STATES OF JERSEY

     OFFICIAL REPORT

WEDNESDAY, 4th NOVEMBER 2020

PUBLIC BUSINESS – resumption

1. Draft Statistics and Census (Amendment of Law) (Jersey) Regulations 202- (P.115/2020)

1.1 Senator J.A.N. Le Fondré (The Chief Minister):

1.1.1 Senator K.L. Moore:

1.1.2 Senator J.A.N. Le Fondré:

1.2 Senator J.A.N. Le Fondré:

1.2.1 Senator S.W. Pallett:

1.2.2 Deputy R.J. Ward of St. Helier:

1.2.3 Deputy S.M. Wickenden of St. Helier:

1.2.4 Senator J.A.N. Le Fondré:

2. Draft Census (Appointed Day) Act 202- (P.116/2020)

2.1 Deputy S.M. Wickenden (Assistant Chief Minister - rapporteur):

2.1.1 Deputy J.M. Maçon of St. Saviour:

2.1.2 Deputy K.G. Pamplin of St. Saviour:

2.1.3 Senator S.C. Ferguson:

2.1.4 Senator S.W. Pallett:

2.1.5 Deputy M. Tadier of St. Brelade:

2.1.6 Deputy S.M. Wickenden:

3. Draft Income Tax (Amendment No. 46) (Jersey) Law 202- (P.118/2020)

3.1 Deputy S.J. Pinel of St. Clement (The Minister for Treasury and Resources):

3.1.1 Connétable K. Shenton-Stone of St. Martin:

3.1.2 Deputy S.M. Ahier of St. Helier:

3.1.3 Connétable M.K. Jackson of St. Brelade:

3.1.4 Deputy G.P. Southern of St. Helier:

3.1.5 Deputy M. Tadier:

3.1.6 Deputy D. Johnson of St. Mary:

3.1.7 Deputy R.J. Ward:

3.1.8 Senator K.L. Moore:

3.1.9 Deputy K.F. Morel of St. Lawrence:

3.1.10 Deputy J.A. Martin of St. Helier:

3.1.11 Deputy L.B.E. Ash of St. Clement:

3.1.12 Senator L.J. Farnham:

3.1.13 Connétable R.A. Buchanan of St. Ouen:

3.1.14 Senator S.C. Ferguson:

3.1.15 Deputy S.J. Pinel:

3.2 Deputy S.J. Pinel:

3.2.1 Deputy G.P. Southern:

3.2.2 Deputy S.J. Pinel:

3.3 Deputy S.J. Pinel:

3.3.1 Senator K.L. Moore:

3.3.2 Deputy R.J. Ward:

3.3.3 Senator L.J. Farnham:

3.3.4 Deputy K.G. Pamplin:

3.3.5 Deputy S.J. Pinel:

3.4 Draft Income Tax (Amendment No. 46) (Jersey) Law 202- (P.118/2020) Acte Opératoire

3.4.1 Deputy S.J. Pinel:

4. Draft Social Security (Amendment of Law No. 13) (Jersey) Regulations 202- (P.113/2020)

4.1 Deputy J.A. Martin (The Minister for Social Security):

4.2 Deputy J.A. Martin:

5. Migration and Population Data (P.120/2020)

5.1 Deputy J.H. Perchard:

5.2 Migration and Population Data (P.120/2020): amendment (P.120/2020 Amd.)

5.2.1 Deputy J.H. Perchard:

LUNCHEON ADJOURNMENT PROPOSED

LUNCHEON ADJOURNMENT

5.3 Migration and Population Data (P.120/2020: Amendment (P.120/2020 Amd.) - Amendment (P.120/2020 Amd.Amd.)

5.3.1 The Deputy of St. Peter (Assistant Chief Minister - rapporteur):

5.3.2 Deputy J.H. Young:

5.3.3 Deputy I. Gardiner of St. Helier:

5.3.4 Deputy J.H. Perchard:

5.3.5 Connétable C.H. Taylor of St. John:

5.3.6 Deputy K.F. Morel:

5.3.7 Deputy M.R. Higgins of St. Helier:

5.3.8 Deputy L.B.E. Ash:

5.3.9 Deputy R.J. Ward:

5.3.10 Deputy S.M. Wickenden:

5.3.11 Deputy K.G. Pamplin:

5.3.12 Deputy G.P. Southern:

5.3.13 The Deputy of St. Peter:

5.4 Migration and Population Data (P.120/2020): amendment (P.120/2020 Amd.) - resumption

5.4.1 Deputy J.H. Young:

5.4.2 Deputy S.M. Wickenden:

5.4.3 The Deputy of St. Mary:

5.4.4 Deputy J.H. Perchard:

5.4.5 Deputy K.F. Morel:

5.4.6 Deputy M.R. Higgins:

5.4.7 Senator K.L. Moore:

5.4.8 Deputy S.G. Luce of St. Martin:

5.4.9 Deputy L.M.C. Doublet:

5.4.10 Deputy G.P. Southern:

5.4.11 Deputy J.H. Young:

5.4.12 Deputy M. Tadier:

5.4.13 Connétable J. Le Bailly of St. Mary:

5.4.14 The Deputy of St. Peter:

5.4.15 Deputy R.J. Ward:

5.4.16 Deputy C.F. Labey of Grouville:

5.4.17 Deputy J.H. Perchard:

6. Immigration and Social Security Co-ordination (E.U. Withdrawal) Act 2020: Extension to Jersey by Order in Council (P.140/2020)

6.1 Connétable L. Norman of St. Clement (The Minister for Home Affairs - rapporteur):

6.1.1 Deputy G.P. Southern:

6.1.2 Deputy R.J. Ward:

Deputy M. Tadier:

The Attorney General:

6.1.3 Deputy K.F. Morel:

6.1.4 Deputy M. Tadier:

6.1.5 The Connétable of St. Clement:

Senator K.L. Moore:

Deputy J.A. Martin:

Senator K.L. Moore:

Deputy J.A. Martin:

Senator K.L. Moore:

Deputy M. Tadier:

ARRANGEMENT OF PUBLIC BUSINESS FOR FUTURE MEETINGS

7. Deputy R. Labey of St. Helier (Chair, Privileges and Procedures Committee):

7.1 Deputy I. Gardiner:

7.1.1 Deputy L.M.C. Doublet:

7.1.2 Deputy R. Labey:

ADJOURNMENT

[9:32]

The Roll was called and the Dean led the Assembly in Prayer.

PUBLIC BUSINESS – resumption

1. Draft Statistics and Census (Amendment of Law) (Jersey) Regulations 202- (P.115/2020)

The Bailiff:

We now resume Public Business.  The next item is the Draft Statistics and Census (Amendment of Law) (Jersey) Regulations P.115, lodged by the Chief Minister.  The main respondent for the purposes of this debate will be the chair of the Corporate Services Scrutiny Panel and I ask the Greffier to read the citation.

The Deputy Greffier of the States:

Draft Statistics and Census (Amendment of Law) (Jersey) Regulations.  The States make these Regulations under Article 8(8) of the Statistics and Census (Jersey) Law 2018.

Senator J.A.N. Le Fondré:

Deputy Wickenden is acting a rapporteur on this proposition and the next one, the Appointed Day Act.

The Bailiff:

Deputy Wickenden is marked excuse I am afraid, Chief Minister.  That is back to you.

1.1 Senator J.A.N. Le Fondré (The Chief Minister):

The proposition P.115, which is the Census Regulations.  As Members are hopefully aware, the chief statistician has directed that we put a census in place for 2021.  After various pieces of work that are outlined in the report, they have determined that there are 2 areas that need to be added to the Census Law.  Essentially they are very straightforward.  The areas or topics that need to be added are the person’s general state of health and whether the person has a physical or mental disability or chronic illness.  There are also 2 voluntary questions that are being added included in the census but because they are voluntary they are not formally added to the census schedule.  That is broadly speaking it.  It is a very simple proposition and all I can do is commend it to the Assembly.

The Bailiff:

Is the proposition seconded?  [Seconded]  Does any Member wish to speak on the proposition? 

1.1.1 Senator K.L. Moore:

Simply to add that the Corporate Services Scrutiny Panel have considered this proposition and are in agreement with the Chief Minister.

The Bailiff:

Does any other Member wish to speak on the proposition?  If no other Member wishes to speak, I close the debate, such that it is, and call on the Chief Minister to respond.

1.1.2 Senator J.A.N. Le Fondré:

I thank Senator Moore for her comments and I maintain the principles.

The Bailiff:

The principles are therefore adopted.  Yes, we probably need to vote, do we not?  It has already been a long week and I apologise.  Very well, could the Greffier please put the voting link in the chat?  It is there.  I open the voting and ask Members to cast their votes in the normal way.  If Members have had the opportunity of casting their votes, I ask the Greffier to close the voting.  The principles have been adopted:

The Bailiff:

Does the Corporate Services Scrutiny Panel wish to call this matter in, Senator?

Senator K.L. Moore (Chair, Corporate Services Scrutiny Panel):

No, thank you.

The Bailiff:

Do you deal with the matter now in Second Reading, Chief Minister?

1.2 Senator J.A.N. Le Fondré:

Yes.  Can I take the Articles en bloc?

The Bailiff:

Are the Articles seconded en bloc?  [Seconded]  Does any Member wish to speak on the Articles? 

1.2.1 Senator S.W. Pallett:

Just extremely briefly.  Article 1 deals with a new area where we are asking about people’s general state of health.  Just really a question around mental health.  Could the Chief Minister confirm that, if we are going to ask people whether they are suffering from any mental disability or chronic illness, there is some explanation of how that information will be used, just to put people’s minds at rest?  Because I know it is an area that there is a lot of stigma still about and people that are providing this information do need to be comforted that their information is going to be used in a confidential way.  I am sure it will be, but I just wanted to confirm that.

1.2.2 Deputy R.J. Ward of St. Helier:

I just had a question regards the collecting of data for people under the age of 16.  Is that done by whoever is primary caregiver in the household?  It just remains the question around gender identity being asked for and whether that is going to be determined by the person filling in the form or the individual themselves.  You do go into a difficult area sometimes with young people who may be struggling with that sort of thing and just some clarity on that as well, leading on from Senator Pallett, which was a good point I think he made.

1.2.3 Deputy S.M. Wickenden of St. Helier:

I will just try to help out and answer some of the questions.  Under-16, the adults tend to fill in these forms about these kind of things. 

[9:45]

The reason the Stats Unit have put forward the gender identity as a voluntary is it is only if you feel like you are comfortable and that is what you want to put in that you can put in that information.  The chief statistician and the Stats Jersey Unit are fully aware that it is a very sensitive area.  That is why it is not a mandatory question because that would be ridiculous and that is why it is a voluntary question.  The mental health and the form itself, the form does explain how data is used and what it cannot be used for.  The law also is very explicit in how data can and cannot be used.  So it will be made very, very clear on the form why this data is being collected, how it is being collected, and how the data will be used to give as much reassurance to people as possible, why it is done in this way.

The Bailiff:

Does any other Member wish to speak on the Articles in Second Reading?  If no other Member wishes to speak, I close the debate and call upon the Chief Minister to respond.

1.2.4 Senator J.A.N. Le Fondré:

I thank the Deputy for his assistance.  I do not think I need to particularly add any more.  It is treated in the absolute most appropriate way in terms of how all our census information is used and individuals cannot be identified.  In terms of the information, obviously that is publicised by the Census Department.

The Bailiff:

I ask the Greffier to put the voting link in the chat.  I open the voting and ask Members to vote in the normal way.  Members have had the opportunity of casting their votes.  I ask the Greffier to close the voting.  The regulations have been adopted in Second Reading:

The Bailiff:

Do you move the matter in Third Reading, Chief Minister?

