T Y N W A L D C O U R T O F F I C I A L R E P O R T
R E C O R T Y S O I K O I L Q U A I Y L T I N V A A L
P R O C E E D I N G S
D A A L T Y N
HANSARD
Douglas, Tuesday, 20th May 2014
All published Official Reports can be found on the Tynwald website www.tynwald.org.im/Official Papers/Hansards/Please select a year:
Reports, maps and other documents referred to in the course of debates may be consulted on application to the Tynwald Library or the Clerk of Tynwald’s Office. Supplementary material subsequently made available following Questions for Oral Answer is published separately on the Tynwald website, www.tynwald.org.im/Official Papers/Hansards/Hansard Appendix
Volume 131, No. 12
ISSN 1742-2256
Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2014 TYNWALD COURT, TUESDAY, 20th MAY 2014
Present:
The President of Tynwald (Hon. C M Christian)
In the Council: The Acting Attorney General (Mr J Quinn), Mr R P Braidwood, Mr D M W Butt, Mr M R Coleman, Mr C G Corkish MBE, Mr E A Crowe, Mr A F Downie OBE and Mr J R Turner with Mr J D C King, Deputy Clerk of Tynwald.
In the Keys: The Speaker (Hon. S C Rodan) (Garff); The Chief Minister (Hon. A R Bell) (Ramsey); Mr D M Anderson (Glenfaba); Hon. W E Teare (Ayre); Mr A L Cannan (Michael); Hon. T M Crookall (Peel); Mr P Karran, Mr Z Hall and Mr D J Quirk (Onchan); Hon. R H Quayle (Middle); Mr J R Houghton and Mr R W Henderson (Douglas North); Mr D C Cretney and Mrs K J Beecroft (Douglas South); Hon. C R Robertshaw and Mrs B J Cannell (Douglas East); Hon. J P Shimmin and Mr C C Thomas (Douglas West); Mr R A Ronan (Castletown); Mr G D Cregeen (Malew and Santon); Hon. J P Watterson, Hon. L D Skelly and Hon. P A Gawne (Rushen); with Mr R I S Phillips, Secretary of the House.
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Business transacted
Leave of absence granted ...... 1475 Procedural – Tynwald and House of Keys Standing Orders to be laid electronically...... 1475 Procedural – Item 5 postponed to June sitting...... 1475 Bills for signature ...... 1476 Papers laid before the Court...... 1476 Questions for Oral Answer ...... 1478 1. Financial regulations – Council of Ministers’ ability to set aside ...... 1478 2. Ci65 Ltd – Council of Ministers’ authority to appoint ...... 1480 3. Health Inspection Fund – Ministerial role in decisions re payments ...... 1482 4. United Nations International Covenant on Economic, Social and Cultural Rights – Contribution to sixth periodic report ...... 1484 5. Chief officers – Terms and conditions ...... 1485 6. Vulnerable people – Definition; numbers ...... 1487 7. Ci65 Ltd – Due diligence performed by Treasury ...... 1490 8. Public Sector Employees Pension Reserve – Annual withdrawals; depletion of fund ... 1494 9. Noble’s Hospital reviews – Financial provision made re any changes required ...... 1495 10. ISAs– Treasury’s view on introducing a scheme ...... 1498 11. Pension pots – UK announcement re use by retirees ...... 1501 12. Retail properties – Plans to address high rents ...... 1502 13. Action Plan for the Island’s Green Lanes – Statement ...... 1506 14. Green lanes – Promotion of more sustainable activities...... 1507 15. Bus timetables and routes – Involvement of general public in changes ...... 1510 16. Public sector pensions – Cost-sharing proposals ...... 1510 17. United Nations International Covenant on Economic, Social and Cultural Rights – Advice sought re contribution to sixth periodic report ...... 1512 Questions for Written Answer ...... 1514 2.18. Cannabis – Decriminalisation ...... 1514 2.19. General Elections of 2006 and 2011 – Statistical information ...... 1514 2.20. Legal aid – Impact of recent changes on annual spend ...... 1515 2.21. Family courts – Consideration of practice guidance on transparency ...... 1515 2.22. Dilapidated properties – Local authority powers to compulsorily purchase ...... 1516 2.23. Dilapidated properties – Application of Local Government Act 1985, section 26 .... 1516 2.24. Nurses – Further information on bands 7,8 and 9 ...... 1517
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2.25. Watercourses and drainage works on privately owned land – DoI statutory duties, responsibilities and rights ...... 1518 2.26. Marine Development Order – Date for bringing to Tynwald ...... 1519 2.27. Safeguarding Children Board – Modification of information-sharing guidance ...... 1520 2.28. Watercourses and drainage works on privately owned land – MUA statutory duties, responsibilities and rights ...... 1521 Order of the Day ...... 1523 3. Manx National Insurance Fund – Statement by the Minister for Policy and Reform .... 1523 4. Armed Forces Covenant – Statement by the Armed Forces Champion ...... 1531 5. Supplementary Capital Authorities – Motion not made ...... 1533 6. Children’s Services Joint Improvement Plan – Debate commenced ...... 1535 The Court adjourned at 1.05 p.m. and resumed its sitting at 2.30 p.m...... 1537 Children’s Services Joint Improvement Plan – Debate concluded – Motion carried ...... 1538 7. Tynwald Honours Committee – First Report received and recommendation approved 1540 8. Social Affairs Policy Review Committee – Pre-school education – Third Report received and recommendations approved ...... 1543 Announcement of Royal Assent ...... 1569 9. Tynwald Management Committee – Fees for searches – Report received and recommendation approved ...... 1570 The Court adjourned at 5.11 p.m. and resumed its sitting at 5.35 p.m...... 1574 10. Control of Employment Act 1975 – Control of Employment (Chief Officers of Departments Etc) Order 2014 approved ...... 1574 11. Education Act 2001 – Education (Student Awards) Regulations 2014 approved ...... 1577 12. Income Tax Act 1970 – Income Tax (Social Security Benefits) (Exemptions) Order 2014 approved ...... 1581 13. Customs and Excise Act 1993 – Customs and Excise Acts (Amendment) Order 2014 approved ...... 1582 14. Customs and Excise Act 1993 – Export Control (Amendment) Order 2014 (Application) Order 2014 approved ...... 1583 15. Value Added Tax Act 1996 – Value Added Tax Act 1996 (Amendment) Order 2014 approved ...... 1584 16. Audit Act 2006 – Audit (Local Government) Direction Order 2014 approved ...... 1584 17. Farm and Horticultural Improvement Scheme 2006 – Farm and Horticultural Improvement Scheme 2006 (Amendment) Scheme 2014 approved ...... 1587 18. Dogs Act 1990 – Dogs (Exemption) (Amendment) Order 2014 approved ...... 1587 19. Annual review of the Financial Supervision Commission – Amended motion carried . 1588 20. Means testing of state pensions – Amended motion carried ...... 1591 21. Construction industry – Strategic plan for development of Government-owned land – Debate commenced ...... 1610 Suspension of Standing Order 1.2(2) to conclude Item 21 – Motion lost ...... 1615 Suspension of Standing Order 1.2(2) to continue until 9.30 p.m. – Motion lost ...... 1617
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Suspension of Standing Order 1.2(2) to complete Order Paper – Motion carried ...... 1618 Construction industry – Strategic plan for development of Government-owned land – Debate concluded – Motion carried ...... 1619 22. Planning administration – Planning Committee decisions and delegation of functions – Motion lost ...... 1620 23. Public sector and state pensions Amended motion carried ...... 1631 24. Public Sector Pensions Authority Report to Tynwald 2013 – Amended motion carried ...... 1644 The Council withdrew...... 1656 House of Keys ...... 1657 The House adjourned at 10.30 p.m...... 1657
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Tynwald
The Court met at 10.30 a.m.
[MADAM PRESIDENT in the Chair]
The Deputy Clerk: Hon. Members, please rise for the President of Tynwald.
The President: Moghrey mie, Hon. Members.
5 Members: Moghrey mie, Madam President.
The President: In the absence of the Lord Bishop, the Chaplain will lead us in prayer.
PRAYERS The Chaplain of the House of Keys
Leave of absence granted
The President: Hon. Members, the following leaves of absence have been given: the Lord Bishop for today; Mr Teare from the end of the morning sitting today; Mr Singer for the entire 10 sitting; Mr Wild, who is still unwell and in hospital – I am sure Members will join me in wishing him a speedy recovery from his illness. (Members: Hear, hear.) It is possible that the Chief Minister will join us a little late tomorrow because of another appointment.
Procedural – Tynwald and House of Keys Standing Orders to be laid electronically
The President: Before we start the session, may I ask the Court’s permission for the Clerk to 15 lay the latest edition of the Tynwald Standing Orders and House of Keys Standing Orders electronically at the next sitting, rather than in paper form? Is this agreed, Hon. Members? (Members: Agreed.) Hard copies of the revised Standing Orders will be circulated in due course.
Procedural – Item 5 postponed to June sitting
The President: As Hon. Members already know, Item 5, which is a Treasury motion, will not be moved at this sitting but will be postponed until next month. 20
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Bills for signature
The President: Hon. Members, I have to announce that the following Bills are ready for signature: the Criminal Justice, Police Powers and Other Amendments Bill 2013; and the Post Office (Amendment) Bill 2013. With your agreement, Hon. Members, these will be circulated for signing while we proceed 25 with business. Is that agreed?
Members: Agreed.
Papers laid before the Court
The President: I call on the Clerk to lay papers.
30 The Clerk: Ta mee cur roish y Whaiyl ny pabyryn enmyssit ayns ayrn nane jeh’n Chlaare Obbyr. I lay before the Court the papers listed at Item 1 of the Order Paper.
Control of Employment Act 1975 Control of Employment (Chief Officers of Departments Etc) Order 2014 [SD No 2014/0158] Education Act 2001 Education (Student Awards) Regulations 2014 [SD No 2014/0159] Income Tax Act 1970 Income Tax (Social Security Benefits) (Exemptions) Order 2014 [SD No 2014/0122] Customs and Excise Act 1993 Customs and Excise Acts (Amendment) Order 2014 [SD No 2014/0115] Export Control (Amendment) Order 2014 (Application) Order 2014 [SD No 2014/0127] Value Added Tax Act 1996 Value Added Tax Act 1996 (Amendment) Order 2014 [SD No 2014/0132] Audit Act 2006 Audit (Local Government) Direction Order 2014 [SD No 2014/0148] Farm and Horticultural Improvement Scheme 2006 Farm and Horticultural Improvement Scheme 2006 (Amendment) Scheme 2014 [GC No 2014/0023] Dogs Act 1990 Dogs (Exemption) (Amendment) Order 2014 [SD No 2014/0145]
Reports Tynwald Management Committee: First Report for the Session 2013-2014: Fees for Searches [PP No 2014/0069] Tynwald Honours Committee: First Report for the Session 2013-2014 [PP No 2014/0047] Children’s Services Joint Improvement Plan in Response to Scottish Inspectorate Report [GD No 2014/0033]
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Note: The following items are not the subject of motions on the Order Paper
Documents subject to negative resolution European Communities (Isle of Man) Act 1973 Community Design Regulations 2014 [SD No 2014/0089] Community Trade Mark Regulations 2014 [SD No 2014/0090] Patents (Supplementary Protection Certificates) Regulations 2014 [SD No 2014/0091] Fisheries Act 2012 Inland Fisheries (Tidal and Freshwater Boundaries of Rivers) Order 2014 [SD No 2014/0142] High Court Act 1991 Rules of the High Court (Family Proceedings) (Amendment) 2014 [SD No 2014/0167]
Documents subject to no procedure Value Added Tax Act 1996 Value Added Tax (Amendment) (No. 2) Regulations 2014 [SD No 2014/0131] Currency Act 1992 Currency (John McGuinness) (50 Pence Coins) Order 2014 [SD No 2014/0164] Building Control Act 1991 Building Regulations 2014 [SD No 2014/0165] Summary Jurisdiction Act 1989 Summary Jurisdiction (Amendment) Rules 2014 [SD No 2014/0166]
Reports Annual Report on the Activities of the Manx Industrial Relations Service for 2013 [GD No 2014/0026] Report by the UK Government Actuary on the Operation of the Social Security Acts in the Isle of Man for the period 1st April 2007 to 31st March 2012. Presented to Tynwald pursuant to Section 166 of the Social Security Administration Act 1992 (as applied to the Isle of Man) [GD No 2014/0029] Notice by the Registrar of Members’ Interests under Rule 6(1)(iv) [PP No 2014/0065] Department of Education and Children’s Response to the Social Affairs Policy Review Committee Third Report for the Session 2013-2014: Pre-School Education [GD No 2014/0031] [This item is relevant to the Social Affairs Policy Review Committee Report [PP No 2014/0027] which is due to be debated at this sitting as Item 8] Environment and Infrastructure Policy Review Committee Second Report for the Session 2013/14: The Countryside Care Scheme [PP No 2014/0014] [In accordance with Tynwald's resolution of 18th January 2011 this report will be considered, along with the Government’s response, no later than the second sitting after this one.] Department of Home Affairs Police Advisory Group Report for 2013 [GD No 2014/0030] Council of Ministers First Annual Report on the Operation of the Armed Forces Covenant [GD No 2014/0034]
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Questions for Oral Answer
CHIEF MINISTER
1. Financial regulations – Council of Ministers’ ability to set aside
The Hon. Member for Douglas South (Mrs Beecroft) to ask the Chief Minister:
Under what circumstances the Council of Ministers is able to set aside financial regulations?
35 The President: We turn to our Question Paper, Hon. Members. I call on the Member for Douglas South, Mrs Beecroft, to ask the Question standing in her name.
Mrs Beecroft: Thank you, Madam President. 40 I ask the Question in my name.
The President: Chief Minister to reply.
The Chief Minister (Mr Bell): Madam President, the financial regulations are, as their 45 introduction says, issued by the Treasury as required by section 3 of the Treasury Act 1985, which states that one of their primary aims is to supervise and control all matters relating to the financial affairs of the Government. The regulations apply with few exceptions to the Manx public sector. The designated bodies are bound to comply with the directions comprising part 1 of the regulations. As the Treasury 50 issues the regulations under its statutory powers, it is for the Treasury to maintain them, to update them from time to time, to enforce them and to determine what action should be taken should they not be complied with. The functions of the Council of Ministers are set out in the Government Code. The Code makes clear that the statutory functions of the Council of Ministers are limited. However, Hon. 55 Members should note paragraph 1.15 of the Government Code, which I read out in full:
‘An important statutory reserve power which the Council has is the ability to issue directions to Departments and Statutory Boards in relation to any matter which appears to the Council to affect the public interest.’
Madam President, in concluding, I can say that there is a potential power which the Council of Ministers could use in order to direct the Treasury in relation to the financial regulations. I can, however, inform this Court that this power has not been exercised in relation to the work of Treasury during my time as Chief Minister. 60 The President: Supplementary question, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Chief Minister clarify: when he says that Treasury can determine what action if 65 financial regulations are not complied with, surely there must be something laid down to say what action should be taken; and if it is the Council of Ministers who actually make a decision that does not comply with financial regulations, is it down to Treasury then to determine what action should be taken against the Council of Ministers? Perhaps a bit of clarity on that. Also, the Chief Minister just mentioned the direction that can be given to Departments, but 70 this is surely the other way round to what I am asking about – it is where the Council of Ministers actually take a decision; it is not where they are dictating to a Department. ______1478 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: Chief Minister.
The Chief Minister: If the Hon. Member is unclear about the wording of the intent of these 75 financial regulations, Madam President, I can circulate them. I am sure Treasury would be happy to circulate them to make sure that Members are fully briefed with what the situation is.
The President: A further supplementary, Mrs Beecroft.
80 Mrs Beecroft: Thank you, Madam President. If it is found that the Council of Ministers have not complied with financial regulations, what sort of mechanism is there for censuring, or whatever? Is it possible that there is a surcharge put on the Council of Ministers, or is it individual Ministers under collective responsibility? What actually is the position if the Council of Ministers have made a decision that they did not have 85 the right to?
The President: Chief Minister.
The Chief Minister: Madam President, I am aware of the issue that the Hon. Member is 90 referring to. We are getting an independent legal assessment of that decision and at that point we will know whether any misguidance has taken place. As to the specific case, as far as I am aware, this has never happened before and I am not aware of what the circumstances would be.
95 The President: Final supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Whilst the questions obviously do relate to a case, the questions I am asking are of a broader nature, so it is a broader response that I would like to actually… the principle of this – if the Chief 100 Minister would revisit his response again and answer it as a principle, rather than as one issue.
The President: Chief Minister.
The Chief Minister: I answered the Question, Madam President – the Hon. Member clearly 105 did not pick up what I was saying – but I will clarify the situation and arrange for an explanation to be circulated to Members.
The President: The Hon. Member, Mr Karran.
110 Mr Karran: Eaghtyrane, could the Ard-shirveishagh tell us where will he be getting his legal advice from and whether the likes of… Doesn't the Chief Financial Officer advice the Council of Ministers when they are acting outside the regulations? Is not the Chief Financial Officer part of CoMin still, from my days when I was there?
115 The President: Chief Minister.
The Chief Minister: It is very clear. All Members will know, Madam President, that both the Attorney General and the Chief Financial Officer are in attendance on a weekly basis at every meeting to ensure that Council does not step outside its legal authority. That has been the case 120 to date and it will continue to be the case. The Hon. Member knows full well what the situation is.
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2. Ci65 Ltd – Council of Ministers’ authority to appoint
The Hon. Member for Douglas South (Mrs Beecroft) to ask the Chief Minister:
Under what authority the Council of Ministers appointed Ci65 Ltd as consultants for the second phase of the review of National Insurance and benefits?
The President: Question 2. The Hon. Member for Douglas South, Mrs Beecroft.
125 Mrs Beecroft: Thank you, Madam President. I ask the Question in my name.
The President: The Chief Minister to reply.
130 The Chief Minister (Mr Bell): Madam President, the Council of Ministers did not appoint Ci65 Ltd as consultants for the second phase of the Social Security and National Insurance review.
The President: Supplementary question, Mrs Beecroft. 135 Mrs Beecroft: Thank you, Madam President. Could the Chief Minister then confirm who did sign the contract with Ci65, who signed the official order, what date were both of these signed and on what date did the Council of Ministers agree to the hiring of Ci65? 140 The President: Chief Minister.
The Chief Minister: This was a joint approach, as I understand it, Madam President, with the Department of Social Care and Treasury, and all the paperwork in relation to that was signed by 145 those Departments.
The President: Supplementary, Mr Houghton.
Mr Houghton: Thank you, Madam President. 150 Could the Chief Minister advise why no FD8 waiver was sought following the meeting of the Council of Ministers? Were they advised of this in the meeting? Can he just elaborate on those two points, please?
The President: Chief Minister. 155 The Chief Minister: I was not at the meeting, Madam President, so I cannot answer the question. The Treasury Minister was at the meeting and he was satisfied with the proceedings which took place.
160 The President: Supplementary, Mr Karran.
Mr Karran: Could the Ard-shirveishagh tell us why the financial regulations appear to have been ignored as far as this issue is concerned?
165 The President: Chief Minister.
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The Chief Minister: As far as I understand it, there was no ignoring of financial regulations at all. This is just a point which has been raised by Mr Karran.
170 The President: Supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Chief Minister clarify was there an official order completed, as specified under FD3 of financial regulations? 175 The President: Chief Minister.
The Chief Minister: I am sure all the paperwork was correct.
180 The President: Supplementary, Mr Hall.
Mr Hall: Thank you, Madam President. Can the Chief Minister confirm against what precise benchmarks did the Council of Ministers agree the price of the contract? 185 The President: Chief Minister.
The Chief Minister: I understand that the proposal was brought to the Council by the Minister for Social Care, the Treasury was in attendance and the background to the paper was 190 explained to Council at that time.
The President: Supplementary, Mr Houghton.
Mr Houghton: Thank you, Madam President. 195 Can the Chief Minister advise whether he and the Council of Ministers were actually aware that the firm that they were contracting to was very much in its embryonic stage of being set up; and who advised that this particular company should be appointed rather than appointing a company that had a greater track record and understanding of it… rather than this particular company? It is crucial that the Chief Minister advise us why and how this actually happened 200 where this company actually was only being formed at the time. Can he throw some further light on that?
The Chief Minister: Extensive answer, Madam President, has been given to questions over the last few weeks, and I am pretty sure this point was covered as well. I do not have that 205 answer. It was a decision taken within the Department of Social Care and it was ultimately endorsed by Treasury and by the Council of Ministers.
The President: We are straying somewhat from the original Question. Supplementary, Mrs Beecroft. 210 Mrs Beecroft: Thank you, Madam President. Could the Chief Minister clarify why Ci65 was actually appointed at this time, given that we have only just got the actuarial review, which is tabled later on the Order Paper? I would have thought anybody looking to review and report would have actually needed the up-to-date 215 figures.
The President: Chief Minister.
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The Chief Minister: Madam President, this answer has been given on a number of occasions 220 to the Hon. Member and to this place, and indeed, I think, to the House of Keys. It was quite clear that the Department felt they needed as much information as possible upon which to develop further strategies to this vitally important element of Government policy, and therefore… They believed this was the best way forward to give them that background knowledge which they could then overlay with the actuarial report, and that then would enable 225 them to plan the long-term strategy. This answer has already been given.
The President: Final supplementary. Mr Thomas.
Mr Thomas: Thank you, Madam President. 230 Does the Chief Minister not worry that the authority of the Council of Ministers making this decision was diminished, because if all firms had known about phase 2 – an £800 million contract – they might have come in and there might have be more experienced firms? (Mr Robertshaw: £800 million?) Eight hundred thousand.
235 The President: Chief Minister.
The Chief Minister: No, I do not.
The President: Question 3. 240 Mr Houghton: Madam President, if I may just have one final question?
The President: No, I have said ‘final supplementary’. We have had an extensive number of supplementaries.
3. Health Inspection Fund – Ministerial role in decisions re payments
The Hon. Member for Douglas West (Mr Thomas) to ask the Chief Minister:
What role the (i) Minister for Health and Social Care, (ii) Treasury, (iii) Council of Ministers and (iv) Tynwald play in respect of decisions about payments in and out of the Health Inspection Fund?
245 The President: We will move on to Question 3. The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President. I beg leave to ask the Question standing in my name. 250 The President: The Chief Minister to reply.
The Chief Minister (Mr Bell): Madam President, when proposing in his Budget this year that the Health Inspection Fund should be set up, the Treasury Minister said: 255
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‘This fund is being proposed as we are aware that the quality review currently underway at Noble’s Hospital may result in recommendations to bolster resources in some areas. Having said this, the Council of Ministers wants to ensure that any increases in health budgets are targeted and that all possible efficiencies are found, prior to giving additional funds. An Internal fund is a better way to deal with this issue than simply increasing the vote of the Department. The resources are set aside, but will only be used if necessary.’
Tynwald approved the creation of this Fund. The Department of Health and Social care will be required to seek the approval of Treasury on a case-by-case basis before drawing from the Fund. The Council of Ministers will not play a direct part in this process, although I am sure that the 260 Minister for Health and Social Care will be giving us regular updates on any changes which prove necessary at Noble’s or elsewhere in his Department. Madam President, this Hon. Court approved the creation of the Fund, as I said just now. Tynwald will not be required to give any further approvals to individual business cases relating to the use of the Fund. 265 Details of how the Fund has been used during the financial year will be presented to Tynwald as part of the Budget and national accounts process, as is the case with other internal reserve accounts.
The President: Supplementary question, Mr Thomas. 270 Mr Thomas: Thank you, Madam President, and to the Chief Minister for providing more information. I note in the Pink Book at page 9, the Isle of Man Budget 2014-15, there is the phrase that the drawdowns from this Fund will be made if approved by the Council of Ministers during 2014-15. 275 There is not actually any mention of the Health and Social Care Department at all in the Pink Book, so I just wanted to clarify because that seems different from what the Chief Minister has just said now.
The President: Chief Minister to reply. 280 The Chief Minister: The Fund ultimately is in the control of Treasury and ultimately, obviously, the Council of Ministers has overall responsibility for the Budget in those terms. It would have been much easier, if the Hon. Member has a query about this, if the Member had spoken directly to the Treasury Minister, who could have explained very easily what the 285 problem was.
The President: Supplementary question, Mr Thomas.
Mr Thomas: Thank you, Madam President. 290 The Treasury Minister told me, on 6th May, that this Fund was hypothecated so that it was in a separate reserve, so it would be made available if it was required. Can the Chief Minister advise then whether this Fund will be extinguished at the end of 2014-15 and the money will go back into the general revenue account, from where it came?
295 The President: Chief Minister.
The Chief Minister: The Hon. Member has been speaking to the Treasury Minister; I am sure the Treasury Minister will have told him that.
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4. United Nations International Covenant on Economic, Social and Cultural Rights – Contribution to sixth periodic report
The Hon. Member for Douglas West (Mr Thomas) to ask the Chief Minister:
Pursuant to the April 2014 Tynwald resolution encouraging Isle of Man civil society to prepare and submit its own report to the UN Committee on Economic, Social and Cultural Rights in connection with the sixth periodic report regarding the UN International Covenant on Economic, Social and Cultural Rights: UK, British Overseas Territories, Crown Dependencies, what support the Government will provide to enable equal participation for all in its preparation and submission?
300 The President: Question 4. The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you very much, Madam President. I beg leave to ask the Question standing in my name.
305 The President: The Chief Minister to reply.
The Chief Minister (Mr Bell): Madam President, the resourcing of any response to the UN Committee on Economic, Social and Cultural Rights is a matter for the body making that submission. 310 The President: Supplementary question, Mr Thomas.
Mr Thomas: Thank you very much, Madam President. The body making the submission to the Ministry of Justice and then on to the United Nations 315 is the External Relations department, and I believe the Chief Minister is responsible for the External Relations department so I repeat my Question.
The President: Chief Minister.
320 The Chief Minister: And I repeat the Answer.
The President: Supplementary question, Mr Thomas.
Mr Thomas: Thank you, Madam President. 325 In 2009, the United Nations fed back to the United Kingdom, which is responsible for the Isle of Man, but it recommended including adequate support to civil society and national human rights institutions in their efforts in relation to awareness-raising about these issues. It also recommended to us that there were efforts to improve awareness. Does the Chief Minister not think that a few hundred pounds supporting engagement with 330 people who are affected by this Covenant would be money well spent?
The President: Chief Minister.
The Chief Minister: Clearly this report is a reasonably important issue, and Government will 335 certainly do its best to guide the civil organisations in putting their responses together. I would point out, though, the United Kingdom itself does not give support to the civil groups that the Hon. Member refers to, and indeed I understand in the United Kingdom there is actually an NGO body itself which co-ordinates the private sector response.
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340 The President: A further supplementary, Mr Thomas.
Mr Thomas: Does the Chief Minister then confirm that the External Relations department, which is responsible, welcomes a civic society group putting together a response and will offer all the encouragement it can, as the Treasury Minister said back in April? 345 The President: The Chief Minister.
The Chief Minister: I fail to understand the point of this question, Madam President, because Government has made it very clear we have made responses to the UN for many years and we 350 would encourage the private sector to do so as well. There is nothing unusual about this.
5. Chief officers – Terms and conditions
The Hon. Member for Onchan (Mr Karran) to ask the Chief Minister:
What plans he has to introduce changes to the terms and conditions for chief officers, such as a five-year contract and a system for chief officers to be held to account for the manner in which they carry out their duties?
The President: Question 5. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, I ask the Question standing in my name.
355 The President: The Chief Minister to reply.
The Chief Minister (Mr Bell): Madam President, as Hon. Members will be aware, terms and conditions of service are a matter for individual employing authorities and it must be for each employer to consider the need to introduce changes and to progress some through established 360 collective bargaining mechanisms, or other means, as appropriate. Having said that, I can confirm that the concept of limited-term contracts and new performance reporting mechanisms for departmental chief executives are being explored at present, and once the Civil Service Commission has determined its position on these issues, I will ensure Hon. Members are informed. 365 The President: A supplementary question, Mr Karran.
Mr Karran: Eaghtyrane, I would like to thank the Ard-shirveishagh for his reply. I am glad to see some positive movement on this point, allowing for the fact that I did bring 370 in a five-year contract for the Chief Executive of the Water Authority when I was Chairman. Would he not agree that the fact is that it needs to be collective and not trying to give it to individual Departments? If these public servants want private sector rates of pay and conditions, then they have private sector accountability – would the Chief Minister agree with that?
375 The President: Chief Minister.
The Chief Minister: Yes, I would.
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The President: A supplementary question, Mrs Beecroft. 380 Mrs Beecroft: Thank you, Madam President. Could the Chief Minister confirm whether the Civil Service Commission… whilst they are looking at all these other things, are they actually looking at having some sort of performance targets within the contracts? 385 The President: Chief Minister.
The Chief Minister: I do not know the specific terms of this review which is taking place at present, Madam President. The Hon. Member would be much better asking the Chairman of the 390 Civil Service Commission.
The President: A supplementary, Mr Karran.
Mr Karran: Could the Ard-shirveishagh… I thank him for his original positive response; but 395 allowing for the fact that we have never seen a chief executive ever held to account on the number of things… could he see whether it is possible to give it more priority in order to help him and his Ministerial colleagues in the difficult times we have, as far as trying to make hard decisions – that you at least need the decent staff to be kept on and the ones that are not kept on… being got rid of? 400 The President: Chief Minister.
The Chief Minister: It already has a high priority, in my estimation, Madam President. Part of the proposals which we are working up at the moment obviously relate also to the 405 Public Services Commission, which I am grateful that the House of Keys passed unanimously very recently. That will have some impact on the operation of the overall management structure, but certainly the challenges facing the Isle of Man over the next few years are pretty enormous – quite separate from the rebalancing of the Government Budget – and therefore we need the best possible people we can get in key managerial roles; not just chief executives, but also key 410 posts below the chief executives. It is my ambition to make sure the Isle of Man does its best to achieve that.
The President: A supplementary, Mrs Beecroft.
415 Mrs Beecroft: Thank you, Madam President. Could the Chief Minister confirm whether he would be in favour then of performance targets for chief officers and these key roles that he is referring to?
The President: Chief Minister. 420 The Chief Minister: I have absolutely no problem with that, Madam President, as long as the key performance targets are relevant to what we want to achieve.
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6. Vulnerable people – Definition; numbers
The Hon. Member for Castletown (Mr Ronan) to ask the Chief Minister:
What criteria he uses to define who is vulnerable; and how many people on the Isle of Man come into this category?
The President: Question 6. The Hon. Member for Castletown, Mr Ronan. 425 Mr Ronan: Thank you, Madam President. I beg leave to ask the Question standing in my name.
The President: The Chief Minister to reply. 430 The Chief Minister (Mr Bell): Madam President, I would refer the Hon. Member to the Answer given to the Hon. Member for Onchan, Mr Hall, in answer to an identical Question asked in another place on 25th February. In this Answer, it was stated that Council of Ministers have discussed the importance of having a workable definition of ‘vulnerable’ within which to set 435 policy-making parameters for protecting the vulnerable – one of Government’s core objectives. The Social Policy and Children’s Committee have also discussed this issue and have agreed that ‘vulnerable’ is impossible to define accurately, not least because it is subjective and individual circumstances change, with people requiring support at different times and at different levels. 440 Having said this, Government Departments are making significant progress on the Joint Strategic Needs Assessment involving the collation of data from Health, Social Care, Home Affairs, Education, OHR and Economic Development, which will provide the first integrated approach to where most social need is on the Island, which will greatly help target resources towards the vulnerable. 445 Consideration is also being given to using the triangular model, where people will move between support levels as their needs change. Most people will access universal services, moving up to additional needs then complex needs, with acute and statutory needs at the top. This model defines people based on their needs and recognises that not everyone who feels vulnerable needs support. 450 The President: A supplementary question, Mr Ronan.
Mr Ronan: Thank you, Madam President. I am delighted to see the Chief Minister mentioning the Joint Strategic Needs Assessment, 455 which is obviously going to be a key document for the Isle of Man. I would like to ask what proactive steps his Government is taking to address the causes of vulnerability in our society and how he, long-term, intends to reduce this number?
The President: Chief Minister, a fairly extensive question. 460 The Chief Minister: It is a very extensive question, Madam President, and certainly not one I can give a quick answer to now. I would suggest the Hon. Member comes and talks to me or, in particular, the Minister for Policy and Reform, who has been leading, firstly through his involvement in Social Care 465 previously and now in developing a broader strategy towards devising an across-Government approach to this particular issue.
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The President: A supplementary question, Mrs Beecroft.
470 Mrs Beecroft: Thank you, Madam President. Could the Chief Minister then explain how… In his three aims for his Government, two of them – to grow the economy and balance the budget – are actually measurable and we can see whether they have achieved that, whereas protecting the vulnerable is actually, as he said, impossible to define; so, as it is such a woolly statement, is there any point in having it in as an 475 aim of the Government?
The President: Chief Minister.
The Chief Minister: Madam President, the Hon. Member may feel helping the vulnerable is 480 not an important issue –
Mrs Beecroft: That is not what I said.
The Chief Minister: – for this Government to address, and that is obviously for her and her 485 political position. I believe passionately, Madam President, that we need to do all we possibly can to help those on low income, with health problems, with various social problems. There is a whole raft of areas where people can be identified, without having a specific definition attached to it, whom we know and believe to be vulnerable people. 490 It is vitally important that Government has a joined-up approach to vulnerability. It is very difficult, and the United Kingdom have had the same problem in trying to identify a specific short identification of what the vulnerable are, because needs change on a regular basis. What we are working towards… and it will not happen overnight, but we – certainly in the medium to long term – hope to be able to identify a process where we can identify specific individuals, 495 rather than a generic cross-society definition of what ‘vulnerable’ is. This takes time. It takes a lot of co-ordination across Government; but I do believe we are moving in the right direction. Whilst the Hon. Member might not feel it is important, it will remain – certainly while I remain Chief Minister – central to what we are trying to achieve; because if we fail to ensure that the benefits of economic growth, which we have enjoyed over 500 many years... if that fails to get down to those on lower incomes, pensioners and various people who are struggling for a variety of reasons, then we are going to store up more problems for the future.
Mrs Beecroft: A point of clarification, Madam President. 505 The Chief Minister has twice said that I have said I do not think that placing importance on the vulnerable is the right thing to do. That is absolutely wrong. As usual, he is twisting my words and putting a meaning to them that was not there. I have never said I do not think protecting the vulnerable is important. I have questioned him and his definition of it.
510 The President: I think your point is made. A supplementary question, Mr Ronan.
Mr Ronan: Thank you, Madam President. I appreciate, as the Chief Minister says, it takes time to identify and we all fully understand 515 that. Given one of his three main policy planks is to protect the vulnerable, does he truly believe – given the lack of money across Government – we are actually targeting those in our society who are truly vulnerable, and more focus now needs to be given to actively target those who are not? ______1488 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
520 The President: Chief Minister.
The Chief Minister: Yes, and this is the big challenge. It is identifying benefit for those genuinely in need, not who believe that they should have support. This means challenging universal benefits. It challenges the concept of benefits for life. It challenges many concepts, 525 Madam President. It will take time, because this is a partial unravelling of the welfare state that we have come to enjoy and recognise over the last 50 or 60 years, but it is absolutely essential if we are going to be able to evolve a sustainable support system for people in our community who are genuinely vulnerable. 530 We have to revisit all aspects of not just benefits, but law and order, health, and a whole raft of different areas, and identify first those who genuinely need help, to do our utmost to help the wider community to be more self-reliant and not fall back on the state constantly for support. We need to put in those support mechanisms to ease people back away from the benefits system. 535 It is work in progress. It will take a number of years before we have the whole model finalised, Madam President, but I do believe it is absolutely vital, for us to protect what we… [Inaudible] the welfare state into the future, that we have answers to these questions and we have a structure in place which genuinely helps those who actually need it.
540 The President: A supplementary, Mr Karran.
Mr Karran: Eaghtyrane, does the Ard-shirveishagh agree that obviously, with the reply to the Hon. Member for South Douglas, he needs a hearing test? (Mrs Beecroft: Hear, hear.) Would he not also agree that what the Hon. Member for South Douglas is on about is the lack 545 of clarity as far as this issue is concerned, and it is a classic example of lhiam-lhiat-ism, where it means all things to all people and nothing to anybody? Does he not feel that the answer has to be that if you cannot define it, then it really is quite meaningless if you are not prepared to… not about a sincere commitment of helping the vulnerable? 550 And further, would the Ard-shirveishagh not consider that Item 20 on this Order Paper would be one way of helping him to release funds in order to help him with the proud record we have seen in the past of helping the vulnerable as far as this society is concerned?
The President: Chief Minister. 555 The Chief Minister: Madam President, I cannot really add any more than I have already said. We have a sincere commitment to help those on the Island who genuinely need help. There is no quick and easy solution to this, and whilst it is very attractive to drift into sound-bite politics, I do not believe in that. I think we have got to work strategically across Government, 560 taking the best advice we can, not just on the Island, but off Island because many societies currently are struggling with the same challenge. There is no easy solution, Madam President, but we are committed to do it and we are making progress in a number of areas.
The President: A supplementary, Mr Hall. 565 Mr Hall: Thank you, Madam President. Would the Chief Minister not agree with me that a lot more thrust needs to go into collating the right data and statistics so that we can meaningfully assess vulnerability against the various benchmarks, such as the natural one, being poverty? 570 The President: Chief Minster. ______1489 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The Chief Minister: I agree entirely. We need as much statistical information as we can possibly get, and one of the steps we have already set in train with the restructuring is to move the Economic Adviser’s Division into the Cabinet Office to enable us to give, alongside the social 575 statistics that we have, the wider interpretation of the performance of the economy in key areas. The important thing for us in the longer term is to get as many people into work and out of the benefits system as possible, and by knowing where the opportunities lie within the economy and what we need to do economically, that will go a long way to actually help to restore the self- 580 esteem of these individuals and give them a much more fulfilling life than perhaps they are receiving on benefits.
The President: A supplementary, Mr Thomas.
585 Mr Thomas: Thank you, Madam President. Will the Chief Minister join with me in congratulating his colleague in the Cabinet Office on announcing last week that in the next few days he will actually be publishing poverty data, so we will have indices, seven of them, about deprivation in the Isle of Man?
590 The President: Chief Minister.
The Chief Minister: This is all part of the strategy, Madam President, which I have referred to. It may not be getting publicised on a daily basis, but a huge amount of work is going on behind the scenes at the moment to develop these strategies, based on the data the Hon. Member 595 refers to and as much other data as we can possibly get. There is no quick fix with this issue. We have to be persistent and drive on until we find a model which will work. It will take some time. It is not something which is going to be achieved in the short term.
TREASURY
7. Ci65 Ltd – Due diligence performed by Treasury
The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for the Treasury:
What due diligence Treasury performed on Ci65 Ltd before the Council of Ministers awarded them the second phase of the review of National Insurance and benefits?
The President: Question 7. The Hon. Member for Douglas South, Mrs Beecroft. 600 Mrs Beecroft: Thank you, Madam President. I ask the Question in my name.
The President: The Minister for the Treasury to reply. 605 The Minister for the Treasury (Mr Teare): Thank you, Madam President. Due diligence checks are concerned with the mitigation of risk. By discovering information about a tendering company, the Government is able to establish control as appropriate to any business risk associated with contracting with that company.
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610 In the case of Ci65 Ltd, the Department of Social Care and Treasury were aware the company had only just been incorporated prior to them being commissioned to perform the second phase of the review of Social Security and the National Insurance policies, and so standard checks would have returned no additional information over and above the identity of the directors and the capitalisation of the company. 615 The Departments were well aware of the risk associated with this lack of historical financial data; therefore, in order to mitigate the risk, the contract provides for payments to be made in arrears on delivery of specific pieces of work. Clearly, if the work does not get done or is unsatisfactory, the consultant will not be paid. In addition, members of the consultant’s delivery team are in daily contact with Treasury officers, so it would become immediately apparent if the 620 agreed pieces of work were not being progressed to my Department’s satisfaction. Madam President, Treasury is pleased with the way in which Ci65 is progressing the review and the materials it has so far produced, and has no concerns about Ci65’s ability to complete the review. However, it should be noted that should that position change, Treasury could, in accordance with its terms and conditions, terminate the contract. Whilst this would be 625 unfortunate and it would certainly delay a review of the utmost importance, the Treasury would not be liable to make any further payments to Ci65. Thank you, Madam President.
The President: A supplementary question, Mrs Beecroft. 630 Mrs Beecroft: Thank you, Madam President. Would the Treasury Minister agree with me that the talk of continuity of people is actually irrelevant in this context because the contract is with the company, not with the individuals? An individual could leave a company, other people could be appointed – the same with directors, 635 shareholders etc – and so there would be no continuity guaranteed as such. How comfortable does the Treasury Minister feel, saying that due diligence is satisfactory when the company has only been formed for two days prior to giving a presentation to the Council of Ministers?
640 The President: Treasury Minister.
The Minister: We are satisfied with the expertise that was demonstrated through the delivery of the first phase of the report. That expertise was still there in the shape of Ci65, and so there was certainly continuity. 645 We are talking about intellectual property here; not, in effect, where it comes to building projects. This is more of an intellectual project. The issue here is not due diligence per se, but how the risk was managed, and I am satisfied that by paying on results, Treasury and the Department of Social Care have demonstrated that that risk is being proactively managed.
650 The President: A supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Treasury Minister confirm whether at any stage he was advised by his Chief Financial Officer, or by any other officer, that either he or the Minister for Social Care was acting 655 or had acted outside of financial regulations in appointing Ci65?
The President: Minister.
The Minister: I was certainly not briefed in that manner. 660 The President: A supplementary question, Mr Houghton. ______1491 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Houghton: Thank you, Madam President. Bearing in mind that the Minister states that he pays on results, against what benchmark did the Council of Ministers, or indeed the Treasury, agree on the price of the contract… and 665 whether any Minister present had previously met and dealt with any team member from Ci65?
The President: Treasury Minister.
The Minister: I am not aware whether any other Members of the Council of Ministers had 670 met before, but it would be certainly very unusual anyway. This was a scheme which was discussed with the Council of Ministers, but it was in effect managed by Treasury and the Department of Social Care, who brought the programme forward together. The price of it… the cost of the original RSM Tenon report was very competitive and certainly compared very well. Off the top of my head, there were, I think, 13 companies who originally 675 indicated interest in the first contract, but I think there was only a small number. There were two who actually attended at the end of the day. So we have not got a big pool, as it were, of people who were wanting to actually deliver this project and we have to acknowledge too that this project is not just a single report; it is a series of reports, building into a very substantial workstream. 680 The President: Supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Treasury Minister clarify how many of the personnel transferred from one 685 company to the other to give him the grounds for saying that it is in continuity? And could he also confirm whether it is his opinion that it would have been better to wait for the actuarial report from the UK actuaries before appointing anybody? What figures were given to Ci65 to base any of their opinions on?
690 The President: Treasury Minister.
The Minister: I do not know… I am not aware because it is outside the scope of the original Question how many personnel came over from RSM Tenon to Ci65, but what I can say is that it would not have been better to wait for the UK government’s actuarial report into the state of 695 the NHI fund before commissioning this. Let us have a look at the actual phase 1 of this report. It has highlighted there has been a significant divergence in claims experience between the UK and the Isle of Man over the last decade or so. If we had to follow the UK claims experience, we would have been paying out considerably less than we are currently, and with the pressure on our finances we need to be 700 absolutely sure that the funds that the Government, on behalf of the taxpayer, is paying out are directed at the most vulnerable in our society, and that is important. How do we protect the vulnerable? We need the information to enable us to do so.
The President: Supplementary, Mrs Cannell. 705 Mrs Cannell: Thank you, Madam President. Can I ask the Minister, he has just told Tynwald Court that the matter was discussed with the Council of Ministers, but in another place, he told a committee that the matter had been approved by the Council of Ministers. Could he clarify for the Hon. Court, please, because we 710 have heard this morning from the Chief Minister that it was not approved by the Council of Ministers? Further, can I ask the Minister: he says that his Chief Financial Officer did not advise him about the FD8 waiver requirement and financial regulations. When then did he hear for the first ______1492 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
time that the FD8 waiver was a requirement under financial regulations for this type of 715 transaction which had not been followed?
The President: A number of questions. Treasury Minister.
The Minister: Actually, it is certainly well outside the scope of this Question, Madam 720 President, I would suggest. Certainly, before approving anything, surely people discuss it. So are we not talking about merely semantics here?
The President: Supplementary, Mrs Beecroft.
725 Mrs Beecroft: Thank you, Madam President. Given that the Treasury Minister has said that he does not know how many personnel transferred from one company to the other, how can he claim that it was given to Ci65 on the basis of continuity of people? It seems rather contradictory. If he could clarify this. And then he says, ‘Well, let’s have a look at these reports.’ Well, let us have a look at them. 730 Could he clarify when Tynwald Members are actually going to see them?
The President: Treasury Minister.
The Minister: The reports are coming in at the moment and I have just had the first set given 735 to me electronically in the last day. Having said that, we are currently working with Ci65. I have been impressed by the quality of the reports that are coming in –
Mrs Beecroft: That was not the question. 740 The Minister: We intend to have a full briefing of Hon. Members in July, because by that time the workstreams will have been finished, the reports will have come in and they will have been analysed. We have also got to remember that these workstreams, these reports have to be collated 745 and they have to be presented as a single issue to Hon. Members.
The President: Supplementary, Mr Houghton.
Mr Houghton: Thank you, Madam President. 750 If the Treasury Minister would be kind enough to advise, before this actual decision was made, who actually advised Treasury to approve the appointment of Ci65 – a company which was in its embryonic stage and with an unproven track record? Why did they go for such company?
755 The President: I think we have had the answer to that, but Treasury Minister.
The Minister: Unproven track record – if I could just deal with that. That is really, I would respectfully suggest, far from the truth, because the individuals who delivered the original report, which we were very content with, were still working on part of the team which was 760 delivering the other workstreams. (Interjection by Mr Houghton) Sorry, Hon. Member, the fact is that we were still dealing with the same people. So they had an established track record. The way that the contract was actually structured as well was payment on results. So as far as I can see, I feel the Treasury have acted appropriately in mitigating and managing the risk here. 765 ______1493 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: Final supplementary, Mr Hall.
Mr Hall: Thank you, Madam President. Can the Minister confirm whether at any stage prior to or after the meeting of the Council of 770 Ministers, the Chief Financial Officer advised the Minister for Social Care or his Chief Executive that they may be acting outside of financial regulations, or were acting outside of financial regulations? Is he aware of that and could he confirm?
The President: Treasury Minister. 775 The Minister: This was dealt with in evidence given to the Select Committee, but basically I think it was January that that matter was brought to the attention of the Department.
8. Public Sector Employees Pension Reserve – Annual withdrawals; depletion of fund
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
What the (i) extent and (ii) composition are of the annual withdrawal from the Public Sector Employees Pension Reserve; and when this fund is expected to be depleted?
The President: Question 8. The Hon. Member for Douglas West, Mr Thomas. 780 Mr Thomas: Thank you, Madam President. I beg leave to ask the Question standing in my name.
The President: The Minister for the Treasury to reply. 785 The Minister for the Treasury (Mr Teare): Thank you, Madam President. The amount forecast to be drawn from the Public Sector Employees Pension Reserves in 2013-14 was set out in the Budget, page 30 of the Pink Book, and showed that some £29 million will be used to support pension costs and operating expenses associated with pensions 790 administration. Once our year-end work has been completed, final figures will be published in the Government’s financial statements in due course. I can inform this Hon. Court that the balance on the Public Sector Employees Pension Reserve as at 31st March 2014 stood at £232.3 million, a comparative figure for 31st March 2013 being £253.6 million. 795 Hon. Members will recall the substantial body of work produced by the consultants, Hymans Robertson, which underpins the implementation of the reform of the Government Unified Pension Scheme. The forecast produced at that time indicated that the dependence upon the reserve would be greater in the short term, whilst the number of contributions were being increased and greater numbers of staff moved onto the revised structure. 800 There are still a number of variables in determining exactly how this reserve may be affected in the longer term, but at the present rate of drawdown it should provide adequate resource for the next 10 years. Thank you, Madam President.
805 The President: Supplementary question, Mr Thomas.
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Mr Thomas: Thank you very much, Madam President, and to the Treasury Minister for confirming that £20 million was the drawdown most recently, and that is on top of drawdown since 2008, and also for confirming that 10 years. 810 Can the Minister give more information, please, about the composition of the drawdown? For instance, is the Public Sector Pensions Authority funded from that reserve? And how much is made up as annual deficit on the pension situation?
The Minister: Rather than go through the detailed figures, I would suggest to the Hon. 815 Member that he has a look at the Light Blue Book which will be published shortly, and that is followed up by the audited accounts, the Dark Blue Book, in due course. Those books give out full details of the various drawdowns from these reserves that we have, and I am sure that they will clarify the issue for him.
9. Noble’s Hospital reviews – Financial provision made re any changes required
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
What provisional sum Treasury has included in Health and Social Care budgets from 2015-16 onwards to allow for the continuation of any changes which may be required as a result of reviews undertaken at Noble’s Hospital?
820 The President: Question 9, the Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you very much, Madam President. I beg leave to ask the Question standing in my name.
825 The President: The Minister for the Treasury to reply.
The Minister for the Treasury (Mr Teare): Thank you, Madam President. In response to the Hon. Member’s Question, the Answer is quite simply there has been no additional financial provision made within the Department of Health and Social Care budget 830 from 2015-16 onwards to meet any incremental impact arising from the various reviews being undertaken at Noble’s Hospital. Hon. Members will be aware from recent parliamentary Questions that there is a provision set aside in the Health Inspection Fund of £2.1 million to meet additional costs, but at this stage it would be premature to commit further resources until the implications and impact of the 835 review’s recommendations have been thoroughly examined and costed. Thank you, Madam President.
The President: Supplementary question, Mr Thomas.
840 Mr Thomas: Thank you, Madam President, and to the Treasury Minister for confirming what he has been saying recently. There must be a typo then in the Pink Book, because on page 9 of the Pink Book there is a phrase:
‘Treasury has included a provisional sum in health budgets from 2015-16 onwards to allow for the continuation of any changes required.’
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I just wondered whether that is not contradictory to the statement? 845 The President: Treasury Minister.
The Minister: No, I do not. I feel that the Pink Book is a very comprehensive document and Hon. Members will recall that, this year, there were more challenges than usual facing Treasury 850 because we had to prepare two sets of budgets: one with the previous Government structure and one to reflect the updated Government structure which we now have in place. So it was a very, very difficult time. I must pay tribute to my colleagues who worked over Christmas and the New Year, getting the budgets actually drafted into the Pink Book. That was a tremendous effort on their part. 855 The President: Supplementary question, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Treasury Minister confirm that the £2.1 million is actually to be used for the 860 changes, or is part of that to pay for the reviews which will point out the changes that are going to need to be made? When he says it is premature to put funds aside for any further changes, will he confirm that he is open to the idea of putting further funds aside for changes when they are recommended, because otherwise what is the point of having all these reviews if he is not going to fund them 865 appropriately to do what is necessary to actually raise the standards?
The President: Treasury Minister.
The Minister: The £2.1 million was not to pay for the reviews. That is already within the 870 Department’s budget, the actual cost of the reviews. So I thank the Hon. Member for giving me the opportunity to clarify that. As far as ongoing costs are concerned, we will have to consider those when they arise, but I have to say with a heavy heart that there is a limit to affordability – what we can afford.
875 The President: Supplementary, Mr Thomas.
Mr Thomas: Thank you, Madam President. Can the Minister then reply to my question after this sitting and actually confirm why there is a difference between what appears in the Pink Book and what he has said today about the 880 provisional sum in the Health budgets from 2015-16 onwards? The Treasury Minister recognised last week in another place that the use of funds and the general revenue account is becoming very complicated.
The President: Treasury Minister. 885 The Minister: I welcome the hon. questioner’s close interest in this, especially as he voted against it in the first place, but nevertheless, we will review all items of Government expenditure, all Departments’ budgets, as part of the budgetary process during the summer, which is the normal course of events. 890 The President: Supplementary question, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Given that the Treasury Minister is referring to possibly not giving any further funds for any 895 changes that might be recommended, could he clarify then why he is keeping National Insurance ______1496 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
contributions lower than those of the UK; because for every 1% that he decides not to increase them by, it is £7 million per annum that could actually be used for something else. So really it just seems a bit contradictory, where he is saying, ‘We want to do this, but we haven’t got the money,’ when getting the money is actually within his own hands. 900 The President: Treasury Minister.
The Minister: Yes, it might well be within my own hands, subject to the agreement of this Hon. Court, of course. 905 Could I suggest that we need to have a look at the Island’s wider competitive position – certainly on the basis of the information that we have to hand, we are the top end of employment taxes. And of course we should recognise that National Health Insurance is that: it is an employment tax. We want to give employers the best incentive we can to employ people, and that has worked 910 very well, I would suggest, through the National Health Insurance holiday scheme for employers taking on additional employees. When we have got over 1,000 individuals who are now employed as a result of that, I think that is good news. But it also, I would suggest, Madam President, does illustrate to us how sensitive employment is to the costs of employment.
915 The President: Supplementary, Mr Karran.
Mr Karran: Eaghtyrane, would the Treasury Minister not agree that, once again, either he is not understanding the situation or he is misinforming this Court… that what we are talking about is the levy that is put on the employees, not on the employers? Is that not the case as far as the 920 1% is concerned? Secondly, could I just thank him that it has been such a success, the new scheme that they have implemented of Liberal Vannin, that brought it here, that was so impossible to do? But I do congratulate him that he has taken on board that initiative, and I hope that Liberal Vannin can help the Government in the future. 925 The President: Treasury Minister.
The Minister: In the interests of co-operation and bonhomie, it just goes to show that Treasury has an open mind. 930 The President: Final supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. Could the Treasury Minister answer my question, as he seems determined not to answer my 935 colleague from Onchan when he is talking about employment? My understanding is that it is the employees’ contributions that are 1% lower than the UK. That would have no effect on employers, so it would not harm our competitive edge in any way. I would suggest that possibly most people on the Isle of Man would actually be happy to pay an extra 1% National Insurance if they thought it was going to raise £7 million that was going to 940 go towards sorting the problems that our Health Service has?
The President: Treasury Minister.
The Minister: I think the Hon. Member who has just resumed her seat has hit the nail on the 945 head: if they thought it was going to solve the problems. Certainly, with the reports that we have got coming in, they will highlight areas where we can improve practice, improve performance and also deliver the services more cost effectively. But from a wider economic ______1497 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
perspective, I would say that by taking money out of the economy, as we would be doing by increasing the NHI charge on employees, we run the risk of increasing the fiscal drag, and that 950 means we would be reducing spending power in the economy. We have always had a very difficult balancing act when we are considering the Budget: how much money do we take out of the economy without the risk of tipping the economy over into recession? So, Madam President, I hear what the Hon. Member says, but there are wider implications here.
10. ISAs– Treasury’s view on introducing a scheme
The Hon. Member for Onchan (Mr Karran) to ask the Minister for the Treasury:
What the Treasury’s views are on an ISA scheme for Manx taxpayers developed with the private sector running an investment bond independent of Government to create capital for projects for action for the Manx economy? 955 The President: Question 10. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, I ask the Question standing in my name.
960 The President: Minister for the Treasury to reply.
The Minister for the Treasury (Mr Teare): Thank you, Madam President. An investment savings account (ISA) as operated in the United Kingdom is exempt from UK income tax on the investment returns, and no UK tax is payable on the moneys withdrawn from 965 the scheme. Whilst I fully support encouraging individuals to save, the introduction of a tax-free savings vehicle would only serve to reduce our tax receipts and would require me to look at additional revenue-raising or cost-saving measures elsewhere in order to achieve a balanced budget. It is possible for private sector organisations to create their own investment bonds to create 970 capital for projects in the Manx economy, and I would expect the private sector would do so if the return was considered sufficient. I would be concerned if Government was expected to underwrite such projects, given the pressures on public finances. As I have stated in my previous two budget speeches, the possibility of seeking funding through the issue of Government bonds remains on my radar screen. However, I also stated that 975 I would not seek funding from the public until we actually need it, and that certainly remains my position. Thank you, Madam President.
