Monday, 24 April 2017

Chief Minister: Term Limit

Early in 2012 I wrote that:

as a precautionary principle, the Chief Minister should be allowed two terms of office before having to pass the reigns of power to another member. This is a widespread practice in other jurisdictions, and even within some local societies - the Société Jersiaise, for example, has restrictions on the President holding a term of office - this ensures that the voter does not feel wholly disempowered when they cannot vote for or against a Chief Minister.
and as part of my submission to the Electoral Commission, I noted:

Terms of Office and Sundry Matters

Three years means one year for any new member to get to grips with the States, one year to participate actively, and one year partly taken up with seeking re-election. I think that six years would be too long a period, and four years - as in Guernsey - would probably be the best compromise. 

The removal of Senators, and the choosing of a Chief Minister from other States members mean that some electors may not have the opportunity to remove a Chief Minister. 

Therefore, as a precautionary principle, the Chief Minister should be allowed two terms of office before having to pass the reigns of power to another member. 

This is a widespread practice in other jurisdictions, and even within some societies - the Société Jersiaise, for example, has restrictions on holding a term of office - this ensures that the voter does not feel wholly disempowered when they cannot vote for or against a Chief Minister.
I first emailed a number of States Members about limiting terms of office in 2007. These did not include Sarah Ferguson who I don't believe was in the States at that time. They included John Le Fondre, Roy Le Herrissier, and Mike Jackson. Not one of them brought a proposition. I gave up on the idea, so I am really pleased to see it back on the table. Well done, Sarah!

And now can we also have Rob Duhamel's suggestion that, like the UK, if a 2/3rds majority of States members vote for an early election, it can go ahead?

Sarah Ferguson's Proposition
THE STATES are asked to decide whether they are of opinion 

(a) no person shall be elected to the office of Chief Minister more than twice; 

(b) no person who has been elected to the office of Chief Minister, or acted as Chief Minister, during an electoral term to which some other person was originally elected Chief Minister, shall be elected to the office of the Chief Minister on more than one subsequent occasion; and 

(c) to request the Privileges and Procedures Committee to bring forward amendments to the States of Jersey Law 2005, as well as any necessary Standing Orders changes, to give effect to this proposition before the end of 2017.

It should be noted that this is not a personal attack on anyone, least of all the current politicians. It is, however, a topic which should be discussed now rather than in the frenzied heat of the election period.

Many countries now place limits on the length of time individuals are permitted to hold the highest offices. This is a policy which appears to have been formalised by the Founding Fathers of the United States of America. George Washington set the precedent and it was followed by Adams, Jefferson and their successors. Management Consultants have discussed at length the ideal duration of a tour of duty as Chairman. 

If someone is a good leader then there is a tendency to encourage them to stay on but it is not often that there is an actual assessment of the performance of the Chairman in most companies. Can the election by the Public and by the States be considered to represent a genuine review of performance of a Chief Minister? 

In business there is a tendency to get a little stale during the second period of a contract and to lapse into burnout in a third period, a fact which does support the concept of a limited term. For example, the Comptroller and Auditor General is in post for 7 years only, and it is proposed that a limit of 9 years is placed on the Chairman of the Appointments Commission. Commissioners to the Jersey Financial Services Commission normally serve 2 terms only. The post of Lieutenant Governor is held for a period of 5 years only and it is an unwritten rule that there should be no second term. 

The American showman P.T. Barnum allegedly said: “Always leave them wanting more” – which must apply to high profile positions in politics as well as business and theatre. On this basis, and for the reasons given, it is advisable to limit the length of term of the Chief Minister to 2 terms only.

Sunday, 23 April 2017

Why Kneel?

Elephant Misercord, Exeter Cathedral

From "The Pilot", 1968 comes this, an interesting historical ramble.

Some Church Customs Explained
By S.G. Thicknesse

Why Kneel?

All the possible attitudes have been used for worship down the centuries. Because kneeling is among the most helpless and uncomfortable it has been employed by all who have wanted especially to express before God their humility, their supplication, and their penitence.

