16 April 2008
The Chairman of the States Fiscal Policy Panel (FPP), Mr Joly Dixon, is visiting the Island today to present the Panel’s preliminary report, which clarifies the role of the Panel, explains how it sees the new framework operating and sets out the basic principles that will guide its work.
The FPP is an advisory body with an important role to play in helping to ensure prosperity through economic stability.
Joly Dixon said that: “The Fiscal Policy Panel will be working hard in coming months to ensure that we make the best possible start when the first annual report is published in August. It is important that the Panel has the Island ’s trust and confidence from the outset.
“To do this the Panel intends to gain a full understanding of how Jersey ’s economy works and we will be discussing the key economic issues with all sections of the Island ’s community. It will be fully transparent, making all of its recommendations and advice public and making its methodology known.”
The preliminary report sets out for the first time the five guiding principles that will inform the Panel’s work:
- stability is at the heart of sustainable prosperity;
- fiscal policy needs to be focused on the medium term;
- policy should aim to be stable and predictable;
- supply in the economy is just as important as demand;
- low inflation is fundamental to the competitiveness of the economy.
Welcoming the Fiscal Policy Panel’s preliminary report, Senator Terry Le Sueur, the Treasury and Resources Minister, commented: “I am pleased that the Panel has chosen to set out how they intend to undertake the importance task they have been given. The FPP is the lynchpin of the Council of Ministers’ new Anti-inflation Strategy. This preliminary report is also a timely reminder that low inflation is critical to the Island’s continued economic success and benefits all Islanders.
“It is often said that there is little we can do to control inflation in the Island but, while we are influenced by many factors outside our control, there is much we can do to improve our inflation performance. The setting up of the Fiscal Policy Panel is an innovative step taken by the States that will help us improve tax and spending policy to meet our economic objectives. I look forward to receiving the Panel’s full report in the summer.”
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Notes to Editors:
The Fiscal Policy Panel is a group of three independent professional economists with extensive experience in policy making. Its task is to advise the Minister for Treasury and Resources on the Island’s future fiscal (tax and spending) policy. The Panel is part of the new fiscal framework agreed by the States in October 2006. Other key elements included the setting up of a Stabilisation Fund to smooth expenditure and promote growth through stability and a Strategic Reserve to be used in very exceptional circumstances.
The Panel will produce an annual report for the Treasury and Resources Minister in August each year. The report, which will be made public, is intended to:
- examine the strength of the Jersey economy, the position in the economic cycle and the outlook for the Jersey/world economies
- comment on the appropriateness of the States financial position/forecasts given the above
- recommend policy regarding the Stabilisation Fund and whether economic conditions justify payments to or from the Fund and give guidance on their size
- consider if payments are to be made what would be the best way to achieve them
- outline when the Stabilisation Fund may be at sufficient levels and therefore when payments should be made into the Strategic Reserve.
The three members of the Fiscal Policy Panel are Joly Dixon CMG (Chairman), Christopher Allsopp CBE and Marian Bell CBE.
Joly Dixon CMG, worked for nearly 30 years at the European Commission, holding a variety of senior posts. He was Director for International Economic Affairs in the Directorate General for Economic and Financial Affairs from 1992 to 2003. For the previous five and a half years, he was a member of the cabinet of President Jacques Delors, concentrating on economic and monetary issues.
Christopher Allsopp CBE is Director of the Oxford Institute for Energy Studies. He is a Fellow of New College and Reader in Economic Policy at the University of Oxford. He has recently completed a Review of Statistics for Economic Policymaking (the 'Allsopp Review'). He is a former Member of the Monetary Policy Committee (2000-2003) and of the Court of Directors of the Bank of England (1997-2000). He is the Editor of the Oxford Review of Economic Policy and a Director of Oxford Economic Forecasting.
From June 2002 to June 2005, Marian Bell CBE was an external Member of the Monetary Policy Committee of the Bank of England, appointed by the Chancellor of the Exchequer, to set interest rates to meet the UK Government’s inflation target. Prior to that, Marian held posts at The Royal Bank of Scotland where her roles included managing the Treasury and Capital Markets Research function, and at HM Treasury where she worked on modelling and forecasting the UK economy for fiscal policy purposes. She set up Alpha Economics in September 2000 to undertake independent research and consultancy.
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A copy of the report can be found by clicking here. Please note it is embargoed, like the press release, until just after
midnight on Wednesday 16 April (ie free to use on Thursday morning).
For further information, please contact Dougie Peedle, States Economic Adviser, on 440446.
The Chairman of the Fiscal Policy Panel, Mr Joly Dixon, will be available for comment and to respond to questions at a press briefing on Wednesday 16 April at
11am in the Council of Ministers’ room on the 9th floor at CLMH.
gov.je