Clash over States finances in last sitting before election

Wednesday 24 September 2014

Frustrated politicians fired a warning shot over the new black hole in States finances in the last sitting before the election - but were offered some potential good news about the huge hospital project that could start next year.

The Budget covering next year’s tax plans was passed by the House with just one amendment last night, but several speakers complained about the late news about a major black hole in States finances. The States have approved plans to deal with the deficit - estimated at £95 million over three years - by cutting department budgets next year, and raiding special funds and States-owned utility company reserves.

After being criticised for the forecasting issue, Treasury Minister Philip Ozouf used his summing up speech to reveal that the States were talking to the owners of two hotels next to the General Hospital about buying the sites to extend the building - which could cost less than the two-site solution of having different parts of the hospital in Gloucester Street and at Overdale.

The Budget is the last for several Members who are not standing for re-election on 15^th October, and for any who find themselves voted out of office next month.

There were final Budget speeches from States veterans including St John Constable Phil Rondel and Deputy Roy Le Herissier and at least three ministers – Education Minister Pat Ryan, Social Security Minster Francis Le Gresley and Home Affairs Minister Ian Le Marquand.

Deputy Ryan used the occasion to attack the Budget, and plans to reduce department cash limits by 2% to try to fill the gap between the optimistic tax forecasts adopted a couple of years ago and the reduced tax revenues coming into the States. He said that now was the time to be investing in Jersey’s education system, not cutting back.

But Chief Minister Ian Gorst defended the Budget and the spending plans – saying that the decision to invest an extra £30 million into the Health department that had widened the gap between spending and tax receipts had been the right thing to do.

“It is the right course of action,” he said. “We have to find ways of funding the health service.

“We are doing a piece of work that will look at how we are going to fund the rising cost of health care.”

Amendments to the Budget to exempt domestic energy from GST and to provide tax allowances for health insurance payments were rejected by the States, with a proposal to alter stamp duty rules by Deputy John Young amended, subject to a couple of changes from the Treasury.