The President: Supplementary, Mr Karran. 980 Mr Karran: Would the Shirveishagh not agree that if we are looking at that, like the previous Question, the 1% on the National Insurance contributions of employees which does not affect… could be one way of sorting out the issue as far as the tax revenue is concerned? Would the Minister not agree that the thing is that I would be horrified if Government was to 985 run such a bond, but this would be a way of trying to kick-start the economy, as at the present time many investors… the interest being charged and the policy of the banks on the Island being of the UK’s policy, are not encouraging such investment in the Island to get the economy going. This could be a way of helping – an independent bond being set up, free from the views of ______1498 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Government control, that could actually be there to try and reinvest to get things going in this 990 economy.
The President: Minister.
The Minister: Thank you, Madam President. 995 The Hon. Member has the kernel of an idea here and I think it would help us all if he was able to work up a business case, and then we could have a look at it in more depth. But on the initial views – and I have to say we have not got a great deal of information by the Question as put on the Order Paper – it could represent a double whammy for Government. On one side we would give tax relief, so we would be losing an income there; and we would have to 1000 pay out for the financing of this bond, interest on it. I see the Hon. Member shaking his head. That is really why I think we need more clarity. So if he was able to bring back a fully worked up business case, then I am sure we would be able to have a better discussion.
1005 The President: Supplementary, Mr Houghton.
Mr Houghton: Thank you, Madam President. Following the Minister’s comments just then, would he assist the Member to build that business case up? Would he provide officers to him in order to help him do it? He cannot do it 1010 alone. Your Treasury officers have the brains and the fortitude to do that: can they be asked to do it, so that we can see something further?
The Minister: With the reductions in resources in Treasury, like other Departments of Government, I do not have the resources, and that is why I did suggest to him that he might like 1015 to work up the case. Also, a bit of blue-sky thinking coming from outside Government would not do any harm, I would suggest.
The President: Supplementary, Mr Karran.
1020 Mr Karran: Eaghtyrane, allowing for the previous history of myself as Chairman of the Water Authority, as far as the water bond was concerned, would the Minister not agree that what we could do with is a situation that an independent bond… a liability as far as with a professional portfolio of the fact that it can only be invested in projects in the Isle of Man, would actually help the Manx economy going…? 1025 I am happy with the reply that I have got from the Minister and I will be looking at how we address this issue. So I can see some movement as far as common sense in this Hon. Court.
The President: I am not sure there was a question. Minister.
1030 The Minister: I think part of the issue here is some confusion, because as I read the Question originally it looked like he was suggesting public-private partnership, which as we know – or as I feel, anyway – is a discredited concept in the UK because it has finished up that the government has paid a lot more for projects which could have been delivered much more cheaply. So I look forward to receiving the Hon. Member’s proposals in due course. 1035 The President: Supplementary, Mr Shimmin.
Mr Shimmin: Thank you, Madam President. Would the Treasury Minister comment upon the often times of criticising our economy, 1040 when actually we are still growing at a faster rate than almost any other country in Europe? ______1499 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
As my Department is responsible for the economy, I would offer the support to Mr Karran and his party to actually discuss issues of relevance, and that might attach to the question from Mr Houghton as well: that we are here to help and work together (A Member: Hear, hear.) and we would be grateful if the Treasury Minister would support that action. 1045 Two Members: Hear, hear.
The President: Treasury Minister.
1050 The Minister: Yes, I would be delighted to work as part of a team, because Government now is actually not a government of silos. Under the direction of the Minister for Policy and Reform, we are working together as a single cohesive unit. So yes, I certainly would welcome that, but I would also reiterate that there has been a strong divergence in economic experience between the Isle of Man over the last five years and the other Crown dependencies. We have managed to 1055 maintain a very creditable rate of growth, whereas some of our competitors have at the best stabilised and at the worst contracted. So I think we have done reasonably well, but that is another good reason why the Minister for Economic Development is certainly not resting on his laurels.
1060 The President: Supplementary, Mr Karran.
Mr Karran: Eaghtyrane, would the Shirveishagh not agree that the reality is that yes, the issue with growth is very good but the exorbitant growth in liabilities is not being met by that growth, and that is a major factor? 1065 Would the Shirveishagh Tashtee also take on board that I am not looking at a scheme like the United Kingdom? What I was hoping for was the input of some sort of ISA scheme as far as the Island is concerned, and the private sector developing an independent bond outside the use of Government… having any control on it, especially with the record we have had in the past with so many of our projects. 1070 The President: Treasury Minister.
The Minister: If I could just shoot that hare before it starts to run any further, it would be interesting to see any evidence of cost overruns on capital expenditure. Certainly from the 1075 information I see, we are delivering projects on time, on budget, and in fact in some cases we are delivering the projects before we expected to deliver them. So I think the Capital Projects Unit, under the control of my good friend and colleague, Mr Braidwood, is definitely working well. If the Hon. Member would like to come back to us, I would very much appreciate it. What I would say is that in my 2012 Budget I did reduce the number of allowances – or as 1080 some would say, offsets – for tax, to simplify the system, so it is very difficult to say we are going to simplify the system on one hand and then make it more complicated on the other. So there is quite a lot of work to be done here, Madam President, I would suggest.
The President: Supplementary, Mrs Beecroft. 1085 Mrs Beecroft: Thank you, Madam President. Could the Treasury Minister just clarify why he thought the questioner was actually suggesting something of a partnership between the public and private sector, when it clearly states ‘the private sector running an investment bond independent of Government’? It does not 1090 mention anything else. And could he confirm that, if my colleague should go back to him with a business case, he will actually read what is there? ______1500 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: Treasury Minister.
1095 The Minister: Yes, I do read. The good Lord has blessed me with reasonable eyesight; so yes, I do read and I do read a considerable amount of papers each week. One of the blessings that all Council Members have is a volume of papers to read, but we make time to read them. I am sure it will be very succinct, focused and to the point, so I look forward to receiving it.
1100 The President: Final supplementary, Mr Thomas.
Mr Thomas: Thank you, Madam President. If it is succinct, focused and to the point, is the Treasury Minister envisaging putting the Government of national unity back together again by inviting the Hon. Member for Onchan into 1105 the Treasury Department?
A Member: Hear, hear.
The Minister: I certainly do not regard the Hon. Member for Onchan as a wolf, but he is 1110 certainly very welcome to discuss his ideas.
11. Pension pots – UK announcement re use by retirees
The Hon. Member for Onchan (Mr Karran) to ask the Minister for the Treasury:
What plans he has to investigate the changes announced by the UK Treasury in relation to the manner in which pension pots can be used by retirees?
The President: Question 11. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, I ask the Question standing in my name.
1115 The President: The Minister for the Treasury to reply.
The Minister for the Treasury (Mr Teare): Thank you very much, Madam President. In his March budget, the Chancellor of the Exchequer announced a major reform of the whole of the United Kingdom’s pensions regime. The Assessor of Income Tax is currently 1120 considering the implications of these changes, including discussing them with the Isle of Man Association of Pension Scheme Providers. The Assessor will submit her conclusions and any recommendations to Treasury for consideration in due course. Thank you, Madam President.
1125 The President: Supplementary, Mr Karran.
Mr Karran: Eaghtyrane, would the Shirveishagh Tashtee not agree with the annuities being so long? It is such an unfair system, and it would have benefit to the individuals not to be tied into this restrictive practice that there was. 1130 Would he also consider that this could be an initiative that could help him with the short funding in the National Insurance Fund by allowing the fact that any taxed levy on money taken out, that did not go into annuities at the dismal rates there are at the present time, could be
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directed into the National Insurance Fund to help his Government as far as the funding crisis it has got at the present time? 1135 The President: Treasury Minister.
The Minister: Certainly in the UK that has been a suggestion, but also the financial commentators have said that the upfront charge, the tax charge on amounts being withdrawn 1140 from pension schemes, would in effect be bringing taxation forward. So they are going to move tax forward and then they are going to have difficulties later on, because there will be a tax void, so it would just alter timing. What I would just like to make clear is that in April 2008 the Isle of Man introduced major changes to the taxation regime for pensions. There is now no requirement to purchase an 1145 annuity and the pensioner can draw down regular amounts from the pension scheme; so in other words, we are already some way down that road.
The President: A supplementary, Mr Karran.
1150 Mr Karran: I thank the Shirveishagh for his response, but we could do with going the whole way down that road. Would he not agree that it would be far better getting the money out in taxation this way than in the situation where the annuity… the big businesses doing the investments for the annuities would take the profits from the taxation and you get virtually nothing, and this is a way of helping deplete the National Insurance Fund pot by using the 1155 initiative here. I just hope that the Shirveishagh will reconsider his present stance on this issue.
The President: Treasury Minister.
1160 The Minister: Thank you, Madam President. For clarity, I do not recall – and I have just had a look at my opening reply again – any policy having been reached. What I have said in my opening comments is that the Assessor was currently reviewing them and that she will come back to Treasury, and that we would look at them again as part of the 1165 Budget planning; and that certainly remains the case, Madam President.
12. Retail properties – Plans to address high rents
The Hon. Member for Onchan (Mr Karran) to ask the Minister for the Treasury:
What plans he has to address the problem of high rents for retail property by introducing deemed income for taxes on landlords of retail outlets?
The President: Question 12. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, I ask the Question standing in my name.
1170 The President: The Minister for the Treasury to reply.
The Minister for the Treasury (Mr Teare): Thank you, Madam President. Retailing is one of the most rapidly changing parts of economies worldwide, and in recent years we have all witnessed the changing face of our high streets and town centres.
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1175 In recognising the importance of this sector, my colleague, the Minister for Economic Development, published the Isle of Man Retail Sector Strategy in December 2013. This strategy sets out the need for Government to be proactive in developing this sector and our town centres, as has been evident in the regeneration work being undertaken in Douglas and also in Ramsey. 1180 No-one wants to see empty shop units, and in the vast majority of cases that includes the landlords who are incurring expenditure and receiving no income. Any income from rents on the Island received by an individual or company is already liable to Income Tax, irrespective of where the landlords reside. Applying a tax charge on imaginary income, as suggested by the Hon. Member for Onchan, is more likely to discourage investment in shop units and could potentially 1185 increase rents as landlords seek to recoup the cost or additional tax during vacant periods. Thank you, Madam President.
The President: A supplementary, Mr Karran.
1190 Mr Karran: Eaghtyrane, would the Shirveishagh Tashtee not agree that he really has not got his finger on the pulse of the real problem as far as retail is concerned? Apart from internet shopping, the biggest problem for retail, which is killing it, is the price of rents. Would the Minister not agree also that at the present time we have such a cartel – so few landlords own so many retail units on the Island – that the fact is that that is killing off the retail 1195 industry more than anything? Would he also not agree that what we are trying to do is find a way where you create notional tax income for everybody else? Here is a way you could actually serve the general public and encourage landlords to be more progressive in getting a realistic rental agreement than leaving them vacant, holding people to ransom as far as the retail sector is concerned. 1200 The President: Treasury Minister.
The Minister: The Hon. Member has accused me of not having my finger on the pulse. I do have my finger on the pulse and there is a heartbeat there – although probably not if you put 1205 your fingers on my wrist! Madam President, what we need to make sure is that we do not discourage investment in shops. I am concerned that if we did that and followed the general thrust of what he is proposing here, the availability of shops for rental would diminish. This would cause upward pressure on rents and I would suggest that this would be exactly the opposite of what he is 1210 trying to achieve. I know he is trying to achieve it for the best of reasons, but I cannot really envisage how he is going to achieve it by his proposals.
The President: A supplementary, Mr Karran. 1215 Mr Karran: Eaghtyrane, would the Shirveishagh Tashtee not agree that maybe if he stopped listening to the vested-interest groups, as far as the landlords are concerned, and actually listened to other sections of the community, he would find out that what he is saying is quite perverse… to what would actually happen? 1220 Would the Shirveishagh Tashtee ask for them to look at the Business Premises Act – I think of 1951, which was amended in the early 1970s – which is totally out of date, totally in favour of the landlords and not of the tenants as far as business premises are concerned? And will he consider asking the general public who is right as far as this proposal is concerned: what is killing off retail shops in the Island – is it my proposal, or is it his proposal of 1225 doing nothing against the abusive cartel that is out there?
______1503 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: Treasury Minister.
The Minister: I am not aware of an abusive cartel because my understanding is, from the 1230 information I have got, that there is a variety of landlords who are both resident on the Island and who live off Island. What he is looking at really… and this goes back to an earlier Question that the Hon. Member has tabled – in fact, two earlier Questions. It does relate in a way to the Taxation Strategy. He has obviously got a lot of ideas. It is a pity these ideas were not articulated when we were 1235 considering the Taxation Strategy in this place in January 2013. Instead of looking at things on a piecemeal basis, I would suggest we should look at things in the round at the one time. Whilst he is trying, and trying hard, we should not be bringing things forward on a piecemeal basis. We had a look at it last year as part of our Taxation Strategy and that would have been, with respect, the appropriate time to bring the matter forward. 1240 The President: A supplementary question, Mr Quirk.
Mr Quirk: Thank you, Madam President. Can I ask the Treasury Minister: the Member is indicating there is a cartel on the Island – 1245 does the Treasury Minister have any evidence from any outside source, or the Member himself or any organisation, that there is a cartel operating on the Island?
The President: I think the Hon. Member has already answered that in the last question.
1250 The Minister: No, I am not aware of any instance of a cartel and that a cartel is operating. What I am certainly aware of is that the letting market is very competitive, and I am aware that some landlords are giving incentives to encourage tenants to rent their shops. That might be help with the refurbishment of the shop or it might be a rent holiday, but there are various ways at the moment where tenants and landlords are working together to make sure that the 1255 properties are occupied.
The President: A supplementary question, Mr Ronan.
Mr Ronan: Thank you, Madam President. 1260 I am very interested to hear the comments from the Treasury Minister there. Does the Treasury Minister agree that it is not just about retail; it is also about commercial activity? If commercial activity in our town… and he has to admit that commercial activity in our towns and villages has changed beyond recognition in the last two decades; it is not just the last decade, as he already stated. But for retail and commercial activity to survive, landlords owning 1265 these key properties in our Island – all across the Island – will need to adjust their rents, so businesses old and new can be sustainable in the future.
The President: The Treasury Minister.
1270 The Minister: I certainly agree with the Hon. Member who has just resumed his seat. It is, quite bluntly, market forces; and market forces will drive prices up or down. For landlords, it can be a bit of a rollercoaster because the return on their investment can decrease. As they say in the public health warning on some investments, the value of your investment may rise or fall; and that is exactly the same here. 1275 Also, as the Hon. Member has alluded to, we are seeing a change in retailing. It is moving away from the traditional retail environment to a combination of the internet and the physical presence as well – the so-called ‘click and collect’ – and really the retailers can work now in
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conjunction with the landlords to deliver a new retailing model which is more suitable for the 21st century. 1280 The President: A supplementary, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. I would just like a bit of clarification really, if I may, from the Treasury Minister, because the 1285 suggestion is to try and get more realistic rents to have less empty retail units, but the Treasury Minister has stated that it would actually have the opposite effect. He did not give any clarity as to why he felt it would have the opposite effect. I just wonder if he would elaborate on that.
The Minister: Yes, I am delighted to get the opportunity to do that. The proposal, as I read it, 1290 would drive a landlord’s costs up. If your costs are going up, then the temptation is to try and recoup those costs by increasing the rents. So we need to be careful about the collateral damage, as it were, and look at things as the totality of the picture.
The President: A final supplementary, Mr Karran. 1295 Mr Karran: Would the Shirveishagh not agree that the reality would be that actually it would make them look at more realistic rent levels? Could the Shirveishagh also maybe do the exercise of going back and doing a breakdown of who owns the shops in these predominant areas for retail – and he will find out that what I am 1300 saying is the disproportionate of a few that own so many of them. And finally, how does the Minister justify the statements he is making when you have shopkeepers having to pay rents which are more akin to Manchester city centre, with the throughput, than to the Isle of Man? There is something desperately wrong if we want to kick- start this economy and kick-start retail. We need to be looking at this area in order to stop the 1305 abusive practices by a few on the whole retail sector.
The President: Treasury Minister.
The Minister: I think it goes back to an earlier supplementary question when the Hon. 1310 Member, I am sure for very good reasons, alluded to a cartel. He obviously has that information there, and rather than me trying to go and repeat the exercise –
A Member: You have got the staff. (Interjection by Mr Karran)
1315 The President: Hon. Member, the Treasury Minister has the floor.
The Minister: I am sure that the Hon. Member who has just resumed his seat would not make a statement unless he had the information to back to it up. What I am saying to him is please share that information with me, and then I will have a look at it. Why should I, with due 1320 respect, expend the resources –
Mr Karran: You should know, sir.
The Minister: – to try and reinvent the wheel for something that he has already done? 1325 Please, just let me have the information.
A Member: Hear, hear.
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INFRASTRUCTURE
13. Action Plan for the Island’s Green Lanes – Statement
The Hon. Member for Douglas North (Mr Henderson) to ask the Minister for Infrastructure:
If he will make a statement on the Department’s recently announced ‘Action Plan for the Island’s Green Lanes’ and how the Department envisages the long-term management of the Island’s green lanes; (a) who was involved in consultations, and whether this included environmental and ecological officers from the Department of Environment, Food and Agriculture; and, if not, why not; (b) whether his Department will be involved in future monitoring of green lanes and any damage that may be occurring or, illegal use; and (c) whether he will bring in measures to ensure that any further damage is minimised?
The President: Question 13. The Hon. Member for Douglas North, Mr Henderson. 1330 Mr Henderson: Gura mie eu, Eaghtyrane Ta mee shirrey kied yn eysht y chur ta fo my ennym. I beg to ask the Question in my name.
The President: The Minister for Infrastructure to reply. 1335 The Minister for Infrastructure (Mr Skelly): Gura mie eu, Eaghtyrane. The Department of Infrastructure has recently carried out extensive consultation with various user groups and the Department of Environment, Food and Agriculture into the sustainability of the Island’s greenways. Meetings chaired by my predecessor in the Department, Mr Cretney, 1340 were held with various interested parties, including Ministers with DEFA, DED, representatives from the Four Wheel Drive Club, off-road motorcyclists, horse riders and mountain bikers, as well as the Green Lanes – Our Heritage group, which includes members of the Manx Footpath Conservation group. Following these consultations, a management strategy, the Action Plan for the Island’s Green 1345 Lanes, was drawn up to address the concerns in a way that protects the most vulnerable of our green lanes and upland tracks, whilst minimising the impact on enjoyment of these facilities by the diverse range of users. User groups were again consulted on the proposals and a consensus was reached that the proposals were acceptable. As part of the management arrangements, green lanes will continue to be monitored by the Department, the DEFA warden and volunteer 1350 wardens who will assist under the ‘Adopt a Lane’ scheme, which we are keen to pursue and in the process of setting up. I am optimistic that the proposed range of measures will have the desired result of effective long-term management of our green lane network. To help promote the long-term sustainability of our green lanes, we are proposing to close some dead-end routes and introduce one-way systems on other routes. There will also be 1355 improved signage on tracks, along with better-quality maps showing preferred routes and highlighting the location of vulnerable tracks. I would recognise that people on all sides of the debate are extremely passionate about the future of our green lanes. The Department has listened to all interested parties and is bringing forward what it believes is a workable solution. We will continue to promote the active 1360 involvement of volunteer groups, and I would encourage everyone to work together to secure a sustainable future for an important and valuable natural asset.
The President: A supplementary question, Mr Henderson. ______1506 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Henderson: Gura mie eu, Eaghtyrane. 1365 I thank the Shirveishagh for his positive Answer on this important conservation issue and would further ask him that in pursuing this new strategy, which is very welcome, will his Department take into account the fact that if further erosion occurs on some of the greenways, his Department will take measures, such as temporary closures, to ensure they can cause the affected greenway to come back into its former condition? 1370 The President: Minister.
The Minister: Gura mie eu. Yes, I would. What we have come forward with is an Action Plan that is a living strategy for 1375 the next two years, and what that basically means is that we will monitor very closely and we will amend as and when necessary. It is not just the use; there is also the weather damage that we do need to take into consideration too. Once more, I would just like to make the point that we encourage these user groups to work together, and in particular come forward and take up the mantle of managing it themselves. We 1380 have had a number of groups already who are very active in managing and maintaining a lot of the green lanes and we want to encourage more of that.
14. Green lanes – Promotion of more sustainable activities
The Hon. Member for Douglas North (Mr Henderson) to ask the Minister for Infrastructure:
Whether his Department will, with the Department of Economic Development, help to promote alternative uses of the Island’s green lanes other than for motor sport, discourage off-Island visitors from using them and promote more sustainable activities to replace any perceived income loss?
The President: Question 14. The Hon. Member for Douglas North, Mr Henderson.
Mr Henderson: Gura mie eu, Eaghtyrane 1385 Ta mee shirrey kied yn eysht y chur ta fo my ennym. I beg to ask the Question in my name.
The President: The Minister for Infrastructure to reply.
The Minister for Infrastructure (Mr Skelly): Gura mie eu, Eaghtyrane. 1390 The Department of Infrastructure is holding officer-level meetings with DEFA, DED, Manx National Heritage and other interested parties to discuss and develop proposals for the future of outdoor tourism, which include the use of the Island’s public rights of way and green lanes. It is already evident that we need to provide improved maps and way-marking to allow various potential users of the green lanes to enjoy their visit in a way that respects the environment and 1395 the rights of other users. Our green lanes are clearly an asset and that could attract and does attract visitors. I do not wish to discourage this, although I realise that the Hon. Member only wants to discourage visitors using the green lanes for motorsport-type activities. I believe our new management plan will allow all groups to use the greenways sensitively and sustainably, as long as we provide clear 1400 information on what is encouraged and have wardens to act on what is not encouraged. The vast majority of users, whether on foot, horseback or vehicle, treat other users with courtesy
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and the environment with care. I will do what I can to encourage these users and to discourage those who cause unnecessary damage and disruption.
1405 The President: A supplementary, Mr Henderson.
Mr Henderson: Gura mie eu, Eaghtyrane. Again, I thank the Shirveishagh for his positive Answer in addressing this growing issue, but would he not agree with me that, due to the finiteness of this resource and the fact that a lot of 1410 places in the UK are closed off because of erosion problems, it is putting unnecessary pressure on our greenways and this is something that we need to monitor; because, would he agree with me, in some instances it is clearly and obviously unsustainable to have motorsport events and riders or drivers in certain areas of our uplands?
1415 The President: Minister.
The Minister: Yes, I would agree with the Member and that is why we have taken the action, as I stated in the previous answer, of closing some of the green lanes and making others one way, and we are going to monitor the rest of them. 1420 I think the introduction of the volunteer wardens will actually play a very positive and quite an active role in the future management of this Action Plan. So we will be monitoring it and we will take action as and when necessary.
The President: A supplementary question, Mr Braidwood. 1425 Mr Braidwood: Thank you, Madam President. Would the Minister agree with me that it is very difficult to identify motorbikes which go off the green lanes and tear a lot of the land up? Would he consider, for those motorbikes, for the riders to wear tabards or registration numbers on the back of their helmets so that they would 1430 be able to be identified?
The President: Minister.
The Minister: Gura mie eu. 1435 I thank the Member of Council for raising this point. That is what you would call, I guess, truly off road, and there is obviously activity that does happen with regard to that, and we do have to monitor that issue too. Registration is the question. That will be something that we will consider ongoing. But what we are trying to do is… we set forth an Action Plan with a whole series of different measures and 1440 what we want to do is to see if that will be effective. If we do need to introduce other measures, then we will look at that. What we are trying to do is, principally, not discourage the use of our green lanes. We want all users to enjoy them, but we want them to enjoy them responsibly and to consider the sustainable future. 1445 So it is all about responsible use, more than anything else.
The President: Supplementary, Mr Turner.
Mr Turner: Thank you, Madam President. 1450 Would the Minister not agree that these lanes are in fact highways, and it is better that users are keeping to these lanes than tearing about all over the hillside?
The President: Minister. ______1508 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The Minister: Indeed yes, I would, and one argument of course is that they are tearing off the 1455 lanes because of the damage on the actual lanes themselves. So it is an issue and it is something we are aware of. We will certainly be discouraging that off-road activity wherever we possibly can.
Mr Gawne: Hear, hear. 1460 The President: Supplementary, Mr Turner.
Mr Turner: Thank you, Madam President. I thank the Minister for his response. Would he agree, though, that closing some of them 1465 may actually increase the illegal off-road activity? Would he also acknowledge the work that has been done by many of the motorsport organisations in keeping some of these routes in good… well, not in good condition, but in better condition and in fact that, by doing this work, they are indeed contributing to enabling other users to also use some of these tracks? 1470 The President: Minister.
The Minister: Indeed, and just to highlight it once again, there are already active groups involved in managing and maintaining it, and we want to encourage that and try to get other 1475 groups to participate with that. I would just highlight once more, as always in these cases, it is always a minority. The vast majority of people… and I certainly do a lot of walking. I have experienced all these different methods, different users and I see a lot of responsible use, but it is those few minority that we do need to be careful with. I hope with these new measures of the Action Plan, with the 1480 volunteer wardens, the different groups participating with this, we will actually have sustainable and responsible use of our green lanes going forward.
The President: Final supplementary, Mr Henderson.
1485 Mr Henderson: Gura mie eu, Eaghtyrane. Again, I thank the Minister for his positive commentary on the problems with our greenways and the erosion issues, but would he not agree with me that ultimately it may be that it is unsustainable to encourage or allow others from elsewhere to come into the Island and use these greenways, which is clearly in some places unsustainable, and that we need to reinvent 1490 the tourism initiatives into other areas?
The President: Minister.
The Minister: Gura mie eu. 1495 Yes, with regard to the encouragement and the promotion of this type of activity, I know from my colleagues within the Department of Economic Development it is not actually encouraged. We do have a situation where it is known that the Isle of Man is open to this activity, and whilst we do not encourage it we do actually have to find a way to manage it. Do we need to introduce legislation to forbid it? I certainly hope we do not. There are other 1500 measures in terms of registration, as Mr Braidwood I think highlighted earlier, but we have a two-year period here to manage, as I say, a living strategy, a living Action Plan that can be amended as we go forward and we will be monitoring it very closely.
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15. Bus timetables and routes – Involvement of general public in changes
The Hon. Member for Onchan (Mr Karran) to ask the Minister for Infrastructure:
When he introduces changes to the bus timetable and routes if he will allow the general public to contribute to help any changes to be more effective?
1505 The President: Question 15. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, I ask the Question standing in my name.
The President: The Minister for Infrastructure to reply. 1510 The Minister for Infrastructure (Mr Skelly): Gura mie eu, Eaghtyrane. During the course of each year, customer feedback is recorded and those points are considered before services are changed. The needs of the public are carefully balanced against the budget which is available. 1515 I will shortly be consulting on how we balance the level of services and the charging mechanisms with the budget available to operate bus services, and I am happy to include a facility for those responding to this consultation to make route-specific suggestions. I must make it clear, though, that we will not be able to provide bespoke solutions for every individual journey desire. 1520 As I have stated publicly already, there has been no increase in Bus Vannin’s budget in real terms. The Division is conscious of its responsibilities towards achieving Government’s national priorities. It has an important role to play in delivering new efficiencies and helping rebalance public finances, providing services that support the economic needs of the Island, and also promote social inclusion to protect the vulnerable members of our community. 1525 The President: Supplementary question, Mr Karran.
Mr Karran: Eaghtyrane, I would like to thank the Minister for his reply. It is a breath of fresh air and I am really pleased, allowing for the fact that there could be input from people at the 1530 coalface who are using these routes and could help as far as bus timetabling is concerned, in order to make sure we get the most effective way. I really do not need any other supplementary to say… but thank you for that, and the situation that local authorities might be extended as far as interested parties in any discussions in the future. 1535 Thank you.
POLCY AND REFORM
16. Public sector pensions – Cost-sharing proposals
The Hon. Member for Michael (Mr Cannan) to ask the Minister for Policy and Reform:
Under the public sector pension cost-sharing proposals for 2020 – (a) what the split will be between the employees and the Government; and (b) what the estimated employees contribution would be per annum if the cost sharing was in place now? ______1510 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: There wasn’t a supplementary, so we move on to Question 16. I call on the Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you. 1540 I ask the Question standing in my name.
The President: The Minister for Policy and Reform to reply.
The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. 1545 The Public Sector Pensions Authority has responsibility under the Public Sector Act 2011 for advising the Council of Ministers on policy relating to the superannuation of public sector employees, including issues around cost sharing. Currently the Isle of Man Government Unified Scheme 2011 has brought provisions for cost sharing within its rules. Other schemes which are still linked to the UK, for example schemes for 1550 police and teachers, will have new cost-sharing provisions attached to them, as a result of the changes to those schemes in the UK from April 2015. Details of those provisions are still awaited. Therefore, with regard to the Hon. Member’s Question, I can only respond in respect of the current cost-sharing provisions contained within the Government Unified Scheme. With regard to the first part of the Question, the actuary to the Unified Scheme would 1555 determine whether there has been a change in costs over the period being assessed, which is normally over a three-year period against a given set of criteria. Any increase in costs is then shared in accordance with the scheme rules, which is that 75% of the cost increase is payable by active members – that is, those members currently contributing to the scheme – and 25% is payable by the employing authorities. The cost increase is effected via an increase in 1560 contributions from active members and employing authorities. With regard to the second part of the Question, detailed amending legislation has been under consideration by the PSPA, which when combined with the Government Unified Scheme rules on cost sharing would stipulate the criteria and assumptions to be used by the actuary in assessing any future increase in costs. 1565 However, as the amending motion in January Tynwald referred to the feasibility of implementing further cost-sharing and other measures, the PSPA has put this work on hold pending further discussions on the matter within the Pensions Working Group. Therefore, as no detailed amending legislation has yet been drafted, consulted upon and approved and as no cost-sharing assessment has been undertaken by the actuary, it is not possible to comment on 1570 or to speculate what estimated increase in employees’ contributions would be following a cost- sharing review.
The President: Supplementary question, Mr Cannan.
1575 Mr Cannan: Thank you, Madam President. Clearly, it is disappointing, would the Minister not agree with me, that we have put together a structure under the Unified Scheme for a cost-sharing arrangement in the future, and have done so on the basis that we are unable to tell anybody exactly what that cost sharing is?
1580 The President: Minister.
The Minister: Well, I think we have indicated in my Answer, Madam President, that the cost- sharing relationship on increases in cost is 75% to the employee and 25% to the employer.
1585 The President: Supplementary question, Mr Cannan.
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Mr Cannan: Thank you, Madam President. Would the Minister therefore not agree with me, it is reasonable to assume, is it not, that the costs for the employees, given the figures that he has just quoted, would rise significantly over 1590 and above the rate that they are currently paying? Indeed, it is reasonable also to assume, is it not, that were the scheme to proceed as planned, by 2020 employees would be making significant contributions towards the cost of pensions, which may be as high as 20% or 25% of their salary?
1595 The President: Minister.
The Minister: Madam President, I noted that the Member for Michael supported the motion in January which asked effectively for the working party to go away and have a look at all these matters – and that is exactly what we are doing and we are currently awaiting the actuarial 1600 report, which will be including a lot of data which was not available at an earlier date when the GUS was first set in motion. So I would beg the Hon. Member’s patience as the working party works through all the data and arrives at definitive positions on these important matters. Thank you, Madam President.
1605 The President: Supplementary question, Mr Thomas.
Mr Thomas: Thank you, Madam President. I come to my feet hearing talk of another actuarial report, because I would like the Minister to tell us more about that – because I know that we have just received actuarial reports through 1610 the PSPA on all of these schemes.
The President: Minister.
The Minister: I think the Hon. Member for West Douglas is slightly confused. The actuarial 1615 report just received is for the state pension. The one I am referring to is the public sector pensions, which is a different matter.
TYNWALD ADVISORY COUNCIL FOR DISABILITIES
17. United Nations International Covenant on Economic, Social and Cultural Rights – Advice sought re contribution to sixth periodic report
The Hon. Member for Douglas West (Mr Thomas) to ask the Chairman of the Tynwald Advisory Council for Disabilities:
Whether any Government Department, Statutory Board or the Isle of Man Medicines Commission sought any advice from the Tynwald Advisory Council for Disabilities on matters relating to chronically sick or disabled persons before the Isle of Man Government made its contribution in 2013 to the UK’s sixth periodic report regarding the UN International Covenant on Economic, Social and Cultural Rights: UK, British Overseas Territories, Crown Dependencies; and if so, what advice was given?
The President: Question 17. The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President. 1620 I beg leave to ask the Question in my name. ______1512 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: The Chairman of the Tynwald Advisory Council for Disabilities to reply.
The Chairman of the Tynwald Advisory Council for Disabilities (Mr Braidwood): Madam President, in response to the Hon. Member for Douglas West’s Question, I can inform him and 1625 Members of this Hon. Court that no Government Department, Statutory Board or the Isle of Man Medicines Commission contacted the Tynwald Advisory Council for Disabilities before the submission of the Isle of Man Government’s contribution in 2013 to the United Kingdom’s sixth periodic report regarding the United Nations International Covenant on Economic, Social and Cultural Rights – which included the United Kingdom, British Overseas Territories and Crown 1630 dependencies – was made.
The President: Supplementary question, Mr Thomas.
Mr Thomas: Thank you, Madam President, and to the Chairman for that helpful reply. 1635 I suspected that was the case, having recently read the 2013 report. Was the Chairman surprised about that? As a second supplementary question, would the Chairman be able to report to this Court and to the Chief Minister how valuable the participation of all the groups that attended your recent annual general meeting was and how valuable it might be to set up a situation where civic 1640 society and other groups could actually be fully included in the submission to the United Nations through the United Kingdom?
The President: Chairman.
1645 Mr Braidwood: Thank you, Madam President. I actually read through the report of the Isle of Man Government, the core report, and also the information report. For the benefit of Hon. Members of this Court, this can be found – and I will give the website out, Madam President – at www.justice.gov.uk/human-rights/periodic- reports-to-the-united-nations. 1650 The President: I think, Hon. Member, if you e-mailed it… [Inaudible] (Interjections)
Mr Corkish: Could you repeat that, please?
1655 Mr Braidwood: It is a very interesting report, Madam President, and in the core document on pages 158 and 159, yes, the Disability Discrimination Act 2006 is mentioned. It is also mentioned about the Equality Bill, which is in progress, and the formation of a multi-agency forum. I think it was disappointing that, apart from the TACD not being contacted, the multi-agency forum – which has met, I believe, on four occasions – was not asked either to submit 1660 information, although one member of the TACD does sit on the multi-agency forum, and I hope that the next time the Isle of Man submits its report it does contact the multi-agency forum and the TACD.
The President: Hon. Members, that concludes consideration of our Question Paper, the 1665 remaining Questions being for Written Answer.
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Questions for Written Answer
CHIEF MINISTER
2.18. Cannabis – Decriminalisation
The Hon. Member for Garff (Mr Speaker) to ask the Chief Minister:
What the rationale is for his recent public statements supporting the decriminalisation of cannabis and the possibility of establishing cannabis cafés in the Isle of Man; and whether this is the policy of the Council of Ministers?
The Chief Minister (Mr Bell): At my weekly media briefing on Friday, May 2nd 2014, I was asked by both Manx Radio and IOM Newspapers to respond to the recent suggestion by Professor David Nutt that the Isle of Man could lead the way in relaxing the criminalisation of 1670 drugs use. I commented that drugs use should be treated more as a health issue than a criminal matter, that the international consensus was beginning to shift in favour of decriminalisation, and that a fresh debate was needed on the matter, albeit that the Isle of Man could not change in isolation. This was an honest expression of long-held personal views, given in response to media 1675 questions. I was not announcing a change in Isle of Man Government policy on drugs.
2.19. General Elections of 2006 and 2011 – Statistical information
The Hon. Member for Garff (Mr Speaker) to ask the Chief Minister:
In respect of the General Elections to the House of Keys in (a) 2006 and (b) 2011 – (i) what the resident population of the Island aged 16 and above was; (ii) how many people registered to vote, and of these, how many were in contested constituencies; (iii) how many people voted; (iv) what the resident population of the Island aged 16 and 17 was; (v) how many people aged 16 and 17 registered to vote, and of these, how many were in contested constituencies; (vi) how many people aged 16 and 17 voted?
The Chief Minister (Mr Bell): The following table provides the information requested. The resident population data is from the Isle of Man Census. Registered voters and election figures are from September 2011 and November 2006.
a) 2006 b) 2011 i) 65,487 69,461 ii) 52,047 60,382 contested constituencies: 49,855 all constituencies contested iii) 30,386 34,369 (excluding 116 rejected votes) (excluding 120 rejected votes) iv) 2,001 2,052 v) 689 1,234 contested constituencies 660 all constituencies contested vi) 397 668 (rejected vote figure unavailable) (rejected vote figure unavailable) ______1514 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
TREASURY
2.20. Legal aid – Impact of recent changes on annual spend
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for the Treasury:
What the estimated impact on annual legal aid spending is arising from the (i) introduction of Plea before Venue; (ii) Deemster’s decision in R v Darroch not to grant a temporary advocate's licence; (iii) reduction in the number of court duty advocates and (iv) reduction in the number of court sessions each week?
The Minister for the Treasury (Mr Teare): In answer to part (i) of the Question, it is not possible to indicate the impact on legal aid spending of the introduction of Plea before Venue as the costs will depend on the plea made by the defendant. 1680 I am unable to respond to part (ii) as the case referred to is still before the courts and any comment may prejudice proceedings. In any event it is not possible for the Legal Aid Office to assess the potential financial impact on the legal aid budget of a decision to grant or refuse a temporary advocate’s licence in relation to proceedings. 1685 In answer to parts (iii) and (iv) of the Question: the level of expenditure for the criminal duty advocate scheme in 2013-14 was lower than that in 2012-13 and just came within the budget provided for it. This was due to there being fewer matters on the court lists, thus enabling the courts to revert to a single duty advocate for most court sittings and reducing the number of fixed summary criminal courts from three to two a week.
HM ACTING ATTORNEY GENERAL
2.21. Family courts – Consideration of practice guidance on transparency
The Hon. Member for Garff (Mr Speaker) to ask HM Acting Attorney General:
Whether he has considered the Practice Guidance on Transparency in the Family Courts issued by Sir James Munby, President of the Family Division on 16th January 2014, and if so; (a) what his decision is with regard to adopting this guidance in the Isle of Man without delay; and (b) what the reasoning is behind that decision?
1690 HM Acting Attorney General: I have considered the Practice Guidance issued on 16th January 2014 by Sir James Munby (President of the Family Division of the High Court of England and Wales) on Transparency in the Family Courts. In turn his Practice Guidance is being considered by the Care Users Group established by Isle of Man Courts of Justice which Group is chaired by Deemster S Roberts. 1695 I am represented on the Care User Group by a legal officer from my Chambers and it is the intention to engage fully the Group’s consideration of the issues which the Practice Guidance raises in the context of the Isle of Man as a separate and distinct jurisdiction. The decision as to whether to adopt the Practice Guidance in the Isle of Man Courts is ultimately for our Courts to determine, not for me. I will, however, contribute to the Care Users 1700 Group consideration of the matter to make my views known as to the public interest issues raised.
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2.22. Dilapidated properties – Local authority powers to compulsorily purchase
The Hon. Member for Douglas North (Mr Henderson) to ask HM Acting Attorney General:
Under what powers a local authority may compulsorily purchase a dilapidated property?
HM Acting Attorney General: Section 26 of the Local Government Act 1985 provides that a local authority may acquire compulsorily any land for the purpose of its functions under any enactment. This provision can be considered as supplementary to the powers (under section 25 1705 of that Act) of a local authority to purchase, sell, exchange, take on lease or let any land, within or outside its district, for the purpose of its functions under any enactment. Should it be necessary to acquire land compulsorily, the provisions under the Acquisition of Land Act 1984 concerning the authorisation for the planned acquisition and the process for assessing compensation, acquiring the land and paying the compensation would apply. 1710 For a local authority to acquire land, whether compulsorily or otherwise, it would have to be able to demonstrate that it was doing so for the purpose of carrying out its statutory functions. There are many examples of such functions in the Local Government Acts 1916 to 1976, the Housing Act 1955 and the Public Health Act 1990, included within which are the provision of shelters and public conveniences, free libraries and museums, sports/recreational grounds, 1715 holiday accommodation, public housing and facilities for the deposit of household waste. Thus, a local authority could compulsorily acquire a dilapidated property in order to use it, or the land on which it stands, in order to carry out its statutory functions, such as the provision of the facilities listed above. However, the fact that a property may be dilapidated is not in itself a reason to justify a compulsory acquisition of the property in question. 1720 Section 9 of the Local Government Act 1946 enables a local authority to acquire land inter alia to preserve the amenities of a place of public resort within their district or of any estate belonging to the local authority. This would enable the compulsory acquisition of a dilapidated property provided its actual location brought it within the scope of section 9.
2.23. Dilapidated properties – Application of Local Government Act 1985, section 26
The Hon. Member for Douglas North (Mr Henderson) to ask HM Acting Attorney General:
To what extent section 26 of the Local Government Act 1985 applies to local authorities’ functions in relation to dilapidated properties under the Building Control Act 1991?
HM Acting Attorney General: The functions of a local authority in relation to dilapidated 1725 properties under the Building Control Act 1991 (‘the 1991 Act’) are contained in section 24. Where a local authority considers that a building or structure in its district is detrimental to the amenities of the neighbourhood by virtue of its ruinous, dilapidated, or neglected condition or its unfinished state, section 24 enables the authority to serve a notice on the owner of the property concerned requiring that repair or restoration work be carried out or that all or part of 1730 the building or structure be demolished. If the notice is not complied with, the enforcement procedure under section 58 of the Local Government Act 1985 (‘the 1985 Act’) applies (provided for by sections 24A and 36 of the 1991 Act). The owner also has the right of appeal to the High Bailiff on specified grounds. Subject to any order made on appeal, failure to comply with the notice is an offence triable in the Summary 1735 Courts. Further, section 58 provides that, should the notice not be complied with, the local ______1516 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
authority concerned may itself execute the works required by the notice and recover from the owner the expenses reasonably incurred in doing so. Section 26 of the 1985 Act provides that a local authority may acquire compulsorily any land for the purpose of its functions under any enactment. This provision can be considered as 1740 supplementary to the powers (under section 25 of that Act) of a local authority to purchase, sell, exchange, take on lease or let any land, within or outside its district, for the purpose of its functions under any enactment. Should it be necessary to acquire land compulsorily, the provisions under the Acquisition of Land Act 1984 concerning the authorisation for the planned acquisition and the process for assessing compensation, acquiring the land and paying the 1745 compensation would apply. The mechanism provided by section 24 of the 1991 Act enables the authority to require a property owner to carry out necessary works to his property, which may include its partial or full demolition, with power to the local authority concerned to step in and undertake the works. In either case, the expense falls to be met by the owner. Section 24 does not however provide a 1750 mechanism or vires by which the local authority could acquire the property, compulsorily or otherwise, as the function of serving, and enforcing, a notice under that section 24 of the 1991 Act is not a function which, by its nature, relies on the acquisition of the property concerned for its discharge. Indeed, the functions conferred on a local authority by section 24 can be exercised only in relation to a property which is in the ownership of a third party. Thus, section 26 of the 1755 Local Government Act 1985 does not give local authorities’ the power to compulsorily acquire dilapidated properties under the 1991 Act.
HEALTH AND SOCIAL CARE
2.24. Nurses – Further information on bands 7,8 and 9
The Hon. Member for Douglas South (Mrs Beecroft) to ask the Minister for Health and Social Care:
What academic qualifications are required for nurse leaders (senior sister/senior nurse) to achieve bands 7, 8 and 9; how many nurses Noble’s Hospital has at each of these levels; and how many nurses employed at Noble’s Hospital in bands 7, 8 and 9 have the required academic qualifications, broken down by band?
The Minister for Health and Social Care (Mr Quayle): Posts at bands 7, 8 and 9 require the post holders to have knowledge and expertise acquired through a combination of pre- registration qualification, in-depth experience and graduate, postgraduate and post-registration 1760 study, which may be obtained through a degree, a Master’s Degree or equivalent experience/qualification, or significant formal training or research in a relevant field where appropriate for the role. In addition to this, short courses and post-registration experience is required to maintain competence and registration. In Noble’s Hospital the breakdown of staff in bands 7, 8 and 9, excluding relief employees are 1765 as follows:
Band 7 141 Band 8 98 Band 9 1
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We can confirm that staff on appointment to their roles met the qualification criteria for the post at the time of appointment. We are unable to supply specific information on how many 1770 nurses in bands 7, 8 and 9 meet the current qualification criteria for these roles. This is due to the fact that the qualification criteria has changed over time, most recently with the introduction of Manx pay terms and conditions in 2008 when the current banding system was introduced. Staff employed in their roles prior to this date may have been appointed where different qualifying criteria was required. 1775 The Department is able to confirm that all staff within these bands would have met the qualification criteria applicable to the role at the time of appointment. New appointment to these, and other bands, are dependent upon successful candidates meeting the essential criteria currently in place.
INFRASTRUCTURE
2.25. Watercourses and drainage works on privately owned land – DoI statutory duties, responsibilities and rights
The Hon. Member for Garff (Mr Speaker) to ask the Minister for Infrastructure:
What the extent is of his Department’s statutory duties, responsibility and rights over watercourses and drainage works which lie on privately owned land?
The Minister for Infrastructure (Mr Skelly): The Department of Infrastructure is responsible 1780 for various properties in the form of areas of land, buildings, railway lines, electric tram lines, and highways. With regards to watercourses and drainage works on property for which the Department is itself the owner, it has the same duties, responsibilities, and rights, as any other private land owner. These duties, responsibilities, and rights are governed by a combination of the common law and the flood risk management legislation, although there are also sections of 1785 the various Acts concerning railways and highways which also deal with drainage matters. Below, I have detailed sections of the Highways Act 1986 that specifically deal with drainage from the highway:
‘27 Drainage of highways (1) The Department may, for the purpose of draining a highway or of otherwise preventing surface water from flowing on to it do all or any of the following, that is to say — (a) construct or lay, in the highway or in land adjoining or lying near to the highway, such drains as it considers necessary; (b) erect barriers in the highway or in such land as aforesaid to divert surface water into or through any existing drain; (c) scour, cleanse and keep open all drains situated in the highway, or in such land as aforesaid. (2) Where a drain has been constructed or laid, or barriers have been erected, (whether before or after the commencement of this Act) for the purpose of draining surface water from a highway or, as the case may be, diverting it into an existing drain, the water may be discharged into or through that drain and into any inland waters, whether natural or artificial, or any tidal waters. (3) If a person, without the consent of the Department alters, obstructs or interferes with a drain or barrier which has been constructed, laid or erected (whether before or after the commencement of this Act) for the purpose aforesaid, he shall be guilty of an offence, and the Department may carry out any work of repair or reinstatement necessitated by his action and may recover any expenses reasonably incurred by it in so doing from him. (4) In this section ‘drain’ includes a ditch, gutter, watercourse, soak-away, bridge, culvert, tunnel and pipe.
28 Power to fill in roadside ditches, etc (1) If it appears to the Department that a ditch on land adjoining or lying near to a highway constitutes a danger to users of the highway, the Department may —
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(a) if it considers the ditch unnecessary for drainage purposes and any occupier of the land known to the authority agrees in writing that it is unnecessary for those purposes, fill it in; or (b) place in the ditch, or in land adjoining or lying near to it, such pipes as it considers necessary in substitution for the ditch, and thereafter fill it in. (2) If a person, without the consent of the Department opens up or keeps open any ditch filled in under subsection (1) (except as may be reasonably necessary for the purpose of doing work on any pipes placed in the ditch), he shall be guilty of an offence, and the Department may carry out any work of repair or reinstatement necessitated by his action and may recover any expenses reasonably incurred by it in so doing from him. (3) In this section, ‘ditch’ includes a watercourse and any part of a ditch or watercourse, and ‘pipes’ includes culverts, tunnels and other works
47 Blocked drainage (1) If a drain leading from a highway is so obstructed or choked as to prevent water passing away, the Department may by notice to the owner or occupier of land contiguous to the highway require him to scour the drain, within such time, being not less than 14 days from the date of service of the notice, as may be specified in the notice. (2) If a person, in forming, laying out or altering a means of access from a highway to any adjoining land, permits the passage of water from the highway to be obstructed by failing to provide a sufficient drain underneath it, he shall be guilty of an offence, and the Department may by notice require that person, or the owner or occupier of that land, to provide a sufficient drain within such time, being not less than 14 days from the date of service of the notice, as may be specified in the notice.
Railways The overarching legislation for the railways is the Isle of Man Passenger Transport Act of 1982. Schedule 5 states….’The Department shall maintain in good condition all accommodation works’. ‘Accommodation works’ includes- a) Bridges, gates, arches, culverts, passages over, under or by the side of any railway.’
There are no other references in the Act specifically to drainage or water and no reference to 1790 obligations in respect to privately owned land. With regard to watercourses and drainage works which lie on privately owned land, the Department has no specific duties or responsibilities, unless these duties or responsibilities have been detailed in a legal agreement such as a wayleave. This is other than in consideration of flood risks during the planning process. 1795 Many private landowners, especially those on the downstream side of a highway, contend that once water reaches the highway it should remain the responsibility of the Highway Authority, or Government generally. This is especially so of householders rather than farmers, the latter having a better knowledge of drainage issues. Many householders refuse to accept that the responsibility for watercourses on their property is theirs alone.
2.26. Marine Development Order – Date for bringing to Tynwald
The Hon. Member for Douglas West (Mr Thomas) to ask the Minister for Infrastructure:
When the Marine Development Order will be brought to Tynwald; and why it was not brought to May 2014 Tynwald as hoped?
1800 The Minister for Infrastructure (Mr Skelly): I would like to advise this Hon. Court that following a recent enquiry regarding development within Manx waters, to which my Department granted consent under the Submarine Cables Act, the Harbours Act and the Water Pollution Act in 2012, officers from the Department and the Attorney General’s Chambers revisited the consenting regime as approved by the Town and Country Planning Act (Extension to the 1805 Territorial Seas) (No2) Regulations 2013. (‘The 2013 Regulations’). In so doing, the Department came to the conclusion that to proceed along its original proposed path to introduce marine
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planning legislation may unduly ‘confuse’ the current operation of the consenting regime for applications for development in the territorial seas. In essence, it had been the Department’s intention that following Tynwald approval of the 1810 2013 Regulations, further secondary legislation would be brought forward as soon as practicable to provide the Department with the appropriate vires to assess any applications for development and to levy a charge for any such applications. The aim was that these additional elements of legislation would be in place by the summer recess. However, the review process concluded that to do so would in effect simply create an 1815 additional layer/burden of consenting requirement for developers beyond that which is currently applied by means of the aforementioned Submarine Cables Act, Harbours Act and the Water Pollution Act and thus this had the potential to add both confusion and delay to the process. The Department has therefore concluded that the appropriate resolution going forward is to 1820 revoke the 2013 Regulations as soon as possible with the intention of bringing forward new primary legislation to provide for a simplified consenting regime for the territorial seas. Whilst I will be bringing this matter before the Court at the next sitting, I can advise that development applications will be dealt with promptly, professionally and with all consideration of environmental and sustainability issues. I will commit to bring a published policy on the 1825 determination of those applications to that Court and to referring applications to the Council of Ministers even though the existing primary legislation clearly provides for the Minister of Infrastructure to issue the relevant consents. I will provide full details at the next sitting. Finally, and importantly, the Department would seek to reassure this Hon. Court and the wider marine development industry that should any proposals for development activities be received by 1830 Government prior to the introduction of any new primary legislation, they will continue to be assessed under the current consenting regime(s) as is currently applied in a timely manner.
POLICY AND REFORM
2.27. Safeguarding Children Board – Modification of information-sharing guidance
The Hon. Member for Garff (Mr Speaker) to ask the Minister for Policy and Reform:
What action the Minister has undertaken as a matter of urgency, to ensure that the Safeguarding Children Board modifies its information-sharing guidance to ensure that children and families in the Island are not subjected to unwarranted intrusion along the lines of AB and Anor, R (on the application of) v The London Borough of Haringey (2013) EWHC 416 (Admin) (13th March 2013)?
The Minister for Policy and Reform (Mr Robertshaw): The outcome of this judicial review is being considered by the designated safeguarding leads of all agencies, and will report to the 1835 Safeguarding Children Board any recommendations to change of any procedures or policies required. It is important to note that the judicial review found the action by Haringey unlawful insofar as they did not evidence either the criteria or the decision for a Sec 47 inquiry, and so subsequently all information gathered was not lawful (in so far as it was neither by consent or 1840 statutory duty). To this end the information sharing guidance was not flawed, it was the compliance with legislation and statutory duty that was not followed.
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When examining the actions of the Council highlighted within the case, it is also important to consider the context within which Council officials operated. Haringey Borough Council have 1845 received significant criticism for failure to act earlier to prevent the deaths of Victoria Climbié and also Baby P. The Council was under ‘special measures’ from 2009 to 2013 following a report by Ofsted which placed the Council in the bottom nine councils in the UK for the quality of its children’s services.
MANX UTILITIES AUTHORITY
2.28. Watercourses and drainage works on privately owned land – MUA statutory duties, responsibilities and rights
The Hon. Member for Garff (Mr Speaker) to ask the Chairman of the Manx Utilities Authority:
What the extent is of the Authority’s statutory duties, responsibility and rights over watercourses and drainage works which lie on privately owned land?
The Chairman of the Manx Utilities Authority (Mr Cannan): The main area of legislation that 1850 deals with the Authority’s statutory duties, responsibilities and rights over watercourses and drainage works which lie on privately owned land is the Flood Risk Management Act 2013 (Act), which came into effect on 1st April 2014. It has been assumed that the Question refers to the Authority’s functions in relation to flooding and land drainage issues and not to its various roles under the Sewerage Act relating to 1855 private drains or to its water supply functions under the Water Act.
Duties Manx Utilities’ duties under the Act are limited. The two core responsibilities of the Authority are: 1860 • to administer the Act and monitor and enforce compliance with it; and • generally supervise all matters relating to flood risk management (FRM). Both of these duties apply to flood risk from watercourses and drainage works which lie on privately owned land. Other duties in relation to private land would arise if the Authority decided to exercise its 1865 powers under the Act. For example, under section 12 the Authority must consider the costs and benefits involved before exercising its works powers (under section 24). Similarly, under section 13, the Authority is generally obliged to consider conservation and recreation implications.
1870 Responsibilities The Act defines a special category of watercourse as ‘designated watercourses’ (previously called ‘main rivers’); these are the ones that are considered to be of major significance in the context of flood risk management. Management and maintenance of designated watercourses is the sole responsibility of Manx Utilities for flood risk management purposes, even when situated 1875 on private land. However, the land involved remains in the ownership of the landowners concerned, who continue to be able to use it in the usual way – for example for the grazing of animals. The Authority is obliged to keep records of all designated watercourses and make them available for public inspection. Apart from these designated watercourses, all other watercourse (which includes ditches, 1880 land drains and culverts etc.) are the responsibility of the private landowner, known in common law as the ‘riparian owner’. ______1521 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Rights and Powers Under section 24 the Authority has powers (but not duties or responsibilities) to carry out works on privately owned watercourses/ drainage works but only under certain circumstances. 1885 These include the power to take action where there is a serious risk of flooding or to mitigate the damage caused by flooding. Under section 26 the Authority has powers to inspect and carry out surveys on private land in order to decide, for example, whether or not to construct new flood risk management works on that land. 1890 Sections 30 and 31 enable the Authority to take appropriate enforcement action against, for example, someone who has constructed a culvert that affects the flow of a watercourse, without the Authority’s consent. These provisions also encompass the situation where the improvement of land drainage is being impeded due to the failure of another person to properly maintain the condition of a watercourse on private land – whether designated or not. 1895 Section 39 empowers the Authority to acquire land for the purposes of the Act. However, it is envisaged that this power will be very rarely exercised in practice. This is because, in the vast majority of instances, designated FRM works will be constructed on land that will remain in the ownership of the landowners concerned and as such continue to be capable of being used by them for say normal agricultural practices – albeit that the land will of course be subject to the 1900 various restrictions that apply under the Act (in particular under sections 18 and 19) Section 41 enables the Authority to adopt private FRM works where the Authority considers that those works should come under its direct control. However, before agreeing to do so, the Authority will be able to require those concerned to pay to it an appropriate commuted sum to reflect the anticipated future maintenance obligations. 1905 All of the Authority’s powers under the Act are permissive, which means that it has discretion to decide whether or not to exercise them in any particular situation.
