Cyril Le Marquand interview
This interview with one of Jersey's greatest politicians of the second half of the 20th century, president of the Finance and Economics Committee Senator Cyril Le Marquand, was first published in Jersey Topic magazine in 1965. The interviewer was the magazine's editor Ted Vibert.
He sat opposite me, relaxed and confident. After a month of political activity ranging from a public slanging match over his car tax proposals and culminating in an unpopular budget he seemed undismayed at the wake of public anger that he had left behind. I had a feeling that he had enjoyed the political furore.
- ”No, said Senator Cyril Le Marquand, “no one enjoys being an unpopular politician. But my proposals are right. The new car tax is based on the belief that the car owner should pay more for the services he gets — that he should be self supporting. What we were getting in from the motorist was just not enough to cover what we were spending.
- ”I must admit that I was surprised at the opposition from the public, but this is obviously what happens when you have had something too cheap for too long. With the new car taxes and the petrol tax, the motorist is now paying his way. This is what is important. I felt it right, too, to point out to the people of Jersey that if they wanted such expensive amenities like swimming pools they should have to pay for them."
The public sees you in the role of a person attempting to balance the books of the island. How do you see yourself?
- "I think that description is fair enough, but it makes everything a little too simple. In balancing the books I have to ensure that I do nothing which will, in any way, adversely affect the economy of Jersey.
- ”I have told the States many times that my role is like that of a housewife who pays her way and looks after any money that is left over. The same principles apply to government, surely."
Do you not think that running an island with big business potential should be put on the level of running a big business and that this demands more than being just prudent?
- "I don't think so. Business principles apply to any business, no matter the size. If you mean should I gamble more on projects the answer must be no. My job is to ensure that Jersey's economy remains solid and stable and this is always the base on which I build."
You have increased taxation to cover the cost of running the island? Why is it necessary to finance so much out of income?
- "Firstly, let me deal with the taxes involved. Because of an increase in expenditure we had to put up taxes. What we have done is to tax the non-essentials. However, put these taxes in perspective. Despite the increases, we are still paying far, far less for these items than in the United Kingdom.
- "On the question of financing more projects out of loan. At the moment our national debt is £9,000,000. This is not a great amount, but I believe it to be enough. I am not a great believer in hire purchase because you end up paying too big a price for what you get.
- ”If I borrow a million pounds for Jersey, spread over 15 years, I pay back £1,600,000. This, really, is just postponing payment and having to pay dearly for this. I am not saying that there is never a place for loans, but I think loans should be confined to projects of real emergency – we financed a housing scheme on loan because we felt we could not afford to wait – and to projects that are going to be revenue earning. If, for instance, a committee could bring to us a scheme for Fort Regent and could prove that it would be revenue earning and pay back the loan and the cost of it out of revenue, we woule be interested.”
Faith in tourism?
Your unease about raising loans seems to spring from a basic lack of faith and confidence in the tourist industry?
- ”No, I have a great deal of confidence in the tourist business for it is cearly the firmest pillar in our economy today. With the increase in leisure time tourism must continue for a long time to be the greatest of our growth industries, and as opportunities broaden, Jersey will continue to get its share. But I have constantly warned the States that it is an industry over which we have little control. There are so many factors that can upset a tourist industry over which we have little control. There are so many factors that can upset a tourist industry about which we can do nothing. A serious epidemic, for instance. Decisions by the British Governemnt; a slump in Britain. All these factors must be carefully watched.”
Much of the money raised by income tax (3¾ million pounds) comes from the registration of foreign companies and tax on their subsequent profits. Why did you not drop income tax to 3s 6d in the £ on the basis of what you lost on the swings you would gain on the roundabouts?
- ”That is an interesting theory, but a dangerous one. It is a gambler’s action isn’t it? This would make Guernsey and the Isle of Man compete with us and we would be back where we started. I wouldn’t want to be a party to cut-price income tax. But even more important is the fact that income tax has remained constant at 4s in the £ since the war and it is this complete stability which attracts money here. If we start messing about with it a lot of people might well be worried about investing in Jersey.”
Is there not an unwritten agreement with other offshore islands that we will never put our tax down below four shillings in the pound?
- ”No, there is no such agreement. Such a thing has ever been discussed.”
Jersey is growing as an international financial centre, yet you seem to be a trifle embarrassed about it all. Is this because you believe that Jersey is in a vulnerable financial situation as far as the British treasury is concerned?
- ”I am not at all embarrassed by our position. I think that the British Treasury is very glad that we are in our present position, and I cannot believe that they would take any action which would endanger the prosperity of the island. After all, we do help them greatly in their balance of payment problem. If there weren’t offshore islands such as ours offering a haven of escape from penal taxation that money might well go to other foreign places with similar tax climates. I has, however, been very much out policy to discourage people domiciled in the United Kingdom from using this island to avoid paying taxes properly payable there. I think it woule be very wrong for us to do this.”
There is a belief that the Finance Committee works too closely with the UK Treasury and that is affecting our chances of being a big international finance centre. Your encouragement of the British Government to stop cheap money is used as evidence.
- "Let me make it quite clear that I did not stop cheap money. This was done by Selwyn Lloyd. However, it is true that I was against this type of
money because it was 'hot' money, borrowed on short term and recallable at short notice. It blew too much air into our economy and there was a great danger of the whole thing bursting suddenly. Since we repealed the code of 1771 – which made it an offence for anyone to lend money at more than 5% - I am convinced that this island has benefited greatly. Our growth has been slower, but more solid. This is a decision which I believe was absolutely right. And it is encouraging to know that this decision is now regarded by a nu,ber of important financiers as beign right.”
A Jersey bank and financiers
There is a growing feeling among financiers that Jersey should have its own bank. How do you view this prospect?
"Not very favourably. You would have an unsurmountable problem of exchange control. I couldn't see it being feasible.”
There are a number of financiers now based in Jersey. Do you not think that a regular meeting between your committee and these men would he valuable?
- "Well, I try to talk to as many people as possible about their plans and I am grateful for the help I get. I do think that the time is coming for us to have an economist to work on our behalf, and I hope that we will soon have this."
In your last budget I had the feeling that you really pulled out all the stops. What now happens when the demands from committees goes up again next year ?
- "We have up to a point pulled out our reserves. As for the future, it comes back to what people are prepared to pay. If they want a well-run community with good social services, schools for their children, houses to live in and so on, they cannot expect to have all these without paying for them."
So Jersey is not broke?
- "Not by any means. We have a very good economy. My job is to make sure that it stays that way.”
We had talked well into the afternoon. As I left him he told me the story that 'every true Jerseyman had understood the rudiments of economics front time immemorial'. Long before Greshams law - that bad money chases good money - had been heard of, Jerseymen had developed the art. Over 600 years ago King Edward II found it necessary to make an order in these terms:
- "To cause the farms and rents of the islands to be collected and levied in strong money, as the money current in the island is depreciated by more than one half owing to frequent changes of money in the realm of France, and the men of the islands endeavour to pay their farms and rents in feeble money to the King’s manifest prejudice.
- ”Even in those days." he said with a smile, “we knew how to look after ourselves. I think we still do.”