Why the States of Jersey aren’t really going to control population levels
Over the last decade Jersey’s population has increased by 11,900 people with net inward migration accounting for three quarters of that growth. In 2016, out of 29 European countries, Jersey was beaten only by Luxembourg for the greatest increase in population, 1,300 people came to the island. A decrease on the record amount of 1,500 people the year before.
It has been estimated that by 2037, if population trends continue, Jersey would need the equivalent of 230 Le Marais high rise blocks. With the public making it clear they wish to protect Jersey’s natural environment and green areas, highlighted in the Future Jersey document, it has understandably led to increasing pressure on the States of Jersey and its Chief Minister, Ian Gorst, to try and control population levels.
However, despite this pressure and the Chief Minister agreeing that the growth seen over the last two years in the “medium term” is “not sustainable” and that the current average annual growth of a thousand people also “appears” not sustainable, there is probably little political motivation to curtail it. This is due to a number of important reasons that have serious consequences for Jersey and its future.
For one, economic growth is a key objective pushed by the government. It’s one of the four strategic priorities of the Medium Term Financial Plan. For modern governments, growth is the benchmark of success and any growth cannot be achieved without further inward migration. Part of this growth strategy has included the building of the ‘Jersey International Finance Centre’ in the hope of — whether successful or not — attracting new businesses to the island.
With increasing public scrutiny and ongoing resistance to the project, it’s highly doubtful that employment restrictions are part of the package to entice businesses and fill up floor space. No doubt the current economic uncertainty and risks surrounding Brexit have increased the reluctance to implement tougher population controls. Why potentially sabotage Jersey’s biggest and most profitable industry at a time like this?
Then there’s fledgling Digital Jersey, which is making concerted efforts to train Islanders but will still require access to expertise and skills for a rapidly developing and changing industry. It’s unlikely Jersey can provide that kind of expertise at this time which is why its CEO, Tony Moretta, has publicly made the case against restricting importing talent. With Jersey so heavily reliant on finance, the need to diversify our economy is paramount so it‘s doubtful that the States would want to hinder the growth industry of the future.
The hospitality industry has also made clear its struggle to find local staff. It could also soon face having to pay a waste charge at a time when the industry appears to be picking up pace on the back of a weak Sterling rate, seeing the biggest rise in tourism numbers for 20 years. Will the States’ response really be to bring in a waste charge and restrict the ability for hospitality to employ more workers, further entrenching our reliance on finance?
Retail has also suffered of late, with more competitive online outlets, rising inflation, stagnant wages and falling standards of living, people have reduced their non-essential spending which has undoubtedly impacted upon the local high street. The total employment (headcount) of retail since 2005, compared to other industries, has decreased the most — by minus 4.2%. It would be unfair of the States to further restrict retail when it’s actually seen a decline compared to other industries, which is maybe why they’ve just handed them a one-off payment of a £100,000.
So it begs the question, which industry should the States of Jersey hamper at this time?
According to the Jersey Stats Unit, between December 2001 and 2016 private industry headcounts have increased in the following industries; Hotels, restaurants and bars(850); financial and legal activities(770); construction and quarrying(740); and “Miscellaneous business activities” by 2,220 people. Education, health and other services (private sector) increased the most with 3,460 people which is 2,690 more than financial and legal over the same period. This obviously doesn’t change the fact that finance is still the biggest employer but it shows which industries have increased their headcount the most since December 2001.
Whereas the following have seen a decline in their headcounts: Agriculture and fishing(-180); Electricity, gas and water(-100); Wholesale and retail trades (-160); and by far the most, Manufacturing, which has seen a decline of 1,140 people by December 2016.
Another major aspect against restrictions is Jersey’s ageing population. Natural growth has been in decline since 2011 and people aged over 65 are expected to increase by 60% by 2035. That will equate to one in four in the community. With so much of the population retiring and not in work it is shaping up to be quite the crisis. The only reason islanders haven’t been paying more for Social Security already is due to increases in population.
More than ever we will need tax paying workers to cover our ageing population and the growing costs of maintaining Social Security and local infrastructure.
A London School of Economics study also found that immigrants to the UK pay more in taxes than they take out of the system and therefore can help reduce budget deficits. This, no doubt, adds further appeal to not applying any strict immigration controls. As population increases it also has the knock-on effect of creating more demand in the economy, which creates more jobs, further fuelling the need for workers, and businesses will always lobby for more workers when they’re needed.
Jersey then appears to be a victim of its own success. The State’s annual population forecast of 325 — set in 2013 — wasn’t even met during the worst financial crisis seen since the Great Depression. In 2009, net inward migration was still 500 people, 175 over the forecast. The more stable and prosperous the island outwardly appears, the more attractive a destination it naturally becomes.
Even the States annual charge of £50 per licence for each migrant employed will likely have little effect as employers can easily take it out of their wages, £4.16 a month. Employers paying minimum wage will have to weigh up the cost but some are subsidised through their staff receiving income support payments anyway. This appears to be more of way for the States to obtain additional funds than any kind of deterrent.
There’s been a lot made of the fact the government has revoked 283 permanent registered licences in the first six months of this year compared to 47 last year. Yet the amount of permanent registered licences granted this year, compared to last, was only 16 less. According to former politician Rob Duhamel in his latest Jersey Evening Post column, there are still 6,000 permissions “slopping around” in the system waiting to be used by local businesses. So on the face of it this hardly appears to be a major crackdown by the government and it will be interesting to see how these numbers change post election next year.
This seemingly intractable population dilemma was raised again last month when Deputy Tadier, in the States Assembly, pressed the Chief Minister on the failure of government to implement a credible population policy. The Chief Minister accused the Deputy of making a “rambling statement” and said one is currently being drawn up.
It’s hard to believe that our pro-business, globalisation and economic growth promoting Chief Minister has suddenly had a change of heart and is now going to stifle local businesses, jeopardise the Jersey International Finance Centre, weaken a struggling Social Security fund and hinder economic growth, all during a time of low growth and British economic uncertainty over Brexit.
Does anyone really expect this new population policy to have teeth? If it does, we’ll likely be biting the hand that feeds us. Jersey’s part of the “free market” now, and there’s no turning back.