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Order of the Day
3. Manx National Insurance Fund – Statement by the Minister for Policy and Reform
The Minister for Policy and Reform to make a Statement on the Report by the UK Government Actuary on the operation of the Social Security Acts in the Isle of Man for the period 1st April 2007 to 31st March 2012. [GD No 2014/0029]
The President: We now revert to our Order Paper at Item 3, the Manx National Insurance Fund. I call on the Minister for Policy and Reform to make a Statement. 1910 The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. We are required in law to have an actuarial review and report on the operation of the Manx National Insurance Fund at least every five years. The review is carried out for us by the UK Government Actuary’s Department, often referred to as GAD. GAD’s latest report, for the five- 1915 year period to March 2012, was received on 5th March 2014 and has been distributed to Hon. Members. The GAD Report examines the sustainability in the long term of the National Insurance Fund, taking into account various factors which might influence expenditure on state pensions and other contribution-based benefits, income from National Insurance contributions and current 1920 policies. Projections are included for the period 2011-12 to 2071-72. Based on some central assumptions which Hon. Members will see in the Report, GAD has projected that if no action is taken to rebalance the position, the National Insurance Fund, which at the end of the 2012-13 financial year had a balance of £646 million, will be exhausted by around 2054. After that point, there would be a very substantial funding gap. Page 61 of the 1925 Report shows how substantial that gap would be. Once funding has gone, we would have a gap between National Insurance contributions and related benefits of some £384 million per year. I think it would be helpful if I drew Hon. Members to page 20, which shows the blue line diminishing from around about 2030 onwards, and then goes to zero at around about 2054. It is very, very important for Hon. Members to appreciate that that is where the GAD Report’s 1930 responsibility ended. It was not for them to project what would happen in the negative field below that line, so I just reinforce the point again that that would effectively take us into negative territory and therefore impact upon current accounts by about £384 million per year – devastating, if it was allowed to happen. The point at which the Fund will be exhausted shows a deterioration of five years compared 1935 to GAD’s previous report, which was completed on 31st August 2011. However, it is important to know the Actuary’s comments, and I quote:
‘There is considerable uncertainty about the future progress of the Fund and actual experience could differ materially from the projections.’
Madam President, the projected exhausted date of 2054 is based on the assumption that 1940 existing policies continue. As Hon. Members are aware, we are carrying out a comprehensive review of our National Insurance and Social Security schemes before starting a national debate about their futures. Having a Social Security regime which is both affordable and sustainable in the long term is the Government’s primary aim.
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1945 Under the reciprocal arrangement with the UK, which has been in place for over 60 years, we are in large part obliged to follow any changes in the social regime which are introduced across the water. Another aspect of the debate which we must have, therefore, is the future of that reciprocal arrangement. It may or may not be in the best interests of the Isle of Man to continue to follow policy shifts which meet the ever changing political and social needs of a nation of 1950 63 million people. The current coalition government in the UK is radical in its approach to Social Security policy, which makes the pressure on the Island that much more acute. Hon. Members, this latest Report from the Government Actuary reinforces the message that the status quo is untenable. We must look critically and honestly at our National Insurance and Social Security policies and agree on what needs to change. 1955 I am sure these matters will be brought back to Tynwald regularly until we have reached a consensus on the way forward. Thank you, Madam President.
The President: Hon. Members, we can take questions on the Statement, not particularly on 1960 the detail of the Report. The Hon. Member, Mr Cannan.
Mr Cannan: Thank you very much, Madam President. It is interesting to hear the Minister’s Statement, but when exactly does he intend to bring 1965 this to Tynwald for a sensible debate? What we have heard so far is that this is going to go out to the public and then we are going to have a public consultation, and then it might come back to Tynwald for final approval. Surely, isn’t it better that the facts and the evidence be put before Tynwald in the form of a motion, so that all Members have a chance to input their views on behalf of their many constituents, not all of whom will be able to partake in a public debate? 1970 So, can I ask the Minister when he intends to move a proper motion so that this matter can be debated properly and thoughts and contributions from the elected Members can be taken into consideration?
The President: Minister. 1975 The Minister: Thank you, Madam President. Just to clarify the process a little for the Hon. Member, it is the intention of myself and the Treasury Minister to go out to the general public in July and August on part one of what we call ‘the big debate’. 1980 It will be very important, as the Hon. Member has suggested, that significant contribution comes from elected Members as this process develops. A combination of receiving views and opinions from Hon. Members, the massive input from Ci65 and the feedback from stage one of the big debate will all go forward to formulate Council’s view on what more specifically the options should be. That will then take us into stage two of the big debate, when the general 1985 public and Members are asked to consider in more detail more specific options. So it is an ongoing process, and as soon as information becomes available in a format that can be captured in an appropriate way, I will most certainly bring it back to Hon. Members. Thank you, Madam President.
1990 The President: The Hon. Member, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. I just have a few questions, if I may, where I would be grateful for some clarification. Firstly, we are being told now that the projection for the Fund has deteriorated by some five 1995 years since the last report, which went to 2007. So it was actually then going to run out between
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2059 and 2060. I am wondering why nothing much was made of it at that time, because it is only another five years’ difference now. I would have thought that there would have been quite an issue made of it at the time of the last one and action taken before now, because I would have assumed that a small amount of action over a longer period of time would have been preferable. 2000 Again, I would query why the National Insurance contributions have been kept below the UK when it has been known that this is coming and that money could have been used either for Health, as I suggested this morning, or to increase the Fund itself. Again, if we turn to page 37, if I just may, it is about nursing care contributions and it is saying that from 2011 it is now being taken out of the National Insurance Fund rather than from 2005 general revenue. I am just wondering why anybody would do such a thing if we know that that Fund is running out. What is the rationale for actually taking more money for something that has historically been taken out of a revenue budget and diminishing the Fund even quicker? And then it comes to –
2010 The President: We perhaps should allow the Minister to respond to some of those questions. I will allow you further questions. (Mrs Beecroft: Okay.) If we can focus on the Statement, please, Hon. Members. Minister.
2015 The Minister: I sometimes think that with the Hon. Member for South Douglas we cannot do right for doing wrong, really. I do not think this administration has done anything else since our inception other than to make it absolutely clear – crystal clear – that this is a matter of great import to us and that we intend to meet the challenge and deal with it. 2020 I do not think we can be accused of prevaricating on the one hand, and then, when we do act and bring in people like Ci65, somehow we have done the wrong thing. As far as over a period of time is concerned, that is the whole point about acting now so that any adjustments that we make to ensure long-term viability are as limiting as possible in their impact on pensions. We are being responsible and long term in our view. I will steal a phrase 2025 that the Treasury Minister often uses: our actions and our conduct are not about the next General Election; it is about the next generation. I think the Hon. Member for South Douglas is getting a bit obsessed with comparisons in detail between ourselves and the UK, so let's look at it. Our position is that right now we have a Fund in the region of £640-something million. That correlates to four-and-a-half years’ funding 2030 for our pension fund. The UK, which has higher National Insurance contributions, has a National Insurance fund which runs out in weeks, effectively. So I think we are in a sounder position than the UK. Do not think that the UK are in a comfortable position. Most western European countries are struggling with these issues, and we are determined to deal with them. With regard to the detailed item on nursing care on page 32, that is a small detail in terms of 2035 the enormity of the task ahead, so I do not really recognise the validity of that comment.
The President: Hon. Member, Mrs Beecroft.
Mrs Beecroft: Thank you. 2040 My final questions really all revolve around the assumptions that this Report is based on. Is it in order to ask those – because it was part of the Statement, referring to the assumptions within the Report?
The President: If they were referred to in the Statement, yes. 2045
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Mrs Beecroft: Thank you. On page 9, it refers… The actuaries obviously relied on the information provided. Page 7 gives a list of some of that information, and I am just wondering which of those factors and central assumptions were actually provided by Government and which the actuaries worked out for 2050 themselves, because I know that some of them were provided by Government. On page 17 it says that there was insufficient data for the demographic assumption, so they have used equivalent bases from Great Britain. I am just wondering why we have insufficient data that they were able to use. On page 25, the next to the bottom of the pointers on that page says: 2055 ‘...we have been instructed by the Department of Social Care to continue to model the existing incapacity benefits,’
and I am just wondering again why that assumption has been made when we know that these are subject to review. On page 41 it is about the migration and it is saying:
‘The the figures also suggest relatively high numbers of out migrants at ages 85 and over...’
but further down, it says: 2060 ‘It has been agreed with the Isle of Man that this out-migration should be ignored in deriving an assumed age distribution for migrants.’
I am just wondering why we are actually ignoring that. If more of our senior citizens are leaving the Island in a bigger proportion, why are we ignoring that when we are looking at pensions? 2065 Page 43, just over the page, is about the earnings distribution.
The Minister: Madam President, can I answer a few of these?
The President: Yes. I think we are getting into something of detail here when the Statement 2070 is about the general principles. We will be coming to a debate on the detail in due course. Minister.
The Minister: Madam President, turning to page 7, I think the information as to its source actually is detailed in this Report – where it comes from the actuarial people themselves and 2075 where it comes from us. Page 17 and 4.16 – I take it that is the point that the Hon. Member for South Douglas is referring to:
‘In terms of the demographic assumptions there were insufficient data on the Isle of Man population as a whole to derive the demographic assumptions from actual experience.’
2080 I think our profile is very similar to that of the UK, and it should be borne in mind that as GAD is a UK-based organisation and our review follows the UK’s, they had information which they were confident to use rather than an estimate from us; so I think they did the correct thing there. Page 25: with regard to the benefit assumptions, the Hon. Member is quite correct, there are 2085 reviews going on, but it would have been wrong for the actuaries to anticipate those outcomes, and therefore we worked – or they worked, shall we say – on information which was solid and reliable.
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Page 41: as far as age distribution and migration is concerned, I think it is important not to get too lost in minutiae, because the assumptions made by the GAD Report were zero migration, 2090 500 annual migration and 1,000 migration. These are intended to be broad-based guides for us, rather than being accurate and specific down to the last dotted i or crossed t, Madam President. Thank you.
Mr Crowe: Madam President – 2095 The President: I have a number of people who wish to ask. I will let Mrs Beecroft conclude her questions, if she has any more.
Mrs Beecroft: Thank you, Madam President. 2100 I will not continue with the detailed questions, but if I could just… I am not saying that there is anything actually wrong with this Report; I am just wanting reassurance that the assumptions that have been made when preparing these figures are reasonable. We know of reports in the past where Government have supplied figures that really have been questionable subsequently, and I am just wanting assurances from the Minister, before going out to the public with this, that 2105 he is as sure as he possibly can be that all assumptions in this Report are reasonable and justifiable.
The President: Minister.
2110 The Minister: Madam President, I have pleasure in confirming that I am satisfied.
The President: The Hon. Member for Castletown, Mr Ronan.
Mr Ronan: Thank you, Madam President. 2115 I will be very short. (Laughter and interjection) Thank you for that! My only comment on the situation being depicted to us at present is that in 2007 a set of forecasts were put together showing that the National Insurance Fund was going to run out in the 2050s. Today, a frenzy appears to be being whipped up because the National Insurance Fund is going to run out in the 2050s. Why is this a crisis now and not back in 2007, like the Member 2120 for South Douglas said? I think I would like him to answer that, really. I will reserve the rest of my comments for later when there are going to be debates on the general pension scheme. Thank you, Madam President.
2125 The President: Minister.
The Minister: Madam President, I have got to question the use of the Hon. Member’s word ‘frenzy’. There is no frenzy. It comes back to the point that the Hon. Member for South Douglas has made, in a way, and I tried to answer it – that the earlier you deal with long-term issues, the 2130 less impact there will be on current pensions. There was neither an ignorance earlier on nor a frenzy now, but an administration determined to be responsible in its application to these challenges and in due course to deliver to Hon. Members its conclusions; so I am very comfortable with our position. There is no frenzy, but my goodness me, this is a very important matter for our children and 2135 our grandchildren and we will deal with it. (Interjection) Yes.
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The President: The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President. 2140 I appreciate the Minister referring to the fact that our National Insurance Fund is significant relative to the UK. Does the Minister agree with me that it is actually in a position 350 times better off than the one in the UK, so we do not really have a problem with the National Insurance Fund? I think the UK fund is £2 billion and we have £650 million. The second question is I wondered whether any information about our intentions – how to 2145 react to the UK single-tier pension in 2016 – was included in the assumptions given to the actuaries; and also whether any estimate had been made about the impact of reducing the contribution needed from 40 years-plus to 30 years recently on the value of the Fund. Finally, I just wanted to ask the Minister whether or not he regarded the 2012 consultation which was carried out, about social policy, to include the National Insurance Fund as it affected 2150 pensions.
The President: Minister.
The Minister: Thank you, Madam President. 2155 In a way, the Hon. Member has answered his own question, because he says on the one hand in comparison to the UK why do have a problem. Well, actually, the second part of his question says that they are introducing the single-tier pension, which suggests that they are concerned and intend to take some pretty dynamic action on their part to stabilise the situation going forward, as must we. So those two things need to be linked together. 2160 To answer the next part of his question, it was not part of the GAD Report to look at whether we should or should not adopt the single-tier pension. This is an actuarial report, and if you read through it you will see that the assessments made, the projections made now, are worked out on the concept, on the principle, that the existing policies – the triple lock etc – carry on as they do now. Well, of course, the challenge for us is how we are going to adjust this to make sure we 2165 protect current pensioners and also, going forward, protect pensioners in the future. So that is our responsibility and challenge as a Court. The third part of the question I was not quite clear about, but the social policy debate… Yes, it all interrelates. The concept of the three overarching principles and the six working principles, the work coming out of Ci65, this Report, the big debate – all come together progressively so 2170 that this Hon. Court can devise a way forward that will ensure that our welfare state going forward is sustainable, and one in which we can have pride and confidence.
The President: The Hon. Member of Council, Mr Braidwood.
2175 Mr Braidwood: Thank you, Madam President. Would the Minister agree with me that the problems associated with the depletion of the National Insurance Fund have been mentioned in the last few actuarial reports from the Government Actuary, and in actual fact we are very fortunate that the Fund has increased in the last 33 years from £51 million market value to, as the Minister said, £646 million? 2180 I would just like to highlight something, Madam President, from when you were Minister at the DHSS and were moving the Pension Supplement (No. 2) Scheme 1999 (Amendment) Scheme 2000. I would just like to quote from the Hansard of 22nd November 2000 – that is when you were looking at a review:
‘The starting point for the review was the fact that the actuary had drawn attention to potential problems in the longer term in continuing with existing policies in relation to benefit provision and contribution liabilities. The magnitude of those potential problems is most starkly summed up in his projections that by 2061 the national insurance fund would be in deficit to the tune of anywhere between £2 billion and £4 billion depending upon the
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extent of population changes with annual deficits of upwards of £130 million being the order of the day. That nightmare scenario is exclusively the consequence of the local pension supplement policy.’ 2185 That is why I am glad, Madam President, that we are carrying out a full review after this actuarial report.
The President: Not quite sure whether that was referred to; but Minister, you may care to 2190 reply.
The Minister: I will desperately try and find a question in there somewhere, Madam President, but I am grateful for the Member’s comments and concur with them. I think it is important to also just recognise the fact that this actuarial report has come out on 2195 time, but the previous one was not five years ago. As I recall, it was something like two or two- and-a-half years late. I could be taken to task over whether that is precise, but it was very, very late so this one and the one before have been quite close together. One of the more recent impacts upon the projections has been the introduction of the triple lock, which effectively pushed back the date by which the Fund would be exhausted by 10 years; 2200 but our movements in extending retirement age have pushed it five years the other way, so there is a net result. All of this clearly indicates that there is a tremendous amount of work to do both on the benefits system and the pensions system to get it right for the Isle of Man, and that is what this administration is in the process of doing. 2205 Thank you, Madam President.
The President: The Hon. Member of Council, Mr Crowe.
Mr Crowe: Thank you, Madam President. 2210 Yes, I look forward to the Tynwald debate when it comes, and I thank the Minister for his Statement today. I was on Social Care at the time a few years ago when the report was delayed by three years, (A Member: Two years.) so I was just rising to confirm that. You did mention that there would be public consultation. Can you just elaborate on this? Will 2215 it be roadshows, or will it be just the usual consultation by writing in?
The President: Minister.
The Minister: Madam President, when you are dealing with something so profound and so 2220 fundamental, which has the potential to impact on everybody’s life – children, pensioners, parents, everybody – it is very important that we as a Court do not just consider these things internally, but really fully engage the people of the Isle of Man in such an important subject. It is for that reason that we have been signaling now for some many months that there would be a big debate, which I alluded to a little bit earlier. 2225 To answer the Member’s question, it will not be a simple, straightforward consultation. We are developing how we are going to go out now, but it will be, I hope, very engaging and very informative to people; and it will not be just a question, as a normal consultation would, of going out with options. What we want to go out … first of all, in stage one, as I mentioned earlier, is the concept of these are the challenges that we face; these are the issues that we, as a society, 2230 have got to resolve. The second stage is bringing all this evidence together, and the third stage is to resolve what those options are, again with the general public and Members. And then, finally, for Hon. Members in this Court to decide what actions we are going to take. Thank you, Madam President.
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2235 The President: The Hon. Member, Mr Karran.
Mr Karran: Eaghtyrane, with the Report, the issue which it highlights once again – which has been highlighted even by yourself, Eaghtyrane – and that some of us highlighted a decade or so ago about the issue, and the recognition that the Minister has given that the longer we leave it 2240 the bigger the hole is and the bigger the problem is… Does he not feel it is about time that executive Government actually pinned its colours to the mast, instead of running away from this like previous executive Governments have done for the last 15 or 20 years? If this Hon. Member could recognise that without the resources, surely executive Government…? 2245 Can he give a clear timeline of when he feels he can come back with some firm proposals in order that we can actually address this issue, so we do not leave nothing more than a debt of fiscal debt for the next generation… than the debt of gratitude that we should all be working for as far as the next generation is concerned?
2250 The President: Minister.
The Minister: Madam President, I think there are two points there. First of all, I cannot even begin to recognise the idea that we are running away from anything.
2255 Mr Karran: We have done for the last 15 years.
The Minister: Well, others may have done before; that is a question for others to answer. We are not running away from anything. (Mr Gawne: Hear, hear.) We are running away from nothing: we are dealing with it. 2260 I want to come to the second point, this almost over-anxiety to grab at a decision-making process. We are not dealing with incremental adjustments here to a welfare state or a pension system or a benefits system. We are fundamentally trying to address how we make it better. Earlier today you have heard a Question raised by the fellow Member of Liberal Vannin, the Member for South Douglas, asking us to define vulnerability, and quite a detailed Answer from 2265 the Chief Minister. All of this is part of the challenge that we face to make sure that we spend money in the right place, in the right way, that we do not waste it, that we make the life experiences of those in vulnerability better – to make sure, in accordance with the social policy principles that we agreed to in 2012, that everything comes together and that the Isle of Man has a welfare and health system of which it can be proud. 2270 It is not about sitting here today or tomorrow agreeing a particular detailed point; it is about engaging in the fundamental principles of where are we going and why, and we can only do this with the people of the Isle of Man. We cannot presume upon ourselves that we can just adjust the detail here or there and make it right, because we will not – it is more fundamental than that. 2275 Thank you, Madam President.
The President: The Hon. Member for Rushen, Mr Watterson.
Mr Watterson: Madam President, would the Minister agree that this is too big an issue to 2280 rush from public understanding to choosing between preselected solutions that have been determined by the executive, and that instead we actually all need to go on a journey together; but it is rightly the job of backbenchers and others to make sure that the system is fair and it is kept on the rails and is achieved in a timely manner? Will he also undertake to ensure that, in addition to shall we say ‘the usual suspects’ of 2285 consultation – businesses, local authorities and the politically engaged – we take special
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measures with regard to this Fund to ensure that younger people are more engaged in this debate (A Member: Hear, hear.) because they will be the ones who are most affected by its outcome?
2290 Mr Thomas and Mr Corkish: Hear, hear.
The President: Minister.
The Minister: Thank you, Madam President. 2295 I think the Hon. Member for Rushen put it a little bit more eloquently than I did, so I am grateful to him for that. As far as engaging with the public and the importance of engaging young people – and he is quite right to make the point – only yesterday, the Treasury Minister and I were discussing this very point and a part of the roadshow process will be to go out to young people whose future 2300 we hold in our hands now in this Hon. Court. They will be engaged and we will be listening to their views. Thank you, Madam President.
4. Armed Forces Covenant – Statement by the Armed Forces Champion
The Isle of Man Government Armed Forces Champion to make a Statement on the First Annual Report on the Operation of the Armed Forces Covenant. [GD No 2014/0034]
The President: If there are no further questions, we will turn now to Item 4. I call on the Isle of Man Government Armed Forces Champion to make a statement. 2305 The Isle of Man Government Armed Forces Champion (Mr Watterson): Madam President, I wanted the opportunity at this point to inform Members of the progress that has been made in the first year of the Armed Forces Community Covenant. I will also mention the work done by the War Memorials Preservation Committee and allow 2310 Members to ask any questions on that work so far. The Report on the Armed Forces Community Covenant which is laid before the Court today revolves around several themes: looking after the welfare needs of our Armed Forces personnel and their families; acknowledging, as a lead employer, the valued role that reservists play within the Island’s community; recognising and remembering the sacrifices faced by the Armed Forces 2315 community, for example in annual commemorations of Remembrance Day and Armed Forces Day; welcoming Armed Forces visitors to the Island, honouring those in particular with whom the Island has special links; working with armed services associations to nurture understanding and awareness amongst the public of issues facing those within the Armed Forces community both past and present; continuing to develop and strengthen links with those in the UK 2320 government departments most closely associated with the Armed Forces personnel and their welfare, in particular the MoD and Ministry of Health and their Isle of Man equivalents; acknowledging the important role of the cadet forces of all military services and the valuable contribution that they make to the youth and community services in the Isle of Man; promoting awareness of the role and significance of the Armed Forces within the Isle of Man by bringing 2325 together serving personnel, veterans, youth, schools, local charitable bodies and voluntary organisations; and developing ways of improving access to information for serving and ex- service personnel and their families in respect of support and services in the Island.
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The Isle of Man Government will review on an annual basis, or more frequently as needed, the measures that they are taking to implement the principles of the Armed Forces Community 2330 Covenant and consider if further actions would be helpful. I am pleased to report that the Isle of Man Government has done very well, and during a visit to the Island, Lieutenant-Colonel Richard Jordan and I reviewed the Island in comparison with a lot of best practice in the north west. I am particularly pleased to report that the Island is doing exceptionally well on all fronts. On the back of the advice received, though, we have developed 2335 a website which is designed as a one-stop shop under the Cabinet Office website, which provides contacts and information relating to our commitments. Hon. Members, in providing unanimous support for the Covenant, I am conscious that I was pushing at an open door with our community, who have really engaged and embraced this promise. In return, we are getting even greater engagement with the Armed Forces; and in 2340 addition to our traditional links with HMS Ramsey and 12th Regiment Royal Artillery – the successors to the Manx Regiment – we have also built links with 103 Regiment Royal Artillery, who have provided a light gun for Remembrance Day and attended Armed Forces Day. We even hope to have an offshore patrol vessel join us for the Queenie Festival, subject to operational pressures. 2345 The business community has started to engage, and Squadron Leader (Retired) Andy Averre will be the point of contact with the Chamber of Commerce and business community generally. In this regard, thanks to the efforts of him, Charles Wilson and others, we are helping returning servicemen to find jobs by translating their CVs into civvy-speak and pointing them in the right direction. 2350 Madam President, the War Memorials Preservation Committee, whose report will be laid before next month’s sitting, will not be accompanied by a statement; however, I would likewise commend that report to Hon. Members’ attention as well. That Committee has come a long way in the five years since it was formed as a Government Committee. In addition to the Bill that will be coming to the House for First Reading soon, there are also 2355 plans afoot to commemorate Operation Market Garden in Castletown, which Mr Ronan, our Vice-Chairman, is leading on, and ongoing work with Manx National Heritage and Hannah Gerrard, who has become our War Memorials Officer. Finally, on that, I would perhaps – getting ahead of myself – commend Hector Duff on his nomination for the Tynwald Honour, partly for his significant service to this Committee; and last 2360 but by no means least would like to thank and commend Linda Webb, who has recently retired from the Chief Secretary’s Office, who has been the secretary of the Committee since its inception. Thank you, Madam President.
2365 The President: Questions. The Hon. Member for Castletown, Mr Ronan.
Mr Ronan: I beg to second and reserve my remarks.
A Member: It’s a Statement. 2370 Mr Corkish: No need to second it.
Mr Ronan: I do apologise, but obviously I am delighted to get to my feet and support this Report. 2375 The President: It is a question, sir. If you have any questions, please put them. If you have no questions, please take your seat.
______1532 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
5. Supplementary Capital Authorities – Motion not made
A Member of the Treasury (Mr Braidwood) to move:
That Tynwald 1. Authorises the Treasury to expend in respect of the year ended 31st March 2014 from the Capital Transactions Account sums not exceeding £14,557,556 in payment of the items set out in column 6 of the schedule accompanying the motion. 2. Approve expenditure not exceeding £9,925,218 incurred in respect of the items set out in column 7 of the schedule accompanying the motion.
1 2 3 4 5 6 7 Additional amount to Excess be Vote Actual vote for Authorised Department Item Description 2013-14 2013-14 2013-14 for Project (note 1) (note 2) £ £ £ £ Department 1 Planned Maintenance Schemes 1,600,000 1,641,114 41,114 - of Social 2 House Purchase Assistance Scheme 3,000,000 3,604,314 604,314 - Care 3 Clagh Vane Redevelopment - Project 3 - 4,196 4,196 - 4 Clagh Vane Environment Work - Project - 3,855 3,855 - 1 5 Bowling Green Site Demolitions - 41,132 41,132 - Department 6 Rail Infrastructure Renewal (to 2008) - 387,293 387,293 - of 7 Ballafletcher Pitch Development - 22,498 22,498 - Community, 8 Snaefell Mountain Railway Track 27,000 89,657 62,657 30,934 Culture and Leisure 9 Diesel Shunter 100,000 154,144 54,144 - Department 10 Isle of Man College PMLD Unit 1,000,000 1,262,365 262,365 - of Education and Children Department 11 Vehicle Acquisition 1,237,225 1,271,444 34,219 - of Home 12 Minor Capital Works 169,000 209,644 40,644 - Affairs 13 Castletown Fire Station Replacement 11,070 55,374 44,304 44,284 Department 14 Central Community Healthcare 100,000 123,477 23,477 - of Health Development Phase 3 (Relocation of Ambulance Service) 15 Extension to Neonatal Unit 970,000 1,126,338 156,338 -
______1533 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Department 16 Disability Discrimination Act - Public - 71,940 71,940 - of Buildings Infrastructure 17 Tribunal/Court House - 6,163 6,163 - Accommodation 18 Control Tower - 2,943 2,943 - 19 Off-Street Car Parking (Douglas) 450,000 511,777 61,777 - 20 Purchase of Land (note 3) - 9,850,000 9,850,000 9,850,000 21 Off-Street Car Parking (Ramsey) 300,000 574,922 274,922 - 22 Cruise Ship Pontoon - 15,121 15,121 - 23 Douglas Promenade 605,000 1,181,853 576,853 - 24 Radar Replacement 28,000 142,448 114,448 - 25 Vehicle Test Centre - 84,292 84,292 - 26 Jurby Hangars Refurbishment - 11,788 11,788 - 27 Highway Strategic Maintenance - - 64,268 64,268 - Footway Reconstruction 28 Highway Strategic Maintenance - - 537,056 537,056 - Reconstruction Unclassified Roads 29 Peel Road 2,855,000 3,270,655 415,655 - 30 Grit Store / Snow Depot 23,000 333,650 310,650 - Manx 31 Natural Gas Network - 172,622 172,622 - Electricity Authority Isle of Man 32 Treatment Plant Santon - 81,061 81,061 - Water and 33 Pumping Stations Refurbishment - - 11,317 11,317 - Sewerage Phase 3 Authority 34 IRIS Pumping Stations 250,000 363,131 113,131 - Refurbishment - Total 14,557,556 £9,925,218
Notes: 2380 1. Column 6 shows the Supplementary Capital Vote required to authorise the spending in excess of the annual Vote that occurred in the last financial year. Exceeding the Vote for the year does not necessarily imply that the total cost of the project approved by Tynwald has been exceeded. Exceeding the Vote for the year can arise simply because a project proceeds faster than originally estimated. 2. Column 7 shows additional spending of the project, if any, against the total cost of the project previously 2385 approved by Tynwald. Further information is included within Note 3 and Note 4 below. 3. The additional amount to be authorised for the Department of Infrastructure in respect of the acquisition of land and property (included within Column 6 and Column 7 at Item 20) relates to the purchases of Finch Hill House and the Middlemarch site in Douglas. The expenditure was not included within the Budget for 2013-14 and is wholly financed by transfers from the Land & Property Acquisition Reserve. The expenditure required 2390 and received the prior approval of Treasury. 4. The additional amounts to be authorised for the former Department of Community, Culture and Leisure and the Department of Home Affairs relate to additional expenditure on design fees for schemes that are included within the Government’s capital programme.
______1534 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
6. Children’s Services Joint Improvement Plan – Debate commenced
The Minister for Policy and Reform to move:
That the Children’s Services Joint Improvement Plan in response to the Scottish Inspectorate Report be received by Tynwald. [GD 2014/0033]
2395 The President: We move then, Hon. Members, to Item 6 – Item 5 is not being moved – Children’s Services Joint Improvement Plan. I call on the Minister for Policy and Reform.
The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. 2400 I have today tabled – as requested by this Hon. Court in March 2014, following the receipt by the Court of the Scottish Care Inspectorate Report on Children’s Services in the Isle of Man – the Children’s Services Joint Improvement Plan. This Plan details the actions needed to address the issues identified in the Inspection Report, who will be responsible for completing the action, target dates for completion, and the lead 2405 scrutiny groups that will ensure the target dates are met. As I am sure Members can see, work has already started on some of the actions and a new children’s policy and a five-year strategy for children and young people will be presented to Tynwald in the near future. These will set the future vision for Children’s Services to ensure the provision of high-quality services with clearly defined outcomes for children and young people. 2410 Hon. Members will be well aware that concerns related to children’s and families’ services go back a long way, first coming into the full public consciousness over a decade ago. In the intervening period, there have been false dawns and highly well-intentioned but perhaps not quite suitable initiatives; but I can honestly say that I believe the service is now on the road to recovery. I do not, however, simply expect you to take my word for this. Members will recall that 2415 I have asked the inspectors to return in one year to review progress on the Joint Improvement Plan, by which time the actions required will have been completed or will be well on the way to being able to give evidence of material progress. Madam President, I beg to move.
2420 Mr Watterson: Madam President, I beg to second and reserve my remarks.
The President: The Hon. Member, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. 2425 There is really just one item within this report that I would like some clarification on, and that is action 4 under the first heading. Firstly, I am assuming that the ‘Safeguarding Children’s Board’ shown as the lead delivery group is simply a typing error, but I would be grateful if the Minister could confirm that this should read the ‘Protecting Children Board’. Secondly, the action point states that it is to ‘review and strengthen the arrangements for 2430 sharing information, and develop consistent guidance on this matter.’ I would be grateful if the Minister could clarify why it is thought necessary to strengthen the arrangements for sharing information, because my understanding is that all sharing of information must be in accordance with the law as it stands at the moment – and that means it must comply with the Data Protection Act 2002 and the European Convention on Human Rights. 2435 So, if complying with the law as it stands is not particularly onerous and simply means that information may be shared either with the consent of the child and family, or if a practitioner has reasonable grounds to believe that a child is likely to suffer significant harm and where to seek consent would cause further significant harm… So wanting and being able to help are ______1535 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
actually two different matters, and if an agency simply wants to help there is no problem 2440 provided it complies with the law as it stands now. I think it is quite clear that Children’s Services does need to win the respect and trust of the public and their confidence in it, but respecting the law as it stands and discussing any concerns with the child and family first and seeking consent to make further enquiries – obviously except in cases of clear child protection matters – I think would be a good starting point. 2445 So, in a nutshell, Madam President, I cannot see any need to strengthen the arrangements for information sharing because they seem to be adequately covered in the law as it stands. So I would just like some explanation, really, of what that is all about, what it actually means… what they are looking for. Thank you.
2450 The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you, Madam President. Three questions – or questions on three areas. Can the Minister tell us more about the training group in item 3.6, because one of the things 2455 that I felt, in my experience, was working particularly well was integrated training between Health and Social Care, so I wondered whether that was being diminished with this new formation of any new training group. The second question is about item 1.7. The action point is to review concerns and complaints procedures across Government. The first question is: can the Minister clarify what the difference 2460 between a concern and a complaint is? Secondly, can he integrate an appeal into the answer he gives, because I have many cases where people effectively have not been making a complaint – they have actually been making an appeal against a decision of something like the resource allocation panel or something like that. Moreover, it seemed to me in 2009 that we had the beginnings of a very good complaints and 2465 appeals system inside Health and Social Care and I wondered whether that was being diluted with this approach across Government. Finally, on point 1.3, I wondered how the Minister intended to promote equality; how he was going to take on this duty to promote equality; and what budgets does he have in mind to meet the additional and complex needs with the triangular approach that he discussed and described 2470 this morning.
The President: The Hon. Member, Mr Speaker.
The Speaker: Madam President, I am just conscious of the time so I will keep my remarks 2475 short. (A Member: Hear, hear.) As the Minister said, we are 10 years on from the inquiry, and what we have is – following a first opportunity for a detailed inspection, albeit general, report – three very surprisingly short tables of bullet points. The lead scrutiny groups that are referred to… There are three of those, and as the Member 2480 for South Douglas has already pointed out, it should be the Protecting Children Board that is one of them and not the ‘Safeguarding Children’s Board’. Who has executive responsibility for these? Is it ultimately the Council of Ministers? Who will be accountable in one year’s time following the next inspection if the next report is no better? Why is there no mention in the action plan of something that is pretty fundamental, and that 2485 is putting the Protecting Children Board onto a statutory basis? (A Member: Hear, hear.) I am quite surprised that there is no reference to this because it has been announced that this will take place as part of the Education (Amendment) Bill that is coming forward. This is not just some academic nicety. It is actually very important because unless it is on a statutory basis it cannot be subject to public or annual inspection; if it does not have any legal existence, no 2490 complaint against it can be pursued; and given that the Protecting Children Board is involved in ______1536 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
serious case reviews and handling of sensitive data, it has to be, as an entity, registered with data protection in its own right. So it is pretty fundamental to everything else that it is put on a statutory basis. The references, the actions… I will not repeat what Mrs Beecroft has said but she is quite 2495 right to refer to establishing an early intervention strategy and strengthening the arrangements for sharing information. The key to this is the sharing of sensitive and personal information without the consent of parents, because nothing is more guaranteed to destroy trust between parents and families and the social services system than the fact that social workers are going behind the backs of families. We know that the law provides for not requiring consent in the 2500 cases of child protection, children at risk of significant harm; but where it is low-level concerns about need, it is absolutely essential that parents are engaged in sharing of information. I had a Written Question down about the Haringey judgment to the Minister, which is pertinent because that was the case where there was a false allegation, and instead of engaging with the family early on it was escalated, without the parents’ knowledge, into a child protection 2505 issue. It had no foundation and the court ruled it was contrary to human rights. As a result, Ofsted, who do the inspections in England, have modified their guidance in the light of this Haringey judgment to make it absolutely clear that there is a need to obtain parental consent except where a child is likely to suffer significant harm. In other words, it is differentiating between early help and statutory child protection. 2510 This has been the problem of why, in the Isle of Man, we had to engage 51 more social workers two or three years ago – locum social workers – and why we had to engage 12 more permanent posts, because the system was dealing with low-level referrals… it turned out to be absolutely groundless in terms of the law. The action plan does refer to the fact that as an issue:
‘There was no agreement across services about what would define a child as “in need”…’ 2515 It is no surprise that this concept of need is not understood, because in law statutory need and risk of significant harm are the only thresholds for intervention by the Department, by the state, with families. Social workers and others need to understand that there is a difference between child welfare and child protection, and it is low-level concerns about child welfare that 2520 have needlessly engaged families and all the apparatus of the child protection system – as the Minister himself, from his own very vivid account of the matter to or three years ago well understands. Why is there therefore no action about defining better in law this concept of welfare and need to give the justification for social workers to involve themselves in family life? They have 2525 done this in Wales. There is a Social Services and Well-being Bill that makes provision for refusal by a parent of a needs assessment for a child, unless it is a case of child protection, and that is good because we can then engage the trust of parents more fully. This concept of informed consent as a means of building trust between the public and the services is absolutely key to the proper functioning of the social services system. 2530 Is the system to be focused on children at risk, which led to the original childcare inquiry? If so, it will be a smaller operation in terms of resources. But if we are going down the road of non- statutory interventions for welfare, then the costs are going to escalate. Madam President, I would appreciate some comment on those points.
2535 The President: Hon. Members, the Court will now adjourn. The adjournment will be until 2.30. I would like to remind Members that there is a presentation to Members by the Law Society in the Barrool Suite.
The Court adjourned at 1.05 p.m. and resumed its sitting at 2.30 p.m. 2540
______1537 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Children’s Services Joint Improvement Plan – Debate concluded – Motion carried
The President: We continue our debate on Item 6. If no other Member wishes to speak, I call on the mover to reply.
The Minister: Thank you, Madam President. 2545 Listening to the tenor of the points made by Hon. Members with regard to the Joint Improvement Plan, I reflected over lunch time and thought that really it was slightly remiss of me – I should have contextualised the Joint Improvement Plan a little bit more than I did, so perhaps I can do that now. The Joint Improvement Plan should be seen, and will be seen, in context with the policy and 2550 strategy which will be forthcoming in due course. I think Mr Speaker alluded to the fact that it was a bit shorter than he expected. The intention of it here was that, following the inspection, the guidance that we got from the inspectors was ‘Don’t try and look at everything and do everything: focus in on the key areas of concern and respond to them in a robust way.’ So that is why the Joint Improvement Plan is presented in the way it is. It talks about collaborative 2555 leadership, about the concept of immediate response and improvements to the provision of early intervention, and it should be seen in that regard, rather than an over-arching, all-singing report. On a detail, the Hon. Member for South Douglas, Mrs Beecroft, is absolutely correct: it is the Protecting Children Board. I think where that has come from is that, as Hon. Members may 2560 know, there is an intention now to have working towards a safeguarding adults board and the two will run parallel, and I think that perhaps we got slightly carried away with ourselves on that one. It should be ‘Protecting Children Board’. Again, the issue about the data protection – the context of that should be seen as… and it is dealt with, the issue of collaborative leadership and working across Departments. It is a matter 2565 of professionals working more closely together. It in no way intends or suggests or instructs us to move outside the remit of the Data Protection Act. Nor would we, nor would the Children and Families services do any such thing. I think it is also important, and Mr Speaker captured it somewhat, this difference between serious intervention on the one hand and a much lower-level support, and a number of 2570 Members talked about the issue of engaging with families. That is exactly what this is all about. The intention here is not to… as we have done in the past, had a much more brutal and singular process which drew, unnecessarily, children into serious intervention levels and drew in application of Social Care services. The intention here is to see it at two levels. It is to get low- level support injected in at the appropriate level to help families ensure that issues do not get to 2575 a serious level. That avoids referrals. That avoids the need to find ourselves intervening in serious cases because it has been dealt with earlier. So that is absolutely at the core of everything that is being done in terms of Children and Families services. It is not to brush the family aside. It is to engage with the family, it is to help the child, it is to help the family maintain their own integrity and well-being; and only then, later on, should we hope to see fewer 2580 referrals, and to some extent that is happening already. The matter of training was touched upon. Again, the training issue was more about helping professionals learn better how to do that low-level support work without, as has been in the past historically – and the Speaker alluded to it and I did when I was a backbencher, my concern there… to have professionals understand that they have a professional role to help support 2585 families and children outwith that Social Services intervention directly. With regard to the Hon. Member for Douglas West’s comment about complaints and appeal, I think I am going to circulate Members with a note on that one later on, if that is helpful. (A Member: Vote!) ______1538 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
As far as the matter of the statutory basis of the Safeguarding… or Protecting Children Board 2590 is concerned, that was outwith this particular element and will appear elsewhere. I hope that answers the question there. I think with that, Madam President, I beg to move.
The President: The motion before the Court is set out at Item 6 on your Order Papers, Hon. 2595 Members. Those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 17, Noes 0
FOR AGAINST Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Quayle Mr Robertshaw Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 17 for and no votes against.
In the Council – Ayes 7, Noes 0
FOR AGAINST Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The motion therefore carries, but I would register my concern that there are six Members who are not present to vote on this issue. 2600 Mr Corkish: Hear, hear.
______1539 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
7. Tynwald Honours Committee – First Report received and recommendation approved
A Member of the Tynwald Honours Committee (Mr Speaker) to move:
That the First Report of the Tynwald Honours Committee 2013-2014 [PP No 2014/0047] be received, and the following recommendation be approved:
That Mr Hector Duff MM BEM be awarded the Tynwald Honour on 7th July 2014.
The President: We move on to Item 7. I call on a Member of the Tynwald Honours Committee, Mr Speaker, to move the Tynwald 2605 Honours Committee Report.
A Member of the Tynwald Honours Committee (The Speaker): Thank you, Madam President. In 2002, Tynwald was empowered to confer honours in its own right, and the remit of the 2610 Tynwald Honours Committee was extended to recommend to Tynwald the awarding of such honours to living Manx persons. The Committee has met during the last year and has considered the issue of awarding honours to living Manx persons. The Report which was presented before this Hon. Court reflects the results of these deliberations. I would like to explain to the Court the basic thinking behind 2615 the Report. Madam President, the Tynwald Honour is the highest honour which the Isle of Man can bestow. It is awarded only to those who have made an outstanding contribution over many years to one or more areas of Manx life. Hon. Members can see the full criteria for the award in paragraph 5 of the Report. It does not have to be awarded every year and has been awarded 2620 only to people who have made a significant contribution to Manx life over many years. This year, 2014, your Committee has resolved to award the Tynwald Honour to Mr Hector Duff MM BEM, who is a World War II veteran. Aged 19, he served with the 7th Armoured Division, known as the Desert Rats, from 1940 to 1945. He was involved in Normandy on the afternoon of D-Day and was awarded the Military 2625 Medal for bravery for his services. On his return to the Island, he served a 30-year career as a firm, fair and fearless member of the Isle of Man Constabulary, well respected for his integrity. For most people, a distinguished military service followed by a lengthy career protecting the Manx public and upholding the law would have been enough. However, upon his retirement from the Police, he dedicated his life to important and often thankless charitable work. It would 2630 be impossible to list these charities in their entirety, but even today, in his 95th year, Hector Duff is active in the following organisations: Chairman of the Normandy Veterans Association, Chairman of the Joint Ex-Service Association, a member of the Isle of Man Government Armed Forces Day Committee, a member of the War Pensions Committee, a member of the War Memorials Committee, a member of the committee of the Police 2635 Benevolent Fund. He continues to participate to a large extent in the work of the Royal British Legion and the Soldiers, Sailors, Airmen and Families’ Association. He is dedicated to these organisations, giving to them a great deal of his time and energy. He is forthright in his views and continues to be a diligent worker, despite his years. He has made a real difference to many people and is a wonderful advocate of those who have served their country. 2640 In recent years, Mr Duff has delivered hours of education to many young people. Having not spoken about his personal experiences of war for much of his life, he decided to talk to students about the horrors of war. He has consequently spent a considerable amount of time describing war to a generation that can only begin to imagine what a world war was like. He has undoubtedly made a difference to the understanding of young people, but also made a ______1540 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
2645 difference to their development as individuals, for which we should all be grateful. In the New Year’s Honours of 2013 he was awarded the British Empire Medal, presented at a ceremony at Government House in recognition of his work with the Island’s school children. Hector Duff has given his whole life to public service, both paid and unpaid, in conflict and in peacetime. He is truly an example to all. 2650 Members were circulated in confidence with this proposal so that they could submit to the Committee in private any comments they may have in advance of discussion on the floor of Tynwald Court. Hon. Members will note from the Report, at paragraph 18, that we recommend that the Tynwald Honour be awarded to Mr Hector Duff MM BEM on Tynwald Day 2014. Madam 2655 President would present the medal in the chapel after the captioning ceremony. We believe this to be a suitable and dignified occasion for the award to be made. It is now necessary, in line with the terms of reference of the Tynwald Honours Committee, for Tynwald Court to decide whether the Honour should be bestowed on Mr Hector Duff MM BEM. I commend him to the Court. 2660 I beg to move.
The President: The Hon. Member of Council, Mr Corkish.
Mr Corkish: Thank you, Madam President. 2665 As we are all aware, the Tynwald Honour is the highest accolade that our Island can bestow on a member of our community. We are also aware, as has been pointed out by Mr Speaker and indeed it is obvious to the Tynwald Honours Committee, that this prestigious award is not given lightly, nor indeed to be awarded annually but only to a worthy recipient readily identifiable. 2670 Mr Speaker has provided to this Hon. Court a comprehensive précis of the life and times of Hector Duff MM BEM, to which I cannot easily add. In this his 95th year, Hector Duff could be expected to lead a quiet and relaxed lifestyle, but he continues to lead a full, active and worthwhile life within our community, contributing greatly to its many facets and adding to the pride we take in our Island and its people. Such passion, enthusiasm and zest for continuing to 2675 contribute to Island life, together with a distinguished war service, made his nomination by the Tynwald Honours Committee a unanimous one, encapsulating all the criteria demanded of such noble Honour. Madam President, I have the greatest pleasure in seconding the motion.
2680 Mr Houghton: Hear, Hear.
The President: The Hon. Member, Mr Butt.
Mr Butt: Thank you, Madam President. 2685 I would like to congratulate the Committee on choosing Hector Hugh McDonald Duff as their recipient of the award this year, as I really do believe he does deserve the award. If I could just say a few words about Hector, whom I had the privilege of working with for many years and have known for most of my life. When I was a young constable he was a senior PC, and all we knew about Hector was that he had done some brave act in the desert during the 2690 war and that he had allegedly driven for General Montgomery as his driver as a result of his war service in the desert. But we did not know if any of that was true because Hector never ever spoke about it to anybody. He was very modest, as were several of his generation in those days. His son Colin, who is a friend of mine, I asked two or three years ago what actually happened, and even Colin, his son, did not know what Hector had actually done – and that was the modesty 2695 of the man.
______1541 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
In his service in the Police Force his integrity was without question. He led a life without blemish in the Police Force. But Hector – and I think Mr Speaker mentioned he was forthright – would take up the cudgels on anybody’s behalf who had a problem, young PCs etc, because the senior men in the Force in those days respected him so much that he could go to them, have a 2700 row with them, tell them what he thought, and they would listen to Hector. Hector was a great support for many people in their careers in his service in the Police Force. He had a hard war – he served in some very important battles – and he did his duty in the Police Force. Those were his duties, in a way, but I think his later career is even more impressive. When he retired, he had a short stint as a driving instructor. Hector was one of only two men 2705 trusted to drive the only police car in its day – the Austin Westminster 3-litre, which was the police car in the 1960s. Only two were allowed to drive that. Hector could drive at speed and Hector knew how to drive. He became a driving instructor and taught many hundreds of people how to drive, including my family – so there is some benefit to the Isle of Man there. But his later work he carried on not as a duty but because he cared. Mr Speaker mentioned 2710 the list of charities he was involved with. He did a lot more than that and I know that he dealt with policemen who retired and their widows, servicemen who retired and their widows, and he still does to this day. Members of my extended family he has gone and helped out. People who are 30 years younger than him he is helping with their shopping and driving around etc. Hector has devoted his life to helping other people ever since. 2715 One thing that always stands out for me every year is his whirlwind work with the British Legion around November, when he singlehandedly collects thousands of pounds. He is the one- man band almost in the Onchan and Douglas Legion area. I always receive with great pleasure that letter in that perfect copperplate handwriting that he still has and has not blemished in all his 94 years. To receive that letter reminds me that Hector is still with us, and Hector is the man 2720 that I admired throughout my career. I am so pleased to be able to give a public thank you to Hector for the help he has given me personally and my family and lots of my colleagues over many years, and he really is a worthy recipient.
2725 Several Members: Hear, hear.
The President: The mover to reply.
The Speaker: Madam President, I do thank the Members, Mr Corkish and Mr Butt, for that 2730 particularly heartfelt tribute to Hector Duff, which I think sums up very eloquently the thinking that lay behind this particular nomination. I am once again pleased to commend to the Court Hector Duff – a real Manx hero. I beg to move.
2735 Mrs Cannell: Hear, hear.
The President: The motion before the Court is set out at Item 7 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
______1542 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
8. Social Affairs Policy Review Committee – Pre-school education – Third Report received and recommendations approved
The Caairliagh of the Social Affairs Policy Review Committee (Mrs Cannell) to move:
That the Third Report of the Social Affairs Policy Review Committee for the Session 2013/14: Pre-School Education [PP No 2014/0027] be received and that the following recommendations be approved:
Recommendation 1 That Tynwald is of the opinion that, where a Department or the Council of Ministers is contemplating a radical change in policy, the need to consult Tynwald and the public is greater than ever; and that even if the need for a change is driven by budgetary considerations, efforts should be made to consult upon and debate the change outside the budget process.
Recommendation 2 That the Department of Education and Children should work with the Department of Health and Social Care to consider regulation and other means which will maximise the educational standards applicable where pre-school establishments enjoy the benefit of public funding through the credit scheme.
Recommendation 3 That the Department of Education and Children should continue to produce baseline assessment data for new reception children, and that this information should be published annually together with a detailed analysis of the reasons for any changes.
Recommendation 4 That the Department of Education and Children and the Department of Health and Social Care should assess the impact of the 2012 pre-school reforms on the Government’s ability to identify children with special educational needs, and report with recommendations on what action could be taken in mitigation.
Recommendation 5 That the Department of Education and Children, with the Treasury and the Department of Health and Social Care, must aim to design the credit scheme and to allocate sufficient funds, to ensure that no child is denied the opportunity of attending five 2.5 hour sessions per week throughout their pre-school year.
2740 The President: Item 8. The Caairliagh of the Social Affairs Policy Review Committee, Mrs Cannell.
The Caairliagh of the Social Affairs Policy Review Committee (Mrs Cannell): Thank you, Madam President. 2745 Your Committee has undertaken an investigation following a letter that we received, which was sent to us on 20th April 2012 by 10 Members of Tynwald, namely Mr Cregeen, Mr Cannan, Mr Quayle, Mr Hall, Mr Singer, Mr Quirk, Mr Houghton, Mr Henderson, Mr Corkish and Mr Butt. They wanted us to actually have a look at the new policy change that the Department of Education have brought in, in terms of pre-school education, and to consider the new policy – 2750 whether or not it was value for money and also if it meets educational needs – and that is what we have been doing since 20th April 2012. ______1543 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
On 27th April the same year, we issued a call for public evidence and we are very grateful to everyone who did respond. The responses received are reprinted within this Report, other than one submission which was sent in confidence and another which was looking at the wider 2755 educational policy rather than the single matter of free education. On 2nd May 2012, we were scheduled to hear evidence from the then Minister for Education, Mr Karran, and the former Chief Executive, Mr Dobson, and the Director of Education, Mr Barrow, as would normally be our process, and of course we took the opportunity at that meeting to ask them about pre-school education. Hansard is printed in the Report, which 2760 will give you an idea of what we had a chat about. In April 2013, we conducted an online consultation designed to find out about the experience of families using the new system. The results of that are published in the Report and are at annex 1. We are very grateful to all who responded, and in particular to the staff of the Tynwald Chamber and Information Service who undertook the consultation exercise, and to the 2765 Economic Affairs Division for their assistance in interpreting the returns. In December of the same year, 2013, we wrote to all registered providers of day care in order to make a further assessment of how the pre-school sector was developing. The results of this survey are at annex 2. Again, we are grateful to those who took the time to respond. Throughout the investigation we have received written evidence from the Department of 2770 Education, which is included within the Report. Also included is a private and confidential Council of Ministers paper, published with the kind permission of the Chief Minister but having originally been leaked by Mr David Cretney, Member of the House of Keys, who was then a Member of the Council of Ministers; and the executive summary also of an internal audit report. Those are also contained as annexes at the back of the Report. 2775 We received quite a number of submissions and we had a very interesting one from a former Minister for Education, Mrs Hazel Hannan, who was also the Member for Peel for a considerable length of time. She told us that she had instigated an investigation into nursery education in 1992, and the policy developed at that time was:
‘As and when finances and circumstances arise, nurseries would be developed in infant schools.’ 2780 Prior to 1998, provision was made at various schools throughout the Island. From 2005, schools with space in their reception class were also supported in operating foundation stage units. This applied to Ballasalla, Bride, Marown, Laxey, Foxdale and Anagh Coar. By 2010, the Department was able to offer approximately 470 places, each of them for five 2785 2.5 hours per week. At that time, there were approximately 840 children in each year group, leaving a shortfall of 370 pre-school places. In particular, there was a shortfall in the south of the Island, in Jurby and also central Douglas and Ramsey. On Tynwald Day 2009, a Petition for Redress was presented by the Mothers’ Union. This Petition was picked up for debate on 21st October 2009 by the Hon. Member, 2790 Mr Juan Watterson. The result of the debate was a commitment by the Department to undertake a consultation and report back to Tynwald. The consultation paper was undertaken in January 2010 and the report to Tynwald was debated in March 2010. That report identified a series of options but recommended a continuation of the existing policy, despite an amendment being moved by the mover, Mr Watterson, that a charge be 2795 introduced of £5 per session for each child. This was rejected, two votes to 20 in the House of Keys, and one vote to six in the Legislative Council. So the policy established on 16th March 2010 was and continued to be:
‘That the Department of Education continues to provide free pre-school provision as currently exists and will seek to expand that provision into those geographic areas where there is a recognised shortage, in particular, the south, central Douglas and the northwest regions of the Island.’
