THE government is running yet more businesses “into the wall” by failing to understand the real-world impact of decisions driven by populism and a naive approach to helping the less well off, a senior hospitality industry leader has said.
Marcus Calvani, chief executive of the Jersey Hospitality Association, who runs bars and restaurants, and others across the sector have told the JEP that ministers are exacerbating the problems that they are trying to resolve.
The row has erupted over a failure to carve out an exception to the new requirement that all staff, irrespective of age or experience, must be paid the full wage of £13, and double that on bank holidays, which comes into force today.
That means a 16-year-old would be paid at least £26 an hour – or the equivalent of about £50,000 on a standard 37.5-hour week.
The industry figures say that they may well have to shut on these public holidays and will no longer be able to offer jobs to teenagers and trainees, which will deny them vital work experience and paid employment in the sector. The problem is especially bad for “high-volume” cafés, including beach concessions so popular with Islanders and a key part of Jersey’s leisure culture.
And this newspaper has learned that the issue is going to affect many other businesses outside hospitality as well, including those which provide activities and rely on young people as employees. (See separate story below.)
The setback for trade is echoed across the economy, with many complaining that well-intentioned policies are counter-productive and unrealistically expensive for businesses, which drive the economy and deliver a significant amount of the tax revenue that pays for public services, and creates employment and wealth.
Developers have perhaps been the most vocal critics, saying, for example, that a stamp-duty hike designed to prevent investors snapping up properties otherwise for first-time buyers is actually stopping developers building because they cannot guarantee a return. In other words, a policy designed to deliver more affordable homes is having the opposite effect, as fewer will be built, further distorting the balance of supply and demand.
The regulatory landscape – especially in relation to financial services, has also, as highlighted by the JEP in its reporting by investigations editor Orlando Crowcroft of concerns about the Jersey Financial Services Commission – is killing growth and entrepreneurialism, and suffocating Jersey’s golden goose.
Mr Calvani said that many of his members were considering closing on bank holidays, or reducing the services they offer, something the Island got a bitter taste of after Brexit and Covid when restaurants had to close or reduce hours because they could not recruit sufficient staff amid significant wage inflation
He said: “We highlighted this for government when they came up with this idea and we’ve been trying to get the Social Security Minister to do a trainee or student rate. We are ruining the quality of life for Islanders with all these unintended consequences of government policy. Our concerns have fallen on deaf ears.”
He added that the industry did not have an issue with the living wage per se, as, post-Covid, most people in the industry were earning more than that anyway, but that it was of particular concern regarding students and apprentices.
He warned that many businesses simply would not be able to afford to take on students as summer or weekend help, which would deny many a source of income and vital work experience.
Mr Calvani argued that it was time that the government stopped obsessing with finance and looked after other vital limbs of the economy, adding that success should not just be a matter of spreadsheets and bottom lines, but the wider public good that a business or economic sector generated.
“The actual impact of not having these student workers is that these businesses are having to consider closing,” he said.
“The people that the government are trying to protect are going to end up losing their jobs. It just does not balance out. It was a quick decision that looks good on paper because they think it will win them votes. This is not our industry being greedy. It is just basic economics that mean people cannot afford to open. People will not pay twice as much for a meal. We have been going on and on about this.
“They are trying to benefit the general public. Their heart is in the right place, but the reality is that they have not given due consideration to the unintended consequences and are damaging the opportunities for young people they want to support.
“This government is driving this island into the wall.”
Emma Vautier, owner of Colleen’s Café at Grève de Lecq, said: “It is a really difficult one for us to absorb. We would normally open for 15 hours on a Friday as we serve fish and chips in the evening, but on Good Friday, we cannot afford to pay 15 hours of wages, which is just not viable. The extra cost is a serious consideration. You cannot put up your prices by double because you are paying staff double. It’s difficult.”
She said that Colleen’s was the only café at Grève de Lecq so she felt it was important to meet the needs of customers who wanted a meal out on a bank holiday.
Many businesses, Mrs Vautier explained, relied on additional student and trainee staff at the weekend and on bank holidays, and paying them additional wages might well mean that she would have to employ older and more experienced people instead if they cost the same.
“Everyone is very worried about it,” she said.
Paul Duffy, owner of Sumas in Gorey, said that while his was not a business that needed a lot of part-time and seasonal staff in the same way as beach concessions that had a high volume of trade, he thought that it would seriously affect the opportunities available for young people as student workers who wanted apprenticeships.
Mike Hunwin, owner of the Breakwater Café at St Catherine, said that he was also in the position of having to make some tough choices about how to respond.
“We will be paying young teenagers £27 an hour, which is quite a big chunk of money. We are looking at weekend openings and might have to simply open with our regular staff and no students, perhaps offering a reduced service. We will probably be open the Easter weekend, but will have to review it after that.”
Gabby Mason, owner of the Driftwood Café at Archirondel, added that all of her staff were already paid the living wage, but that this would hit teenagers looking for work and trainees.
She explained that she would be paying a 14-year-old the same as an adult when the young staff understandably needed more “hand-holding” and could not, for example, serve alcohol.
“We are just less likely to give jobs to 15-year-olds as it makes sense to hire someone with more experience.”
Options for family activities limited due to venue closures
BANK holidays in Jersey are looking likely to become more stressful for families who are deciding what to do, as activity centres choose to close to avoid footing a jump in their bills.
Activity businesses which hire teenage weekend workers have told the JEP that they are “seriously considering their opening hours” after new rules came into force today.
As families look towards the four-day Easter break in a few weeks’ time, options for things to do may be pared back.
Jump Jersey, operated by Les Ormes, employs various weekend staff and has already made the move to completely close on all bank holidays in 2025, something it did last year and will continue to do in future years.
General manager Nathan Maguire explained: “Bank holidays are the biggest issue. It is not financially viable to open. It’s not the wage that is the issue, it’s the fact that we have to pay double.”
Mr Maguire continued: “It’s across the whole of Les Ormes, [having to consider staffing and opening times], and it does impact the business’s that want to employ young staff.”
Roger Le Maistre, director of Valley Adventure Centre, was similarly apprehensive.
“We’ve strongly voiced our concerns to the Jersey Hospitality Association and the Chamber of Commerce,” he said.
“Most activity companies have a strict instructor/participant ratio. Wherein other businesses you can reduce staff and efficiency, our regulations do not allow that. We can’t cut staff.”
Employing twenty 16-to-18-year-olds, mostly on zero-hours contracts, Valley Adventure Centre would have to pay each of them £13.78 per hour, which includes a 6% rolled-in holiday pay, nearly double the rate of pay for the age bracket in 2019, when it was £7.50.
Mr Le Maistre said: “There are no longer any trainee rates, so the increased pay for teenage workers means that the wage bill becomes thirty to forty percent of a business’ income ratio. On bank holidays, that then becomes 60% to 80% of average income, and the other 20% is easily eaten up, meaning we’d make a loss.”
To offset the wage increases, Mr Le Maistre confirmed the Valley Adventure Centre had stopped kids’ clubs and would only run activities that required fewer staff on bank holidays in April, such as paintballing, and they would close the high-rope amenities like the aerial trekking and zip wire.
With the knock-on effects of Covid and the cost-of-living crisis, he warned the tourism and activity tourism sector would continue to struggle as a result of wage increases.
He said: “Tourism and activity tourism in Jersey is going through a very bad time, coming off Covid and already increased costs.”
He added: “It’s tough because we want to take on young people, give them an outdoor lifestyle and work opportunities but we have to make a decision [on opening on bank holidays and paying double].”
The centre said it would “re-assess” the situation for bank holidays after April.
