Friend or Foe?

[eastrock]

Has the dominance of the finance industry made your every day life better or worse?

[crappogre]

Both!

[onecheesey]

I have to admit that my wife has worked in the industry for 20+ years. She's no high earner though! Most aren't who keep the wheels of finance turning. She has suffered bullying, crap wages, crap hours etc.

On the other hand, she has had some terrific employers with good conditions, pay etc.

I personally loathe it with a passion. To a husband who has seen his missus crying at the end of a bloody hard day it seems hard to understand ! I suppose its the money that keeps many chained to it: sad really when most have little or no choice. I have never worked in it and will never lower myself to do so.

Probably why i've had so many jobs since leaving school nearly 30 years ago now.

So I agree: its been great when the cash comes in but s**t when all is going wrong It's just a terrible shame that all our fragile eggs are in one very thread bare basket. Bring back our trio of industries: tourism, farming & finance or better still scrub finance to be honest!

[davidrotherham]

Personally, I think I gain more than I lose from having it here.

[overandout]

I don't think I'll ever move back to Jersey while the finance industry is as large as it is now. It's not because of ethical or moral reasons, more just the feel of the place now - the smugness and the suits - and some practical reasons.

Everytime I go home I see people who I went to school with (who had trouble doing basic addition even when they had finished their A-levels) swanning about the place in flash suits and flash cars. There's something just a bit weird about it - in many other western societies some of them would be the people naturally asking 'Do you want fries with that?' But because it's Jersey they could step into a bank job and think they're JP Morgan himself. (Please note I don't think this about everybody who works in finance at all - most of whom are decent, intelligent people - I just seem to always notice these 'special cases'!)

I also think the cost of living, and the extortionate price of houses are direct results of having the finance industry in the island - and in my chosen profession I just wouldn't be able to afford a house back home anymore (and I have no interest in becoming one of them suits). By comparison, it's not actually been that tricky sticking to the job I want, becoming a home-owner and raising a young family even in London.

So, with all that in mind - the fact that I feel I have lost the chance to be a Jerseyman in Jersey anymore - I would have to put it down as a foe!

[crappogre]

It's sad that you feel you've been cut off from returning.
I think the same thing is affecting us all, as there must be plenty of others in my generation (raising kids) who are realising that their children are also losing the chance to be Jerseyfolk - I can't imagine my kids being able to afford their own place when they're adults. I'm expecting to lose them as they move away elsewhere, which will break my heart.

[overandout]

You could always go with them?
I know Jersey has a unique draw for a Jerseyman, but if my folks lived over here (in the UK) I would miss the place a darn sight less!

[fritz]

I hate the "finance industry", (industry, what do they actually produce?). Well I dont hate the "Industry", just all the little w**kers who work in it. I,ve actually bitten my lip till it bled on occassion, thinking that I allow these to**ers to look after my dosh. Then again, you,ve got to pay someone to do it. May as well have a load of "brain deads". If you had clever feckers they would rob you.

[Bea]

Fritz they do not produce ,but provide a service .It is a service industry.

There is a difference between how the average resident utilises the Finance Industry,the sort of banking that looks after your standing orders,your mortgage and your overdraft,and the other side of Finance which is here purely to assist people with "Tax Planning""Wealth Management","Fiduciary Services" and the other glossy terms they use,to promote their services.

The second type is the one that produces all the negative publicity,and the interest of other Governments,because they are aware that taxes are not staying in the countries of origin.

[Jersey Forum Admin]

Jul 12, 2008 19:08:03 GMT fritz said:

I hate the "finance industry", (industry, what do they actually produce?). Well I dont hate the "Industry", just all the little w**kers who work in it. I,ve actually bitten my lip till it bled on occassion, thinking that I allow these to**ers to look after my dosh. Then again, you,ve got to pay someone to do it. May as well have a load of "brain deads". If you had clever feckers they would rob you.

