First of all, on behalf of our government let me welcome you to Jersey.
Over the centuries this small corner of the world has had a surprisingly varied impact on global trade:
- in the 19th century a thriving shipbuilding industry serviced the cod fishing trade
- our small, yet perfectly formed Jersey dairy cow, which can adapt to a wide range of conditions, has been exported to many countries around the world
- we gave our name to the Jersey jumper, recalling our woolen and knitting industry
- our famous Jersey Royal new potato is the only fresh vegetable grown in the British Isles with EU Protected Designation of Origin status. The Jersey Royal ranks alongside champagne, Camembert and Parma ham on the scale of culinary origins
- and we have given our name to an American State. New Jersey was named by one of our most famous sons, George Carteret
International links
Now, centuries later, Jersey has a distinct international identity.
We are just twelve miles from the coast of France, yet we are part of the British-Irish archipelago;
Jersey is a blend of historic links with Normandy and modern partnerships with Britain and Ireland;
Jersey is not part of the European Union, yet is intimately connected by geography, trade, culture and politics with Europe; and most importantly, as an international finance centre, Jersey has increasingly significant links with other nations across the globe.
We are building on those links through a comprehensive programme of global engagement. Our aim is to make best use of our international expertise, combined with digital technology, to protect and expand the finance industry.
We believe the global trend for international finance centres will be to provide real ‘substance’ and Jersey more than meets this requirement:
- we support global standards on regulation
- our financial position is strong, with a balanced budget over the economic cycle the norm
- the island has one year’s GDP in reserve and significant assets
- our finance industry employs just about the same number of people today as it did 8 years ago
- we have a AA+ rating from Standard & Poors, the highest possible rating for a jurisdiction of our size
These all point to a highly regarded, well regulated, stable, experienced jurisdiction providing certainty to international businesses and their clients.
Strategic Plan
So we start from a position of strength. However, we want to continue to raise living standards, provide better jobs for islanders, improve our environment and deliver better social outcomes.
This is a difficult challenge even when starting from such a strong position.
And at the same time we must find the extra money we know is going to be needed for the ageing society, against the backdrop of lower income growth as a result of the protracted global economic downturn, particularly in our finance sector which has been affected by low interest rates.
Our parliament has recently approved the Government’s strategic plan for the next four years and beyond. It highlights where we plan to focus our resources and what my priorities are for this term of office. We have set Health, Education, and Economic Growth as our main priorities
Priorities
In health, we are transforming our services to care for Islanders throughout their lives, as far as possible in their homes, as we know that’s what people want.
In education we are raising standards to keep our island globally competitive. A successful community needs people with the right skills to sustain it, so schools need to prepare young people for the jobs that a modern, island economy can deliver. We are making sure that young people leave school with an understanding of the world of employment, a good grasp of technology and a ‘ready for work’ approach.
It is only through maintaining a strong economy that we can fund high quality services for our people, and one of the ways we can meet the rising costs of health care and fund improvements to our education system is through economic growth.
Resources
We know health services are costing more each year, and those services will be funded from the taxes of a smaller working population as our population ages. Our forecasts show that if we are to maintain existing services and fund our priority areas of health, education and economic growth, as well as necessary capital spending, we need to control our costs and increase our income.
We have agreed on a number of measures to achieve this:
- to increase our income we will boost economic growth, encourage business start-ups and create jobs
- to control our spending we are working with staff and unions to restructure the public sector
- we are reducing spending in some areas to invest in other priority areas
- this will mean ceasing to provide some services and redesigning others
- we will merge departments, restrain pay rises, reduce duplication, remove unnecessary regulations and provide flexible office accommodation so staff can work where they are needed
E-government
We are reprioritising our spending so we can put the money where we really need it, and offering more services online is integral to these plans. We have already set up systems for e-government which are providing a solid foundation for some of the more technical elements of the programme. Now we are now focusing the e-government programme on getting our tax and Social Security systems to share information and on enabling teams and departments to work more closely together.
Our aim in e-government is to deliver quality services reorganised around our customers. This will support the drive to make the public sector more efficient.
Economic growth
I would like to turn now to some of things we are doing to improve our underlying rate of economic growth. The focus of our strategic plan is to deliver productivity led growth and this requires success in a wide range of areas.
We must complement the improvements I have mentioned on education and skills with:
- a greater focus on new, high potential growth sectors
- productivity-led growth across all Jersey’s economic sectors
- support for innovation, enterprise and inward investment
- ensuring working age people fulfil their potential in rewarding employment
- competition that helps contain prices in key markets
- sustainable public finances that allow us to invest in our infrastructure
- low inflation that helps support competitiveness
I will now cover in a little more detail what we intend to do in these areas.
Financial services, digital, innovation and competition
I have given my Assistant Chief Minister responsibility for the Financial Services and Digital Industries, Competition and Innovation. Senator Philip Ozouf – who you will be hearing from tomorrow - is working hard to create the right conditions to foster economic growth, to support increased productivity in all parts of the economy and to encourage new business start-ups across different sectors.
We are looking for new and innovative ways to do things better by embracing technology, diversifying the local economy and creating rewarding job opportunities that build a good standard of living for islanders. We are putting a greater emphasis on innovation and technology.