So when Solomon had made an end of his great prayer that God would continue to bless and keep his people after the Ark of the Covenant had been brought into the new temple that he had built, `he arose from before the altar of the Lord, from kneeling on his knees with his hands spread up to heaven' (I Kings viii. 54).

Christians seem to have knelt rather more than other people at their prayers, perhaps because their sense of sin and unworthiness was stronger. In the early days, however, as they particularly associated kneeling with humiliation and penitence, they stood for general public prayer.

This was the usual custom among the Jews, as it was among the Romans. In the story of the Pharisee and the publican, for example, Jesus has described how `the Pharisee stood and prayed thus with himself ... and the publican, standing afar off . . . ' (St. Luke xviii. I r-13).

St. Mark also tells (ch. Xi. 25) how Jesus said to his disciples, `When ye stand praying, forgive, if ye have ought against any: that your Father also which is in heaven may forgive you your trespasses'.

Early Christians when they stood praying often extended their arms: Tertullian says in the attitude of Christ crucified. There was, however, one group. of people in the early centuries which had to kneel almost continuously at worship. This group comprised the penitents, people who, unlike the outcast `mourners', had been allowed back at least into the church porch, but were dismissed by the bishop before the prayer of consecration, until such a time as their penance was complete.

They were, indeed, commonly called `kneelers' or `prostrators', as early Christians did not distinguish in language between full prostration or kneeling upright or bowed, all of which positions they described indifferently as `kneeling'.

Even when a seventh-century Council ruled that the faithful should not kneel at all on Sundays or between Easter and Whitsun, since these were joyful days, not days for remembering sin, the `kneelers' were especially excepted.

Despite this ruling, and the feeling that to kneel was especially to admit sin, some Christians took it upon themselves to kneel when they need not. Some of them became remarked for their holiness because of it, as did St. James the Just, whose knees, from his constant kneeling, became calloused like those of a camel.

As time passed, however, some people preferred kneeling to standing, and wished that the formal occasions for it were longer; others disliked it and continued to stand when they should have knelt. Among the first were monks and others who had to stand through long offices; when the time came to kneel they would some-times prop themselves on their arms or hands, or even lie prostrate, and be glad of the rest. It was as an act of mercy towards such people that many choir stalls were fitted with misericords from the thirteenth century.

 Beverley Minster

These additions to the underside of the ordinary hinged-seat of the stall, jutted out unobtrusively, and so furnished a small ledge on which the monks or canons could prop themselves as soon as they had to stand and their hinged- seats had been folded up. There are some very spirited carved misericords in some English churches, as for example those in Beverley Minster.

Among the second group of people who preferred standing was the congregation of Bishop Caesarius of Arles in the sixth century, which gave him occasion to exclaim, `When I often, as I ought, and heedfully take notice, as the deacon cries, "Let us bend our knees," I see the greater part standing upright like columns!'

A thousand years later, in England, some upright and unbending people became known as Puritans. They held, as Lutherans and others still do, that they should stand and not kneel to pray. It was against this opinion that the Prayer Book rubrics reiterate the order that the congregation shall be meekly kneeling upon their knees, even on occasions when primitive Christians stood.

Jenny Geddes so much disliked the introduction of these rulings into Scotland, that on the 23rd of July, 1637, she threw a footstool at the head of the Bishop of Edinburgh in St. Giles's Church.

Saturday, 22 April 2017

The dry land

Jersey is in a time of drought, but there are other kinds of drought than the merely material. This poem explores drought across the world, both physical, and spiritual.

