By Carl Parslow
JERSEY prides itself on being nimble, outward-looking and pragmatic. Yet for many small- and medium-sized Jersey businesses (SMEs), particularly outside finance, the Island now feels anything but.
A creeping sense has taken hold that regulation in Jersey no longer distinguishes between the multinational and the family firm, between the complex and the simple, or between risk that is real and risk that is theoretical. One size, increasingly, is being forced to fit all.
This matters because SMEs are not a footnote to Jersey’s economy. They are its ballast.
They provide the bulk of employment outside financial services, sustain King Street and Queen Street, train young people, and keep money circulating locally. When they struggle, the effects ripple well beyond balance sheets.
Yet Jersey’s SMEs are disproportionately exposed to regulatory burden. Fixed compliance costs fall harder on smaller businesses that lack in-house legal teams or compliance officers. Multiple licences, overlapping approvals and opaque processes add delay and expense without always adding protection. Regulation designed with large players in mind can unintentionally suffocate smaller ones.
None of this is uniquely Jersey’s problem. Internationally, regulators have long recognised that uniform rules can entrench advantage rather than level the playing field. The European Union applies a formal “SME Test”. The OECD promotes a “Think Small First” principle. The UK requires Small and Micro Business Impact Assessments for new regulation. In Jersey, by contrast, SME impact guidance exists but remains advisory, unevenly applied and regularly ignored.
The Island’s regulatory culture is therefore heavy on aspiration and light on obligation. Ministers consult, departments publish guidance and yet rules once introduced rarely receive systematic review. Regulations accumulate, overlap and persist long after their original logic has faded. The effect is not dramatic failure but gradual constriction, a business environment that becomes just a little slower, a little costlier and a little less forgiving each year.
The solution is not deregulation for its own sake. Jersey rightly values protection, safety and probity. The question is not whether regulation exists, but whether it is proportionate, targeted and alive to economic reality.
One answer lies in adopting two ideas already common elsewhere: rigorous forward-looking SME impact testing, and mandatory retrospective review of existing law. Before any new rule affecting SMEs is introduced, government should be required to show, not merely assert, that the burden is justified and proportionate. That should be a hard procedural gate, not a box-ticking exercise.
More importantly, existing regulations should no longer be treated as immutable. A structured, transparent retrospective regulatory review process would force departments to re-examine the rules already on the books, prioritise those with the highest compliance costs, and explain publicly why they should remain unchanged, be amended or be repealed.
Sunsets, post-implementation reviews and published dashboards would introduce discipline into a system that currently rewards inertia.
Critics will warn that this creates more bureaucracy. In truth, it replaces informal, fragmented decision-making with clarity and accountability. Properly designed, impact tests can be proportionate: simple screens for low-risk proposals, deeper analysis only where triggers are met. Reviews can be embedded into existing departmental processes rather than bolted on as a new empire-building exercise.
There will also be cultural resistance, there already is. Regulators are accustomed to designing rules for the highest common denominator. Shifting towards a “Think Small First” mindset requires accepting that equal treatment does not always mean identical treatment. A micro-business is not a small version of a large one; it is a different organism entirely.
The prize, however, is considerable. Lower compliance drag improves competitiveness, encourages entrepreneurship and makes Jersey a more attractive place to start and grow a business. Trust improves when government explains its reasoning in the open. And regulation, subjected to periodic scrutiny, becomes better rather than weaker.
Jersey is small enough to do this well. Its scale allows for faster feedback, closer engagement with industry and more responsive policymaking than larger jurisdictions can manage. But those advantages only matter if the Island chooses to use them.
Red tape rarely arrives with fanfare. It accumulates quietly, justified in isolation, defended by habit and left in place by default. If Jersey wishes to remain prosperous beyond finance, it must relearn an old lesson: rules should serve the economy, not slowly envelop it.
For Jersey, the distinction matters. Stating in a manifesto that you support small and medium-sized businesses is a sentiment; reviewing the rules that shape them is a choice.
The credibility of the Island’s budding political candidates will ultimately rest on what follows their election, whether they act to support the non-financial services sector, or whether the rhetoric fades once the votes are counted.
Born and educated in the Island, Carl Parslow is an experienced Jersey Advocate and notary public with over 25 years’ experience. He heads up Parslows LLP business legal services department, advising corporates and individuals on a range of issues with a particular emphasis on acting for Jersey owner-managed businesses. Outside of work, he enjoys rugby and cycling with Lasardines.
