BREAKFAST CHAT – Why Guernsey needs to court, rather than exploit, wealthier individuals

Below is the latest in our series of talking point pieces under the heading of “Breakfast Chat”, intended to provoke thought and discussion.


Why Guernsey needs to court, rather than exploit, wealthier individuals.


The States of Guernsey Medium Term Financial Plan 2017 made an estimate of capital expenditure needs for the following four years, and proposed raising some £14M of these by “targeted tax measures”.  A continual emphasis in the Plan is that of “those who can afford to pay more, paying more.” Unfortunately, of course, this phrase carries a built-in judgement which means all things to all men. Everyone tends to subscribe quickly to the stated principle without really translating it into actual measures, because not to agree automatically with it risks looking selfish, cold or greedy – and anyway, people also instinctively feel that those who can “afford to pay more” are simply those who are wealthier than they are themselves. However, the tide underlying this philosophy can lead to a dangerous apparent targeting of, and antipathy towards, the very individuals whom Guernsey ought to be encouraging to come or stay here, and to contribute to the island’s prosperity and well-being.


It is not suggested that the general concept of “those who can afford more should pay more” needs to be abandoned, but it does need to be applied with caution. Those who can afford to pay more in fact already pay more in general taxation terms, because the flat rate percentage tax imposed across earnings means that they inevitably pay “more”. Once you follow a policy of distorting this basic effect further, by resort to an increasingly “progressive” approach of imposing a higher proportionate burden on “those who can afford to pay more” as individuals, you risk at least three disadvantageous consequences. These risks therefore need to be balanced against any real gain, as contrasted with an illusory one or simply ideological gratification.


First, by pressing this concept too far, you create ever increasing resentment amongst the better off. Most of the more affluent members of society will in fact accept that they can reasonably be expected to pay relatively more than others to some degree towards the common need and good, because the proportionately greater money which is taken from them is money which they would use for luxuries rather than the basic necessities of life. However, most of them will also feel that they have come to be “able to pay more” because they have made energetic or prudent use of their talents, opportunities and resources, and that their fortune is not the product of unmerited good luck, but of care, astuteness, hard work, and risk-taking. They will feel that it is therefore unjust to deprive them very greatly of the ability they have created for themselves, to enjoy life with a high quality of assets and experiences, and an improving standard of living, to the full. Like everyone, they only have one life and they too have a right to be able to make the most of it. They will accept an imposition against this to some extent if it is not too great, and there are compensating advantages such as feeling good or gaining respect, but there will come a point at which their goodwill evaporates.


Second – and very importantly leading on from this – at the higher end of the spectrum of “those who can afford to pay more”, are persons who are very mobile. They can vote with their feet. They do not have to base themselves in Guernsey; they choose to do so – and the balance of pros and cons affecting their decision to come or to remain will be under constant review. Despite any vague establishment aspirations to make Guernsey one of the “happiest and healthiest places in the world to live”, living in Guernsey has significant practical disadvantages compared with other places. Travel access is often difficult and unreliable, and is famously expensive. The island is small with consequent limitations on experiences. The cost of housing, at all levels, is breathtakingly high. The cost of living is is also high, being on a par with that of Central London but without the access to London’s facilities and entertainments. Most food is imported, making it both expensive (even absent VAT or GST), and less fresh in quality. It is very difficult to get things done promptly and affordably. Therefore, to induce the better off to come and give their support to the island’s economy, it is necessary to make them feel that there are advantages which more than compensate for these downsides.


Third, repetition of the mantra that “those who can afford to pay more should pay more” simply encourages law-makers to press this approach, because they see it as a good, popular way to garner votes from those who see themselves as amongst the less able to pay – whose number is, naturally, far greater in vote terms than the wealthier end of the spectrum. The vital point here, though, is that the actual financial gain to be made for the States coffers from from heaping progressive taxation obligations on to individuals who are perceived to be able to “afford to pay more” does not, in practice, bring in a significant amount of revenue, and almost certainly insufficient to have any discernible effect in reducing the necessary burden of tax on others at middle or lower income levels. Its real point then just becomes that of appeasing the less well off by penalising the better off. That is an unworthy approach and should not be allowed to drive policy decisions on progressive taxation.