The dry land

Bare bones, a valley of the dead:
Famine, no breaking of the bread;
The wind came from south, so dry:
Clear skies above, no cloud to spy;
This is a dry land, the land of dust:
The migrant begging for a crust;
The sky is clear, blue, bright, cold:
Rich pickings for the wealth, gold
To plunder, everything has a price:
Geography is a lottery, throw of dice,
And some are lucky, having plenty,
Others starve, their bellies empty;
Dry earth: and there is no dew fall,
And no one hears the stranger's call;
Crops fail, famine across the lands:
Time trickles like wind-blown sands;
Palaces, riches, walls to keep out,
Build of arrogance, with no doubt;
The eleventh hour, almost too late:
The stranger calling at the gate:
Turned away, by folly, avarice, greed,
Hoarding of food in hour of need;
The sun is high: it is nearly midday
The people come, are turned away:
The starving children, farmers toil,
At failing crops, the empty soil,
While gluttons feast, the city strong,
Walls keep out all who do not belong;
Enough is enough! Shalom the way!
Take what is needed for the day,
And leave the gleanings in the field,
That poor might eat, world be healed;
Greed rules, fields ploughed, destroy,
No left over scraps for poor to enjoy;
Sun so bright, bones bleached white,
Dying in a world of plenty, their plight
Ignored, a deaf world, and blind eye:
The economy ruling all: that’s the lie!
Compassion needed more than ever:
Not cut off, like limbs to sever;
Military leaders, medals and sashes:
Dust to dust, ashes to ashes;
This is a last chance, a final endeavour:
Famine stalks the land, a grim spectre,
Reaching out, touching: a connector;
A choice to be made: we are all one:
All creatures beneath the rising sun;
Bleached bones: dig our own grave,
In economic domination: to enslave;
The dry land, drought, cracked soil:
Furrows of the dying, empty toil;
We need to pray for rain to come,
Join the dance, and beat the drum;
All hold hands, clasp palm in peace,
Pray that wars will someday cease;
Share the food, drink deep of wine,
Open the gates, let the light shine,
Down dark alleys, narrow streets
Let all come share, all come to eats
The hour is close, time draws near:
Reach out a hand, not draw back in fear;
The dry land, possess all you will:
Starvation looms, and it will kill;
The angel of death, across the sea:
No hiding place, no place to flee,
Time to mourn, sackcloth and ashes:
Take off the medals, burn the sashes
Lay down the weapons, kneel at pray:
Deliverance from drought: the rainy day;
Call for rain, a small cloud in distance,
Water, the necessity for existence:
And living water flows in streams,
I have a dream - no - many dreams,
Of walking together hand in hand,
Across the desert, bone-white sand;
The dry lands: wilderness, desert:
Warm air, dust blowing, dust, dirt;
The wind is coming from the east,
And welcomes beggars to the feast;
And when the wind turns to the west,
The rains shall come, all shall be blest.

Friday, 21 April 2017

Who was St Ouen - part 2

From a 1948 copy of "The Pilot" comes this piece by G.R. Balleine. When it comes to the names of our Parish churches some are recognisable from the gospels - St Peter, St Mary, St John - and some are other saints. 

The first posting (here) looks at the authentic history of St Ouen

In this second half, Balleine looks at how the cult of St Ouen developed.

Who was St Ouen - part 2
by G.R. Balleine

When St. Ouen became recognized as a major Saint, a demand arose for Lives of him, from which extracts could he read as Lessons in church and in the refectories. At least a dozen Lives of this kind were produced. But a Saint's Life was dull reading, unless it was filled with miracles.

So now amazing stories began to be inserted: how as a baby, when his mother was going to bath him, she found the spring had run dry, but the infant struck the rock with a twig, and water gushed out ; how at Mass, a dove brought hint in its beak a prayer on a slip of parchment, which protected everyone who used it against lightning; how once St Ouen deputized for the Pope ; on one visit to Rome he convicted the Pope of unchastity, and sentenced hint to seven years' penance, and occupied the Papal Throne till the penance was completed : another Pope on his dying bed entrusted him with his ring, and ordered him to rule the Church, until God revealed to him who was to be his successor.

Another legend exalted St. Ouen. not only above Popes, but above St. Peter himself. It told how a lame man went to Rome to pray to the Apostle for healing, but St Peter told him in a vision that no one but St. Ouen could cure him. So he started for Rouen on his donkey.

