During an Economic Affairs Scrutiny Panel hearing yesterday, Senator Steve Pallett said that an increasing number of bars, restaurants and hotels were employing staff on a ‘cash-in-hand’ basis and bypassing the tax and social security systems.
Senator Pallett, who sits on the Housing and Work Advisory Group and is an assistant minister in the Economic Development Department, said that the trend was being caused by chronic staff and skills shortages, as well as fewer work licences being granted.
A number of hospitality, as well as agricultural, businesses have reported staff shortages this year as the declining value of sterling due to Brexit has made wages less attractive for foreign workers.
Last year, ministers also decided to limit the number of licences that are made available for businesses to employ foreign workers in an effort to reduce immigration levels.
Responding to questioning from panel chairman Deputy Kirsten Morel, Senator Pallett said that he had been ‘very frustrated’ after having to refuse an increasing number of work-licence applications.
‘There are staff shortages in all sectors in Jersey and it seems in particular in hospitality and also in service industries, which are deemed to be low value, so don’t fit the criteria for work licences being approved,’ he said.
‘It is becoming clear that we need to take a new approach to this. I have had to refuse licences from a lot of smaller businesses who have done everything that they should have to make their applications.
‘It is frustrating, a lot of those businesses are small now but could potentially become very important.’
He added that it was becoming evident to him that more businesses were bypassing regulations to get the staff they needed.
‘A black market is starting to appear where people are working for businesses and are being paid cash-in-hand,’ he said.
‘Obviously, that is not beneficial because they won’t be paying ITIS or tax to the Island. We know that there is a shortage of, for example, chefs, in the Island and businesses are turning to alternative ways to find them.’
Earlier this year, Chief Minister John Le Fondré made the decision to delay a debate on the Island’s new population policy, which included proposals for a work-permit system and tougher background checks on immigrants.
During the hearing both Senator Pallett and Economic Development Minster Lyndon Farnham said that they agreed on the decision on the grounds that the policy still needed development.
Senator Farnham said: ‘We all want to support businesses and the economy but we have seen exponential growth in population and the population policy is something we need to get to grips with.
‘The very difficult decision we have to make is how to manage the economy without an unsustainable growth in population.’
The hearing was also attended by assistant minister Montfort Tadier and panel members Deputies Scott Wickenden and David Johnson.