Senator J.A.N. Le Fondré:

Yes.

The Bailiff:

Is it seconded for Third Reading?  [Seconded]  Does any Member wish to speak on the regulations in Third Reading?  If no Member wishes to speak in Third Reading, I close the debate and ask the Greffier to post a vote into the chat.  The link is there.  I open the voting and ask Members to vote in the normal way.  If Members need to vote in the chat then would they please now do so.  If Members have had the opportunity of casting their votes, I ask the Greffier to close the voting.  The regulations have been adopted in Third Reading:

2. Draft Census (Appointed Day) Act 202- (P.116/2020)

The Bailiff:

We now come on to P.116, which is the Draft Census (Appointed Day) Act.  The main respondent for the purposes is the chair of the Corporate Services Scrutiny Panel.  I ask the Greffier to read the citation.

The Deputy Greffier of the States:

Draft Census (Appointed Day) Act 202-.  The States make this Act under Article 8(4) of the Statistics and Census (Jersey) Law 2018.

The Bailiff:

Is this you, Chief Minister, or Deputy Wickenden?

Senator J.A.N. Le Fondré:

It is Deputy Wickenden.

2.1 Deputy S.M. Wickenden (Assistant Chief Minister - rapporteur):

Under the Statistics and Census (Jersey) Law 2018, Statistics Jersey are required to take a census at intervals as directed by the chief statistician.  Jersey has had a census every 10 years generally since 1821 and we are back at the 10-year mark.  The last census started on 27th March 2011 and the chief statistician would like to start this census on 21st March 2021 to start it off.  This is the Appointed Day Act that allows us to start the census on that point as per the law.  With that, I propose the proposition.

The Bailiff:

Is the Appointed Day Act Seconded?  [Seconded]  Does any Member wish to speak?

2.1.1 Deputy J.M. Maçon of St. Saviour:

I just want to put on record my thanks to the chief statistician and his team who gave a thoroughly informative presentation about the census and everything that they are doing.  That needs to be recognised.  Also, what was interesting is how the timing of this was to do with the U.K. (United Kingdom) census to try to make sure that message gets out in a co-ordinated way.  I thought that was very pragmatic.  I just wanted to put that on record.

2.1.2 Deputy K.G. Pamplin of St. Saviour:

The Deputy of St. Saviour 1 in unison; I just wanted to echo what Deputy Maçon just said, to thank the chief statistician.  But also add on the backdrop of the pandemic that he has our full support and that Islanders get behind him and his team for this very important date.  That is all I wanted to say.

2.1.3 Senator S.C. Ferguson:

In fact we used to have census more frequently than 10 years.  It was only in about 2005 or something that the Ministers at the time decided they had better uses for the census money and changed it to 10 years.  I do wonder, with the rate of change in population that we have at the moment and the pressure that this is giving us, and starting to put some sort of leverage and movement on a migration policy, perhaps we ought to bring it back to every 5 years so that we know where we are going.  At the moment, I hear people talking of a level of population anything from 106,000 to 115,000.  So I would like a little more accuracy a little more frequently.  Perhaps this can be considered.

2.1.4 Senator S.W. Pallett:

Again briefly, my apologies that I could not attend the meeting where this question may have been answered, but we all hope that COVID is not going to rear its ugly head in too difficult a way, but if the date for the census was in any way threatened by a large outbreak of COVID, what processes have been put in place to deal with that and would the date of the census potentially be reviewed?  Those are the 2 questions I have.

2.1.5 Deputy M. Tadier of St. Brelade:

It is right that the chief statistician gets some praise.  It is a difficult area.  Even the word “statistician” is quite difficult to pronounce, let alone the work that the chief statistician does.  Senator Ferguson’s point about the census being more frequent may have merit, but I would simply add that we should not need to rely on a census to tell us what the current population is.  In fact that is not the prime or even necessarily the secondary point of a census.  The census obviously finds key information about the demographics.  We should be able to know at any single point, from day to week to month to year, what the population is in Jersey.  We should have systems in place to do that.  It is probably not the exact debate in order to riposte those comments, nor for the wider debate to be had on the census itself.  This is only an Appointed Day Act.  But it is probably worth just putting those points on the record.

The Bailiff:

Does any Member wish to speak on the proposition?  If no other Member wishes to speak, then I close the debate and call on Deputy Wickenden to respond.

2.1.6 Deputy S.M. Wickenden:

Thank you to the speakers.  I will absolutely agree with Deputy Maçon and Deputy Pamplin about the great work that the team at Statistics Jersey has done, headed up by the chief statistician.  The frequency of the date is set out in law that it is defined by the chief statistician.  The chief statistician also collects data from many other sources, so it could be more frequent if we get the right data.  Unfortunately, we do not have something all the time that tells us when people leave the Island.  Some people leave the Island for a short period; some people leave for a medium or long period, and some people leave for good.  But at the moment there is no way of knowing whether they are going to come back in a year or never come back again, come back in 5 years, or they come back in 6 months.  So the statisticians try to use other data sources to find out that, Social Security and the like.  So we do get a very good idea about the population.  But, as Deputy Tadier said, the census is about a lot more than just collecting data on how many people live in the Island.  The census takes place from March to the end of the year and the Statistics Jersey team spend a lot of time trying to make sure that as close to 100 per cent of the households have filled in the form as possible.  It is done in as many different languages as is required.  I want to thank them for the amazing work they do on this one.  Senator Pallett, again, if there is a big outbreak, at first we have paper forms that go out, they have people on the phone, they have a digital form that we are going live.  So the date is unlikely to change for an outbreak because the way of collecting the data can be done in so many different ways and it does go on until the end of the year.  So I hope that gives Members comfort in how it works.  I did do a presentation on this earlier last month but I know people are busy and maybe have not been able to make it.  I am sure, if anyone has any real concerns, they could contact the chief statistician.  But, with that, I put forward this Appointed Day Act for the vote.

The Bailiff:

I ask the Greffier to put the link into the voting box.  The link is there.  I open the voting and ask Members to vote in the normal way.  If Members have had the opportunity of casting their votes, I ask the Greffier to close the voting. 

[10:00]

The Appointed Day Act has been adopted:

3. Draft Income Tax (Amendment No. 46) (Jersey) Law 202- (P.118/2020)

The Bailiff:

We now come to the Draft Income Tax (Amendment No. 46) (Jersey) Law, P.118/2020, by the Minister for Treasury and Resources.  The main respondent for the purposes of this debate is the chair of the Corporate Services Scrutiny Panel.  I ask the Greffier to read the citation.

The Deputy Greffier of the States:

Draft Income Tax (Amendment No. 46) (Jersey) Law 202-  A law to amend the Income Tax (Jersey) Law 1961 to remove the prior year basis method of paying income tax.  The States, subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following law.

3.1 Deputy S.J. Pinel of St. Clement (The Minister for Treasury and Resources):

At this time, two-thirds of Jersey taxpayers are paying off their 2019 tax bill and one-third are paying off their 2020 tax bill.  At the end of this month, up to 8,000 self-employed people and pensioners are due to pay the balance of their 2019 bill, so-called payment on account taxpayers.  We know many cannot afford to do so.  We know many were unable to pay a first instalment of that bill earlier this year.  This measure, if accepted, and if implemented immediately, will help those people immediately and another 23,000 or so employed people during 2021.  I have become aware that there are around 500 so-called payments on account taxpayers who may not, as this amendment law is drafted, gain the benefits I intend them to receive.  Although it may have been possible for the Comptroller of Revenue simply to handle that administratively, I have instructed officers to prepare an amendment to the Draft Finance Law, which I lodged on Monday, which will put this beyond doubt.  If this measure is not adopted and implemented by Acte Operatoire today, about 8,000 payments on account taxpayers will be deprived of the opportunity to defer their November 2020 tax payment.  Revenue Jersey will, in all likelihood, be overwhelmed by those thousands of taxpayers seeking assistance at an individual level.  I know that all Members want to help reduce the pressures on Revenue Jersey, which is indeed currently having difficulty, both from the pressures of its transformation programme, as well as the extra work that the pandemic is causing.  I have however made it clear, since the early spring, my intention to accelerate this work.  The proposition stands on its own merits as a longer-term tax reform, something that the C.S.S.P.’s (Corporate Services Scrutiny Panel) own technical adviser has described as indisputable.  If we take immediate action, however, it keeps people’s money in their pockets for the next 3 years until 2024 when the Fiscal Policy Panel is expecting economic recovery to be underway.  Our current situation, which we operate 2 different ways of paying taxes, arises from the introduction of I.T.I.S. (Income Tax Instalment Scheme) in 2006.  Some Members will remember the problems associated with not having such a pay as you earn scheme before 2006.  It was a time when many thrift clubs existed where Islanders could save towards their tax bill.  In 2006, our predecessors eventually grasped the nettle and provided a payment scheme.  Unfortunately, they did not grasp the nettle quite hard enough.  From 2006 all new employees paid taxes as they earned, the current year basis of paying tax.  All existing employees made monthly payments, which contributed towards their previous year’s tax bill.  Most jurisdictions historically had a P.Y.B. (prior year basis) system and most jurisdictions have now shifted to a C.Y.B. (current year basis) system.  This includes making arrangements for the self-employed to pay more of their taxes on a current year basis.  The Council of Ministers proposed in the 2020 Government Plan to consider options for bringing all taxpayers on to a current year payment basis.  We envisaged aligning such a change with the introduction of independent taxation in 2022.  Independent taxation will be much easier to administer on a current year basis but the 2 are not co-dependent.  The problems that arise from the co-existence of prior year basis and current year basis are well understood by aficionados of tax, but less well by the general public.  It is clear, even from the current public debate, that we have at least successfully raised awareness that two-thirds of Islanders have a latent tax liability, which for many will hit them when they retire and they need to pay tax on their last full year’s employment income from a lower pension income.  Our tax system is, in a number of places, archaic.  This is certainly one of those places.  If a current year basis woman marries a prior year basis man, the couple become a prior year basis taxpayer.  A current year basis employee will become a prior year basis pensioner, because all pensioners currently pay taxes on the prior year basis.  A prior year basis employee who leaves Jersey to work in the U.K. will immediately pay as they earn in the U.K. but still be paying a P.Y.B. debt in Jersey.  A P.Y.B. person who retires off-Island could face particular difficulties, which Deputy Young has recently raised with me and which I look to alleviate in the further work we will be doing in this field.  A prior year basis taxpayer who has faced a reduced income in 2020 is still paying taxes on higher income earned in 2019.  Worse still, if they have not reported that drop in 2020 income and accepted a higher I.T.I.S. effective rate, then they will be underpaying their 2019 tax bill.  This needs to change.  This proposition, if accepted, will ensure that everyone in Jersey is paying their taxes on the same basis and paying as they earn.  I have accelerated this work and I am asking this Assembly to support immediate action with good reason.  Paying taxes on the prior year basis is most problematic for those whose financial circumstances change significantly.  2020 has of course seen the biggest changes in Islanders’ financial circumstances that we have seen in our lifetimes.  If we make this change now, and I accept that we have done this work at speed, but certainly not in haste, then prior year basis employees who have faced reduced income in 2020 will, in most cases, enjoy I.T.I.S.-effective rates in 2021 than they otherwise might, leaving more money in their pockets.  Our self-employed people who are all effectively prior year basis taxpayers will be relieved of the obligation to make a payment in November 2020 towards the larger profits they in most cases made in 2019.  This includes the 500 or so taxpayers I mentioned earlier where I will make additional provision.  We estimate we will be leaving around £18 million in aggregate in the pockets of prior year basis taxpayers, primarily as a financial support to them to help them recover from the lockdown.  Perhaps also as an economic stimulus.  The survey, which we conducted from 3rd August to 2nd September, garnered over 2,300 responses.  The results have been published.  A majority, 52 per cent, said they supported making this change.  Predictably, the survey tells us that most would rather not pay their 2019 tax bill at all.  We debated that in-committee on 20th October.  Accepting that this is not a realistic option, most people seem to be saying that they would want at least 10 years to pay off their 2019 tax bill.  I proposed a freeze as part of this proposition.  In focus groups held during October and in discussion with the Scrutiny Panel and others, we have established even greater flexibility would be helpful.  I accept this proposition has divided opinion.  I believe making this change now is in the best interests of all those Islanders who have suffered financially from the lockdown.  I recognise that many people have not been financially affected and many of those do see this proposition as being asked to contribute some of their taxes sooner than they otherwise might.  They are right.  If they can afford to do it, I am asking them to do so, for the benefit of the less well-off and to help Jersey manage its way through these difficult times.  Last week I published my draft proposals for the payment of the 2019 tax bill.  These proposals were developed following focus groups that were held during October and further refined following our in-committee debate on 20th October, in which Members raised similar concerns to those raised by the focus groups.  I am prepared to keep listening to suggestions for further improvements and the payment options will only be finalised over the coming months after which I will lodge draft regulations for debate early in 2021.  I have listened to those concerns and have so far expressed, and I believe responded, fairly.  As a result, my proposals offer far more flexibility than I had originally proposed.  If my proposition is adopted today, I intend to provide those affected with 2 core options, both of which provide a significant amount of time over which the 2019 liability can be repaid.  The first option is for taxpayers to sign up to a fixed payment plan starting in 2025.  This would also give taxpayers the option of starting payments in 2022 if they could afford to do so.  The 2019 bill would not need to be paid in full until 2042.  In most cases, therefore, I expect taxpayers will have a full 20 years over which to spread out their payments.  Revenue Jersey will normally expect people to pay one-twentieth of their liability annually from 2022 or one-seventeenth from 2025.  To provide even greater flexibility, I expect taxpayers using the fixed payment plan to be able to pay more quickly if they wish or to be able to apply for a payment holiday in tougher times.  If this option is implemented, it is unlikely that the affordability test, which was originally proposed in an earlier consultation, may be needed.  Although Revenue Jersey would be able to consider financial hardship on a case-by-case basis as they currently do.  The second option is proposed largely in greater consideration of the circumstances of those bringing up a family.  Here I wish to thank Deputy Morel for bringing this case to our attention.  I have been challenged a number of times, particularly about the financial impact on those in the broad age band of 35 to 55, those who often have large outgoings, whether that is early years childcare costs, large rents or mortgage repayments, or funding their children’s university education.  Under the second option, taxpayers could use existing arrangements or put in place new arrangements to pay the 2019 liability when they reach the States pension age.  The early findings emerging from the focus group sessions highlighted to me just how prepared financially some taxpayers are in Jersey.  Therefore, those who prudently have plans already in place will still be able to execute those plans.  In most cases I expect the finances to come from a pension pot from which a tax-free lump sum can be taken at retirement.  Those who wish to put in place new arrangements along these lines, rather than signing up to the fixed payment plan, would be able to do so.  I believe that together these 2 options should provide States Members with the sufficient clarity and comfort they have rightly sought in the lead-up to this debate.  That said, I would ask Members to remember that this debate is about the principle of moving all taxpayers to a current year basis for the reasons set out in my report.  If we pass this proposition today, and give it immediate effect by Acte Operatoire, then many Islanders will immediately financially benefit from keeping money in their pockets.  It will reduce the financial stresses on many Islanders, of whom may not yet have realised the implications of what reduced income during 2020 will have on their 2021 I.T.I.S.-effective rates.  They will most likely go up if we do not provide this easement.  The exact detail of payment options is for future debate on draft regulations.  Despite the unprecedented impact on our economy, it is the case that some prior year basis taxpayers’ incomes have increased in 2020.  The move to current year basis would necessarily result in increased I.T.I.S.-effective rates for them.  I want to assure States Members that those whose incomes have increased during the pandemic would be able to spread out the increased rate over a longer period than usual in order that they are not unduly affected by the proposals.

