Christmas bonus scrapped as ministers' plans scrape through

Wednesday 07 October 2015

Ministers have won three key battles over future spending, scrapping the Christmas Bonus, ending free TV licences and forcing the States to pay parish rates - all on the first day of debate on their new financial plan.

Chief Minister Ian Gorst opened the debate telling politicians that with the Island facing a £145 million black hole and with the prospect of economic recovery within reach: “It’s vital that we get this right.”

And he will be pleased with the debate so far – although he did come within a single vote of losing out on one major amendment.

Members voted by 24-23 to reject plans to remove spending and tax targets for 2017-2019. Ministers want to spend £3.1 billion over the three years, but say they won’t have any detail on the plans until next June – and the Corporate Services Scrutiny Panel said they should put the spending plans on hold until then.

Members also voted:

- 26-17 to give ministers another year before having to pay Parish rates.

- 28-18 – to back ministers’ plans to scrap the Christmas Bonus to pensioners.

Senator Gorst told politicians when he introduced the Medium Term Financial Plan that the plan proposed combined cuts to balance the budget (£70 million planned to the pay bill), new charges (£45 million in health and sewerage taxes), capital investment (£168 million over four years) and £143 million for health, education and economic growth.

He said: “Our decisions this week will determine how effectively the Island manages the challenges, and seizes the exciting opportunities, that are emerging across the world.

“We think this is the right plan. It recognises the strategic challenges we face: an ageing population; income rising at a slower rate than in the past; the after-effects of the global recession.

“It proposes sustainable, long term solutions. It aims to deliver a balanced package of measures, encouraging independence, ensuring people are always better off in work than on benefits.

“It enables us to invest in priority areas, like Health and Education; to deliver a modern, efficient public sector; to support economic growth and achieve balanced budgets by 2019.

“It proposes: an extra £168 million for capital projects over the next four years; £96 million more for Health; £27 million more for Education; and £20 million for projects that boost economic and productivity growth.

“This is vital investment, reflecting our strategic priorities.

“It is targeted investment – built on reform, restructuring and achievable savings. We know it won’t be easy, but it’s the right thing to do.”