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2800 That was further reaffirmed at the start of the 2011-12 academic year and was subject to a Written Question on 12th April 2011. So right up until April 2011 that was the policy of Tynwald Court for pre-school provision. Then, of course, we had a change of direction. In February 2012, the Department announced a significant change of direction. The change in itself was highly controversial at the time. So too was the way in which the change was handled 2805 and this was the subject of much of the written and oral evidence we were given during the first part of our investigation. The sequence of events is outlined here and set out in chronological order in annex 3. I think Hon. Members will find that very helpful and a very quick guide as to the sequence of events. On 16th February 2012 – less than a week before the 2012 Budget debate – teachers were 2810 briefed on the changes with the Department of Education and Children, on what they proposed to bring in for September that particular year. On Tuesday 21st February 2012, the proposal was debated as part of the main Budget debate. The following day, 22nd February, it was again debated – this time on a motion tabled by Mr Speaker as a Matter of Urgent Public Importance. It was the subject of written and oral 2815 Questions in Tynwald in March 2012 and in the House of Keys on 27th March and 3rd April. Also on 3rd April 2012, an attempt in the House of Keys to have the matter debated as a Matter of Urgent Public Importance was tabled by myself and was narrowly defeated by 11 for and 12 against. It was the subject of a further Tynwald debate on 17th April 2012, again on a motion tabled by Mr Speaker. The topic was then referred to us by letter on 20th April 2012. 2820 So, Madam President, it shows that there was clearly a great concern as to this change of direction by Government on such an important provision which the people had enjoyed up until that point. We have taken oral evidence from the three former Department Members, Mr Butt, Mr Hall and Mr Houghton, and we learned something of the way the discussions behind the scenes 2825 leading to the 2012 Budget had been conducted. All of that is recorded in Hansard, for Members’ interest. Their account suggests that an increase in student tuition fees had been under discussion but that Mr Karran, as the Minister, had opted to pursue changes to pre-school education as an alternative. The irony, of course, is that student fees soon got increased anyway the following year in the 2013 Budget – moved then by Mr Crookall, the Member for Peel, the 2830 new Minister for Education. There was a Council of Ministers working group put together by the Chief Minister, who had three meetings – 1st March, 6th March and 8th March. Then they produced a report. The report is also annexed within this particular Report. It gives the summary of the Council of Ministers’ decision on the way forward. 2835 Given the time which has elapsed, we recognise that some of the political machinations, about which we heard so much in 2012, are now of historical interest only. Nevertheless, it remains the case that the whole episode was badly mishandled by the Department of Education and Children and by the Council of Ministers. Before the initial announcement of February 2012, the degree of consultation was woefully 2840 inadequate. After the announcement, Departmental officials and some politicians made valiant attempts to engage with interested parties, including two young mums, Mrs Burns and Mrs Morris, who campaigned so effectively on behalf of the affected families. In the event, however, no account appears to have been taken of their proposals in rolling out the new policy. We recognise that times are hard, and having had to make an 2845 announcement on the new policy in February 2012 there was not much time to get everything in place by September 2012. Nevertheless, we regard this whole episode as a profound failure to manage the expectations of the public and to introduce change in a constructive manner. Therefore our first recommendation, Madam President, is:
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‘That Tynwald is of the opinion that, where a Department or the Council of Ministers is contemplating a radical change in policy, the need to consult Tynwald and the public is greater than ever; and that even if the need for a change is driven by budgetary considerations, efforts should be made to consult upon and debate the change outside the budget process.’ 2850 Not forgetting, Madam President, that this went directly against established Tynwald policy, which was affirmed in 2010 and reaffirmed in 2011. So this change in policy was done without the sanction and approval of this hon. place – a place which I had always regarded as being the place to establish and debate and consider policy and finance. Why else would we be here? 2855 We had some difficulties at the commencement of the investigation because there appeared to be not one Department able to give us the answers we were looking for, in terms of looking and evaluating whether or not it was value for money and whether or not it met with any kind of educational merit. We started by asking the Department of Education and Children to tell us what was going on 2860 with the new policy, the new service. They were able to provide updates on applications to the credit scheme and on work such as segregation of facilities which was going on in their own premises. The Department of Social Care was able to provide information on the number of operators registered to provide day care facilities. But neither Department could give us even basic management information such as the number and location of places and the number of 2865 hours of pre-school education each child was receiving. So it was very difficult for us to monitor, and hence this has taken us the best part of two years. By the time we launched the online consultation in April to May 2013, it gave us a little bit more information, but it was mostly from a carer’s and parent’s point of view. Then of course, later, the survey that we did of the registered providers in December 2013 gave us information 2870 from their side of things; but it also left an awful lot of unanswered questions which to date we have not been able to find a satisfactory answer to. Perhaps it is because the system is still new and it is still bedding in. So we tried to focus on the educational needs, the quality of provision and the qualification of staff. It was that, in essence, that was the main concern that ran as a main thread all the way 2875 through the public’s concern, the parents’ concern, the teachers’ concern, Hon. Members’ concern, throughout the debates in 2012-13: what about the educational element; what about early learning; how is that going to be undertaken if teachers are no longer going to be required to head up these establishments? We received submissions from the Association of Teachers and Lecturers, and they 2880 emphasised that:
‘Entitlement to free early education gives children the best chances to learn and develop… [and] high quality provision for young children is absolutely vital to give them a good start in life.’
One of the greatest concerns aired in the debates in 2012 and in the written and oral evidence presented to us in that year was that the new system would no longer be teacher-led. 2885 This remains a concern. One UK academic study with which we were presented found that:
‘Children with access to a trained teacher were more co-operative and sociable, and children in rooms with a better qualified workforce were more co-operative and displayed fewer worried and upset behaviours than children cared for by less well-qualified staff teams… The development of a well-qualified childcare workforce is vital for improving positive child development. In particular, employing qualified teachers to work with children under the age of three has a significant impact on children’s developing co-operation and other peer skills.’
In oral evidence in the House of Commons to the UK’s Public Accounts Committee in 2012, Prof. Iram Blatchford of London’s Institute of Education said: 2890 ‘We have shown over and over again… that there is a strong correlation between quality and the qualifications of staff. However, when staff are qualified, they have to be paid more.’
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So we looked at the quality assurance in a market delivery model. One way of ensuring teacher-led provision is to arrange that provision directly through the Department of Education and Children, as was done prior to September 2012. We acknowledge that this is not a viable 2895 model. When the change to pre-school was being brought in, we were assured by the Department of Education and Children that it would work with the Department of Social Care to ensure that day care providers provided a suitable level of educational content. Indeed, Mr Dobson told us that the Department was working closely with the Department of Social Care and he said – and 2900 it is in Hansard:
‘[We are] looking at moving the regulation on in terms of educational content.’
That gave us great comfort at the time. However, in its January 2014 submission, the Department of Education and Children appeared to have drawn back from that commitment, 2905 saying that they will continue to work with the Department of Social Care and will continue to encourage them to look to educational standards in their settings. So, on the one hand, we were assured regulations would come in to give some sort of comfort and to ensure that a good level of educational content was provided to each pre-school age child; and then a little while later we are told, ‘Well, actually, we are just going to continue 2910 to encourage.’ We say co-operation and training are all very well but the option of writing more detailed educational standards into the Department’s regulations should not be lost sight of. Hence, Madam President, our second recommendation is:
‘That the Department of Education and Children should work with the Department of Social Care to consider regulation and other means which will maximise the educational standards applicable where pre-school establishments enjoy the benefit of public funding through the credit scheme.’ 2915 Also, on page 11 you will find that since 2009 we asked the Department of Education for some baseline assessments – whether or not they have been monitoring the success of these children over the years. They had since 2009 and overall, personal, social and emotional development, communication, language and literacy, problem-solving, reasoning and numeracy, 2920 knowledge and understanding of the world, physical development, and creative development are all up. But then you would expect it to be up because the numbers are greater – there are more children accessing pre-school. However, attainment in knowledge and understanding the world was, in fact, 5% below the 2012 standards. So there is a question mark over that and I feel sure that the Department will consider and monitor that very closely. 2925 We congratulate the reception children of 2013 on their achievements but we regard it as far too soon to attribute their success to the new pre-school regime. This claim by the Department needs to be tested. As a consequence, our third recommendation is:
‘That the Department of Education and Children should continue to produce baseline assessment data for new reception children, and that this information should be published annually together with a detailed analysis of the reasons for any changes.’
2930 Throughout the debates in 2012-13, and also throughout our investigation, the identification early on of special needs was quite profound and Mr Butt, Member of the Legislative Council, emphasised in the Budget debate of February 2012 the importance of a comprehensive system which can pick up special needs, and we have quoted what he said, which was also in Hansard. We share Mr Butt’s concerns, which were well-articulated in 2012, and we remain deeply 2935 concerned that, although the geographical coverage and the overall capacity of the system have both increased, the different funding model means that there is at least as much and probably more chance that the most vulnerable children will slip through the net. Further work is needed on this. Towards the end of this Report you will find some of the written evidence, and there are
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one or two in there from parents with children of special needs who have fallen through the net, 2940 so to speak. Recommendation 4 is:
‘That the Department of Education and Children and the Department of Social Care should assess the impact of the 2012 pre-school reforms on the Government’s ability to identify children with special educational needs, and report with recommendations on what action [should] be taken in mitigation.’
Then, of course, we began to look at the value for money. We had some very good evidence from Mrs Amy Burns and she said there were a number of academic studies that were 2945 undertaken seeking to enumerate and to quantify in cash terms the benefits which can arise from public expenditure on pre-school education. She cited the High/Scope Perry pre-school study, which is a widely quoted US study. She also quoted a review in 2004 by the Economic Policy Institute of the United States by economist Dr Robert Lynch. Dr Lynch puts it like this: 2950 ‘There is a strong consensus among the experts who have studied high-quality early childhood development (ECD) programs that these programs have substantial payoffs… Even economists who are particularly skeptical about government programs make an exception for high-quality [early children’s teaching] programs.’
He came up with the equation: for every $1 invested, there was a return of $7.16. I do not think any of us would actually argue, Madam President, the benefits of early intervention, early pre-school education, and its value on our youngsters. 2955 We looked at the expenditure on the old system – the one that was in place right up until 2011. The expenditure was actually not shown separately in the Government accounts. The accounts show expenditure on primary education broken down by establishment, and as all pre- school provision was provided within existing primary establishments it would appear that pre- school expenditure was most likely included within that figure, but it was never actually 2960 separated. Actual expenditure on primary education in 2011-12 was £21.7 million. The Department of Education’s 2010 report, which reaffirmed the existing policy of free pre- school education, quoted the revenue cost of the then existing system as ‘approximately £75,000 per year per unit’. The report does not make it clear what it means by ‘unit’, but assuming this means an establishment with dedicated pre-school provision, as opposed to 2965 schools with space in a reception class, there were at least, at that time, 11 units, giving an overall annual cost of £825,000. The Council of Ministers’ paper of March 2012 states that the Department of Education was, at that time, providing free places for just over 50% of eligible children and that the Department would need to allocate approximately £1.65 million to cover the overall cost of extending the 2970 free system, as it was then, to those parts of the Island where there was a shortfall. Expenditure on the new system: the Council of Ministers paper confirms that they had, in fact, offered a maximum budget of £400,000 per year to set up the new credits system. In January 2014, the Department of Education and Children’s submission told us that the total expenditure for 2012-13 was £475,600. A budget of £469,000 had been set for the financial year 2975 2013-14. The Department denies that there was any overspend in the financial year. While this may be true at a technical level, it seems clear to us that the Department is spending more than the £400,000 anticipated in the Council of Ministers’ report, per annum. Under this new scheme, every child is eligible for a credit worth £350 a year. On the evidence submitted to us, this typically covers no more than 20 half days per year. That is equivalent to 2980 four weeks under the old scheme, or around a tenth of what was available before. Children in families on very low incomes are entitled to £1,150 per year. This is more than three times the standard level, so would cover 65 half days or 13 weeks’ worth under the new system. We looked at the expenditure and the future of considering the means testing which was announced earlier in 2013. In fact, it was on 19th November in a debate on the means testing of 2985 child benefit that the Minister for Social Care, Mr Robertshaw, said that the savings of doing that would be around £½ million – this is by means testing child benefit – and that was going to go to
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the Minister for Education and it would go towards the propping up of this new pre-school credit scheme. So we waited to see how that would develop. But in its January 2014 submission to us, the Department of Education and Children provided 2990 the following clarification from the Department of Social Care – so it was not as we thought it was going to be; it was something a little bit more complicated. They said:
‘The income testing of child benefit entitlement from April 2014 is expected to save £2.5 million per annum, £½ million of which has been ear-marked to provide additional financial help to families who are on relatively low income, but who do not receive income-related social security benefits, with meeting pre-school education costs… The precise mechanism for income-testing entitlements and the levels of help which will become available have yet to be determined.’
So it would seem that that is some time off. Perhaps one of the Ministers has got an update 2995 for us on that. If we take the existing budget of around £470,000 and we add an addition of £½ million from the means testing or the money that is going to be freed from the means testing of child benefit, we would anticipate that the budget for pre-school education for 2014 will be around £970,000. This would be more than was being spent on the old regime but would have the benefit of 3000 supporting an Islandwide system. Nevertheless, depending on how the proposed income-related support is designed, there remain risks both to value for money and social cohesion. Looking at the value for money, in the first two years we would say it is akin to ‘crumbs for all’: whereas previously we had half a cake, now there are crumbs for all. On the face of it, the Department has succeeded in delivering, in the academic years 2012-13 and 2013-14, an 3005 alternative model available in all parts of the Island and taken up by more children. So it has moved from providing half a cake to providing crumbs for all. This would represent value for money if the crumbs for all were sufficient to make the service sustainable in all locations and if families were both able and willing to make up the remaining costs to ensure their children had a sufficient amount of pre-school education. But the evidence 3010 we have received is quite the opposite. It is very mixed. Some families are saying, ‘Well, we pay up the shortfall.’ Others are saying, ‘Well, we have sent our child every day because we can afford it.’ Others are saying, ‘Well, I cannot afford to send them, other than to use the credit, which is half a day a week for so many weeks’ – usually the last term before they start main school education. And some are saying, ‘One half day a week is not sufficient for my child 3015 because there needs to be some kind of continuity to get true benefit from it.’ So it is difficult to establish what exactly is happening, because the evidence that is available is mixed. The providers suggest that there is good take-up of spaces. Some parents clearly are making up the difference; others, including some who contributed to our online consultation exercise, are not in a position to do so. The picture is rendered more complicated by the fact 3020 that families on very low incomes are able to claim more from the credit scheme, resulting in a ‘squeezed middle’ of working families who feel they are losing out as compared with families on benefits. Even to the extent that many families who can afford it are making up the difference, there remains a concern that the system is socially divisive, and the Association of Teachers and 3025 Lecturers wrote to us and said this:
‘The move to bring in private providers… highlights an issue for [us] of charging generally in education. For statutory provision as well as in this non-statutory areas, the [Association] believes that there is a risk of introducing inequality between those who can pay and those who can’t…’
and they believe:
‘… there is a moral obligation for there to be equality of access.’
3030 We would not disagree with them.
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We concluded that the sums originally allocated – the £400,000 – to the pre-school credit scheme were inadequate and created both inequality of access and a significant risk of poor value being obtained for such public money as was being spent. We have considered that the optimum number of hours of pre-school education a child 3035 should have per week will vary enormously from one child to another and, for any one child, will vary over time. In Jersey, the level provided by the States is 20 hours per week for 38 weeks a year. In England, there is universal provision of 15 hours per week, with additional free provision for two-year-olds from the most disadvantaged families. In the Isle of Man, under the old system, 3040 the level was 12.5 hours per week throughout the pre-school year, so not unlike what they have in Jersey. The value of pre-school education arises not only from attending for a sufficient number of hours per week, but also from maintaining an appropriate pattern of attendance. In the UK, they have been having extensive debate on this, chatting and debating about whether or not the 3045 15 hours that are provided free are long enough and whether or not it meets with the needs of the working parents, as opposed to three to five shorter days, regarded as giving greater educational merit. Prof. Blatchford explained to the House of Commons Public Accounts Committee, on 12th March 2012: 3050 ‘Let me take one policy and give an example of the flexibility that can be applied to the hours that the children go to pre-school. The 15 hours can be used so that a child may go all day Monday and half day Tuesday so mum can study or work. From the centre’s point of view, the continuity and planning for education which, as an intervention should be going in drip, drip, drip over a five-day period – we know from research that that benefits children more…’
The Association of Teachers and Lecturers also agreed with that type of thinking – that it was more a drip-drip feed. In other words, at least three half sessions per week would benefit a child more than one, or even going every day. 3055 So we considered the assistance provided in enabling parents to return to the workplace. Our view is this: that while this may be a spin-off benefit of a pre-school education, it is not an end in itself. It is essential to maintain a clear distinction between pre-school education on the one hand, and childcare on the other. We say, Madam President, that public funds should not be used to subsidise childcare for working families. 3060 Judging on the basis of experience before September 2012, five sessions per week of 2.5 hours per session was an adequate number of hours per week for children living in those parts of the Island where it was provided. We believe that this should remain the Department’s aspiration, to enable all children to access at least this much pre-school education throughout their pre-school year. 3065 We make suggestions on how that could be afforded, and we are not talking about a universal basis because we have now moved away from that; we are talking about something entirely different. The new model enables limited public funds to be targeted towards needier families, whilst allowing families on higher incomes to contribute to the cost of pre-school education by paying top-up fees. 3070 Ideally, a child from a family on a low income should be provided with sufficient credit to purchase 12.5 hours per week over 38 weeks of the year, while a child from a family on a moderate income should be able to access the same amount of pre-school education through a combination of credit and the payment of reasonable but not excessive top-up fees. As more information becomes available on the fees being charged by private and voluntary 3075 providers, and on the preparedness of families to pay top-up fees for pre-school education, and as additional funding becomes available – for example, from the means testing of Child Benefit – the credit scheme should be developed in accordance with these principles. Given the potential
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return on public investment in pre-school education identified by the international research that we have referred to, it would have absolutely huge benefits for the Isle of Man. 3080 We would favour provision being available throughout every child’s pre-school year. The Department should consider the phased-onset model adopted in the UK, with public funding being universally available only from the term after a child’s third birthday. This might be another way of targeting funds where they can be most effective. So our recommendation 5, Madam President, is: 3085 ‘That the Department of Education and Children, with the Treasury and the Department of Health and Social Care, must aim to design the credit scheme and to allocate sufficient funds, to ensure that no child is denied the opportunity of attending five 2.5 hour sessions per week throughout their pre-school year.’
That, in essence, is what the actual Report has contained within it today. But now, just before I take my seat, I have to make reference to the Department of Education and Children’s response to our Report, which is dated May 2014. There is quite a bit of preamble 3090 on page 2 and page 3 before they actually get to the recommendations and their comments upon them. It is pleasing to note that they are happy to accept recommendations 2, 3, 4 and 5 with qualification, but we are a little puzzled, the Committee and I, as to why they take exception to approving recommendation 1. With your permission, Madam President, I would remind the Court that recommendation 1 3095 says:
‘That Tynwald is of the opinion that, where a Department or the Council of Ministers is contemplating a radical change in policy, the need to consult Tynwald and the public is greater than ever; and that even if the need for a change is driven by budgetary considerations, efforts should be made to consult upon and debate the change outside the budget process.’
The Department’s response to that is that the Council of Ministers would still contend it is the role of a democratically elected politician who has undertaken their role as Minister to make 3100 decisions about policy. I am sorry, Hon. Members, but it is Tynwald Court that determines policy. If it is not, and if that is going to be removed from Tynwald Court from now on and into the future, then I would beg the question: why are we here? Why are we still here? Why do we bother with a Court such as ours, Tynwald? Why do we assemble? Let us not forget that the Department is blaming the former Minister for this, but I think 3105 there was more to it – we all think there was more to it. Nevertheless, the policy at the time was that we would continue with free pre-school, and as and when we could afford it we would extend it. There were attempts to modify that by introducing a charge. That was defeated. That policy was reaffirmed in this place as early as 2011, and yet about a year later it is changed. There should have at least been a declaratory motion placed here in Tynwald Court, in terms 3110 of this radical policy change. That is the very least that should have been done to show regard and respect for the parliamentary process. It was not done and this is why we have come forward with the first recommendation and we have cast it in the way that we have. But the Department of Education says:
‘… neither the Department of Education and Children or the Council of Ministers is able to accept this recommendation.’ 3115 And they go on to say that:
‘As politicians, we are elected to set policy and to make difficult decisions and to suggest that each time such actions take place we should engage in public consultation would significantly slow the process of change down and unduly limit the ability of a democratically elected Government to deliver the policies necessary to meet its commitments to the people of the Isle of Man.’
I would have thought, if we have a party political system then that kind of quote I have just 3120 read out would be very relevant, and one would say, ‘Yes, yes, that is right, because you are the
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party that is delivering the policies.’ But we do not have a party political system here. We are quite the opposite. We are independent, and it is this place, the Hon. Court of Tynwald, where policy is determined, changed, brought in, tweaked, renewed, whatever. Here in this place; not in Council of Ministers. 3125 So we are very disappointed that the Department finds it cannot support openness and transparency here, and actually very surprised – very surprised. As I said, Madam President, most of it, they are able to accept; but then in recommendation 4 – this is the one where the Department of Education and the Department of Social Care should assess the impact of the 2012 pre-school reforms and Government’s ability to identify children 3130 with special educational needs and report with recommendations on what action could be taken in mitigation – the Department is saying that they do that and there is the Pre-school Assessment Centre and the expertise of the reception class teachers in identifying special needs. But it was because of that that the concept of pre-school was first introduced to this place. It was to prevent the burden of having to identify… especially if your are a reception teacher and 3135 you have got 20 or 30 children in your class… To then have to not only handle that first very demanding year of learning, but also to have to do the screening and assessment of children who might have a special need is just going backwards. That is what we had before pre-school, and it is going backwards. I would not – and I do not think our Committee would – want to rely and put the burden back onto the teachers; however, the Department is able to accept the 3140 recommendation. So at least if they continue to assess the impact in terms of that and put in mitigation measures as soon as it starts to show a problem where children are coming through… they are starting to show need. The last recommendation is that the opportunity of attending five 2.5-hour sessions per week should be afforded to all children – the opportunity. The Department says it is happy to aspire to 3145 it, but it does question the merit of us doing it and talks about universality; but at least they are happy to aspire to it. If there is a little bit of confusion in terms of what we mean by ‘aspire to’, then I would refer the Minister and his team to the Report. Page 18, item 56 makes it quite clear what we are talking about and how we justify that recommendation. I hope the Minister does contribute. I hope he explains a little bit more about why he has 3150 responded in the way that he has, and I hope he and the Council of Ministers will have a change of heart in terms of supporting the first recommendation, because I would suggest to Hon. Members that if this is allowed to be dumbed down – especially recommendation 1 – then we might as well go home at five o’clock today (Several Members: Hear, hear.) and never ever come back again; just leave it to the Government to run things and meet once a week in another 3155 place to determine legislation. I beg to move.
The Speaker: Madam President, I beg to second and reserve my remarks.
3160 The President: The Hon. Member, Mr Crookall.
The Minister for Education (Mr Crookall): Madam President, can I ask, under minute 3.12 of the Standing Orders (1)(a) and (b), that the propositions be debated as one but voted upon separately, please? 3165 The President: Do we have a seconder?
Mr Watterson: I second that, Madam President.
3170 The President: Is that agreed, Hon. Members? (Members: Agreed.) Right, I will move the recommendations separately. We now proceed with the debate. The Hon. Member, Mr Crookall. ______1552 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Crookall: Thank you, Madam President. May I take this opportunity to thank the Hon. Member for Douglas East, Mrs Cannell, for her 3175 presentation of the Social Affairs Policy Review Committee’s Report. The Report provides an accurate account of the backdrop against which the decision was made in 2012 to transfer responsibility for group care education to private voluntary providers. At the time, the Department’s distribution of pre-school education was inequitable and was well open to legitimate criticism from a range of organisations about the lack of pre-school provision 3180 in some areas. The system that existed at this time resulted in approximately 50% of families having no access whatsoever to such provision. (Mr Karran: Hear, hear.) The vote in Tynwald in March 2010, when Hon. Members reaffirmed the policy of increasing pre-school provision as and when resources allowed, further exacerbated these pressures. Similarly, in 2012 the Department was also facing the need to significantly reduce spending. As 3185 pointed out in the Report, much time has elapsed since the decision was taken and, to an extent, such contextual information is indeed of historical interest only; but nonetheless it provides an important insight into the imperatives facing Members of the Department of Education and Children at the time. It is difficult to entirely agree that the Department badly mishandled the situation. Of course, 3190 lessons can always be learnt with the benefit of hindsight. But as politicians we are elected to set policy, and to open each decision we make to wider public consultation would inevitably result in a slower and perhaps larger government, meaning that ultimately we are unduly limited in our ability to deliver the policies required to meet our commitments to the people of the Isle of Man. 3195 Having said that, I feel sure that in making the decision he did in 2012, my predecessor took full account of the views of a number of groups. He would have been aware that there was a large section of the population opposed to such inequitable provision and cognisant of the demands from some members of the public to access pre-school provision for their children. He would have been conscious of the need to make revenue savings and aware of the need to 3200 reduce uncertainties for employees by taking prompt action such that they were able to be redeployed into vacant posts. Given this, I support his decision. I do not blame him for making the decision that he had to and not going to wider consultation, but rather to make a policy decision and subject it to the democratic scrutiny of Tynwald. It is for these reasons that my Department and the Council of Ministers is unable to accept 3205 the first of the recommendations made by the Social Affairs Policy Review Committee. However, the Department of Education and Children does welcome three of the other recommendations – numbers 2, 3 and 4; and with some qualification, to use the word that the Chairman used, the main thrust of the final recommendation. We also accept that the sum originally allocated to this scheme was not as great as ideally 3210 would have been the case. The notion that it would benefit all children to attend pre-school provision for five two-and-a-half-hour sessions per week in their pre-school years is one that the Department of Education is happy to aspire to. However, any decision about whether this provision should be fully funded on a universal basis would have to be taken within the context of the wider debate about the delivery of universal services and broader Government 3215 assumptions about the notion that the user pays for services, where they are able to do so. Therefore, with some qualification, with regard to whether such provision could or should be universally funded by Government, the Department of Education and Children is able to accept this recommendation. It should be noted that the Department of Education and Children considered a number of 3220 possible alternatives, including the withdrawal of all pre-school provision, and concluded that the credit scheme represented the fairest and most cost-effective model, while also allowing support to targeted families with the lowest incomes. Since its introduction, the scheme has proved to be effective in a number of ways. Around 90% of families who qualify have accessed the scheme. Nearly 25% of families have been able to ______1553 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
3225 access the higher level of credit. Early indications, from baseline assessments carried out in autumn 2013, demonstrate that the children are achieving at least as well on entry to school as they were under the previous system. A range of providers has been established to meet the increased need for pre-school provision. It would also be possible, given the current arrangements for the administration of the 3230 scheme, to offer increased amounts of funding, either universally or to targeted groups, as and when revenue budgets allow for such increases. Therefore, given that there is now increased equality of access to provision and that standards of four-year-olds entering school appear to be at least in line, or even improved, compared to previous levels, the Department of Education and Children finds it difficult to 3235 accept the conclusion that the new system created both inequality of access and a significant risk of poor value being obtained from such public money as was being spent. At the same time, however, it is acknowledged that increased funding would be likely to lead to further improvements in accessibility of a concomitant increase in standards. Madam President, just to finish off, I would like to say that I am currently working with the 3240 Treasury and the Department of Health and Social Care. I hope to be coming forward to the Court soon to be able to announce improvements to the scheme. Thank you.
The President: If Members wish to remove their jackets, that is in order. It is very warm in 3245 here. The Hon. Member for Onchan, Mr Karran.
Mr Karran: Eaghtyrane, Hon. Members, I have to say to start off with that I was disappointed that no-one came back over the evidence. It was amazing and obvious that the point is that we 3250 have actually successfully managed to address the issue and got a more universal, fairer and accessible system than I inherited as Shirveishagh son Ynsee, the Minister for Education. The fact is, when reading the Report, any right-thinking person, who is fully aware of the facts – and admittedly, many in this Hon. Court are not – who reads this Report will agree that once again personalities have got in the way of the facts that were quite clear as far as this 3255 Report was concerned. The problem the Committee has, as well as executive Government has, is the fact that I took the right ministerial decision in an environment that has not reflected on what was going on in the Report at the time. I think the Hon. Member for North Douglas summed up the whole affair, after leaving the Department, perfectly well, especially after reading the Report and the 3260 proposals of Mrs Burns and Mrs Morris, that they wanted to charge to keep the status quo that was not universal, was not fair, was not accessible on the basis of social need and educational need. In some of the highest areas of both social and educational need, it was absent, with little or no chance for the next decade to see any new initiatives as far as those areas were concerned under the previous scheme. 3265 I think people need to realise, and I am sorry that the Chairman has not highlighted that part of their scheme wanted to pay between £5, £7 and £8 per session as far as that. That would have precluded so many people on fixed incomes from being able to facilitate this facility. The simple fact is that the proposal… that the children who most needed it would not go, and in fact to be fair to my former Department Member, Mr Houghton, when he replied to me, ‘Peter, the 3270 children of those parents would not go anyway.’ Well, I am sorry, but that is not an acceptable excuse. This was a scheme that predominantly benefitted the Chelsea-tractor brigade. It was not in the areas where it should be. Let us go back to the facts. Why keep a scheme which was going to be reduced to about 40% of the intake in the next year’s appraisal of the year? Such as where the Chairman represents, one of the biggest social 3275 and economic educational deprivations in our society exists, where English is a second language… that we have far too many, where ordinary working mums, who are trying to keep a ______1554 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
roof over their heads, could not facilitate what was being proposed, unless she had a grandparent available to be able to drop the child off and pick the child up on the school run because of work restraints. 3280 May I say that the issue of second language is an important issue, one that I followed up with letters to the Department, because this for pre-school is very important if we want social inclusion and an inclusive society. So unless we had protected a scheme which had so many flaws, which was regarded as one that looked after the more fortunate in our society, as far as pre-school, by many outside this Hon. Court, I had to be honest about having to make a hard 3285 decision – it was not easy. Just like the long list where I have been on the wrong side of public opinion at the time and been proven right later on. Hon. Members, when going into the position of Shirveishagh son Ynsee, Minister for Education, I was mortified at how much education had been cut, and we kept on hearing the mantra about the UK and how we were better off and much more better funded that the UK. I 3290 do not mind private education for swank, but not for necessity for children’s education. In large areas in Britain, British parents are now forced to send their children to private education in order to get a decent education to give them any future. We need to stop drifting, sleepwalking into a situation that… I would remind Members, when they read about Jersey’s pre-school provision, it would be far better to get the statutory provision sorted out than the large number 3295 of parents who have had to select the private education routes because they feel that there is a better education system than is provided by the States of Jersey – their parliament. I will make no excuses. My professionals have told me that whilst the scheme that we had… that pre-school scheme had many flaws, that I was going to create a hornet’s nest… and let me go and cut 40 or 50 teaching posts to fulfil the ill-thought-out proposals of Minister Teare’s 3300 policy, as far as cutting was concerned, and becoming de facto the Minister for Education… I was not prepared to put up with this. I wanted to minimise putting the teacher:pupil ratios up, which were far too high already. Yes, I could have taken the easy option that is in the Report and brought in tuition fees – another part of the Report – but what was proposed at that time was an even bigger, more incompetent, bigoted and short-sighted policy than what was ever got 3305 through later on with the demise of me as Minister… what the Treasury wanted. What he would have brought in would have been the culling, as far as the access to education for most working-class families and their future education. No self-respecting Minister for Education would have followed the proposals of Minister Teare, who was expecting parents to bring in bridging loans in order to get university education – that was a nonsense. I am 3310 disappointed in this Report that they have not mentioned that as part of the facts, and if they had done their work they would have known it. Education should be accessible as far as academic need is concerned, and not on the depths of children’s pockets. Yet another piece of nonsense that has not been put into this Report, the fact that we did look at other areas. I put up UCAS points by 80 points, so that young people 3315 went on an educational basis on university life… than lifestyle. These were part of the equations that are wide. We made the decision we made when Minister for Education. So by making that stand, not only did we actually get some sensible movement as far the pre-school is concerned for the majority of children… who actually stopped the abusive proposals that Minister Teare and the Treasury have as far as education, university education was concerned and how it was 3320 going to be paid for. There were options. I could have decimated and closed down the Youth Service, which would have been a lot less hassle. My staff told me that instead of addressing a grossly unfair form of pre-school provision… allowing them to adopt this policy, and I told my staff that we do it without fear or favour. 3325 I want to mention my good friend, Mr Butt. One thing that we did do, and we made sure, was that the special unit was not part of the cuts. I do not see that being highlighted in this Report. Secondly, if he was so concerned about the children who needed the pre-school… well, that was alright if you were lucky enough to get within what was proposed for the following years… ______1555 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
40% of the lucky few that were in the catchment areas who were nearest to the school in the 3330 more better-off areas of the Island; but the reality was there were real problems where, for example, we had single mums paying high rents in substandard accommodation and waiting for local authority housing, or parents of children where English is a second language. There was nothing, and that was the reality of what we had as far as the pre-school is concerned. What we saw here, once again, was the political cowardice in this Court, as far as the mob, 3335 instead of doing the right thing. To be fair to Mr Butt, if he was so concerned as a Member for Health, as far as getting the vulnerable in, what Health Services should have done is stop them doing the cuts to health visitors, which would have made sure that more children in need would be picked up much more effectively to go to the special unit, that was not cut by the recommendation of a proper funded health visitors’ service. This service has been decimated 3340 over the years. This successful scheme was far better at identifying those children than the pot- luck pre-school schemes which were in areas which were the height of social concern.
The President: Hon. Member, this is interesting history. Could you draw your remarks closer to the actual Report? 3345 A Member: Hear, hear.
Mr Karran: Eaghtyrane, I am talking about the Report. I must say that I looked at some other issues in the Report. Only in the Isle of Man would you 3350 be attacked for honouring your promises made at an election and in the manifesto. This is perverse, as far as this situation is concerned, and people should be congratulated as far as that is concerned. We looked at the former Minister for Education, the Shirveishagh son Ynsee, the Member for Peel, Hazel Hannan, and her input. Her provision was brought through in different economic 3355 times. It was not worked out. It was not on the right basis from the start, and I am sure she would agree with me that children living in Peel had little chance to get into the pre-school provision under the previous scheme, either on an educational or a social level, following the development of a new housing estate… that the further families lived from the school, they were a lot less likely to obtain a place. This is not what Mrs Hannan brought about the pre- 3360 school about, and this is what the reality was. I must say, regarding the conclusions, the sums originally allocated to the pre-school were inadequate. I totally agree with this. I totally agree with this as far as the Report is concerned. To create both an inadequate access with significant risk of poor value obtained for the public purse has been spent… I have to say that I do not agree with this, because of the totally inadequate 3365 scheme. If you were lucky… of the 50% that was going down and the 40% of children that accessed the scheme, it was great; but if you were part of the 60%... who were 50% going up to 60% of them next year… were facing nothing. And what added insult to injury, it is not going to win me a vote in Onchan, but in the most deprived social areas as far as the provision, there was nothing in those areas and it was totally wrong. 3370 On recommendation 1, I can live with this, but I do think Hon. Members need to live in the real world, because the real issue was budgetary constraints and what Departments are being put under. If we do not address the real issue of how we are going to boost the economy again, there will be many more hard decisions that are going to have to be made and we need to recognise that when we are voting. 3375 I can live with recommendation 2, because what we have got is a more inclusive scheme than what we had for all our children of that age group. On recommendation 3, I can live with that too, because it vindicates what was wrong with the previous scheme, unless we had loads of money in order to be able to deal with the issue then what we have now has successfully achieved a much fairer accessible scheme for the 3380 individuals, the children, equally. ______1556 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Regarding recommendation 4, we did ring-fence special educational needs anyway, but the fact is, the reality is, and what Mr Butt is completely deluding himself… is that we are more likely and have more chance to get accessibility for vulnerable children to partake in the pre-school programme that we have now. 3385 Finally, on recommendation 5, I totally agree with this. It would be nice when times improve to be able to increase the funding to ensure that we can get it better than the current five sessions of two-and-half hours each week that was there. At least now parents who could not facilitate taking up the opportunity under the old scheme can partake in a much fairer pre- school credit scheme than the previous scheme, which was only very good if you could access 3390 that scheme, and we were going down to… out of 10 children, only four places for every 10 children. Hon Members, what this Report does is to vindicate that in those circumstances I was right to make the decisions I did as Minister for Education. We have actually got a fairer and more accessible scheme now than the old scheme could ever achieve without huge amounts of public 3395 money that was not there to do so. So I would like to thank the Committee as far as vindicating me, even if the Report is lacking in real facts. Also I want to thank the Report for highlighting the hypocrisy, as far as the Ard-shirveishagh, the Chief Minister, over the David Cretney affair. (Interjection) 3400 I would like to also thank the Department of Education staff when I was there for the work and the service they gave in most difficult times. I think also, Eaghtyrane, being on the other side of the attack, I would also like to thank Mrs Amy Burns and Mrs Lisa Morris, as I am sure that because of them, we would not have as good a scheme as we have, because of their fantastic campaign. It just shows how democracy 3405 works. And to be fair to the Chairman of the Report, the Member for East Douglas, Mrs Cannell, in helping with that campaign, I am sure we would not have got as successful a scheme as far as what has come out of this. And finally, Madam President, I would like to thank Minister Robertshaw and Mr Gawne for not allowing individuals to get in the way in bringing forward a fair and accessible pre-school 3410 scheme for the whole of society, not just the lucky few in the better-off areas. I appreciate the increase in value in credit that is going to come about to follow up that commitment. When the Council of Ministers get it right, they should get credit. I am glad to see that they have not reneged on that, but I have to say I think the public pressure from outside this Hon. Court has helped as much as the pressure from the few of us inside this Hon. Court who tried to hold the 3415 executive Government to account.
The President: The Hon. Mr Speaker.
The Speaker: Thank you, Madam President. 3420 I just want to make comment on three things, and that is the response of the Department of Education to the recommendations. I would ask the Court very carefully to consider supporting wholeheartedly recommendation 1; it is a very important point of principle that we have here. Recommendation 1 is saying, basically, that where there is a radical change in policy, please consult Tynwald and the public; and if for reasons of budgetary timetable you find that difficult, 3425 at least make an effort to do so. (A Member: Hear, hear.) Why? Because, Hon. Members, we are in a system based on election, in the main, of independent Members, and our policy is built on consensus. That is why it is important to consult the public, or at least the representatives of the public elected to Tynwald. I am pleased the Hon. Member for Onchan made reference to a manifesto commitment, 3430 because I said, ‘in the main, independent’. If you run a political manifesto as a party and get endorsement for a particular policy and you are in a position to implement it, you are quite entitled to do so because you have got an endorsement for that policy, and in fairness to ______1557 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Minister Karran, it had been a manifesto commitment, an extension of pre-school through a voucher scheme or something of the like. So the question is: was he successful? If he was, then 3435 well done to him for persuading Council of Ministers to line up behind that particular policy; but if it is otherwise, the response appears to be, ‘Look, it wasn't practicable. We had no choice. There really wasn’t time to consult because of the Budget timetable. It is the role of the Minister to make decisions and the need for expedient action.’ And yes, I do agree with that, having been a Minister. Government has got to have the ability to govern sometimes. A government must 3440 govern, and you can consult to death (A Member: Yes.) at times. So what, in my view, should have happened is that, given the Budget timetable going on and the fact that the policy in place, as the mover, Mrs Cannell, has explained, was the 2010 Tynwald policy, if you are going to change that policy, consult Tynwald. No time to consult the public. Okay. The Budget needs to be signed off two months’ hence, and so what should have 3445 happened, as the mover has said, is a declaratory resolution to build Tynwald consensus round the expedient action the Council of Ministers found necessary to get consensus for this change in policy. They were changing policy by decree. Yes, entitled to do so, and okay, there is acknowledgement that Tynwald may well test that, which it did; but really, it would have been politically preferable, in my view, to have brought a declaratory resolution and get Tynwald 3450 behind the policy. So for that reason, Madam President, please think very carefully before voting down recommendation 1. It is an important principle. Recommendation 2, which was for educational standards, says that the Department should work with the Department of Social Care to consider regulation and other means to maximise educational standards. In the response, there is no reference to regulation at all. There is 3455 reference to the numbers of meetings taking place to maximise the educational standards of pre-school settings and there is talk about proposals for revised minimum standards for day care centres, but no mention about regulation. The Committee was led to believe, as the mover has already said, that the then Chief Executive in November 2012 told the Committee that they were looking at moving the regulation on in terms of education content. So my question is: has this 3460 been reconsidered by the Department? Is there to be no regulation? There is the ability to bring in regulation under the current Education Act. There is a new Education (Amendment) Act if they needed primary legislation, but just as we have been advised in relation to the pupil database situation, which was not the subject of separate regulation, just as we have been advised by the Acting Attorney General and given learned advice that it would 3465 be preferable to put beyond doubt any question as to the implementation of policy through regulation, here is a very good example where there seems to be a grey area. How are you going to have standards guaranteeing minimum education…? How are you going to guarantee minimum education standards in non-primary education settings without regulation? You have to have the regulation, and it is not referred to, which is mysterious. 3470 And finally, at recommendation 5, which says the aim should be that no child be denied the opportunity of attending five two-and-a-half-hour sessions per week throughout the pre-school year, with respect I think the Department has muddied the waters somewhat by making reference at least twice about delivery of universal services and the qualification about provisions being universally funded by Government. Well, actually the recommendation is not 3475 saying the Government should provide universal funding to deliver the same. What is actually said in the Report is that ideally a child from a family on a low income should be provided with sufficient credit to purchase 12½ hours per week – that is five two-and-a-half- hour sessions over 38 weeks of the year; while a child from a family on a moderate income should be able to access the same amount of pre-school education through a combination of 3480 DEC credit and the payment of reasonable but not excessive top-up fees. That is what we mean in this recommendation, about giving every child the opportunity of five two-and-a-half-hour sessions. It will not be necessarily a universal credit. It is recognised universal funding is not likely to be practical. The reason we do this, of course, is that half the children… well, it is the crumbs-for-all argument we are talking about. Whereas half the children previously enjoyed ______1558 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
3485 access to five two-and-a-half hours free, so should that provision, which in education terms has been judged pretty well the ideal, be available for all children, and we are far short of having that. We should be aiming for that. It will not happen necessarily by Government funding entirely. So I accept the Department has accepted the recommendation, but I just wanted to explain 3490 why this qualification that they made might have been based on a misunderstanding of what the recommendation actually said. Thank you, Madam President.
The President: The Hon. Member, Mr Crowe. 3495 Mr Crowe: Thank you, Madam President. At the risk of extending this debate, I would just like to say a few words as the third member of the Committee. Just to say we produced what we believe is a very comprehensive and full Report, with very genuine recommendations which the Chairman and the Speaker have fully 3500 explored and expounded upon. I would just ask, if you have any doubts, to vote for the recommendations as stated on the Order Paper.
The President: The Hon. Member, Mr Cretney.
3505 Mr Cretney: Yes, thank you, just briefly from me… I have always, in all the time I have been here, tried to work with people I represent. I think one of the important things about the Isle of Man and about Tynwald and about the House of Keys is a closeness to those we represent, and from time to time that can cause problems. For me in this instance it obviously caused a problem and an embarrassment for the Council 3510 of Ministers inasmuch as, in order to try and explain to my constituent that the Council of Ministers and the Department of Education were working down a certain route, and in the complete absence, in my opinion… in an information vacuum, if you may, between Government and the people outside, I – wrongly, history has proven – made a decision to try and share with the person I represented the information to which I was privy. I did that on the basis that it was 3515 not being done by the Department, which I considered should be doing that at that time. I have apologised. I apologised to the Chief Minister and the Council of Ministers at the time, and I have done to this Court as well. However, please be assured it was done on the basis that I hope, wherever possible, even where we are making controversial decisions, we should try and bring the people we represent with us; and it was quite obvious that that was not happening 3520 with this situation. For that reason I am disappointed, to say the least, that the Department of Education, and I understand the Council of Ministers, feel that recommendation 1 should not be supported, because I strongly believe it should be supported; (Mr Quirk: Hear, hear.) and it is for that reason that I am standing and saying that… and I want to endorse what Mr Speaker said, 3525 inasmuch as even if… and I agree with him completely that we do over-consult, but on something as important as this, where a Tynwald policy is being changed so fundamentally, I do believe that a process… Even given the timescales, which I understand were pressured, we should have done better; and I hope we learn from this, if nothing else.
3530 A Member: Hear, hear.
The President: The Chief Minister.
The Chief Minister (Mr Bell): Thank you, Madam President. 3535 Madam President, I do not want to go over the whole Report. In the main, I think it is a balanced Report and it is something I can live with; and the Education Department, as the Minister has said, is likewise, I think, reasonably comfortable with the outset. ______1559 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
I think the comments which the Minister has made – that there are further improvements in the pipeline, which will be announced I hope in the not-too-distant future – ought to give the 3540 wider public some reassurance that we have not walked away from that commitment, that we are now committed to doing our very best to raise the range and quality of the service provision that more people can benefit from. So that is in train and I hope we will be able to announce more detail in the not-too-distant future on that. Madam President, just two points really I want to touch on. I do not want to extend this 3545 debate, because I think it has covered most of the points, but there has been a question on why Council would oppose recommendation 1. In the main, I am reasonably comfortable with it. I am absolutely committed to consulting, certainly with Tynwald and wherever possible with the public, but as previous speakers have said, there is a danger of this Government – not just in this particular case, but in the more general case – consulting to death some of the issues that come 3550 along. (Mr Crowe: Hear, hear.) I am certainly getting comments from those people who are being consulted as to why they are being written to in the first place, because we are extending the consultation far and wide to people, frankly, who have no interest and even less knowledge of what it is they are being consulted on. So I would just put that one caveat: that while we do need to consult, we perhaps should be a little bit more careful sometimes and a bit more 3555 focused on where that consultation takes place. The other point in relation to that, Madam President, is that, taken at face value, you cannot disagree with it, but there may be occasions when we do need to move quickly. We are still in very challenging times fiscally, and there may be a need for Council, for whatever reason – not necessarily to do with education, but in other arms of Government – to move quickly to change 3560 policy, to be able to either respond to a particular situation or budgetary constraints which are on us at the time. So I can support recommendations 2, 3, 4 and 5, but I would urge Members to oppose recommendation 1. I can give an absolute commitment that, certainly while I am Chief Minister, we will do our absolute utmost to consult as widely as possible, particularly with Members, but 3565 where appropriate outside as well. That is clearly not quite the same as a binding recommendation of a Tynwald resolution, but as Chief Minister I can give you that commitment that that would take place. The other point, which has just crossed my mind, Madam President, as we have gone through this debate – and this is not actually meant to be a criticism of anyone at all; it is just a 3570 general point – is the role of the Scrutiny Committees themselves, particularly where you have a Chairman or a Member who has been actively involved in the issue which is under discussion or under scrutiny by that Committee. Mrs Cannell… this is not a criticism at all, but she was very active in opposing the changes in education at the time, working with the external bodies. Every Member is perfectly entitled to 3575 do that, I am not criticising that; but it just seems to me that it is very difficult then for that Member to move from being in opposition and strongly opposing, to being what is seen then as an independent Chairman of a Scrutiny Committee, to be able to look at the issue in any objective manner. I do not have the answer to this. I do not know, in a small environment like this, whether 3580 there is any way of being more transparent, more independent in that sense, but today we have got Social Affairs: it could be any other Scrutiny Committee that crops up, Madam President. It is just one to be banked, that we possibly need to think about at some point in the future: how do we ensure objectivity on the Scrutiny Committees when a Scrutiny Committee has been very actively opposing the policy in the first place? 3585 I just leave that thought for consideration, but in the main I am comfortable with the Report. I would ask Members, though, to leave Council with the flexibility to move quickly on policy without having to consult the whole Island on it, but with the commitment I am making that I will ensure that, where it is necessary, I will see that Council consults on any major policy change in the future. ______1560 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
3590 The President: The Hon. Member of Council, Mr Butt.
Mr Butt: Thank you. I will be brief on this, Madam President. I was brought to my feet because of recommendation 1, mainly. First of all, I would like to congratulate the mover of the motion on the presentation she 3595 made to us today. (Mr Quirk: Hear, hear.) I thought it was excellent and I congratulate the Committee on the Report they have done as well – it is very comprehensive. When you read through it though, it brings back two years ago when all this went on, and recommendation 1 is very important because at that time… I will not use the word ‘shambles’, but there were last-minute changes being made up to the last second almost before the Budget 3600 debate, because there was not a clear way forward. I received a text at 10 o’clock on the Monday night before the Tynwald debate, saying ‘there is a plan in place’ – that late in. If we had proper scrutiny, as per recommendation 1, none of these things would happen. A proper scheme would have been thought through that would have been more acceptable to the general population maybe, to Members here and maybe to the Council as well. That is why 3605 recommendation 1, to me, is very important to avoid that last-minute rush, trying to change plans on the hoof. There were even changes later on when the extra committee was set up to try to work out the way the voucher scheme would work. Secondly, very briefly, Madam President, I will just go on to a couple of small points about recommendation 2. 3610 No matter how good the nursery care is that is being provided at the moment, the reality is that it is nursery care – it is not educational care. That is the reality, no matter how good the providers are. I will stress the analogy too about the ‘crumbs for all’. Yes, there are crumbs for all now. Compared to 56%, as it was previously, there are crumbs for all; but the more money you have, 3615 the more crumbs you can buy and the more cake you can have. It is based on your financial ability. There are a lot of people in the middle range who cannot afford to send their children to school as much as other people. I have a close family member: they can only go one and sometimes two days a week because they have not got the money to send them for five half days, and that is a fact for a lot of people. 3620 That actually disrupts the child. When the child is in there for one day a week, sometimes two, they meet different children each day. They have not got the consistency of being with the same children, having the same input, and that has made a big difference to a lot of people. I hope that recommendation 3, about analysing the results as they go on, will actually prove that the system is working; but I do have serious concerns about that. 3625 If I can just finish off by saying that I went to Dundee with Minister Crookall, Minister Robertshaw, Minister Cregeen and other officials to look at their children’s services, and when we spoke to the Director of Education in Dundee and mentioned that we had stopped our pre- school education, he was shocked. He said, ‘This is where we concentrate our efforts, pre-school education – the first thousand days in particular are where you put your money.’ 3630 I do hope this Court has not forgotten the long-term value of pre-school education on our community. (Mr Houghton: Hear, hear.) It will bring in benefits for us if we run it properly in the future, and I do hope the Council of Ministers and the Court has not forgotten that. Thank you, Madam President.
3635 The President: The Hon. Member for Douglas South, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. I will be brief, I am not going to repeat everything, but I would just like to say a few words in respect of recommendation 1. 3640 When I read it, I thought, ‘I actually cannot see anything wrong with that recommendation,’ and the more I am listening to today actually is reinforcing that opinion. ______1561 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
It does make me rather concerned when you have the Chief Minister asking do we expect to go out and consult the whole Island on every little issue, because that is not what the recommendation says. It says: 3645 ‘… where a Department or the Council of Ministers is contemplating a radical change in policy,’
That is not consulting on every little issue, and it is saying every effort ‘should be made to consult upon and debate’. It is not saying if it was of such national importance that we could not do it any other way; it is saying that in the normal process this is what should happen. I cannot 3650 see why anybody would actually object to that being the normal process. I think it is very unfortunate, and it would be unfortunate for every Minister in the future, because of these vaunted budgetary constraints and timescales and everything else, if they were put in a position where they had to make a radical change in policy without being able to do this, without having the timeframe given to them by the Council of Ministers to be able to do it in a 3655 proper fashion. I will definitely be supporting recommendation 1, as all the other recommendations, but I just wanted to make that point particularly about recommendation 1. Thank you, Madam President.
3660 The President: The Hon. Member for Rushen, Mr Gawne.
Mr Gawne: Gura mie eu, Eaghtyrane. Firstly, just following on from the Chief Minister’s comments in relation to the Chairman, the Caairliagh of the Scrutiny Committee, and talking about the scale of the Isle of Man and how we 3665 actually tackle issues where on the one hand someone is opposed to something, but in another role they are required to be wholly independent… The reason I am making these comments really is in relation to my own role as Chairman of Mooinjer Veggey. I have been involved in a charity running pre-school organisations, or pre- school groups, for about 15 years now. Despite that, I was actually asked to assist with the 3670 Council of Ministers’ subgroup looking at pre-school. I should say that the old system was far better for my organisation than the new system, so I certainly was not influencing the discussion in favour of my particular organisation. So I think, although people never believe you, it is possible for you to walk away from certain responsibilities and then provide some level of independent scrutiny. 3675 Having declared my position, certainly I have no financial interest in this. In fact, if anything, it takes a lot of my time and I certainly do not get paid for it, but I do have an interest and I do want to make sure that we do the right thing in relation to pre-school. Certainly the comments that the Hon. Member of Council, Mr Butt made about the shock displayed by the Director of Education in the Scottish place – it was Dundee, I think he said – I can understand. As someone 3680 who has been actively involved in pre-school education for 15 years, it is quite clear that that is a really important area for the development of children when it comes to education. I can understand why we have ended up in the position we are in. My view though is, rather than recriminations and finger-pointing and the blame game, we should be looking to see how we can make the system work as well as we possibly can. 3685 The biggest concern for me about what we have introduced is that, whilst the lowest common denominator may well have increased, the highest standards are being significantly diluted – there is absolutely no doubt about that, as far as I can see. The former providers for the Department of Education service have had to dilute their service for the simple reason that we are not getting the level of support I would have hoped we would have got in terms of 3690 promoting the value of what we were actually trying to provide. In fact, if anything, the comments of the former chief executive were perhaps driving people away from that level of service by saying, ‘Anyone could provide this, it is simple; you do not have to be a teacher.’ I
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know a lot of our teachers were very offended by that and promptly decided to move into other areas of education. 3695 It is true that the better qualified the deliverer of the service then inevitably the better the service will be. It is also true that we have some absolutely excellent nursery nurses out there who have a tremendous ability in terms of nursery provision. But the teacher-led provision, certainly in my experience, in my view was a far better service, and it is a shame that unfortunately we are all now perhaps being dragged down to the lower common denominator 3700 because of the necessity of having to compete in an open marketplace. I am certainly doing what I can to work with the Department to ensure that we get the best possible standards, and I know the Department is committed to trying to improve the service as best it can.
3705 The President: The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President. Three brief questions for the Chair. The first one is when we look at recommendation 2, about ‘and other means’, what other means did the Committee consider? Was it to do with 3710 good-quality buildings and good parking and that sort of thing, as well as educational standards? The second question is in recommendations 2, 4 and 5, the Committee used named existing Departments. Was the Committee minded to actually use ‘Isle of Man Government’ to suggest that perhaps when the scheme was first introduced money was wasted because there were different units administering things? Even now perhaps we do not need a Registration and 3715 Inspection Unit and pre-school advisers; perhaps we can do things in a better way. My third question is, in respect of recommendation 5, to what extent did the Committee examine option 4, which was consulted on in 2010? I invite the Chair to say something about the merits of option 4.
3720 The President: The Hon. Member for Malew and Santon, Mr Cregeen.
Mr Cregeen: Thank you, Madam President. Just very briefly, I hope the Chief Minister will change his mind on recommendation 1. I think it is just on the reading of it, but my reading of it is: 3725 ‘…that even if the need for a change is driven by budgetary considerations, efforts should be made to consult upon and debate the change outside the budget process.’
That could be a Tynwald briefing to Members upstairs: that is all it takes. I think if the Chair confirms if there is anything that urgent… I think the Chief Minister would say if there is an urgent matter he probably would consult Members on a briefing anyway, so I would hope he 3730 could support it if it is the same understanding that I make out of the recommendation.
The President: Hon. Member for Onchan, Mr Hall.
Mr Hall: Thank you, Madam President. I am going to keep my comments brief as well. 3735 I too am disappointed that the Department has rejected recommendation 1. We know we have to make decisions on how to invest the money most effectively in education, amongst other things. We have rarely got the money that we would actually like and therefore prioritisation is a key part of our role, and that prioritisation needs inevitably a clear evidence base and we need to analyse it and then debate it. 3740 The kind of questions that would be included in that recommendation 1, consulting Tynwald, are questions – fundamental ones – such as when is the public investment in education at its most effective; how can we get the most impact on child development; and how can we reduce the impact of child poverty on aspirations and learning by investing in the right way at the right ______1563 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
time for the right child? I would have thought it would be very reasonable to say that those kind 3745 of fundamental questions should be ones that we should be debating in this place. On that basis, it is very disappointing that the Department and the Council of Ministers have decided not to support recommendation 1. Then, if we look at recommendation 5 – aiming to design that credit scheme to have two- and-a-half hours… five of those sessions each week throughout the pre-school year – I think that 3750 really is absolutely vital and paramount. Probably, in my view, I would have liked to have seen it a bit more beefed up, in the sense that we all know the importance of it – it is absolutely vital. I would draw the Court’s attention to Graham Allen MP, who outlined in a report – which was called ‘Early intervention: the next steps’ – how a child’s development score at just 22 months of age can serve as an accurate predictor of his or her educational outcomes when they reach the 3755 age of 26. So we must meet that aim and we must develop it to ensure that there are at least five two- and-a-half-hour sessions per week. That is very important. I think I am going to leave my comments to that, and I will hand over to the next speaker. Thank you, Madam President. 3760 The President: Hon. Member for Onchan, Mr Quirk.
