A GOVERNMENT proposal to reduce the amount of money paid into the Social Security Fund and use it instead as a way of helping businesses adjust to the introduction of the Living Wage was maintained on Wednesday 17 November, after a backbencher’s amendment was rejected.
Deputy Sir Philip Bailhache saw his call to restore £10 million to the fund for 2025, and the same amount for 2026, fail after he criticised ministers for “plundering” the fund and treating it “like a piggy bank”. The amendment was defeated, with 21 votes cast in favour and 25 against.
“It is amoral, improper and wrong to take pensioners’ money due to the fund and use it for purposes which have nothing to do with the payment of pensions or other benefits which can be paid from the fund,” he said.
Deputy Bailhache’s move signalled the first evidence of cracks in the “collective responsibility” principle, which sees ministers and assistant ministers support the government on matters of policy.
Assistant Health Minister Barbara Ward described the move as “a serious departure from the principles of law” and not a correct use of money. She said she had told Chief Minister Lyndon Farnham that she would be voting against the government and thanked him for “his respect and understanding”.
Deputy Hilary Jeune referred to a rejected plan in last year’s Budget, when it was called the Government Plan, to take £40 million from social security reserves over two years and repay it back in 2027.
Among the Members who shot down those past plans were current members of the Council of Ministers – Deputies Rob Ward, Sam Mézec and Constable Andy Jehan, to name a few – who this time around supported the move.
Undecided, Deputy Jeune asked these Members why they had reversed their principles and how the government would pay money back into the Social Security Fund.
“We need a concrete plan to replenish this vital resource,” she said, before incorrectly quoting from a Hansard transcript to suggest that Deputy Rob Ward – rather than Barbara Ward – had last year accused the government of acting like Robert Maxwell in reducing the Social Security Fund grant.
Mr Maxwell embezzled hundreds of millions of pounds from his own companies’ pension funds to pay for his lavish lifestyle.
Deputy Jeune subsequently apologised once the error was spotted.
Deputy Jonathan Renouf made the same mistake moments later when arguing: “We should not be taking money out of our funds, we should be living within our means. This is the start of a very slippery slope that soon becomes the norm.”
He, too, subsequently apologised.
Constable of St Clement and third-generation States Member Marcus Troy said his father and grandfather would be “turning in their graves” if they knew politicians were planning to reduce the grant to this fund.
He said: “It is a gentleman’s agreement that you do not touch the Social Security Fund. That is sacrosanct. I also don’t want to be stoned to death, hung, drawn and quartered in the St Clement Parish Assembly this evening by a bunch of pensioners.”
Infrastructure Minister Andy Jehan said he was not afraid of being stoned by pensioners on his return to St John yesterday evening, saying the grant would actually be increased from £78m to £80m if the amendment was rejected.
He added: “The funding will be maintained in a dedicated head of expenditure with all costs carefully controlled. Any funds remaining will be transferred back into the Social Security Fund.”
Also on the other side of the debate was Education Minister Rob Ward, who said this was a “intelligent use of taxpayers funds to improve lives, increase skills and training, address apprenticeships and act on all the things we’ve been talking about in this Assembly”.
He added: “We cannot continue to not support companies and those who want to train in their Island, stay here, pay their social security and taxes long-term towards the Social Security Fund. That is what creates long-term stability of our funds and pensions.”
Housing Minister Sam Mézec, addressing the accusations of hypocrisy – which he termed “inconsistency” – said he was “proud” to take part in the cause to “alleviate inward poverty”.
Economic Development Minister Kirsten Morel’s leading argument for the diversion of funds was that the concept of something being “sacrosanct” was as antiquated as the Divine Right of Kings – something which is no longer widely believed.
Social Security Minister Lyndsay Feltham urged Members to reject the amendment, reminding them that the fund also existed to provide working-age benefits to working-age people, not just pensioners.
Rejected
After three amendments were defeated on the opening day of debating, there was no relief for backbenchers during the opening stages of yesterday’s morning session.
On behalf of the Economic and International Affairs Scrutiny Panel, Deputy Montfort Tadier put forward an amendment seeking to limit proposed cuts in government funding to both Digital Jersey and Jersey Business.
Deputy Tadier said the panel had gained the impression during interviews with Economic Development Minister Kirsten Morel and External Relations Minister Ian Gorst, who has responsibility for the Island’s financial services sector, that both were uncomfortable with the cuts, although he admitted he was “reading between the lines”.
The proposed reduction in funding was a short-term measure, Deputy Tadier added, “not something I would expect from a pro-business government”, hence his suggestion that the proposed 13% cuts to each body be halved.
Deputies Gorst and Morel spoke to defend the government’s move, with Deputy Gorst saying reduced funding was appropriate and temporary, and that taking money from the Central Reserve was not the right thing to do.
The Scrutiny amendment was defeated by 27 votes to 18.
