By Lindsay Ash
WE hear an awful lot on social media, and indeed in the letters pages of the JEP, comments such as ‘you wouldn’t run a company like that’ or ‘surely there are good local business people who could be the Government of Jersey chief executive’.
Both are statements that warrant further scrutiny (if scrutiny is no longer a dirty word in the States Assembly).
Firstly, which companies are people referring to? Barings? Lehman Brothers? BHS? RBS? Or, more recently: Sir Richard Branson’s failed fly to space project? The Silicon Valley Bank Collapse? Or closer to home: Camerons the builders? So the private sector is not always perfect but what it does do, or aim to do, is to generate profit for its shareholders. Or at least that is the aim. If it fails it folds up and probably starts up again under a new name, streamlined and debt-free, having agreed a 10p in the pound pay-off to creditors – but that’s a different story. Governments have, or should have, moral obligations that companies are not burdened with, although some are now taking them on board, albeit because they feel there’s money to be made from carbon neutral funds, for example. Or maybe I’m just a cynical ex-trader.
So what’s the difference? It’s actually massive. The public sector in any decent society has a duty to look after its young and its elderly. If companies had the same duty you’d have crèches in every bank and care homes for all former employees. Of course, it doesn’t because, despite a lot of lip service, the private sector is mainly interested in profit. It reached a zenith when staff of Salomon Bros were given the contents of their desk in a bin bag and, in effect, told to ‘do one’. This created an outrage even in ‘Thatcher’s City’ and since then a gentler touch has been applied to the ‘kick your a*** out the door’ with redundancy laws put in place and companies eager to protect their image using outplacement agencies.
However, it’s still heavily geared to profits, thus compassion is not high on the agenda if it interferes with profit. This will no doubt have many business leaders spluttering in angst and pointing to their charitable work and staff welfare schemes but, nice as they may be, it’s largely window dressing and part of a large company’s PR campaign. Yes, we may make food that causes children to become obese but look at how much we give to ‘Fat Kids r us’ (if one can still make such comments after Mr Dahl was censored).
Let’s look at Covid. If certain companies had taken the decisions rather than governments it would possibly be very different. It doesn’t make pleasant reading but makes economic sense. ‘Why spend a lot of money keeping people 60-plus and others in care homes alive? Far better to let nature take its course – initial pressure on the health system but long-term gain with fewer elderly in homes and geriatric wards. And it takes pressure off pension funds and saves a fortune in vaccines’. Not nice at all, but the decision a business might have considered when looking at profitability and shareholder demands that a democratic government would or should not take.
So I hope that shows why running a company and a country is very different.
But it’s also different in other very important ways. If you are the chief executive of a company, or indeed the commander-in-chief of an army, basically what you say goes.
In the Government of Jersey it most certainly does not because our system is designed to guarantee the chief executive and the Chief Minister are as weak as possible. The Troy rule virtually ensures that the tail doesn’t just wag the dog, it picks the dog up by the tail and swings it round its head.
Let’s look at how things differ in practice by comparing the two.
This is how it works in a company in the private sector.
‘We have decided to close our metals desk as it’s making no money and we feel we’d be better looking towards establishing a crypto-digital desk.’
Clear concise message and action taken to replace a failing part of your business with a new and, hopefully, more profitable one.
If this, however, was the government the same message would arise after six months of debate and much wasted civil service hours.
‘Following the decision by the Assembly to adopt the amendment put forward by Deputy Le Baise-Tout it has been agreed that we’ll just close the metal desk to save money and have a five-year report into the feasibility of a crypto-digital desk.’
Likewise in the army, when those out of Camberley responsible for strategy (not always successfully over the years it must be added) decide to deploy troops in a certain manner and outline tactical plans they expect them to be obeyed not to hear: ‘The privates have got together and voted that they don’t want to do this and will just stay in the pub for a few months.’ It’s known as mutiny and, in days gone by, would have got you shot.
I hope that, in some ways, explains how running a company, even a successful one, differs greatly from running a government. Your obligations are different and your chain of command is very different.
In case anyone feels I am anti-business, that is not the case at all and I am proud to have been a part of Jersey Telecom’s IOT sale, which was a great example of a company being so much better in certain fields than a government could ever be. All I am trying to do is point out that running a company and running a government are two different animals.
Would Pep Guardiola do such a good job with the England rugby team? Although actually with recent results it may be worth a try (pun intended).
Lindsay Ash was Deputy for St Clement between 2018 and 2022, serving as Assistant Treasury and Home Affairs Minister under Chief Minister John Le Fondré. He worked in the City of London for 15 years as a futures broker before moving to Jersey and working in the Island’s finance industry from 2000.
Feedback welcome on Twitter @Getonthelash2