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Deputy Geoff Southern must have one of the most interesting academic backgrounds within the States emerging from university specialising in metallurgy and French! A former school teacher, it is perhaps this background that has led to his reputation for research in both his propositions and Scrutiny work that has earned him the respect of both colleagues and opponents alike. Widely believed to be in contention for the accolade of having asked more questions, and brought more propositions than any other present Member, as well as being the current Chairman of the Economic Affairs Scrutiny Panel Deputy Southern is also Vice-Chairman of Income Support and a member of the Migration Policy sub-panel. 

WHO PAYS JERSEY TAX? …..   WE DO!

Figures produced today by JDA Deputy Geoff Southern show that in the past decade the tax burden for running Jersey has shifted dramatically from business to the ordinary workers of Jersey.

These figures produced in the table below show how the Walker, Le Sueur, Ozouf  Councils of Ministers have transferred the tax burden way from business and on to the shoulders of ordinary working people in Jersey.

“Back in 2000 companies contributed over half (52%) of the tax revenue needed to run the island” said Deputy Southern.

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 “That proportion has been steadily reduced and thanks to the zero-ten tax regime is now as  little as 12% of the sum required.  Over the same period workers and their families have seen their taxes double to 84% of the revenue needed  Click here to read the rest of the article

“Companies do not pay tax” says Treasury Minister Philip Ozouf, in the States in question time on 1^st March.

Companies don’t pay tax – under zero/ten, and now that deemed distribution has been ruled out by the EU, all non-finance businesses, whether locally owned or not, will pay zero per cent on their profits. These companies contributed

£82.5 million in 2007 (the last year for which figures are available) in 2010 this will be down to £13.5 million – that is £70 million of missing tax.

Why has Senator Ozouf not announced his policies for recouping some of this tax? Does he know what he can do?

Companies don’t pay tax – under zero/ten, finance companies will pay only £50.4 million in 2010 at the 10% rate on their 2009 profits of £809 million. Throughout the past decade their contribution has been around £150 million – that is a further £100 million of missing tax. The effective rate on finance company profits is a mere 6.3%.

Why is the full 10% not being paid? When will Senator Ozouf clamp down on this avoidance?

Who pays tax? We do!

The total tax paid by ordinary working families will rise from £166m in 2000 to an estimated £436m in 2011. This is the deliberate policy of Senator Ozouf and his predecessors over the past 10 years. He has done this by imposing and raising GST, raising impots, freezing income tax allowances, and by the imposition of IT IS and “20 means 20”. We now pay 84% of the total tax needed. This means that all families, whether low or middle earners, including those like pensioners on fixed incomes, have been paying the price of Senator Ozouf’s failed zero/ten policy.

When will Senator Ozouf stop punishing ordinary Jersey workers and their families and rebalance his tax policies? When will business be made to pay its fair share of tax for trading in Jersey?

Company Tax versus Personal Tax 2000 - 2011

*2000-2006 Treasurer’s Report p.xi. Financial Report & Accounts, 2006

2007-2008 Treasurer’s Report Table 2, p.7. Financial Report & Accounts, 2008

2009 Treasurer’s Report Table 4, p.8. Financial Report & Accounts, 2009

(E) Estimates Draft Budget Statement 2011 Summary Table B p.74

FURTHER INFO: GEOFF SOUTHERN 07797 772 632

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How Ben Shenton go it wrong - again

The comment in the JEP editorial column (February 8) described Senator Ben Shenton as “a politician with a penchant and talent for extracting uncomfortable truths from numbers”. As another politician who is equally comfortable handling numbers, may I venture to suggest that my colleague is also one who is prone to using a partial analysis to arrive at somewhat superficial conclusions.

Income Support is our basic safety net to assist residents to live a decent life. People can, indeed, appear to be better off on benefits than in work. A single parent with two children in rented accommodation can receive up to £560 per week (£29,000 per year) on Income Support (IS). But before one jumps to the conclusion that IS is just too generous and must be cut to save money, one might first ask why.