Mr Quirk: Thank you, Madam President. Just on the point that the Chief Minister made about the independence of the chair, I know 3765 when I cast my vote for committees to be set up we assess those individuals, and I can assure you that if the report was skewed one way or there was dissent in the committee’s recommendations – which there was not in this particular case – that would give us a worry. But I would think that in this Court we choose those individuals… and I could say I know the individuals, but I chose to be on that Committee and I am sure that the Report was done fairly 3770 and the scrutinising that was done was done fairly too.
The President: Hon. Member for Castletown, Mr Ronan.
Mr Ronan: Thank you, Madam President. I will be very brief. 3775 It seems as though the Report has been nearly universally accepted. Just again touching on recommendation 1, which seems to be the contentious issue, I do understand where the Chief Minister is coming from. I understand the need for… the Government needs to govern, but at the end of the day, this was and still is a very emotive and sensitive subject. We are a very close- knit community, and just speaking from personal experience regarding the closure of the 3780 nursery in Castletown, I know what effect it had on the community in the town. I think on issues like this we should not be afraid to consult, and touching on what my colleague for my neighbouring constituency, Malew and Santon, just said, he is absolutely right: this is about how we consult and how we do it. So I would not be frightened of recommendation 1 because it is as broad as it is long, really, and I think it is a good thing and a 3785 good message to send out. Thank you, Madam President.
The President: Caairliagh to reply.
3790 The Caairliagh: Thank you, Madam President. We have had 14 Members of this Hon. Court who have contributed to the debate and I thank them very much for that. First of all, I thank Mr Speaker for seconding; and also Mr Crowe, member of the Committee, for also speaking and supporting.
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3795 The Minister, Mr Crookall, was the first to get to his feet and he reiterated basically the paper that we already have before us in terms of his Department’s response to the Report. The one thing he did say was that, after the 2010 policy was reaffirmed, pressures were brought to bear on that Department. That was the time really to have taken Tynwald Members aside and explained the rationale behind the thinking, because surely the rationale of thinking 3800 must have started then if the pressures were being brought to bear after the reaffirmation of free pre-school to continue in 2010. So I think an opportunity might have been missed there to actually consult then. I know the Department had already gone out when the Minister was the Hon. Member, Mrs Craine, Member for Ramsey. She was Minister at the time. They had gone out to public consultation, but having looked at those consultation papers we found really that 3805 they did not reveal the true pressures of the time. I think had they done you may well have got a different response from members of the public. Nevertheless, the pressures that came to bear on the Department post-2010 policy confirmation ought to have been shared and experienced with Hon. Members of this place. That was the opportunity that was missed. Mr Karran… obviously, he was a Minister for eight months, bless him – I think not as short as 3810 I, who was chair once of an authority for five months. Nevertheless, he lasted a little bit longer than me –
Mr Houghton: Still too long.
3815 The Caairliagh: – in his ministerial position. It was quite natural to expect him to defend what he had done, and what we have done in this Report… We are not criticising what he did; we are not criticising what the Department did. We criticise the way in which it was handled, and I do not think any Hon. Member could deny that it was badly handled, but what we are saying is that it is not quite there yet and 3820 improvements need to be made. It is disappointing, I think, really, to criticise members of the public who bring things to our attention and put a lot of time and effort into a project to raise awareness about it. We may disagree with what they say and how they do it, but we have to admire their spirit in doing it. It must be pretty formidable, as young mothers, to actually challenge the system, which they did 3825 very effectively. But Mr Karran then did go on to balance his comments by also praising the work of Mrs Burns and Mrs Morris. I thank Mr Speaker for his input. Of course, he also has a lot of experience in this area, having been a Minister once for the Department of Education. He is also an excellent parliamentarian and is very good to remind you of what the true parliamentary process should be and how it 3830 should be followed; and so I would urge Hon. Members to take note of what he had to say. I thank Mr Crowe. I also thank Mr Cretney in particular, who apologised at the time and also apologised again today for leaking a confidential Council of Ministers report at the time. It just really, I think, illustrates how desperate even some Ministers were feeling at the time as to the radical policy 3835 change – that he wanted to help his constituents by enabling them to better understand the thinking that was going on behind the radical change in policy. He did what he did; however, if that had been me, I would have been sacked on the spot – but then my face has never fitted anyway. (Interjection) Quite. I think he supports all the recommendations. Mr Bell, the Hon. Chief Minister, also said he thinks it is a balanced Report and personally he 3840 has not got a problem with recommendation 1. I was hopeful that he might be able to persuade his Education Minister and his other colleagues to think like him. I thank him for for regarding it as a balanced Report, but then he went on to say, ‘Trust me, I’ll make sure that…’ Well, I have to say that this radical policy change happened whilst he was leader – it has happened since he became the Chief Minister – so although he is assuring us that it will not happen again, it already 3845 has. It happened at the beginning of his term as Chief Minister.
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He then went on… I am a little bit disappointed that he questioned my impartiality as Chair of this Committee. Yes, I have a great interest in social affairs – always have had – and I think that is why the majority of Tynwald Members actually elected me to be the Chair of this particular Committee. What I can say is that the Committee is balanced with two other elected Members, 3850 and we have had no less than… Prior to Mr Crowe we had Mr Callister, and I thank him for his contribution in this Report. Prior to Mr Callister we had Mr Turner, so we have had one, two, three, four different Members over the span of the life of this particular Committee. I can assure the Chief Minister that if I am in the chair, regardless of the issue at hand, I am impartial. I would not push my own personal view or belief, because I would get rick very quickly by Mr Speaker for 3855 one, and certainly Mr Crowe would not like it and I would know straight away that I had gone beyond the breach. I would never do and never have done. I thank Mr Butt for his support and also for the valuable contribution he made to the Committee in giving evidence, as did Hall and also Mr Houghton. I thank Mrs Beecroft. Mr Gawne: I thank him for being so open and honest with his true feelings on this issue, and I 3860 am sure we all agree with him – it is not as good as it was, but we are where we are. What we are saying in the Report with the recommendations is we can make it better, we can aspire to make it better, and we are even making positive suggestions on how that can be done. Mr Thomas had some questions which puzzled me. I could not quite understand what it was that he was actually asking me. He talked about recommendation 2. He questioned where we 3865 say:
‘to consider regulation and other means which will maximise the educational standards…’
What do we mean by ‘other means’? Well, if you read through Hansard when we took evidence from Mr Dobson, you will read there that, in other jurisdictions, as well as regulation 3870 they are also bringing in a sort of a reward system. In other words, it is a voluntary thing, but if you undertake so many hours of training in order to maximise your ability to educate young children, you can attain an award. So there is a little bit of prestige. It is to try and encourage nursery nurses to step up a little bit higher than just being nursery nurses. But we are not actually saying just rely on that; we are saying consider regulation, because there is regulation 3875 that was actually promised to us and it is that which would give greater assurance. I thank Mr Cregeen. I also thank him for initiating this letter back on 20th April 2012. Just to state, Madam President, the full letter said… it is only very short:
‘We the undersigned request that your Committee review the Department of Education and Children’s policy for pre-school education. As you will know, this has been a concern of many members of the public and Tynwald Members. We would ask that you consider if the new policy is value for money…’
– well, what we are saying is not yet, it is not value for money yet – 3880 ‘…and also if it meets educational needs.’
What we are saying, in essence, is ‘not yet, but it is getting there’. We could have sat on this for another one or two years and continued to monitor the intake and the improvement or decline, but we felt it was so important that we should report now. 3885 I thank Mr Hall. I also thank Mr Quirk, and I thank Mr Ronan for his support. I would just say that I hope the Chief Minister has given his cabinet a free vote on this because, in essence, recommendation 1 says:
‘… [if] the Council of Ministers is contemplating a radical change in policy, the need to consult…’
– that is what we are saying, the need to consult – 3890
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‘Tynwald and the public is greater than ever;’
– it is a statement of fact –
‘and that even if the need for a change is driven by [finance], efforts should be made…’
– that is all we are saying, efforts should be made –
‘to consult upon and debate the change outside the budget process.’
3895 We are not saying you should, you must, you shall; we are saying efforts should be made if you are making a radical change in policy. I think the very least that we owe Tynwald Court is that dignity, that respect and that regard; so I hope the majority of Hon. Members will support this recommendation and the other four. I beg to move. Thank you. 3900 The President: The motion before the Court is set out at Item 8 on you Order Paper. The motion embodies five recommendations, Hon. Members, which I will move separately. We turn, first of all, to recommendation 1. Those in favour, please say aye; against, no. The ayes have it. 3905 A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 14, Noes 8
For Against Mrs Beecroft Mr Anderson Mr Bell Mr Crookall Mr Cannan Mr Gawne Mrs Cannell Mr Quayle Mr Cregeen Mr Robertshaw Mr Cretney Mr Shimmin Mr Hall Mr Skelly Mr Henderson Mr Watterson Mr Houghton Mr Karran Mr Quirk Mr Ronan The Speaker Mr Thomas
The Speaker: Madam President, in the Keys 14 votes for and 8 against.
In the Council – Ayes 6, Noes 1
For Against Mr Braidwood Mr Corkish Mr Butt Mr Coleman Mr Crowe Mr Downie Mr Turner
The President: In the Council, 6 votes for and 1 against. The recommendation therefore carries.
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3910 I put to you recommendation 2, Hon. Members. Those in favour, please say aye; against, no. The ayes have it. The ayes have it. Recommendation 2 therefore carries. Recommendation 3: those in favour, please say aye; against, no. The ayes have it. The ayes have it. Recommendation 3 therefore carries. Recommendation 4, Hon. Members: those in favour, please say aye; against, no. The ayes 3915 have it. The ayes have it. Recommendation 4 therefore carries. Finally, recommendation 5: those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 22, Noes 0
For Against Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 22 votes for and no votes against.
In the Council – Ayes 7, Noes 0
For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The recommendation 3920 therefore carries. I will finally put to you the substantive motion as printed, Hon. Members. Those in favour, please say aye; against, no. The ayes have it.
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A division was called for and electronic voting resulted as follows: 3925 In the Keys – Ayes 22, Noes 0
For Against Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 22 for and no votes against.
In the Council – Ayes 7, Noes 0 3930 For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The motion therefore carries, Hon. Members.
3935
Announcement of Royal Assent
The President: Hon. Members, I can announce that Royal Assent has been given to the Criminal Justice, Police Powers and Other Amendments Act 2014 and to the Post Office 3940 (Amendment) Act 2014.
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9. Tynwald Management Committee – Fees for searches – Report received and recommendation approved
The Chairman of the Tynwald Management Committee (Mr Speaker) to move:
That the First Report of the Tynwald Management Committee 2013-2014: Fees for Searches [PP No 2014/0069] be received, and the following recommendation be approved: –
That Committees of Tynwald and its branches and Members of Tynwald who are carrying out their public duties should be exempt from charges for access to the records held in the General Registry, whether by means of an extra-statutory concession or by amendment of the law.
The President: We turn now to Item 9. I call on the Chairman of the Tynwald Management Committee, Mr Speaker.
3945 The Chairman of the Tynwald Management Committee (The Speaker): Madam President, the proposition behind this Tynwald Management Committee Report and recommendation is quite simple: that Members of Tynwald and Committees of Tynwald and its branches need open access to publicly held records because of their duties as public representatives. The Tynwald Management Committee believes that public representatives, both individually 3950 and collectively in committees, should therefore have an automatic right to access the publicly held material without charge. It should not be necessary for committees to use the power to issue a precept to avoid the charge, as was suggested to me by the Treasury Minister when I spoke to him about this issue. Precepts are, quite rightly, rarely used and should never become a routine tool to enable 3955 research to be carried out. I am grateful to the Hon. Member for Douglas North, Mr Houghton, for bringing this matter to the attention of the Committee last summer. He pointed out that access to the Deeds Registry records by Members of Tynwald in the past had been treated in the same way as access by Government Departments, and that customarily no charges had been levied. He expressed 3960 concern that the Registry had, at that time, not been able to confirm that this was a formal arrangement. At the time that the Committee started to look at this, we understood that the General Registry made no charge for access to the Deeds and Probate Registry by Government Departments and Statutory Boards, as well as by other public organisations such as the Manx 3965 Museum and National Trust and local authorities, and that this had been a long-standing arrangement. I have to point out that the Report to Tynwald wrongly assumed that this state of affairs still continued. However, after the Report was prepared and published, we learnt that this situation had changed relatively recently, in the summer of 2013. So the opening paragraph of the Report represents the previous position, not the current one, as regards fees payable by 3970 Government and other public bodies. I apologise to the Court for that error. We print as an appendix to this Report an exchange of letters between me, as Chairman of the Tynwald Management Committee, and the Chief Minister, which is self-explanatory and which sets out the Government’s views. Hon. Members, it is rare for the Tynwald Management Committee to make a 3975 recommendation to Tynwald. We do so on this occasion not because the sums involved are large – they are not – but because, as a matter of principle, Members should have open access to publicly held material, unless there is special reason to the contrary, when carrying out their parliamentary duties.
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Madam President, I want to emphasise that it is only when carrying out public duties should 3980 exemption from charges be made; not when Members are making a search of public records as a private individual for their own benefit or own purposes, nor when they are asked or prevailed upon by an individual constituent to do so on their behalf to avoid or circumvent that individual having to pay the £5, the £6 or the £10 fee – or whatever it is. The Committee was conscious of this possibility for potential misuse, and notwithstanding Members being expected to act 3985 honourably in any case, would suggest as a Committee, for example, the signature of a declaration – that Members would have to sign a declaration at the desk of the Registry when they were acting in the course of their public duties. Nor did the Committee consider that this exemption facility would in practice need to be used very frequently by individual Members in any case. The sums are low. Any loss of income to 3990 the public purse from the relatively rare times searches would actually be made at no charge are minimal. But there is an important principle involved, as I have said. Accordingly, the Committee recommends to the Court that Committees of Tynwald and its branches and Members of Tynwald who are carrying out their public duties should be exempt from charges for access to the records held in the General Registry, whether by means of an 3995 extra-statutory concession or by amendment of the law. I beg to move.
The President: The Hon. Member for Douglas North, Mr Houghton.
4000 Mr Houghton: Thank you, Madam President. I have great pleasure in seconding this motion from the Tynwald Management Committee and I would thank their Chair, the Hon. Mr Speaker, for bringing this forward. It was indeed I who asked the Tynwald Management Committee to look into this, because I thought, when I had made enquiries with the Registry, who were most helpful, that in fact the 4005 whole issue of this also included this Hon. Court and its branches who would have to have paid for sight of documentation – and these are public documents, obviously – in the General Registry. There are, as the Speaker quite correctly says, only rare occasions for use of Members, but I have used these facilities in the past for boundary issues, bona vacantia issues etc, where you 4010 need to actually see the deed and see the demarcation on the plan of the deed in order to assist in a constituency issue, or indeed bring it further in a case that you may bring to a Government Department or indeed this Court. So it is a useful tool to use and to have access to, and all I can do is commend this to all Hon. Members for their full support. 4015 Thank you.
The President: The Hon. Member, Mr Downie.
Mr Downie: Yes, Madam President. 4020 I have no problem supporting the principle of this, but I should state at the outset that the Fees and Duties Act requires everybody to pay for fees. If you look at what happens in other parliamentary jurisdictions, there is a similar situation in place there. But that being the case, if this is the will of Tynwald Court, well this will be the will of Tynwald Court. I would just like to say to the Speaker that, in supporting this and him saying that a Member 4025 would have to sign a declaration, surely it would be easier if there was an appointed person, either in the Tynwald Library or in the Tynwald Office, so that the Member seeking information would go through there and then a record could be kept so we knew what the instances were. As the Speaker quite rightly said, we do not want members of the public to think that Members of Tynwald have access to go on fishing expeditions. We need to do this for our own 4030 benefit and we need to be open and transparent in the way that we do it. ______1571 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
I think if people thought Tynwald Members could walk into the Registry and surf through company details and all sorts of information about probate and land and so on, we would be open to scrutiny on that. As much as I support what is recommended here today, I think we owe it to ourselves just to put a safeguard in place to make sure that the enquiries go through an 4035 appointed person. I would support the motion.
The President: The Hon. Member for Onchan, Mr Quirk.
4040 Mr Quirk: Thank you, Madam President. I will be brief on this. I support the Report here today. I have been a Member now for about six and a half years – I think I have used the Registry about three times. As our colleague from North Douglas says, it is to do with an issue about a boundary dispute, something that has come up, or maybe as you go towards these area plans and strategic plans and you want to make sure 4045 what land is there, you need to have this. I was quite surprised, and I have mentioned it to the Hon. Member of Council, Mr Downie, too, that sometimes the attitude you get up at the Registry I thought was a little bit discourteous, and I have registered that up there. It seems quite strange, really, that… We are not getting, I do not think, anything different. It is 4050 a different job. You see the researchers in there, you see all sorts of people – they are all quite helpful, because at the end of the day it is a nightmare trying to look at things, especially when a member of staff steers you in the wrong direction.
The President: The Hon. Member for Onchan, Mr Karran. 4055 Mr Karran: Eaghtyrane, all I would like to say as far as the Report is concerned is the fact that we are actually putting back the status quo. (Two Members: Hear, hear.) This is how it was. It is absolutely ridiculous – and quite frankly, if we are to do our job right of holding the executive to account, it is nice to see there has been a watershed and people now realise that the 4060 parliamentary role is something that needs to be valued. I know with the Mount Murray inquiry I think we had something like a thousand company files out. That would have been impossible for most people to afford. What we should not be doing is penalising Members who are not part of the executive for actually doing their parliamentary scrutiny. So, as far as I am concerned, what we have here today is actually 4065 returning to what was the position for the first 15 years, maybe 20 years, of being in this Hon. Court. The idea that somehow there should be a list kept for the executive to know what the parliament does, as far as the information is concerned, really does show that my good friend from the Council does not understand that parliament is actually supposed not to be a rubber 4070 stamp and should actually do its job, because at the end of the day a government is only as good as its opposition, and by putting back the status quo I think this will help as far as Government is concerned.
The President: The Hon. Member for Rushen, Mr Watterson. 4075 Mr Watterson: I just think I need Mr Speaker to square the circle in the summing up on this one, Madam President. We have heard two Members refer today to the fact that this has been quite helpful in assisting with constituency matters, and yet Mr Speaker was quite clear at the outset that this 4080 was not for constituency work. So I think what I would like from him is some assurance that, firstly, it is not for constituency work, for which there are other mechanisms for individuals out there to get the information and an MHK should not be used to circumvent that. I want to know ______1572 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
how that is going to work, basically, and I would like the Speaker’s view on that in summing up, because I think that is going to be the crux of whether I vote for this or not. 4085 Mr Henderson: Vote!
The President: The mover to reply.
4090 The Speaker: Thank you, Madam President. I thank Mr Houghton for seconding and for describing how in practice the sort of searches we are talking about would work and the circumstances. I think perhaps that, I would hope, would answer Mr Watterson’s point. I did not say it would not be applied for constituency work. Obviously, as constituency representatives we act in the 4095 public interest. What I would not want, though, is an individual who happened to be a constituent… the way we get approached perhaps to sign passports and countersign, as quite often we do, as a public representative, as an approved person. There should be no similar expectation that you can go along to your MHK and use his office to do your private search work. Obviously, as a constituency Member, where you are acting generally in the public 4100 interest, there will be occasions when you do need to look into particular circumstances that might have been originally brought to your attention by definition by a constituent – that is the way it works – but what you would seek to avoid to do is to act on a specific person’s behalf to do work which they would otherwise have been required to pay a fee to do. I am grateful to the Member for raising that, because it will ultimately be a matter of 4105 judgement on the part of the Member, which is why actually the signing of a declaration will help that Member focus the mind to be absolutely sure that the work he is doing is in general public duty or parliamentary duty, and not on behalf of an individual’s private interest. I thank Mr Downie, and he is right – the Fees and Duties Act does apply to all, so it may well be a case of amending it if an extra-statutory concession would not be seen as workable or 4110 reasonable, or against principles. So be it, amend the primary law. Instead of signing a declaration, he is suggesting perhaps going through the Tynwald Library, where a record could be kept; or at least putting a safeguard in place, that enquiries should go through an appointed person. For the reason Mr Karran said, I think there is a bit of a principle here: do we want lists of Members’ parliamentary activity being held to be consulted upon? I do 4115 not think so, but there will need to be an appropriate mechanism and I think that is what the Hon. Member, Mr Downie, did say – a mechanism that is appropriate. That may need some further thought if this goes through. I thank Mr Quirk also for his contribution and the others who have spoken. I beg to move. 4120 The President: The motion before the Court is set out at Item 9 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 19, Noes 3
For Against Mr Anderson Mr Bell Mrs Beecroft Mr Robertshaw Mr Cannan Mr Watterson Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall
______1573 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas
The Speaker: Madam President, in the Keys 19 votes for and 3 votes against.
In the Council – Ayes 5, Noes 2
For Against Mr Coleman Mr Braidwood Mr Corkish Mr Butt Mr Crowe Mr Downie Mr Turner
4125 The President: In the Council, 5 votes for and 2 against. The motion therefore carries, Hon. Members. The Court will now take a break and we will reconvene at 5.35 by the Court clock, Hon. Members.
The Court adjourned at 5.11 p.m. and resumed its sitting at 5.35 p.m.
10. Control of Employment Act 1975 – Control of Employment (Chief Officers of Departments Etc) Order 2014 approved
The Minister for Economic Development to move:
That the Control of Employment (Chief Officers of Departments Etc) Order 2014 be approved. [SD No 2014/0158]
The President: We turn now to Item 10, Hon. Members. 4130 I call on the Minister for Economic Development.
The Minister for Economic Development (Mr Shimmin): Thank you, Madam President. Hon. Members will recall that when the Control of Employment Bill was in another place, Mr Downie moved an amendment to exempt the Chief Secretary or the Chief Officer of a 4135 Department or a Statutory Board from the requirement for a work permit. He considered it very important that the Government should be able to appoint the best person for the job in the case of these very important, demanding and highly paid posts. He was also mindful that some important vacancies, such as the Chief Executive of the Department of Health and Social Care, had either been advertised or would be coming up shortly. 4140 Whilst my Department had not originally consulted on such an exemption, having given it careful consideration both my Department and the Council of Ministers supported the
______1574 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
amendment on the grounds that an exemption would be likely to widen the pool of applicants for top public service appointments and be likely to lead to an overall increase in the quality of public services to the benefit of our citizens. The amendment had the unanimous support of 4145 both branches that consider primary legislation. Madam President, when the amendment came to be considered in the Lower House I gave notice that, provided I was to receive Members’ support, I would bring forward an Order to this Hon. Court to be made under the existing Control of Employment Act so that chief officers could be exempted from the requirement for work permits as soon as possible in advance of the new 4150 Act coming into operation. As the matter has only recently been debated in both branches and received widespread support, I do not propose to say much more; but would, however, make the following points. Firstly, the Order is not intended to discourage Isle of Man workers who have the appropriate skills from applying for chief officer posts. (Mr Quirk: Hear, hear.) I note in this respect that 4155 while the post of Chief Constable has long been exempt, the holder of the post is of course an Isle of Man worker who was promoted entirely on merit. Secondly, this exemption is only one of a range of measures that I consider need to be put in place to ensure that all chief officers can lead their organisations effectively. Madam President, our Government needs to develop ways of more systematically identifying its most able staff 4160 and then providing them with the requisite training and development opportunities so that they are not disadvantaged against external candidates, (Mr Henderson: Hear, hear.) and where they are appointed to chief officer posts they will have the skills needed to do the job. I also believe there is a need to better appraise the performance of chief officers, and indeed other senior officers, to ensure we have the high standards of management that our public 4165 services require. Also, we need to ensure that applicants for these posts are always genuinely motivated by a desire to improve the particular organisation and the services it offers to the public, and that a chief officer post is never merely seen as a useful stepping-stone before retirement (A Member: Hear, hear.) or a convenient way of enhancing one’s pension. (Two Members: Hear, hear.) Madam President, I believe all of these matters are primarily for the new 4170 Cabinet Office to address, rather than legislation. Thirdly and lastly, one other point that has been raised concerning this set of exemptions is the question as to whether Government is operating double standards, with one set of rules for the public sector and another for the private sector. In fact, chief officers of international groups have been exempt from the requirement for a work permit since 1st January 2010. Although 4175 chief officers of domestic companies and other organisations are not presently exempt, my Department would not necessarily rule out reviewing the existing position in the future to bring forward an exemption order under the new Act, but only if there were a good case for such an order and ultimately approved by Tynwald. Madam President, I beg to move the Control of Employment (Chief Officers of Departments 4180 Etc) Order 2014 be approved.
The President: The Hon. Member, Mr Cregeen.
Mr Cregeen: Thank you, Madam President. 4185 I beg to second.
The President: The Hon. Member, Mr Cannan.
Mr Cannan: Thank you, Madam President. 4190 I am really pleased to hear the Minister talk about the issue of potential double standards and perception that would apply from the private sector, because the very arguments that he has used for this to come in for the public sector clearly will apply in very many cases in the
______1575 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
private sector. I am pleased to hear the reassurances now that he has just given today in respect of that. 4195 I think it is important that any government – and the Manx Government in particular – on a small island operates a fair and credible system that is applicable both in the public sector and in the private sector. This is a bold move, I think, in many ways, and I think the sooner therefore it also applies to the private there can be no criticisms of having an unfair or biased system. Thank you, Madam President. 4200 The President: The Hon. Member, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. I was making virtually the same points really. It is just that the Minister for Economic 4205 Development said that he would be in favour of looking at the Isle of Man companies to see if there was a case for bringing in the legislation. I would certainly support that, on the basis that there is a case for bringing it in to make it a level playing field for all. I do hope that he will take it on board and progress that legislation, and bring it forward maybe a bit sooner than he is anticipating at the moment. 4210 The President: The Minister to reply.
The Minister: Thank you, Madam President. Somewhat shocked that… The two Hon. Members who have spoken are not normally my 4215 greatest supporters, so I am grateful for their concern in this area because we have just gone through the legislation to this effect. I am grateful to Mr Downie for having brought this to our attention. It has the potential to be quite contentious, as indeed it would be if we were to identify Isle of Man companies; but I think if we are going to excel in the Isle of Man, if we are going to create jobs and opportunities, then 4220 we do at times have to bring people in who have the skills requisite to do that job. Therefore, understanding it can be contentious, I take on board the comments that have been made. We do have a target date of December 2014 for the new Act to come into place, but I will at least consider between now and the next couple months whether indeed we need to bring another exemption forward. If we were to do so, probably July would be the earliest that I 4225 would be able to consider that as a prospect, but I will take soundings to that effect. Thank you, Madam President.
The President: The motion before the Court is set out at Item 10 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it.
4230 A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 20, Noes 0
For Against Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton ______1576 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 20 votes for and no votes against.
In the Council – Ayes 7, Noes 0
For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The motion therefore carries, Hon. Members.
11. Education Act 2001 – Education (Student Awards) Regulations 2014 approved
The Minister for Education and Children to move:
That the Education (Student Awards) Regulations 2014 be approved. [SD No 2014/0159]
The President: Item 11. The Minister for Education and Children. 4235 The Minister for Education and Children (Mr Crookall): Thank you, Madam President. In February 2013, this Hon. Court approved the introduction of a contribution of £2,500 by all undergraduate students towards the cost of tuition fees. The financial contribution was introduced to enable the Department to continue to manage the reduction in its annual budget, 4240 whilst maintaining the provision of inspirational and engaging educational experiences, together with helping to ensure the future prosperity of the Island by meeting the training needs of the workforce. The 2013 Regulations also enabled the Department to make available to students undertaking their first degree a loan of £2,500 together with the provision for a further means- tested contribution of 35% of family income in excess of £100,000. 4245 Madam President, I am pleased to announce that there are no such policy changes within the 2014 Regulations. The 2014 Regulations are a consolidation of the 2013 changes, together with the inclusion of some new relatively minor provisions. These provisions include the ability for the Department to consider a student as being independent from the requirement for parental contributions where they have been 4250 irreconcilably estranged from their parents for at least 12 months before the beginning of the course.
______1577 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
A further new provision is the discretion to accept a late application for departmental support. This is because some students who may not have planned to go to university may, on receipt of their results, decide to apply for a place. The 2014 Regulations will enable these 4255 applicants to be dealt with in the normal way. A further new provision is regarding formal reviews and refusal of an award. Such a review may not be requested if the refusal was on the grounds that the course is not an approved course or the applicant is ineligible for the award. Finally, the 2014 Regulations include the provision for the maximum term of an award to be 4260 extended where a course includes work experience of six months or more. This provision will enable students undertaking courses which include extended periods of work experience to complete their course with the continued support of the Department. I believe that the minor changes introduced in the 2014 Regulations, together with the consolidation of changes agreed in the 2013 Regulations, will provide greater clarity for those 4265 who apply for an award. Madam President, I beg to move the motion standing in my name.
The President: The Hon. Member, Mr Anderson.
4270 Mr Anderson: Madam President, I beg to second and reserve my remarks.
The President: The Hon. Member, Mr Quirk.
Mr Quirk: Thank you, Madam President. 4275 Just for the Minister, if I could – maybe if he has not got the information he could let us know how many did take up the loan offer of £2,500 previously?
The President: The Hon. Member, Mrs Beecroft.
4280 Mrs Beecroft: Thank you, Madam President. I would just like to put on record that I will not be supporting this. I did not support the student tuition fees coming in in the first place, and I am sure that anybody who voted against them when it was first introduced will not be supporting this. It really is just condoning something that I do not agree with in the first place. 4285 The President: The Hon. Member of Council, Mr Butt.
Mr Butt: Thank you, Madam President. Similar sentiments. In particular, I was concerned about the UCAS points when they were 4290 raised to 200 points, and I am still concerned about that. I understand the reason they have been raised is to try to winnow out those children who have not worked very hard or as hard as they should have done towards their A-levels, but there are children who are from homes where they are not supported by their family, where they have not got a study space, where there is not a culture of support for the children, and those extra points to make it up to 200 can be 4295 sometimes very difficult. I am particularly thinking of children who are in care and children who have had traumatic upbringings. They often mature later than other children and this does disadvantage them. I do think the rise to 200 UCAS points will disadvantage them, and for that reason I would not support that particular issue. 4300 Thank you, Madam President.
The President: The Hon. Member, Mr Karran.
______1578 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Karran: Eaghtyrane, the only issue I have is the fact that when people see that the 200 4305 points equates to having to have one B, one D and one E in order to go to university… Whilst I totally agree with my colleague from the Council about the issues about a level playing field, I have to be honest with you – what we wanted to see was actually to raise it further than this as an alternative. By bringing this up, from I think it was 160 or 140 when I was Minister, to what we have here, we save something like 15% of the costs as far as university costs for people going 4310 across. There has to be an assessment as far as education is concerned. If people want to go on a university course, it should be on the basis of their academia, not on the depth of their parents’ pockets. I have to say that I do feel that, whilst I will not be voting for this, the situation is that 200 points… There might be justification for it actually to be raised further, because I think one B, 4315 one D and one E is not an awful lot of UCAS points to start off with. If I had been still in the job, I have to be fair to the Minister, I would have been putting it up further. Maybe there would need to be some allowance made for exceptional circumstances as far as that is concerned. I think the issue as far as parents being estranged from their kids… I really think that you are going to end up with wholesale abuse as far as this is concerned, because it will be very difficult 4320 to prove, especially if you end up with some poor little rich kid being put in a flat as part of the situation and half the time it is into their own parents’ flat. We have got tremendous abuse of this scheme anyway, as far as making sure that the right people get the right support; and to be fair, it is not going to be easy. But I do think that the issue about the 200 points… I would be more sympathetic for that 4325 going up than bringing in tuition fees in the first place.
The President: The Hon. Member, Mr Hall.
Mr Hall: Just a very brief comment, Madam President. 4330 If the Minister, when he sums it up… just a few comments if he could make the… I note that recently in the United Kingdom there have been some comments made that 45% or thereabouts of university graduates will not even earn enough money now to repay their student loans, according to the UK government. What are his thoughts on that and what assessment has he made on that similar impact in the Isle of Man? 4335 Also, is he aware that they have estimated in the UK that 28% of loans would actually never ever be paid back in full, when factoring in the contributions looking at it on a long-term basis? So what sort of estimate has he made of the percentages going forward in the medium to long- term of loans that will never actually ever be paid back, or what percentages have they made that… graduates not even earning enough to repay those loans? I would be interested to hear 4340 about what work has been going on within the Department in that regard.
The President: The Minister to reply.
The Minister: Thank you, Madam President. 4345 I thank Mr Anderson for seconding me this afternoon. In reply to Mr Quirk, with regard to the loans, there have been no loans taken out yet because they only start from this September, so that will clarify that for him. Mrs Beecroft’s comments: I take on board what she said. If she did not support it last year, I would not expect her to do it this year. It is a point of principle and I fully understand that. 4350 Mr Butt: with regard to UCAS points being 200 or more, I have to say it is one grade C we are looking at and two others. I do not think that is an awful lot to ask in this day and age. I take on board Mr Karran’s point that it was looked at, but this was agreed in 2012 – two years ago – and it has stayed the same since, but I take on board your comments again. Mr Karran’s comments, I note, but I think it was a mixture of what was already being said by 4355 the other Members. ______1579 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Just to pick up on the Hon. Member for Onchan, Mr Hall – 45% do not earn enough to repay their loans. That would mean here that anybody earning under £21,000 would not be repaying their loan. Obviously, we are not at that stage yet because it will be some years – two to three years – before anybody starts working after having a loan, but it is one that we will have to keep 4360 an eye on to see what happens. With regard to the 28% who never repay their loans, we have had a look at the Department this week at other countries where they do this and it is actually only the UK that you will find figures for. Everybody else keeps those figures very quiet, because the more they advertise that 30%, 40%, 50% never repay it, that encouragement goes out there. So it is only the UK, I think; 4365 but it is one that we and Treasury will be keeping a close eye on. So there is not a lot of detail out there to come back on that, but we will be keeping an eye on it. Thank you, Madam President. I beg to move.
The President: The motion before the Court is set out at Item 11, Hon. Members. Those in 4370 favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 15, Noes 7
For Against Mr Anderson Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mrs Cannell Mr Cretney Mr Hall Mr Crookall Mr Houghton Mr Gawne Mr Karran Mr Henderson Mr Thomas Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Watterson
The Speaker: Madam President, in the Keys, 15 votes for and 7 votes against.
In the Council – Ayes 6, Noes 1
For Against Mr Braidwood Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 6 votes for and 1 vote against. The motion therefore carries, Hon. Members. 4375
______1580 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
12. Income Tax Act 1970 – Income Tax (Social Security Benefits) (Exemptions) Order 2014 approved
A Member of the Treasury (Mr Henderson) to move:
That the Income Tax (Social Security Benefits) (Exemptions) Order 2014 be approved. [SD No 2014/0122]
The President: Item 12. The Member for the Treasury, Mr Henderson, to move.
A Member of the Treasury (Mr Henderson): Gura mie eu, Eaghtyrane. 4380 This Order gives effect to the exemption from Income Tax of Employed Person’s Allowance, which was announced as part of the 2014 Budget. The Order is made under a power introduced into the Income Tax Act 1970 by section 7 of the Income Tax (Amendment) Act 2014. The Order could not be brought in as part of the Budget as the 2014 Act only came into operation on 6th April 2014. 4385 Section 7 substituted a new section 48 into the Income Tax Act 1970. Under the new section 48, Treasury can by order remove a benefit from liability to Income Tax or make a benefit chargeable. The section also lists those Social Security benefits that are not to be treated as income for any purpose of the Income Tax Act until the first order is made under the new power. That first 4390 order must then list all benefits that are to be exempt from tax. As this Order is the first, it also exempts all the Social Security benefits listed in the new Order 48. In addition to the above, the Order also again exempts Jobseeker’s Allowance. This benefit has been exempt from tax since the 2009 Budget, but was not added to the text of the statute at that time. It is therefore included here as a tidying-up measure. 4395 Finally, a concessionary treatment approved by Tynwald in January 2013, which exempted Child Benefit, Income Support and Employed Person’s Allowance from tax in certain circumstances has been brought into statute for Child Benefit and Income Support – Employed Person’s Allowance already being covered by the 2014 Budget. Eaghtyrane, in this year’s Budget, the Treasury Minister announced that he would bring an 4400 order before the Hon. Court to exempt Employed Earner’s Allowance from Income Tax. This will prevent increased amounts of benefits from being paid simply to meet the additional tax liability arising from it, which should in turn also prevent increased administration costs. The Order being considered today will introduce that change. As this is the first Order to be made under the new power recently introduced in section 7 of the Income Tax (Amendment) 4405 Act 2014, it also includes the benefits listed in the 2014 Act as being exempt from Income Tax together with Jobseeker’s Allowance, which has been exempt from tax since 2009. Finally, the Order formalises a concession approved by this Hon. Court in January of last year and which will exempt Child Benefit and Income Support from tax in certain circumstances. Eaghtyrane, I beg to move. 4410 The President: The Hon. Member, Mr Downie.
Mr Downie: I beg to second, Madam President, and reserve my remarks.
4415 The President: The motion before the Court is set out at Item 12. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
______1581 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
13. Customs and Excise Act 1993 – Customs and Excise Acts (Amendment) Order 2014 approved
A Member of the Treasury (Mr Braidwood) to move:
That the Customs and Excise Acts (Amendment) Order 2014 be approved. [SD No 2014/0115]
The President: Item 13. A Member of the Treasury, Mr Braidwood, to move.
4420 A Member of the Treasury (Mr Braidwood): Thank you, Madam President. This Order makes amendments to section 30 of the Finance Act 1994 as applied in the Island to increase the rates of Air Passenger Duty for bands B, C and D with effect from 1st April 2014. These increases were previously announced last year. The duty rates for band A, which is the band into which most journeys made by people departing the Island would fall, is unaffected 4425 and remains at £13 per person. The increases for the other bands are £2 per person for the standard class of travel in bands B and C, and £3 for band D. The increase for travel in a higher class of travel would be double these amounts. Madam President, I beg to move.
4430 The President: The Hon. Member, Mr Downie.
Mr Downie: I beg to second, Madam President, and reserve my remarks.
The President: The Hon. Member, Mr Turner. 4435 Mr Turner: Yes, just a comment really, Madam President. I am aware of course that we are bound under certain agreements over this matter, but I would just like to repeat my stance on Air Passenger Duty, which is one I know is shared across the UK as well, that it is a harmful tax. It is harmful to the United Kingdom and certainly will do 4440 them no favours in trying to develop Heathrow as a hub. Other countries, such as Ireland, have recently completely abolished this. I know that when recently I flew to the United States, by routing via Dublin and starting the journey in Dublin, and still using a flight out of Heathrow, the saving ran into hundreds of pounds on that journey. It is certainly something I would recommend to anybody thinking of going long haul: they should go 4445 via Ireland and avoid paying this disgraceful, harmful tax. I think the UK and indeed the Isle of Man should be thinking about this because it is certainly not doing Britain as a whole any favours.
The President: The Hon. Member, Mr Hall. 4450 Mr Hall: Thank you, Madam President. Just a few comments to echo the previous Speaker. I too would vote against this. I think Air Passenger Duty is generally seen as a bit of a punitive tax. It hurts the aviation industry and I think it has been shown to strangle economic growth to a degree at a time when it is most 4455 needed. I could go on and make a whole number of further comments, but I will just keep it to those brief comments and I will vote against it.
The President: The Hon. Member, Mrs Beecroft. 4460
______1582 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mrs Beecroft: Thank you, Madam President. I too will be brief, but I too will be voting against it. I would certainly like to see some sort of business case if we are supposed to support this, because it must discourage people from coming here, whether to set up business or to come here as a tourist. It has to have some 4465 detrimental effect to the wider economy. Until we have had a very good business case that shows why we should be doing this, I think we should not be doing it.
The President: The Hon. Member, Mr Braidwood, to reply.
4470 Mr Braidwood: Thank you, Madam President. I have some good news for Mr Turner, Mr Hall and Mrs Beecroft, because the Chancellor in the UK announced in his budget that it was planned to abolish bands C and D from April 2015 (Interjection) and this would only then affect long-haul flights to destinations such as those to the Far East. Madam President, it is likely that the Island would also drop bands C and D. 4475 In reply to Mrs Beecroft, if we do not apply Air Passenger Duty, the UK would apply it and they would get the revenue and not the Isle of Man. So there is the business case, Madam President, and I hope people will support.
The President: The motion before the Court is set out at Item 13. Those in favour, please say 4480 aye; against, no. The ayes have it.
Mr Turner: Divide.
Two Members: Too late.
14. Customs and Excise Act 1993 – Export Control (Amendment) Order 2014 (Application) Order 2014 approved
A Member of the Treasury (Mr Henderson) to move:
That the Export Control (Amendment) Order 2014 (Application) Order 2014 be approved. [SD No 2014/0127]
4485 The President: The Member of the Treasury, Mr Henderson, to move.
A Member of the Treasury (Mr Henderson): Gura mie eu, Eaghtyrane. This Order applies in Island law the Export Control (Amendment) Order 2014. The applied Order amends the Export Control Order 2008 in relation to trade controls and 4490 trafficking and brokering activities by Island persons and by other people who are in the Island. The amendments meet the requirements of the United Nations Arms Trade Treaty signed by the UK in April 2013. The amendments will add combat aircraft and attack helicopters to the list of goods subject to the tightest control and substitute a new list of goods subject to the next level of control. The Order will permit the extension of the UN Treaty to the Island and will 4495 demonstrate the Island’s desire to be a responsible member of the international community. Eaghtyrane, I beg to move.
The President: The Hon. Member, Mr Downie.
4500 Mr Downie: I beg to second, Madam President, and reserve my remarks.
The President: The motion before the Court sits at Item 14 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it. The ayes have it. ______1583 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
15. Value Added Tax Act 1996 – Value Added Tax Act 1996 (Amendment) Order 2014 approved
A Member of the Treasury (Mr Braidwood) to move:
That the Value Added Tax Act 1996 (Amendment) Order 2014 be approved. [SD No 2014/0132]
The President: Item 15. A Member of the Treasury, Mr Braidwood, to move. 4505 A Member of the Treasury (Mr Braidwood): Thank you, Madam President. This Order amends part 2 of schedule 7 to the Value Added Tax Act 1996 in relation to supplies made on or after 1st May 2014. The supplies in question are those of radio or television broadcasting services and telecommunications services. 4510 The changes made more closely align domestic VAT law with the underlying European Union VAT law. The amendment is largely a revenue protection measure, introduced in part because some suppliers making supplies to non-taxable customers are offering prompt payment discounts which, when customers do not take up the opportunity, means that the supplier avoids VAT on a proportion of the total cost. 4515 Madam President, I beg to move.
The President: The Hon. Member, Mr Downie.
Mr Downie: I beg to second, Madam President, and reserve my remarks. 4520 The President: The motion before the Court is set out at Item 15. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
16. Audit Act 2006 – Audit (Local Government) Direction Order 2014 approved
A Member of the Treasury (Mr Downie) to move:
That the Audit (Local Government) Direction Order 2014 be approved. [SD No 2014/0148]
4525 The President: Item 16. The Member of the Treasury, Mr Downie, to move.
A Member of the Treasury (Mr Downie): Thank you, Madam President. Under the existing regulatory framework, all local government bodies are subject to a full statutory audit in accordance with the Audit Act 2006. 4530 As Hon. Members will be aware, significant improvements in financial reporting and compliance with the Audit Act 2006 have been achieved over the past five years in this sector. Having reviewed the overall position following a consultation exercise in December 2013, the Audit Consultative Committee, of which I am the current Chairman, has concluded that the current regulatory requirements are no longer proportionate to the risks within the sector, 4535 especially for the smallest bodies. Treasury is proposing therefore the adoption of a three-tier framework as a basis for the accounts and the audit requirements for the sector based upon annual turnover of the organisation.
______1584 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
This Order will introduce a framework that will balance more proportionately the level of assurance required with the associated cost of obtaining that assurance. The proposal should 4540 bring with it an overall reduction in the cost of assurance for the sector’s smaller bodies. Unfortunately, due to limitations in Treasury’s current powers under the Audit Act 2006, these proposals cannot be applied to burial authorities without amendments to primary legislation. However, I am pleased to report to the Court this evening that the Council of Ministers has recently approved the introduction of a short Audit Act amendment Bill into the 4545 legislative programme with the primary purpose of rectifying this. Madam President, I beg to move the motion standing in my name.
The President: The Hon. Member, Mr Watterson.
4550 Mr Watterson: Thank you, Madam President. I am delighted to second this motion, (A Member: Hear, hear) which I think I raised in Tynwald in December 2009, so it has worked its way through. This is a far more reasonable risk-assessed approach and it will end the somewhat crackers approach that we had when I was auditing local authorities and burial authorities, where they 4555 would be charging hundreds of pounds, maybe even a thousand pounds, for the audit of a burial authority which only had a turnover of a few thousand pounds itself. This is a far more proportionate approach to the risk that is faced in these burial authorities and I wholeheartedly support it, Madam President.
4560 The President: The Hon. Member, Mr Cregeen.
Mr Cregeen: Thank you, Madam President. Just a couple of points for clarification, if the Member would not mind. As did the Member for Rushen, Mr Watterson, I raised this some time ago – 4565 A Member: Oh, you raised it!
Mr Cregeen: – regarding the huge increase of costs that went off to local authorities because there were so few companies tendering for the work. 4570 One of the recommendations from the committee I think that was looking into it was actually to see whether it could go out in smaller tranches to smaller companies. I just need a bit of advice whether that has actually happened; or is it that you have got to bid for all the local authorities or none?
4575 The President: The Hon. Member, Mr Quirk.
Mr Quirk: Thank you, Madam President. Just if the Member would bear with me too – I noticed in the notes here the appointment of a reviewer. It says ‘must be undertaken by an auditor’. I presume that is a chartered or 4580 certified… or whatever they are. The other issue I would not mind… There is an examiner as well on here, and I wonder what the two roles are, or the conduct of the examiner. It also says, in 3(1):
‘In carrying out an examination the examiner must have regard to any directions issued by the Treasury.’
4585 Therefore, it brings me to the back of the page, where:
‘On completion of the examination the examiner must complete and sign a report (the “examination report”).’
______1585 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
I am just wondering whether… because in the past a number of local authorities have failed to deliver their accounts properly to Treasury. I notice a number of reports we have had in the 4590 last few years… there have been a number of local authorities who have been outstanding on those accounts to be made available to the general public. I just wonder if this will be an additional power – if a local authority does not come in, that Treasury then would give direction; and what would be the penalty?
4595 The President: The Hon. Member, Mr Anderson.
Mr Anderson: Thank you, Madam President. I would just like to congratulate the Treasury for listening to the views on this. There was quite a lot of concern a couple of years ago on this one. 4600 I just wondered, for clarification, whether this would impact on this financial year. Would this kick in, if it was approved today, for audit accounts in this financial year?
The President: The Hon. Member for Castletown, Mr Ronan.
4605 Mr Ronan: Thank you, Madam President. Certainly under the current structure of local authorities this is a good and positive move. Certainly in my time as a local authority Member it was pretty clear that the… [Inaudible] brought in by… the way auditing was done was unbalanced and unfair, certainly to the parish and village authorities around the Isle of Man. So I congratulate Treasury myself for bringing this 4610 forward.
The President: The Hon. Member to reply.
Mr Downie: Thank you, Madam President. 4615 Could I first of all thank my hon. colleague, the Member for Rushen, Mr Watterson. Treasury have listened, but you will recall, Hon. Members, that some years ago the local authority accounts were in a dreadful state (Several Members: Yes.) and they were late coming in. What we had to do when we introduced the Audit Act 2006… we applied a lot of pressure on them to deal with their financial affairs in a much more organised way and a more regulated way 4620 because there were a lot of discrepancies. At the end of the day, like the Hon. Members of this Court, they are dealing with public money and they are accountable, so it had to be sorted out. I am pleased to report now that the books are all fairly well up to date, and in fact on Friday of this week we will be interviewing for new auditors to come in to deal with one of the issues raised by Mr Quirk. We do take the overall approach. Government will sit down with 4625 representatives of Douglas Corporation, with the local authorities themselves, the Municipal Association, and we will be interviewing the final selected people to see if we can get a good audit package put together. What will then happen is that the severity will depend on the income of the local authority. So a full-blown audit will be required for the larger authorities; and proportionately, where a 4630 local authority does not have the same level of expenditure or responsibility, they will be able to put that out to a practitioner; and in the lowest grade it will be able to be delivered by a book- keeper or somebody who is acceptable to the Treasury in order that we can save money, or they can save money. We have to have some further dialogue with the Church because we need to amend the 4635 legislation regarding the burial authorities, and likewise a much more commonsense approach will be taken with them. Hon. Members might be interested to hear that we deal with 52 authorities in all, so there is quite a lot of work to get through and that does not include the Isle of Man Local Government Superannuation Scheme. ______1586 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
4640 I would just like to thank Mr Anderson for his comments and say to him Treasury did listen, we finally got there – the outstanding matter is the burial authorities. To Mr Ronan, I thank him for his remarks. As a local authority man himself in the past, he realised what a good move this has been. With that, Madam President, I beg to move. 4645 The President: The motion before the Court is set out at Item 16 on your Order Papers. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
17. Farm and Horticultural Improvement Scheme 2006 – Farm and Horticultural Improvement Scheme 2006 (Amendment) Scheme 2014 approved
The Minister for Environment Food and Agriculture to move:
That the Farm and Horticultural Improvement Scheme 2006 (Amendment) Scheme 2014 be approved. [GC No 2014/0023]
The President: Item 17. The Minister for Environment, Food and Agriculture to move. 4650 The Minister for Environment, Food and Agriculture (Mr Gawne): Gura mie eu, Eaghtyrane. This amending Scheme makes provision for support in respect of packaging material which is embossed with an approved logo and used by agricultural businesses when promoting their produce. Support for such packaging already exists in the Farming Horticultural Improvement 4655 Scheme for horticultural businesses and provides 30% of the costs by way of assistance. This amendment will provide the same support to other agricultural businesses. I would therefore, Eaghtyrane, move the resolution in my name.
The President: The Hon. Member, Mr Turner. 4660 Mr Turner: I beg to second and reserve my remarks.
The President: The motion before the Court is set out at Item 17, Hon. Members. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
18. Dogs Act 1990 – Dogs (Exemption) (Amendment) Order 2014 approved
The Minister for Environment Food and Agriculture to move:
That the Dogs (Exemption) (Amendment) Order 2014 be approved. [SD No 2014/0145]
4665 The President: Item 18. The Minister for Environment, Food and Agriculture to move.
The Minister for Environment, Food and Agriculture (Mr Gawne): Gura mie eu, Eaghtyrane. This amending Order adds to the list of dogs exempt for payment in respect of a dog licence. That list currently includes dogs which are held by a blind person or used in law enforcement, 4670 by way of examples. This amendment ensures that assistance dogs, specifically trained to aid persons with a disability, are included on that list. As this Court will see, this amendment will ______1587 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
encompass a large number of dogs trained not only to act as the eyes and ears but also and in some instances the main carer of an individual who would otherwise require constant support. I am sure that the Court will agree that this is a welcome step the Department is taking. The 4675 flexibility of using the term ‘assistance dog’ will ensure that any further additions will become part of the list automatically provided. (A Member: Hear, hear.) I would therefore, Eaghtyrane, move the resolution in my name.
The President: The Hon. Member, Mr Turner. 4680 Mr Turner: I beg to second and reserve my remarks.
The President: The motion before the Court is set out at Item 18, Hon. Members. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
19. Annual review of the Financial Supervision Commission – Amended motion carried 4685 The Hon. Member for Michael (Mr Cannan) to move:
That the Economic Policy Review Committee should conduct an annual review of the work of the Financial Supervision Commission; that such a review should include the requirement for the Chief Executive to give evidence in public; and that the first review should take place before December 2014.
The President: Item 19. The Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you, Madam President. In November last year, I asked the Treasury Minister when the last review of performance of 4690 the Financial Supervision Commission had taken place and whether he would consider now to be an appropriate time to consider such a review. The answer that I received was, in essence, that such a review was not appropriate and that the OECD have recommended that such scrutiny between parliamentary bodies and financial regulators should not take place. Despite that reply, I do believe that it is an appropriate time to review the work of the 4695 Financial Supervision Commission, and indeed I took the opportunity at the time to write to the Economic Policy Review Committee to ask that they undertook such a review. I am pleased to acknowledge that they did take that e-mail at the time very seriously, and I understand that they have been in communication with the Financial Supervision Commission. The purpose of this motion today will simply add weight to that request and will give the Committee firm guidance 4700 and direction, if supported, that Tynwald does approve of such a review. I should make it clear I have no evidence to suggest that the Commission’s performance is less than satisfactory, but I do ask the Hon. Court today to reflect on the following points. Firstly, the FSC plays a pivotal role both in maintaining the reputation of the Isle of Man as a premier location for financial services and in delivering balanced and fair regulation. This also 4705 helps the Island develop its sector offering vis-à-vis its jobs and business opportunities. Given the importance of its role, I am not aware that the FSC has undergone any form of parliamentary review in recent years; and neither, it would appear, has public evidence been sought from those on the receiving end of the legislation as to whether the regulator performs in such a manner so as to perform both good regulation and the framework for future growth. 4710 Secondly, in some respects the financial services industry has not developed as well as perhaps may have been expected, given the position that it was in during the period 1999 to ______1588 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
2005 – for example, the fund administration industry literally upped sticks and moved off in pretty quick time; and we have not seen, for example, development in other areas such as foreign exchange trading and perhaps other more complex financial instruments – and it would 4715 be good for the Committee to understand perhaps a bit more as to why these areas have not developed. The other areas worth considering surround the recent signing of the UK FATCA agreement and the forthcoming USA agreement, which may change the future for some companies. What role, I ask, is the FSC planning to play in such fundamental changes? 4720 The situation in the UK, with what was formerly the FSA and now the FCA, appears to be that there is regular interaction between Parliament and the regulator, particularly via the Treasury Select Committee. There is no reason, therefore, that I can see why such an arrangement should not exist on the Island for the parliament here to be able have a regular and constructive dialogue with the regulator. 4725 Madam President, I hope this motion today makes sense. I have spoken to and met with the Chief Executive of the Financial Supervision Commission and he was fully open and indeed supportive of my reasons for bringing this forward. It is an ideal opportunity for the Financial Supervision Commission to state their case, to talk about the good work that they do, and also an opportunity to understand in what areas we can seek improvements. 4730 Madam President, I beg to move.
The President: The Hon. Member for Douglas North, Mr Houghton.
Mr Houghton: Thank you, Madam President. 4735 I am very happy to second such a motion that has been brought by the Hon. Member for Michael, Mr Cannan. I, and I am sure other Members of this Hon. Court also, support this motion. It is a very good, commonsense way forward. The Economic Policy Review Committee is the ideal platform to do such a review, and I think it will give a very healthy way of looking into the roles and the 4740 development of the Financial Supervision Commission moving forward with the financial sector. Thank you.
The President: The Hon. Member for Rushen, Mr Watterson.
