Ministers ‘chickened out’ over Government Plan taxes
MINISTERS have ‘chickened out’ of raising taxes for higher earners and face a potential new backlash from public sector staff unless they can engage openly with workers about a proposed new £100m programme of spending cuts, a backbench Deputy has warned.
Deputy Geoff Southern said the civil service – fresh from a year of major structural change that has led to job losses, redeployments and the complete reorganisation of States departments – was ‘frightened’ about more restructuring.
However, restructuring forms part of the plans to save £100m over the next four years, as proposed in the Government Plan published this week.
The plan, which will be debated in November, includes measures to increase spending while at the same time making millions of pounds of savings and increasing a number of taxes.
However, Deputy Southern believes those tax increases – reducing the GST de-minimis level, duty increases and rises in long-term care contributions – do not go far enough or target the right people.
And he urged ministers to engage with staff and their union leaders over the proposed efficiencies to avoid a prolonged ‘fight’ and achieve a better outcome that suits both sides.
Meanwhile, the Council of Ministers has been criticised for not sharing details of the Government Plan with backbenchers before its public release on Tuesday. Full story: Page 8.
Deputy Southern said: ‘These are significant so-called efficiencies and the major element of the spend is on people. This means jobs won’t exist. It means two jobs will be rolled into one. It means, for example, many will be asked to reapply for their own jobs. And those are the heavy elements that the public sector has got to bear.’
He added: ‘I think they have chickened out of in terms of raising more tax, more revenue. If we are going to have the facilities we need to care for our ageing population and our medical needs, we are going to have to find more money. We can no longer be a low-tax low-spend community because the demand is going up.’
His warnings come just days after public sector unions reported a spike in membership and interest in their activities following the reform programme. And one union leader warned that the government would have a ‘much tougher fight’ on its hands if further disputes arose with staff – an increasing number of whom he said were becoming ‘radicalised’ – in the coming months.
Yesterday Chief Minister John Le Fondré said he could not rule out job losses as part of the newly proposed efficiency programme but that he hoped there would be other options to find savings. A total of £19.7m of savings have already been earmarked for 2020, with the same amount again still to be found.
Among the savings already identified by ministers in the plan is £8.2m for the first phase of a ‘transformation of services within departments’, which they say will include using more cost-effective structures, integration of services and driving improvements in productivity.
Deputy Southern said: ‘You and me might call them cuts, they call them efficiency savings, but that is what the civil service are frightened about – the restructuring.’
He added that he hoped the States Employment Board and ministers had learnt something from the events of the past few months, including teachers’ strikes, and would be more open with representatives of the civil service with the new efficiency programme.
‘It doesn’t have to be a long fight, it can be win-win,’ he said.
The Deputy also questioned why income inequality did not feature in the plan until a third of the way through, suggesting that indicated ministers are ‘not wholeheartedly behind it’.
‘I don’t think that is going to be delivered in any shape or form,’ he said.
More reaction to the Government Plan page 8.