The first factor that explains the levels at which Income Support is set is the cost of accommodation. Jersey has the highest rent levels for social housing in the UK. So the first £13,000 of IS goes direct to the landlord. Over 40% of the household income goes straight out on rent. If it is a States property, it is set at 90% of private sector rentals. Where the private sector leads, the States follows. Are rent levels set too high? Are we merely subsidising greedy landlords? There are those who would argue that this is the case. Where in Senator Shenton’s argument is the case for rent control?

So that leaves £16,000 a year to maintain a parent and two children. Let us now suppose this single parent goes out to work (as many do). Let us suppose that she finds work on the minimum wage, 40 hours per week, at the princely sum of £6.32 per hour; a total of £252.80 per week gross, or £237.63 after Social Security. By how much is she better off in our Income Support system? After disregards, and allowing for no additional expenses for getting to work, Income Support is reduced to£363 per week and her total income rises to £600 weekly. She works 40 hours a week in order to be £40 a week better off.

What conclusions can one draw from these numbers? Are the disregards and tapers for earned income set at the right level to encourage work? Ask yourself whether you would be incentivised by the prospect of working for £1 an hour.

The system cannot be said to sufficiently encourage work; far from it. Then ask yourself about the minimum wage.

Could you support a family of three on £237 as your weekly wage? Is the minimum wage set far too low for Jersey prices? Is the States merely subsidising employers? Should we, like London, be pressing for a much higher “living wage”? Where in Senator Shenton’s analysis is a case for higher wages to match our inflated higher cost of living?

This simple analysis ignores the potential need for childcare to enable the parent to work. In the absence of relatives and friends who might help, let us assume one hour before and after work for each child at £6.00 an hour (this is the low end of childcare costs)

This would mean an additional cost of £120 a week to enable this parent to work. Income Support will be increased by £92.70 towards this cost, leaving the family £27.30 short. Overall this parent, if independent, proud and fiercely determined will go out to work her 40 hours each week for the net return of £12.70 (of course that doesn’t include her bus fares to and from work).

Income Support has many defects. As an incentive to work, it is woefully inadequate. I have been pointing that out since its inception. The response, however, is not the knee-jerk reaction of cutting away the safety net, but to ensure that the components and structure can meet real need when and where it arises.

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Budget: Freeze GST says Deputy

Deputy Geoff Southern has lodged an amendment (P 157/2010) to the 2011 Budget to freeze the rate of GST at 3% until at least June 2012.

“Now is not the time to be imposing such tax rises on the working people of the island” says the Deputy. “Such a move will cost households over £800 a year on average. At a time when Senator Ozouf is considering a 2-year pay freeze it will hurt every islander.

GST remains a regressive tax which hurts the least well off most. It will also further depress the economy, damaging local retailers most. These are facts which no amount of “categorical assurances” can deny. Senator Ozouf is putting any recovery in danger with his high-risk game of immediate tax rises for the low and middle earners.”

“The time has come to use the Rainy Day Fund forestall knee-jerk tax rises such as a hike in GST” says the Deputy. “We could and should spend £26m of last year’s £50m interest on the Strategic Reserve to protect ourselves over the coming year. Tax rises must not be imposed until recovery is in place. Once GST is raised, it will never come down. If we do not stop this now, then sooner or later it will be at 17.5 % and we shall all be worse off.”

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Time to Adopt all Clothier Report Recommendations 

January 7, 2011

Well, you turn your back for a few days and all sorts of nasty creatures come out of the woodwork.

In this case, over the Christmas break, no sooner were the lights turned out in the States Chamber than there was an outbreak of conservatives scurrying around to preserve the status quo and desperate to turn back any vestige of democratic reform.

The States recently voted to begin the tentative process of reform of the States Assembly which has lain neglected for over a decade. Clothier was cherry-picked by ministers for their own ends.

Recently, however, members voted to reduce the number of Senators by two. The ‘no change’ party sent up howls of anguish: ‘Save the Senators’, ‘Protect the Constables’. And then they went on the attack: ‘Destroy the Deputies’ and finally ‘Beat up the backbenchers’.

Senator Paul Routier was in the vanguard with a straightforward attack on the ability of all non-executive members to represent their constituents and to bring propositions to the States.

He seems to want a parliament where the only business is the rubber-stamping of whatever a minister chooses to bring to the States. Recently many backbenchers have actually started to get political. They bring their own propositions and have the temerity to argue with ministers.

