Retail tax ‘puts £20m store deal at risk’

Yesterday, during the third day of the Budget debate, politicians from the Economic Development Department revealed that civil servants had been in discussions with a ‘high-net-worth family’ over bringing a large retail outlet to the Island.

But they said that earlier this week, as Members began debating proposals to levy a tax of up to 20 per cent on large retailers, the negotiations were put ‘on hold’.

No details of the plans were revealed and now, after the States approved the Budget yesterday afternoon, the fate of the project is unclear.

The revelation was made by Assistant Economic Development Minister Murray Norton as he criticised the tax, which will apply to retailers earning an annual profit of more than £500,000.

Deputy Norton said he was finding it increasingly difficult to support the move, and instead backed an amendment from Senator Philip Ozouf to cap the tax at ten per cent. The amendment was ultimately rejected.

‘Of course they should pay tax. There is a difficulty, though, in doing that if we lose some of the investment,’ he said.

‘At the moment, as of two days ago, a £20 million investment in retail is now on hold. It has been put on hold for one reason only – because they are now faced with a 20 per cent retail tax,’ the Deputy added.

He went on to criticise Treasury Minister Alan Maclean for ‘failing to properly consult’ industry representatives on the potential impact of the tax before unveiling his Budget proposals.

‘Did you consult with the Consumer Council? No. Did you consult with the Jersey Retail Association? Of course not, why would we consult with them – they’re just the Retail Association. Did you consult with the Chamber of Commerce? Why would you do that? They only represent business,’ he said.

Economic Development Minister Lyndon Farnham later added that the investors were a ‘high-net-worth family’ with a background in retail who had moved to the Island.

He said: ‘My view is clear within the Council of Ministers about the level of retail tax that is set. Tax at this sort of level will effect decisions and investment will drop because the amount of profit that they have to invest will fall.’

He said that the family had moved here and were looking to set up their business in the Island. He added that he would be meeting them to ‘see if there is anything we can do’ to persuade them to continue with their investment.

Senator Maclean told Members that there had been a lot of consultation with retailers but that of the 30 large retailers invited to meetings, only ten attended.

He added that he was supportive of inward investment and believed that the Island would continue to be an attractive place to do business.

lFull Budget report: Page 5.

How they voted

For: Senator Routier, Maclean, Gorst, Green and Ferguson. The Constables of St Peter, St Mary, St Martin and Grouville. Deputies Southern, Carolyn Labey, Pryke, Tadier, Noel, Vallois, Higgins, Maçon, Pinel, Luce, Bryans, Mézec, Doublet, Russell Labey, Brée, Johnson and McLinton. Total: 26

Against: Senator Ozouf. The Constables of St Lawrence, St Ouen, St Brelade, St John and Trinity. Deputies Martin, Hilton, Kevin Lewis, Andrew Lewis, Wickenden, Norton, McDonald and Truscott. Total: 14

The Constable of St Clement abstained

Senator Farnham was not present for the vote

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