A 20% levy was applied on a sliding scale to retailers with profits exceeding £500,000 this year, prompting concerns that prices will rise and shops, which are already struggling to compete with online traders, could go out of business.
A budget amendment lodged by St Helier Constable Simon Crowcroft, who is concerned at the impact on the town centre, calling for the 20% rate to be halved was this week rejected by the States.
Tony O’Neill, chief executive of Sandpiper, accused States Members who failed to attend briefings arranged by the business community on the matter of ‘ignorance’.
‘It was pleasing to see that most of the 20 or so States Members who attended the recent briefing on the implications should the 20% tax rate be ratified were convinced of the implications and voted for the reduction,’ he said.
‘Equally, it was clear that, without exception, all of the speakers who voted against the reduction and who could not be bothered to attend the briefing demonstrated their complete lack of understanding of the subject matter.
‘As a business we have now spent enough time trying to inform and educate States Members of the hugely damaging effects of a 20% tax rate. We will now focus all of our efforts on taking the necessary actions to mitigate the damage to our business, as clearly outlined to Members, and trust that voters will take note of the individuals who have demonstrated their ambivalence/ignorance of the long-term implications for the town centre and consumers in Jersey.’
His feelings were echoed by Chamber of Commerce chief executive Murray Norton, who said the decision posed a ‘very real risk’ for retailers and consumers.
‘We provided States Members with opportunities to meet with business leaders – the experts in the field of retailing – to give them an honest appraisal of the potential dangers of the 20% retail tax remaining,’ he said.
‘Sadly many did not take the opportunity, nor did they listen to the countless excellent Corporate Services Scrutiny hearings, where these risks were spelled out. Instead, during the debate, some of our States Members gave those leaders in our retail sector the benefit of their “knowledge and wisdom” of what retail needs to do.’
Mr Norton added that the 20% tax was already having an impact on the sector.
‘We have already been told of two leading brand concessions that will now not be coming into Jersey because of this, and that would have created 30 new jobs and a £1.2m spend on developing the stores,’ he said.
‘Another two leading brands have looked at some of the vacant stores and have now turned away from coming, and we hear that, again, the retail tax level was too high for them.
‘The impact of empty stores, an unwillingness for new investors to come in and widen the brand choice, create competition, and therefore better pricing, may impact consumers in using the shops on our streets and that will impact retailers large and small.’
How States Members voted on the proposal to halve the retail tax:
Senators John Le Fondré, Sarah Ferguson, Ian Gorst, Sam Mézec and Tracey Vallois; Constables Richard Buchanan, John Le Maistre, Deidre Mezbourian, Chris Taylor and Richard Vibert; Deputies Carina Alves, Lindsay Ash, Louise Doublet, Gregory Guida, Carolyn Labey, Mike Higgins, Kevin Lewis, Jeremy Maçon, Susie Pinel, Hugh Raymond, Richard Renouf, Geoffrey Southern, Montfort Tadier, Robert Ward and John Young,
Senators Lyndon Farnham, Kristina Moore and Steve Pallett; Constables Simon Crowcroft, Mike Jackson, John Le Bailly, Philip Le Sueur, Sadie Le Sueur-Rennard and Karen Shenton-Stone; Deputies Steve Ahier, Rowland Huelin, David Johnson, Mary Le Hegarat, Stephen Luce, Judy Martin, Kirsten Morel, Kevin Pamplin, Jess Perchard, Trevor Pointon, Graham Truscott and Scott Wickenden.