Guernsey in fact needs to cherish and encourage the presence of high net worth individuals on the island. Because such persons are looking for support, in both business and domestic matters, they create jobs – although it does seem that, as many indigenous islanders regard these as unduly menial and Guernsey has enviably full employment, such jobs often go to incomers from the Latvian or Madeiran communities. The more affluent impose less of a burden on States resources because they have private resources which they find it more convenient to resort to, even though at greater cost to themselves. Where they feel welcome, they will use their own resources voluntarily in charitable and other beneficial works for the community. Their contribution to the good of the island is largely underestimated and is ignored by those who see them only in the abstract stereotype of “rich toffs”, or on an “us and them” basis. Facts and figures showing this underestimated contribution were demonstrated last year by the survey carried out by the Open Market Forum, which set out to improve the “image” of the Open Market, following justifiable anger that their property rights and interests had been ignored and overridden by the States when amending the Housing Laws.


Guernsey really cannot afford to alienate either the Open Market community, or the more affluent local market community, by making them feel that they are seen simply as a milch cow by politicians with a socialist agenda.


An example of this last, mean-spirited attitude has already been implemented by the States in the disgraceful “rolled up” proposal to make rates of TRP on residential properties (ie people’s homes) more “progressive”. The proposal was to impose increased “progressive” rates of TRP in bands, rising according to the increased floor size of the property, but it was claimed that it was “too complicated” to introduce the entire hierarchy of these rising band rates at one time. So in a particularly nasty move, it was enacted, not merely to increase TRP rates generally, but in the same provision, to impose what was ultimately to be the very highest band rate, payable only on the largest properties, alone and in full at the very outset, thereby raising TRP on such properties by an eye-watering 76%. The proposed lower tiers of increased rates for less large properties were to be deferred.


It may well have been appropriate to increase TRP rates generally because of inflation. There may also be an argument for progressive rates of TRP for larger properties, – although once again, those individuals who inhabit larger properties are inevitably “paying more” even though their consumption of public services is no greater, and very often less, than those who inhabit smaller properties. But the appropriate approach would have been to bring in the higher bands gradually from the lower levels upwards, over successive years, rather than just to “soak” the theoretically better off at one fell swoop, achieving very little financial gain, just because it was easy to do so, and would doubtless help appease the complaints from the majority of the populace facing a general increase in rates of TRP.


The message this discrimination sends to better off individuals is that their assets and wealth are the subject of envy, and that the States will take advantage of any opportunity to try to extract more money out of them, and make them pay extra for their good fortune. Such an attitude will deter from our island just the kind of individuals whom we should be seeking to encourage to join us, and to contribute – by investment, energy, goodwill, job creation and voluntary contributions, – to our society and its prosperity.


At present, one of the attractions of Guernsey to the well off is that it still appears to believe that an individual’s money is, in principle, his own to do what he likes with, and government should take in taxation only that which is required to ensure the security of the population, to provide necessary infrastructure and services as required by all, to support those who, through no fault of their own (the young, the old, the infirm, the temporarily jobless) need financial support from the community in general, and otherwise to facilitate individual enterprise and responsibility. It has not yet fallen into the mind-set that an individual’s money really belongs to society at large, and government is entitled to decide how much it will graciously allow the individual to spend on himself. Guernsey needs the well-off and it must think of means to attract them – although this of course extends beyond the purely financial, to matters such as a high quality education system, attractive environment and general quality of life. Guernsey cannot, however, afford to appear to have a socialist agenda.


Bemused of Torteval

© 2019 The 2020 Association

BREAKFAST CHAT – A medical consultant’s thoughts on the Guernsey health system

Below is the latest in our series of talking point pieces under the heading of “Breakfast Chat”, intended to provoke thought and discussion.

A medical consultant’s thoughts on the Guernsey health system

First some history. Forty years ago in Guernsey, primary and secondary healthcare (ie general practitioners and specialists) were combined in several private medical practices. This was perhaps an unusual solution, in view of the size and remoteness of Guernsey.


It was an entirely private system funded by the patients themselves, often through various health insurances such as Oddfellows, and Foresters, and the more usual commercial insurers, such as BUPA. The States of Guernsey helped those on social benefits.


All private practising doctors covered the emergencies at the Hospital by a rota system through what was then called the Receiving Room – which went on to be called “A and E”.  