On the way it was stolen by robbers but at last he reached the Archbishop's Shrine, and, as he kissed it, not only did his legs recover strength, but the lost donkey came galloping up the aisle to greet him !

We have thus two Lives of St. Ouen, the real life and the legendary one and this is instructive. In the case of St. Helier we had only the legendary lives; but St Ouen shows how widely a legendary life could stray from the real facts.

One disadvantage of being a Saint was that your bones were never allowed to rest in peace. When Vikings-overran Normandy in the ninth century, the monks hurried the Archbishop's bones from one refuge to another. till after seventy years they returned to Rouen, to be burnt eventually by Calvinists at the Reformation.

But meanwhile, wherever they rested on their wanderings, a fragment was left as a relic in return for hospitality. In this way they were divided and sub-divided, till fractions of them found their way to many different countries.

In the tenth century Canterbury possessed a portion of St. Ouen's skull, a rather terrifying relic. If you were worthy of healing, when you touched it, your diseases vanished ; but, if you were unworthy, you were hounded from the cathedral by visions of avenging angels.

Other fragments of the skull were at Malmesbury and Dublin. In this way probably our Jersey parish obtained its name. No altar in those days might be consecrated, unless it contained a relic.

So, when some early de Carteret built a little chapel on his Fief, he most likely secured from Normandy a splinter of one of the Archbishop's bones. Thus the altar became St. Ouen's altar, and so in time the church and parish became St. Ouen's.

For further particulars see Father Vacandard’s Vie de St. Ouen.

Thursday, 20 April 2017

Who was St Ouen - part 1

From a 1948 copy of "The Pilot" comes this piece by G.R. Balleine. When it comes to the names of our Parish churches some are recognisable from the gospels - St Peter, St Mary, St John - and some are other saints.

The material on those is often fragmentary. St Helier only exists in legendary accounts dating around 400-600 years after his lifetime, which are untrustworthy. St Brelade is mentioned in Bishop Grandisson's ordinate, circ. AD 1330. Grandisson was Bishop of Exeter. Confusingly he lists two saints of similar names:

St. Branwalethri, a martyr son of King Kenem.

SS. Branwalader and Mellenus, confessors and bishops. St. Branwalader is also commemorated in a Winchester calendar, and one at Treguies in Brittany. In the Exeter Litany, cited by Mabillon, there is also an invocation of him. On January 19, 905, King Athelstan translated the body of St. Branwalader to Milton. William of Worcester says before it reposed at Branston, eight miles from Axminster. His days were June 8, January 19, June 5.

But with St Ouen we are on terra firma, with solid history. In this first part, here is that history, and tomorrow will be the later embellishments.

Who was St Ouen - part 1
by G.R. Balleine

When Ruskin was asked “Which is the loveliest Church in Christendom? He answered: “the glorious Abbey of St Ouen at Rouen”.

All over Western Europe are churches bearing this Saint’s name. There was one in the City of London, another at Gloucester, another at Hereford, another at Bristol (though under the name St Ewen), another at Armagh in Ireland. In Spain the Cathedral of Vich is St Ouen. Near Naples, he has a shrine to which the deaf flock for healing.

In France there is hardly a Department that has not several towns or villages called St. Ouen-sur-this or St. Ouen-des-that. The Diocese of Rouen has thirteen churches dedicated in his honour. The Diocese of Coutances has ten. Who was this Saint, who left so deep an impression on the Western church?

He is not a Saint, out of Legend Land like St. Helier or St. Brelade, but a real character, whose life-story can lie verified from contemporary documents. He lived in the seventh century, in days when the Merovingian conquerors were ruling France.

His real name, a common name among the Francs, was Dado. Later, when he was made a Bishop, this was Latinized as Audoenus. In French the first syllable was dropped, and he became Ouen.

The Merovingian Kings kept round them a corps of lads of good family, who later would have been called pages. Admission to this corps was the first step toward a public career. Dado became one of these pages. King Dagobert was a typical barbarian chief, a drunken ruffian with three wives and a vast seraglio of concubines . but among his pages was a group of lads who even in these unsavoury surroundings were enthusiastic Christians.