4745 Mr Watterson: Thank you, Madam President. I certainly concur with the mover of this motion about the pivotal role of the Financial Supervision Commission and the fact that there is no regular parliamentary review at present – with the exception of the last proper parliamentary review, being the Kaupthing Singer & Friedlander Select Committee, which did look at the regulation, in quite some detail, of that 4750 particular entity. I would also agree that they provide the framework for growth and customer protection, and they have that difficult balance to strike. It is in that spirit of agreeing with the Hon. Member on so much of what he is saying that I move the amendment, which is intended to be constructive and add to the spirit of the motion 4755 rather than to deflect it. I support the scrutiny of the work of the independent regulator ensuring that there is accountability but not operational interference for their work; and as Mr Cannan rightly pointed out, in the United Kingdom the process is that the Treasury Select Committee reviews the annual report of the Financial Services Authority. Whether such a report needs to go annually 4760 before the Economic Policy Review Committee is something for that Committee, but the wording of this amendment would not prevent an annual scrutiny session with the Chief Executive if that Committee thought it was necessary.
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It is also important that this opportunity for scrutiny is not restricted to the Financial Supervision Commission but all of the financial services regulators, and I propose to add the 4765 Insurance and Pensions Authority and the Gambling Supervision Commission to the list of bodies that can be summoned before the Economic Policy Review Committee. As both the proposer and seconder have said, it is important that the work of these important bodies is opened up to Tynwald scrutiny, that their good news is shared and that their operations are properly scrutinised. 4770 I beg to move the amendment standing in my name:
Leave out all the words after ‘That’ and add ‘the remit of the Economic Policy Review Committee should include the work of the Financial Supervision Commission, Insurance and Pensions Authority and Gambling Supervision Commission, this remit to include the requirement for the Chief Executive to give evidence in public.’
The President: The Hon. Member, Mr Coleman.
4775 Mr Coleman: Thank you, Madam President. I rise to speak in my capacity as the Chairman of the Economic Policy Review Committee. The Committee is quite willing to… it was quite willing to add the FSC, and based upon a poll I think we would be quite happy to add the Pensions Authority and the Gambling Supervision Commission into our annual reviews. 4780 The President: Are you seconding, sir?
Mr Coleman: Oh, well… Yes, I will second. (Laughter) We had commenced, based upon Mr Cannan’s contact with us in November last year, a 4785 review into the FSC. Unfortunately, this review was interrupted by the review into the personal injury damages and how they are calculated, and I believe that only now can the Committee start to revisit the FSC review. Common sense would suggest that the proposed annual reviews be commenced when we have completed the review which we are picking up again, and therefore the date that we would 4790 do the annual reviews would be on the anniversary of when we have finished the one that we will be continuing to work on, the report for which would be within your timeframe of December this year – so I am quite happy to second.
The President: The Hon. Member, Mr Thomas. 4795 Mr Thomas: Thank you, Madam President. When the Financial Supervision Commission Rulebook Order was being debated, I think I suggested this was a good idea and also said that periodically this Court should actually have a financial regulation review of the way we go about financial regulation. 4800 One point to observe, even with the amendment, is that there is one financial regulator that is still missed out of the list, which is the Office of Fair Trading, which actually runs the Financial Services Ombudsman Scheme and also registers moneylenders. I am surprised that the Economic Policy Review Committee could not already take evidence from these people; and if it is going to, it would only be right to include a full list of the financial services regulators and 4805 other regulators in its remit. Just to say that why I think parliament, Tynwald, should review the whole of financial regulation and perhaps also gambling regulation periodically is that in the statute we do have statutory objectives and it would be perfectly normal for the regulators to report not only on paper in a report but also to come to this Court to actually talk about how they achieve those
______1590 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
4810 objectives and how they take into account the interests of the industry and how they protect consumers. I put on record that I believe we should have periodic full debates about the reports presented to us by all our financial services regulators.
4815 The President: The Hon. Member, Mr Cannan, to reply.
Mr Cannan: Thank you, Madam President. Many thanks to my seconder, Mr Houghton, for his support. I have got no problems with the amendment that has been moved by Minister Watterson, 4820 and indeed I think it is eminently sensible that all the regulators appear at least annually to give evidence in public about their performance and also accept challenges and opportunities to seek improvements in what they are doing. Just coming back to Mr Coleman, obviously the idea of my motion was not to bog the Economic Policy Review Committee down in reams and reams of reports and analysis, but really 4825 to have this annual opportunity for verbal transparent questioning of the chief executive – or chief executives now, if the amendment is passed. One would assume that this would presumably sensibly be done once the annual report was produced and prior to a Tynwald debate; but obviously I will leave that in your capable hands to decide how best to proceed. I do accept that potentially there is a whole raft of work here, were 4830 you to delve into every detail, and that certainly was not the primary focus in bringing this forward – I think more to lower the barrier, shall we say, that seems to have risen between regulatory bodies and Tynwald, and the parliament. Mr Thomas, thank you for your support, and obviously that is a possible point for the future regarding the OFT. 4835 Madam President, I am happy to support the amendment and I beg to move.
The President: The motion before the Court is set out at Item 19. To that, we have an amendment in the name of the Hon. Member for Rushen, Mr Watterson. I will put to you the amendment. Those in favour of the amendment, please say aye; against, no. 4840 The ayes have it. The ayes have it. I now put to you the motion as amended as the substantive motion. Those in favour, please say aye; against, no. The ayes have it. The ayes have it.
20. Means testing of state pensions – Amended motion carried
The Hon. Member for Onchan (Mr Karran) to move:
That Tynwald is of the opinion that state pensions should not be means tested; and calls on the Treasury to examine the benefits linked to pensions, such as the Christmas bonus, funeral benefits, pensions supplement and passported benefits with a view to phasing out payment of such benefits to those whose net income is above the national average wage or who have capital above a set limit; and to report to Tynwald in October 2014.
The President: We move on to Item 20, Hon. Members. I call on the Hon. Member for Onchan, Mr Karran. 4845 Mr Karran: Eaghtyrane, Hon. Members, I move this motion today: that Tynwald is of the opinion that the state pension should not be means tested and calls on the Treasury to examine ______1591 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
the benefits linked to pensions, such as the Christmas bonus, funeral benefit, pension supplement and passported benefits, with a view to phasing out payment of such benefits for 4850 those with a net income of above the national average wage – which is well over £600 at the present time – or who have capital above a certain set limit; and to report back to Tynwald in October. There are a number of issues which I think are fundamental principles. Firstly, that Government has got to start making hard decisions and has got to start having an 4855 administration that will be inclusive and not exclusive. Up to now, I have seen too many of the vulnerable being hit, as far as Government policies are concerned. This has got to stop, and it is time that we dealt with the issues of having to live and cut our cloth in these difficult times by making sure that it is inclusive to all sections of the community, particularly to those who have an ability to pay and can afford to do so. 4860 Secondly, Government far too often wants to make the laws and make the rules, but does not want to apply them to itself. The state pension, just like the health services, was originally primarily funded through the National Insurance contributions. The principle was to provide a universal pension scheme as part of that fundamental contribution basis. I move this part of the motion particularly because I heard that there are talks in executive 4865 Government about the issue of means testing of the state pension. Promises made should be kept. If we are ever to win back the respect of the general public as far as politicians are concerned, then we have got to start applying the same rules and conditions as everyone else is supposed to, if we are to be seen as fit and proper people. The line is drawn here: I will not support any changes until promises have been made – and they need to be kept. 4870 The issue of fringe benefits which are available from the state when attaining retirement age is a different issue. Many of these issues I have been in the vanguard of bringing about with my former Labour colleagues in the past. One issue that I particularly take exception to is the issue over the pension supplement. This was instigated many years ago, and why we brought this about was originally to bring in a cost- 4875 of-living bonus for those pensioners who had spent their working lives on an average wage of less than 50% of their UK counterparts and were having to pay for a cost of living which was much greater than the equivalent person’s in most of the UK. When the original supplement was first thought about it was not meant to be a universal payment – that was not what we were trying to achieve in the first place. The bonus was a cost- 4880 of-living bonus for those who were on Social Security or those who were not on a decent standard-of-living income, which a caring and prosperous society should be providing for those individuals in their twilight years. As we have seen so often, the scheme then got politically compromised so the position of those in privilege would also receive it. We also saw the idiotic proposal about the 10-year 4885 contribution basis, which was a great mistake and it should have been on a contributory basis over the years in the National Insurance Fund, either as a worker or as a full-time carer of children. The real matter that horrified me was when we adapted it: the fact that we ended up with so many people, who had fled the Isle of Man as economic refugees in the 1950s and 1960s, 4890 coming back to the Island in their twilight years to retire, only to find that they were unable to partake in the pension supplement. Fortunately, Eaghtyrane, we managed to get common sense to prevail and we managed to accept the principle that just because their fund path had not come back with them because of the changes in regulations at the end of the 1970s, we deemed that they had paid into the National Insurance scheme. 4895 We are not talking about small amounts: this scheme alone costs £34 million. I believe that the situation is that we are in hard times, and bearing in mind the number of arguments when I was a Member of the Department, when this proposal was initiated… One of them was that one in four pensioners in the Isle of Man was paying the upper limit of Income Tax, and that was actually used as an excuse against the universality of it in the first place. ______1592 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
4900 I find it ridiculous that the likes of passported benefits, Christmas bonus and pension supplement, are provided simply on the basis of age and not on any basis of income. I feel that there is a case to be argued that if benefits are to be paid then I think sometimes, especially exemptions for teeth and the likes of prescriptions… Young couples with young families who are just starting out, with all the added costs of bringing up children, struggling with big mortgages 4905 and exorbitant rents because the Government favours too much the developers. These people are our future; these people would be far better to have it than those who are on over the above-average-wage income, as far as pensioners are concerned. Eaghtyrane, I think it is time that this Government stopped being selfish – and this parliament – and started looking at the real issues when we are talking about cuts. There is no pensioner in 4910 this Court who needs a pension supplement, a Christmas bonus, a funeral benefit, or free dental and free prescription charges. I would hope most people would realise that that is not an unreasonable request. It is an absolute disgrace and outrage that these passported benefits are not means tested at the level of the average working wage. Most young couples, with the added costs of children, 4915 are living on a lot less than the average wage – having to pay out housing costs and additional costs for bringing up children without this support, when most of us, when get to the end of our lives and are pensioners, do not have these costs. It is about priorities. Social Security is about the bare minimum which is supposed to be acceptable in a civilised society for people to live on in the Isle of Man. This new level could bring 4920 about some improvements. There are times when such things as the mobility allowance, which is age related, should be put at the higher criteria of income in order for it to be more accessible, because of many ending up with a case of someone being profoundly disabled later in life…. It can have severe financial costs and effects on the quality of life of the individual concerned. Maybe in better times we could use this level to bring the basis upwards, using the average 4925 wage as a new level of entitlement for certain benefits that should be looked at. This is a simple proposal which would easily bring about… and was intended when the original issue of a pension supplement was initiated… by providing a pension taxation benefit certificate. Pensioners not in possession of that certificate would not be eligible for the pension supplement and the other passported benefits. If people can afford these things… 4930 We are in this together. Not just the likes of the other day, Eaghtyrane, when I hear that the nursery unit at the back of Radcliffe Villas for the people with learning difficulties is now… its future is in question. I know where my vote will be going if I have to cut that or cut this, where the likes of us have got to lead. This is not bureaucratic; it is a simple administrative task by the Treasury, and this fact could 4935 save millions of pounds going to people who do not need it. The time has come for us to make hard decisions. This is but one step: getting Treasury to report back to the October sitting of Tynwald with the savings and implications of such a proposed scheme is what is long awaited and long overdue. Please rise up to challenge. Let’s get away from the political cowardice. Let’s start making the 4940 hard decisions that are so desperately needed. We are a national parliament. I do not want to say that nothing has been done when people ask me why we are in such a mess… when I make suggestions to deal with it. I hope Members will support us. Let’s get the Treasury and CoMin to report back to the October sitting with proposals on this issue. Hon. Members, this is a lifeline, just like others I keep on throwing in order to create the 4945 reality that we have to address if we are to protect the massive social improvements we have seen in my time as a Member of this Court, and in the time of your Chief Minister as well. I move this motion standing in my name and I hope people will support it.
The President: The Hon. Member, Mrs Beecroft. 4950
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Mrs Beecroft: Thank you, Madam President. I second the motion and reserve my remarks. But whilst I am on my feet, may I ask – (Laughter) No –
4955 The President: If it is a point of order, Hon. Member.
Mrs Beecroft: May I ask a point of order – or a point of clarification; I am not sure which it is. We have been given a piece of paper that says there is a ‘suggested’ amendment –
4960 The President: I will come to that when it is moved, Hon. Member.
Mrs Beecroft: Okay, thank you. (Interjections)
The President: You have reserved your remarks, I understand that. 4965 Mrs Beecroft: I have reserved my remarks.
The President: The Hon. Member, Mr Robertshaw.
4970 The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. As the Treasury Minister and myself, in conjunction with the Council of Ministers, build up and prepare for the big debate, I welcome the Hon. Member for Onchan’s opening salvo to the debate, effectively, and welcome his comments. But I would propose an amendment, which leaves out everything after ‘That Tynwald’ and 4975 substitutes the wording such that the amended motion would read:
‘That Tynwald supports the action being taken by Government in reviewing and reforming the welfare state; and calls on the Treasury to examine the benefits linked to pensions, such as the Christmas bonus, funeral benefits, pensions supplement and passported benefits; and to provide a progress report to Tynwald by December 2014.’
Ultimately, as the debate develops and more information becomes available to Members, it may well be that this Hon. Court adopts some of the points made, but this is not quite the right 4980 time to do so. I am sure Hon. Members will wish to see the Ci65 reports which specifically deal with and report on the whole concept of passporting. Also, the concept at this stage of choosing a particular arbitrary point about means testing something based on the national average wage is something that will need careful deliberation and be part of the debate. 4985 I also included a progress report to Tynwald of December in 2014 because the submissions from Members need to be incorporated in a way that would flow with the debate itself. So with that, Madam President, I beg to move the amendment.
Leave out all the words after ‘That Tynwald’ and substitute ‘supports the action being taken by Government in reviewing and reforming the welfare state; and calls on the Treasury to examine the benefits linked to pensions, such as the Christmas bonus, funeral benefits, pensions supplement and passported benefits; and to provide a progress report to Tynwald by December 2014’.
4990 The President: The Hon. Member, Mr Shimmin
Mr Shimmin: I beg to second, Madam President.
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The President: Can I just comment, Hon. Members, that when an amendment is circulated, it 4995 would be helpful if it indicated how it is amending the original motion, and it also should be signed and dated by the person who is going to move it.
Mr Robertshaw: Thank you, Madam President.
5000 The President: It would be helpful to the Court, so that they know what is circulated before them, Hon. Members. The Hon. Member, Mr Downie.
Mr Downie: Thank you, Madam President. 5005 I have listened to the Hon. Member for Onchan, Mr Karran, and I do not doubt that his objectives are very laudable, but I think what you have got to realise is when you are talking about people making a contribution to the economy, there are a lot of people who are 65 and upwards who have actually paid in to the National Insurance Fund for 40 to 50 years, and if the Hon. Member thinks that… Some of these people are not wealthy; they may not even be 5010 comfortable. At the end of the day, they are the people who have made this Island what it is: they are the ones who have worked and put their shoulders to the wheel; they have not been running for benefits every five minutes; they have not been producing illegitimate children and all sorts of other problems that we have to deal with. What I would say is that there needs to be an element of fairness here in all this. It is alright saying we are going to take their bonus away, 5015 their funeral benefits or whatever passported benefits, but this argument needs to be balanced, because if you lose those people in this argument and they feel that we are not acting in their best interest – well, on your own head be it. The Hon. Member says ‘the national average wage’. I hope he can give me an idea of what the average national wage is, because we have seen figures recently about what the average 5020 wage is in the Isle of Man and I do not think I earn that much – so be very careful where you draw the line. (Interjections and laughter) Yes, well, you can all have your laughs at the right time, but I think when we are starting to talk about benefits and the welfare state, just look at what has happened in the UK now: no wonder they are in trouble. You only have to make a contribution in NI for… what, 30 years? No wonder there is a shortfall there. 5025 As a person who is over pensionable age, I would have no problem making a contribution to my NI and my health now, and I am sure lots of other people of that age group who are working… And let’s be honest, you keep pushing the retirement age up in this place. There are secretaries working in here, in Government, who are going to be working until they are 67 years of age. So let’s not deprive them of an opportunity in years to come. Let’s look at the job with 5030 the right sort of perspective and with some balance. I am happy to support the amendment because I think this exercise needs to be done; but, Hon. Members, do not throw the baby out with the bathwater here – it is very easy to do, and jump on this great social charger and ride off into the distance – because those people you are trying to punish now, Hon. Member for Onchan, are the people who have made the contribution 5035 to the economy. They are the people who are still making the contribution to the economy. What little they have got they are paying probably nearly 20% of in tax, and as well as that they are actually paying VAT and they are doing all sorts of other things; and if you want to look at education, you will probably find they are propping up their grandchildren too and assisting them to get their foot on the housing ladder. 5040 So I would just point out to you, be very cautious what road you go down here, because it is one that needs an awful lot of thought. It is alright shaking your head: the road to hell is paved with good intentions, so be careful.
The President: The Hon. Member, Mr Ronan. 5045 ______1595 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Ronan: Thank you, Madam President. Preceding motion 23 on the Order Paper today, where it recommends that public sector pensions be dealt with prior to changes being made to the National Insurance based pensions, I would like to support the Hon. Member for Onchan in moving his motion today. 5050 He talked a lot about the areas in the motion. I am going to focus on basically the first line:
‘That Tynwald is of the opinion that state pensions should not be means tested;’
He is absolutely right. We have heard the previous Minister for Social Care, Mr Robertshaw, talking about the 5055 vulnerable. When I was first elected, he explained to me that in Latin the word ‘vulnerable’ translates as ‘to wound’ or ‘open wound’. Therefore, we are setting ourselves a goal to protect those who are wounded. This policy underlines the deep concerns that I and many Members share with this jingoistic attitude that has been whipped up, by the media and public speeches by both Hon. Members 5060 and senior civil servants, that there is an imminent crisis around the state pension. What I see is utter hypocrisy. If we are not careful, these threats and shroud-waving tactics will mean even more people are vulnerable (A Member: Hear, hear.) and they will be become vulnerable at the hands of this Government, if we are not careful. Mr Karran is striking all the right chords for why we are here today. I fully support what he is 5065 saying on this matter; I fully support what he is doing. Of course we need to balance the budget, of course we need to protect the vulnerable and of course we need to grow the economy; but we need to do this not by sacrificing the livelihoods and the quality of life of the people of the Isle of Man who have worked so hard over the last 40 years to build our excellent record of underpinned economic growth, to mirror what Mr Downie said. We seem to have forgotten that 5070 our people approaching retirement age have paid for their state pension. (Several Members: Hear, hear.) It is a benefit that is due to them from many years of hard work. (Several Members: Hear, hear.) It is irrelevant what they earn or what they have saved: it is their entitlement for the money they have paid into the National Insurance Fund over their working lives. I will therefore be supporting the Member for Onchan with this motion. 5075 The President: The Hon Member of Council, Mr Braidwood.
Mr Braidwood: Thank you, Madam President. I will be supporting the amendment in the name of the Hon. Chris Robertshaw because, as he 5080 mentioned, we have got the Ci65 review of the welfare state. It is 23 years ago since Derek Chislett had a review of the Social Security system, and he came forward with 33 recommendations. I am not going to go through all those recommendations, Madam President. The Department at the time were in agreement with 21 of them, and they were not in agreement with three. Others were ‘partly in agreement’, ‘in agreement in 5085 principle’, and ‘a firm view not yet reached’. One of those recommendations was a pension supplement, one of them was to keep the reciprocal agreement with the UK; and one of the things why I have been brought to my feet, Madam President, is something that the Hon. Member for Onchan, Mr Karran, said – that the pension supplement was only brought in for those people who were being means tested, who 5090 were on benefit. (Interjection by Mr Karran) That is not what I understand. When Derek Chislett brought his recommendations – and he had to complete the review by 31st December 1991 – the Minister of the time, Mr May, brought forward to this Hon. Court, in May 1992, some of the recommendations. Those recommendations were a pension supplement, the reciprocal agreement with the UK; and also… and one of the reasons the pension 5095 supplement was being able to be paid was that there was an £80 million surplus in the National Insurance Fund. The philosophy which he said then:
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‘The philosophy behind the pension supplement is in the short term to give pensioners a share in the prosperity of the Island and in the long term to lessen their dependence on means-tested benefits.’
So that is why the pension supplement, Madam President, was brought in. That supplement was brought in at £5 in April 1993 and increased all the way up until eventually it was made 50% of the basic pension by you, as Minister. I think the basic pension was £72.50 and the 5100 supplement was £36.25, giving £108.75. That, as I said this morning, has been why the supplement was increased, one of the reasons being because the pension was being increased by RPI and was not being increased by the average earnings, which it had been previously. So the pension supplement was being increased by the amount of money which was the difference between if the actual pension had been increased by average earnings. 5105 So what I am saying now, Madam President, is that we need… and I totally agree with Mr Karran that we need a full review, but the best thing to do is wait for the Ci65 report; because otherwise, as has already been mentioned this morning, our National Insurance Fund will run out in around about 2051. I ask Hon. Members to support the amendment. 5110 The President: The Hon. Member, Mrs Cannell.
Mrs Cannell: Thank you, Madam President. I have got a problem with both the motion and the amendment. To be honest with the Court, 5115 I think it is premature to be debating this issue now. The mover of the motion, Mr Karran, did say that he understood that the issue of the potential or the possibility of means testing state pensions was being considered by the Council of Ministers; so, if that is what he has picked up, this is why he is seeking to move the motion now. I am afraid the only part of his motion that I do support is that Tynwald is of the opinion that 5120 state pensions should not be means tested. That is the only thing I could possibly agree to at this moment in time, because I have not seen the facts and figures or the business case for abolishing anything yet.
Mr Braidwood: You get yours in September. 5125 Mrs Cannell: It goes on to say:
‘calls on the Treasury to examine… [such things as…] with a view to phasing out…’
I could not agree to phasing it out, because I have to see the reasons to be able to make a 5130 proper considered decision on whether or not any of these or some of them should be phased out at all. I would echo some of the comments made by the Hon. Member of the Legislative Council, Mr Downie. It is all well to hit the pensioners whose net income is above the national average – the national average changes year on year – but then his motion goes on to say: 5135 ‘whose net income is above the national average wage or who have capital above a set limit;’
They might have capital, but it might be invested in the house they live in. (A Member: Yes.) We have quite a lot of retired folk who actually live in a family property – the family have all moved on, the partner has since died and they struggle on a pension in trying to maintain that 5140 property. We do not have a system that reflects on a person’s ability to pay, so you could not start imposing sanctions like this without proper, careful consideration of the facts and figures as they are now, possibly as they have developed over the last decade to arrive where we are today, and then a reflection on going forward.
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If you start making decisions like this… It is always the pensioners who get hit, and that is 5145 what the folk outside say: ‘Why is it always us? Why is it always the pensioners?’ And yes, we have probably got more pensioners than we have economically active people at the moment, and that proportion will grow over time; but why start hitting them? I would say it is premature. I am disturbed at this business about ‘the national average wage or who have capital above a set limit’ without knowing the individual circumstances. 5150 Then, of course, we come to the amendment. I have never seen an amendment so poorly prepared in all my time in this place. I do not know who did it. (A Member: No idea!) (Laughter) ‘Amended motion in respect of…’ – unsigned, (Interjection) entitled ‘Suggested amendment’. Good heavens above! (Interjection) But again, I have a problem with that because it starts by saying: 5155 ‘That Tynwald supports the action being taken by Government in reviewing…’
– that is fine, I do not mind a review any time –
‘and reforming the welfare state;’
Well, hang on here: I do not know whether we should be reforming the welfare state; and 5160 again, if it is not broken, why try and fix it? Okay, we have got a Fund that is depleting and it needs thinking outside the box – not radical cuts and not hitting the pensioners. So I am sorry, Madam President, I cannot support the motion and I really cannot support the amendment either.
5165 The President: The Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you, Madam President. I half agree with most of the comments that have been made today, but completely disagree with a lot of what has been said – except of course Mrs Cannell, who has been very eloquent 5170 (Interjections) in her speech just there. Actually, I would suggest to the Chamber that the best way forward is to reject both the motion and the amendment (Several Members: Hear, hear.) (Interjection by Mrs Cannell) as both being deeply flawed. First of all, just briefly to deal with Mr Karran’s motion, whilst I sympathise with his 5175 willingness to try and find solutions, unfortunately what he has stated is far too wide-ranging, without any sort of evidence base, and really needs some proper thought and consideration. So I cannot see how possibly Tynwald can support that motion. As for the amendment, it asks us to support ‘the action being taken by the Government in reviewing and reforming the welfare state’. Well, I do not actually know what action is being 5180 taken at the moment. I understand that a group of consultants are looking at it, but in supporting this I am almost backdating my support for the consultants to have come in. So, until I see the evidence – until we see the evidence – of those consultants, I do not see how we can possibly approve the action at this stage. And the calling on the Treasury ‘to examine the benefits linked to pensions, such as the 5185 Christmas bonus, funeral benefits, pensions supplement and passported benefits’ – is this not the job of Treasury anyway? I would have thought on an annual basis the Treasury Minister should be looking at all these benefits, along with the appropriate Ministers and the Departments, to assess their relevance. As my good friend from Onchan says, it is not hard, it is not bureaucratic and really should be a simple task. 5190 So my recommendation this afternoon to the Chamber would be to reject both the amendment (Two Members: Hear, hear.) and the motion and let’s move on.
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The President: The Hon. Member for Douglas South, Mrs Beecroft.
5195 Mrs Beecroft: Thank you, Madam President. I think really the amendment – or suggested amendment, whatever it is – is quite telling. Mr Karran said, when he was moving his motion, that it was because he had heard a whisper that Government were considering means testing the basic state pension, and when you look at the amendment it certainly would look like that is what could be in the pipeline, because there is 5200 no mention of protecting that in the amendment. The amendment says:
‘That Tynwald supports the action being taken by Government in reviewing and reforming the welfare state;’
but if that includes the appointment of Ci65 without Tynwald approval, I do not see how anybody could actually support that. I think that what should be taken today from this motion is that, as Mr Ronan said, it is a clear message to people outside this Court that their state pension, their basic pension, is safe. 5205 That is the message that we should be sending out, because this amendment does not even mention any comfort of that sort. And to say that pensioners, or to infer that pensioners are not economically active – I would disagree with that. Pensioners are very economically active (A Member: Hear, hear.) and they should not be disregarded. To me, the whole point really of this, and for my coming to my feet today, is to send out a 5210 very clear message to the public that their state pension – their basic state pension which they have paid for – is safe. The message I will be sending out to them and to this administration is that if they try to means test the basic state pension I will be bringing a motion to this Hon. Court asking for Civil Service pension schemes to be means tested and Tynwald Members’ pension schemes to be means tested likewise. 5215 Thank you, Madam President.
The President: The Hon. Member for Onchan, Mr Hall.
Mr Hall: Thank you, Madam President. 5220 I too am a little bit reluctant to support the motion and also the amendment, partly due to the way both have been worded, and also because I think that… like the Hon. Member for Michael, Mr Cannan, was talking about basing our decisions on seeing some evidence, and obviously I do not feel personally that there is enough detail and we have not seen the evidence to really be endorsing our decisions here. 5225 I certainly would agree that the welfare state does need to be reformed; but then again, it needs to be reformed in quite a lot of countries all over the world. I think the welfare state has become a little bit like Japanese knotweed, where you get one benefit – that then entitles you to claim for another benefit, and then that leads to… you can then be entitled to claim for something of another benefit. It is like a Japanese knotweed type of a scenario, and I think that 5230 needs to be changed. I think when we are talking about reforming the welfare state, we also need to look at some countries which have made some radical changes, and I think we could learn a lot from them – countries with contributory social security systems, and they have adjusted theirs to emphasise that the welfare should be an insurance against hardship and not a way of life. 5235 If we look at Denmark, they have moved to treat claimants more generously if they have previously worked, (A Member: Hear, hear.) and it offers extra incentives to those who are prepared to retrain. I think that is something to take on board. In Germany, they have slashed entitlements for those who linger on benefits and refuse minimum-paying jobs in order to stay on the welfare. I think we can learn a lot from those kind 5240 of examples around the world.
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I would totally agree that we need to work on reforming it, but I do feel uncomfortable with both of the motions, (A Member: Too early.) the way they have been worded, (A Member: Hear, hear.) and I do not think I can really give my support to either; but I do look forward to seeing the work that comes forward with regard to reforming the welfare state, looking at that, 5245 analysing it, and making my decisions as to whether I agree or disagree with it on that basis.
The President: The Hon. Member for Rushen, Mr Watterson.
Mr Watterson: Thank you, Madam President. 5250 I perhaps just want to underline briefly the comments I made this morning, and I apologise if in keeping my comments relatively brief I somewhat mangle the message and do not come across terribly well. I think it is important that we do not rush this subject; but I think, unlike the past… and I think we have been criticised in the past… Governments have been criticised about their lack of 5255 willingness to tackle the financial problems… But I do accept the point, that I think was first made by Mr Downie here, that we need to square those financial problems that we are suffering today with promises that have been made in the past. I am concerned that previous generations of Members in this Court have overpromised and undercollected. The figures that I have seen show that past Governments have only collected a 5260 third of the money that has been required in order to pay out the pensions that people have been promised. We have talked about people paying into their pension and getting back what they have paid in: well, actually, they are getting back three times what they have paid in, according to the figures that I have seen. But this has been promised to them and we should be very aware of that. 5265 There is going to be a need here for long-term rebalancing, and I have seen it referred to in many sources as ‘intergenerational equity’. We are faced with fewer workers supporting a growing number of pensioners, and those pensioners will have increasingly complex health and care needs – as we are reminded this week by National Dementia Awareness Week. I believe that there should be a basic state pension for most people, regardless of their 5270 means. I am actually quite open to the idea that if you are an individual who is living on the Isle of Man and who is enjoying the benefits of a tax cap, then under those circumstances I do not think you necessarily should qualify for the basic state pension. I have immediately taken away that principle that basic state pensions should be available to everybody, but it should be only those people right at the very top of the income tree that should be taken out of that loop. Most 5275 people should be able to go into their retirement knowing well in advance what they will get and what they will be entitled to. That requires a pretty fundamental rewrite of the contract that there has been and should be between the state and the individual. Governments have got to be honest and have got to have the promises that they make in the future backed by facts. There needs to be less tinkering with the pension system, something 5280 which the UK government, to which we have been tied for all these years, has been very much guilty of. It needs to be a sustainable scheme; it needs to be far simpler; it needs stability, as I have talked about; we need to encourage greater savings in individuals; and it needs to be fair – that goes without saying. This cannot be done overnight. It requires great public engagement with people of all ages. I 5285 believe it is inevitable that the further you are from retirement age today, the less you should expect from the state. This is not going to be easy. We need to be honest that we cannot afford to continue as we are, and the Government Actuary’s Department report has demonstrated that. Asking people to give up any part of what is seen as an entitlement is not easy. It is far easier 5290 to adopt the attitude taken by Mrs Cannell, that you can kick it into the long grass; but I would draw the analogy perhaps less like Japanese knotweed and more like climate change – that there are more and more people coming round to the idea that what has been promised in the ______1600 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
past is not going to be affordable at the present rate of collection. So, whether it is a higher retirement age, higher contributions, lower benefits – it is going to need a change. We are going 5295 to need regular and far better communications with the public. We are going to require leadership from Tynwald and from Government, no matter what the answer is and no matter what the mix ends up being. I am actually quite warming to Mr Cannan’s idea that we can throw out the amendment, throw out the motion, and actually just let Treasury and the Minister for Policy and Reform get 5300 on with the job and come back to us when it is ready; but I know that it is only right that Tynwald will want a deadline, will want to know when something is coming down the line to provide the first steps of certainty about how the process will work, even if we are honest at the moment and say we do not know what that outcome is going to be. All I would finish up by saying is we need to approach this with caution. We need to be really 5305 aware and really careful of the consequences and look after all of our citizens as best we can in very difficult circumstances.
A Member: Hear, hear.
5310 The President: The Hon. Chief Minister.
The Chief Minister (Mr Bell): Thank you, Madam President. I was not really intending to speak on this – Mr Robertshaw is leading on it and doing a very able job – but I am brought to my feet really to congratulate Mrs Beecroft. It is astonishing with 5315 what regularity this Hon. Member manages to set hares running when there is absolutely no basis in truth for the story that she is trying to release into the public. I can see – as she has already said she is going to communicate with the wider world tomorrow – the headline being ‘Government plans to slash pension’. Utter nonsense! We are not talking about means testing. There has been no statement whatsoever from the Council of Ministers that we are going to 5320 means test the basic state pension. It is the Hon. Member who has raised this issue, and we need a bit less of this. We hear a lot about ‘climate change deniers’ – the Hon. Member from South Douglas is a ‘population change denier’. She is already on record as saying that, once the baby boom generation has passed, the ageing population will come back into balance again and we have no 5325 problems for the future. Utter nonsense, Madam President!
Mrs Beecroft: Point of order, Madam President.
The Chief Minister: We have to – 5330 The President: Hon. Member, point of order. Hon. Member, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. 5335 Point of order. I have never said any such thing.
Mr Karran: He’s been speaking to one of his cabinet Ministers.
The Chief Minister: I am not saying she said it today, Madam President. She is on record in 5340 public as making that statement. Madam President, the ageing demographic on the Isle of Man, as in many western countries, is one of the most challenging issues that any government has to deal with. It is hugely complicated, it cannot be resolved, it will be years before we get a full solution to this; but we have to start work sometime. We have to recognise… We have already had the first warning
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5345 shot from the review of the NI Fund. There are signs all about us, not just for pensions but for the welfare state generally. It is unsustainable in the structure that we have at the moment. We have a Health Service which is unsustainable in the structure we have at the moment. There are major challenges for this Government, and probably for several governments to come, to find a solution to this. 5350 The Hon. Member for Rushen, Mr Watterson, is absolutely right that what we are engaged in now is long-term rebalancing; not just the revenue budget, but the whole structure, the social structure that we have on the Island and how we support those services. This Government, believe it or not, is absolutely committed to helping those less fortunate people in our community, but to do that we have to put a structure together which is sustainable financially 5355 for all age groups. We are not in the business of demonising our pensioner or elderly population. We are doing our best at the moment to help them, and the best way we can do it is bring into being a support structure of pensions and other benefits which we know we can sustain and afford into the future. 5360 There will be changes in the pension – nothing to do with us: the Isle of Man has a reciprocal agreement with the United Kingdom. It is already marked up that there will be changes in the next few years. We will have to consider how we follow that, and undoubtedly it will have an impact directly or indirectly on the pension supplement; not the core pension – that is likely to increase. 5365 So, Madam President, we have a massive job to do here. The amendment the Hon. Member is bringing forward was an attempt to be reassuring and helpful, in part supporting at least half of the Liberal Vannin Party in recognising that many of these benefits at least need reviewing, but also to give reassurance to the pensioner community outside that we are not, at this stage, looking to reduce or means test their basic pension. I hope 5370 that message goes out very clearly, Madam President.
Several Members: Hear, hear.
The President: The Hon. Member, Mr Speaker. 5375 The Chief Minister: Sorry, I have just one final point. (Laughter) This is a very serious point, Madam President. This whole strategy that we are embarked on now needs the wholehearted support and engagement of all Members in this Hon. Chamber. I have to say I am astounded that the Member for South Douglas… I am sorry, for East 5380 Douglas, is willing to say, ‘I am not prepared to support any change.’
Mrs Cannell: I did not say that.
The Chief Minister: She has indicated that over the last two years in voting against pretty 5385 well every change that has been brought in.
Mrs Cannell: It’s your hearing, Chief Minister.
The Chief Minister: The Hon. Member might think she can hide away from it, but the 5390 challenges which the Isle of Man is facing are growing by the day and we cannot bury our heads in the sand. If we are going to have a sustainable welfare state for the future, it has to change from where it is now and we have to recognise that some of the support that we have had in the past needs to be delivered in a different way. We need everybody’s wholehearted engagement in this, Madam President. It is going to be a 5395 very challenging few years for Government, whoever is in power at this time. I would hope some of the point-scoring comments which have been made by one or two Members are not taken ______1602 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
seriously and that we can all pull together and work together on this one, because this is a challenge for everyone.
5400 Mr Corkish: Hear, hear.
The President: The Hon. Member, Mr Speaker.
The Speaker: Madam President, as the debate has gone on I am finding myself rather 5405 confused. On the one hand, Members are going to vote against the motion because they do not like the motion and what it is saying; but nor do they like the amendment – they are going to vote both down. The debate is a bit like how many angels can dance on the end of the pin. I am not quite sure why we are having this debate. 5410 On the one hand, the motion is saying:
‘Tynwald is of the opinion that state pensions should not be means tested;’
I read that first and I said, ‘Well, hang on a minute, they are not means tested… Ah, no, what it means they should not be means tested in the future.’ Well, I was not aware they were going 5415 to be means tested in the future. There are those who support the principle of Mr Karran saying that, but do not like the other parts of the motion relating to other benefits and being specific on what should happen to them; then those who do not like the amendment because it makes no reference to means testing at all, and therefore the implication is that Government might be introducing means testing. Well, I did not think it was, and I thought, ‘Well, what are we arguing 5420 about?’ But then Mr Watterson expresses the view that at the top end, the tax cap individuals, he might be perfectly prepared to envisage that means testing should be applied to the state pension – for which they have contributed, by the way. I think to myself we are all getting into a bit of a muddle here, and whatever the vote is on the motion or the amendment could well be misinterpreted. So, in an effort to be helpful, 5425 Madam President, I am proposing an amendment:
To leave out all the words after ‘means tested’.
So the motion would read:
‘That Tynwald is of the opinion that state pensions should not be means tested.’
I do not know whether that gets us any further forward, (Laughter) but it is an expression of opinion that is as good as one we are likely to reach tonight, I suggest. 5430 The President: The Hon. Member, Mr Thomas.
Mr Thomas: I rise to second the amendment in the name of Mr Speaker. My point is that, for me, my fear about means testing the contributory pension to which 5435 pensioners have contributed was raised when the Chief Minister, in the modernising ministerial government debate, actually mentioned £250 million of universal payments that were under review. When I saw that in the Government plan, which I commend the Minister for Policy and Reform has now actually been published… about the amendment… it has now actually been 5440 published according to the revised deadline… we actually do say that the Government is now considering the mechanism used for means testing Child Benefit for other universal payments,
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benefits and services, which would seem to suggest there could be a possibility. So that is why I rise to second Mr Speaker’s amendment.
5445 The President: The Hon Member, Mr Ronan.
Mr Ronan: Thank you, Madam President. I just rise also to support the second amendment by the Speaker. It makes total sense, and if you heard what I actually said, that is what I was getting at as well: that the first line is the 5450 punchline and the rest of it is messy and is all over the place a little bit. I understand what he is trying to say. I think that what you are trying to do is bring this back. I totally agree with it. Just on the amendment from Mr Robertshaw, which we have never had chance to speak on, I obviously cannot support that one with my motion coming up later, but I congratulate the Speaker for bringing us back. 5455 Thank you.
The President: The Hon. Member, Mrs Cannell.
Mrs Cannell: Thank you, Madam President. 5460 Speaking to the amendment moved by Mr Speaker, I am happy to vote for that also, because it is merely saying that Tynwald is of the opinion that state pensions should not be means tested. It will be a good test and a good rick to see if the Government actually take notice of Tynwald opinion, if this was approved today – which I think it should.
5465 A Member: Vote!
The President: The mover to reply.
Mr Karran: Eaghtyrane, I am disappointed with the Chief Minister in particular, because the 5470 fact is that one of the issues why I put the declaration as far as the state pension is because I have heard Ministers talk about the issue of means testing of the state pension. I think it is wrong for... (A Member: Who?) (Interjections) Well, to start with, you have got Mr Teare, who is not in the Chamber today, (Laughter and interjections) and we have heard even of the Minister, Mr Robertshaw. To be fair, Mr Watterson was the only one who actually came out and said 5475 people with tax caps should not get it. So the truth is that is on the agenda. (Interjection) What I want to get over is the fact that £611.75 is the average wage – it is £675 if it is including the non-manual workers. I go and look at my little niece, who is paying £850 a month for rent, who has got a one-year-old child, with all their costs. When I leave this House – if you have not bankrupted the place – then I will have a pension more than that amount. 5480 The bottom line is who needs free prescriptions? Who needs free dental care? Is it me, as a pensioner on over £611 a week with the mortgage paid and with no kids? Yes, I have not got grandchildren, but even… [Inaudible] we will be expected to do our bit as far as trying to make sure that we want to see them go further. The fact is that is what this is about, Eaghtyrane. I would just like to say that the problem is, with the Minister for Social Care’s concern, the 5485 longer we… or the Minister for whatever he wants to call himself now (Laughter)… [Inaudible] in this administration. The longer we leave this issue and do not address it, the bigger the hole, the bigger the problem and the problems as far as the expenditure is concerned. (Interjection by Mr Henderson) My concern with his amendment is it is too lhiam-lhiat-ish. I am sick to death of listening to 5490 this for the last 10 years where some of us have been prepared to make decisions. I have to say that if you go with this amendment… it is meaningless. Here is some criteria… We hear the mantra from the Chief Minister and his Members that we never put anything up. I am sick to death of putting up alternatives and them not being listened to. ______1604 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
As far as Mr Downie is concerned, I am sorry, but I am afraid that any Member of this Hon. 5495 House who feels that they should get these passported benefits, when many are on over £100,000 a year in income in this Hon. House, would –
A Member: Who?
5500 A Member: Who’s on £100,000?
The President: Not in this ‘Hon. House’.
Mr Downie: You might be on it with your pension! (Laughter) 5505 Mr Karran: If you talk about occupational pensions, interest and all the other things, there are a lot of wealthy pensioners in this Hon. House, and the point is (Interjection by Mr Henderson) we all pay National Insurance. (A Member: So do we.) It is not about the National Insurance; it is about right and wrong. 5510 We are in difficult times. Most decent people outside this House who are pensioners would agree with me. And remember, I have a massive amount of wealthy constituents who are over pensionable age (Interjection by Mr Downie) and have loyally supported me over the years; but they do accept, if it is at a reasonable threshold – and I think it is £611.75 if we take the lower average wage, or £675.69 if you take the non-manual level of average wage… would agree with 5515 me. We should not be expending money on that sector when we do not need it. It is not an attack on the pensioners; it is about prioritising. I believe my argument to this House tonight is that we need to look a bit further than ourselves and we need to realise that we need to sort this out, especially when there are so many people who are having to live on a lot less than the average working wage – having to pay housing costs, having to pay to raise 5520 children. I think it is an absurdity that I will be entitled to free teeth or all these other things when I get to pensionable age. (Interjections) I thank the support as far as Mr Ronan is concerned that the state pension should not be means tested. As I have said, the issue has been raised and we do need to make a declaratory… that we are not for that. 5525 I welcome the Speaker’s amendment as a fall-back position on my original motion. As far as Mr Braidwood is concerned and the amendment, it is just more excuses. Stop looking after us. Let’s be fair about this, Eaghtyrane. The fact of the matter is we have seen horrendous cuts as far as lots of people. I go up and I see the likes of the learning difficulties at the Garden Centre down at Radcliffe Villas, all frightened for their facilities. 5530 To be honest with you, if I have got to choose between my wealthy constituents, who actually vote for me more than my council house tenants do… having to say to them, ‘I am sorry, the choice is between you getting these passported benefits or we cut the weak, the poor and the sick...’ I believe that I know where the choice should made. Yes, it will release votes, but we are here to do what is right and I remind people of this. 5535 May I just also tell the Member of Council that when we talk about the Bernie May initiative, the issue of a cost-of-living bonus was talked about long before the Minister for the DHSS was Bernie May. We have got a tough time ahead. We have got to make real changes. I hope that the Member of Council, Mr Braidwood, will find it in his heart to just ask that 5540 question: £611, and you need all those passported…? Just because I have got to 65 or 60, wicky wacky woo? I am sorry, it is not on – we are in hard times. Why do you think people have such a disregard for us in this House when we will not look at things that actually affect us directly? As far as Mrs Cannell is concerned, the problem is that she is against both of them. Well, you stay on the fence and let’s see. When Tynwald falls completely off the fence and is knocked 5545 unconscious and we end up with the situation where we are having to slash fundamentally ______1605 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
things that we are all proud of taking place, then we can say, ‘Well, again, we told you so; we were not prepared to make reasoned savings where the cuts should have been, and now we are in crisis.’ I believe that we need to be living in the real world, and living in the real world is prioritising 5550 what are the benefits that should be going to pensioners who are on a reasonable amount of money. It is not an attack on pensions, far from it. I find Mr Cannan’s input into this… I think he will go far in politics, because his input on this… He is with me, with thee, with everybody – and of course can be completely untouched. I can remember our classic, where we used to have a certain Member who was the people’s friend: 5555 he would talk one way and vote the other – he was a past master of it, and this boy is going places. (Laughter) He talks the mantra, Eaghtyrane: ‘We must be tough.’ (Interjections) (Mr Henderson: Nursery fees!) Well, we can be tough on anybody else, (Mr Henderson: Nursery fees!) but not on the people we could be tough on. (Mr Henderson: Nursery fees!) We need to take action now. This action should have been taken 10 or 15 years ago. 5560 Mrs Beecroft, the Hon. Member for South Douglas, I have to thank her – even if she does seem to be off the Christmas card list of the Chief Minister. The fact of the matter is –
Mrs Beecroft: I was never on it!
5565 Mr Karran: – there was a clear message there, as far as the first part. I have no problem with passported benefits. I have been in the vanguard of many of these… [Inaudible] but times change. We need a clear message, and the clear message… this would be the way forward. I have to say to my colleague, one of our younger Members of this Hon. Court, (Mr Henderson: Vote!) (A Member: David!) Mr Hall, I am disappointed, because what I am doing 5570 is trying to help his generation. It is evident that if people are on more than £611.75 as a pensioner, they do not need free dental… free eye tests, free prescriptions and things like that – and that is the message that we need to get over to people. I am prepared to draw that line and say where it should be, and I think that the problem is that if he does not support this, what we are going to end up with is too little too late. 5575 As for the Hon. Member for Rushen, Mr Watterson, another one of that generation: don’t rush, don’t worry, don’t rush about it. This is about protecting your generation. (Mr Watterson: I know.) But you are not, sir. You are not, and that is the problem. So long as these cuts do not hit the better off… He talks about the issue of only paying a third of what you are getting out as a pensioner now. That actually is a very good argument that, if that is the case, that means that 5580 people at that upper limit who do not need it should not get it. I hope the Hon. Member can look at his peers when the problems will be in his generation if we do not start addressing this issue, because this issue should have been started to be dealt with long before he was a Member of this Hon. House. (Mr Henderson: Vote!) Okay, Hon. Members, you might not like what I say, but the fact is I think it is important that 5585 people need to realise. I am disappointed with the Hon. Member for Ramsey, as far as his input about the ageing problem over the last 15 years and the long rebalancing. How long do we have to wait in order to start getting some clear definition as far as this is concerned? I have put a simple resolution down which is prepared to be publicly associated that this is the line I am prepared to take. I 5590 believe that this should have been seen as a lifeline to his administration. I do hope that he will reconsider that passported benefits of people who are pensioners with an income over £611.70… they do not need most, if not all, of those benefits. I want to thank the Speaker, as far as this situation is concerned. He has actually succeeded where Mr Cannan has not succeeded, about the woolliness of the situation. The situation is that 5595 we cannot be all things to all people – we need to make a clear declaration. As a fall-back position, I could support the Speaker’s… but I believe that this House should be supporting my motion as it stands: ______1606 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
‘That Tynwald is of the opinion that state pensions should not be means tested; and calls on the Treasury to examine the benefits linked to pensions, such as the Christmas bonus, funeral benefits, pensions supplement and passported benefits with a view to phasing out payment of such benefits to those whose net income is above the national average wage or who have capital above a set limit; and to report to Tynwald in October 2014.’
Stop the red-herrings about the issues about people’s private houses: that is already clearly 5600 clarified. (Mr Henderson: Vote!) I hope Hon. Members will make the stumble – because this is only the start – in the right direction and support the motion standing in my name. Let’s not do the lhiam-lhiat bit and the false tears. Let’s prioritise where the cuts are coming and let’s hit the people at the top end on things that should not be going to them in the first place. 5605 I beg to move.
The President: Hon. Members, the motion before the Court is set out at Item 20. To that, we have two amendments: one in the name of the Hon. Member, Mr Robertshaw; and one in the name of the Hon. Member, Mr Speaker. 5610 I propose to take the amendment in the name of Mr Speaker first, Hon. Members. That amendment states:
‘To leave out all the words after “means tested”.’
Those in favour of the amendment in the name of Mr Speaker, please say aye; against, no. 5615 The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 22, Noes 0
For Against Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 22 votes for and no votes against.
______1607 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
In the Council – Ayes 7, Noes 0
For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The amendment therefore 5620 carries, Hon. Members. The amendment affects the motion, so the substantive motion now reads as follows:
‘That Tynwald is of the opinion that state pensions should not be means tested.’
To that, we now have the amendment in the name of the Hon. Member, Mr Robertshaw. Those in favour of that amendment, please say aye; (Laughter) against, no. The noes have it.
A division was called for and electronic voting resulted as follows:
In the Keys - Ayes 1, Noes 21
For Against Mr Bell Mr Anderson Mrs Beecroft Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 1 vote for and 21 votes against. (Laughter and 5625 interjections)
In the Council – Ayes 0, Noes 7
For Against None Mr Braidwood Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
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The President: In the Council, Hon. Members, no votes for and 7 votes against. I think we can safely say the amendment fails to carry, Hon. Members. I will now put to you the original motion as amended as the substantive motion. That is to say 5630 that the motion is:
‘That Tynwald is of the opinion that state pensions should not be means tested.’
Those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 22, Noes 0
For Against Mr Anderson None Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys 22 votes for and no votes against.
In the Council – Ayes 7, Noes 0
For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 7 votes for and no votes against. The motion as amended therefore carries, Hon. Members.
______1609 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
21. Construction industry – Strategic plan for development of Government-owned land – Debate commenced
The Hon. Member for Onchan (Mr Karran) to move:
That Tynwald notes with concern that the construction industry is 70% dependent on taxpayers’ moneys; and calls on the Department of Infrastructure to investigate and report on all vacant and available sites in Government ownership in order to develop a strategic plan for the land to be used to encourage economic development for the nation; and to report to the October 2014 sitting of Tynwald with proposals for such a plan for land use.
5635 The President: We turn now to Item 21. I call on the Hon. Member for Onchan, Mr Karran, to move.
Mr Karran: Madam President, Hon. Members, I move that Tynwald notes with concern that the construction industry is 70% dependent on taxpayers’ moneys, and call on the Department 5640 of Infrastructure to investigate and report on all vacant and available sites in Government ownership in order to develop a strategic plan for the land to be used to encourage economic development for the nation, and to report to the October sitting of Tynwald with proposals for such a plan for land use. This is not a new issue. This is an issue that I previously raised when I was in the Council of 5645 Ministers as Minister for Education. This is an issue which is dear to my heart because the fact is that we have lived through the biggest economic boom, and those days are over. Government will have to start governing without spending money. It cannot afford the luxury of having the construction industry dependent to the tune of 70%, and in fact recently the figures have been even higher. 5650 What I am proposing is that the Department of Infrastructure should go out, investigate and report back on all vacant and suitable sites within Government ownership in order that they develop a strategic plan for land use and to encourage economic development that will use taxpayers’ assets in a business manner. This report should be presented to the October sitting of Tynwald, together with proposals for such a plan. 5655 The development of vacant, redundant sites would create work in the building industry.
A Member: No, it won’t!
Mr Karran: The development of these sites would create the stimulus for the building 5660 industry and help bridge an industry in decline. The development of sites would help attract inward investment to the Island. The development of these sites would be a financial return to the taxpayers on sites that are currently lying idle. The sites could be included in the Eastern Area Plan as sites of special status, which could have a range of uses which could be applied through the needs of economic benefit. 5665 If we can invest taxpayers’ money in a film industry, surely we can invest in other national assets for financial return also. We need a fresh approach to keep a stable economy, and the Government must be seen to take part in that approach. The possibility of equity stakes in development as another source of income for Government is something that I was keen on when I was Minister for Education. 5670 The Prison site on Victoria Road was an example of how not to treat a Government asset. The Prison was demolished at a considerable amount at taxpayers’ cost, and no proper consideration was given as far as the value of the structure on the site. Haven’t we learnt anything – when we remember we made the same mistake when we came to the Summerland development, which
______1610 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
cost the taxpayer dearly? This is a site that could have gone into the marketplace for a venture 5675 between investor and Government, with the costs of demolishing being part of their costs. We must learn from the private sector and use Government assets to fill the potential and the return. I am considering a motion to support the DoI in providing financial resources to support the Department in bringing forward the timescale for the Eastern Area Plan, because we need action 5680 now. The failure to have a policy planning zone in the greater Douglas area is a scandal. How can we be promoting inward investment when there is no secure policy to invest in? These sites could provide indirect funding to the Department of Infrastructure to finance the resources to bring forward the Eastern Area Plan. Government must be proactive in supporting the private sector, but Government must provide the platform for that inward investment. Securing the 5685 development of these sites would be the correct initiative to promote sites as sites of special economic development opportunities. Also, the fact is we simply cannot afford the luxury of allowing a situation where the construction industry, which is somewhere between 12% and 15%-plus of the employment pool for the Manx economy, is 70% dependent on the taxpayer for their jobs. This is an issue that 5690 needs to be clarified when we talk about who is actually employed by the public sector when we allow for such things. I would be very happy to assist and help facilitate any ideas with the new Minister for Infrastructure in his investigation and report to be placed before the October sitting of Tynwald. Time is of essence as far as taking action. If we do not start creating the policies and the plans 5695 to make sure that we create the environment so that we can stay a high-wage, low-unemployed society, with the opportunities of new economic development creating the new income streams in order that Government can stay a low tax area… I believe that this, like the previous one, is a small step in the way forward for good governance of this Island.
5700 The President: Hon. Member for Rushen, Mr Skelly.
The Minister for Infrastructure (Mr Skelly): Gura mie eu, Eaghtyrane. I have no trouble and in fact actually welcome an opportunity to second this motion. I think this body of work will be helpful. It will be helpful actually for the Strategic Plan for the 5705 Isle of Man and likely helpful for the area plans. It picks up a very important point, and that is the importance, actually, of our construction industry. The construction industry of the Isle of Man has always been the engine room of our economy, and we have to recognise that is needed for the future. What I would disagree with though is the ‘70% dependent on taxpayers’ money’, this 5710 industry. That is very likely correct, but historical, some years ago. It is more likely near 40% today, and that is through the adjustment of what the Government has been doing over the last four or five years. Do we need a report on all vacant land and sites in Government ownership? Absolutely we do, because we need to look at those and see how we can help benefit and attract inward 5715 investment, just as the Member for Onchan has pointed out. I would point out also that we are already very active in this field. We are working very closely with Economic Development. I know we have a number of sites that we are trying to bring forward – namely Lord Street; Parade Street; Summerland, as mentioned; and Albert Road in Ramsey. We are working on the south and the Airport technology park in Ballasalla, and we 5720 are even trying to help our good friend from Michael in Jurby industrial estate to try and open up sites for that inward investment. So we are already doing our bit for economic growth, but I do think this body of work will be beneficial. I also will support my colleague, the Minister for Economic Development, as he has actually commissioned an employment land review specifically centered around employment, which will
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5725 obviously be a key driver again for our economy and what some people might regard as the opportunity to create enterprise zones. So this is an important piece of work and we will be working together with this. Whilst I am quite happy for my Department, the Department of Infrastructure, to take the lead, we must do this in partnership with Economic Development, and also Treasury and the Strategic Asset 5730 Management Unit. So, quite frankly, I am happy to second this and I encourage Members to support it too.
The President: The Hon. Member, Mr Quirk.