‘We can’t have that!’ says Senator Routier. ‘Let’s increase the lodging time for backbencher propositions, and insist that any proposal has seven signatures before it is lodged. That will slow them down. While we’re at it, we can reduce the time allowed for any backbencher to speak in a debate. That way we can get decisions wrong more quickly.’

Then we had contributions from Senators Cohen and Ferguson. They have both leapt to the defence of that endangered species … the Senator. Senator Cohen is the mildest, with a proposal for a referendum on the reduction of senators from 12 to eight. Senator Ferguson (clearly not acting out of self-interest but purely from altruistic motives) takes a harder line, demanding that the decision to reduce the number of senators be reversed.

Then to cap it all, into the fray charges Deputy Eddie Noel, who has never brought a back bench proposition, but appears to constantly await instructions on his Blackberry from his political masters, with a cunning plan.

‘Let’s reduce the number of deputies from 29 to 21!’ This reduces the representation of St Helier, with a third of the population, down to seven. It leaves the Assembly with its Constables and Senators providing an overwhelming conservative majority.

Despite their best efforts the fact is that there must be reform if we are to have a viable and responsive democracy in the Island. The way to achieve this democratic representation was outlined by Sir Cecil Clothier back in 2000. He said:

• The role of Senator should be abolished.
• The Constables should cease to be ex-officio members of the States.
• The Bailiff should no longer preside over the States Assembly.
• There should be one General Election every four years.
• There should be a single central register of voters.

The time has come to follow through with the full package of reforms contained in the Clothier report. Reform Jersey will pursue this agenda to achieve responsible and accountable government.

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Ozouf launches attack on Jersey

With the Budget chained firmly tied to the Comprehensive Spending Review (CSR) last week, the Treasury Minister, Philip Ozouf, finally and openly declared war on the ordinary residents of Jersey.

“Having warmed up with snatching school milk, closing hydrotherapy and letting go of front-line police, customs and medical staff in stage 1 of the CSR, he has launched a full-frontal cut and tax attack in stage 2, which leaves none but the wealthy unharmed,” says Deputy Geoff Southern, on behalf of the JDA.

The message is clear: If you are a worker whose pay is frozen; if you are a pensioner on a fixed income; if you are vulnerable and on Income Support; young or old: Jersey is not for you. Don’t be poor or sick in Jersey. In fact even for those workers on an average wage, struggling to support your family, Jersey is not for you.

Despite all his promises, Senator Ozouf has raised GST. The average household already pays over £1,400 a year in GST. Senator Ozouf will raise this by an eye-watering £900 to over £2,300 at a stroke from June next year. We all knew he would put GST up – here it is – a 66% hike. How will ordinary workers and families make ends meet?

Over the next 3 years he will take over £100m extra from the pockets of ordinary Jersey residents, and only £25m from business, little from the really wealthy 1(1)(k) residents, and still nothing from non-local, non-finance companies.

After giving away £100m of business tax through zero/ten, he asked the ordinary Jersey residents to pay an extra £70 m to make up for the shortfall. He now wants to make them pay again. This is yet another budget for the wealthy at the expense of the rest.”

What impact will these proposals have?

FOR WORKERS – a £14m cut, the largest single element, will come from employee terms and conditions – top of the list?
a 2-year wage freeze

• Whilst wages are frozen, GST costs for the average family will go up by over £900

• Ozouf claims only around 150 job losses. The reality is that
250 jobs will be lost by 2013, with more to follow in 2014. These job losses will further depress the economy.

• Massive reductions in overtime and shift rates, sick pay and pension conditions which will be trialled on public sector workers before they spread into the private sector.


FOR PENSIONERS

• Single pensioners will pay an extra £300 a year in GST for pensioner couples it will mean a extra £700 GST

• Proposed £2m in compensation for those least well off will be swamped by a £4m reduction in Income Support

• Rehabilitation and assessment services for older people will be reduced by £400 k


FOR CHILDREN & YOUNG PEOPLE

• Nursery and pre-school hours reduced to 20 hours £275,000 extra in fees charged to parents

• £90,000 to be charged for instrumental lessons

• Over 60 teaching posts to be lost by 2013 from schools accounting for over £2.75m spending cuts

• Unemployment for young people will continue to rise