Treasury sticks to its guns over gloomy view
Monday 16th March 2009, 2:29PM GMT.
TREASURY is standing firmly behind its financial forecasts predicting big tax rises despite sustained criticism of the model it is using.
Chief Minister Lyndon Trott is among those who have asked why the model ties Guernsey into UK growth patterns despite T&R’s own consultants admitting there was no particular short-term correlation between the two’s historic growth rates.
The department has based its prediction that it needs to raise an extra £52m. a year on a forecast model which has Guernsey’s economy shrinking by 2.7% in 2009 and 0.2% in 2010.
‘Whatever you think the outcome will be for 2009 you will probably find someone out there with a similar forecast,’ said Deputy Charles Parkinson (pictured) in the face of Deputy Trott saying he was much more optimistic about the economy.
‘Our consultant, Rothschild, has taken a range of forecasts from reputable UK economists and derived from that range a consensus forecast.
‘Obviously there are a range, but I don’t think 2.7% negative this year is very unreasonable.
‘Although we hope the result will be better, I think it’s paramount to model to that consensus view.’
He added that Rothschild’s observation was that in the long term the UK and Guernsey’s growth was strongly correlated, although there were short-term variances.
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I fear that Charles Parkinson will be proved to have been optimistic! Whatever the facts of the matter, ‘tax havens’ are going to be scapegoated to mitigate some of the shortcomings of U.S and U.K. regulators and politicians. (You should have heard them laying into C.I. and City of London on France Culture this morning). Better start recommissioning the vineries. Additionally, the tax take on our income from savings will have vanished by 2010.
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Who would you trust, Trott or Parkinsn?
Who has the best knowledge of tax?
Our CM did say at the time of the Island Wide Tax Consultation, that the black hole was 45 million.
Then two days before the 2008 Election voting, it was a grey 25 million and in November 2008, he said it was almost a white 12 million.
As Deputy Parkinson said,you can not make up your numbers by what score you get on a board.
I know who l believe, it is sometimes better to have the unpalatable truth.
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Time to give up those big government pensions then.
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David
Just to be clear, I’m a different David to you (a different Gravatar), which I’m sure confuses some posters on this blog.
I don’t actually think that this is a question primarily about tax, more a question of economics and forecasts. In my experience neither of those is an exact science and never will be, and its invariably possible to present arguments that both are right and that both are wrong !
What’s more worrying here is the personal battle between the two individuals, which has been very openly played out for around the past 5 years since Deputy Parkinson entered the States. Let us hope that both of them are big enough to put their two sizeable egos to one side and act for the better interests of Guernsey and its people, rather than trying to score points off each other. One of them would eventually win a head-to-head battle, but I for one would rather that their time be spent focusing on improving Guernsey’s economy rather than on their personal battle.
Chris – don’t worry about France. It detests the CI because it thinks that its citizens are hiding money in the islands but from my market intelligence there is next to no French-linked offshore business here or in Jersey !
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This is David, agreeing mostly with the other David.
It would be great if the two of them could work together, but you can not have two entirely different views forever conflicting.
One of them has to be right, not both.
So far, we have had Trott taking HMS Guernsey navigating into uncharted waters,but now people are realizing that it may not be the right course.
Is the Captain properly qualified, does he know where the ship is heading, and is the crew behind him?
As Parkinson has always said, we may have to tinker with the direction,so as not to hit rocks.
Even Jerseys CM, said that we had,set course to early and made a mistake.
It is not good news, when Jersey point out where we went wrong and laugh at us.
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David
Both have different character flaws and have very thick skins. One is an academic who doesn’t play the political game, while the other is an experienced politician who is an expert at the political game. Neither is going to back down as they both believe that they are right. Both have their own supporters in the House which is likely to be divided down the middle when it comes to backing one or the other. Talk about a hung parliament ! Not good at all for Guernsey bad sadly all very predictable.
I wouldn’t be too inclined to view Jersey as a better model. They are arguably in an even bigger mess although for different reasons !
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>>So far, we have had Trott taking HMS Guernsey <<
Didn’t the CM used to be a fisherman?
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Jackie!
you’ll be telling us next that CM also walked on water.
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David asks; who do you trust?
My answer to that is, absolutely none of the present paid States members;
It was long ago that Guernseymen took up piracy, now these States are re-newing the old habit.
Take down the Guernsey flag, the States disgrace it: they should fly the ‘Jolly Rodger’
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I would not call are CM, an experienced politician, more like Arther Daley type.
I have too admit that l personally, would rather buy a car from the latter one.
As for Jersey there are times, even as a proud Guernsey man, l have to reluctantly admit, they do occasionally do things better.
It is a foolish person, that does not learn, or take advise from somebody, who has done it better.
If this is a hung parliament?
Yes, it should be, and things with this crowd will not, in my opinion will get worse.
They have problems and hard decisions, should be made, but l can not see them making them.
One of them is to cut the States expenditure by at least 15%,but they will not even attempt that.
All ten Ministers should be told to cut this percentage, from their Departments, or submit their resignations.
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Jackie. I would suggest, that you ask Dougal Lane, or another fishermen their opinions of CM’s abilities at sea.
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>>All ten Ministers should be told to cut this percentage, from their Departments, or submit their resignations.<<
By whom? Unlike the UK, our Treasury doesn’t have the power to set Departmental budgets. Asking nicely if a Department can save a % can will be ignored.
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