By election husting St Brelade

A spot of gentle rain  and a nice reduction in temperature are very welcome.  So an early finish for the day and I've a chance to review another husting recording,  This one is St Brelade .

Before I get to another very good question , a quick comment on a couple of the speeches.  Sarah Ferguson majored on a very valid point about the shift of tax burden  and particularly the way local trading companies can be used to avoid almost all tax as long as you don't distribute profits.  Top marks for speeches from a green point of view however must go to Guy De Faye. He nailed the population growth problems and previous target busting, back to the days when 80,000 was the limit!  Better yet he actually explicitly stated the economic growth model of the CoM is bust.  The only one to do so to date that I am aware. 

The question was put by friend Glyn Mitchell who asked if it wasn't time to put more emphasis on the environment,soil and ecology rather than on the economy.  There was also a concurrent question about supporting the MTFP, so I have included that here.

MD charges are a hidden tax. EU might change that as Brexit will cause examination. Might fail their tax considerations. He attended Dr Ingham talk. Some small scale work locally. Doesn't know if Jersey soil and agriculture were ever environmentally friendly. Should be an environmental candidate on the hustings talking about this. Brexit will affect it.

CM Could not agree to MTFP in its current form, especially health charge and commercial waste charge. On environmental consequences we have to be aware of negative effect of industry and not looking carefully at Jersey's environment. Future Jersey plan needs to be put into action including climate change and global warming impacts for low coastal areas. We are not prepared. See consequences at St Aubins bay. Have ideas from SOS – need to do more.

JY. On the health  tax he will bring an amendment to put on hold until sorted out. Will vote against MTFP if that fails. Last 20 years working on  environmental matters. Proud of what has been achieved. But environment is  taken for granted in Jersey. Strange as it attracts people and is put at risk all the time. In times of economic stress environment goes even lower on priorities. Population & limiting its growth is at heart. Need urban dev plan – too densely populated in urban areas -traffic too.

SO  Glanced over MTFP quickly. Need IQ over 200 to understand. Should be thrown out as unworkable. Stealth taxes ridiculous. On environment St Aubin bay -sea lettuce, Seymore Tower infestation  of asian crabs, Dont know what we can do but they are a problem. Should put sea lettuce on fields for fertilizer. Big machine is a waste of time & money.

SF. Has record for bringing propositions against budgets. Would bring amendment for charge to be held back until promised review delivered. One of few positive EU directives is requiring rotation of crops. Awaiting SOS testing outfalls. Part of St Brelade dev group on landscape building density & tourism facilities. Have to keep nice for tourists. Identification of brown field sites for new houses.

NleC Right wing candidates will be supporting MTFP. Don't be fooled by words saying they wont do it., they will they are loyal to govt. CoM are implementing austerity programmes -preserves income of the rich. Would be great to see an environmental candidate here Greens should get themselves together and get more candidates for the coming general election. Put pressure on govt that is indifferent to such issues.

GdeF MTFP latest version has to be masterpiece of obfuscation. Need code breaker to decipher it. Very unlikely to be able to turn around the collective responsibility of CoM with their lickspittles and camp followers seeking preferment who will vote for it en masse. Will try on key points. Like accepting charges in principle without defining workings. Not fair. Keen on environment was a member of Greenpeace at school. Also need perspective. Sometime environmental things cost a lot of money. See Guernsey recycling debacle.

SM no force on heaven and earth persuade him to vote for MTFP. Problem doesn't matter how squalid some members will vote for it because the minister tells them too. Amendments will only have 1 day to be laid after election.  He will lay an amendment as deputy anyway. On environment COM doesn't think environment makes money so they ignore it. Should be self sufficient in energy. Have local talent like SOS, Glyn to make changes, don't keep bringing in UK consultants.

HR. Been involved with MTPF. Biggest problem is get to end and its not clear if you can do it. See comments of home affairs minister  on impacts on fire, police etc. more work goes to parish and Hon Police. There are areas you will have to support. Sporting programme is losing people. Vice chair of Racecourse, negotiation with environment Department on keeping character. 32,000- registered cars -more than domestic houses? More sharing more public transport. Env is important.

M OK B. Sam won't be doing propositon. She had to stand down as Centenier to stand, Sam has let down St Helier no 1 (MBF Not hes deputy for St Helier no 2district!) - should stand down too. Does not like new projects when we are overspending. Main project like schools and sewage system should go ahead. Not in favour of stealth taxes to cover infrastructure spending. Environment is expensive, start with hearts and mind. Go in schools.

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What is £10 million between friends?