Hi Fritz,

You're obviously angry about the situation on the island (as a number of people here are), but please bear in mind that some forum members may be employed in the finance industry, so may take personal offence to the tone of your post.

By all means feel free to it make known that you're annoyed about anything you so desire, but in future please try and do so with some thought for how your comments may be taken by other members, thanks.

[fritz]

Only having a laugh for goodness sake.

[Nobody]

Jul 13, 2008 11:55:29 GMT @davroslesueur said:

My stance is that Finance are in fact the REAL government of this island.
Everything that is done appears to assist them in some way.

There you have it in a nutshell.

And ignoring the very public Government exhibitions of support for the finance industry, look at what happened earlier this year, something that reveals an attitude far more worrying.

Frank Walker (don't forget folks, our equivalent of a Prime Minister) refused outright to address with the EU the issue of local-born residents being denied the right to work in Europe.

Why?

Because he didn't want to "rock the boat" for fear of political demands being made of our finance industry.

So Walker has already shown that on at least one occassion a high-level political decision which directly impacts upon the lives of thousands of islanders, was made with concern only for the finance industry, for the benefit only of that industry.

Pause for a few seconds and consider how serious that concept actually is. Then pause for a few seconds more, and ask yourself the likelyhood of that style of reasoning having been a one-off.

Whether or not anyone's life has benefitted from the Finance industry having a foothold on this island, the simple fact is that when political decisions are being made along the above lines, it's unhealthy.

[crappogre]

What's good for Finance is good for continuing the status quo - income from Finance paying a large amount of our required budget, and providing employment in the major sector (what else can we depend upon these days?).
Given that The Establishment gets in again each election time (the small turnouts being perceived as a sign of satisfaction) and there isn't major unrest in the streets, the States can assume that most of us are happy with that.
Correct me if I'm wrong!
So, why would they want to rock the boat?
Now I'm no fan of The soi-dissant Oligarchy running the island in their favour at the expense of the Common Man, but on the whole it would seem that a majority of us really aren't doing too badly by Western World standards, and the minority aren't exactly complaining loud enough to disturb them. With rising prices and GST it would seem that the minority may be growing, and there are plenty of silly decisions coming from The States that annoy most of us, but supporting Finance is a "no-brainer" unless you've got something else in mind that could keep the island afloat?

[Nobody]

Jul 13, 2008 15:55:41 GMT crappogre said:

but supporting Finance is a "no-brainer" unless you've got something else in mind that could keep the island afloat?

Well the problem we have is that Finance has been allowed to get such a tight grip as that. Were it to be removed tomorrow, the immediate consequences would be devasting. And bear in mind, when the time is right it will chose to remove itself without a thought for this island.

It may now be a no-brainer to support Finance, but in reality that's a concept no different in principle to a junkie supporting a policy of free methodone.

We need to be asking why the States have no provisions whatsoever for the day when Finance leaves. Out of all proportion, the government are continuing to focus on helping to build a Financial tower of Babel, without any thought for what's going to happen when that tower falls.

That's an attitude mired in the 1980's. In the past decade the nature of global finance has changed radically, at a speed never before seen in human history. In the mid 1990's did you ever think you'd be able to sit at a computer, in the comfort of your own home, and with 2 clicks of a mouse transfer money from your Bank account? Did you think you'd one day be able to buy a CD, a TV or a car without moving from your seat, with one eye on Eastenders? No.

And those changes are continuing, apace. So in the long-term it's really not to the benefit of the people of this island for anyone to be now sitting back and saying "Yeah, I'm doing alright, so Finance has my support"....because such complacency is laying the foundations for even greater damage to the island when Finance leaves.

Had the Finance industry not taken root on this island, we would naturally have developed in other areas. When the Finance industry leaves, we will be forced to develop in other areas. It's a nonsense to think that should we lose the Finance industry our standards of living will plummet to match those found in the slums of Rio or something similar (as many doomsayers would preach), but it's a nonsense that serves the Government's short-sighted agenda very nicely.