That system made life very varied  and interesting for practitioners and it worked well. It was also relatively cheap to run, with sharing of costs and overheads. Patients were also seen much more quickly, because referrals were within the same structure. The only real difficulty with this model was the expense of major surgical procedures for people who chose not to take out insurance (or were unable to do so and yet not on incomes low enough to entitle them to states benefits). They were in a minority, though, and of course could make arrangements with their practice to pay the bill over time, or the bill would sometimes be waived, and thus the losses were shared.


In the early 1990s, the States then effectively intervened and insisted that specialists and GPs should separate, and that the specialists should form their own private practice. They said that their aim was to provide a “more balanced” service. They were also concerned to limit the number of consultants who could practise.


The Medical Specialist Group was therefore formed, in effect, at the behest and the insistence of the States, with the agreement (although reluctantly in some instances) of the specialists of each practice. The States did not, however, provide land or accommodation for the new specialist group, and the doctors themselves, therefore built the specially designed MSG building.


Approximately two years after the MSG was formed, the States resolved to introduce a compulsory insurance scheme for secondary care.  However, they were unable to find a reasonably priced, inclusive, insurance company provider and so they chose to fund the system themselves, as they have been doing ever since.


This was arguably a mistake; the Board of Health lost the chance of a better system when they concentrated only on secondary care, and making that free at source.   


A contract was concluded between the Board of Health and the MSG, renewable at regular intervals with reviews on performance criteria as to waiting times for appointments/operations etc. However, within the contract there was no consideration given to criteria to monitor the clinical outcomes of this system. This seemed strange. However, this contract has soldiered on over the years. It is now past its sell-by date and there needs to be a total review of both primary and secondary care systems.  


Primary care has been largely ignored by politicians to date, and the GPs have been able to develop their practices, largely without any States involvement. The current contribution made by the States to each patient consultation fee is now wholly unrelated to the actual cost, so that the actual patient contribution is way above that of the States contribution.


The initial MSG contract put extreme pressure on the consultants to see new patients speedily and within set time frames. However the GPs did not act as efficient gatekeepers, and there was no real incentive to them to do so.It was probably easier for them to pass patients over to a specialist, even though their treatment was well within the GPs’ own capabilities. The GPs were no doubt also under pressure from the patients themselves to be referred to specialists, as that was entirely free to the patient. The actual referral rates were therefore extremely high, compared to other systems like the NHS. This also, would tend to lead to some GPs becoming de-skilled in the management of conditions that would, historically, have been managed by them – as they were and have continued to be in the UK.  


The time is long past to get to grips with the entire system of primary and secondary care.  


The States of Guernsey, through the Board of Health, gradually became increasingly directive of the MSG, and this has gradually eroded the consultants’ incomes. This has led to the extraordinary situation under which primary care doctors, remaining entirely private, have been left alone to charge what fees they want, whilst consultants have been subject to constraints. It is believed that the result has been that GPs now earn significantly more than consultants.


The States appears to have been trying to develop a system which resembles the NHS. This is sad and misguided, as the NHS system itself has real problems, and is deeply flawed. There is a common pattern in Guernsey, to follow many years behind trends in the UK, but then to ignore the flaws which have come to light through experience, and blindly just decide to follow in the UK’s footsteps. The way in which the education system has been changed is yet another example of the States failing to take into account the outcomes and demonstrated problems of systems tried by others, and from which they have the opportunity to learn.


Sadly, and in the same vein, there has been a vast increase in the number of administrators in the health system in Guernsey over last 40 years, with all the attendant bureaucracy, resulting in decision-making being slow and unwieldy. Members of the medical profession who were dealing with States officials came to spend an inordinate amount of time in committees, discussing the same thing month after month, without leadership or effectiveness from the Department of Health. One example is that specialist obstetricians tried to discuss the problems which they saw in the midwifery service with States officials, but were firmly reminded that this was not their business, as the system was run by the civil servants. Scant regard was paid to the views of the specialists; the officials seemed uninterested in the views of the actual professionals. We all know what happened, then. A predictable and avoidable incident caused the Department of Health much heartache, expense, resignations and political upheaval.   


The result of that incident sadly being the death of a baby, the States then decided to introduce a very expensive, UK type system of overarching regulation, when, frankly, a simpler, more appropriate, less expensive and “Guernsey friendly” solution should have been introduced.  This has arisen because the people who were engaged by the States to look into the problem and come up with a remedy, were commissioned from the UK, and therefore, having only the experience of the NHS, they come with both a lack of wider imagination and a predisposition to think that only the NHS systems, which they are used to, provide the answer. They ignore and overlook the different needs of a small island, and what is really appropriate here.


