A Week in Politics
Monday 30th March 2009, 2:00PM BST.
HERE we are again. A new set of States Members, a new set of economic circumstances, the same arguments – and maybe, just maybe, a different result.
First up, a confession: some weeks ago I made a bet with a legendary tipster about the result of the GST exemptions debate. Was there any way the States would vote against dropping the 3% sales tax on food and domestic fuel? Surely not, I thought.
And yet, said tipster – not a man given to emotional reactions to financial propositions – seemed unnaturally confident. Not only did he accept the bet, but he happily upped it to £50.
I was a little spooked. But, less than a week later, I found myself in the company of another, slightly less legendary tipster, who was happy enough to make a corresponding wager – £50 that the exemptions wouldn’t get passed. Bet laid off, money safe, worries gone.
Two reasons for telling this story – firstly, that apart from the obvious, I won’t be making any money out of the outcome of the debate. I won’t be doing anything more taxing than taking a walk across town with £50 of someone else’s money in my pocket.
Secondly, the outcome is a lot less certain that I thought it would be when I wrote on 1 December: ‘One thing’s for sure after the elections – GST is coming off food.’
Having done the numbers with the last debate, the positions of people who’ve left the Chamber and those who are newly arrived, all I can say is that it’s still very, very tight.
On balance, I reckon it might go through.
It should, of course. That goes without saying – the case was strong enough before the election, and it’s pretty much cast-iron now. Which is not to say that the nay-sayers don’t have a point.
Removing GST on food (in line with the UK VAT rules) and domestic energy will mean a loss of around £6m per year, make the GST system twice as difficult to run, make life difficult for food and fuel retailers and spark a rethink of the way benefits are run.
All that’s true. It really is. The nay-sayers’ argument stands up and it makes sense. You don’t have to be stupid, nasty or uncaring to go for it. But that doesn’t mean it’s right. The question isn’t an economic one, or even a moral one – it’s far, far worse than that. It’s political.
First off, the whole ‘but it’ll cost us money’ argument doesn’t really work any more, particularly when it comes from the Treasury department. There’s a lot of smart, decent people working at the Treasury – I’ve known a fair few – but there’s also a reckless cowboy or two who fancied playing at currency speculation over the Euro incinerator blunder(tm).
And it’s a bit much for the ministerial team at the Treasury to play that card, just weeks after conspicuously dropping the Budget pledge to pull in £5m in tax from the non-finance, non-local companies who will pay no tax at all next year.
Secondly, the issue isn’t just about tax and spending. It’s about what the public want. If you really, truly believe that people want to pay GST on food and fuel, then I’m afraid we’re living not just in different parishes or social circles – we’re living on different planets.
Four of the six Senators elected in 2008 favoured exemptions, as well as a similar majority of elected Deputies. It’s the middle-ground position. If you stand back and look at it, the principle of GST is probably right, wholesale changes to Social Security funding and the £68m taxpayer supplementation notwithstanding.
But exemptions on food and fuel are the kind of basic and reasonable compromise you could expect to that. If the States are serious about reconnecting with a public who hold them in pretty low esteem – not altogether fairly, I should add – then they need to cough up some actions as well as words. I hope you’re sitting down – this could be the week.
Another week, another twist in the Euro incinerator blunder(tm) (a label I’m sticking to until my learned colleague Harry McRandle figures out how to shorten it to three syllables and add -gate to the end of it).
It turns out that the civil servants facing a disciplinary hearing over EIB(tm) won’t have to answer questions in a properly convened Scrutiny hearing about it, because they might prejudice the disciplinary outcome.
That’s what Chief Minister Terry Le Sueur thinks, anyway. I’ve tried to figure out how that works, but I just can’t. The disciplinary process and the Scrutiny process are two different things, with two radically different purposes.
One is to find out whether individual officers were personally responsible for the loss of £3m, and to figure out what to do with them if they were. The other is about finding out what went wrong, and how.
If that disciplinary process can really be prejudiced by a Scrutiny hearing, then it’s got to be pretty flimsy. If the States Employment Board can be so swayed and unbalanced by a public meeting that they won’t even attend, then you’ve got to ask some serious questions about the people on it.
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