[eastrock]

For what it's worth, I totally agree with your post. The Jerseyman is most definitely adaptable. It finance legs it, we'll try something else. My only worry is, the damage that the industry will leave behind when it finally decides to move on. An island that is covered in cheap developments that will appeal to no one. Will we be able to repair that?

[crappogre]

Try something else? Wouldn't there be signs of that happening already? I see no niche industries developing. What if the internet, globalisation, outsourcing etc have finally laid to rest any advantages we had from being a small island with our own government?

Any successful industries we once had relied upon transport links being crude and slow (back centuries ago) and our climate. As soon as the age of sail passed and the world opened up, Jersey got left behind, even more so from the 1990s with air travel impacting tourism. If it wasn't for Finance, I really don't know where we'd be!

We can't grow anything that can't be grown cheaper elsewhere with economies of scale.
We can't manufacture anything more cheaply than 3rd world / "tiger economy" countries.
We increasingly can't rely upon our independent-ish tax situation.

What else is there, because I'm all out of ideas?!

I'm sorry but, much as I hate to admit it, we are dependent upon the Oligarchy for our wellbeing, just like the masses always have been dependent upon their Lords and Masters. They continue to get away with it by giving us the illusion that we have some democratic say, and we have, just occasionally, a chance to make it big ourselves and join them if we strike it lucky - but basically we are all slaves to the rat race like the poor huddled masses from centuries gone by. Except that we have weekends to ourselves, colour TV, cheap clothes, a wide range of fresh food from around the world, good healthcare, the ability to support ourselves in comfort without working ourselves to an early death, etc etc.

It's not so bad.
Let's keep it that way!

[Bea]

What about a offering a real University,and Higher education courses.?
Good for the economy in many ways

[Jeremy Strickland]

Jul 13, 2008 20:30:05 GMT @eastrock said:

For what it's worth, I totally agree with your post. The Jerseyman is most definitely adaptable. It finance legs it, we'll try something else. My only worry is, the damage that the industry will leave behind when it finally decides to move on. An island that is covered in cheap developments that will appeal to no one. Will we be able to repair that?

Jul 13, 2008 20:30:05 GMT @eastrock said:

My only worry is, the damage that the industry will leave behind when it finally decides to move on.

Damage there will be. I don't for one minute suggest that we rid ourselves of the goose that lays golden eggs. I'm just concerned that we keep our golden eggs in the one basket (apologies for a crap extension of the metaphor)

Has anyone read the Oxford Economic Research Associates' report?
www.gov.je/NR/rdonlyres/F7C85909-818A-4EDE-8875-87547BCF1082/0/OXERA_Feb04.pdf

In section 3:- it examines the likely impact of 90% of Jersey-based financial services leaving the Island. (90% being the maximum effect)
In the OXERA report it cites first order effects of not reacting to economic, and political pressure thus:

Total population decline of 20-30% = 20-28,000 people leaving. This mainly being finance workers and their families moving elsewhere for similar employment and wages.
- That solves our over-population problems in one go.

However the remaining demographic would see a higher proportion of elderly Islanders with subsequent demands on pensions, and public services, which can not be matched without raising taxes, and social security contributions.

- Firstly this assumes that an aging population is incapable of looking after itself having made no provision for their retirement. It also assumes that most elderly people are subject to ill health. I will comment no further on this particular prejudice.
Even if OXERA's worst case scenario were to materialise with respect to an aging demographic I'm not so sure it would be a permanent user of public resources. If the aforementioned finance workers left with their families that would mean less demand on public services. There would be a possible re-assignment of some capital to the temporal needs of the elderly population.
The income lost from the exodus of finance workers compared to the reduced drain on public services wouldn't be a proportional match. However governmental expenditure would decrease in a depressed economic climate anyway. The transition would be temporary as attested by OXERA in their secondary effects.

