A Perfect Storm?

Web photo 1Listening to the wind howling through the eaves last night reminded me of 1987 and the storm which changed Sevenoaks to One Oak and my parent’s road from Pine Walk to No Pine Walk. Luckily ( as far as I can see), the damage here on Guernsey was no where near as bad but it was scary – both for me and my cat.

It also reminded me of Michael Fish’s forecast.  A woman phoned in that October morning many years ago and asked if there was a hurricane on the way and Michael replied “Don’t worry there isn’t but having said that it will become very windy.”

So from one forecast to another and the Budget debate at the beginning of November.  According to Vice-President Lyndon Trott, the forecast is that we will be in surplus this year.  This is good news but, to appreciate what it really means, it must be remembered that this is only the start.  For eight years we having been dipping into our own and our children’s piggy banks to pay for our weekly bills and the surplus means we can, hopefully, now start topping up those piggy banks again.

As well as those piggy banks, we also need to pay for the maintenance of our Island home.  It is estimated we should spend 3% of GDP on capital projects, on infrastructure, each year but again we will fail to do so to the tune of £24 million in 2016 alone.  We must, and can, do better.

Last week, the Policy and Resource Plan and the Fiscal Framework were debated.  Both are necessary to identify where we are going and the rules that will apply in getting there.  We did not, however, decide how the money should be spent – that will come later in Phase 2 – but we did agree on the overarching place we want to be in 20 years and our priorities for the next five.

All but one of us did approve the wording of the Plan.  As I said at the time, I would have written it differently but I believe in its aims and its restrictions. So we have a plan and a fiscal framework which means it is now down to the six Principal Committees and the Policy and Resources Committee to work together to get that meat on those bones.

One aspect of the debate which did get me a bit heated though was in relation to our regulations and whether they should be kept to a minimum.  On occasion, minimum regulation can be good but not always.  In the finance industry, it has been long established that regulation should not be introduced which purely allows us to scrape through the international requirements.  Our hard-fought reputation has been built on relevant, proportionate regulation and losing that edge would be something which our competitors would relish.

For those of you who are horrified that this market advantage could so nearly have been lost, don’t worry I offered to explain the necessity of removing the words “at a minimum” to those who voted for them to be retained.  Whilst I’m not holding my breath, do watch this space.

I should add that the P&R Plan is not just for the purposes of good government – it is for all of us.  It is a means by which we can contribute in our own particular way so we achieve a true surplus.  A surplus over and above our realistic annual commitments so we are able to invest in infrastructure and, even better, put the money back in the piggy banks that we have used in the last eight years.  Then we will truly be able to face a perfect storm even if it is not in the forecast.

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