As regards the future, it would be good to see:


  1.  More input from the medical professionals into health care, and less micro-management from politicians. This has been a common negative feature of various committees over the years.


  1.  More investment into private care (eg expansion of facilities for private patients/more private rooms and care/separate theatres  for private patients). This could be be funded either by the States, or by private  investment – and it could surely be a very good income generator for the island.


  1.  The encouragement of private health insurance by giving tax breaks for premiums and to reduce cost to the States.


  1.  A recognition that if the system continues to erode the standard of living of consultants, there will inevitably be more problems with recruitment and the standard of service and the calibre of consultants will fall.  


  1. Consideration being given to a method of taking more control of GP practices to bring down costs and to save States money by ensuring that there are no inappropriate referrals to “free” specialists.

© 2019 The 2020 Association

Briefing note 3

The briefing note below is the third of the series giving a summary of business scheduled for debate at future States Meetings, to enable 2020 Association Members to be aware, in advance, of significant matters. There is some comment which Members may wish to reflect on. It is not thought that there is any matter upon which Members’ views should be surveyed on this occasion, but, as always, Members’ comments are welcome.

Future States Business brief (3) – Meeting of 27 March 2019

There are only four matters scheduled for discussion at the March States Meeting which merit particular note or comment.

The first is the laying before the States (effectively for rubber stamp ratification) of various Orders concerning matters to do with motor vehicle traffic. These were debated by the States in December, and they concern contingency plans for attempting to minimise any potential problems caused by Brexit with regard to Guernsey drivers either taking vehicles abroad or simply driving abroad. They will enable such matters as the future granting of International Driving Permits to Guernsey drivers, registration of professional driving instructors, standards for traffic circulation regulation (ie, a Highway Code), seat belt requirements, and, and perhaps of most noteworthy impact, a regulatory system of mandatory safety testing and certification of vehicles and trailers. All this is to comply, with the Vienna Convention on Road Traffic 1968, and to enable this Convention to be applied, therefore, to Guernsey, and give corresponding international recognitions in certain countries.

These measures have been perhaps somewhat hurriedly introduced as a perceived “fail safe” with regard to the uncertainties created by Brexit. However, the general implications of acceptance of yet more regulation do bear thinking about, in general. Many of these regulations, particularly those regarding vehicle testing, have been introduced under the virtuous aim of promoting road safety, and raising and maintaining standards, which is no doubt very worthwhile in large countries, mainly with land borders and much international traffic. However, the introduction of a blanket periodical vehicle testing system is yet another matter of regulation and consequent expense – to the taxpayer in the devising and implementing of the system, and to the individual vehicle owner, in the test fees which will then be mandatorily incurred, in addition to general vehicle servicing costs. Carrying out the tests was known to provide a ‘nice little earner’ for garages when introduced into the UK, with the fees simply increasing the expenses of motoring, quite apart from the need to regulate the testers.

It is already a criminal offence in Guernsey to allow an unroadworthy vehicle on the road, and the authorities do carry out random checks. Whether there is any evidence of death, injury or damage being caused to any significant degree by unroadworthy vehicles in Guernsey does not appear to have been considered (although perhaps owing to lack of time). A close consideration of whether it is actually merited, on balance, that the whole of the driving populace of Guernsey must accept and pay for a general system of motor vehicle testing, as against the possible inconvenience or difficulty for the number of Guernsey drivers taking vehicles abroad in obtaining any necessary certification to do so, is beyond the scope of this briefing note. The general point, however, is that it behoves the States to consider closely whether introducing intrusive and expensive regulation of yet another aspect of everyday life actually delivers worthwhile benefits, rather than simply to take the easy course (in the modern context of ever more officious government) of agreeing to introduce it.

The second major item of proposed legislation is that required to authorise proceeding with the first phase of the proposed modernisation plan for the Princess Elizabeth Hospital. This will, of course, incur significant capital expenditure, but it appears to be generally recognised that the community would both need and wish to have a modernised hospital, and no further comment is therefore required.