Call me an optimist but we have always adapted, and found a way to succeed. Any nascent economic prosperity would lead to a demand in an increased workforce, which would be constructed from existing Islanders, and numbers of skilled immigrants. (not to be confused with Imagine Jersey 2035). The ensuing States income would compensate any demands on the State by an elderly population without having to resort to such high tax rates seen in the UK, which is the scenario proposed by OXERA.

The average skill base would diminish.

- This is only pertinent if the finance industry would be replaced by another necessitating said same skills. As I suggest later our finance industry can be reborn through active intervention from the States, and, or through creative destruction from within the industry itself. We would still have the knowledge it would never evaporate into the ether.

The proportion of Jersey-born people would increase if finance were to fail.

- And this is cited as a negative consequence?! It's insulting in it's implications.

There would be less immigration.

- Again this appears to be a simple logical consequence of less money going around, but only temporary as I'm sure new industries will emerge that will kick-start the economy and invite the necessary skills importation.

Should there be an exodus of finance workers this would leave a surplus of accommodation. Prices would fall leaving mortgagees in negative equity.

- Even OXERA state this as a temporary effect. We all know that economic sectors experience peaks and troughs. The housing market is no different. My solution would be to rid ourselves of the 12 year time constraint and allow anyone to purchase a house. This would also alleviate the Dickensian lodger society. Not easily done during an economic downturn when mortgage lenders toughen-up their lending criteria, but can be done with time and help from a caring government that would invest in social needs, and economic development for long-term gain. It might be timed just right to capitalise on the swing to inevitable prosperity that surely follows any depression.

OXERA's secondary effects note a possible reversal of fortunes in tourism, and agriculture. However nothing to rival the high yield per head of the finance industry.

- I feel they have deliberately not explored possible remedies here.
For one Jersey milk products should attain special status in Europe, and the world market in similar vein to 'champagne', or 'Cheddar cheese'. The market potential for award winning dairy products has not been fully explored. There is scope for extolling other marketable agri-products. Who knows what else we can grow with an extra 1% in global warming (Come on! I didn't mean that particular crop )
As for tourism we've already mentioned lower costs. This should mean lower fares to, and from the Island. We could lower impot duties which only account for, I believe, £3million to States coffers. It would encourage day-trippers to take advantage of real duty-free shopping. In the long run the lowered impot duties should entice a higher yield due to economy of scale.

Casino? What other location would be more ideal than Fort Regent; high on a hill-top lit up with lazers and a stones-throw from the harbour and those private yachts that don't have to suffer GST on their fuel?

High-yield per head industries? What about soft-ware developers? The computer game developers are a good example of such a high yield per head venture. We wouldn't have to ask EA Sports to decamp from Redwood, California, but we could entice part of their European contingent to re-locate here. ( EA Sports employ 8,500 people world-wide, and reported net profits last year of $3.5 billion. Don't forget it's only a maximum of 90% of our finance industry that decamps. The other 10% will cater for new investment which brings me on to my final point not addressed by OXERA.

- Since when have you ever heard of a market sector, such as finance, totally disappearing from any jurisdiction's economy? We've seen historic examples of a bad economy mis-managed into a wheel-barrow economy from time to time, but never disappearing. Who is to say that had we not opted for 0/10 the finance industry would have emigrated never to return. The Isle of Man moved to 0/10 in 2004. Jersey is not due to do the same until 2011. That's 7 years difference. Where is this mass exodus of our highly mobile finance industry? From what I read Jersey's finance sector reports year on year profits!

We still have a States Assembly capable of economic stimulation through innovative legislation no matter who's in charge. Necessity is the mother of invention. And when it comes to innovation, and invention, Jersey people are never found wanting.

[revolution]

IF IT ALL GOES WRONG WE WILL HAVE TO PAY FOR THEM TO GET OUT OF THEIR MESS
WIV FINANCE IT IS ALWAYS WIN WIN FOR THEM