Middle Jersey cost of living support

2025.10.21

4.2   Deputy L.M.C. Doublet of St. Saviour of the Chief Minister regarding the cost of living to Middle Jersey' (OQ.236/2025):

Will the Chief Minister detail what support, if any, is being provided or offered to households considered to be "middle Jersey" to assist with the cost of living and if no support is being provided or offered, why not; and will he further advise how this group are considered when policy decisions are made regarding the cost of living?

Deputy L.J. Farnham of St. Mary , St. Ouen and St. Peter (The Chief Minister):

Let us start by saying I think Members will know that the increases in cost of living are not unique to Jersey; that is something we are seeing globally, particularly in the west, due to geopolitical challenges. Of course, we import about 95 per cent of what we consume, so we are at the mercy of other economies sometimes. However, there are levers we can pull to help reduce the impact of cost of living on Islanders. Those have included, in line with our Corporate Strategic Policy, a reduction in the cost of G.P. (general practitioner) appointments, the hot school meals are now available in every state school, government fees and charges, we have a policy to keep those as low as possible. We have a cap at 2.5 per cent and quite often charges are put up below that. In addition to the forthcoming Budget, the forthcoming Budget proposes increased tax thresholds with the income thresholds rising to £21,250 before people pay tax. Importantly, as mentioned by the Minister for Social Security, one of the big challenges the Island has been facing is that of childcare. We are proposing in the Budget up to 15 hours of new free childcare fully funded for 2 to 3 year-olds to give every child the best start. This proposal would invest £4 million into childcare for 2 to 3 year-olds, creating an opportunity to families to save up to £6,000 a year in childcare costs.

1. Deputy L.M.C. Doublet :

I think that we understand very well the profiles of lower earners in the Island, and we have an income support system to provide for those Islanders. Could the Chief Minister outline, aside from the individual topic-based things he has outlined, what systematic work is being done to understand, for example, families who have a mortgage on one property that they own and are working full-time hours and have children, the struggles that families like that might be facing who are outside of the perhaps income support requirements?

Deputy L.J. Farnham :

There is no, as such, clear definition of what the Deputy means by "middle Jersey". I think we know what she means but we manage. We tend to target support for Islanders. We have general policies that help all Islanders. For example, I mentioned the childcare support because that is universal; it is not means-tested. That is one example of where we are helping all Islanders.

[10:00]

I think you could argue that the introduction or the move to a living wage will help more Islanders, those outside of the lower income support measures, because the impact of a minimum or a living wage increases wage levels across, right through the pay scales. We manage that and we work on that based on our policy and strategy that has always been to target the support of more of those people on lower income. But as I have explained, we are introducing more universal support packages moving forward. But there is no clear definition of ... well, I am not sure what the Deputy means by "middle Jersey". Perhaps that is something we need to look to establish if we want to get more details for the Deputy .

2. Deputy J. Renouf of St. Brelade :

The Government is, in its Budget, reducing contributions to the Social Security Fund by a quarter of billion pounds with measures to spending to help Islanders. Did the Chief Minister consider options such as time-limited cuts to tax or social security contributions, which would not have been a long-term drain on the fund; and if not why not?

Deputy L.J. Farnham :

Because we have allowed this Assembly, previous Governments have allowed, the cost of running the public sector to grow exponentially we needed to make a decision about how we invest taxpayers' money. The Government has decided to invest a bit less of that money in pension reserves and put more of that money, as the Minister for Social Security explained in a previous answer, into supporting Islanders. For example, the provision of much-needed housing for looking after children, and, of course, increases and improvements to the Health budget, and health we provide for Islanders. If you start reducing social security contributions, that has a long-term impact, and once you start reducing them, they are much harder to bring them back up again. The argument is the same if we were to increase pensions. The long-term impact of that is far greater than what we are proposing. We are proposing a short-term reduction in the taxpayer contribution to the reserve funds. Bearing in mind we are still proposing to put in £184 million during the course of this Budget and forecast, which is a lot more than has gone in from the public, from the taxpayer in the last 5 years. What we are actually doing is reinstating the contributions to the Pension Reserve Fund, and increasing what is going into them.

