if any such payments were made, did this come from the public purse and what was the total amount?

Would the Chief Minister also clarify whether the former Chief Officer of Health and Social Services resigned, was invited to resign, was dismissed or left by ‘mutual agreement’ in the light of the Verita Report findings?”




To Chairman oF PPC

“Given the fact that the requirement for a Member to attend meetings of the States is set out within the Oath found in Schedule 2 to the States of Jersey Law 2005 and paragraph 2 of the Code of Conduct in Schedule 3 of Standing Orders, will the Chairman advise what disciplinary measures, if any, exist to ensure Members carry out their duties as required?

Would the Chairman advise whether Members leaving the Chamber and indeed the States Building entirely after roll call to pursue non-States matters and to conduct private business is in breach of the above legislation; further still, if none exist will the Committee consider developing disciplinary sanctions to put a stop to this practice?”



To Chief Minister

“In the light of the serious and detailed allegations against the Chief Executive to the Council of Ministers outlined in the sworn affidavit, signed by the suspended Chief Officer of the States of Jersey Police, recently released into the public domain by the Deputy of St. Martin, will the Chief Minister clarify why he has not, as a ‘neutral act’, suspended the Chief Executive until the allegations of engaging in political activity wholly outside of his remit can be fully investigated?”



To Minister for T&R

“Given that 1(1)(k) classified residents fall into two categories; namely those who were granted residence before current regulations were put in place, and those who have been granted residency since, will the Minister list the number of individuals by year for the period 2005 to 2008 inclusive, who paid tax within the following brackets –

(a) less than £20,000;

(b) between £20,000 and £50,000;

(c) between £50,000 and £70,000; and,

(d) between £70,000 and £99,000?

If any 1(1)(k) classified residents do fall into these categories, would the Minister advise how this fits into the framework outlined within the relevant income tax legislation?”

Public Sector Pay Is Not The Problem

The headline 'Adapt or Die' over the article on Ben Shenton's views was sufficiently alarmist to cast doubt on the integrity of what he was reported to be saying, but I was even more concerned when I read the details.He appears to say that the solution to the Island's problems lies in public sector pay, which must be reduced. I fail to see why he targets the public sector employees in this way, as they are in no way responsible for the current recession nor even for the 40% spending rises. In the period from 2005 to 2009, inflation has risen by 16%, and average earnings in the public sector have risen by 22% - the same as the average earnings in the private sector.

If we go back to the beginning of this economic cycle in 2002, the cost of living has risen by 31%. In this period average earnings in the public sector have risen by 33% and in the private sector by 38%. In 2009, due to the pay freeze, average earnings in the public sector have again fallen behind the private sector. So bringing public sector pay into line with private sector pay would involve a pay rise for most public sector workers. For example there is at least one private school in Jersey that pays its teachers 5% more than those in States' schools.

The 40% rise in spending mentioned by Senator Shenton may be due such projects as the incinerator, and the mismanagement demonstrated by senior officers but pay levels are not the cause of overspends. It seems that in any economic difficulties the public sector is targeted. When the economy overheats these employees are asked to show restraint. In times of recession, when they could help to boost the economy if their spending power were to be maintained they suffer a pay freeze. Let us not forget that these employees are not just faceless bureaucrats, but groups such as teachers, nurses, firefighters and paramedics who provide vital services.

Senator Shenton refers to the pensions 'black hole' but employees have paid contributions over their working lives and the employer's contributions have been part of their terms and conditions. These conditions and the job security that he also wishes to remove are part of what attracts well educated people into the public sector when they could earn more elsewhere. But these benefits are currently being eroded. For example, new entrants to the teaching profession will have much reduced pensions, and not until they are 65 rather than 60. As this is worse than is on offer in the UK we are likely to see further recruitment problems. There is currently a severe shortage of nurses due to the fact that the pay in Jersey is not high enough to compensate for the high cost of living.

Senator Shenton must know that Jersey is, contrary to the current spin, a low tax, low spend economy. Progressive taxation - not an increase in GST - could continue to deliver the services we have enjoyed up to now. Perhaps his emotive 'adapt or die' has some truth in it after all. Jersey must adapt to paying the appropriate rate for its services, or a cancer sufferer who has to wait for treatment because of a shortage of health professionals may well die.

Anne Southern

Trevor's Alternative Minimum Wage Amendment

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MINIMUM WAGE: REVISED HOURLY RATE FROM 1st APRIL 2010 (P.14/2010) - AMENDMENT

PAGE 2

For the figure of ‘£6.28’ substitute the figure ‘£6.36’


DEPUTY T.M. PITMAN OF ST. HELIER

Report

As States Members will appreciate it is hardly surprising that I agree whole-heartedly with the contention outlined within the proposition of my JDA colleague, Deputy Geoff Southern that the 2010 increase to the Minimum Wage proposed by the Minister for Social Security does not go quite as far as it should. Where Deputy Southern and I disagree is simply upon the extent of that increase. The Deputy sets his proposal at a rate of £6.28; or 40.5% of weekly average earnings.

