URGENT questions have been asked about whether the government should “pause” on rolling out a £20 million package designed to help businesses transition to paying workers a higher minimum wage.
Deputy Jonathan Renouf yesterday asked Economic Development Minister Kirsten Morel to explain how he justified more than £5 million of direct grants to Visit Jersey, Ports of Jersey, and the rural and marine support sectors.
Full details of the ambitious package were unveiled to the public and other States Members on Monday, when Deputy Morel said the Island “suffers from low levels of business investment” – less than half the UK level, which is the lowest of all G7 nations – and these new measures would “help stimulate the growth and improvement in productivity that we need”.
From April next year, the minimum wage will rise to £13 per hour, a move that is designed to be a stepping stone to setting it at two-thirds of the 2024 median wage in April 2026.
The “Better Business Support Package” for 2025 and 2026 will be proposed in the Budget and includes a £2.3m productivity grant, a £2 million skills grant, a £1.1m rural and marine grant, a £1m grant for increasing connectivity and £3m to boost the tourism sector.
Deputy Morel said a large portion of that funding would go to the tourism, rural and marine sectors because these were the industries which had been identified as “being significantly impacted by the increase in the minimum wage” which causes “stress and concern for those businesses”.
He said the grants for Ports and Visit Jersey were designed to allow them to “grow our visitor economy by bringing more visitors to the Island, particularly in the shoulder and winter months”.
Filling hotels in October, he said, would lead to positive knock-on economic impacts from more workers and tourists in the Island.
With regard to boosting the Rural and Marine Support Scheme with £1.1 million, he said: “In order for them to remain competitive, given the wage rises that are being put upon them, we believe that it is absolutely right to use the existing support schemes to reduce the impact of those wage rises, and by doing so, help those industries remain competitive against highly subsidised international markets in which they operate.”
Deputy Philip Ozouf noted that there had been “no scrutiny” of the government’s proposed package of measures and “lots of questions”.
He asked: “Does he [Deputy Morel] really think that he should be pressing ahead with this package in this absence of information … [with] Members [only yesterday] having received the detail of what is a huge amount of money being spent? Isn’t it about time to say enough is enough and we need to pause this?”
Deputy Morel argued that he was merely following through on a States decision taken in 2021 to raise the minimum wage to two-thirds of the median wage by 2024.
“That’s what is being delivered on,” the minister said, adding: “I am very concerned about business investment in this island. I’m very concerned about the rate of productivity in this island.
“By designing a package of support measures which focuses primarily on productivity, but also has competitiveness as part of it, we are helping businesses in this island make those investments in themselves, so they become more productive, more resilient and robust, to make sure that Jersey has a high-performing economy for the future.”