If anyone had any doubts that our economy was struggling, multiple items of recent news should have clarified matters.  In no particular order, Funds on deposit in Guernsey down 15% last year.  Yes their economy is not a direct parallel of ours, but is is a clear indicator that things are not wonderful.  The dropping of  £75 million development in Bath street is not a good omen either.  Ostensibly concerns of the planning department approach are cited.  There may be some credibility in that given the difficulties the Coop had over their  plans, but no one I know  would drop such a scheme just on that basis. - there's too much potential  and sunk costs.  It is much more likely to be shelved because the outlook for selling/letting  space is too low to make the project attractive, possibly even non-viable.   A third strand - we hear that passenger numbers between Jersey and the Isle of Man airports are down a lot, and  the operator of the direct route is to drop it.  That is not a tourist route, the overwhelming  proportion of the passengers are people in finance and  support industries, like IT.  Then there is the leaked news from the UK Government that they intend to introduce  FACTA type obligation, coupled with the emergency meeting response of our government. In theory it is a pointless move -all those UK investors declare their taxable income to the Inland Revenue, like good subjects.  As a 'well regulated' finance centre we do the KYC checks, and we don't open accounts for people who would not dutifully declare their income, surely.  The knee jerk response rather suggest otherwise, and if that is the case, a chunk of our primary industry is  likely to be heading far to the East.

It is hardly surprising therefore that some people think the millions it will cost us to buy Plémont is too high a price.   It is certainly true the handling of the whole Plémont saga by the States has been woeful. In fact he States of Jersey has 'form' when it comes to projects around the  £10 million mark.    There was Les Pas holdings States vote for Les Pas deal  , The Millennium Town Park, and most recently the redemption of preference shares in JT. 

In the recent debate in the States on the MTFP, there was a disagreement over the redemption  of preference shares in JT.  The core of the issue was that JT have them on their books valued at  almost £30 million, whereas the States we looking to redeem for £20 million (par value I think).  The shares produce dividends of 1.8 million a year for the States, which will disappear on redemption , of course. So did we lose £10 million on the deal?  It certainly looks like a good deal for JT - they pay out £20million in cash, eliminate a book debt of £30million , and remove an ongoing obligation to pay out £1.8 million annually.

It is important to recognise that these shares are not tradable.  There is no market in them.  The value of the shares is whatever price at which the buyer and seller are both prepared to do the deal.   The Treasury Minister argued that since we own 100% of the equity of JT , it makes no difference to us - the value of the remaining shares adjusts to reflect that extra £10million on the JT books. That is true at the point the deal is done, but of course hard cash today is different from a book value tomorrow.  It only needs JT to lose a court case, or be totally out manoeuvred by a competitor to potentially lose a lot of value.

So why was  the Treasury Minister working so hard to sell us a deal that, on paper, looks rather poor for the tax payer?  The truth is he had little choice. In order to  balance his income and expenditure he had to raise that £20million. Without it there would be no money to set up the innovation fund, and some other new schemes.  By implication the Treasury Minister must be expecting the return on that fund to be somewhat more than the 9% dividend the prefs pay us. Experienced business angels can achieve returns in the order of 20%, but even so a third of their investments crash valueless.
  
One other observation about the sale of those preference shares. The special and non tradable nature of the pref shares and the States relationship  to JT over them would complicate any possibility for JT  taking on other investors. This arrangement now means the States only hold ordinary shares in JT.  In three years time the Treasury will need to raise some cash again.  Now it is not a monopoly local provider and with all the money pumped into Gigabit, and the nicely segued net £10 million on the books, a ready fattened JT will be an obvious privatisation  prospect. It might even happen sooner if we do go ahead with a new hospital.

What confuses and disappoints me is that the issue of the purchase of Plémont attracts so much comment , despite not being an economic proposition, when the redemption of the JT shares, and the arguable loss of £10 million to the tax payer attracts so little comment.  The value on Plémont is not directly economic, it is for the ecology, the space and  future generations. As with the JT shares valuation, the price of the deal is what is the issue, but that is a different matter from the value.  In granting planning permission, the Environment Minister has considerably shifted the valuation in the perspective of the sellers, and probably in the view of any independent valuer who might assess it.
Like the JT shares redemption, buying Plémont is  a one off deal.  Unlike the JT share deal it does not carry a £1.8 million a year loss of income - the maintenance once cleared is minimal.  If the land is retained in ownership of the States, albeit perhaps on loan or managed by the National Trust for Jersey, it is an asset on the books.  Contrast that with the JT shares which is actually a reduction of assets.

Finally, if the economic outlook really is a bad as the indicators I mentioned at the outset suggest, that development at Plémont is a very high risk.  The very people who might be able and interested in buying those properties are the ones at the front line of the economic decline that is heading our way. You need no such wealth or high pay to appreciate or partake of open public space. At a MTFP consultation I asked the Treasury Minister what was plan B if in the three years of the plan something  happened to throw the estimates and assumptions off.  His response was that we would not do austerity, he would look to create economic stimulus, borrowing  if necessary.  Clearly if we can contemplate borrowing to spend we can certainly afford to buy a one off asset.