3. Deputy J. Renouf :

Perhaps I was not clear. What I was suggesting was as a cost-of-living measure. Did the Government consider taking short-term, say 2-year, cuts in contributory benefits or taxes, which would not have had a long-term effect because they would have been short term? Can the Chief Minister confirm whether that was considered and if not, why not?

Deputy L.J. Farnham :

I thought I explained that in the opening part of the question, but sorry if I was not clear. No, we did not seriously consider that because, as I have explained, we have to finally balance the books at the moment, given the increase in the cost of running the public sector. Now this Assembly in the Budget might decide they do not want to, they want to put even more money into the Reserve Fund, in which case we will have to look at what we spend taxes and the money we save on. That will mean a significant reduction in some services or not introducing a new service; for example, the £4 million for childcare, the money we need to build new children's homes, the increase in the Health budget to provide better health for Islanders. That is a legitimate debate for the Assembly, but this Government has decided, for the reasons explained numerous times in Scrutiny and here in the Assembly, that we think it is better use of taxpayers' money now to invest in the current needs of Islanders, while still keeping the Social Security Reserve in a very strong position.

4. Deputy P.F.C. Ozouf of St. Saviour :

The Chief Minister has been in this Assembly as long as I have, albeit with some absences. He will recall many discussions about the need to find monies for improving public services, improving services at the same time as delivering efficiencies. In the committees and Governments that I have been with him, would he agree that the cost of living is not just about reducing ... albeit the previous questioner asked some pertinent questions about reducing the contribution to social security, but does his Government also not continue to agree that a relentless focus on driving down domestic cost of living is important, and was he concerned to hear the comments of the retailers when they said that as a result of the flat rate card all of the groceries in Jersey were going up?

Deputy L.J. Farnham :

I think there were a number of questions in there. Of course we remain concerned about the cost of living in Jersey. We have done all along, and I remember the Deputy 's frustrations when he was the Minister for Treasury and Resources, the limited impact we could have on the cost of living because we control ... we do not have monetary policy, we have fiscal policy. So we are limited. In relation to the flat rate card, let me just explain that while that might see a very small increase in the cost of freight in the short term, I believe that will bring benefits to freight because it will introduce more competition in the freight-forwarding process moving forward. Right now, where we have only one freight-forwarding operator delivering the vast majority of our freight, any increases, for example, the difference between what Condor paid and a new flat rate card, can be passed straight through to the retailers. But we want to see more competition in food retail. The Deputy knows we want to bring food prices down, that is perhaps where we need to be looking. Freight-forwarding costs, food retail costs for competition. I would also remind Members that out of the 2 bidders in the tender process for the ferry service, both of them put forward flat rates there. So, whichever ferry operator we would have chosen we would have seen an increase to the flat rate.

5. Deputy P.F.C. Ozouf :

My constituents in St. Saviour, and I think it is also across the Island, are getting tired of hearing about jam tomorrow. They wanted to see action during the course of this Assembly and they have not. When they hear that grocery prices are going up, because that is what the retailers all of them said when they appeared for the Scrutiny Panel, they linked that directly towards the flat rate card. Is he saying he is not concerned by the comments that the retailers advanced on oath at a public Scrutiny hearing that their grocery prices were going up as a result of the flat rate card? Was he not concerned?

Deputy L.J. Farnham :

I take exception to the accusation of talking about jam tomorrow from the author of the jam tomorrow phrase used in this Assembly, and the times when I go back to the Deputy 's time in office when we had promises that never materialised and we saw rises in the cost of living, significant rises in the cost of living, through his time in office. But of course we know that was not all of his fault because at that time as well we were subject to rises in cost of living from factors outside of our control. This Government has done more in the last 18 months to bear down on the cost of living and to support Islanders with assistance than previous Governments have. That is something we continue to do and hopefully the Assembly will continue to support that. The economic advice we have received in relation to the increase to the flat rate, will have a minimal impact on the cost of food. We are seeing huge increases to the cost of food. Just look across the U.K. (United Kingdom) and how the major multiples are seeing major ... you speak to people. I have friends and family that live in the U.K. and they talk about significant increases to the cost of food. It is something that is going on right across the world, and it is beyond our control. We do not like it and we will do everything we can to help bear down on that. But our choices are limited.

