As ever, despite similar objectives, Jersey and Guernsey have pursued different policy options over the years. Jersey with its ‘J cats’ and Regulation of Undertakings legislation of yore; Guernsey with its ‘open market’ and licensing, a ten-year population ‘cap’ honoured more in its breach than observance, followed by the inglorious introduction of work permits and a very efficient, highly praised but not inexpensive Population Management Office. Both are currently committed to developing new population policies in the not-too-distant future.
Given the most important determinant of population is the state of the economy and – as we all know – economies go through cyclical ‘ups’ and ‘downs’, even if ours have in recent years managed to avoid full blown ‘booms’ and ‘busts’. But with time lags on the way up and the way down, both islands have struggled to find population-management policy solutions that are sufficiently dynamic to react quickly enough to turn the taps on or off, as appropriate.
Economic free marketeers would argue that we don’t need any additional bureaucratic overlay – just leave it to the marketplace. This argument rests on the premise that the interaction between an individual’s ability to get productive employment and their ability to fund their cost of living, particularly housing, as typically the largest household expenditure, will be all that is needed to determine whether they come to or depart from the islands. If you can’t afford to live in central London, you will live somewhere else in the UK; if you can’t afford to live in Jersey or Guernsey, moving to one or other end of either island doesn’t help you much – you will end up leaving. In one sense, this ‘safety valve’ theory of the market driving population numbers has served the islands well. If people can afford to live in the islands, they contribute to taxes and the economy; if they can’t afford to live in the islands, they no longer demand any public services – schools and hospitals in particular. However, the safety valve also makes it a real challenge for planners and policy makers to divine the quantity of housing and services that are going to be needed in five, ten or 15 years.
A laissez-faire free-market view of the world also does not take into account the political reality that our communities like the comfort blanket of population-management policies. The islands have been conditioned by 50 years of population-management policy-making to believe that such policies are absolutely essential to avoid becoming overrun by the hordes waiting on the docks in Poole to come and scrounge benefits or take local jobs and housing, were it not for the existence of these shiny legislative bulwarks against such terrors. Rather like the prohibition of cannabis over a similar timeframe, it may be hard to definitively prove the effectiveness of population regimes at delivering their policy objectives.
Interestingly, this is one policy area where the consensus – not unanimous by any means – view is that the other island has got it wrong. So in Guernsey, the consensus says that Jersey policy has just sucked in a whole lot of lower-value labour that has driven down the Gross-Value-Added-per-person measure of economic performance, while at the same time driven up house prices, requiring more expensive taxpayer-funded school places and hospital beds. In Jersey, the consensus seems to be that Guernsey’s population policies have stifled business’s ability to grow the economy, ageing the demographic, so increasing the dependency ratio of non-worker dependants to workers, making the public finances more unsustainable.
When you then project on to this canvas a post-Covid, post-Brexit economic recovery which seems red-hot in some sectors, defying all logic and expectation, it becomes nigh on impossible to identify the determinants of labour constraints. The hospitality and hotel sectors are experiencing visible labour shortages, particularly as island-based students leave after working over the summer to return to their studies elsewhere. The construction industry has many supply-side problems and labour is just one of them. While the finance sector is demonstrating classic signs of wage inflation. Is all this just because of Covid, which drove some workers to the safety of their families ‘back home’? Or is it Brexit, with its slightly less welcoming (to the EU) face, increased visa bureaucracy and costs and lower-value Sterling? Or is it the regulatory straitjacket of population-management policies impeding business activity? In truth, it may be a bit of all three.
This is one area of policy where the islands working together might actually make sense. While the economies are in competition at a macro level, these are common problems shared. This is complex stuff. If you pull a lever, does it actually do what was intended? And what are the unintended impacts? And how does population policy interact with other policies? The need for additional housing and the demand for public services are obvious, but what about other issues? Is Jersey really better placed to access low-cost airlines simply because it is able to offer higher demand from a larger population?
It seems like an obvious first step might be to jointly commission a comparative analysis going back over the decades to review the effectiveness and impact of the islands’ respective population-management policies. This would be an opportunity to learn from each other what has worked and what has not. Will this happen? No, I very much doubt it. For two reasons: firstly, there has been no obvious appetite either end for such a piece of work while both governments are heavily distracted with their own priorities; and secondly, my suggesting it – particularly this side of the water – is a kiss of death. Perhaps someone else could instead?
Gavin St Pier is a Guernsey politician. He previously served as the President of the island’s Policy and Resources Committee.