By Ben Shenton
AS we all know, most of us who live in Jersey could move to the UK if we wished. We don’t need any permissions or permits, don’t need to go through an interview process, and we never have UK politicians raising concern over our immigration rights. It is a right that many Islanders are grateful for, indeed my own grandparents retired to the UK many decades ago.
And, as I hope we all know, most of those in the UK can move to Jersey if they wished. They don’t need any permissions or permits, don’t need to go through an interview process, and for the majority they rarely have Jersey politicians discussing their arrival – unless they are wealthy and going to pay a lot of Jersey taxation.
Last summer I met a lady on the beach who had moved here. She was retired, single, and previously lived in Nottingham, or somewhere similar – I forget exactly. She had undertaken some research on places to retire to and Jersey topped her list. She had absolutely no connection with the Island and her only visit previously was to check us out.
Her plan was to supplement her UK state and private pension with the capital from her house sale. She had done the calculations and it was easily possible to retire here given life-expectancy rates. She was living in lovely “non-qualified” accommodation with reduced rent as she looked out for her elderly landlady. Once she had her housing qualifications she said she may consider renting a qualified flat. She will pay absolutely no Jersey income tax and contribute nothing to the costs of living here – other than duty and GST.
There are many who come over here who pay little or no tax and are a drain on resources, and many who do pay tax will receive far more in benefits, such as free nursery and free schooling for their children, than the amount of tax paid.
If a wealthy individual from Jersey decides to move to the UK they will take tax advice and will invariably have tax advantages over the wealthy in the UK who built up their assets constrained by capital gains tax and other UK taxes. Jersey reciprocates this policy and the wealthy moving here similarly get certain taxation advantages over the locals.
In terms of financial management I would give the Island no more than D+ as we are now in a situation whereby our government income is well short of our expenditure, and has been for many years. If pigs really do fly, and the public sector does what is best for the Island in terms of costs, rather than what is best for themselves, we have a small chance of avoiding tax increases. From a purely economic viewpoint we need the right sort of people to come here, those who pay tax, because if we don’t it will be the poorest and most vulnerable that carry the burden as GST rises, perhaps to double-digits, and benefits are cut. The inconvenient truth is it is those who pay tax that keep the lights on, the hospital running, the schools teaching, and the bills paid. Looking at it coldly, the focus on restricting those who will help us financially, while ignoring those who cost dearly, is both utter stupidity and economic suicide.
It is my observation that people more readily criticise the wealthy than the poor due to deep psychological, sociological, and cultural reason. I remember being in St Patrick’s Church and the priest said, “let us pray for the poor”. I remarked to my wife that in all my years of going to church I have never heard any priest say, “let us pray for the rich” – as if money solved everything and the rich don’t suffer mental-health issues, relationship breakdowns, cancer, etc.
In most religions the poor are characterised as virtuous, humble, and deserving of compassion, while the rich are morally at risk and tempted by greed and pride. Phrases like “it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of God” are powerful cultural statements. However, these statements were probably more designed as a cynical way to get the wealthy to give their mortal wealth to the church before they passed. From an early age the Robin Hood narrative is deeply embedded.
When high-net-worth people come to the Island they enter into a special partnership where they commit to contributing more to the Island’s future than typical taxpayers. This is a deal, it is not a favour. These individuals help us to preserve our autonomy, our quality of life, our services – and the Jersey we are proud to pass to the next generation.
Maybe it is time to stop taking about “High Value Residents”, “Wealthy Incomers”, and the “21e scheme” and start referring to them as “Major Contributors”, “Economic Partners”, and “Strategic Residents”.
Green-eye and envy has no place in economic management and fiscal responsibility. Restrict the number of large taxpayers and GST and other taxes will almost certainly need to rise – transferring the tax burden to the poor and most vulnerable.
With an election ahead I’m not surprised that some candidates want to reduce the number of major contributors who move to the Island. After all, envy makes for excellent speeches and soundbites, but terrible spreadsheets.
Hypothetical question: If a paid politician is given community service to be undertaken instead of their political work, is this in fact paid community service? If so, is taxpayer-paid community service actually a punishment for a criminal offence? Surely for the court ruling to elicit punishment for a criminal offence through community service the politician must immediately resign from their role, without severance pay, so the taxpayer is no longer paying them? Otherwise the court has brought itself into disrepute through non-punishment of a guilty verdict, and it must therefore explain its actions.
Ben Shenton is a senior investment director. He is a former politician, Senator, who held positions such as minister, chair of Public Accounts Committee, and chair of Scrutiny. He also assists a number of local charities on an honorary basis.
