THE last States meeting before the summer break will be a testing one, with several very big issues to resolve, from rubbish disposal to bridging the ‘pensions gap’. Whether the States will come to any firm decisions is questionable. Their record on taking difficult ones isn’t good and it’s clear there are big splits on both issues.

I won’t revisit the incinerator issue today, but there’s also a requete from Deputy Parkinson, promoting kerbside recycling and the ‘user pays’ principle for household-waste disposal. The fairness of the second part of this proposal is so blindingly obvious that it’s shameful it wasn’t introduced years ago. It’s simple. The more general rubbish you put out, to be tossed into landfill or incinerated, the more you pay. The more you recycle, or minimise your waste, the less you pay.

This financial incentive must surely increase recycling rates and that’s vital because the incinerator project is predicated on 50% recycling. It’s also much fairer. Why should a little old lady, living frugally in a largish, former family home, pay a fortune for her rubbish disposal when she puts out only one sack a fortnight?

My only question is why this funding arrangement needs to be tied to kerbside recycling. That will be expensive and the same fairness and incentive to recycle could be achieved by a combination of a charge per sack coupled with improved ‘bring banks’ for recycling.

Why hasn’t a ‘user pays’ system been in place for years?  The simple answer is, ‘so we don’t erode the parish system’. That’s a very poor justification. The wider public good should always come before parochial tradition. Certainly if kerbside recycling is introduced, it would be ludicrous if customised collection vehicles had to turn around half way down a road because they’d reached the parish boundary.

Moving on to pensions, and full marks to Social Security for having the courage to face a looming problem head on. Having asked islanders if they wanted to pay more or work longer and got the predictable answers, they’ve had to spell out the hard facts. We’ll need to do both if we are to avoid widespread poverty amongst a burgeoning elderly population. If no action is taken, before long, with fewer contributors and more pensioners, the real value of pensions will have to fall.

Longevity is a boon but it has a massive impact on pensions. If life expectancy goes up from 75 to 85, that might seem like a significant but not earth-shattering change. However, it doubles the average time pensioners draw their benefits. Coupled with fewer islanders of working age, that is unsustainable. So Social Security had to consider our feedback and pick the least disliked alternatives.

It is also good to see they have gotten over their irrational opposition to scrapping the so called ‘insurance principle’, which meant no one ever paid more than the estimated cost of their own benefit. If high earners don’t cross-subsidise lower earners within the scheme, then the cash has to come from general revenue and that’s simply unaffordable.

The opposition is coming from T&R on two fronts.  Firstly, because Social Security is doing its own thing rather than being part of an integrated fiscal strategy. They have a point, but the retirement pension is probably the least suitable part of Social Security for integration. Anyway, they can’t wait – this sort of action was needed five years ago.

Secondly, because raising the upper-earnings limit will hit the same income group that was most impacted by zero-10. In other words, those who can most afford it. Is this a bad thing? Of course it is important not to seem to punish financial success, but if extra cash is needed, we definitely shouldn’t be targeting low-income families.

Let’s get some perspective. High earners will pay the same percentage of their income as everybody else. To see any increase at all they will have to be earning more than £69,000. No doubt some States members will show how detached they are from the real world by describing those on £70k-£90k as ‘middle earners’, when the middle-income range is really £40,000 below that.

T&R is worried the move will deter entrepreneurialism, but if that’s true, the current system should also stop those on £25,000 seeking to earn £50,000. It doesn’t. In reality, with a flat, 20% income-tax rate, Guernsey will still be a pretty good place to be a high earner.