Comment: parasites and power

Thursday 15 February 2018

What has the finance industry ever done for us? You mean aside from paying the island's bills?

Of course, the true picture is far more complex than that, and here, Express columnist - The Insider - gives his personal view from within the corridors of the island's principal industry. He believes that we should actually be focussing our attention on the value being delivered by the senior levels of the civil service.

"“The finance industry is a parasite.”  I have often heard this, either explicitly or implicitly, in arguments against the industry, suggesting that it is living off its Jersey host, whilst causing a number of unpleasant side effects. 

The argument generally runs along the lines that the island has been ruined, house prices are too high, the cost of living is too high, the ordinary Jersey ‘man’ has not benefited, and Jersey is seen as a den of dodgy offshore tax evaders which undermines our international reputation (surely, no worse than Bergerac!)

There is usually very little fact to back-up whichever combination of negative symptoms is used in the argument.

It has often caused me to ask myself, if we are a parasite, how do we avoid killing (or being killed by) our host, so that we can keep a mutually beneficial relationship going? 

The definition of a parasite is an organism which lives off another organism, obtaining nourishment and protection.  The term is used in a derogatory sense to imply that the parasite is nourished at the host’s expense, and that the host gets no benefit.

You could certainly argue that the finance industry has ‘captured’ its host in the sense that much of the establishment dances to its tune; but it would be utterly wrong to say that the host gets no benefit.

The vast majority of tax taken locally comes directly, or indirectly, from the finance industry. Every restaurant, hotel, bar and taxi driver is, to a greater or lesser extent, dependent upon it.  Every homeowner coming up to retirement has the finance industry to thank, to a large extent, for the substantial growth in asset values which will fund a comfortable retirement on downsizing.

Clearly, there are some negative side effects.  If you are not earning the very high average salary, then you will feel left out; and the sense of exclusion will be amplified by the extent of the wealth all around you.

As in most economies, there is a failure of wealth to ‘trickle down’ to all areas.  It is true to say that in general, the rich get richer whilst the poor at best stay poor, and at worst get poorer.  But is that the fault of the finance industry?

Part of the issue is the management of perception, and the industry has certainly got to do a better job in convincing those who feel marginalised that it is, on balance, a force for good.  Which it clearly is.

When critics point to distortion in the local economy resulting from the success of the finance industry, the blame should actually fall on the failure of the government to effectively manage the side effects.

I have some sympathy for the hard working, but largely ineffective, politicians who are doing a job that I would not volunteer for; but there is an army of highly paid civil servants below them. 

This is not to criticise the hard-working men and women at the ‘coal face.’  Many of them express similar frustration at the layers of ineffective management above them, and have become demoralised that they don’t have the proper resources to do the job.  Friends of mine within the civil service are immensely frustrated by the weakness of senior management.

I am questioning the value for money being delivered by those earning £100k+, with very large pension pots. Are these unaccountable figures the real 'parasites'?

I would like to see the new crop of politicians backing the fresh CEO Charlie Parker in his fight for change - but stressing that this does not necessarily need to involve a confrontation with front-line staff.

Indeed, if savings from culling those at the top, or in the middle, can be reinvested in the front-line, then the workers might be ‘captured’ as agents of change, with a vested interest in the outcome. 

Under those circumstances, we might find that the change is quicker, and the savings greater, than we all imagine. 

It seems to me that change is long overdue and that until this nettle is grasped we are unlikely to get the effective government which is so necessary to the challenges mounting in front of the island. 

At the same time, the finance industry needs to work harder in communicating the benefits it brings, and helping to reach out to the marginalised in terms of improving social mobility."

The views expressed in this article are those of the columnist, and are not necessarily shared by Bailiwick Express.