I am proposing that the rate should in fact be based on 41% of weekly average earnings i.e. a new Minimum Wage hourly rate of £6.36. This would take us precisely to the 2010 position targeted by the Employment Forum some two years ago within a framework of aiming for gradual incremental increases of .5%.

It should be noted here that both the original proposition from the Minister for Social Security and that of Deputy Southern already provide excellent background material; drawing at length on data provided by the work of the Employment Forum. In particular I would draw members’ attention to the graph contained in Deputy Southern’s proposition outlining percentages within individual business sectors. Given this material I obviously have no wish to duplicate any information - other than that which I deem to be absolutely essential for the purpose of understanding the justification for the proposition – so will keep my observations as brief as is practical.

The principle underlying a rate set at 41%

As Deputy Southern highlights within his proposition, in 2007, the Employment Forum, in making its recommendations for the minimum wage and in looking to the future advocated a figure of 40% of average weekly earnings following comparisons with minimum wage rates of a number of other countries. These are set out in the table below. Here I would draw Members’ particular attention to the average figure based on all of the countries utilised for comparison highlighted in yellow – 41.14%.

Minimum wages as a percentage of average wage in other jurisdictions
 


An amendment that simply brings us to the point where we should now be

Though the average percentage figure indicated in the comparison chart above is compelling in itself; in his proposition Deputy Southern reminds us how the Employment Forum emphasised the fact that if government wished to raise the bottom end of earnings the minimum wage must equate to more than 40% of the average wage in future. As already highlighted, the ideal being stated that the Employment Forum would strive to gradually increase the percentage of the average wage used in the formula towards 45% in the future.

Though I personally believe that in Jersey we should actually be aiming, long-term, to ultimately reach a figure of 50%; with regard to the proposed figure for 2010 we need to bear in mind that the Employment Forum unanimously agreed to show a commitment to very gradually increase the minimum wage above 40% of weekly average earnings (half a percent for 2009). Significantly:

The 2009 figure was set at 40.5% of average earnings

Viewed within this context it is my belief that 2010 should therefore have seen us naturally implement a rate of 41%. However, as Deputy Southern highlights, in targeting the minimum wage rate for 2010 the Employment Forum has taken both a backward step from its own established benchmark figure of 40.5%; and also abandoned its previously stated aim of incrementally raising over time the relative value of Jersey’s minimum wage.

The consequence – particularly viewed in the light of significant recent hikes in electricity and domestic fuel costs, the impact of GST etc – is that the position of those at the very bottom of the pay ladder have not been protected. Indeed, it will essentially have been worsened and at the very time such employees need governmental resolution the most!

Of course, though it must be acknowledged that the Forum does offer limited comment in attempting to justify this retreat, to the effect that they felt the need for caution given the economic downturn, the fact is that an equally compelling case can be made for adhering to the Forum’s earlier position.

After all, as we stand in spring 2010 pay awards for the year relating to a number of major pay groups are still being negotiated. Both private and public sectors will now be looking to the future based on fairness and sustainability. We can be quite certain that this proposed incremental increase to 41% with regard to the minimum wage will not be out of step when these awards are finalised. I would also draw Members attention to the fact that the Minister’s proposed rate of just £6.20 is, to the surprise of many I have spoken to, actually even set at below the RPI (X). Please see the table below.






We must ensure a ‘living wage’ is available to all

Considering all of the above I feel that I must conclude with an observation arising from a public seminar I attended late last year relating to the North Town Master Plan. The incident really emphasizes the need for us to keep our sight fixed firmly on reality. At the seminar, like a number of other people present, I was shocked to hear the owner of a St. Helier business complain bitterly about how the States really should be LOWERING the minimum wage if politicians wished to help businesses like his thrive.

Indeed, the gentleman went on to state quite specifically that if we (the States) would only allow him to pay people £3.00 an hour his business and many others would be so much more profitable. Why do I mention this now? Only because I feel – like so many of my constituents working in this bracket who find it necessary to approach me for help – that there are far too many people in Jersey who, perhaps because they have never had the misfortune to find themselves there, have no real conception at all of how difficult it is to make ends meet on Jersey’s present minimum wage.

As I believe most Members will be all too aware, a great many people at the lowest end of the earnings market work very hard indeed. There reward – a reward that we as the island’s government should ensure with vigour and courage given the reality of our highly expensive island – is a rate of minimum pay that is not an ‘existence’ wage but a ‘living’ wage. Setting that rate at £6.36 will do just that. Though an increase form the Minister’s proposed £6.20 per hour of 16 pence may seem, at first glance, a big difference let us keep this in perspective: set against an assumed working week of 40 hours this actually breaks down at an increased salary of just £6.40 per week.

