Constable Steve Pallett was the only States Member not present in the Chamber on Tuesday when politicians voted on Senator Philip Ozouf’s proposition to reduce the tax to ten per cent.
When pressed by the JEP about the reason for his absence, Mr Pallett said that it was a family matter and he was not able to provide any further details.
The vote was tied – 24 votes in favour and 24 against. In such circumstances the status quo is maintained and the proposition is unsuccessful. The decision means that retailers earning annual profits of more than £500,000 will be subject to the new retail tax of up to 20 per cent, as approved by States Members during the last Budget debate.
Mr Pallett has been a vocal critic of the 20 per cent top rate and said he would have voted in favour of the proposition had he been there.
And Chamber of Commerce president Eliot Lincoln warned that the decision to stick with the higher rate could be a damaging blow to the Island’s already struggling high street, as larger retailers might think twice about setting up in Jersey.
Assistant Economic Development Minister Mr Pallett – who is standing for election as Senator – said he was ‘very disappointed’ the States did not approve the proposal and added that he would like to see the matter brought back to the States for debate after May’s general election.
Mr Pallett said: ‘I had to leave to deal with an urgent private matter. They [Members] made the choice that they wanted to vote against the proposition – it failed because 24 other people decided they didn’t want to support it.
‘My record on this matter speaks for itself. We shouldn’t have had the debate on Tuesday because people made the wrong decision during the Budget.
‘I’m not saying we shouldn’t have a retail tax – the industry themselves understand and are quite happy to pay their share. What they feel is that it is potentially going to damage any potential further investment in retail.’
He added that the vast majority of States votes have a large number of Members missing and said: ‘It was unfortunate I wasn’t there – particularly if it might have made a difference – but sometimes things come up which you have to deal with.’
During what was the last States debate before the Assembly was dissolved for the election season to begin, Senator Ozouf told Members the 20 per cent rate would lead to price rises and more empty shops. And he said there had been a lack of consultation with retailers before the new tax was first approved.
Treasury Minister Alan Maclean ‘strongly refuted’ the claims that there had been a lack of consultation and said that the top tax rate only affected the most successful retailers which could afford to pay 20 per cent.
Speaking after the debate, Mr Lincoln said: ‘The retail industry is finding things challenging at the moment and adding an additional challenge will affect decisions of businesses to be here. It will affect employment and I think it will affect prices. You have to think, as a large retailer looking to set up in a new jurisdiction, should they be looking at a jurisdiction which has 20 per cent tax?’
He added that attracting larger international retailers to Jersey was ‘vital’ for the survival of smaller businesses, as the footfall they created brought more people to the town centre. ‘We are looking at a 2.2 per cent [shop] vacancy rate at the moment, which is the highest it has been for ten years. I don’t see that trend going in any other way, unfortunately.’
