Angry men fail to produce the evidence of States waste

Tuesday 3rd November 2009, 3:00PM GMT.

THEY won’t believe me, but I positively welcome the re-emergence of the Angry Men in the debate over the Budget.

There’s not much these leading businessmen say that I agree with, but I wholeheartedly support their aims – less waste in the States, the smallest public sector possible and the lowest taxes we can get away with.

I too would be angry if I thought there was wholesale waste in the States, that our public sector was bloated and that our taxation was running at too high a level. But I don’t believe any of those things because there is no evidence to support them, so I remain more positive than the angry businessmen.

I guess it comes with having to run a business, balance the books and constantly make sure that every penny is spent wisely that fosters extreme views about States spending.

The Angry Men must say, surely it can’t cost half a billion pounds a year to run a tiny island like this. So there must be enormous waste, they conclude. Obviously it must be those lazy manual workers and the fat-cat pen pushers living off the hard work of honest businessmen that are the problem. Well, let’s put that all into context.

There’s not a lot of research but what research there is indicates that Jersey’s public spending is on a par with other similar jurisdictions. Indeed, in his report on the Crown Dependencies and Overseas Territories, Michael Foot includes a useful table showing the percentage of GDP taken up by the public sector in the nine jurisdictions he looked at.

The Turks and Caicos spend the smallest percentage of GDP on the public sector, followed by the Isle of Man, but Jersey spends the third-lowest percentage of GDP on running the Island. Guernsey, Gibraltar, Cayman and BVI spend at least twice as much in percentage terms.

More detailed statistics published elsewhere show that Jersey comes close to the OECD average in terms of spending per capita on items such as health and education. Certainly we are nowhere near the top of the league for spending in these areas. So there’s certainly no evidence there of a bloated public sector.

The only graphs where Jersey’s performance does stand out is in terms of wealth and taxation.

Every organisation from the World Bank to the CIA puts Jersey at the top or close to the top of the income per head of population tables. Normally the Island comes second to Luxembourg when measuring income per capita, but the Grand Duchy has an unfair advantage. Thousands of workers come across the border every day to help create that wealth but they are not included in the population statistics. So Jersey can probably lay claim to being the wealthiest jurisdiction in the world.

It should therefore be able to afford to support a high level of public services. Indeed, you could argue that the Island could really afford to spend more than the average that’s currently being spent on health, education etc. Now that’s something that’s going to make the Angry Men even angrier.

The Angry Men will say that it’s ludicrous to talk about spending more on public services when we all face higher taxes and have to pay that dreaded GST (which, by the way, Michael Foot has urged all other Crown Dependencies and Overseas Territories to introduce).

But compare Jersey’s tax levels with just about any other jurisdiction in the world, and you will find that they are still the lowest by far.

So instead of being a tax and spend economy, as the Angry Men obviously believe, we’re largely a don’t tax, don’t spend economy.

There’s nothing wrong with that, of course. Indeed it’s an enviable position to be in and long may it last.

Unfortunately it’s unlikely to do so because the cost of providing even an average level of public services is rising faster than revenue, and something will have to give.

The Angry Men know the answer, of course – cut the tremendous waste that there must be in States spending. They are no doubt encouraged by comments made by none other than the Treasury Minister, who once again has pointed out that it’s always possible to make cuts and any States department can become more efficient.

It’s always possible for well-paid accountants to squeeze a few more pounds’ worth of efficiency from States departments, but as we’ve already seen, services will have to suffer.

This appears to be a sacrifice the Angry Men are prepared to accept, although it may not come home to them until it’s the services they need that are really affected.

The Angry Men have other solutions to the Island’s spending problems, however. Their leader complained in this newspaper that there are ‘whole swathes of managerial departments within the States that are overpaid’. He didn’t produce any evidence, of course, because there isn’t any.

Then he complained about shroud-waving because it’s always said cutting public service jobs means fewer nurses, teachers and firemen ‘as if they are the only people they employ’.

Well, it’s undoubtedly true that the States do employ more professionals than just nurses, teachers and firemen. There are also doctors, policemen, judges, air traffic controllers, accountants (even if only to pay the wages), public health inspectors, planners, Customs officers, sewerage workers, road cleaners, parking wardens etc etc.

Perhaps we can get rid of a few of those. However, not even the Angry Men can escape the fact that the vast majority of taxpayers’ money goes on wages and the vast majority of wages are paid to essential staff.

If that is not the case and if there is in fact any area of States spending the Angry Men can identify as being ripe for culling, then I’m sure the Treasury Minister would be delighted to hear about it.

Peter Body is editor of Business Brief magazine

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