Deputy P.F.C. Ozouf : Point of order, Sir. The Deputy Bailiff : Yes.

Deputy P.F.C. Ozouf :

May I ask, the Chief Minister in his answer made a number of suggestions of policies that I may have been involved in, which I do not recognise, and facts. Do I have any recourse in order to ask the Chief Minister to withdraw such comments? Someone has to take the insult, Sir?

The Deputy Bailiff :

It is just parliamentary discussion and debate, nothing unusual what the Chief Minister ... Deputy P.F.C. Ozouf :

It sounded insulting, Sir.

Deputy L.J. Farnham :

It was not meant to be insulting, Sir. I am just trying to make a point. If the Deputy cannot take it he should not dish it out.

The Deputy Bailiff :

There is no point of order. Chief Minister, I have dealt with the point. I have dealt with the point.

6. Deputy M. Tadier of St. Brelade :

There has been a suggestion that the flat rate card is contributing excessively to the cost-of- living crisis in Jersey. Whatever the facts of that are, and we may get to them at some point, would the Minister state whether he is dogmatic about the continuation of the flat rate card or would he be open to suggesting that the DFDS do not have to charge a flat rate for freight to allow for more dynamic pricing and more flexibility in the charging of  freight for that company?

Deputy L.J. Farnham :

As I said before, we like to be flexible, but I honestly think that a flat rate will work in the best interests moving forward. It is going to provide some very small inflation in the short term, but that should quickly level out. But, of course, I will say everything is possible. We can negotiate any aspect of the contract at any time. The Minister for Sustainable Economic Development and his team can do that with the ferry operator, and that is an option on the table. If we were to see an ongoing problem or continue challenges, if we fail to see more competition in the freight-forwarding market, then that might be a time to look at renegotiating that to try and drive costs down. But right now, I think we need to stick to our guns on that and support more competition in the markets. We have to remember that when there was a dynamic rate, the main freight forwarder were paying less than half of what new entrants into the market would have to pay for shipping rates. That just eliminated all competition.

7. Deputy M. Tadier :

Does the Chief Minister accept that economics might state that if there is very little traffic, let us say going on a Tuesday and Thursday, it might be normal for a company to incentivise more traffic, more freight, going on those days by offering a discount? Currently, it is not possible for DFDS to offer discounts when there might be light freight days. Is that something that the Minister would consider, especially if there is evidence that a non-flat-rate card might actually produce better benefits for the consumer, ultimately, than a flat-rate card?

Deputy L.J. Farnham :

I will have to pass that one over to the Minister for Sustainable Economic Development in due course, but I am not sure that it would because we have to remember that our ferry service has to be financially sustainable. [Approbation] Thank you, Minister.

Deputy M. Tadier :

At least one person agrees with you, Chief Minister. Deputy L.J. Farnham :

I am grateful for the Minister's support on that. We remember that our previous ferry operator, Condor Ferries, because of various private equity purchases and sales ended up in severe financial difficulty. What we have here now is a partnership with a large global organisation that we believe will be much more financially secure and sustainable moving forward. I think it is important we bear that in mind, given the lifeline nature of the services they provide.

8. Deputy L.M.C. Doublet :

I thank the Chief Minister for his answers. I can see that this current Government, as with the previous Government, is taking the cost-of-living challenges seriously and attempting to tackle them. As the Chief Minister mentioned, much of it is beyond our control, but does he agree that where we target our support is within our control? Would he agree that a piece of work is necessary to understand and define the needs of middle Jersey so that our policies and legislation can be targeted properly? Could he consider initiating this before the end of this term of office so that it can be completed early in the next term to inform the policy making of the next Assembly?

Deputy L.J. Farnham :

I think the short answer to that is yes, insofar as I can ask the Cost of Living Strategy Group to put that on their agenda for the next meeting and consider that. The first thing we need to do is have a definition of exactly what middle Jersey is because we are a small, I think, and united community. We tend to look at the Islanders, we try to do the best for all Islanders, but we can certainly look at that. I think I speak on behalf of all Ministers, I wish we could do more to bear down on the cost of living, and we will do everything we can to play our part in minimising the impact for all Islanders.

[10:15]