Friday, 22nd August 2008

GP Opinion

Coming up to speed on finance

AFTER tomorrow’s general election when a new House has been returned and a new Policy Council formed, the process of governing the island will begin with a chamber that has at least 40% of new faces. It may well be more than that if islanders decide that they want change and new direction, a theme that has certainly emerged on more than one doorstep.

Whatever the outcome, however, it is clear from the candidates’ manifestos and performance at the hustings that most members’ attention will be fixed on domestic issues – and there are enough of them.

However, as the Government Business Plan recognises, external matters remain the priority because without a vibrant and competitive financial services sector, Guernsey as we know it simply ceases to exist. Yet as the credit crunch and subsequent market turmoil have demonstrated, these are arcane matters that pass by ordinary folk and it is not until someone is refused a loan or mortgage that it bites home locally.

The tendency, therefore, is to leave such things to the experts and the new House is likely to be of the same mind. It is bad enough picking up the complexities of government without – in terms of understanding the offshore world of finance – learning a new language.

The danger, of course, is that without that level of understanding, States members  risk becoming detached from the causes of the island’s prosperity while being only too anxious to spend it.

As today’s financial out-turn figures indicate, this island performed much better than expected last year and has a substantial – and welcome – surplus that is more than £30m. in excess of what was anticipated. Part of that is due to the States exercising restraint during 2007 and the figures show just how vital is is for all departments to control public sector costs.

The wider point, however, is what generates the wealth and how to protect and nurture it.

What has also emerged during the election run up is the cynicism aimed at industry practitioners as they explain the fragility of the sector and the need for a competitive environment like zero-10.

It underscores the need for deputies to be able to take decisions from a position of knowledge – and for ‘the system’ to get them swiftly up to speed.

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