[10:15]

I have asked the Comptroller to review whether his existing legal powers in this regard are sufficient.  If they are not, then draft regulations will extend them further.  In conclusion, this is a significant reform of Jersey’s tax system.  I believe it is the right thing to do in principle as a precursor to introducing independent taxation and as a significant simplification of an archaic tax system.  If it is done now and brought into force today by Acte Operatoire then we will also be delivering financial support to many of those Islanders who have suffered financially during the pandemic.  We will be helping our tax officers to administer the dreadful impacts of COVID on people’s tax positions and we will be providing a clear future income stream to help manage the additional costs we have incurred on behalf of Islanders to support them through the pandemic.  As I mentioned earlier, the exact detail of payment options is for further debate on draft regulations.  As a reminder, this proposition is just to agree the legislation amendment to move prior year basis taxpayers to current year basis taxpayers from 2021.  It is long overdue.  I ask Members to support the proposition.

The Bailiff:

Is the proposition seconded?  [Seconded]

3.1.1 Connétable K. Shenton-Stone of St. Martin:

I am speaking from the States Chamber, somewhat concerned that this Assembly is again debating incomplete legislation.  We are being presented with what is in essence a principles paper and those detailed regulations were promised before the debate, they were not forthcoming.  I would draw your attention to key finding 2 of our Scrutiny report that: “The principle that the amendment could be considered without regulations is difficult to understand, given the significant impact for two-thirds of taxpayers.”  Instead of the detailed regulations, we are expected to change the basis of taxation for 66 per cent of taxpayers based on a hastily produced last-minute proposal, 30th October, that is a dramatic U-turn from the Minister in relation to the payment proposals initially mooted.  This seems to highlight the last-minute and clumsy nature of this proposition and that the basic groundwork was clearly not carried out before this proposition was brought to the Assembly.  The revised suggestions, and at this stage that is all they are, suggestions, are welcome.  As is the fact that the Minister for Treasury and Resources has clearly listened to further feedback.  But we all know too well the possible adverse consequences of relying on verbal assurances and last-minute drafted communications.  It is unclear from the revised statements made what the effect of these new ideas will have on any economic stimulus.  At first sight, for many taxpayers, they are being offered better terms than they already have.  There is no detail that Revenue Jersey, who we all know is struggling to produce a service fit for purpose, will be able to cope with these changes.  With anything to do with tax, the devil is in the detail.  We do not have the detail.  We need this detail.  I also understand that there is some disquiet with the tax professional community that there could be a detrimental impact on certain current year taxpayers due to the law drafting.  If this has not already been raised with the Comptroller and Minister for Treasury and Resources then it will be shortly.  I am therefore in a dilemma.  Do I support a draft law that is clearly incomplete, as I have been promised beneficial changes, though there is no way that these can have been researched fully in such a short period of time?  I have no guarantee that the regulations will echo what, as I understand, the position to be as the information provided is so scant.  Or do I vote against the proposition in the hope that a future proposition will be brought before this Assembly that is complete?  If I can ask for assurances from the Minister for Treasury and Resources, and I really need that assurance, that the final regulations will not be any worse for taxpayers than the proposition presented on 30th October 2020; that these proposals are presented in good time and are complete for debate; that any technical anomalies that require change are changed; and confirmation that Revenue Jersey have the resources, capability and systems to deal with these changes efficiently, then I will reluctantly support the proposition as I appreciate that time is of the essence.  Can I expect these assurances?  Please can the Treasurer address this in her summing up.  Finally, may I say how dismaying it is to be debating incomplete propositions with no detailed regulations presented by the Council of Ministers and I do expect better?

3.1.2 Deputy S.M. Ahier of St. Helier:

The proposal itself has merit and the rationale for implementing a move to current year basis tax for all Islanders is accepted.  But the haste with which this proposal has been brought does not inspire confidence.  A considered approach would require 2 to 3 years of work, including the design of a new I.T. (information technology) system and thereafter to stress test it properly, which could take up to a year by itself.  But if this proposition is passed today it will put pressure on the department and it will be the staff who will be left to pick up the pieces.  There are doubts as to whether the department has the capacity at the present time to oversee a smooth transition.  If indeed the department does lack the requisite resources, this could precipitate a major upheaval, which may well interfere with normal tax collection.  The acceleration of the proposal was originally presented as a fiscal stimulus targeted at those who had suffered an income reduction due to the lockdown.  It was subsequently suggested that the reform was necessary to address the COVID deficit.  But the decision to extend the repayment period to 20 years casts doubt on this explanation.  It seems to me that once again the changes we need to see are being initiated in the wrong order.  In this instance, the introduction of independent taxation for married couples should have preceded this change to avoid technical challenges in the future.  It seems to me that the driving force behind this confusion is a great deal of unnecessary pressure to implement several changes in a very short space of time, which is, as our Corporate Services Scrutiny Panel tax adviser has described it, a high-risk strategy.  I feel that insufficient time has gone into planning this proposal and I strongly urge the Minister to consider more realistic timeframes going forward.

3.1.3 Connétable M.K. Jackson of St. Brelade:

As intimated by previous speakers, it concerns me that there has been little consultation with those in offices and businesses throughout the Island that have, as their duties, the obligation to collect the I.T.I.S. payments.  Lack of resource in the Tax Office will lead to muddle and confusion at that end, and that has been the case quite regularly in a lot of offices.  It is easy to make these changes from within, the Minister for Treasury and Resources is empowered to do this, but the consequences need to be thought through.  I suggest I would like to hear from her in her summing up how that is proposed to be organised.

3.1.4 Deputy G.P. Southern of St. Helier:

What an interesting proposition.  Let us take a look at it and ask some questions about what is being proposed and what that might mean to our taxpaying voters.  The first question is this proposal is described as produced at speed, which is the polite way of saying it is rushed.  It certainly is rushed.  We have seen it is still in flux almost on the last few weeks, change after change after change.  So it has certainly been rushed and certainly the Tax Department should not, I do not think, be making rushed changes, even in response to the pandemic.  Secondly, is it fair?  Well it only applies to previous year taxpayers, about two-thirds of income taxpayers, and it does not apply to current year based taxpayers.  So it certainly discriminates against one group over another, because what we are doing is setting up different rules for each.  So I do not believe - although it is represented as fair - it is fair.  The question must be, if we have a problem that we need to raise funds for, why are we raiding this particular pot, the hidden tax pot, of prior year taxpayers, and not some wider taxation measure, which could spread the load more evenly?  I think that is a possibility.  Also, this is presented as in principle, so if we vote for this today then we can go and create something down the line, which does what we want, with all the bells and whistles on it.  No.  We should not be going there.  We should not be accepting it in principle on the basis that it will all work out on the night in 2 years’ time and we will be hunky-dory.  We should never accept that from a Minister.  So what I would like to do is to take Members through some questions I have asked of the Tax Department and see what you make of them.  Because I think they are truly horrific in terms of the fairness issue.  I must praise the Tax Department for the 9 questions I asked, I think they are fairly comprehensive and complex, but I got an answer back in 2 days.  So they are to be praised indeed.  I wish every department were as prompt in responding to Back-Benchers’ questions as this department was.  So thank you very much, Treasurer, on behalf of your department.  So my questions were, question one: “What is the total borrowing we have taken on due to the COVID-19 crisis?”  The answer: “The only borrowing facility taken out by the Minister for Treasury and Resources is the £500 million revolving credit facility with a consortium of 5 local banks.  As at today, this facility remains undrawn, but plans for the utilisation of the facility are detailed in the Government Plan and also in P.118 and for the establishment and funding of the Fiscal Stimulus Fund.”  So nothing committed yet, we are still looking at this 2-year revolving credit facility.  I asked: “What are the terms, long and short term, under which these loans are made?”  “The R.C.F. (revolving credit facility) is initially available for a period of 2 years until May 2022.  There is an option to extend the facility by a further 2 years if it is required.”  That is very clear, not used yet, and there is an option to extend, but it is a 2-year loan.  I ask: “What costs repayments are entailed in the period to 2025 and then in the period longer term to 2035 of P.Y.B./C.Y.B. proposals are adopted or not?”  The answer: “The annual financing costs of proposed borrowing are incorporated within the Government Plan and are as per the figures in your question 7.”  I will go to question 7 in a minute: “These costs relate purely to the repayment of the interest over the period of the Government Plan and do not include any capital repayment.  The Council of Ministers intends to finalise its medium-term debt strategy for inclusion within the Government Plan 2022 to 2025.  We cannot comment on costs out to 2035 until the medium-term strategy is agreed.”