The third item of interest is a proposal to introduce law to amend the principles of awarding damages for personal injury. Where persons suffer extreme physical injury and are entitled to damages which may represent major future loss of earnings and care costs for life, the present law in Guernsey is that these must be assessed and paid as a single lump sum. The proposal is, firstly, to correct (to make more realistic) judicial authority as to the appropriate rate of discount to be applied to the figures to allow for the benefits of this sum being paid in advance, and, second, to authorise that, in appropriate cases, such an award of damages can be ordered to be made by periodic payments, at the time they are required in the future, thus avoiding having to “guesstimate” future uncertainties such as the length of the person’s life, and future rates of inflation. Again, this is all non-controversial, and as it of financial assistance to liability insurers, its introduction will assist in keeping down insurance premiums.

The fourth major item is one of constitutional significance, but is again, scarcely controversial. The fact that a certain group of MPs in the UK have sought to introduce legislation into the UK parliament to force the Crown Dependencies (including, therefore, Guernsey) to introduce legislation to require a fully public register of the beneficial ownership of Guernsey registered companies even if they do not wish to do so, has highlighted the constitutional issue of whether the UK has power to legislate for the Crown Dependencies without their consent. The Guernsey position, backed by long established convention, is that Westminster cannot do so, and that it is the approval of Guernsey itself (signified by registration in Guernsey of the relevant UK enactment) which gives force to any such legislation in Guernsey. Hitherto there has been no formal process with regard to the decision whether or not any such legislation should be registered in Guernsey. It is therefore proposed to remove any uncertainty created by this omission, and to enact a Law, similar to one already enacted in Jersey, to provide expressly for the question of proposed registration of any legislation of the UK parliament which purports to affect Guernsey to be brought before the States of Deliberation for debate, and to decide whether or not to give consent to its being brought into Guernsey law by registration. This is to be welcomed.

The remaining legislative and policy items which will be considered by the States are not matters of particular note or controversy. For completeness, they relate to some very minor amendments to social security benefit entitlements, and to the treatment of children from Alderney and Sark in relation to the Population Management Laws.

Information regarding future States Business can be found on under “Search States Meetings Information.”

2020 Association claims publication victory

The long awaited PwC Air Links Infrastructure Report has finally been released on Friday 8th March, following a request for its publication made by The 2020 Association under the States of Guernsey Code of Practice for Access to Public Information, (2014).

The 2020 Association made its request on Monday 4th March. After an immediate holding response saying that the States would “aim to respond within 20 days”, the Policy and Resources Committee then stated to the Association that the Report would be released by Monday 11th March. A draft was in fact released on Friday 8th March, an interim version on Tuesday 12th March and the final release on Wednesday 13th March.

James Collings, the Chief Executive of the 2020 Association, said: “We are very pleased that as a result of our efforts, and apparently following some urgent scrambling caused by the receipt of our request, this important Report has now been opened up so that the public, who have paid for it, can examine its content and judge how it has been handled by our government. We will ourselves be looking at the Report in the light of the comments made during States’ Debates after receipt of the Report but before it was made public.

“We are especially pleased at our victory because we understand that up to 90% of requests under the Code are declined. We remain of the view that such an important aspect of government accountability ought, in the modern day, to be the subject of a full Freedom of Information Law, rather than simply a Code of Practice. Guernsey’s people deserve nothing less.”

The Report can be found on line at:

PwC Airport & Condor Reports

2020 Association demands to see PwC reports on transport links

The 2020 Association has made a request under the States of Guernsey Code of Practice for Access to Public Information (2014) for the two Reports commissioned by the States on the island’s air and sea transport links to be produced to it, with a view to general disclosure to the public.

James Collings, the Chief Executive of the Association, said “In spring 2018, PwC was commissioned by the Policy and Resources Committee to produce two Reports: one into Air Links Infrastructure and the second into a Contingency Plan relating to the sale of Condor Ferries by its owner. These Reports were received back by P&R in autumn 2018. They have been shared with the Committee for Economic Development, the States Trading Supervisory Board and the Committee for the Environment & Infrastructure. However, they have been withheld from the public. These are public documents. They have been paid for from the public purse. The taxpayer has a right to see them, and P&R have an obvious obligation to produce them. The 2020 Association has therefore made a request for production under the States of Guernsey Code of Practice.”

The improvement of transport connectivity, and the implementation of a full Freedom of Information Law are among the foremost stated objectives of the 2020 Association.

A copy of our letter is here.