THE government is exploring suggestions made by hospitality representatives after the sector slammed proposed increases to alcohol and tobacco duty.
Treasury Minister Ian Gorst was questioned by the Corporate Services Scrutiny Panel this week on the draft Government Plan for 2024 to 2027, which is set to be debated next month.
The plan proposes increasing duty on beer, wine and spirits by 8.9% in 2024, in a move which has been criticised by Jersey Hospitality Association co-chief executive Marcus Calvani, who argued it would add up to 50p to a pint and “unfairly hit ordinary businesses and Islanders”.
Responding to questions from panel chair Deputy Sam Mézec, Deputy Gorst said: “We are in the world of balance here. We have the health protection argument which says alcohol duty should be raised substantially above that which we are proposing, and then we have the hospitality sector who are quite clearly finding things difficult with the cost-of-living crisis and the state of the economy.
“Since the Government Plan was lodged, I have met again with the hospitality sector and heard their views and they have made some suggestions to me which we are exploring.”
The plan also proposes to increase duty on tobacco products by 15.9% (inflation plus 5%).
Deputy Lyndon Farnham, another panel member, challenged Deputy Gorst on whether “exponentially increasing duties on tobacco is working”.
Deputy Gorst defended the proposal, which would add £1.38 to a 20-pack of cigarettes, but said: “Because of the nature of our geography, there is an unintended consequence that people buy these products duty-free and we see more and more of that happening.”
After freezing road fuel duties in 2023, ministers are also proposing to increase this duty by 10.9% in line with inflation.
Deputy Mézec asked Deputy Gorst if he was aware of “knock-on” issues from fuel increases which would “disproportionately affect those on lower incomes”.
Deputy Gorst revealed that the Council of Ministers discussed the possibility of extending the freeze for another year but decided against it on the grounds of progressing Jersey’s Carbon Neutral Roadmap.