[10:30]

So there we have, in a nutshell, the costs relate only to the payment of interest, just servicing the loan, there is no repayment of the loan itself.  The Council of Ministers has not finalised its medium-term strategy, this is coming down the road, this is 2 years away: “We cannot comment on costs out to there until the medium-term strategy is agreed”.  So we are setting the path out there, there is only one way to go, and it has not yet been agreed.  So, to go to my question 7, and here comes some of the nub.  Question 7: “Repayments on the revolving credit facility are given as £3.7 million, £7.1 million, £8.7 million and £7.8 million, for the period 2021 to 2024.  Is this simply to service the loan or is the variation due to some other changes and, if so, what?”  the answer from the Tax Department: “These are the estimated financing costs over the period of the Government Plan.  They combine the interest costs arising from the utilisation of the R.C.F. and high-level estimates of the cost of servicing a medium-term debt strategy, which the Council of Ministers will bring forward for inclusion in the Government Plan 2022 to 2025.”  So there we have it.  We do not have the new medium-term debt strategy; we do not know what that looks like.  But we estimate that it will not cost more than £8.7 million in a year to service.  So we are looking at a 2-stage process, one now, one in the future 2 years down the line, which will cost something in the order of £7 million or £8 million to service.  We are committing ourselves to that route now if we vote for this proposition.  I think the key question, I ask: “How much does the P.Y.B. generate in a year under the current ‘when you cease working you pay’ terms?  So what is the status now?  How does this break down for an average individual and how many taxpayers does this normally involve?”  The answer comes: “Under current arrangements, when you retire you stop paying by I.T.I.S.  If you are P.Y.B., this means you are very likely to have an outstanding tax liability from the year before and will have paid nothing towards the tax bill in the year in which you retire.  It would not be unreasonable to assume that these 2 combined represent one whole year’s worth of tax.  It is expected that retiring individuals pay that tax within legislated timeframes.  But in cases of hardship within one year or so of retiring, we have flexibility.”  We are aware that we pay tax a year behind, prior, but we know that we can go in and have our individual circumstances taken into consideration.  That is what I expect from my tax man.  That is what I think people who are on P.Y.B. expect of their tax man.  Listen to this then: “There are around 18,500 P.Y.B. individuals between the ages of 40 to 64.  Meaning approximately 740 P.Y.B. taxpayers will retire each year on average.  The current average tax liability of those P.Y.B. taxpayers aged 60 to 64 is about £11,200.”  Do the calculation, 740 taxpayers retiring each year, each of them owing perhaps something in the order of £11,200, multiply the 2, how much does that generate on the current basis now, annually, towards the tax bill.  The answer is £8.5 million.  £8.5 million, how does that compare with the cost of serving the facility that we already have, which is a maximum of £8.7 million?  If we continue with what we have, which requires admittedly some labour to adjust individual taxpaying bills, and the possibility of going in and seeing a human being and not a computer, to adjust your payments, to make sure it is affordable, as we expect now, or have done.  Then we raise £8.5 million, which is surely enough to service any loan.  But what we are saying is this massive change must take place in order to service these loans.  The case is not made, £8.5 million comes in on the current system.  Back to my questions.  Question 5: “What would be the expected annual yield from compulsory repayment over the proposed 10-year period starting in 2025?”  Between me asking these questions about a week ago and the current proposal, that 10-year period has now become 20 years.  How much extra tax would be due from the average taxpayer?  We have the answer: “The Minister has published her proposals for payment of the 2019 liability.  The proposal permits a longer period of repayment, 20 years, from 2022.  Or wait until retirement providing they have a plan in place.  Also, there is no requirement to state how you will repay until 2025.  For illustrative purposes only, if the 2019 liability was spread out evenly between P.Y.B. taxpayers over a 20-year period, it would equate to an additional payment of £44 per month.”  So a 20-year period in which you might be paying something like £44 per month extra taxation, £10,000 or £530 per year, £10,000 per person over this 20-year period.  Is that a bell?  The new rules are in.

The Bailiff:

Yes, you have one minute left.

Deputy G.P. Southern:

May I finish my speech?

The Bailiff:

If it takes only one minute, yes.

Deputy G.P. Southern:

I see, we are playing hardball, are we?

The Bailiff:

No, Deputy, these are the rules the Assembly has adopted.  Nobody made a request ...

Deputy M. Tadier:

Can I have a point of order please?

The Bailiff:

Yes, a point of order.

Deputy M. Tadier:

When we passed this 15-minute rule, we were told there would be discretion from the chairman of P.P.C. and that somebody who was in full flow, who clearly felt passionate and it was an area of their expertise, would be allowed to speak.  Now I am going to speak but I do not intend to speak for more than 5 minutes probably.  You can hold me to that.  I quite happily donate some of my time to Deputy Southern.  But even without that the principle that it was supposed to be a guiding rule and that people should not be getting cut off at the knees when they clearly have things that they need to say.  Otherwise that is a fundamental hindrance of democracy.

The Bailiff:

That, I am afraid, Deputy, was a point to be made at the debate when the States adopted these particular rules.

Deputy M. Tadier:

It was made.

The Bailiff:

Yes, and the States of course voted that there would be time limits placed.  The position is that, unless someone is identified as being the prime responder or has made a request to the Presiding Officer in advance that they may wish to speak for longer so it can be considered, then the rules applying do simply stand.  But in the minute that the Deputy is still speaking, I will look again at the provisions, the guidance, and see what might be said.  Perhaps we will pause for a second.

Connétable S.A. Le Sueur-Rennard of St. Saviour:

Could Deputy Labey not help us at all?

The Bailiff:

No, I am afraid not, Connétable, it is a matter for the Presiding Officer.  I am reviewing as we speak.

Deputy G.P. Southern:

If it is helpful, I have 2 more, only 2 more, question and answers to finish my argument.  The argument is left sitting there unfinished for the moment and has little meaning unless I can finish with the last 2 question and answers because they clear up what is likely to happen.

The Bailiff:

Can I remind Members that at the beginning of the Public Business yesterday I reminded Members then that the 15-minute system applied and obtained for the purposes of these debates.  I note what you say, Deputy Southern.  I also note that there is some flexibility for the Presiding Officer where there is a technically complex point or where it is a particularly emotive matter.  I do not think tax reform, it is capable of being an emotive matter, but certainly I would not go under that heading.  There are some technically complex arguments.  I will allow an extra minute on top of the minute, if you can finish in 2 minutes please.

Deputy G.P. Southern:

That is a very serious task but I will try.  So my question 8 then: “If this short-term loan were converted to something longer term, what would the repayments, interest payments, look like?”  “If the R.C.F. were to be converted into longer-term borrowing, it would most likely take the form of a public-rated sterling bond, similar to that which we have for affordable housing.  Such bonds have annual serving costs, coupon payments, which are driven predominantly by the maturity date of the bond.  At the present time, we are modelling these costs at a rate of 2.75 for longer-term debt, 30 years-plus.  Therefore for every £100 million borrowed there is an annual coupon payback of £2.75 million.”  So that means we could borrow up to £300 million or £400 million on the back of leaving the current system alone.  Finally, the political question: “Why can we not behave like a normal country and borrow and service the loan for as long as we like, or is this a function of the sinking fund to keep the P.Y.B. funds until we are ready?”  The answer is: “Having assessed our immediate requirements as part of managing Government response to the pandemic, the R.C.F. was considered to be the most appropriate and flexible borrowing option for the short term.  The immediate future remains highly uncertain.  Ministers are therefore proposing the use of this short-term debt facility ahead of further action to reduce the debt level before it is replaced by the medium-term facilities.”  Again this 2-pronged attack.  “As already mentioned, the Council of Ministers intends to finalise its medium debt strategy for inclusion in the Government Plan 2022 to 2025 to coincide with the expiry date of the revolving credit facility once the States Assembly has agreed the budget for our hospital.”

[10:45]

So it is possible to vote this out and not change the current terms, under which we are all operating, of prior year tax and still remain fair to everybody.  If we must tax extra, why is there not a fixed charge or a charge that applies to all taxpayers?

The Bailiff:

Deputy, I must ask you to draw to a close.

Deputy G.P. Southern:

Thank you, I have just finished.

The Bailiff:

A remarkable achievement.  That was 2 minutes, 10 seconds, and so thank you very much for that, so 10 seconds over in the circumstances. 

3.1.5 Deputy M. Tadier:

I have to admit that has now left me with a bitter taste in my mouth.  This is not a criticism of you, you have been given the role as the Presiding Officer to enforce Standing Orders.  I do not think this is what we were sold in the previous debate.  It does have an effect on this debate and what I might say.  This is a particularly technical debate.  It is not necessarily the most riveting but it is one that has caused a lot of heat and light.  Clearly, Deputy Southern is one Member who has done a lot of research in this area.  I do not think we have heard fully necessarily in the way he wanted to expound all of his arguments and it is not edifying for the Assembly and for democracy in Jersey.  That is perhaps more for the chairman of P.P.C. (Privileges and Procedures Committee) to note.  I would have hoped there would be more flexibility.  So notwithstanding that, I do nonetheless try and stick to my 5 minutes that I put myself under, notwithstanding everything that Deputy Southern said because I think all those questions need to be answered.  The devil is in the detail I think and if the answers have not been given to all of those questions, the Minister for Treasury and Resources does need to answer them.  I would like to bring it back to the principles and I could quite easily stand up if I wanted to or sit down as I am at the moment and fabricate some argument to criticise the Minister if I felt like it.  I think that there are some elements in the wider society and in this Assembly who are perhaps doing that because the basic principle of what the Minister for Treasury and Resources is trying to do here is correct.  It is to be praised because, essentially, this is about tax which is due already and it is about how and when it is paid.  The argument about unfairness, well, it cuts both ways because if you are on a prior year tax basis, that means, at some point, you were given one-year tax free and so you were getting an advantage when other people who were on current year were not getting that advantage so it just means that you are paying that back at some point.  We have all been faced with this issue because it has been around for a long time.  The Minister has identified that one of those issues is when people come to retirement, they get hit for a big tax bill at a point when many new pensioners will see their income reduced so they will not necessarily have the wherewithal to pay for that.  If we just left it as it currently is without doing anything, in a few years’ time, I think many of those critics will be saying: “Why did the Minister at the time not do something about it when she or another Minister could?”  This really is about grasping the nettle and I think it is absolutely right that she has reconsidered the time period in which people can pay because being asked to pay perhaps within a few years is not realistic for a lot of people.  I also do not think we need to get hung up on what the money is used for.  Taxpayers’ money is used for all sorts of things and it is the Government, with the approval of the States of course, to decide how that money is spent and whether it is ring-fenced or not.  It is kind of academic I think whether it goes to service a debt from COVID, whether it goes to pay for roads, whether it goes to pay for a school or a new cycle path.  It all comes out in the mix.  I am not saying that there are not elements of all of these things and government spending and government borrowing need to be scrutinised.  Of course they need to be scrutinised at the right time but I think it needs to be decoupled from this.  I do need to say that there has been an element of populism, especially in the media from people who have very little to add in terms of constructive politics in terms of their vision for what they want to see and address the real issues in Jersey society.  If some of those people spent as much effort addressing the real issues about the unfairness in our tax system because they say: “This in unfair” but really the unfairness is in our tax system which is that we charge some people 26 per cent tax while we charge other people 20 per cent tax and charge other people 1 per cent tax but only on their declared income and then we charge them 0 per cent on the rest of their income.  So we have a completely unfair system.  We still charge people tax on their non-disposable income so there are lots of people in Jersey who, at the end of the year, do not have any money left to show because they have paid all their money on the cost of living, including very high rents which we are still getting to grips with and which we need to empower the Minister for Children and Housing to deal with as an Assembly.  Other people of course are paying 20 per cent rate of tax on money, which is disposable anyway, so it is a very unfair system.  I would like to see all that energy from the populist commentators out there focus on addressing the real issues because, unfortunately for them, we do need a government, we do need to have taxation and we do need to spend to have a civilised society.  I think this is not the proposition for them to take their anxieties out on on the system.  This is a proposition which should be supported in principle and if there are arguments to be made about the granular detail, that is absolutely right that they are made and it is scrutinised properly but this is a good proposition.  It needs to be done.  If you had a private debt such as a phone bill, et cetera, you would not expect for them to give you 20 years to pay off your debts and I think we should be thanking the Minister for Treasury and Resources in this case.  I am not going to praise her on everything, by the way.  We still have fundamental differences that I will criticise her on but that is politics but this is not one of them.