5735 Mr Quirk: Thank you, Madam President. I listened to the words of the Minister for the Department of Infrastructure and I would say to him I wonder whether this has taken your eye off the ball or your Department’s eye off the ball of what you should be doing anyway. You have already mentioned a number of areas that your Department should be doing anyway. The Strategic Plan: where are we with that? We are 5740 still waiting. The Eastern Plan: where are we with that? We are still waiting. Minister, you need to do the things you should be doing, or telling the Planning Committee to get their finger out. You look at the sites around here today. We know the sites that are available within Government. You mentioned the Prison site, but you missed out the Park Road site. What are we doing there? (Interjection) All in the ownership of Government. The Summerland site and the 5745 bus station site, all in the ownership of Government. What are we doing there now? Land at Ronaldsway, land at Balthane – Government owns a lot of land, so what are we doing? I do not think we need another report where somebody is going to go out there and tell you that we have got all this land. I would like to know from you, as Minister, and the mover of it, how much have you engaged with the business, the construction industry, yourself. All those 5750 forums you have got – the architects’ forums: are we getting some businesses involved and saying we have a piece of land? We have gone out for expressions of interest. What have we done with them? Where are they coming forward? We have got expressions of land or expressions of interest for the Prison site. You have also forgotten, because I have read it here today – and our Minister is on the ball – 5755 the Glenside site as well. What are we doing there? I know what we are supposed to be doing, because I have read it here today – it is in a piece of document that I have seen. But what we are relying on here is Government to get these things done and engage with the construction industry for some maybe design-and-build schemes, where we can go to a developer and say to them, ‘We have a piece of land here and this is what we need,’ – either we need another 5760 sheltered unit or we need another home for the elderly. ‘We have got this amount of money, we need it to be built and we need it to be built in 18 months,’ or 12 months, or whatever. ‘You get the work done.’ We need also for the first-time buyers… There is land out there. What are we doing that way round? That would help the construction industry. All we are doing at the minute is spending 5765 most of the time fighting the Planning Committee, I think – or certain individuals fighting the Planning Committee – but I am sure that will come up later as to what we are actually doing. The gift is not in Mr Karran’s hands. The gift is in the Minister’s hands to get things done, and I am sorry to have a go at the Minister about that, but at the end of the day it is down to the job, sir. 5770 Two Members: Vote!
The President: The Hon. Member for Malew and Santon, Mr Cregeen.
______1612 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Cregeen: Thank you, Madam President. 5775 In the short time that I have been in the Department of Economic Development I have met with the construction industry on a number of occasions, and only last week we had a very good meeting and a number of the contractors were saying they are busier now than they have been for the last three or four years – things are on the up.
5780 Mr Downie: But there are less of them.
Mr Cregeen: Things are on the up and they are happy for the next six months. They are saying they have got contracts coming in. (Interjection by Mr Downie) Companies are there saying that things… There are companies who are struggling. Even through the good times there 5785 were companies that were struggling and going bankrupt, because sometimes they were not doing a good job and so of course they were struggling. But when you are looking across the 70% – not any more. It is round about 38%. Yes, the bigger contractors were relying on Government work. For all the years there were a number of contractors who just relied on Government work, rather than going out in the private sector. You have now got more 5790 companies competing for it. We are talking to Treasury to try and reduce the bureaucracy when you are going out to tender, because one of the comments they made was that sometimes there are 50 pages that they have got to fill in when they are going through the tender. We are looking at ways of simplifying that to make it easier so we can go through it. 5795 There is a design and build, that the Hon. Member for Onchan was saying… I think there is a contract out for tender at the moment for the Department of Health and Social Care for a number of units in Clagh Vane. So that is a first foray into a design and build for a number of years. I think it is easy to knock. When somebody is having a tough time, they will come to 5800 Members and say the construction industry is having a bad time. Yes, but let’s see. There are positives out there. The economy is picking up. There are a number of businesses wanting to move over here, a number of high net worths who are investing a significant amount of money in the Isle of Man construction industry. So things are not always that bad, and I think it is a real positive that we are going to get together across Government and try and sort out an 5805 easier way to move development on. (Mr Corkish: Hear, hear.) It is quite positive out there.
A Member: It is moving.
A Member: Come on, John! 5810 The President: Hon. Member, Mr Shimmin.
Mr Cregeen: That was the truth.
5815 The Minister for Economic Development (Mr Shimmin): Thank you, Madam President. My colleague, Mr Cregeen, has made a number of points, but I welcome the opportunity to try and correct some of the issues which understandably have become urban myths. What happened with regard to the 70%... where this figure comes from… and I do not blame the Hon. Member for Onchan for saying it, but it basically comes from a construction forum 5820 some years ago, based on no evidence, when it was estimated within the Dunlop Report as being 50:50, and then as things got worse they became more dependent. The figure of 70% was picked, and it was a guesstimate then. Now, as Mr Cregeen has just mentioned, things are getting better – but do not get complacent. Mr Downie talked about the fact… or muttered under his breath, ‘There’s less of them.’ 5825 Absolutely. Every part of the construction industry has been struggling for years and they have ______1613 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
been talking to us for years, saying that they are in real danger and that there will be fewer big firms around to actually apply for some of the big capital schemes. Only two on the Isle of Man were able to go for the Westmoreland Road site, because they have shrunk to a level of skills and numbers that is damaging to our future opportunities going forward. 5830 We are still spending more money on the construction industry and training people to go into it. The unemployment figures have fallen more in the last couple of months, and that affects the construction industry positively as well. But the purpose of the Member’s motion is to become less dependent on Government, so let’s see what is happening: high net worths, now over £54 million-worth of property with 5835 planning permission in the high net worth field – that is in recent months; 150 homes in Castletown in the private sector; 30-plus homes in Ramsey and another 30 in Port St Mary in the private sector. Exactly what the Hon. Member is talking about – to try and make sure it is not overly dependent on Government. The Hon. Member for Onchan, Mr Quirk, says, ‘Just do it – just get on and do it.’ Well, firstly 5840 you have got to have developers; secondly, you have got to have banks that are prepared to lend money to the developers; and thirdly, you have got to have banks prepared to lend money to the mortgagees. We know that there are problems within the banks. We know that it is not that easy to invest, as we have seen in recent years, in apartments because the banks will not lend the money and the people will not actually buy some of those apartments. 5845 In reality, I would congratulate the Members who have spoken so far, but it is not the Department of Infrastructure. If anything, it is Treasury and my Department, not the Department of Infrastructure. They could not have been more accommodating with the previous Minister and the current Minister to actually help us make land available for the development, whether it be business or properties. 5850 The Hon. Member for Onchan, who is moving this motion, is shaking his head. I can only tell you the truth, and if you choose not to believe it, Hon. Member, that is up to you. But where is SAMU, the Strategic Assets Management Unit? It is in Treasury, not Infrastructure. Who understands and works with builders and developers in the construction industry? My Department, not Infrastructure. They work with us, but we are the ones who are trying to see 5855 where the opportunities are. We are doing well on actually getting private sector money coming in. The rosy optimistic look out there is genuinely coming through – not out of my mouth, but out of the meetings that I and Mr Cregeen and others have had with the construction industry. The Treasury Minister met with them last week – again, the same message: things are getting better. Let’s not always talk it 5860 down. (Interjection) We are moving away from this overdependence on the capital programme. Why? Because we do not have the long-term opportunities. The private sector is rallying around and coming up with the goods. The Department of Social Care, as was – the housing issue, shared equity: we are looking at that and will be coming back later this year. So there is a lot of good stuff going on, but guess 5865 what is likely to happen: the very thing we have talked about and tried to avoid for years – the boom and bust in the construction industry. At the moment we are in real danger that there is actually going to be a swing, where already we have found some areas where there is a pinch point where we do not have the skills on the Isle of Man and therefore they are holding up further developments, particularly in some of the steel scaffolding side of erection for premises. 5870 Therefore, we have got to at times bring in people on work permits; because if we do not, then the bricks-and-mortar people are waiting for that framework to be built. So we started in employment land, not just in Government but in the private sector. When we have businesses that come to us, we tell them where we have got land but also where the private sector has. We work with estate agents. All of this is going on. Please, Hon. Members, 5875 let’s work together so the Hon. Member, Mr Karran… again to come into the Department and talk on a whole range of issues. This work is already going on and that is why we are supporting it. Let’s be optimistic, but let’s not try and overheat a construction industry which needs ______1614 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
nurturing now to build it back up with our training of the people, with our Government work, but also the private sector; and that does mean, in the short to medium term, bringing in key 5880 areas of workers to actually make sure that we can grow at the right speed. I am supportive of the motion.
Suspension of Standing Order 1.2(2) to conclude Item 21 – Motion lost
The President: Hon. Members, it is eight o’clock. With your agreement I… A proposal from the Hon. Member.
5885 Mr Watterson: Madam President, can I propose that we sit to complete the Order Paper, please?
Mr Cregeen: I beg to second.
5890 Mr Henderson: I propose, Madam President, that we sit to finish this particular Item on the Order Paper.
Mr Thomas: I second Mr Henderson’s proposal.
5895 The President: We have two proposals, Hon. Members. I will put the second one first, and if that is –
Mr Hall: Madam President, I beg to move that we sit until 9.30. (Interjections)
5900 The President: We have three proposals, Hon. Members. I will put first the proposal that we continue to the end of this particular Item. We need 22 votes.
Mr Watterson: Just on a point of order, Madam President, are you going to put all three? If 5905 one was… [Inaudible] they are cumulatively out.
The President: Yes.
Mr Watterson: Thank you. 5910 The President: If this one fails –
Mr Watterson: If this one succeeds.
5915 The President: Sorry, if this one succeeds, then this one succeeds.
Mr Watterson: Yes, but then would you still be putting the 9.30 and the – (Several Members: No.) The second and third will supersede the first, you see.
5920 A Member: Hear, hear.
The President: If this one fails, I will then put the 9.30 one; and if that one fails, I will put the conclusion this evening one. (Interjections) ______1615 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Hon. Members, the motion is that we conclude this particular Item. We have to have 22 5925 votes. I think we should vote electronically, Hon. Members. This is to finish this Item and adjourn until tomorrow morning. (Interjections)
Mrs Beecroft: Sorry, Madam President, I have not pressed a button yet. (Interjections)
5930 The President: I am taking advice from the Clerk, who suggests that if we support this motion it is free for Members then, at the end of this, to move another suspension of Standing Orders to continue. So we are getting into a rather confused state. (Interjections) Hon. Members, I will deal with it this way. The Clerk has indicated that if this motion is supported, we will continue to the end of this motion. If a Member then wants to move another 5935 suspension of Standing Orders, it is up to Members to do that.
Mr Corkish: Yes.
Mr Watterson: And if this one is turned down, would you still be putting the other motions, 5940 Madam President?
The President: I will, yes. So the first motion, Hon. Members, is that we conclude this Item. What you do, if that succeeds, at the end of that is a matter for the Court at that time. We need 16 votes in the Keys and six in the Council, Hon. Members. 5945 Mrs Beecroft: Madam President, I think I have got confused and pressed the wrong one.
The President: Just press it again to correct it, Hon. Member.
5950 A Member: It is too late now. (Interjections)
A Member: The results are up.
Mrs Beecroft: Oh, it doesn’t make any difference. 5955 The President: Roger, has the Hon. Member corrected her vote, or not?
Mr Braidwood: Yes. Correct your vote.
5960 Mr Watterson: Tell them it doesn’t matter, Kate.
Mrs Beecroft: Oh, sorry. I did not realise you were waiting for that. I beg your pardon.
Electronic voting resulted as follows:
In the Keys – Ayes 5, Noes 16
For Against Mr Crookall Mr Anderson Mr Henderson Mrs Beecroft Mr Shimmin Mr Bell The Speaker Mr Cannan Mr Thomas Mr Cregeen Mr Cretney Mr Gawne Mr Hall Mr Houghton Mr Karran ______1616 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Skelly Mr Watterson
In the Council – Ayes 2, Noes 5
For Against Mr Braidwood Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: Hon. Members, the motion has failed. There are 5 votes for in the House of 5965 Keys and 16 against; 2 for in the Council and 5 against. That proposal to suspend Standing Orders has failed.
Suspension of Standing Order 1.2(2) to continue until 9.30 p.m. – Motion lost
The President: I will now consider the motion that we conclude at 9.30, Hon. Members.
A Member: Is that seconded? 5970 A Member: Yes.
A Member: It was not seconded.
5975 Mr Corkish: It was not seconded. I did not hear it seconded.
Mr Braidwood: Nobody seconded it. (Interjections)
The President: Can the Clerk clarify if that was seconded? Did we have a seconder for that 5980 motion? (Interjections)
Mr Corkish: No, it wasn’t.
Mr Cregeen: You’re a troublemaker, you are! 5985 Mr Gawne: You’re a troublemaker.
Electronic voting resulted as follows:
In the Keys – Ayes 6, Noes 15
For Against Mr Cregeen Mr Anderson Mr Gawne Mrs Beecroft Mr Hall Mr Bell Mr Shimmin Mr Cannan Mr Skelly Mr Cretney Mr Watterson Mr Crookall
______1617 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan The Speaker Mr Thomas
In the Council – Ayes 4, Noes 3
For Against Mr Coleman Mr Braidwood Mr Corkish Mr Butt Mr Crowe Mr Turner Mr Downie
5990 The President: With 6 in favour in the House of Keys and 15 against, and 4 for in the Council and 3 against, that suspension of Standing Orders fails to carry, Hon. Members.
Suspension of Standing Order 1.2(2) to complete Order Paper – Motion carried
The President: The final proposal is that we complete the Order Paper.
Electronic voting resulted as follows:
In the Keys – Ayes 17, Noes 5
For Against Mr Anderson Mrs Cannell Mrs Beecroft Mr Crookall Mr Bell Mr Henderson Mr Cannan The Speaker Mr Cregeen Mr Thomas Mr Cretney Mr Gawne Mr Hall Mr Houghton Mr Karran Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly Mr Watterson
In the Council – Ayes 5, Noes 2
For Against Mr Butt Mr Braidwood Mr Corkish Mr Coleman Mr Crowe Mr Downie Mr Turner
______1618 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
5995 The President: There are 17 votes for in the House of Keys and 5 for in the Legislative Council. Twenty-two Members have supported, Hon. Members. We therefore will continue.
A Member: Well done!
Construction industry – Strategic plan for development of Government-owned land – Debate concluded – Motion carried
The President: We revert to Item 21. 6000 The Hon. Member for Castletown, Mr Ronan.
Mr Ronan: Thank you, Madam President. I must admit I am very encouraged to hear that the dependency of construction on Government is now nearer 40% than when it was up at 70%. This is obviously years of hard 6005 work, and a lot have been struggling in the construction industry to get to this level. I remember having a meeting with them myself recently and this was a target they were aspiring to get to, so I am delighted that it is there and I just hope it can be sustained. I am though a little concerned that we may be in danger that this motion is focusing on Government land here. We must not take our eye off the ball that there is quarter of a million 6010 square feet of vacant commercial space in Douglas alone at the moment, and we must focus… as long as we keep focussing on the wider picture on the Isle of Man. But I will certainly be… and I thank you, Minister. I will certainly be supporting the motion. Again, as a builder myself who has had a calamity today, I will say I am absolutely delighted to hear that news. I did not know that. 6015 Thank you.
A Member: Vote!
The President: The mover to reply. 6020 Mr Karran: Eaghtyrane, I would just like to thank Hon. Members. I am glad to hear that the figures are now nearer 40% than 70%. That has been a rapid change from what I was led to believe it was not so long ago, but I am glad to hear that. I am also glad to see that the Minister for Infrastructure has taken on board this as a lifeline, 6025 as a way of helping Government as far as this issue is concerned. We need a clear plan that all have access as far as this land is concerned and everyone has the same knowledge and input. I think, apart from that, I would just like to thank the Minister for his reply, even if I have to say that some of his points were a little bit confused from our bench and from other benches. The situation is that this whole item will come back in October and will actually help to make 6030 sure that we stay a high-wage, low-unemployment area. That is what we want. What we are trying to do here is, like the previous one… a clear definition, so there is none of this lhiam-lhiat- ism, people sitting on the fence. I thank my seconder for seconding it.
6035 The President: The motion before the Court, Hon. Members, is set out at Item 21 on your Order Paper. Those in favour, please say aye; against, no. The ayes have it.
______1619 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 21, Noes 1
For Against Mr Anderson Mr Quirk Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson 6040 The Speaker: Madam President, in the Keys, 21 votes for and 1 against.
In the Council – Ayes 6, Noes 0
For Against Mr Braidwood None Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Turner
The President: In the Council, 6 votes for – 6045 Mr Quirk: Time will tell, and then… [Inaudible]
The President: – and no votes against. The motion therefore carries, Hon. Members.
22. Planning administration – Planning Committee decisions and delegation of functions – Motion lost
The Hon. Member for Douglas West (Mr Thomas) to move:
That a Committee of three Members, with powers to take written and oral evidence pursuant to sections 3 and 4 of the Tynwald Proceedings Act 1876 as amended, be appointed to report to Tynwald by October 2014 about aspects of the authority and operations of the Planning Committee and planning administration including:
______1620 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
(a) (i) the appointment of the Planning Committee; (ii) the validity of planning decisions made by it; (iii) its way of working, including the public’s right to speak at meetings; (iv) its role under the Control of Advertisement Regulations 2005; and (v) the validity of decisions taken by it under those regulations; and (b) (i) the lawfulness of delegation of functions and decisions to officers and other persons; and (ii) the validity of decisions made under such delegated authorities.
The President: We turn to Item 22. 6050 I call on the Member for West Douglas, Mr Thomas.
Mr Thomas: Thank you, Madam President. The Hon. Member of the Legislative Council, Mr Butt made two important points in January when I first brought this motion, during his précis. Firstly that:
‘This motion is actually, although it is a very complicated matter, a fairly simple motion asking for a select committee to… [investigate the lawfulness] of the delegations and the validity of decisions made under those delegations’.
6055 He also said that Mr Cowin was not necessarily right, but he might be. Trevor Cowin had a letter published in December 2013, entitled ‘Planning Committee Shambles’. It started:
‘Those of your readers who have been following my revelations in letters published in your newspapers in recent weeks concerning unlawful decisions taken by the planning committee, will no doubt be interested to learn that a Planning Committee doesn’t currently exist to determine planning applications submitted on or after August1, 2013. […] the Planning Committee appointed under the 2005 Order has, however, continued to conduct hearings… [and] to determine such applications. The determinations made by it on such applications have, therefore, in my opinion, been unlawful.’
Mr Cowin concluded:
‘Hopefully, a Member or Members of Tynwald will refer these questions to a Scrutiny Committee of Tynwald for investigation.’
Any suggestion of unlawful decision-making is something that needs to be taken seriously. I 6060 think all Hon. Members of this Court would agree that. Moreover, Mr Cowin was right to suggest that a committee be set up, as he seems to have failed to get the Department to acknowledge at that time – although things have changed – and address issues he was raising before this motion was moved. As the maker of our nation’s laws, we in this Hon. Court should not be waiting for a test of 6065 the validity of any particular decision. Rather we should be acting and be seen to be acting to make sure that our primary and secondary legislation is not legally defective and that any particular instrument or decision is not unlawful. In fact, this very point was made by the former Minister for Infrastructure when moving the Town and Country Planning Development Order 2013 last July. 6070 So when I move this motion, I have two purposes, I suppose, when I bring it back: firstly to allow the Department to confirm what it will do to provide legal certainty for planning decisions; and secondly – the second purpose is, and I think there is only slightly less agreement in this area – to actually consider whether we need a select committee to review how we ended up with planning administration in a state where it could be perceived and described as in a 6075 shambles. For this Court’s information, this public suggestion of a planning administration shambles, and my move to establish a select committee on planning administration triggered many letters and phone calls which I received. Also my decision to withdraw the motion in April seemed to
______1621 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
disappoint some Members of this Court, and that is one context for bringing this motion back. 6080 There does seem to be a public will for an independent review of planning administration. In particular, several Members of this Court expressed disappointment that they did not have a chance to contribute to the debate in April. They now will, as long as one of them seconds my motion. In particular, I hope that we can hear from the Minister for Infrastructure confirming what I 6085 believe was agreed at the helpful meeting that Mr Cowin had with the Minister, the departmental Chief Executive, the Attorney General, as well as other officers on 2nd April. I had expected the Minister would make a statement to the Hon. Court in April, but for whatever reason he did not. This caused me to write to the Department on 10th April as follows:
‘Will you be making a public statement, and if so, what, when and how? Precisely what action does the Department intend to take…? It is my recollection […] that it was agreed that: 1. Because the Standing Orders of the Planning Committee introduced by the former Minister from the 1st August 2013 did not provide any discretion to the Planning Committee to not introduce the right of members of the public under the Standing Orders to address the Planning Committee, the meetings of the Planning Committee held before such right was introduced on the 18th December 2013 were unlawful, as were decisions made by it on planning applications at such meetings; 2. Because the Planning Committee wasn’t appointed by the Council of Ministers for the purposes of the Town & Country Planning (Development Procedure) (No 2) Order 2013 until the 5th December 2013, meetings held from the 20th August 2013 up to the 5th December 2013 at which it considered and determined planning applications submitted on or after the 1st August 2013 were unlawful, as were decisions made by it a such meetings; 3. The majority of Delegations of Functions made by the Department from 2010 to 2013 were legally defective, unlawful or [in some cases] both; and 4. Determinations made by Officers of the Department from the 1st August 2013 to the 5th December 2013 under Delegations of Authority were unlawful. If it is necessary to bring my motion back to Tynwald,’
– I continued –
‘I am minded to use the above summary when I speak. I think we agree legal certainty is needed, as I stated in January and reiterated yesterday in Tynwald, and thus it is important that details of the facts are made public and that the Department takes the action which is necessary urgently so that future planning decisions are clearly valid.’
6090 The Minister did reply on 30th April. He began by repeating that our meeting had been:
‘helpful and informative and while there were inevitable differences of opinion, I believe that there was an overall common agreement reached between all parties as to the route and approach which the Department should take to remedy the principal issues.’
I am pleased to echo this opinion of the Minister. Moreover, I am pleased to confirm that the Department stated that it has no objection to my release of the following paragraphs which confirm what the Department is and will be doing in response to remedying the principal issues. The Department stated that it agreed that, and I quote:
‘… legal certainty in respect to the issue of the Planning Committee is required. Consequently, and in moving forward, I can confirm the following actions which the Department will undertake to remedy the principal issues: (a) following advice from the Attorney General’s Chambers, the Department of Infrastructure will bring forward a one-clause amendment to the primary Act, that is the Town and Country Planning Act 1999, in order to place the appointment of the Planning Committee in effect on a firmer and more secure statutory basis…’
6095 And the Minister confirmed that:
‘… the Department has commenced the necessary preparatory work with the intention of being in a position to instruct the Attorney General’s Chambers legislative drafters to commence drafting the aforesaid amendment as soon as possible.’
______1622 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Secondly:
‘The Department, following receipt of a very detailed analysis of the Departmental delegations going back to 2010 from Mr Cowin during our meeting…’
– this is the document I have circulated to all Members –
‘… reaffirms its commitment made to Mr Cowing during the meeting that it will fully and properly review Mr Cowin’s document and, where appropriate, amend any existing anomalies. (I can confirm…’
– so said the Minister –
‘that a review of Mr Cowin’s paper has already commenced and, where appropriate, the Department will make new delegations accordingly).’
Then the Minister thanked Mr Cowin and myself for bringing these matters to the 6100 Department’s attention and said that the efforts were very much appreciated. The Minister confirmed in the House of Keys that it was the intention of the Department to bring forward a new amending Bill C, as it is now called, but that is subject to obtaining the necessary approval of the Council of Ministers and it will only be introduced as soon as it is practical. 6105 To address this, I have taken the liberty of preparing and having a Private Member’s Bill put down on 24th June Order Paper, which the House of Keys could give leave to introduce, and that is:
‘That leave be given to introduce a Private Member’s Bill to amend the Town and Country Planning Act 1999 to establish a Planning Committee; and for connected purposes.’
But in the light of the facts of this case, it is, I believe – and that is why I continue with this motion – even more important that the situation is reviewed, in particular perhaps because of 6110 this court case conclusion in the Heritage Homes v Department of Infrastructure, which concluded in February, and I quote:
‘… somewhat unusually, the Department’s Advocate indicated that his client would not be contesting the claim, the Department, in very brief summary, conceding that proper procedures had not been used in respect of LP21 and that its inclusion in the [Area Plan for the South] led to absurd results.’
If the Court does not mind – and please remember, I did actually move we came back tomorrow – I would just like to take a few moments to summarise some of the points which I believe the Department has concurred with, at the meeting on 2nd April, for which the Agenda 6115 was: Item 1 – delegations of functions; Item 2 – the lists of determinations made by officers from 1st August 2013 to 5th December 2013; Item 3 – Standing Orders; Item 4 – the Town and Country Planning (Development Procedure) Order 2013; Item 5 – the format of decisions on planning applications. In relation to Agenda Item 1, the delegations of functions, the pieces of secondary legislation 6120 about which I have circulated Mr Cowin’s 16-page commentary and critique, I should state that these documents were hard to find and remain so – although from yesterday, the Tynwald Library now has copies, at least for Members to view. My understanding is that these documents should be available in public, as they used to be when they were published on the Department’s website until October 2013. 6125 In fact, Mr Cowin I believe was informed by the Planning Director that these documents were available on request, but he only actually received them – which was unfortunate – from the Department’s Chief Executive in January 2014, after the kind intervention of Mr Speaker. Mr Cowin went through – I have to confess at some length – his analysis of the delegations. Members might also have taken the trouble to do that, and they will have found that the ______1623 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
6130 majority are – and remember, he is an experienced drafter and civil servant reviewing legislation – he finds them to be legally defective, unlawful or both. In fact, I have not received any notice since 2nd April that any of the issues raised were not valid issues to have raised, and the Department has confirmed in its letter which I have read out that it will make new delegations accordingly, which I expect to be posted in public. I hope the 6135 Minister can confirm this today. For the record, I would like to go through four particular Delegations – the ones highlighted in the document that I have circulated. The first one is that DOI Delegation 33/13 is unlawful because the Director of Planning has not stated which functions were conferred by section 3(3) of the Government Departments Act 6140 1987, or by whom and to whom the functions were conferred under that section, under which he has authorised the posts referred to exercise such functions. He cannot, therefore, authorise the Development Control Manager, the Planning Policy Manager and the Building Control Manager to exercise functions without stipulating what those functions are and how those functions were delegated to him. 6145 In addition it revokes four other Delegations, all of which had already been revoked: specifically DOI Delegation 37/10, which had already been revoked by DOI Delegation 08/13; DOI Delegation 07/11, which had already been revoked by DOI Delegation 12/11; and so on and so on. Point 2: DOI Delegation 54/13, the former Minister’s vires for the appointment of the 6150 Planning Committee, includes no mention of that Order in the Delegation and I point out that the Delegation is thus legally defective because the Delegation states that… and also it is defective because the Delegation states the authorisations contained in SD 251/05 and DOI Delegation 05/13 are revoked, but there were no authorisations in those two documents to be revoked. The wording in this Delegation is also ambiguous, and this was generally agreed to be 6155 the case when Mr Cowin brought it up, which I found surprising. Point 3: DOI Delegation 55/13, which the current Minister made when he was Chairman of the Planning Committee under the authorisation of DOI Delegation 05/13, but in fact DOI Delegation 05/13 was revoked by DOI 54/13 on 20th August 2013, so the Delegation is unlawful. DOI Delegation 56/13 – this was made by Mr Skelly on 4th December 2013 in his capacity as 6160 Chairman of the Planning Committee authorised by DOI Delegation 54/13, which appears to have been made by Mr Skelly to revoke DOI Delegation 55/13, perhaps because it was realised that the previous delegation was unlawful. But as the Planning Committee was not appointed by CoMin under DOI Delegation 54/13 until 5th December 2013, the Delegation seems to be unlawful. 6165 Discussion at the meeting then centred on the failure by CoMin to appoint the Planning Committee under Delegation of Functions 54/13. Mr Cowin, I remember, asked the Acting Attorney General if he agreed that because the Planning Committed had not been appointed by CoMin until 5th December 2013, its meetings before that date at which it considered planning applications submitted were unlawful and that the decisions made by the Planning Committee 6170 at such meetings on such applications were unlawful also. The Attorney General would appear to have agreed with Mr Cowin’s analysis that the meetings held by the Planning Committee were unlawful, but he clearly stated that the decisions were valid until challenged. The Department of Infrastructure will clearly have its own view on the unlawfulness of the 6175 Planning Committee’s meetings and its decisions based on legal advice, but I am persuaded that as the Planning Committee was not appointed by CoMin for the purpose of the No. 2 Order 2013 until 5th December 2013, it ceased to did not exist in law before that date for the purpose of the No. 2 Order, so its meetings and its decisions were surely unlawful. Surely, we need to revisit the statutory basis of the Committee, as I believe the Department agrees. 6180 I am also disappointed that the DOI index of the Delegations of Functions which purported to indicate the state of play with the 65 delegations was inaccurate, which I believe is a sorry state ______1624 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
of affairs, and perhaps as they are secondary legislation that should be available to the public, I believe, so that is something this committee could investigate. In relation to Agenda Item 2 – lists of determinations by officers – I understand these lists 6185 were requested by Mr Cowin because of his concerns over the validity of previous determinations made by officers. The first list of nine determinations made by the Director of Planning and Building Control, from August to December, I believe the Chief Executive of the Department confirmed that these were made under the DOI Delegation 32/13. These nine determinations were unlawful because 6190 under the Delegation, Mr Gallagher was specifically precluded from exercising functions of the Department which had been delegated to the Planning Committee, which functions included the determination of planning applications. There seemed to be a general agreement by the persons present at the meeting that the Delegations referred to were unlawful for the reasons explained. The Minister may wish to confirm this – that they were unlawful but legally valid 6195 unless they were challenged. The second list of determinations was of 234 determinations made by senior planning officers under DOI Delegation 56/13 in the same period. All of these determinations were unlawful because DOI Delegation 56/13, which was made by the Minister for the DOI in his then capacity as Chairman of the Planning Committee, was not made until 4th December 2013, but 6200 more importantly Delegation 56/13 was itself unlawful as it was made the day before the Planning Committee was appointed by CoMin. There seemed to be general agreement by the persons present that the Delegations referred to were indeed unlawful. The Minister might wish to confirm that the 234 determinations were unlawful, but legally valid unless challenged. The third list was of 138 determinations made by Mrs Chance from 1st August to 4th 6205 December, under Delegation 56/13. These were also unlawful, because DOI Delegation 56/13 was not made until 4th December, and also more importantly because DOI Delegation 56/13 was itself unlawful. The Chief Executive of the DOI had confirmed that the determinations made by Mrs Chance, the officer concerned, could alternatively be made under Delegation 13/11. Any determinations 6210 made by that officer under Delegation 13/11 were unlawful firstly, because the officer did not have the authority under that Delegation 13/11 to determine planning applications; and secondly because DOI Delegation 13/11 had been revoked by DOI Delegation 29/11 on 14th October 2011. The Minister might wish to confirm that these determinations were unlawful, but valid unless legally challenged. 6215 I believe we need scrutiny by a committee of this Hon. Court to see how what would appear to be a sad state of affairs came to exist. In summary Mr Cowin’s enquiries would seem to have revealed that nearly 400 determinations made by senior planning staff of the Planning Department were unlawful. We might need more than a summer to work to investigate it but it seems quite a serious situation 6220 that has been revealed. Discussion then ensued on the failure by the Planning Committee to introduce the right to speak, and it seemed to be that those persons present including… agreed with Mr Cowin’s argument that the Standing Orders did not provide a discretion to the Planning Committee as to whether or not to introduce the Standing Order referred to, and that the discretion was in fact 6225 provided to members of the public who could decide for themselves whether or not they wished to exercise their right under the Standing Orders to address the Planning Committee. (Interjections)
A Member: Is that the end? 6230 Mr Thomas: Some good news –
Mr Watterson: We’re nearly there! ______1625 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Thomas: Some good news, I think, is that at our second meeting, the Infrastructure 6235 Department and the Attorney General’s Chambers indicated that they would take on board further arguments advanced by Mr Cowin that the current planning decision notices did not seem to conform to the law and agreed to consider changes to the format. So in summary, I thank someone for seconding this motion. I hope the debate will then be rich and include a statement from the Minister for Infrastructure in particular about next steps. 6240 Then this Hon. Court needs to decide whether we need a review of what happened at the end of last year and how we got there. I believe this should be by a select committee with the terms of reference on your Order Paper. I move. (Interjection by Mr Watterson)
6245 Mr Quayle: Could you repeat that?
The President: Hon. Member of Council, Mr Butt.
Mr Butt: Thank you, Madam President. 6250 I beg to second the motion, and I will make a few comments on the motion and the inquiry. Apparently in January I said this was a simple matter! The way it has been portrayed today, it sounds quite complex. Can I just go over the history of the first motion which was made in January? Mr Henderson, Member for North Douglas made a helpful intervention, and suggested an adjournment, which 6255 did take place, so that Mr Cowin, the mover, the Department, the Planning and the Attorney General could meet together to discuss these issues. I understand that that meeting did take place and we have heard from the mover that that did take place. It would appear that there is general agreement on lots of the issues. I have got to declare the personal interest, which will put a caveat to my remarks, that 6260 Mr Trevor Cowin is a life-long friend of mine, so please bear that in mind. But I have found that Mr Cowin, over the years and twice before in this Court, has been proved right in his analysis of technical orders and regulations. I think I am therefore biased in my view of the accuracy of how he is going to interpret things. Following the useful intervention of Mr Henderson, we had the adjournment and we had the 6265 meeting. There has been an agreement but I now return to the motion on the Paper. The motion actually is for a committee of three to investigate the issues. At the last Tynwald in April, the motion originally was withdrawn – the adjournment motion was withdrawn – which did not allow anybody else the time or the right to speak. I would hope that if there has been some agreement, the Minister can today make a statement. If he can 6270 make a statement which can confirm some of what Mr… the mover has said, (Two Members: Thomas.) do we really then need to have a committee of three to investigate this? That is the point I was going to make. So I hope that the Minister can respond with some comments to maybe with what Mr Thomas has said. Maybe we can then judge whether we need a committee of three to 6275 investigate, because if there is a remedy available and the Department is aware of it and has the ability to do the remedy, I think perhaps that is all that this Court needs to do at this time. Thank you, Madam President.
A Member: Hear, hear. 6280 The President: The Hon. Member, Mr Skelly.
Mr Skelly: Gura mie eu, Eaghtyrane. I am sure it will not surprise anyone to know that I will be opposing this move, but I would 6285 agree with the Hon. Member for West Douglas that this is a sad state of affairs. However, I think ______1626 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Trevor Cowin does deserve respect, and with that I would just like to make a statement. I would like to begin by making a few points. The current planning legislation was approved by Tynwald between 1999 and 2005, and has since operated without any procedural legal challenge. In 2011, procedural issues were raised in 6290 particular by one individual – we know, Trevor Cowin – with respect to the handling and determination of a number of planning applications and planning enforcement cases. As a consequence, there have been significant volumes of complex and overlapping correspondence to different parts of Government, including the Department of Infrastructure, the Chief Secretary’s Office, Attorney General’s Chambers, as well as Members of Tynwald and 6295 the local press. Despite issues raised, no-one has taken any steps to bring a legal challenge as a result of procedural matters raised over the last two to three years. As this Hon. Court will recall, Mr Thomas first brought this motion in January 2014. Mr Henderson made an adjournment motion which proposed that the Department meet with Mr Cowin and Mr Thomas to discuss primarily the issues raised in the notice of motion, and also 6300 other issues in respect of individual planning applications which had been raised by Mr Cowin during his lengthy correspondence with my Department. In my opinion, both meetings and the ensuing discussions were open and productive from both sides, and whilst there were inevitable differences of opinion, I believe there was an overall common agreement reached between all parties as to the route and approach which the Department could take to remedy the principal 6305 issues raised in the notice of motion. Turning to the Department’s proposed actions, and firstly in respect of the Planning Committee, I wish to restate to this Court that any decisions made by the Planning Committee or by its officers are deemed of valid legal effect and so lawful unless successfully challenged in court. However, it is clear that the question as to whether it has been acting lawfully has raised 6310 differences of opinion. In simple terms, the Department’s position is clear. The Planning Committee is acting lawfully and a detailed reasoning affirming this position was set out in a Written Answer 42 by Acting Attorney General as presented to Tynwald in November 2013. However, I would recognise, the legislation is unclear and in the interest of moving forward 6315 and placing the matter beyond doubt, the Department is therefore proposing, on advice of the Attorney General’s Chambers, to bring forward a one-clause amendment to the primary Act – that is the Town and Country Planning Act 1999 – in order to clarify the appointment of the Planning Committee. To that end, I can confirm that my Department has already commenced the necessary 6320 preparatory work and it is hoped it will be in a position to instruct the Attorney General’s Chambers legislative drafters to commence drafting the amendment as soon as possible. If and when enacted, I believe this will bring closure to this issue. I can advise Members that I have already asked the mover of this motion if he wishes to second this new legislation when it comes to court. 6325 Secondly, in respect of the issue of Department delegations and following receipt of a very detailed analysis of departmental delegations going back to 2010 from Mr Cowin during our meeting, the Department reaffirms its commitment made to Mr Cowin during the meeting that it will fully and properly review Mr Cowin’s document, and where appropriate amend any anomalies. 6330 To conclude, I would like to place on record my thanks to Mr Cowin for bringing these matters to the Department’s attention and my attention personally. His efforts are very much appreciated. That said, I would state the Department has always been happy to correct things that may have gone wrong, and I have made it absolutely clear that if this is the case on any matter, it will continue to do so. 6335 In light of the Department’s proposals as set out, I understand that these actions are acceptable to Mr Cowin and his issues have been or will be addressed. I consider there is now little to be achieved by the establishment of a select committee. I would therefore ask Members ______1627 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
to vote against proceeding with the motion, and I hope Mr Thomas himself will very much agree with me. 6340 Gura mie eu.
Two Members: Hear, hear.
The President: The Hon. Member, Mr Quirk. 6345 Mr Quirk: Thank you, Madam President. I am sorry, Members, this is a serious matter (Interjection by Mr Henderson) and it is to do with law as well. I am quite happy to second Mr Thomas, because nobody else has actually done that. 6350 The President: It has been seconded, Hon. Member. (Interjections)
Mr Quirk: Oh, has it, sorry? Well, I am supporting Mr Thomas on this particular issue. Mr Thomas has made some allegations here regarding the Planning Committee, and in his 6355 introduction it was from 1st August 2013. He has also made reference to a number of invitation meetings that have happened with the Attorney General and the Department of Infrastructure on 2nd April 2014. Members of this Court are not aware of those discussions. They have not been disclosed to any Members at all, so I have seen nothing from either the Attorney General’s department, the Department of 6360 Infrastructure or the Member moving this particular motion here today, to satisfy me that something has been done – something that needs to be corrected. (Mr Henderson: It is!) Now, the public image out there is that there is an allegation from an individual which has gone a long way. That particular individual has listed out several documents, which were circulated to Members only yesterday. They do make reference to previous members of the 6365 Planning department, and individuals who are still on the Planning department. Those particular Members, including myself, were not even aware of the discussions that took place in April, and I think this needs to be explored a little bit more than just saying there was an individual who has made a complaint and had a chat with the Department and something has been resolved. That is not fair. That is not right. What has actually gone on? 6370 I want to know that as a previous Chairman, and I am sure that another previous Chairman of the Planning Committee wants to know what has gone on in the past as well. Because as far as I am concerned, when I was under the delegated function or the delegation of my friend from Rushen there, Mr Gawne and the Chief Executive who was there at the time, Mr Thompson, all those delegations and the paperwork that I had seen that the Council of Ministers provided to 6375 the Planning Committee on their appointments and sometimes reappointments, in conjunction with my Minister at the time, Mr Gawne, were done quite properly. They were advertised. Interviews took place, and it was all done above board. I can say to you at the time they were the delegations and I have received just the four delegations I think that Mr Thomas has actually discussed. 6380 I do not think support is quite lightly. But what I do not want is something with really a bad taste within this particular Court, or against a certain individual.
Mr Henderson: You are going to spoil it, David…
6385 Mr Quirk: No, I am not. I think it needs to be tested. It has been brought to the floor of this. It is being publicly broadcast. It is all in the public domain. (Mr Henderson: The statement.) It is up to us. I know the Minister made a statement, but I do not think that clarifies it enough as far as I am concerned. (Interjection by Mr Henderson) I am putting it on record, Mr Henderson, that I am still unhappy about the situation – and I will be unhappy about the situation. And there may be ______1628 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
6390 other remedies that maybe other individuals want to do on 5th July – which is going to be 7th July. (Laughter) They may want Petitions to the Hill, and then the story goes on and on, and it festers. It is like a sore which is never done or lanced. I think, Members, if you do not support this… and it may be tricky to get all three individuals for this particular committee because a number of us may be affected by it – there will be a 6395 number of Members who definitely will not be able to go on, because they will have the perception of bias for a start, from one side of the fence to the other. So I would think, Members, I would support Mr Thomas on this. Put this committee together, because it is the only way you are going to get this particular issue put to bed and done right within the law. 6400 The President: The Hon. Member, Mr Speaker.
The Speaker: Madam President, the purpose of a select committee, in my experience, is to expose shortcomings and recommend courses of action to put right wrongs. (A Member: Hear, 6405 hear.) Select committees have been very successful in doing that. The particular issue before us which a select committee would be asked to investigate are very serious procedural irregularities which have been catalogued, quite rightly, in detail by the mover and allegations of unlawfulness which have been made by Mr Cowin and which I think I certainly have taken very seriously. I made a point of engaging myself in dialogue with Mr Cowin 6410 at quite an early stage. I had leave of absence in January when the debate took place at that time, but I had certainly taken an interest in the very serious claims being made by Mr Cowin, and like Mr Butt, having worked with Mr Cowin, having been Minister of the DHSS where he was a very highly regarded, meticulous civil servant, whatever he had to say ought to have been taken very seriously and has been taken very seriously. I took up certain aspects on his behalf 6415 early on with the Acting Attorney General, the question of unlawfulness. Now, a select committee is being asked to investigate, take evidence and to report to Tynwald by October on aspects of the authority and operations of the Planning Committee and administration, including in part (a) the issues that the mover has set out in his presentation, but also in part (b) the lawfulness of delegations and the validity of decisions. A select committee 6420 would presumably report back very much along the lines that we have heard, which have been the result of exploring the issues within the Department and with Mr Cowin, with the Attorney General present – i.e. that yes, there is a question mark over the lawfulness of the decision- making process, but until the lawfulness is questioned in court, the decisions of the Committee are valid. I am talking about the validity of the establishment of the Planning Committee, rather 6425 than a delegation, but I suppose the same thing would go. Decisions made under disputed delegated authority are lawful until a court rules otherwise. That seems to be the accepted position, and I am not sure that a select committee would reach a different conclusion. I would certainly have seconded this resolution for the purpose of debate, had it not already been seconded, because I think it was very important to have on the record just what the 6430 Department has done about these claims and allegations, and the subject matter that the committee itself would be investigating. We have heard a bit of detail from the Minister what was discussed and what the Department proposes to do about it, so a course of action flowing from a recommendation of the committee would appear to be there in train waiting to go already. 6435 I was hoping that the Minister for Infrastructure would have actually amended this resolution to give us a fixed position in Tynwald, should Tynwald decide a committee was not needed, because undertakings have been given by the Minister and I do not doubt for one moment the Minister’s willingness to commit to those undertakings. If he has said so publicly, that is fine and I think we would all not question that in any way. 6440 Nonetheless, I think it would have been preferable for Tynwald to be given the opportunity actually to vote on an option which reflected what it is the Department is undertaking to do. ______1629 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
(Interjection by Mr Corkish) Because as things stand – there is no amendment in the wings as far as I can see – you either vote for a committee to investigate the subject matter that is certainly complex… and it is very complicated, but I think most of us have got a grasp of what the issues 6445 are, and it is to do with lawfulness and validity of decisions which the Department is committed to put right. So you vote for a committee, or you do not have a committee and you hope that things will be put right – which is not, I think, the ideal outcome. So I would be interested in the mover’s response to this because I do not want a committee set up for the sake of it, which will take a lot of resource and time to investigate, only to come 6450 up with a consensus of findings and recommended action which will be no surprise to the Department and the Department in principle is committed to anyway. That is not what a select committee should be for. But it seems to be the only option for anything to happen at all that is in the hands of Tynwald itself, other than hearing, noting and accepting the Minister’s own commitment. But there is nothing here on the table, as far as that is concerned. 6455 So Madam President, that is my view on the matter and I look forward to the mover’s response.
The President: The mover to reply.
6460 Mr Thomas: Thank you, Madam President. Thank you to the Hon. Member of Council for seconding, and making the point so clearly about why we needed to have this debate. I also thank the Minister for confirming his intention to try and move forward in the way that he has described. But I immediately acknowledge the concerns raised by Mr Speaker, when 6465 supporting the motion, but saying that it was disappointing that we did not actually have an amendment which we could support more clearly, with knowledge that it would definitely take us someplace that would be better. Secondly, I wanted to congratulate the other supporter, Mr Quirk, for having said something very clearly as well, which is that if we do not have this committee, there is a bad taste. I do not 6470 think Mr Cowin actually wants there to be a bad taste. I certainly do not want there to be a bad taste, and you said it very clearly. It would be much cleaner to have a situation where we can all carry on eating and drinking with a clean taste in our mouths, and we might need to have a committee on the basis that no amendment has been put forward. I have also got some questions… I continue to have some questions, which it is a shame that 6475 the Minister did not answer: will the secondary legislation that is made be put into the public domain as it used to be or will it not, as it became normal? What is the timetable for the Council of Ministers and the Department for amendment Town and Country Amendment Bill C? They have already got A and B and I think there is another Private Member’s Bill, which I guess we can call D. So is it likely to happen? I think it is very important that it does happen, and that is 6480 certainly what I concluded during my engagement with this issue. So in summary, I will be voting for my own motion to have a committee. I appreciate the Department and the Attorney General helping us to move forward, but we also need to look at the past, and we also need to be certain that we are moving forward. Just in closing as well, there are differences of opinion about what determines the validity of 6485 an unlawful and legally detected situation. So that will be something that a select committee could investigate to take this out of any potential legal challenge. Once again, I wanted to reiterate what the Minister had said, which is that we all do actually owe a great deal of gratitude to Mr Cowin, as we did in 2006, for raising some valid points and taking hours, days – in fact, weeks – to put together the document that you have arrived at. The 6490 second point is, I would never have involved myself to consider any local planning issues. I have no knowledge whatsoever of any of his individual planning issues. I have entirely kept my interest to issues of national policy about planning administration, Planning Committee activity and eventually the enforcement of breaches of planning control. ______1630 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The President: The motion before the Court, Hon. Members, is set out at Item 22 on your 6495 Order Papers. Those in favour, please say aye; against, no. The noes…
A division was called for and electronic voting resulted as follows:
In the Keys - Ayes 2, Noes 18
For Against The Speaker Mr Anderson Mr Thomas Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly Mr Watterson
The Speaker: Madam President, in the Keys, 2 votes for, 18 against.
In the Council – Ayes 3, Noes 4
For Against Mr Braidwood Mr Coleman Mr Butt Mr Corkish Mr Turner Mr Crowe Mr Downie
6500 The President: In the Council, 3 votes for, 4 votes against. The motion therefore fails to carry, Hon. Members.
23. Public sector and state pensions Amended motion carried
The Hon. Member for Castletown (Mr Ronan) to move:
That Tynwald is of the opinion that public sector pension schemes should be put on to an affordable and sustainable basis prior to any proposals or changes being made to National Insurance based state pensions on the Isle of Man.
The President: We turn now to Item 23. I call on the Hon. Member for Castletown, Mr Ronan.
______1631 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
6505 Mr Ronan: Thank you, Madam President. Hon. Members, I have campaigned for public sector pensions to be put onto a more sustainable footing since before I was elected. My motion today, however, is not about public sector pensions; it is about separating the reviews of public sector and National Insurance under the state pension as a priority… must be on the issues concerning public sector pensions. This 6510 motion is simply about decoupling public sector and state pensions. The public sector pension is an employee perk funded almost totally by the taxpayer. The state pension, although called a benefit, is owed as a reward for a lifetime’s economic participation and a raft of contributions made by the employee and the employer of the hardworking people of the Isle of Man. These two are not the same, they are not related and 6515 they must be separated. I put down a similar motion in February this year and was persuaded by some Members to remove it from the Order Paper. However, headlines only last week saying the Isle of Man pension system needs urgent reform have caused such consternation to my constituents and colleagues that I realise I was right about this earlier in here. I remain convinced that our voting 6520 public want us to deal first with the unsustainability and inequality of public sector pensions, regardless of any assurances made by a previous administration in 2006 that this subject would not be revisited until 2020. It is now abundantly clear to all of us that the economic world has undergone unprecedented change since 2006 with serious consequences. For example, a slump in interest rates has driven 6525 completely unjustified lump-sum payments being paid to a raft of public sector retirees over the last two years; there have been three UK VAT reviews; there has been unprecedented disruption to western economies; there have been threats to our taxation policy; and interest rates, which had hovered around 5% in 2006, have fallen to ½% with no prospect of recovery in sight. None of these were anticipated by our Government when assurances were made about the 6530 public sector pensions remaining untouched until 2020; so equally, any undertakings based on assumptions that our economy would continue in the same vein must no longer apply, as they are no longer applicable. I am well aware that the Treasury Minister – someone I have got the highest regard for and have worked closely with since being elected – has inherited a situation where both public and 6535 state pensions appear to him to be unsustainable. However, before we revisit state pensions, I wanted to clarify some of the critical issues with pensions, because as the Hon. Member for Michael has said, he thinks that we are in danger of creating our own self-fulfilling crisis if we are not careful, and I am in agreement with him on this point. The state pension is defined by the Oxford English Dictionary as a regular payment made by 6540 the state to people of above the official retirement age. An employment-related private sector pension is a regular payment made during a person’s retirement from what is ordinarily an investment fund to which that person or their employer has contributed during their working life. I would like to consider these definitions from the perspective of the public sector pension versus the state pension, if I may. 6545 With the public sector pension, we have had historically very low contribution levels with very high benefits paid out, and particularly the strong influence of very low interest rates currently which have inflated final salary lump-sum payments and ongoing pension payments. Public sector employees can retire at the age of 55. Average contribution rates to the public sector pensions on the Isle of Man, according to the Government Actuary’s Department (GAD) 6550 report of July 2013, were 6.6% for employees and 26.6% by the employer, funded by the taxpayer. Until fairly recently, the employee made a contribution of as little as 1.5% in many of the Isle of Man public sector pension schemes. Even at contribution levels of over 32% there is a growing shortfall each year of income versus pay-outs. On the other hand, for the state pension, employees have made long-term high-percentage 6555 contributions. At present, the maximum state pension can be achieved by 35 years’ contribution. The average retirement age has been increasing in recent years, with 65, 66 and 67 ______1632 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
now being in place. The majority of the public who have paid into the state pension are totally reliant on receiving the state pension to look after them in their old age. Current state pension contributions are 11% by the employee and 13% by the employer, so 24% paid into the Isle of 6560 Man Government National Insurance Fund. We have a state pension where people of the Isle of Man have paid in high levels of their earnings over a very long period to guarantee a pension on retirement, and we have a public sector pension where historically very low levels of contributions have been paid to generate disproportionately high levels of retirement benefit relative to contributions made. 6565 This is fuelling what the Cabinet Office Minister described, in his paper to the House of Keys on the Public Sector Joint Working Group earlier this month, as the escalating annual gap between income and expenditure of all public sector pension schemes which is affecting cashflow and the ability to rebalance the Budget. It is important because we must also be concerned about the unpredictability of the escalating gap, which in over three years has gone 6570 from £12 million to £24 million to £36 million – completely out of control and beyond what we can afford. Turning now to the state pension, where we are presented with a very large report from the Government Actuary’s Department into the operation of the Social Security Acts in the Isle of Man 2007 to 2012, and it is this document that is causing the Treasury Minister, amongst others, 6575 to make comments like:
‘The impact of the ageing population on the long-term sustainability of the welfare system is a huge issue, but it is certainly not unique to the Isle of Man. However, the pension system needs urgent reform.’
I would like to draw Members’ attention to the chart on page 14 of this report – comparisons of income and expenditure and fund balance and the 2007 and 2012 reviews. The question that I 6580 would like to ask is: how did the pension scheme projections put together in 2007 manage to forecast expenditure so accurately yet overstate come by 30%? This is especially concerning as between 2007 and today we have had the highest levels of employment in the Isle of Man’s history, the highest average earnings on the Isle of Man, the highest number of people in work we have ever had on the Isle of Man contributing between employer and employee 25% of 6585 earnings into the National Insurance Fund. Looking at these figures, it seems to be that the reason the Fund is going to run out five years earlier is because we were unable to accurately forecast the amount of NI income we would have received. So rather than blame the triple-lock guarantees and the decline in contributions, I would like to know exactly why the figures for income were so grossly overstated; because as far 6590 as I can see, we have been through a major employment boom period with very high levels of National Insurance contributions which should have gone into the Fund. I would therefore encourage the Treasury Minister to take a long hard look at exactly where these figures came from and why they went so wrong. As I said, I have the utmost confidence in the ability of the Treasury Minister and his team to 6595 deal with this situation, and I would like to say to him today – and unfortunately he is not here today, but I will forward a copy of my speech to him – that the people of the Isle of Man should not suffer because someone got their forecasts wrong. Equally, as has been published recently, we are now saying that the Fund is going to run out in the 2050s too, just a bit later in the decade. What has changed? Why has what was acceptable 6600 in 2007 become such a crisis seven years later, when really it is very marginal change that is being predicted by the new forecast figures? What I think is happening is that we are linking the word ‘pensions’ across all the sectors of our economy, when these figures are very different pieces of economic and employment policy. We should also look at the dependency ratios, which seem to have become a hot topic in recent 6605 weeks.
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According to reports which I was shown recently, on dependency rates, in The Economist and a blog called fivethirtyeight.com, the UK and the Isle of Man will have some of the lowest dependency rates in the developed world in 30 years’ time. In 2035, the Isle of Man, according to the GAD report, will have approximately 37 people not working for every 100 in work, 6610 compared with 69 for 100 in Japan and 66 in Germany. One reason that the Isle of Man is in better shape is its comparatively high rate of immigration over the last 10 years, because people tend to migrate when they are younger and thus influence bringing down the age of the population as a whole. Equally, the children of the baby boom generation of the post-war are entering their prime working years, and these people 6615 are higher earners than the generation that went before. So whilst there are fewer per head working, the percentage being paid into the NI Fund, based on their average salaries, is higher than it was in their parents’ time. The other trends that will influence the dependency ratio, and thus our ability to fund the state pension, include a trend emerging that those with higher skills will work for longer in the 6620 Isle of Man, and the Isle of Man has a higher-skills workforce, as we all know. We therefore need to maximise the productivity of those who do not work. This motion today is not a criticism of our Government. It is about encouraging strong leadership; it is about showing confidence in the Treasury Minister and his team to find a way to develop new policies and new approaches; it is about encouraging our Department of Economic 6625 Development to reskill our workforce and to encourage new higher-earning people into our economy. But none of this should be considered and done at the expense of the people who have built the prosperity of the Isle of Man. I do not see how attacking the state pension in the Isle of Man because someone got the figures wrong in 2007, and making threats that the people who have worked for 35 years with 6630 little pension provision of their own will suddenly have to suffer is the correct approach, because it will create a new class… Is it the correct approach? It will create a new class of vulnerable and it will be the direct result of policies of this Government if it happens. Therefore, I say to my colleagues in this Hon. Court: support this motion today. This motion is not about state pensions not being reviewed at any time ever. This motion – as I have said 6635 before and I make no apologies for saying it again – is about let us put our own house in order and lead by example. That day has long since arrived and we seem to keep avoiding it. I am on the Public Sector Pensions Working Group with Minister Robertshaw and he knows he has my full support on that. When we have presented that scheme to Tynwald and the review has been agreed, I will then be very happy to work with Minister Teare or Minister 6640 Robertshaw, as I am sure we all will, to find a more sustainable future setting for state pensions. Let’s not behave in a Maxwellian way by saying, ‘You might have paid this money in, but it’s our money.’ Only last week at the Public Accounts Committee, a senior officer said that Treasury has the vires to withdraw money from the National Insurance Fund without reference. Do any of us want to be part of a Government that behaves like Robert Maxwell? I think the answer is no. 6645 I would like your support today to give the Chief Minister and the Treasury Minister a clear mandate that the public sector pensions situation must be sorted out once and for all. We must back them to do this; and then, and only then, can we review the state pension – and only if required. Thank you, Madam President. 6650 The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you, Madam President. I beg to second and reserve my remarks. 6655 The President: The Hon. Member, Mrs Beecroft.
