'To save a bloated business, you need prudent, careful leadership – just look at what happened to Joe Jersey’s empire…'

Ben Shenton

By Ben Shenton

An allegory – the recent history of Jersey…

Joe Jersey was born in 1926 and was just 13 when war broke out. He stayed in the Island, surviving the Occupation unlike his siblings, who died of TB. After the war, in 1947, he married Belle, and they purchased a small guest house at Havre des Pas. Working 24/7, without a holiday, the business was a success and, boosted by a post-war tourism boom, they purchased a second property nearby. In the early 1960s they bought a small country hotel. Belle was very much the driving force, Joe being more front-of-house – socialising in the bar. A chance meeting with a tractor salesman in 1967 led to them taking on an agricultural franchise, utilising some unused barns at the back of the hotel. With agriculture booming the business expanded quickly and in 1969 they got a financial services licence to sell hire purchase to farmers looking to upgrade their equipment.

During the 1970s the finance arm boomed, and a trust company and funds services company were added. Belle would describe their business as being like a three-legged stool – hospitality, agriculture and finance – and each leg was just as important.

Joe’s favourite phrase was: “I’m a great believer in luck, and I find the harder I work the more I have.”

Sadly, in 1988, at the age of just 62, Joe died – a death hastened by his love of small cigars, which he believed reflected success. The business passed to his son Edward, who was born in 1960. Edward was much more interested in growing the profitable finance side of the business, which he did exceptionally well, and he left his mother to run the hospitality side. No one paid much attention to the agricultural business.

By 2000 Edward and his wife were extremely wealthy and had three houses around the world and a private jet. They slowly became more interested in spending the dividends than running the businesses, and, in 2005, coincidentally at the same time ministerial government was introduced, they handed power to a hand-picked group of managers and set off for the life of the jet set.

Unfortunately, in 2024, Edward had a sudden heart attack and died, he was just 64. His death was not surprising, as in recent years he had become extremely overweight from fine dining, had alcohol issues disguised as being a “wine connoisseur” and suffered from mild depression, as he had nothing to get up for in the mornings. His wife had divorced him ten years earlier, and took two of the properties with her, together with most of his cash, and the chauffeur. The sole beneficiary of his Jersey assets was his 32-year-old daughter, Jane, who worked in London for a financial consultancy. She had not visited Jersey for some time.

She flew to Jersey for a showdown with the management, who had been running the businesses for the past 19 years – the chief executive was Charlie Trotter, and she was not impressed with the performance of the business, as it appeared that it was being run for the benefit of the management, and not the shareholders.

At the meeting, Jane said: “You have given across-the-board pay rises to all our businesses, none of which are making money. The hotel was emptied in 2018 to be redeveloped into flats, but planning took so long that the development is barely viable and the property is derelict, meaning we have lost the hotel income. The agricultural side has been ignored and run into the ground, we have the wrong franchise and there has been no investment.

“The pay rises and staff expansion in the finance sector has made us bloated, expensive, and uncompetitive. You gave everyone a 7.9% pay rise in 2023, an 8% plus cash bonus pay rise in 2024, and have promised RPI +1% rises in 2025 and 2026. If these equate to 6% and 5%, all staff will have received a 30% salary uplift in just four years for no added productivity.

“In addition, you give everyone a tax-free 16% salary-based pension contribution, so a manager on £140,000 plus £22,400 pension will have got an uplift over four years of £48,232 and will soon cost us £210,632 (before employer social security). By contrast, the cost of an employee on £25,000 plus £4,000 pension will now be £32,425 plus pension costs of £5,188, which equates to £37,613. This is far more than our competitors, albeit ironically in-line with the public sector.

“Furthermore, you have increased the workforce by 20% with no noticeable improvement in services. You do know that a 20% increase in workforce coupled with a 30% rise in salary will increase your wage bill by 50% in just four years? How can you justify such reckless salary increases, and how will we increase revenue by 50% just to pay for them?”

Charlie Trotter replied: “The pay rises simply match the Jersey public sector pay rises, as does the expansion of the workforce. They plan to cover the increases by taking more money from the public in taxes and charges, while coming up with innovative new schemes such as tunnels and wind farms. We can do the same by increasing our charges to our customers, and opening the first floating bank, so we can visit Guernsey and France and get new customers in these jurisdictions.”

Jane was furious, and assumed the last idea was one of desperation rather than intellectual thought – or it was a bad joke.

She said: “If we do continue to raise our charges, we won’t have any customers left, and as for the public sector, hopefully at least one politician will question their expanding and increasingly unaffordable wage bill.

“This is what we are going to do. You are going to reduce the workforce by 30% by the end of the summer, concentrating on middle management; if you do not hit this target, you can add yourself to the list. We are going to become completely customer focused, stop fleecing them, and there will be strict controls over remuneration and workforce hires. Those responsible for the closed-hotel fiasco will be let go – they wanted the pay and now need to suffer the consequences.

“You have all got yourselves the fat salaries you wanted. Believe me, you will now be held accountable and will have to earn them.”

While Jane’s businesses regained their mojo under her strong and prudent leadership, the public sector just got fatter and less productive, until the whole Island disappeared under its weight and sank slowly to the bottom of the sea.

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