Here Dado formed a lifelong friendship with the boy who later was fatuous as St. Eloi, and several other of his companions became well-known Bishops. Step by step he rose through various offices in the Household until, while still under thirty, he became Referendaire or Keeper of the King's Seal. All official documents had to be sealed by him, and charters survive, which bear his signature.

He was now a Chief Officer of State, a man of influence and wealth ; and he founded a monastery on his father's estate, and secured as its first Abbot an aged disciple of the  Irish missionary, St Columban.

 In 640 something happened which revolutionized Dado's life. The Archbishop of Rouen died. Bishops in those days were elected by the laity, and Dado was popular in Rouen, which he had often visited in the King's train.

The citizens crowded their cathedral to choose a new Archbishop, and someone proposed Dado, and, though he was a layman only just thirty, whose whole life had been spent in secular affairs, to his horror he was elected by acclamation. He tried to escape, but the people would not let him.

So, since no man might become a Bishop, till he had been a year a priest, he was ordained, and spent twelve months with a mission that was trying to convert the Spanish Arians to orthodox views of the Trinity. Then he returned to Rouen, and was consecrated Archbishop.

Rouen was the largest Diocese in North France. The young :Archbishop had about two hundred clergy under him, and all neighbouring Bishops, including the Bishop of Coutances, were his suffragans.

By all accounts Ouen. as we must now call him, was a hard working ecclesiastic who ruled his diocese vigorously for forty three years. France was nominally Christian, but in the north the country-folk were still semi-pagan.

They were baptized and attended Mass, but, if a cow fell sick, offerings were left on the broken altar of one of the old gods, and at certain seasons everyone dressed in animal skins and joined in orgiastic dances.

 St. Ouen set himself to suppress this. He visited every village; he increased the number and quality of the clergy ; he encouraged the foundation of monasteries in remote districts. According to his biographers he stamped out the. last vestige of heathenism. In statuary he is represented as crushing the head of a dragon.

Apart from this he seems to have done all that was expected of a Bishop. He attended the Council of Chalons. Though no longer an officer of the Household, he maintained his influence at Court, and from time to time intervened in the blood-stained politics of the period. On one occasion he negotiated peace between the Kingdom of Neustria and Austrasia.

But the mystery about him is how he gained his reputation as a Saint. He was no martyr or heroic missionary, for in his contest with Paganism he had the power of the State behind him. He was no John the Baptist sternly rebuking, the corruption of the Court. He was no great preacher or theologian (two writings were attributed to him later, the Salic Law and the Life of his friend, St. Eloi; but neither came from his pen). Nothing in his record suggests any exceptional level of holiness. He was just a man who did faithfully and well the work that was given him to do. Many Bishops must have been just as diligent and successful.

But there seems to have been something about him that history has failed to make clear. Almost immediately after his death, his contemporaries acclaimed him as a Saint. (here was in those days no formal canonization).

Five years after his burial his body was removed front its grave, and reburied behind the Right altar in the Abbey Church at Rouen, which henceforth was no longer called St. Peter's but St. Ouen's. And almost immediately other churches began to be dedicated in his name.

Wednesday, 19 April 2017

The UK Election

There can be no doubt that Theresa May’s decision to call a snap general election is a masterly one. Her political career, to date, in the matter of Brexit has been one in which she consistently outflanked and outmanoeuvred her opponents. She has also been lucky, both in the failure of any coherent opposition to her strategy, and in the way she came to power.

When we look back to June last year and the Referendum, it is notable that while Jeremy Corbyn as leader of the Labour party led a very lacklustre campaign, her own light shone even more dimly,

Although she was nominally on the side of David Cameron and the Remain movement, her support was largely confined to private occasions, as was discovered by a later leak in which she addressed bankers including Goldman Sachs. But that only was revealed in October 2016, by which time she was in place as Prime Minister and wholly committed to Brexit.

