A Week in Politics

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He called on the EU. And like any good trusty sidekicks, they didn’t let Him down.

There are words to describe how serious and significant the EU Code of Conduct Group on Business Taxation’s apparent volte face on Jersey’s new zero-ten tax system is – but they are not words that you usually find in family newspapers.

Zero-ten is, or rather was, the compromise that sought to keep the finance industry in Jersey, and the rest of the world happy. It cut corporate tax income by £100m and gave birth to the 3% GST that we’re all paying, the ‘20% means 20%’ package of tax allowance cuts that have cranked up our tax bills, and the Itis package that means we’re paying every month now, instead of every year.

But the God of Bad News didn’t stop with drawing a big red line through it. Oh no.

Because there’s a further set of problems. We don’t know exactly who it is who has the problem with it, and we don’t know exactly what their problem is. And get this: even if we knew who it was that had the problem, we’re not currently allowed to talk to them about it. And the intermediaries we use to do the talking have apparently said they’re not going to help us out this time.

Effectively, Chief Minister Terry Le Sueur and his team are getting ready to play a game of ‘Pin the tail on the Donkey’. Except in this game, the tail is Jersey’s economy, no one actually knows what country the donkey is in, and if he gets it wrong then most of us are out of a job, our homes won’t be worth a packet of biscuits, and we’ll be back to potatoes, knitting and privateering before you know it.

It would be easy (and fun) at this point to start chucking a bit of blame around. And while there are legitimate and serious questions to be asked of Senator Le Sueur and others about why they didn’t try harder to get a definitive answer on whether our version of zero-ten would keep everybody happy – as well as legitimate and serious questions about who knew this news was coming, and when, which the Senator appears very reticent to answer – it won’t really help.

It would also be tempting to take the Senator’s remarks about the EU ‘dithering’ and ‘backtracking’ and respond ‘Dithering eh? Backtracking you say?’ and then beat him and his Council of Ministers around the head with the Millennium Town Park petition until they say sorry.

But that wouldn’t help either. What helps is that he, and whoever it is that’s going to follow him, has got five years to find the donkey.

What also helps is that this Island is chockful of people whose business it is to find donkeys – OK, analogy extended past breaking point, I meant that this Island is chockful of people whose business it is to understand tax systems and international tax law.

The seriousness of the situation is underpinned by the fact that States Members from right across the spectrum have acknowledged its potential impact.

Senator Le Sueur says it’s a big deal, Senator Philip Ozouf says it’s a big deal, Senator Jim Perchard says it’s a big deal, and Senator Stuart Syvret says it’s a big deal.

If those four can agree on an issue, then there’s got to be something in it. And all of them were right about it.

Senator Le Sueur was right to say that it’s significant, Senator Ozouf is right to say that if there had not been an economic crash then this probably would not be happening, Senator Perchard was right to say that the EU ultimately want tax harmonisation, and Senator Stuart Syvret was right to say that the States need to start again with a blank piece of paper and an inclusive approach bringing in Members from across the board.

And while it’s probably reasonable to expect a certain amount of justified ranting and raving in the States – starting tomorrow, when Senator Le Sueur is due to face questions without notice for 15 minutes – the zero-ten crisis creates another challenge for States Members.

Can they actually work together and get this sorted out? Is there the slightest chance of a serious rational debate on this that doesn’t degenerate to name-calling and accusations?

Unless the God of Bad News has a particularly sick sense of humour, this is the biggest issue that will face the 53 States Members until the next elections. They have to be up to it.

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