The Bailiff:

Thank you very much, Deputy.  Before moving on, as the last minute or 2 showed the first exercise by the Presiding Officer and the system of the new 15-minute restriction, could I remind Members that when P.109 was adopted, it was adopted with an appendix, which was the guidance on the exercise of discretion.  If any Members would wish to refer to that, then it might be helpful in the future when Members are seeking to speak for a longer period because that affords the Presiding Officer the ability to consider a request which is indeed provided for within the guidance.  Thank you very much.  Then we come to the Deputy of St. Mary.

3.1.6 Deputy D. Johnson of St. Mary:

The Minister will be pleased to note that my question is a very basic one and one which I am sure she will have no difficulty in answering.  While I appreciate we are discussing P.118, it does relate to the options referred to in R.122 and it is very basic.  The second option has been interpreted by one of my constituents as meaning that, on reaching retirement age, he will be obliged to pay the outstanding 2019 liability in full.  That is not my own interpretation.  I believe that option one remains as an alternative but would she kindly confirm that in summing-up?

3.1.7 Deputy R.J. Ward:

I would like to speak for a number of reasons.  They are really questions.  I can understand why this is necessary for those who have been through a difficult income stream this year with COVID.  I am at an age where I am looking ahead to hopefully retiring and being able to live on my income and facing a tax bill so I suppose I declare that as an interest, as many of us will.  The options that come with this, in which it does seem the detail is not there in terms of regulations, I do feel uneasy about going with the principles before the regulations.  I think the principle is right but I would feel better if the regulations were there and we were absolutely certain about them.  I am happier with the fact that there are many more repayment options including - and perhaps the Minister can confirm this - leaving it until the time when you retire if you want to take that option.  The repayment over 20 years, for example, I was concerned about myself thinking how I was going to address that issue.  There are some other principle points and I would like to say thank you to Deputy Southern.  I do not entirely agree with him on this and we can do that.  We have discussions and I see his point but it is forensic speech, which is what it was, and the detail of it needs to be complimented because he has taken the time to prepare.  I will not go back over the debate over the 15 minutes but that is why I think there is an issue there and I think we should praise people who take the time to do that.  If you do not want to listen to them, that is your issue and not theirs.  I think we need to do that particularly in an area like this.  I would like some reassurances.  I would utterly oppose and I would bring any proposition or amendment I can for any reductions for early repayment because they are both intrinsically unfair and they are punitive towards those with the lowest incomes in our community.  Throughout my time in this Assembly and throughout my time, however long that will be, I will stand for the rights of those on the lowest income as well who struggle.  We need to ensure there is a safety net for people.  In terms of 20 years of repaying the tax and the use of this tax money, I agree with Deputy Tadier on one very important area.  I think it may have been a mistake - and I am not a tax specialist - to ring-fence this for COVID in the way that we have and then come up with the changes in terms of the fluidity of the ways in which it can be paid back.  It does open up that decision to be a target for those who want to say: “You do not have a purpose for this apart from just raising more revenue.”  I think that is the issue that needs to be addressed and if that issue can be addressed, I think it will improve both the image and the perception of this with the public, and I think that is a really important thing that we have to do.  The other area for me in terms of repayment is, I have to say, the ability of the Tax Office to perform this function.  I am concerned about the well-being of those working in the Tax Office and the pressure we may be putting those people under.  [Approbation]  We have to look after our workforce.  We have to look after our public sector.  They face so much criticism but it is not a fashionable job to do tax, but when I rang up the other day to try and sort my tax out and I got through, I got an incredibly helpful individual who was pleasant, polite and managed to help me out the way I wanted to be and I understood it.  I will be honest with you, understanding my own tax is not the strongest point in my life and I have a degree in science so lord help people who try to do it themselves.  I would like to thank Deputy Alves for explaining it to me.  There are issues that have to be faced and we cannot just go headfirst into these principles without addressing those concerns.  It is, in the end, about trust.  It is about trust that if we adopt a principle, the regulations that go with this principle are fair, workable and I suppose the phrase is “do what it says on the tin” and perform in the way that we want to and we can get them to work with the resources we have in the department that has to do that, and those are the big issues for me.  At this point in time, I am minded to support this because it does support those who have had a difficult year and it does give the options for those age groups from the age of 30 to 50.  It is a difficult time with the cost of bringing up children.  I have been there myself and I know how incredibly expensive it is.  I hope my daughter is listening.  I think that we do need to support and ensure that there is a reassurance there for those groups in our society.  If that happens, I think this will be a successful thing to do and it will be accepted.  Again, I think a good point was made by Deputy Tadier about those who are perhaps political commentators who find easier targets and will expose them because they have the voice to do that.  It does not add to our discussions I think at times but we need to be prepared for it.  With that, that is all I would say.  That was 5 minutes, 35 seconds. 

The Bailiff:

Yes, indeed it was.  Thank you very much, Deputy.

[11:00]

3.1.8 Senator K.L. Moore:

I am grateful to our Reform Jersey colleagues who have described very clearly, and I absolutely agree with them, that Deputy Southern gave a very forensic and detailed speech which showed his great understanding of the issues at hand.  It is interesting to hear that they can so openly describe how split they are as a group in relation to this piece because having gone through a very detailed process ourselves as a Scrutiny Panel, we now find that this week and today there is a very balanced decision to take.  It is not simple and it is not easy at all.  It is not helped by the time that this has had to be done but we do appreciate that the Minister has a deadline with this and so there is no way to push this further down.  We have to decide today whether we do this or not.  It is certainly not ideal that we do not have the regulations.  That was one of our recommendations in our report.  The report that the Minister provided last week with her views now on how the repayments will be managed and dealt with was helpful but that report did come out on the same day as our Scrutiny Report.  We did our very best to amend it at the last minute to reflect those last-minute changes but this process has been far from ideal.  Yes, times are difficult and we appreciate fully that the Minister saw an opportunity to grasp one of her long-term goals and to fit it into the COVID context and provide a solution to it.  However, and as our adviser rightly put in her report which is appended to ours and it has been done in other places, we are one of the last jurisdictions to undertake this work, normally a piece of work as detailed as this and is something that makes such a difference to the fundamental point of government which is collecting revenue, would take place over a much greater period of time and it would aim to take those taxpayers with them as it does.  We have received an unprecedented number of communications and interactions from members of the public and members of the accountancy profession but mostly members of the public who are deeply concerned about how they can make these repayments and the impact it might have on their disposable income.  That then places a big question as to what impact will the repayments have on our economy when it is hopefully in a state of recovery from 2025 and onwards?  Any disposable income that is taken out of the economy will be income that is not in circulation and, therefore, it will restrict that recovery and it is a deep economic discussion and argument to have.  There is also the question of the legality of this change so of course Revenue Jersey has been collecting I think 20 per cent of prior year basis taxpayers on a monthly basis.  They have been paying their tax payments this year on the understanding that those were their payments for last year’s tax.  However, now if the Minister is successful today, she will suddenly say: “That was not last year.  That was this year.”  There is a legal argument which has not really been addressed sufficiently as to whether that it is the right thing to do.  The other aspect of course is in taking the repayments.  The Chief Minister has said that if this is not successful, then they, as a Government, would look at alternatives and those alternatives might be an increase in G.S.T. (goods and services tax).  There has also been talk of an increase in social security contributions from 2023.  This level of uncertainty is deeply unhelpful to the people who have to pay their taxes and those measures also, if effected, will have an impact on disposable incomes and again on the recovery of our economy post COVID.  It is really important that the Government is clear about what their intentions are and how they propose to see their measures into the future so that they can build consensus in the community and encourage people to understand the arguments and then pull together so that we can recover our economy as quickly as possible.  Taking disposable income out of it is perhaps not the easiest or the best way forward.  At the end of the day, the only way we can try in our own minds to balance this argument and decide, as we have to take this decision today, is by asking ourselves: “At the end of the day, does this measure do what it is set up to do?”  Initially, as we were told, the Minister said this was to help those who have suffered detrimentally in their financial circumstances this year.  Will it do that?  Well, yes, it will.  Then the next argument became: “Well, this is also a measure that could repay the COVID debt.”  As Deputy Southern alluded to, now that the repayments are to be paid or proposed to be repaid over a 20-year period, that decreases the revenue that would be collected through it and therefore might not make those repayments because there would be insufficient revenue collected.  I did ask the Minister whether there was any modelling that would assist us in understanding these calculations prior to the debate but, unfortunately, she did not have any of those figures.  It is rather disappointing that her officers have not managed to provide any kind of modelling to assess this because, given the level of consultation that has taken place, albeit in a very short period of time, because of the engagement of the public, there is a lot of information there as to what the feelings of the public are.  One would expect that those officers would have taken time to try and at least quantify the messages that they are getting to give a basic calculation of the repayments that can be expected to be achieved over that 20-year repayment period.  All we have, as a panel, managed to do is that basic calculation of: “Okay, we are talking here about £330 million worth of income tax revenue so what does that equal if we divide it over a 20-year period?”  So the simple math is £16.6 million.  We know that the interest repayments on the debt are expected to be in the region of about £8 million annually.  Therefore, that leaves only £8 million roughly to make the repayments and that simply would not be enough to pay down a £330 million debt.  It is complex.  I hope I have tried to get to the heart of the question and I do hope that other Members will contribute to this debate because we do need to dig deep in our own minds and decide how best to progress.  At this time, I am still quite hard pushed to support this measure because of the rapid nature of it and the inconclusive facts that we have with which to take this decision.  It will benefit some positively but it will also have a negative impact on some growing families and that I struggle with as a concept very deeply.