When Cameron fell, she was close enough to the centre to be able to swing the other way and rebrand herself as committed to the people’s decision. Like Harold Wilson with his “white heat of the technological revolution”, she cast herself in the role of favourite for Prime Minister without saying anything substantial.

"The campaign was fought... and the public gave their verdict. There must be no attempts to remain inside the EU, no attempts to rejoin it through the back door... Brexit means Brexit".

The first round saw off all but two candidates, Michael Gove and Andrea Leadsom. Again luck played a part: Michael Gove had so brutally betrayed Boris Johnson that his chances of becoming Prime Minister were as slim as Judas being appointed Pope.

Andrea Leadsom, meanwhile, played the mother card, which spectacularly backfired in the implication that somehow motherhood made a woman better suited to the role of Prime Minister, and that May was deficient in this important regard. It also transpired that her CV may have been massaged to look better than it was.

Gove retired to the backbenches and the world of journalism, becoming a regular columnist for The Times, also contributing to many other papers, but managing to avoid the opprobrium heaped upon George Osborne.

So May took the crown, but did not hold a general election. Cleverly she appointed strong leave campaigners to high office - Boris Johnson as Foreign Secretary, David Davis as Brexit Secretary, and Liam Fox as International Trade Secretary.

She refused calls for a General Election, and pressed ahead with plans to trigger Article 50, first facing off a court battle which the government lost, which gave Parliament sovereign right to approve any Brexit bill. However, she swiftly recovered, presenting to the Commons and Lords a bill so devoid of substance that it again gave her a free hand.

It was at that point that a coalition of the SNP, of Labour, of Liberals and of Conservatives opposed to the bill could have made changes of substance in directing the post-Article 50 policy. That they did not was almost entirely because of Jeremy Corbyn who ordered his Party to vote in favour of the bill. If he had gone the other way, concessions could have been made, but he himself was also now openly committed to Brexit. It was left to the Lords to attempt to introduce some mitigating amendments to direct the shape of Brexit.

After that was complete, nothing could stop May from triggering Article 50, which she duly did, setting out a timetable for negotiations which was promptly derailed by the European leaders acting together, ensuring that trade talks come later rather than parallel, in negotiating.

That could have led to problems with her premiership, as some of the predictions of the remain camp appeared to be realised, but it was here that she pulled a masterstroke, and called a general election. To call it before triggering article 50 would have left that as a question on the election table for the electorate to reconsider, but by doing so after triggering article 50, she is in a much stronger position. What is more, she can be almost certain of a 2/3rds majority needed to gain an election, from her own party and from Labour.

The SNP’s call for independence will be weakened if they lose any seats, and having a high point where they have all but three seats in the Commons over Scotland, they are almost certain to lose to other parties.

Her own critics are also silenced, as they will have to fight an election on a mandate pro-Brexit, post-Article 50 where the best they can hope for is to stress the need for a softer Brexit in terms of trade, immigration and services. That is certainly also the position of the Liberal party.

Labour meanwhile is a mess, having managed to lose a bi-election to the Conservatives when it opposition, and in a seat formerly held by Labour. No one can unseat Corbyn, but it is unlikely that he will lead the party to victory; indeed labour may see the same degree of devastation that it did under Michael Foot’s leadership.

UKIP meanwhile, will almost certainly go for as hard a Brexit as possible. If they fail to achieve any real breakthrough, and their rag-tag party, riven by internal struggles, is not likely to do so, then they give May the opportunity to take that as a rejection by the country of a hard Brexit, should she so wish.

The only real question is whether she can keep up the momentum in the same way that Wilson did, and get to power before anyone realises that she still is being vague on details. Expect then a manifesto which sets out certain markers along the road to Brexit, but in such a way that diversions can be signposted if required.

Tuesday, 18 April 2017

Hospital Funding: The Sensible Option

I saw this piece by Ben Shenton and felt it was worth repeating here. He offers what I think is the most sensible position. While Scrutiny have provided a good alternative, I think when the States debate the matter, someone should also put Ben's option on the table.

The different options are on his blog, which I would also recommend reading in detail. It also contains background news stories of other small island jurisdictions who have borrowed over much and paid a price for lack of prudence.

