This is important for the whole economy and not just retailers, the conference was told, as although it is one of the smaller sectors, it still employs 8% of the workforce, which makes it relatively more important than the UK’s retail industry which employs only 5%.
The sector in Jersey also contributes £280m in Gross Value Added to the economy, pays 36% of the GST collected, brings in £3.5m in car-parking revenue, and with 80% of the 1,000 companies in retail classified as small businesses, plays a particularly important role for less skilled/lower-paid workers.
Most of those questioned at the event were confident that Jersey’s retail industry is facing reinvention rather than Armageddon, a choice identified by key speaker Helen Dickinson, chief executive of the British Retail Consortium. Her speech showed how many of the sector’s problems in Jersey are mirrored in the UK.
But despite the Island’s many advantages, there were few in the audience who thought the sector was about to take off, and near to the end of the conference much of the confidence had already dissipated. Despite the warm words, it became obvious that the industry and the States were nowhere near agreement on crucial tax policies and other issues hampering retail.
Government’s one-way street on taxes, according to Chamber president Elliot Lincoln, included the 20% tax imposed on big mainland retailers without proper consultation, the 5% GST that businesses collect for the government and a 6.5% Social Security contribution. Businesses also faced providing longer maternity leave for staff, Mr Lincoln said, and some were hampered by not being able to open on Sunday. There was a lack of suitable parking for shoppers and now the States were looking at closing a town road which would simply add to business costs.
It was also what the States did not tax, that helped to make life difficult for local retailers, Mr Lincoln said. By not applying tax to foreign retailers, local businesses were not only at a disadvantage but the Island was being deprived of a new source of revenue which could be reinvested in local infrastructure, including the town centre.
The Minister for Economic Development, Senator Lyndon Farnham, agreed that the States had acted prematurely in applying the 20% retail tax, and hoped it would be looked at again. However, he defended the new government of which he is Deputy Chief Minister, and said there was now a genuine desire not only to consult but to listen to the community. That was something that had not always happened in the past.
This should result in the States appreciating that helping the retail industry is not a cost, but an investment which could improve lagging productivity, although they would still need to get the investment right when using taxpayers’ money, Senator Farnham said.
He also suggested that removing the road and joining together two parks on the waterfront might not be the waste that some critics think. ‘We are long overdue new investment in the public realm, some of which is looking a bit tired,’ he said. Critics should therefore keep an open mind because the Liberation Square plans might prove a good investment once they have considered the details.
The conference was being held while the finishing touches were being made to a new retail strategy. The minister revealed that officials had asked for consultants from The Retail Group to be brought in to help finish the strategy, which involves a lot of research and will provide vital new data to measure the industry’s efficiency.
The minister said that this would replace the existing strategy dating back to 2010, but he was determined that this strategy ‘would not be left on the shelf’.