3.1.9 Deputy K.F. Morel of St. Lawrence:

I have struggled with this proposition since it was first mooted a number of months ago and I do thank the Minister for what she said in her opening speech for addressing one of my key issues, which was the problem under the original guidance, which is going to be a 10-year payback period, how that would affect families who are sending their kids to university and trying to pay off mortgages.  Too often, this has been portrayed as something which is affecting pensioners and it is just not the case.  This is affecting people from the age of 35 upwards and so there are a lot of people in that bracket who are at their highest element of expenditure and the Government, through this proposition, will be forcing them to pay back more tax.  Essentially, let us say, 105 per cent tax over a 20-year period.  I am pleased the Minister went off and has come back with proposals we should spread that out over a 20-year period.  That is an improvement on the original suggestions but I still have one real problem with this and that was mentioned by Senator Moore.  Senator Moore referred to it in terms of the legality.  Unfortunately, I do not know enough about the law to know whether there is an issue of legality or illegality but there is certainly an issue of fairness and it comes down to this.  Every prior year basis taxpayer has spent this year paying their tax on the understanding that they were paying off last year’s tax bill.  Part of the way through the year the Minister for Treasury and Resources, through these proposals, is trying to change that.  I cannot support something which makes that change without advance reference to it so the Minister should be making these proposals for next year and the year after and not for this year and next year is what I am trying to say in a very bad way.  It is that lack of fairness and that failure to give any advance notice that I think is the real problem here and there is a failure.  The Minister is shaking her head but it is a failure to give advance notice because we are talking about freezing this year’s tax bill and freezing those payments, which will be put forward to next year’s tax bill meaning that this year is frozen.  That is really, in my view, unfair.  You have to give at least 12 months’ notice of such a change.  Not to do so is failing to give people appropriate notice of changes to their circumstances that are being forced on them by the Government.  While I understand the Government wants the current year basis, I understand the advantages and I understand the disadvantages but you have to do it with proper notice.  To suddenly change half the way through the year like this I believe is just wrong.  Also, there is another point which is not so much about fairness but it is about last year’s Government Plan.  Last year’s Government Plan stated that the Minister for Treasury and Resources would be bringing forward options, pluralised, for moving everyone on to a current year basis.  We have not been presented with options.  We have been presented with one thing.  It is a “yes” or a “no”.  There is no other option.  There is no discussion about: “Is this the better way to do it?  Is that the better way to do it?  How do we do it?”  Not at all.  I do not see it as one option.  It is a “yes” or “no”.  Given that last year’s Government Plan, which was voted on by this Assembly and agreed by this Assembly, clearly stated that there would be more than one option given and due to the lack of fairness in making this change part of the way through this year, I feel it is not possible for me to support this proposition.

3.1.10 Deputy J.A. Martin of St. Helier:

I am quite sad to follow Deputy Morel because I think this is all about people and the last point he makes is about fairness and that maybe people were not told.  The problem is, as I think Deputy Ward said, our tax system is very hard to understand.  I have an interest.  I am coming up to retirement and, at 63, a lot of people can also take early retirement if they have paid enough in and this and that.  I keep saying to people: “You do know you have got last year’s tax.”  “What do you mean I have got last year’s tax?”  “Go down and speak about your pension and then just pop across and speak to the people in the Tax Office because you will be given a way to pay.”  I want to come in here about Deputy Southern and say why would he do it, because people are retiring every year and they are paying into the system £8.5 million?  We are being told that a lot of people struggle to pay that so they have plans; so it is not as easy as that.  This would be a structure plan.  The Minister has listened to the case that Deputy Morel - and I do not know the case - has brought to the Minister.  I said: “You cannot ask people to start paying before they retire or make sure they have paid everything else before” so we have had lots of discussions.

[11:15]

It is mad that I have to ask my children which one ... and one is on P.Y.B. and the other 2 are on C.Y.B., and I am trying to keep up and explain that.  So it is when you retire it really is a pain.  I know it is only 15 years ago but people seem to forget.  Life is busy.  The other big impact of having last year’s tax rate is when you lose your job and when you end up on income support or you end up in a job £20,000 a year less but you still have that liability.  When I stood for this job, and I think it was when the Reform asked me if I thought our benefit system was generous enough, I said: “If you are in the benefit system and you do not have past debt, it is fairly generous.  It pays more than certain places I have researched.”  I did say: “If you carry a debt with you and the biggest one probably would be your tax bill and you have to then try and pay that off or get a job that pays a lot less, it is heart-breaking.”  In fact, I was again surprised with Deputy Southern because Deputy Southern for years said, and I know he has not changed his principles: “Income support will not support somebody who is a high financier but wants to go to train as a caregiver because they drop a lot of money.”  When you probably speak to the caregiver, they have not realised they can drop the money, they still owe the tax because of the year behind, so it just makes everything work better.  It is one of them that people do worry about the nearer they get.  They think it would be lovely if you have got the option to change your job.  We have got people who lost their job or if they did not lose their job they lost a lot of hours this year but they have still got the liability for last year.  Ordinary people that I speak to think it is Christmas coming twice, we might not get the original Christmas, but they think it is a fantastic idea.  When I saw the Minister for Treasury and Resources had literally expanded it right out to the option of out of the pension or out to 20 years, I thought: “I am sure everyone will support this.”  I absolutely take on board it is not the Care Model, we know exactly what we are doing.  I think this one you have seen the options and it is not the day for the debate but when they come back if you do not like them, if you do not think they work, if this gets passed, you can amend.  But it is one of the days, I think you have to trust the Minister, she has met with everyone, she has tried to make it as fair as possible and we have not had the time to get exactly where we want to be.  If we had not had COVID it would be a bit further advanced.  But I really, really hope for the ordinary working man, woman and youngster in Jersey this really, really will help them.  I will leave it at that but I really do ask the people to support the Minister. 

3.1.11 Deputy L.B.E. Ash of St. Clement:

Firstly, I would just like to answer a couple of points that have been raised because I think they are good questions.  The first question that was raised was: can the department cope?  It was one of the first points that the Minister and I put to the department when we were looking at this.  The answer we got was that they most certainly can cope and that, in fact, if this is not passed and we have, let us face it, it could be, a considerable number of people struggling to pay this tax liability, we may well have to come to agreements, bespoke agreements, with very, very many people and that will put a tremendous amount of pressure on.  I would also like to say that I thought what Deputy Ward said was 100 per cent correct.  Sometimes these jobs, not just in the Tax Department but in the civil service, are not the easiest of jobs.  They come with quite a lot of criticism, both from the Assembly and from the media, and it can be a thankless task, so I think it was very good of him to praise the service he received there.  Is it fair on the current year basis taxpayer, was the question I think Deputy Southern asked, and again many people have asked the question of fairness?  In fairness, Deputy Tadier, his party colleague, answered pretty much as I would have done.  Where it would have been unfair is that the current year basis taxpayers are paying their tax, they do not owe any.  Prior year taxpayers owe the Government money, that is the fact.  Now, if we could have written that off, as some people were suggesting, then it would have been desperately unfair on current year taxpayers and it also would have been desperately unfair, as my email in box will testify, on those who had retired and spent a very, very difficult first year trying to pay off their tax liability on a reduced income.  So I do not think that bringing this in is a question of unfairness, I think it will make for a much fairer system.  As for taxes being increased, obviously no one can say whether they will or will not; hopefully this move will make that less likely and Deputy Southern said we should be looking at taxes, in his truncated speech.  Perhaps we could have Senator Ferguson in charge of the clocks and then we could have Fergie time added on at the end of these speeches.  But he raised the point on taxes but the thing is with tax, let us say we did have to raise tax, which I hope we will not, particularly if this measure is adopted, if we put, say, income tax up to 25 per cent or G.S.T. up to 8 per cent, as I think Senator Moore was alluding to, that could fill in gaps here and there.  What it would not do of course is help the taxpayer because he would have to be paying an extra 5 per cent, let us say, on V.A.T. (value added tax) or G.S.T. as we had ... sorry, on income tax, he would still owe that tax money at the end of it.  Here, with this move, the person concerned does not, they will have not got that liability after 20 years.  But we moved away from many things in this debate, from what I would like to go back to, which is to look at why we did this.  Obviously it had been in the pipeline for some time but that was not why this was done at this time and with such speed.  This was to help out the sizeable number of self-employed people and people who are paying their tax a year behind.  Now I have spoken to many people on this and people have sought me out to speak on it, self-employed people, and they have said: “Is this true?” and I said: “Yes, it is perfectly true, if it is passed, that you can put that tax liability back.”  “For how long?”  I said: “Well ...” and I explained, I went right through the scheme.  One person used the phrase which probably might not go down well with certain Members but he said: “That is exceptionally generous.”  Now when we talk about the ... which was raised by Deputy Morel, who I have to say is partly responsible for the exceptional generosity because it was him who pointed out one or 2 flaws but when he says: “This is changing the taxes without giving people proper notice”, well, if we put G.S.T. up, for argument’s sake, which we could or could not, that would not be giving anybody any notice either.  It would not make it illegal, it would just be saying: “We are putting G.S.T. up”, or: “We are putting income tax up”, or: “We are putting [going back to one of my old favourites] alcohol duty up.”  We do not give people any notice on that, it just happens.  So here this is money that is owed to us and we are giving people 20 years, 20 years effectively, to pay it back so I do not think that is being particularly unreasonable.  There are other things it will help, and again I was talking to someone who said he went to London to work for 3 years and he said his first year was very difficult, or his first 2 years in fact, because he was still paying his Jersey tax bill from the previous year, so he was effectively paying 2 years’ tax because he was also paying tax in London.  That will not happen anymore, this simplifies the entire tax system.  It has everybody working on the same basis and that surely has to be a fantastic thing.  It will also of course help people coming up to retirement now who may well have had a very difficult year this year and, who knows, may have a difficult year next year.  So, it is going to give an awful lot of people a considerable amount of time and it will, I think, be a wonderful thing for this Assembly to have achieved after years of talking about it to have put everyone on the Island on the same tax basis.

3.1.12 Senator L.J. Farnham:

I just want to talk about the importance of the economic impact and the impact we faced at the beginning of the year, the economic uncertainty we were facing before the pandemic with Brexit, the economic upheaval we have had to deal with since the start of the pandemic and throughout the pandemic, and we have seen it create very, very tough conditions for the economy at the start.  Those conditions, because of the processes and the methods we adopted for testing and tracking and tracing, and of course on the back of the economic support programmes we have put in place, improved slightly during the summer.  Now they are worsening as we get into the winter and of course the announcement by the U.K. Prime Minister at the weekend, which effectively put the United Kingdom into lockdown from this Thursday is going to have an impact on us as well, notwithstanding the very good position we are in.  So, as Senator Moore stated in her address, times are difficult and they are not just difficult, they are extremely difficult, difficult is an understatement, and so we need to recognise that.  This move, this proposition, does leave considerable disposable income in the economy and it leaves it in the economy now and it leaves it in the economy over the next 2 to 3 years, so the crucial time when we will be having to deal with the oncoming recession and the recovery through that.  We have had economic discussions about this and the outcome is always the same, the economy needs the support now.  We need to make sure that on the back of the support we have given businesses, the payroll scheme, the bank guarantee loan schemes, the defer of social security payments, there are more schemes being announced.  Ministers are meeting on Friday just to discuss the situation moving through the winter because when we agreed that we were going to phase out payroll schemes and such like, we were predicting a better position we might be in, so the position is constantly under review.  But the view from business, from all the business sectors, is the same, they need continued help.  We need to make sure we protect Islanders’ jobs and livelihoods and we free up as much money as we can to go into the economy through the winter and into next year.  So, that will ensure that the foundation, the businesses and the jobs that we have protected are there to take advantage of the recovery when it comes.  Now, a move to rectify this unfairness, Deputy Tadier talked about, a number of Members I think have spoken about the unfairness of the current system, but one of the biggest inequalities is the fact that one-third of our payers are paying current year and two-thirds are paying previous year and this move is an improvement, as it addresses and seeks to start the improvement and improving the equity in the tax system.  We know our best times are ahead of us, which is why we need to make the decisions now.  We cannot be kicking the cans down the road.  Islanders need certainty more so than ever so they can plan, they need to plan now.  Deputy Morel spoke about the notice that Islanders might need but I think the Minister for Treasury and Resources has dealt with that by her demonstration of understanding in relation to revisiting the proposals because I was uncertain about this initially.  But now we have a very realistic and extremely advantageous proposal on the table for many prior year taxpayers, which effectively freezes their liability until 2025 if they need it to be.  I would rather that than saying: “Right, we are going to delay it for another year and then revisit it.”

