Problems behind the good news

Revenue for the year was higher than anticipated, there is real evidence that spending has been effectively controlled – though not quite to the promised extent – the deficit was substantially lower than forecast, and the reserves appear to be in a healthy state.

These, quite clearly, are reasons to be cheerful, even if other indicators show that the wider economy is still struggling desperately to overcome the effects of deep recession.

But there are also reasons to be concerned about last year’s public-sector performance. Across the board, the Island is in a considerably more favourable position than earlier predictions suggested might have been the case, but there have been significant losers in a vital sector of the community.

As the report acknowledges, the extra £29 million in revenue was collected through tax paid by individuals. Freezing tax allowances, the 20 per cent means 20 per cent policy, coupled with lower mortgage interest relief stemming from low interest rates, yielded the additional funds.

But who paid? Once again, it was hard-hit ‘middle Jersey’, those on middling incomes who have faced blow after financial blow in recent years.

It is, of course, true that Treasury Minister Philip Ozouf, his colleagues and advisers have been faced with the primary duty of putting public finances back on an even keel against the background of fiscal turmoil and exceptionally difficult economic circumstances. However, rather than merely expressing satisfaction at a job well done, they must now recognise that the middle has been squeezed to the utmost and that new policies must look in new directions.

The waters of personal taxation have been muddied through certain changes in the way some businesses are taxed, but parallel changes nevertheless mean that some companies are, in terms of tax, getting off scot free. Long-promised action in this area is long overdue.

Meanwhile, the idea that fat remains to be trimmed in the public sector is supported by remuneration figures. Underspends have been achieved and the Comprehensive Spending Review savings target of £65 million was only narrowly missed, but we still have a public-sector workforce in which one in every 11 employees is paid more than £70,000 a year.