Financial and manpower implications

I believe that there are no direct financial or manpower implications for the States.

Geoff's Minimum Wage Amendment

Deputy Geoff Southern will be proposing the following thoroughly reasoned amendment to the new Minimum Wage Order:-


‘to request the Minister for Social Security, having sought the views of the Employment Forum as required by Article 18(1) of the Employment (Jersey) Law 2003, to make an Order fixing the minimum wage at £6.28 per hour and, as this figure is different from the £6.20 rate recommended by the Forum, to report to the States as required by Article 18(4) of the Employment (Jersey) Law 2003'

The recommendations of the Employment Forum on the minimum wage rates for 2010 are summed up as follows:-



The States are asked if they are of the opinion –


In arriving at this figure for 2010, the Employment Forum examined a wide range of factors. The table below illustrates their impact on the minimum wage rate.





In 2007, the Employment Forum, in its recommendations for the minimum wage had the following to say, in establishing the principle of setting the minimum wage at 40% of average earnings:

“The Forum considers that it is logical to take the June figure of the preceding year and intends to use this formula each year to recommend rates for the following April, subject to consideration, only where necessary, of factors which have had a major impact on the economy, for example an exceptionally good or bad year in the finance industry.

Taking the assumed working week of 40 hours, 40% of the average earnings across all sectors of £540 per week, equates to £5.40 per hour.”

This figure of 40% of average earnings was adopted following comparison with other countries’ minimum wage rate given in the chart and table below.



Minimum wages as a percentage of average wage in other jurisdictions

 



The minimum wage rate
The Forum recommended in 2006 that the minimum wage for April 2008 should be set by reference to 40% of the overall average weekly earnings, as released in the June 2007 average earnings statistics. This was based on evidence that minimum wages in other jurisdictions are generally around 40% of the average wage of those jurisdictions.

In making its recommendation, the Forum had been influenced by the Economic Advisers advice regarding the States inflation policy and caution regarding the competitiveness of export driven industries. The Forum emphasized that if the States of Jersey wished to raise the bottom end of earnings, the minimum wage must equate to more than 40% of the average wage in future. Ideally, the Forum would aim to gradually increase the percentage of the average wage used in the formula towards 45% in the future. For example, 40.5% of the average wage would have given a minimum wage of £5.47 for April 2007. The Forum intends to take this into account in its 2007 internal review of the proposed uprating mechanism.

By 2008 the principle of raising the relative purchasing power of the minimum wage to over 40% of the average had been adopted.

“The Institute of Directors suggested that the minimum wage should be £6.08 per hour, based on a formula of 40.5% of the June 2008 average weekly earnings. Although a number of respondents said that the formula should not be increased beyond 40%, the Forum considers that this is based on an expectation that the 40% figure itself will be significantly above the average earnings figure.”
They concluded as follows:
“The Forum unanimously agreed to show a commitment to very gradually increasing the minimum wage above 40% of weekly average earnings (half a percent increase for 2009).
The Forum recommends a minimum wage of £6.08 to apply from 1st April 2009.”

The 2009 figure was set at 40.5% of average earnings. In establishing the level for 2010 the Employment Forum has retreated not only from its own 40.5% benchmark figure, but it has also abandoned its stated aim of gradually raising the relative value of the minimum wage. Worse still the Forum has reverted to the 40% mark and thereby failed to protect the position of the low paid.
The June 2009 figure for the rise in the Average Earnings Index (AEI) was 3% overall. The figure for the private sector was 3.3%. These overall figures however mask the trends in the low paid sectors. The sectoral figures are given here:

Individual Business Sectors

Figure 3 - Annual percentage change in average earnings by sector



The traditional low-paid areas of employment, agriculture, retail and hospitality, saw average earnings rise markedly. The award of only a 2% rise to those on the minimum wage to the hourly rate of £6.20 for 2010 actually reduces the protection offered to these lowest paid; it makes their relative position worse. This proposition simply restores the 40.5% benchmark set the previous year. It produces an extra 8 pence per hour and raises the minimum wage to £6.28.

In percentage terms, the rise in the minimum wage proposed in this report amounts to 3.3%, coincidentally identical with the AEI in the private sector. It also matches the RPI (Low Earnings) figure for December 2009.

What this proposal does is to restore those on the minimum wage to the position established in 2009. Any figure below this effectively reduces the protection offered by the States to our lowest earning workers. Especially in times of hardship I believe we must maintain this protection. We should not allow the lowest paid to bear the brunt of the recession.