[11:30]

Let us provide the certainty now because the notice is in the timetable set out by the Minister for Treasury and Resources.  That swung it I think for so many Islanders who were concerned about it and that, I believe, is the notice period we need.  When I spoke about kicking the can down the road, I think I have noticed in this Assembly, more so than previous Assemblies, there is a tendency, as Deputy Pamplin mentioned yesterday in his speech, to be right before we begin.  As the saying goes, if you always have to be right before you begin, then you will never begin.  If you have to include every single detail before you begin, then you will never begin and you will never achieve anything.  The process we follow here is an agreement in principle and then a sequential process of further approvals.  We have to approve the law and then the process we have in place with annual reviews of future Government Plans, which mean we have every opportunity to continue to approve and improve what we have done and we must do that year after year.  I think I would urge Members to support this today.  It will take a lot of pressure off an awful lot of people who are suffering at the moment, suffering from reduced incomes, uncertainty about their jobs.  I know because myself and my team are on the front line and my inbox is filling up by the day, by the hour, in fact, from businesses and Islanders who are really concerned about what the future holds for them.  I think this might not be a perfect solution but it is a good solution, we should support it and then we can continue to improve our tax system in the months and years ahead. 

3.1.13 Connétable R.A. Buchanan of St. Ouen:

A lot has been said in this debate already and I just have a few points that I want to add to the debate.  I firstly would cast everyone’s minds back to the good old bad old days before we had I.T.I.S. where the situation for taxpayers was even more tricky than it is now.  Taxpayers had to save up their tax for their bill which was, in those days, still on a P.Y.B. for everyone and then they received a very large bill in September or October and after they passed out and had a drink to revive themselves, had to work out how they were going to pay it and those payments were made in a number of ways.  A number of firms offered repayment schemes and allowed people to save up money towards their tax.  People who were self-employed or people who, where that did not exist, had to do it themselves; indeed there were other problems because people used to use saving schemes set up by pubs and other social institutions which they frequented.  There have been some very harrowing tales where people who had come to collect their money to go and pay their tax, only to find that fraud had been perpetrated.  So, we have moved on with the introduction of I.T.I.S.; however, in my view, when I.T.I.S. came in we should have done the job properly and I guess there is no criticism of the people that did it but I.T.I.S. was a bit of a fudge really.  It was a way to get people to be able to pay their tax liability from current earnings even though they were still paying back tax on money they had earned in the previous year but the rate they were paying did not directly bear a huge relationship to the amount that they owed in previous years.  Therefore, we have ended up with this liability for previous years for quite a number of people in the tax system.  The Treasury have been extremely helpful as we have moved towards this debate with providing us with a number of briefings and explanations as to how it is going to work but they did also provide some very interesting figures which I think are worth bringing to people’s attention and I have done some rough calculations.  It is worth knowing that of the people who are on P.Y.B., 68 per cent of them are within 15 years of retirement and 47 per cent of them are within 10 years of retirement.  So those people have got this problem looming large in front of them and, as we have mentioned, times are not easy, people’s incomes in some instances would have dropped, self-employed traders will find their takings dropping, so everyone is cash-strapped and also they have this problem looming on the horizon.  In the normal course of events when they retire they have to find the money to pay back the P.Y.B. liability that they have got but this scheme is a bit like a knight charging over the hill towards them because it does solve for people who are close to retirement the problem in a very nice way for them.  They now have the ability to have a tax-free loan from the state for up to 20 years to pay off this liability, admittedly out of a reduced income once they have retired, but it is an awful lot better than having to find the cash possibly out of their pension pot, if they have a pension pot of sufficient size, or out of savings or indeed coming to an arrangement with the Tax Office to reduce their pension income to a level where they are paying back their liability.  It also gives them just about enough to do, which is not really an ideal situation to be facing when you have worked all your life and you are about to retire.  So, in that respect, I think the proposals solve the retirement problems for a large number of people in the Island.  I calculated it is about 15,000 or 16,000 people who are going to be, in the next 10 years, facing quite a substantial problem in terms of how they deal with their retirement and I think in that respect it is to be applauded.  The other point that I want to make is that our tax system having a P.Y.B., a prior year basis of assessment, is a bit of an anachronism really.  There are very few taxes, and the Minister for Treasury and Resources has referred to this, that are on that basis and it is extremely complicated to administer in that respect.  One of the other benefits that I think we need to focus on doing this is the fact that it will allow the Tax Office to introduce separate taxation for men and women, something that I have been very keen to see happen for a number of years.  The U.K. did it almost 15, 20 years ago and yet we still have the rather old-fashioned system of the tax liability belonging to just one taxpayer, the male, which in today’s age is not something that we should be proud of.  So I think, for all the reasons that we have discussed in this debate, I think this is something that we should be approving and moving forward with, not least because in the current pandemic there are an awful lot of taxpayers who are on P.Y.B. who are going to be struggling and will struggle this year to find the money to pay the extra demand being made of them in November.  So for that reason alone I think it has merit but, for the other reasons I have outlined, I think it is eminently supportable.  As I have said, it will simplify the system for the Tax Office who have had to struggle with an awful lot of problems in the last year or so, not least to get away from what was ... and I think this is worth reminding people, up until a couple of years ago the Tax Office, which is largely paper-based, when you have 105,000 clients is a bit of a nightmare plus all the business paperwork they had to deal with, they have managed to get themselves on to a decent computer system, not without problems, I hasten to add, which I am sure most people’s constituents have been on to them about.  But this will make life even easier for them and move us into having a Tax Office that is up to date and is working to current modern standards.  So for all those reasons, it is my view that this is very supportable and we should allow the Minister for Treasury and Resources to go away and draft the detailed regulations and come back to the Assembly for approval on those because not to do so, I think, will be a retrograde step and would also put a number of taxpayers in some very difficult circumstances at a time when cash is short.  So it very much has my support and I urge Members to support the proposal. 

3.1.14 Senator S.C. Ferguson:

Senator Farnham mentioned being “right before we begin”.  Terribly short-sighted.  When have we got a project to build a hospital we got an idea of the costings.  If you want to build an extension to your hotel, you get a quote or an estimate but you do not just say to the builder: “Here you are, get moving with it.”  It is basic practicality or do you only find that up north?  I question whether this is legal under the law.  My understanding is that it will not be able to be brought into effect before next March.  Basically I already pay so much a month into my tax account.  I received a letter, while I was in hospital, which I thought was a bit unkind, from the Comptroller that I double my monthly payment as of immediately, in other words, effectively putting a gun to my head, in a velvet glove perhaps.  It was put very nicely, very sort of charmingly, but if it cannot be legal until next March, it cannot come into effect, it all seems a bit overkill.  Certainly other countries have changed but I have a nasty suspicion as to motives.  It makes the Government accountant happy, they do not have to work out what the debt level is to sort of estimate the debt on current tax payments.  Great fun.  As for the pressure for people about to retire, most of the people on P.Y.B. are people who will be coming up to retirement.  Yes, for years we have been able to go into the tax people and say: “Can I change my pattern of payment so that I can come out at retirement clear?” but it is really quite possible, likely even, I hope it is not, that these things happen.  It is likely that payment will be truncated, as the pressure the scheme is putting on pensioners may well increase the mortality rate, which is not much fun.  We might get the money if there are sufficient assets to pay any sort of death duties or the equivalent thereof over here, the tax, but any estimates of what you are going to get out of it could well be somewhat overstated because the source of income will not be there.  So I would like to see a better organisation and how it is going to set up and so on.  Yes, we are having a very generous ... you can pay over 20 years and so on, but that will not be a lot of use if the people are dead.  So perhaps we ought to think again about it and see how better we can do it.

The Bailiff:

Does any other Member wish to speak on the principles?  If no other Member wishes to speak, then I close the debate and call upon the Minister to respond.

3.1.15 Deputy S.J. Pinel:

I will start off with, as anyone who knows me reasonably well, I do not act in haste and neither do I bring any proposition to the Assembly unless I believe it is the right way forward, which I think the Connétable of St. Martin was asking for reassurance.  I also said in my opening speech that this debate was not about repayments and many of the speakers have strayed into this.  Normally in a summing up I do it generally but I think this is quite important and a lot of people have asked a lot of questions so I hope people will bear with me while I go through them.  The Connétable of St. Martin did say that it is incomplete regulations.  It is not. 

[11:45]

The principle of moving from prior year basis to current year basis is all this is about, with the separation being that we then have time to listen to the public, to the Assembly, to Scrutiny as to how we think we should move forward with the regulations and I think there was a question about having promised draft regulations.  We certainly said we would propose some draft regulations, instead we gave a framework on the basis that listening to people, the focus groups, which only finished at the end of October - I mentioned Deputy Morel before, Deputy Young - that we can then put people’s questions into the system and then draft the regulations accordingly.  So it is certainly not hastily produced inasmuch as those will not be brought forward until the end of January, February next year for debate; so just to reassure the Connétable on that.  Deputy Ahier again mentioned the haste and talked about the Government Plan.  Well we are not talking about the Government Plan other than this was mentioned in the previous Government Plan so it has been a long time in the coming since 2006 when the move to C.Y.B. was made, this has been talked about putting the whole system on the same repayment pay as you earn.  Twenty years repayment was brought up as being fairer to people, I think as I mentioned in my opening remarks, who have families with children, young children or children at university, mortgages to pay, so that is why we took into account the comments that were made on that.  The Connétable of St. Brelade said there was not much consultation.  Well we had a survey which lasted for a month to which 2,300 people responded.  We have also had the focus groups which have also been going on for a month from which a lot has been drawn and essentially they seem to be people who are very well-appraised of tax issues.  The comments we have had from many of the tax officers, not our own but independent ones, have been very positive about this move forward.  Deputy Southern, delighted that he had a very prompt response from the Tax Office and thank him for mentioning it.  Again, he mentioned it being rushed, I have dealt with that, and it is not change after change, this is purely putting forward different suggestions in the regulations which can be taken forward at a later date.  That is not the essence of this proposition.  Also mentioned by Deputy Southern, and thank him for his breakdown of the figures, he mentioned the R.C.F. as a 2-year loan.  It is a 2-year loan but is also extendable for another year and then if required another year on top of that, so it gives us 4 years, should we require it, and we have not yet.  Deputy Tadier, I thank him for his kind remarks and it is very fair the way we are going forward.  What is unfair at the moment is the dual system where two-thirds of taxpayers owe tax a year late and I think it is fairer to everybody to move on to the current system, which is all this current debate is asking to do.  The Deputy of St. Mary mentioned retirement age, this allows pensioners to have the same 20 years if they need it to pay back the debt.  As has been mentioned further on, that it is pensioners who really do suffer the way it is at the moment because they have to save up and make a pension payment plan either years earlier or then face quite a large repayment debt when they retire on possibly a lower income.  Deputy Ward wants the regulations and principles but I have been quite clear that those are coming later, this is just the principle moving from P.Y.B. to C.Y.B.  He also mentioned it would possibly be unfair on those with lowest incomes.  Those on low incomes do not pay tax, that is about 30 per cent of people do not pay tax.  We have quite a high threshold in Jersey for people paying tax.  Senator Moore was worried about the regulations and timings.  Well again I think I have explained that, that we have done as much as we can to give people a huge amount of information ahead of this debate so that it is an informed debate but the debate on the regulations will come later when we bring the draft regulations to the States.  Deputy Morel, he talked about fairness as well and mentioned to bring it in this year.  It is being brought in this year because, as has been mentioned, I think by Deputy Ash, that the reason for bringing it forward - it was always going to be on the agenda - but the reason for bringing it forward is to help those people who face a large bill by the end of November, the payment on account taxpayers, and it would then freeze their tax bill, if they wish to freeze it; they do not have to.  But it will not be brought in as legislation until 2021 so I think that was a bit of a misunderstanding.  It will not be brought in this year, we just need to get the legislation through for it to be effective in 2021.  Deputy Martin talked about helping out people, pensioners in retirement with a loss of income in 2020 possibly.  So absolutely that is one of the reasons for bringing it forward and, not in haste, a huge amount of work has been done on this, so I want to reassure people that it has not been done in haste.  Senator Farnham mentioned economic recovery, which of course is what we are all very concerned about, and this makes not an awful lot of difference but just to reassure people that if the States Assembly, when we talk about the regulations and repayment, do not wish this money to be ring-fenced to go into the repayment or help with the repayment of the COVID debt, it does not have to happen, it was just a suggestion.  But it would be some way for people seeing where their money went; it does not have to happen.  The Connétable of St. Ouen, thank you for his percentages of people shortly to come out for retirement, and it is quite a large percentage because of the demographics that we are facing at the moment, so it does affect a lot of people and I hope will enable those people to spread out their prior year basis retirement plan.  Senator Ferguson saying “be right before we begin”, as I keep repeating, this is just about moving from prior year basis to current year basis, it is not about the regulations which will come later.  So on that note, I move the principles, please.