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Mrs Beecroft: Thank you, Madam President. I would like to congratulate the mover of the motion, Mr Ronan, on bringing this forward and 6660 for the amount of research that he has obviously done and the effort that he has put into his speech to this motion. I would love to be able support it as it stands; however, I do have just one small area of concern, which is why I have tabled an amendment, which is being circulated at the moment, which adds at the end of this: 6665 ‘other than increases in payments to recipients of state pensions’
My concern is that we do have reciprocal agreements in most of the areas with the UK. If they were to bring in something that would benefit the elderly in our population and this was agreed, then possibly it would be limiting… that we could not do it, because they would say, 6670 ‘Well, you have said, “We are not going to change it.”’ I was just frightened that we were limiting… that we could not change things for the better for the people who are on state pensions. So I would like to say that we cannot make things worse and we do not do any changes other than something that is going to improve matters for them until the public sector pension 6675 scheme has been sorted out – and I quite agree with you on that, but I do think we need to have the option that if we can make improvements for them, then that option should be available. That is why I have moved the amendment. It is no disrespect to the mover of the motion or anything else. It is just that concern that I had and that I wanted to put down as an amendment. Thank you, Madam President. I beg to move: 6680 Add at the end ‘other than increases in payments to recipients of state pensions’.
The President: The Hon. Member, Mr Robertshaw.
The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. 6685 In rising to propose an amendment to the motion, I just want to cast the net slightly wider to reflect on both this motion and Item 20 and the one that follows. It is important that we discuss pensions, but I am concerned that this flurry of motions tonight is in danger of rushing the fences. What the Court has to do in its deliberations is to gather a very significant amount of evidence, and that process is ongoing insofar as the Hon. 6690 Member for Castletown says there is a Public Sector Pensions Working Group in play, of which he says he is a Member, and there is also a huge amount of work going gone with regard to the state pension. These are two separate pieces of work, extremely important, and I for one… The very thought of now putting back this very important workstream on state pensions and the benefits system to some date further down the line frankly horrifies me – it truly does. 6695 This administration has an absolute responsibility to protect our current pensioners, pensioners tomorrow and our children once they become pensioners. To leave it somehow to fester somewhere down the road I think is grossly irresponsible and dangerous. What we need to do as a Court is to gather the evidence from the two separate workstreams and then consider them. They are completely separate matters. 6700 I am sure that once the Hon. Member, the mover of the motion, becomes more involved in the Public Sector Pensions Working Group, he will begin to understand better the implications and the danger of delaying the major review that we are doing, which is headed up by Ci65 and the big debate. I really must ask Members not to rush their fences: wait until the evidence comes in from the 6705 two workstreams and then make their judgements based on the evidence before them. So, with that in mind, Madam President, I propose an amendment:
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To leave out everything after ‘public sector pension schemes’ and substitute: ‘and the National Insurance based state pensions on the Isle of Man should be put on to an affordable and sustainable basis but that any decisions on these matters should be deferred pending: (a) part one of the national debate on the challenges faced by the Island to be undertaken by the Treasury Minister and the Minister for Policy and Reform in July and August 2014, which will be followed in the latter part of the year by part two, which will be the presentation of possible options to the public for consideration; and (b) receipt of the feasibility report by Tynwald in December 2014 from the Pensions Working Group into further cost sharing and other measures to provide for fairer and sustainable pension schemes.’
such that the amended motion would read:
‘That Tynwald is of the opinion that public sector pension schemes and the National Insurance based state pensions on the Isle of Man should be put on to an affordable and sustainable basis but that any decisions on these matters should be deferred pending: (a) part one of the national debate on the challenges faced by the Island to be undertaken by the Treasury Minister and the Minister for Policy and Reform in July and August 2014, which will be followed in the latter part of the year by part two, which will be the presentation of possible options to the public for consideration; and (b) receipt of the feasibility report by Tynwald in December 2014 from the Pensions Working Group into further cost sharing and other measures to provide for fairer and sustainable pension schemes.’
6710 Madam President, this administration has been highly responsible and engaged in both these areas; and in fact, quite contrary to what the mover of the motion says – that he wants to separate the two – actually, by trying to sequence them in some way he is causing confusion and very serious complications. I would beg Members not to follow this particular motion. Thank you, Madam President. 6715 The President: The Hon. Member, Mr Hall.
Mr Hall: Thank you, Madam President. Firstly, I just want to… The amendment that has come out again does not show who it is 6720 actually from, and it is not signed either.
Mr Robertshaw: It is signed.
The President: I have a copy which is signed by the Hon. Member, Mr Robertshaw, but I think 6725 the point has been taken that this is quite inadequate.
Mr Quirk and another Member: Hear, hear.
Mr Hall: Okay. 6730 Just a few words regarding the public sector pension schemes – a hugely complex area. As I see it, there are four points that I would like to make on how I see it going forward. It seems that we have broadly got about four options. The first one is that we continue with the current public sector pension schemes as reformed. Obviously the first one is not sustainable or tenable. 6735 The second option is it is going for further –
The President: Hon. Member, are you… you are speaking to the amendment to the motion. Right.
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6740 Mr Hall: The second is that we have further reforms within the structure of the existing final salary schemes, which as we know are causing a huge strain on the system, and those further reforms might involve changes to the normal… the pension age, the member contribution rates, or to the accrual rate of the final salary schemes themselves; and further capping of pensionable salary or the benefits paid out would also, I suggest, fall into that category. 6745 The third option is reforms to the structure of the schemes that would involve a greater sharing of the risks between the scheme member and the employer or the taxpayer, and reforms of this type would include such things as career average pension schemes in which the pension benefits are tied to average rather than final salaries. This could also include hybrid schemes, for example, where the pension offered is defined benefit, either final salary or career 6750 average, upon a base level of salary with a defined contribution scheme top-up at the higher levels of salary. Defined contribution schemes could also be considered within this category. The last option, as I see it, going forwards, is a move – which has been put on this floor for debate on a few occasions, I recall – to defined contribution pension arrangements that are more similar to the types that we see commonly found in the private sector today. A defined 6755 contribution scheme could be funded in the way that such schemes operate in the private sector, or it could be done in a slightly different way and it could be notional in the way that they do it… the model used for public sector… I know they do this in Sweden, and in that notional defined contribution scheme the Government does not build up a pot of assets to pay for future pension promises but the scheme instead operates on a pay-as-you-go basis with the current 6760 pension contributions meeting the current pension payments. Perhaps that is something to investigate and take a look at to see whether that would be workable or not in the Isle of Man. So, as I see it going forward, those are, broadly speaking, the four options to sort the public sector pensions – looking at it quite simplistically, I acknowledge that, but nonetheless I think that those four options could be looked at. That is all I have to say on it. 6765 Thank you, Madam President.
The President: The Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you very much, Madam President. 6770 I would like to congratulate the mover of the motion on the detailed research that he has put into his speech today, particularly the focus that he has put onto the reports from the Government Actuary’s Department. I would like to suggest that the proper way to have handled this debate was to have debated those actuarial reports right at the very beginning, and I am sure that the Council of Ministers 6775 and the Government would have found that the whole debate would have taken a much more structured format, instead of attacking it like, dare I say, a bull in a china shop. When I look at the amendment here and look at this –
The President: There are no amendments seconded, Hon. Member. 6780 Mr Cannan: – look at this proposed amendment here, Madam President, if it is seconded I can see that what we are being asked to do again is to get behind this national debate, when quite frankly I am not sure what the Treasury Minister and the Minister for Policy and Reform are actually hoping to achieve, other than to go out to the public and receive a whole diverse set 6785 of opinions based on a potentially very complex report, given the size and scale of it, and will have achieved absolutely nothing that would not have been achieved by sensible debate in here two months ago, or a month ago, on the Government Actuary’s report. I have much more to say, Madam President, but I am conscious I have got another motion on a similar vein, so I will leave it at that. 6790 The President: The Hon. Member, Mr Shimmin. ______1637 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
Mr Shimmin: Thank you, Madam President. I wish to rise to second the amendment in the name of Mr Robertshaw, but I am somewhat concerned that once again, whatever is attempted by the Council of Ministers to try and move 6795 this agenda forward, it is alleged that this is ‘alternative agendas’. The Member for Michael, who has just resumed his seat, again makes speeches publicly, he makes speeches today, he has got motions down today… What we are attempting to do is bring together all of these very complex issues, debate it with the public as well as this Chamber, and actually move the issue forward, as opposed to talking but no actual action. So we are 6800 attempting genuinely to try and gather up all of these initiatives. Mr Robertshaw has clearly got an understanding of this beyond most people within this Court. The Member for Castletown is to be congratulated on the way in which he has moved this, and we all understand the complexities of the public sector pension and the emotional problems that the public have with regard to that and the enormous amount of liability there is 6805 for the taxpayer to fund an ongoing Civil Service pension. We do understand that and we are attempting to try and get to a level to go forward, but the dates that the Hon. Member for East Douglas, Mr Robertshaw, puts in are the ones that are realistic to actually bring this debate to a level where Members of this Court, but also the public, have a better understanding. Please, for tonight, support Mr Robertshaw. Bring these together so that we can actually 6810 have meaningful debates instead of what is becoming a very disjointed period – month after month of little snippets coming out. We need to try and collate this together. It is one of those cases where… How do you eat an elephant? The elephant in the room is pensions. We cannot take it on in one go. We have to start bite-size, getting it down to a level where everybody can understand the complexity and diversity of this. Bit by bit we are getting there, but we cannot 6815 do it tonight. I support the amendment, Madam President.
The President: The Hon. Chief Minister.
6820 The Chief Minister (Mr Bell): Thank you, Madam President. I would just like to say a very few words following on from what my colleague, Mr Shimmin, has just said. I fully understand the concerns of the mover behind this. He has mentioned public sector pensions on a number of occasions and I think we are very clear where his position lies on it. In 6825 respect of that though, we have invited the Hon. Member onto the Public Sector Pensions Working Group so he has got a direct input into the development of whatever new ideas might evolve. The concern I have, and I think it is expressed by other Members too, is the linkage of the public sector pension and the state pension. These are two quite utterly distinct and different 6830 (Mr Crowe: Yes.) pension schemes altogether, and to try and link the two together… For once, I agree with Mrs Beecroft: as it is worded at the moment, it would in fact freeze the state pension until we get the public sector pensions sorted out.
Mrs Beecroft: That is the amendment. 6835 The Chief Minister: They are two quite separate issues. There are enough Members in this Court who can remember where we started with public sector pensions. It has taken over five years from when the initial changes… [Inaudible] of the scheme were started, through endless negotiations with staff, with the unions, with all the other 6840 people who were involved in this, to eventually get an overall agreement as to what a new modernised pension scheme for the Government workforce would look like. That was a massive amount of work. It is something that cannot be replicated in a matter of months, which is what
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we are being asked for now. This is why we have given certain undertakings to the unions and to the staff about the way we will approach this going forward. 6845 We may question it, but we still have the basis of the Hymans Robertson report to work on, in terms of long-term projections. If we were now to follow this resolution and support it as written, we would freeze the state pension for a very long time, because I can assure you that whatever new proposals come out of the working group it then has to be passed on to discussion with the unions, with the staff – it goes through the whole process again. We have no 6850 idea how long that process is going to take and it is misleading in the extreme, I think, Madam President, to suggest, certainly to the public, that this is something we can do quite easily – that we just need to get a few ideas together, knock them around, new long-term projections and everything will be fine. Everything will not be fine. We have done exceptionally well to get the public sector pensions reform as far as it is with 6855 by and large the staff signing up to it and the unions actually working with Government to bring in a scheme which… With hindsight, it could be seen to be overgenerous in some quarters, but it was a freely entered into scheme which the unions signed up to and helped us work through. Our pensions expert helped to advise us on it. It was approved by this Hon. Chamber. It has gone through all the stages. You cannot just rip that up overnight and say we are going to bring in a 6860 new set of rules: we have got to do it – the big bang, get rid of them all. It is a dynamic situation. There are a lot of competing pressures outside at the moment that we have to work our way through before we get to a position of further modernisation. The reason I have set up the working group and am supporting Mr Robertshaw in the work he is doing is because we are concerned, obviously, with the annual deficit which has to come 6865 out of the taxpayer’s… because of the shortfall. We are aware there are problems there and that is what we are trying to address, but they have to be addressed in a systematic structured way so we fully understand what the implications of these are. Otherwise, in five years’ time we will be back again with a further set of requirements. At the moment, although we have an unhappy workforce, the workforce by and large has 6870 gone with us on this. If we try to blunderbuss our way through with a new set of proposals simply to meet an artificial deadline, then I think that could well… The staff will vanish and we will have problems on many fronts. We have deliberately set out to try and keep everybody on board on this. That is why it has taken longer than might otherwise be the case, but it has been a fruitful way, it has kept peace across Government, it has reassured most of our staff that we are 6875 working obviously to balance the budget but also in their best interest as well to sustain their pensions long term. It is completely and utterly wrong to try and link what we are doing on the public sector pensions with the absolute necessity to start work on the long-term projections which have been given to us now on the state pension. It is not a choice of either/or: we have to work on 6880 these two workstreams in parallel. In both cases it is going to take a long time before we actually have a workable solution – several years before we have got the whole thing up and running, I would suggest. Madam President, recognising the concern and the frustrations that the Hon. Member has over what he sees as delay on the part of Government to bring in change, I would urge Members 6885 to support Mr Robertshaw’s amendment. We may not have it right yet, but I believe we are working in the right direction. These two issues are two of the biggest issues facing the Island at present and they will do for a long time. It needs a mature debate, a mature understanding; it needs actual facts and figures behind it, not an emotional contribution. If there was a quick fix that we could bring in we would bring it in tomorrow, but there is not one there. It is not that 6890 easy. We have many thousands of staff out there we have to keep on board to get this through. Madam President, I recognise the concern of the Hon. Member, and indeed the Hon. Member for Michael, but I think the language which is being used, not necessarily by these gentlemen but by others over the last few weeks, is starting to muddy the waters by bringing these two pensions together as a single issue. They are not and they must not be, because ______1639 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
6895 otherwise we really will fall between two stools and end up with the worst of all worlds if we cannot help it. Hon. Members, we are committed to progress on both fronts. We know the problems in the PSPA, we know the threat – albeit in the distance at the moment, but the threat – that is building up in the state pensions, and we are taking what we think are the appropriate steps. 6900 But those steps cannot be rushed, Madam President, and I urge Hon. Members to please support Mr Robertshaw on this.
The President: The Hon. Member for Onchan, Mr Karran.
6905 Mr Karran: Eaghtyrane, I would like to second my colleague the Hon. Member for South Douglas’s amendment to this proposal. I think it is sensible that we cannot freeze it. Personally speaking, what I get annoyed with is the fact that I cannot remember… I think it was a little bit over 10 or maybe 12 years ago that we were on about the National Insurance funding crisis happening, and unfortunately it is always jam tomorrow. Nobody wants to make 6910 the hard decisions. As far as the public sector pension is concerned, I cannot remember when we moved the motion that the final salary pension should be stopped for new recruits and that there should be a notional fund developed so that that money could help with the initial problems of cashflow, but if we had done it then we would not be in as big a hole as we are now. What concerns me is 6915 that many in this Court want to talk the talk but they do not want to walk the walk as far as trying to get these things addressed. I am concerned that what we have got is a situation where we have got stalemate and we are going to have to break these proposals. I thought about trying to resurrect my amendment from about seven or eight years ago, saying the new recruits are going to have to go into a money purchase scheme and that we have 6920 to have a notional fund that invested that, to go through the programme of that, but actually the money is being used, but the credit for that notional scheme would be honoured as far as the money purchase scheme. What I am concerned about here is that when we bring up hard decisions, hard ways of trying to get people to do it, everyone wants to run in different directions. 6925 My concern with the amendment from the Minister… I do not question his sincerity and I know he is committed to it, but I have to say that I think he has got as big a problem on his side as we have got on this side when we hear these ones all ranting on that we must cut, we must do this… and then, when we bring proposals forward, they are running in all directions. I am tempted not to vote with the Minister, even though, to be honest with you, the fact is 6930 that when you look at the situation, I do not think there are the people in this Hon. Court who will walk the walk that needs to be done in order to make sure that the only debt that we leave for the next generation is a debt of gratitude for what we have done whilst we have been in here. I do hope Members will support the amendment by my party leader. The point is that this is 6935 to try and create responsibility as far as this issue is concerned, so I do hope that Hon. Members will support it. I would like people to stop trying to rewrite the history books, because the Hansard will show what is fact and what is fiction. All we have seen is people running away. I am supposed to be the populist in this Court, and yet we are prepared to make these decisions. The people 6940 outside are crying out for leadership. Leadership: that is what they want. They want decisions, and if they are fair decisions and we are prepared to get a bit of a slap as far as our potential income, they will respect that. That is what has got to be done. I hope we can get this sorted out, but please support the amendment of my colleague, because it will actually help the situation. It will actually help. It is another lifeline to executive 6945 Government.
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The President: The Hon. Member, Mr Thomas.
Mr Thomas: Thank you, Madam President. 6950 Of course the National Insurance Fund and the National Insurance payments are separate, different from public sector pension payments and any fund, even if it is not ring fenced, to do with that. But the point of the mover’s motion is about the relative situation of those two funds. The National Insurance Fund has a £650 million to £700 million fund backing it, which is not expected to be depleted until 2054 – in fact, it will be rising until 2030-something; whereas the 6955 public sector pension liability is £2.3 billion. The deficit for the public sector pensions has been there since 2008, identified in the Written Answer on 5th November 2013, but the National Insurance situation is in surplus when you include the interest on the Fund that we have got. As we heard this morning from the Minister for Policy and Reform, some policies that are already there for us to take in National Insurance are already there for us to take, and that will 6960 profoundly change the situation; whereas, as is observed in the actuarial statements in the Public Sector Pensions Authority annual reports that were recently received, things are worse in the public sector pension situation than had been expected. Also, we already spent our £1 million on consultancy for the public sector pension fund back in 2008-09, and we are only just spending it now. So I will be supporting the motion because I see the motion as just being 6965 about the relative importance of the two issues. Of course our staff are important, Government staff are important, but the people of the Isle of Man are important as well, and what we need to do is make sure… We need to be fair to everybody in this society, because the debt is all of our debt.
6970 The President: The mover to reply.
Mr Ronan: Thank you, Madam President. I am very conscious of the time and I will be brief because, as the Chief Minister said, this has been revisited many times. I will try and keep this as brief as I can. Just a few… obviously the 6975 people who have contributed… Mr Thomas, I obviously thank you for seconding the motion and for the details which you have said are very relevant and we are all very concerned about them. Mrs Beecroft, thank you for the amendment. It is something that personally I am quite happy with. I think it does make sense and is maybe something I should have thought about, but yes I 6980 have got no problems with that amendment and I thank you for your contribution. The Minister for Policy and Reform, Mr Robertshaw… I have worked with the Minister for two years on Social Care. I am fully aware of his passion and his concerns for the way the Isle of Man is and going forward. Mr Karran said about walking the walk: well, I do know that if there is one person in here who will walk the walk it will be that man over there. We are just slightly in 6985 disagreement here. To me, this is just a simple process of what the public perception is right now. As Mr Thomas has just quite rightly said here, we have this huge forecast deficit for public sector pensions and the concerns… and I just think it is about simply decoupling until we sort the public sector pension out. I am not saying about to get to the finish line… [Inaudible] to get to where it is sustainable… just get to where we need to be. 6990 You mentioned that you are very concerned about causing a frenzy. I can assure you, sir, I have not caused a frenzy; this is being pumped up by others more than me. I am trying my best certainly to work with Government and I do not think I can be criticised in my two and a half years plus in here for not supporting Government. I have been very supportive of Government, but this is something which does cause me great concern. 6995 I do understand that it is not a question of flicking a switch here – it does not work like that, I know that – but the public are uneasy about this, and what this motion is about is as simple as that: it is about decoupling the two processes until we sort the main problem within our Government right now. ______1641 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
I would like to thank Mr Hall for his comments. He mentioned the four options, which are 7000 interesting. He understands it being very complex. I also thank Mr Cannan for his comments and the very interesting comments about the GAD report, saying about... [Inaudible] at the time. Well, maybe it should have been. We are doing what we are doing now. I agree with you, to be honest with you. The Minister for Economic Development, again I understand your support for Minister 7005 Robertshaw. Just to repeat really about concerns about not working with CoMin – there are a lot of those in here who, over two and a half years, have worked and will continue to do that, but please understand, as I said in my speech, this is not a dig at Council of Ministers; far from it, I believe it is a helping hand. I have mentioned a few points that the Chief Minister made. I fully understand his concerns 7010 and I have spoken to the Chief Minister many times. I am moved by some of the stuff you have said to me about the way the Isle of Man was in the 1970s, sir, when you first got involved in local politics and were then elected. I quote that to many people and I share that concern. There is just a little bit of a difference of opinion with us at the minute, but again I think long term we think the same on where this Isle of Man should be. 7015 I will just sum up quickly, Madam President. Thanks again to Mr Karran. He mentions about ‘jam tomorrow’. Again he said ‘walk the walk’– well, I am with Minister Robertshaw certainly on public sector pensions. It is just… (Interjection) I am sir, I promise you, because I think what is important is to… This is a simple process to me, Madam President: it is about decoupling, it is about separating the two, like the 7020 Chief Minister said. But show the public that we have put our own house in order first – it is as simple as that. Thank you, Madam President.
The President: The motion before the Court is set out at Item 23 on your Order Paper. To 7025 that motion, we have two amendments: one in the name of Mrs Beecroft and a second in the name of Mr Robertshaw. I will put to the Court the amendment in the name of Mrs Beecroft first. Those in favour of that amendment, please say aye; against, no. The ayes have it.
7030 A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 7, Noes 15
For Against Mrs Beecroft Mr Anderson Mr Cannan Mr Bell Mr Houghton Mrs Cannell Mr Karran Mr Cregeen Mr Ronan Mr Cretney The Speaker Mr Crookall Mr Thomas Mr Gawne Mr Hall Mr Henderson Mr Quayle Mr Quirk Mr Robertshaw Mr Shimmin Mr Skelly Mr Watterson
The Speaker: Madam President, 7 votes for and 15 against in the Keys. 7035
______1642 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
In the Council – Ayes 1, Noes 5
For Against Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: With 1 vote for and 5 votes against in the Council, the amendment fails to carry. I will now put to the Court the amendment in the name of Mr Robertshaw. Those in favour, please say aye; against, no. The ayes have it.
7040 A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 14, Noes 8
For Against Mr Anderson Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mrs Cannell Mr Cretney Mr Houghton Mr Crookall Mr Karran Mr Gawne Mr Quirk Mr Hall Mr Ronan Mr Henderson Mr Thomas Mr Quayle Mr Robertshaw Mr Shimmin Mr Skelly The Speaker Mr Watterson
The Speaker: Madam President, in the Keys, 14 for and 8 against.
In the Council – Ayes 6, Noes 0
For Against Mr Butt None Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 6 votes for and no votes against. The amendment therefore carries, Hon. Members. I now put to you the motion as amended as the substantive motion. Those in favour, please 7045 say aye; against, no. The ayes have it.
______1643 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 14, Noes 8
For Against Mr Anderson Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mrs Cannell Mr Cretney Mr Houghton Mr Crookall Mr Karran Mr Gawne Mr Quirk Mr Hall Mr Ronan Mr Henderson Mr Thomas Mr Quayle Mr Robertshaw Mr Shimmin Mr Skelly The Speaker Mr Watterson
The Speaker: Madam President, in the Keys, 14 for and 8 against.
In the Council – Ayes 6, Noes 0
For Against Mr Butt None Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 6 votes for and no votes against. The motion as amended 7050 therefore carries, Hon. Members.
24. Public Sector Pensions Authority Report to Tynwald 2013 – Amended motion carried
The Hon. Member for Michael (Mr Cannan) to move :
That Tynwald is of the opinion that full consideration should be given to the report [GD No 0050/13] laid before Tynwald by the Public Sector Pensions Authority and accepts the requirement for the economic burden to be distributed equally amongst all citizens; and recommends that the Council of Ministers should now draw up appropriate legislation to enable certain actions to be enforced that will assist in providing a stable financial platform for the future.
The President: We turn now to the final Item on our Order Paper, Item 24. 7055 I call on the Hon. Member for Michael, Mr Cannan.
Mr Cannan: Thank you, Madam President. I appreciate Members have just had a similar debate, so I will try and be as concise as possible. Nevertheless, this is an important issue.
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7060 I want to pick up on something that has just been said in the previous debate: this issue of the state pension and the public sector pension being two separate issues. Well, they are two separate schemes but they are one issue; and central to this whole issue, which the Ministers need to understand, is leadership. That is what – as has just been said by I think it was my good friend, Mr Ronan – is key to what the public expect. 7065 How do the Ministers think that they will have a sensible conversation on state pensions having had nothing to offer on public sector pensions, which are growing incrementally month on month, rising upwards and upwards, and eventually sooner or later will hit £50 million a year? Do the Ministers expect to be able to go out to the public to justify increased charges, rates 7070 reviews, reduction in pension allowance, higher costs of healthcare and reduction in child allowance, having done nothing with the public sector pensions? Do you expect to justify £¾ million on consultants’ fees for a fully funded state pension scheme, when a scheme with £1.2 billion-worth of liabilities and growing remains untouched? Madam President, I brought before Tynwald in November 2013 a report that was put 7075 together by the Public Sector Pensions Authority, which focused on the actions that have been taken elsewhere in Europe and closer to home to deal with the growing liabilities of these unfunded schemes. We are not alone in this dilemma and I want to pick up on some of the actions that have been taken elsewhere to even the keel. Reading the document which the PSPA published and which details the current state of play 7080 in France, Holland, Sweden, Finland, the USA, Australia and Ireland, we can see there are definitely some common themes emerging. I would like to highlight some of these themes and also focus on the actions of Ireland in particular, our nearest neighbour in these examples and a country that appears to have pulled itself back from the brink of financial disaster through quick and effective remedial action in a relatively short space of time. 7085 First of all, there appears to be, I think, a clear recognition that unfunded defined benefit schemes, such as those that are currently in existence in the UK and the Isle of Man, are simply not sustainable, and there is now a definite focus and move towards defined contribution funded schemes. Secondly, the schemes are now almost all based on career average salary and not final salary. 7090 Thirdly, contributions to these schemes are at least a minimum of 10% of salary, rising to 18% in some cases. And fourth, there appears to be a strong theme of capping lump sums. I want to pay attention particularly to the Irish model that was adopted as part of a series of reforms agreed as part of the EU bailout terms for debt reduction and brought into force in 7095 2010. Clearly, the Irish situation in the immediate aftermath of the 2008 crash was a very serious one, and indeed the country was in urgent need of an EU bailout; but what I think was impressive about the management of the situation was the recognition by the leadership that they could not possibly impose required cuts to public services and impose higher taxes without 7100 first making the necessary changes to the unsustainable burden of the public sector pensions, which were modelled at the time on the same basis as those here in the Isle of Man. These changes were imposed under one piece of legislation – the Financial Emergency Measures in the Public Interest Act 2009 – and I want to highlight to Members of this Hon. Chamber some excerpts from the introductory wording in that Act, which I believe bear 7105 relevance to the economic circumstances of the Isle of Man. In the introduction it says:
‘WHEREAS… a decline in the economic circumstances of the State have occurred,’
Madam President, that is the same situation as the Island. (Interjection by the Chief Minister) Yes, it is, Chief Minister. What do you think has happened? You have been banging on for the
______1645 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
last two and a half years that we have got to make hard decisions, that we are in serious 7110 problems –
The Chief Minister: Ireland was bankrupt; we are not.
Mr Cannan: – that we have to change the way that we do things and that we have to make 7115 some tough decisions in order to progress sustainably – so it is the same situation. I appreciate that Ireland was in far greater financial… dire need of money, but it is exactly the same situation. It says:
‘WHEREAS… there are significant and increasing Exchequer commitments in respect of public service pensions;’
– the same as here on the Island, incrementally increasing month on month, year on year. It says:
‘WHEREAS it is necessary to cut current Exchequer spending substantially to demonstrate… that public expenditure is being significantly controlled.’
– the same here on the Isle of Man. And:
‘WHEREAS the value of public service pensions is significantly and markedly more favourable than those generally available in other employment…’
– again, the same as on the Isle of Man. 7120 That was the introduction to the Act that brought about immediate changes to the public sector pension schemes. It was interesting that in the Financial Times on 19th October 2009, it reports:
‘Brian Cowen, Ireland’s prime minister, on Sunday set his right-of-centre government on a potential collision course with trade unions by signalling plans to make deep cuts in services and public sector wages… Mr Cowen, leader of the populist Fianna Fail party, told the Sunday Independent newspaper: “There comes a time when you can’t continue to borrow at the rates we are doing. And that time has come.”’
It then goes on:
‘David Begg, the leader of Ireland’s trade unions, warned the country was “on a trajectory to tear ourselves apart”. He [warned that] it would be “hugely damaging for [the government] in the long run as a party” [to undertake the cuts that they were proposing to public sector pensions.]’
Well, what has happened? Unemployment is at its lowest for five years, according to the Irish 7125 Times; Moody’s have upgraded the country’s credit rating; Standard & Poor’s have said the economic recovery is underway; and reports are coming through of success for Google and Apple, firms that have relocated and grown in the bad years. Madam President, I raise all this purely because it demonstrates clearly the leadership that was undertaken to resolve the situation: leadership that addressed an issue, that gave the 7130 government a platform to be able to go and communicate with its people; leadership that also meant that the workers, those in employment within the public sector, were given added protection because the unsustainable issue of this matter was addressed. If the Council of Ministers are absolutely serious about sorting out the problems we are facing, they will have no hesitation in supporting this motion, which will ensure that legislation is 7135 drawn up as a matter of urgency to bring forward the changes necessary to ensure that we fairly and equitably address the balance of payments between the public and the private sectors, and more specifically between the public sector workers and their counterparts in the private sector.
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The work of the working group can carry on, but the pressure is now on for results and this directive, if supported by Tynwald, will encourage the working group to achieve the results that 7140 it is seeking. For the Minister for Policy and Reform, the strong support that he receives from Tynwald today will give him much greater leverage in his negotiations and discussions in the next few months. (A Member: Hear, hear.) Madam President, this comes down to leadership. It is about setting the platform, about 7145 being able to go out to the public and say, ‘Yes, we have made the changes necessary, we have done everything we can to put the public sector on a secure, firm and sustainable footing, and now we have to address other issues that are personal to you and to the citizens of this Island.’ Thank you, Madam President. I beg to move.
7150 The President: The Hon. Member for Douglas West, Mr Thomas.
Mr Thomas: Thank you, Madam President. I beg to second and reserve my remarks.
7155 The President: The Hon. Member, Mr Robertshaw.
The Minister for Policy and Reform (Mr Robertshaw): Thank you, Madam President. In rising to propose an amendment, I just want to grasp the absolute essence of what the hon. mover has said. 7160 He accuses us of lacking leadership. On 22nd January, the Hon. Member, the mover of this motion, supported this motion:
‘That Tynwald views with concern the continued rising cost and liabilities associated with public sector pensions including Tynwald Members’ pensions, and calls upon the Public Sector Pension Authority: (a) to undertake a full and comprehensive valuation of the Government Unified Scheme, Tynwald Members’ pension schemes and relevant pension schemes as applicable; and (b) with the Pensions Working Group to report to Tynwald by December 2014 on the feasibility of implementing further cost sharing and other measures to reduce the long term liability in order to provide for a sustainable and fair pension scheme.’
I have been involved with the PSPA for a few weeks. We have formed the working party. There is work going on now by PSPA leading up to our deliberations. We are being consistent, 7165 we are being clear, we are being determined in our actions. That is leadership. That is being clear. But what does the motion say here, this evening? It completely ignores that and starts going off and says:
‘… and recommends that the Council of Ministers should now draw up appropriate legislation to enable certain actions to be enforced that will assist in providing a stable financial platform for the future.’
7170 Madam President, the Hon. Member is rushing hither and thither, grasping ideas, trying to say the right thing. That is not leadership: that is absolutely the reverse. Hon. Members, we were serious, the Court was serious, on 22nd January – the instructions, the leadership it gave. The Council of Ministers was absolutely clear and we will carry out those duties and we will deliver the results in December, as requested. We will also, of course, include 7175 the Report to which the Hon. Member refers, but we will not be dragged hither and thither in the way that he is suggesting, because it is just a fool’s paradise. On that basis, Madam President, I propose the following amendment: to leave out everything after ‘That Tynwald is of the opinion that’ and substitute the wording shown, such that the amended motion would read as follows: 7180
______1647 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
‘That Tynwald is of the opinion that in preparing its report for the December 2014 sitting of Tynwald the Pensions Working Group should give full consideration to the report laid before [23rd October] Tynwald by the Public Sector Pensions Authority and recommends that the Council of Ministers should only draw up appropriate legislation to enable certain actions to be enforced that will assist in providing a stable financial platform for the future once options arising from the Pensions Working Group Report have been fully considered and the implications of those options have been fully evaluated.’
Madam President, I beg to move the amendment:
To leave out everything after ‘That Tynwald is of the opinion that’ and substitute: ‘in preparing its report for the December 2014 sitting of Tynwald the Pensions Working Group should give full consideration to the report laid before Tynwald by the Public Sector Pensions Authority and recommends that the Council of Ministers should only draw up appropriate legislation to enable certain actions to be enforced that will assist in providing a stable financial platform for the future once options arising from the Pensions Working Group Report have been fully considered and the implications of those options have been fully evaluated.’
The President: Hon. Member, Mr Shimmin. 7185 Mr Shimmin: I beg to second, and in doing so, Madam President, I do not believe that this Court is actually that far away from itself. We always do this to ourselves: we actually try and create a tension and a hostility which at times is not there. Every person in this Chamber believes that the pensions issue is one of the ticking time bombs that we, as a group of people, 7190 have to deal with. I would urge Hon. Members to look at the words in this amendment which is going around. The report will come here at the time that was specified, it will be comprehensive, it will try and deal with those… and all Hon. Members and the public will have the opportunity to grasp this nettle once and for all. 7195 Many people in this Court and outside have talked about this for some years. We are getting there. Now is not the time to flip-flop around. It is a case of get this report, deal with it, take the action and take on the chin that hostility which will inevitably arise from the public, from our staff, when they see the changes that are going to be necessary. But now is not the time for that. Please, again, support the amendment. 7200 The reason for three amendments in the same Minister’s name is because he is the Minister for Policy and Reform – he is the Minister who has taken Social Care and this issue by the horns for the last two and a half years, and he is the person now tasked with leading this forward. It is not a surprise, it is not a Council of Ministers’ attempt to try and sideline things. It is the right Minister doing the right thing at the right time. We need your support at this moment. 7205 Thank you, Madam President.
The President: The Hon. Member for Douglas South, Mrs Beecroft.
Mrs Beecroft: Thank you, Madam President. 7210 Regardless of the words of other Ministers that have been directed at the mover, I congratulate him on bringing this motion tonight. I congratulate him on his speech to the motion. I think it is only right that we show the Manx people where the priorities are – that we should not be making cuts against them until other matters have been resolved. But we do have to act quickly. We cannot just allow it to keep going on and on, because next 7215 year we are going to be coming into the run-up to the elections: who is going to want to make unpopular decisions then? I have tabled an amendment, which I believe is being distributed now. It is a very brief amendment and it is just altering one word in the original motion, and that is on the third line:
______1648 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
‘… the requirement for the economic burden to be distributed equally amongst all citizens;’
I think I would prefer to see the word ‘equitably’, because we have seen the problems that 7220 the toilet tax brought in when it was shared ‘equally’ rather than fairly and ‘equitably’. (Interjection) I believe that the mover of this motion is not against my amendment and I hope it is received in the spirit it is meant. I just hope that Members of this Court will support the amendment, which is basically supporting the original mover of this motion, because it is what should be done. It is as simple as 7225 that: it is the right thing to do at this time and he has my full support. I beg to move:
After the words ‘economic burden to be distributed’ leave out the word ‘equally’ and insert the word ‘equitably’.
The President: The Hon. Member, Mr Ronan. 7230 Mr Ronan: Thank you, Madam President. I would also like to congratulate Mr Cannan on his speech and his passion. Passion is rife in here tonight and we all care deeply about this subject.
7235 A Member: We are all passionate.
Mr Ronan: I would just like to say a couple of things. I had a speech prepared, but I would be sounding like a parrot if I went on, to be honest with you. I think just to mention that we all signed up to Mr Quayle’s motion in January. I think we have 7240 got to ask ourselves why this Tynwald has been dominated by pensions? We all signed up to it. What happened in the middle of this – there was a furore regarding state pensions which brought it all back to the burner again. I do not necessary think tonight has been a bad thing. I think we all know where we are. I have listened to Minister Shimmin’s comments, and as always… he said we are not too far apart 7245 here. We are not too far away from this. We all know it is a deep problem of ours. I am moved to go with the amendment from Minister Robertshaw, after hearing all of the debates tonight, and draw this back in. I would just like to finish on something which has interested me as well as the mover, Mr Cannan – his comments about Eire, the Republic of Ireland. I think yes, we are different to 7250 them, but the difference with the Republic of Ireland and the Isle of Man is that they were able to be bailed out by the European Union – countless billions of pounds. They were very lucky. They were going to go bust, we all know that. They are bouncing back out of it – thank goodness, because hopefully we will feed off the back of that somehow. But the Isle of Man does not have that luxury. (Interjections) We are on our own. Our money is our own. We cannot go knocking at 7255 the door of Westminster, Holyrood, the parliaments in the UK, the European Union. We have not got that luxury – which arguably makes the points we are making more serious. So let’s just think of the bigger picture. Sometimes, it is easier to go, ‘Yes, but they do this and they do that.’ The Isle of Man’s money is its own, and thank goodness in a lot of ways. I just believe it makes this big burning issue a problem and a situation that we need to talk about. It 7260 needs to be in the public arena. You are going out to talk about it, Minister, and I am very interested to see what will come of that. I would just like to thank everybody for all the debates tonight. It has been very interesting. I will sit down. Thank you, Madam President. 7265 The President: The Hon. Chief Minister.
______1649 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
The Chief Minister: Thank you, Madam President. Again, I have only a few points to make, and in part the previous speaker at least touched on it. 7270 It is only four months, I think, since we had the debate here which set up the Public Sector Pensions Working Group. That has been meeting now for some little time, but we have a huge amount of work to do. But it is only four months. You cannot expect miracles in four months in a very complex and sensitive area of policy development. I know Mr Robertshaw and latterly Mr Ronan, who has joined him, are working flat-out to try and assess what the situation is for 7275 the future and come forward with positive recommendations. So you are going back very quickly on an issue which only a matter of weeks ago you all voted to set up and establish, all of us sharing those same concerns. But the issue that has really brought me to my feet, Madam President… because, frankly, I was not going to speak on this tonight because the issue is self-evident. When the mover of this 7280 resolution starts talking about the close comparison that there is between the Isle of Man’s situation and Ireland’s, I have to pinch myself to see if we are in the same room together. The Irish situation was totally different from the Isle of Man’s. The Isle of Man had a third of its income taken arbitrarily by the United Kingdom government, as we all know, through the VAT sharing agreement, and that has precipitated a series of actions that we have had to take to try 7285 and rebalance the Budget. We get attacked – and we have heard it from the Hon. Member again tonight in the form that his father would be proud of – that the Council of Ministers are not showing leadership, that we are running away from the problems, that we are ducking and diving and avoiding these difficult decisions. 7290 Madam President, when Ireland collapsed, it really did collapse: the banking system collapsed, the business community collapsed, they had tens and tens of thousands of people unemployed – unemployment was high up in the teens of per cent of unemployment. I think somewhere close to 100,000 young people emigrated from Ireland. They were forced out of the country (A Member: Hear, hear.) because there was no work for them at all. They exported their 7295 unemployed on top of the near 20% unemployed they had at their peak. Yes, Ireland brought in emergency powers. Ireland brought in emergency powers as the price that they were forced to pay – not that they wanted to, but that they were forced to pay – by the IMF and the European Union before they would grant them loan facilities in the first place. If they had not done that, the country would have collapsed completely. It was that dire, the 7300 situation there. What have we done? We have been challenged with the loss of a third of our income… Again… Sorry, the other point I was going to make about that: the Irish economy collapsed into the deepest recession it has ever known. The Isle of Man has taken a steady, mature approach to everything that we have had to face. We have set out a rebalancing programme on our 7305 revenue account. We have done everything possible to maintain economic growth during this period. We have done everything possible not to destabilise the local economy – which the sacking of a thousand civil servants, which I was advised to do not too long ago, would have totally destroyed. We have a growing economy, we have today 2.2% unemployed, we have buoyant reserves. 7310 Ireland had none of these. Ireland was an absolute basket case and it was only on the instructions of the European Union that these changes were brought in, and the reason there was not blood in the streets, as many people expected in Ireland, is because they knew there was no alternative. They had the stark choice of either imposing very, very severe austerity on all citizens, or it would have gone under completely and they would have lost everything. 7315 The Isle of Man has not done that. We have taken a sensitive, mature approach to balancing our care for our society, our care for the Manx people, our care for Government workers to keep people – as many as possible – in employment. We did not go down the route of slash and burn, which Ireland had no choice over. I believe our humane approach to rebalancing the Budget, to ______1650 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
maintaining Government services to a high standard, to progressively downsize them, is the 7320 right way forward. It shows a true compassion and concern, in difficult times, for our people. Maybe that is not leadership. Maybe you would rather see blood on the streets. Maybe you would rather see a thousand civil servants sacked tomorrow. Would that actually solve the problem? If you sack a thousand civil servants, you have got to pay them off (A Member: Hear, hear.) (Mr Crowe: Yes.) – their compulsory redundancy. (Interjection) You have got to then pay 7325 them benefits. You then lose all the contributions that they would be making to their pensions. If we chose that route, the deficit and the crisis we are facing now over the PSP budget… the present figures would pale into insignificance to the challenge we would be facing if we took that hard-headed slash-and-burn approach to rebalancing the budget. We are moving forward. We have taken the advice of our pensions expert. Their advice was – 7330 and I pick up the point Mr Karran has made – that the final salary scheme is something that we could afford. It was on their professional advice that we took that – that the structures that we put in place were sustainable over the long term. There are blips at the moment because we are downsizing. We are having to pay off… We have paid off about 700 workers in the last three or four years. We have lost their contributions to the pension. 7335 All these issues need to be taken into account, Madam President, and it is simplistic in the extreme to say that the public outside are jumping up and down and they want us to have blood on the carpet. I do not believe the Manx community lack that compassion. They want to see a proper, balanced, humane downsizing of Government and its responsibilities. We have fought so hard. Mr Karran has referred to it on a number of occasions, and Mr Cretney as well, that there 7340 are only the three of us left now to know just how hard the Isle of Man Government in particular had to fight for 25 years to get the Government and the public services and the rights of the citizens up to the standards that we have today. It was bloody hard work. I am not, as Chief Minister, prepared to throw all that away in some macho gesture to appease some of our critics outside. To use the Hon. Member for Michael’s words, we are 7345 elected as leaders of this Island as well as managers. We are not here as a bunch of populists to respond to whatever the latest whim is. We have to take a mature and sometimes unpopular approach to develop our policies, and this in particular is one. Madam President, I am very well aware that there are concerns about the scale of the public sector pensions deficit. It worries me as well, but we are determined that we will get to the 7350 bottom of this and we will have a new process in place in due course. The committee is working on that now. It is your committee. You set it up only four months ago, only a matter of weeks ago – it has to have time to think this through. I would just go back to the comments I made in the previous… Mr Ronan’s resolution. The scheme that we have today took five years to implement. It was painstaking. I was involved in it 7355 from the start. But we have worked as partners with the unions, with the staff, right across the piece. We had problems from time to time, but overall we took everybody with us because they knew where we were coming from, they knew that we were genuine in our desire not to unnecessarily damaged not just their life prospects but the prospects of many people outside in terms of the services they get. We have kept to our word in dealing with the staff across 7360 Government, Madam President. We have worked closely with the unions, we have listened to what the unions have put forward, and as a result we have got through all this change – the most radical change… If you go back 25 years I never thought it would be possible to do what we have achieved without social and union activity to respond to it, but we have achieved it. We are on target to resolve these issues, but we have to have time to do it. This is not the 7365 moment for knee-jerk populist responses – which might play well on Manx forums, but in terms of the livelihoods and the lives we have responsibility for it will be damaging. Madam President and Hon. Members, please do not be seduced by this idea that we are exactly the same as Ireland and Ireland got through it with a lot of blood so we should be able to do the same. We are talking about two quite utterly different situations, economic and 7370 politically. ______1651 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
I am committed, as I have said, to ensuring that we do have a solution to this burgeoning deficit, but even if – and I am sure he will – the committee and the committee chairman come back by the end of the year with a series of recommendations, it will take a lot of discussion and negotiating and bargaining with the workforce and the unions before we can bring in those 7375 changes. So expecting a change overnight… it is just not going to happen. It is not practical. This is a moment for leadership, Madam President, but leadership with strong nerves and a clear vision of what we want to achieve at the end of it, and this is what we are committed to doing. I hope Hon. Members will please support the amendment from Mr Robertshaw today, 7380 because that amendment will give us the time to resolve these issues and start to put us back on an even keel again.
Mr Cretney: Hear, hear.
7385 Mrs Cannell: Vote!
The President: Hon. Member, Mr Karran.
Mr Karran: Eaghtyrane, I will second the proposal of my hon. colleague for South Douglas. 7390 I have to say there are points that I am quite sympathetic to in both of these proposals – the idea of actually… the dates that have been put down… At least there is some clear declaration from Minister Robertshaw as far as that is concerned. I just think that the fact is that the problem I think the Chief Minister needs to realise is that we might not be in as dire situation as the Irish Republic, and obviously, to be fair to him, we 7395 should be trying to talk everything up; but when he comes out with the statements about the final salary system of pension being affordable… Alright, I left school at 15 with a dolphin certificate, but the fact is I am afraid that your professionals are deluding themselves. There is no way we can afford a final salary pension scheme. The sadness is that it should have been addressed many years ago when we put down the motion to stop new recruits from being in the 7400 final pension scheme – that was the time. The worry I have in this Court, Eaghtyrane… I am not interested in macho politics. All I am interested in is making sure that the debt left to the next generation is only of gratitude for what we have done in here. But the fact is what I worry about is that if we do not start addressing these gaping sores, haemorrhaging the lifeblood of the Island as far as public finances are 7405 concerned, there is a danger that we will bleed to death. We need to accept that, and that is why I find myself in a difficult position as far as the original motion and this one. What I would like is some simple declaration as far as where we go – some clarity. Some of us are prepared to actually make decisions, suggest where the lines need to be drawn – and we keep running away. But the problem is the longer we run away from these things, the more 7410 difficult, and the less flexibility we will have on this subject. What I worry about, Eaghtyrane, is that… Maybe we will not end up like Ireland – I take it from the input by the Ard-shirveishagh that there is no intent there – but my biggest concern with the way things are going with his Government is that we will end up with a massive fire sale of the public assets because of the crisis of funding, and I think the public sector pensions issue 7415 will be a major factor if that has to happen. I hope that one is completely wrong, but I do feel that this issue is one of the most important issues that we have to face on this Island. I would have been happy to move an amendment that the final salary pension scheme was stopped, like I did years ago as far as the public sector is concerned, including MHKs and MLCs, because I do think that that is going to be the real keel of the situation. Whatever we do to our 7420 staff we have to do to ourselves. I hope that Members will support the amendment by my hon. colleague.
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I also hope that what we do not get… and I do feel that there is a danger of what the Chief Minister says – that there are people putting lines down, but they are in sand. What I think is that what we have got to be seen… is when we come back with some real commitment as far as 7425 this is concerned, we will actually see this Court united as far as making those hard decisions. What worries me is that we are two years, in September, away from a General Election. I have sat in here for 29 years, and what I do not want to see is… The pressure will be on even further, as far as Members who are looking to the next Election, as far as making those hard decisions. 7430 I am only sorry, Eaghtyrane… and when people read the Hansard… that people did not take the leadership on this as far as starting to address the imbalance we have got at the present time. But do not delude yourselves: the public sector pension scheme… They might be all experts, but basic economics say there is no way this Government can afford this without actually hacking back the very things that Mr Bell was on about that we achieved. It is going to 7435 be an either/or. Hon. Members, what we need is… if the Government does not in this debate, it needs to come up sooner and actually see whether these people are committed to what they are saying in this Court… actually resolving the issues. I would like to see a resolution done as far as this proposal much sooner than December of 7440 next year. (A Member: This year.) This year. I believe we should be trying to push this report forward to September and let’s get it debated in October; because the sooner we get this debated, the sooner we can bed in and get these unpleasant things that need to be done…
The President: The Hon. Member for Douglas West, Mr Thomas. 7445 Mr Thomas: Thank you, Madam President. I do not think the mover of this motion wants blood on the floor. He merely wants to take all staff – those with good pensions, those with not-so-good pensions and those with no pensions – and all of the people in the Isle of Man together at the same pace. 7450 It is a pretty serious issue we have with the public sector pension liability. I just want to give one figure before I sit down and one ratio before I sit down, in the way that the Minister for Policy and Reform likes giving these statistics. We have learnt from the Minister for Policy and Reform that we have 20% of GDP in the public sector in the Isle of Man, but it is 40% in the UK, it is different (Mr Robertshaw: Forty- 7455 eight.) – forty-eight – and we have had a comparison today about the size of the National Insurance Fund. Well, I just want to put the Isle of Man public sector pension liability into the context of the other islands before sitting down. We have a £2.3 billion liability. The UK has a £1.008 trillion – £1,008 billion – liability. So we have twice as much as the UK per capita. To put it even more into context, the public sector 7460 pensions liability in the UK is actually only the same size as their national debt, which we all accept is massive and is a real problem to the UK. Ours is between five and nine times our national debt, depending on how the national debt is calculated. So we do have a serious issue and I fully respect the mover of this motion for suggesting that we should have debated the excellent Report that he had commissioned while he was at the 7465 PSPA earlier than we are doing today. I hope that the new Vice-Chairman of the PSPA will look at the… well, I don’t know, what is that… two inches of actuarial statements in the latest PSPA annual reports that he has got, as well as the other things, and I do hope that this issue can be addressed properly so that all people in the Isle of Man, including all the staff, whether they have a pension or not from the 7470 Government, are protected.
Mr Henderson and another Member: Vote!
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The President: The mover to reply. 7475 Mr Cannan: Thank you, Madam President, and thank you to everybody who has contributed. Just to pick up on a couple of points, I think the Chief Minister has probably hotfooted it straight here this evening from the BAFTAs. He has a remarkable ability to turn a drama into a crisis by twisting words and coming up with imaginary scenarios. Nobody ever said anything 7480 about sacking a thousand civil servants.
The Chief Minister: Excuse me?
Mr Cannan: Yes, Chief Minister? 7485 The Chief Minister: You don’t remember saying that?
Mr Cannan: No.
7490 The Chief Minister: You need to get it right.
Mr Cannan: I don’t. Do you know where I said it?
The Chief Minister: Yes. 7495 Mr Cannan: Where?
The Chief Minister: In my office.
7500 Mr Cannan: In your office?
Mr Quirk: He’ll check!
Mr Cannan: Oh, really? Okay. Anyway… Apparently, I said it in his office. 7505 But let me… [Inaudible] this is about protecting jobs. This is about addressing the issues so that we have got and the workforce has got security going forward. Nobody said anything about blood on the carpet. This is about sensible direct action to resolve the situation so that we can move forward. I am pleased to hear we have got buoyant reserves and I am pleased to hear the Chief 7510 Minister talk about fairness, but what is fairness? Are we talking about fairness for the 9,000 public sector workers, or are we talking fairness for the 30,000 private sector workers who just are not receiving anything like the same sort of equivalency – and yet they are the ones who are paying the taxes? That thought really needs to be considered. This is not about drastic blood on the streets or sacking a thousand people. This is about 7515 finding a measured, sensible way, taking direct action to get the issue resolved so that everybody can move on and move forward. Madam President, I would like to thank my seconder and thank him for his words, and indeed those people who have spoken in support of the motion this evening. I think enough has been said. I beg to move. 7520 The President: The motion before the Court is set out at Item 24 on your Order Papers. To that motion we have two amendments: one in the name of the Hon. Member, Mr Robertshaw; and a second in the name of the Hon. Member, Mrs Beecroft. I will take the amendment in the name of Mrs Beecroft first, the effect of which is to leave 7525 out the word ‘equally’ and insert the word ‘equitably’ into the motion as printed. Those in favour of Mrs Beecroft’s amendment, please say aye; against, no. The noes have it. ______1654 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 7, Noes 15
For Against Mrs Beecroft Mr Anderson Mr Cannan Mr Bell Mrs Cannell Mr Cregeen Mr Houghton Mr Cretney Mr Karran Mr Crookall The Speaker Mr Gawne Mr Thomas Mr Hall Mr Henderson Mr Quayle Mr Quirk Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly Mr Watterson
The Speaker: Madam President, 7 votes for and 15 against.
In the Council – Ayes 1, Noes 5
For Against Mr Butt Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
The President: In the Council, 1 vote for and 5 against. The amendment therefore fails to 7530 carry. I will now put the amendment in the name of the Hon. Member, Mr Robertshaw. Those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 15, Noes 7
For Against Mr Anderson Mrs Beecroft Mr Bell Mr Cannan Mr Cregeen Mrs Cannell Mr Cretney Mr Houghton Mr Crookall Mr Karran Mr Gawne Mr Quirk Mr Hall Mr Thomas Mr Henderson Mr Quayle Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Watterson
The Speaker: Madam President, in the Keys, 15 for and 7 against. ______1655 T131 TYNWALD COURT, TUESDAY, 20th MAY 2014
In the Council – Ayes 6, Noes 0
For Against Mr Butt None Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
7535 The President: In the Council, 6 votes for and no votes against. The amendment therefore carries. I will now put the motion as amended as the substantive motion. Those in favour, please say aye; against, no. The ayes have it.
A division was called for and electronic voting resulted as follows:
In the Keys – Ayes 19, Noes 3
For Against Mr Anderson Mrs Beecroft Mr Bell Mr Cannan Mrs Cannell Mr Quirk Mr Cregeen Mr Cretney Mr Crookall Mr Gawne Mr Hall Mr Henderson Mr Houghton Mr Karran Mr Quayle Mr Robertshaw Mr Ronan Mr Shimmin Mr Skelly The Speaker Mr Thomas Mr Watterson
The Speaker: Madam President, in the Keys, 19 for and 3 against.
In the Council – Ayes 6, Noes 0
For Against Mr Butt None Mr Coleman Mr Corkish Mr Crowe Mr Downie Mr Turner
7540 The President: In the Council, 6 votes for and no votes against. The motion as amended therefore carries, Hon. Members. That concludes consideration of our Order Paper. The Council will now withdraw and leave the House of Keys to transact such business as Mr Speaker may place before it.
The Council withdrew.
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House of Keys
The Speaker: Hon. Members, the House will now stand adjourned until our next sitting, which 7545 takes place on Tuesday, 10th June at 10 o’clock in our own Chamber.
The House adjourned at 10.30 p.m.
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