JERSEY risks ‘long-lasting damage to the economy and society’ if it fails to address a growing poverty gap which leaves more than a fifth of Island households living on £420 a week or less after housing costs, according to a new report.
Of those households in relative low income, 38% were pensioners, while the review – carried out by the Jersey Community Relations Trust – also found that the Island’s current tax system is ‘heavily regressive for the lowest incomes when sales taxes are included’.
Relative low income is defined as being below 60% of the median income, which is currently £36,400 or £21,840 a year.
The JCRT makes three key recommendations that it believes the government should prioritise to reduce poverty. They are:
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Reducing pensioner poverty in an ageing population.
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Improving living standards and ensuring a humane experience of living and working in Jersey for our middle- to lowest-earning migrant workers, including temporary and seasonal workers on whom much of the Island’s economy is dependent.
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Improving equality of opportunity for all children and young people in our education system, in a world in which future skills requirements look very different.
The review was initially carried out to explore the potential impact of introducing Universal Basic Income in Jersey. The report states: ‘What started as a high-level exploration of UBI has resulted in a broader understanding of what poverty looks like in Jersey, helping us to identify and articulate some key questions and priorities for reducing the growing inequalities and hardships experienced by the Island’s poorest individuals and households.’
According to the report, 21% of Jersey’s population are living in relative low income after housing costs. ‘The cost of housing plays a big role in pushing household towards poverty in Jersey,’ the report states.
It continues: ‘Almost one in five pensioner households live on less than half the median equivalised income after housing costs even with the help of income support. Some pensioners benefit from property wealth that has increased in value over the course of decades, but many do not have access to this and have limited ways to increase their income.’
Discussing the impact of GST on low-income households, the JCRT said the 5% rate on the majority of goods and services ‘disproportionately affects lowest earners’. Last year, the States Assembly rejected a proposition from Deputy Raluca Kovacs to remove GST from food by 21 votes to 17.
Kate Wright, chair of the JCRT, said: ‘Jersey is a wealthy island, but increasing numbers of Islanders are living in poverty and experiencing hardship – and many of these are in employment. Jersey’s ageing population, rapidly rising costs of living and the housing affordability crisis are significant and challenging priorities for our Island.
‘The JCRT believes that equity and inclusion must lie at the heart of the solutions to fixing these issues, otherwise we risk long-lasting damage to the economy and society.
‘We need to understand how inequality is experienced across our community, especially for those on the lowest incomes – and, importantly, what we aspire for all Islanders in relation to their quality of life and standards of living. Defining this vision, and a joined-up strategy to deliver it, are key if the government is to make meaningful progress in reducing hardship and disadvantage.’
Mark Pragnell, director of Pragmatix Advisory, the JCRT’s research partner for the paper, added: ‘With its international finance centre, Jersey is a prosperous place that produces great wealth for the whole island, but some Islanders benefit more than others. High housing costs are often the root cause of the Island’s inequalities. Material pockets of deprivation and poverty exist – among the retired, seasonal, migrant and low-skilled workers, and now – with the cost-of-living crisis – working families on middle incomes.’
The JCRT is a government-funded, independent campaign group with a focus on promoting inclusivity within the Island.