The Bailiff:

Very well.  Deputy Southern wishes a point of clarification, Minister.

Deputy G.P. Southern:

I just want to clarify that I heard the Minister correctly when she said if people did not want this money to go into paying off the debt, surely all these payments are is servicing the debt, whether it is a short-term or a longer-term debt, that is all we are doing, servicing; we are not paying it off.  If it is longer term it will be a bond ...

The Bailiff:

Well the point of clarification is whether the money is being used for servicing the debt or paying it off?

Deputy G.P. Southern:

Yes.

The Bailiff:

Are you able to assist that, Minister?

Deputy S.J. Pinel:

Yes, what has been mentioned is that the income from P.Y.B. tax liability would be ring-fenced to pay off the debt, not to service the debt, but that is for the Assembly to decide, that is not part of this proposition.

The Bailiff:

I ask, therefore, the Greffier to place a voting link within the chat.  The link is there, I open the voting and I ask Members to vote on the principles in the normal way.  If Members have had the opportunity of casting their votes, I ask the Greffier to close the voting.  The principles have been adopted:

The Deputy Greffier of the States:

Those voting contre in the link: Deputy Morel, Senator Ferguson, Deputy Maçon.  Then within the chat, Deputy Southern.

The Bailiff:

Very well, that concludes the debate on the principles.  As this is a taxation draft it would not normally be called in for Scrutiny but, at any event, I think the Scrutiny Panel has no interest in calling this in at this stage, is that correct?

Senator K.L. Moore (Chair, Corporate Services Scrutiny Panel):

No, thank you, for the reasons we outlined.  This was a now or never and there would be no point in doing that. 

The Bailiff:

Very well, how do you wish to deal with the Articles, Minister?

3.2 Deputy S.J. Pinel:

To propose the Articles en bloc.

The Bailiff:

Very well, do you wish to speak to the Articles either individually or en bloc at this stage?

Deputy S.J. Pinel:

I can do but I think that we have probably gone through everything but I can if you want me to break them down.

The Bailiff:

It is not a matter of what I want, Minister, it is entirely a matter for you as to how you propose the Articles.

Deputy S.J. Pinel:

I will break them down.

Deputy G.P. Southern:

If I may?  I wish to ask a question about when the Minister is referring to Articles which concern the 20-year payoff plan if possible, please.

The Bailiff:

What can happen, either the Minister can speak to the matters individually or she can speak to the matters en bloc or she can simply move them without speaking to them at this point.  You can, of course, speak on any of the Articles that you wish during the debate and the Minister will then be presumably able to answer them when she sums up at the end.  So, are you speaking to the Articles, Minister, or do you simply propose them?

Deputy S.J. Pinel:

Sorry, I am going to simply propose them.  I apologise, I could not quite understand what the Deputy was asking.

The Bailiff:

The Deputy is indicating he has questions or comments to make during the course of the debate on the Articles in connection with some specific Articles, some specific provisions, but you undoubtedly will answer those when the time comes.  Are the Articles seconded?  [Seconded]  Does any Member wish to speak on the Articles?

Deputy G.P. Southern:

Yes.

The Greffier of the States (in the Chair):

In that case, I call Deputy Southern.

3.2.1 Deputy G.P. Southern:

Can the Minister confirm for Members that if this 20-year mechanism is not adopted today or in future that in any case leaving things as they are now she will get the money which is due in a period of between 25 and 30 years anyway? 

[12:00]

This money which is due from P.Y.B. taxpayers will continue to be due and will be paid off within 25, 30 years?

The Greffier of the States (in the Chair):

Was that your speech?

Deputy G.P. Southern:

That was my question, yes.

The Greffier of the States (in the Chair):

Does any other Member wish to speak on the Articles?  If no other Member wishes to speak on the Articles, I call on the Minister to respond.

3.2.2 Deputy S.J. Pinel:

The 20-year repayment scheme to which the Deputy is referring is not part of this debate, that will be part of the regulations which will come forward as draft regulations and be lodged early next year.  So it is not part of this debate, this is purely the move from P.Y.B. to C.Y.B., prior year basis to current year basis.

The Greffier of the States (in the Chair):

So we therefore come to a vote on the Articles.  The link is available in the chat, I ask Members to cast their votes.  If Members have had an opportunity to cast their votes, this is the final opportunity to do so, I will ask the Greffier to close the voting on the link.  The results will be up shortly.  The Articles have been adopted:

The Deputy Greffier of the States:

Those voting contre in the link are Senator Ferguson and Deputy Maçon.  Then within the chat Deputy Southern. 

The Greffier of the States (in the Chair):

Minister, how do you intend to take the matter in Third Reading?

3.3 Deputy S.J. Pinel:

Yes, please, if I can propose in Third Reading.

The Greffier of the States (in the Chair):

Proposed in Third Reading.  Is that seconded?  [Seconded]  Does any Member wish to speak on Third Reading? 

3.3.1 Senator K.L. Moore:

I would just like to say a few words.  I think this is the third time during this sitting that Scrutiny have saved the Government and helped them to bring a major proposition across the line.  I would like to take this opportunity to address the really hard work of the whole Scrutiny team over recent weeks.  [Approbation]  Since COVID they have turned around a very high volume of work with a very small team, they have shown true dedication and we are very grateful to them indeed.  On this particular item, we found an excellent adviser who had a great deal of experience and she brought very technical knowledge to the report, which I hope that Members have had time to read in making these decisions.  This is exactly what democracy is about and I am grateful to the Minister for having moved her initial proposition and having listened to the views of Scrutiny and the public and we will look forward to looking at the regulations when they come.

3.3.2 Deputy R.J. Ward:

Just briefly, I want to say 2 things.  One is just to reiterate the work of Scrutiny and the officers who are not a huge department but do a phenomenal amount of work in a very professional manner and real skill and certainly support us in our Scrutiny work.  We could not perform the functions as well as we do with the independence in the way that we do it without them.  I would also like just to reiterate and have further reassurance from the Minister that we will not give any discounts for early repayment and that we will really be sensitive to those on lower incomes who may face tax bills, particularly older members of our community on lower incomes who face tax bills who may find themselves very vulnerable or those with children who are working 2 or 3 jobs too often on this Island just to make ends meet and are faced with this tax bill.  There needs to be real flexibility and real feeling for them and their lives because the reality of £20 or £30 may not be a lot to some but it is to many in our community and certainly in the district that I represent and others represent as well.  So I would just like those reassurances and I think Third Reading is the place to ask for those. 

3.3.3 Senator L.J. Farnham:

After years of thinking about this, I believe the States today have made a very significant and important decision to address a deficiency in our tax system.  I believe that in these difficult and challenging times many Islanders will benefit and believe the decision will help us as we move through a recession.  I do believe it is in the best long-term interests of the majority of Islanders.  That is it. 

3.3.4 Deputy K.G. Pamplin:

I will be brief.  I just wanted to reiterate what Senator Moore said.  Her Scrutiny Panel report was a great help and I can see with the response of the Minister for Treasury and Resources following the Scrutiny Panel’s work, how aligned it ended up being and it was really grateful.  Also I would like to thank Deputy Ash, I thought his summing up was really helpful and the reason why it was really helpful is he made it simple, understandable and ... [Interruption] I can just reassure people that is not beeping at me.  But it was very, very clear, concise.  My final point on the back of that is, taxes are fundamental as a way of life and it is people’s lives we are talking about here.  It is very difficult sometimes in the vacuum that we operate, albeit in the Chamber or being sat around the Island talking into our laptops, we are talking about people’s lives.  We are talking about a change, positive though it could be, that taxes all our business and we have to make our tax system simpler and we have to take people through the journey.  If this pandemic has taught us nothing, communication and bringing everyone together is so more important.  People are nervous, are anxious and Jersey sometimes struggles with change, does it not, so we need to take everybody through.  So I just request, as I always do, that the communication and supporting people’s concerns and anxieties are met because they are real but this could be a very important moment for the Island.  That is all I wanted to say. 

The Greffier of the States (in the Chair):

Does any other Member wish to speak on Third Reading?  If not, I will close the debate and call on the Minister to reply.

3.3.5 Deputy S.J. Pinel:

I extend my huge thanks to the chair of the Scrutiny Panel, Senator Moore, and totally acknowledge the huge amount of work that has gone into the report that I have in front of me and acknowledge the contribution prepared by Rebecca Benneyworth as well.  The amounts in a short turnaround period, which I acknowledge, has been a vast amount of work.  I apologise to Deputy Ward for not replying to his question before on discounts for people who pay early.  There are none.  We did look at the situation but we then went into would we introduce charges for late payments and it was just too difficult and unfair across the board, so neither will be introduced.  Also to acknowledge to him that I have listened, as has been proved by the details that have come out for the payment scheme, but that is for another debate.  Thank you to Senator Farnham for his contribution and to Deputy Pamplin and of course to my Assistant Minister, Deputy Ash, who, as Deputy Pamplin said, put it in very understandable terms.  So thank you, I propose the Third Reading.

The Greffier of the States (in the Chair):

We now come to the vote on the Third Reading on this draft law.  The link is available in the chat, so I would ask Members to vote, using the link if at all possible, otherwise in the chat.  If all Members have had the opportunity to cast their votes, this is a final opportunity to vote using the link or in the chat, then I will ask the Greffier to close the voting.  The draft law has been adopted in Third Reading.