Fintech is one area with significant growth opportunities. We are working on ways to use technology in financial organisations and to stimulate inward investment and enterprise. We are continuing to build on the partnership between government, industry and regulator In financial services, and we are focusing on protecting existing markets and products, developing new ones, and promoting our services to new markets overseas
Digital
Our International Finance Centre is the key driver of economic growth in our island. Investing in this industry is essential for safeguarding the jobs and growth it creates. But we are in the midst of a digital revolution and we want to become the leading International FinTech Finance Centre of our class in the world.
That is why we set up Digital Jersey, which was born out of the decision to invest in fibre connectivity. Later this year Digital Jersey will be introducing an Entrepreneurial Programme, aiming to attract entrepreneurs with great business ideas to start them up and develop them here in Jersey.
This initiative will act as a springboard for creating a a digitally enabled and connected society and it will need corporate funding. Digital Jersey is working to establish a network of firms who will provide mentorship, funding and support to these budding entrepreneurs.
I hope Jersey investors will want to help these businesses to grow. These entrepreneurs will then employ islanders who will go on to become skilled employees offering services in a global market place.
Competition
You will know from living in islands - although perhaps not all as small as Jersey – that it can be difficult to maintain a suitably competitive marketplace. However, where possible we want to remove barriers to competition and if necessary regulate to allow markets to work in consumers’ interests.
We have seen in recent years the squeeze on households’ income across the globe and what it means for the cost of living. Competition can help markets work in consumers’ interests and help reverse some of the trends in recent years.
As a first step we have commissioned a detailed review of our competition framework, which will be led by economic consultants Oxera with advice from Sir John Vickers. It will look in detail at our competition law and the way all stakeholders – including businesses – are affected by it.
We might be surrounded by water, but we have real and virtual connections across the globe and we have to remain vigilant when it comes to keeping up with an increasingly competitive global market.
Innovation
Jersey has a long history of innovation. I was speaking earlier about historic industries like knitting and ship building. As a small jurisdiction with limited resources we have always had to stay ahead of the game to make sure there is a demand for what the Island produces.
Two years ago we set up an Innovation Fund which supports genuinely new ideas. So far those ideas have ranged from from opportunities in the digital and eHealth sectors, to engineering solutions and innovative consumer products. But I want to go further.
We are therefore reviewing our approach to innovation so we can develop a strategy that will improve our performance and signal the best way forward. In the last fifty years we have maintained a successful international finance centre by adapting to market conditions and business needs.
We have avoided much of the complacency that comes from assuming existing products and markets will never change.
Boosting economic growth is now critical to the future success of the island. It will create employment, provide more tax revenue and reduce reliance on Government funds for public services.
Continued economic growth supports a higher standard of living and reduces the need for tax rises. We are determined to seize opportunities for growth as they arise and we will stimulate forward looking growth through sensible innovation, investment and enterprise.
European Union
One of the ways we are working to diversify and expand our financial services industry is through positive engagement with other jurisdictions, especially our near neighbours. As a responsible international financial centre we are active and cooperative partners of the EU and the wider international community, protecting public finances by tackling tax evasion, fraud and aggressive tax avoidance.
While we are politically outside the EU, our geographic proximity means we are a source of significant net investment into the European economy. Earlier this month I visited members of the European Parliament. I explained that we are pleased to be in the group of jurisdictions that signed the Multilateral Competent Authority Agreement in Berlin last October, committing to early implementation of automatic exchange of information through the Common Reporting Standard.
I met Alain Lamassoure MEP, who chairs the new European Parliament Committee on tax rulings. Also Lord Hill, the EU Commissioner responsible for financial stability, financial markets, and capital markets union. And the EU Commissioner responsible for economic and financial affairs, taxation and customs, Pierre Moscovici.
I made it clear in our meetings that Jersey has no interest in business that engages in abusive tax schemes. This kind of business damages our reputation and brings us little economic benefit.
Cooperation
M. Moscovici welcomed the Channel Islands’ commitment to automatic exchange of information, our support for the OECD action on Base Erosion and Profit Shifting, and the cooperation we demonstrated on the Code of Conduct.
He confirmed in a statement that we have demonstrated good cooperation, and he welcomed the active engagement of the Channel Islands in the key initiatives involved in the fight against tax evasion, fraud and abusive tax avoidance in which, he said, we are important partners of the EU.
He went on to praise our commitment to the adoption of the Common Reporting Standard on automatic exchange of information, as being particularly positive. These were the first ever meetings between Channel Islands Ministers and EU Commissioners. I consider this kind of face to face engagement at the heart of the EU is reaping dividends.
We are successfully communicating our contribution as a neighbouring financial centre that provides investment in the European economy. And we are explaining our role as active partners of the EU in the fight against tax evasion, fraud and abusive tax planning.
Future
As I am sure you will have gathered by now, Jersey has a proud history of looking forward, planning ahead and being flexible as circumstances change. Jersey is a special place. I hope you have found that to be true as you tour the island.
I am confident our community can work together to keep Jersey a special place. We have had tough decisions to make in the last few difficult years, and there are doubtless more to come. But we are in a strong position, we have a plan for the future, and we will come out the other side in better shape.
gov.je