One has also to consider that it was Alan Maclean as Treasury Minister who has to take at least most of the responsibility for the approach taken by the Medium Term Financial Plan, in which measures were passed - health charge, waste charge - without actually specifying any details - so much for saying he wanted "I wanted long term solutions not short term fixes".

The States in their collective folly passed this against the wisdom of Scrutiny, with a result that the waste charge is still under negotiation for how it is actually implemented, and the health charge fell at the first hurdle. 

Presumably as Treasury Minister Senator Maclean also advised Senator Green that it was a charge like Long Term Care and not a tax, and certainly did not contradict his fellow Senator, before doing a volte face on the Long Term Care charge and asking the Solicitor General to conform that it was in fact, as his critics, had said all along, a tax.

Ignoring his past mistakes as the folly of political youth  (albeit expensive ones) as signing of the £200,000 movie grant, setting up a badly structured Innovation Fund, and signing off loans as Economic Development Minister, his record as Treasury Minister also shows a lack of clarity. His ability to pluck a method out of the air without giving alternatives, and they way he assumed it must be correct and try and rush it through the States reminds me more and more of his predecessor. I hope that wiser heads prevail.

HOSPITAL FUNDING - The Sensible Option
By former Senator Ben Shenton:

When I moved house in 2005, and re-arranged our mortgage I felt that interest rates would move lower but, aware no one can see into the future, decided to fix half the mortgage, and take out a base rate tracker on the other half.

In that way if interest rates went up I would have the protection of the fixed element, and if interest rates moved lower I would benefit from lower interest rates on the base rate tracker. On hindsight the base rate tracker only would have been the best option but I was comfortable with my choice – especially as previously I had been tied 100% to a fixed rate mortgage.

This, in my opinion, is the approach we should take to funding the hospital – £200 million from the strategic reserve / £200 million borrowing.

There are a number of advantages of this approach:

  1. Funds will be “as required” during the long build phase (as invoiced). With a £400 million bond a substantial amount would have to be held on cash deposit, at a significantly lower interest rate than we are paying on the bond, for a considerable period. It cannot be invested for the long term as it is short term money.
  2. We won’t have to “max our credit card”. Issuing a bond for £400 million will take us right up to our credit limit (which is why Government had to admit that Long Term Care is a tax). As a Government we cannot have borrowings above our total annual tax take. 
  3. Surely it makes sense to leave an emergency borrowing buffer rather than borrow to the limit – albeit we could always change our finance law to allow more borrowing and watch our credit rating go through the floor, and borrowing costs go through the roof. Always arrange your credit facilities when the sun is shining.
  4. If stock markets continue to perform as the London experts expect we have only reduced the strategic reserve by £200 million – so it is still substantial and we benefit accordingly from the investment returns.
  5. If investment returns are much lower than the London experts suggest then at least our ‘endowment trap’ is only limited to £200 million. We don’t end up in a hole like so many endowment policy holders – albeit most got funds back by claiming “mis-selling”. Perhaps we could claim from the current Council of Ministers?
  6. Scrutiny talks of rebuilding the strategic reserve – the cost of this will be halved – putting less strain on taxpayers. However a strategic reserve that is never utilised is as useful as a chocolate teapot.
  7. Interest costs will be halved to £6 million per annum approx from £12 million.

Sadly with collective responsibility the London Advisers will probably sell us a £400 bond we don’t need and they will pick up their substantial fees as a result. It was London Advisors that said not to sell the Andium Homes bond to local investors. 

The £250 million bond issued to pay for housing had an interest rate at 3.75% which Treasury’s experts said at the time was extremely attractive. Those bonds now have a fixed funding level 1% above what could be achieved today – and the bonds trade at a 32% capital profit for the institutions ( at the time of issue we suggested selling to locals who would have locked in a 3.75% interest rate). 1% interest on a £250 million bond over 40 years is substantial. 

Local advisers did say at the time that interest rates may move lower, London advisers disagreed.