THE government is facing renewed pressure to help struggling Islanders during the continued surge in the cost of living.
Just days after the Bank of England hiked interest rates to the highest level in almost 15 years in an effort to slow rampant inflation, ministers are facing new calls to remove GST from food, tackle housing and energy costs and delay a planned tax change which will increase the cost of some online shopping.
Reform Jersey’s Deputy Raluca Kovacs said that the States decision last year to reject her proposition to remove GST from food was a ‘missed opportunity’ to help those most in need.
She added that there ‘has never been a greater need to reflect on GST to be removed from food’ as it ‘disproportionately affects people on low and middle incomes’.
Deputy Kovacs reiterated her comments that GST on food left Islanders struggling ‘massively’.
Asked whether she would consider lodging another proposition, she responded: ‘It is not the last time the Assembly will hear about this. I’m not saying if or when that can come again, but I believe it can be done. Perhaps not in the very near future, but you’ll hear about it again for sure.’
Charities and food banks have recently reported a rise in the number of Islanders seeking help, as inflation has soared to its highest level since the early 1980s.
Meanwhile, Kate Wright, chair of the Jersey Community Relations Trust, which recently revealed that more than a fifth of Island households lived on £420 a week or less after housing costs, has called for the government to take immediate action.
She said that removing GST would ‘undoubtedly help’ those on lower incomes, but added that the rising costs of housing and fuel also needed to be ‘urgently’ addressed.
Housing and fuel were the highest contributors to the rising rate of inflation, at 24.4% and 22.7% respectively.
Mrs Wright said: ‘We urgently need to look at rising fuel costs, because these are more expensive than the UK and disproportionately affect lower-income Islanders.’
Carl Walker, chair of the Consumer Council, has called on the government to delay plans to slash the ‘de minimis’ threshold at which Islanders pay GST on imported products.
The government is soon to launch a public-awareness campaign notifying Islanders of the reduction of the de minimis level from £135 to £60.
Mr Walker wrote to the previous government last year asking them to take a number of measures, including delaying changes to the de minimis level, to help struggling Islanders.
In its emergency mini budget, the current government agreed to defer the cut – which was originally due to come into force on 1 January this year – to 1 July.
Mr Walker said the cost-of-living crisis was ‘far from over, and any measures that the government considered earlier in the year to help Islanders through this crisis should be reconsidered and extended until we are in the clear’.
He questioned whether it was the ‘right time’ for the cut and said the Consumer Council would encourage the government to ‘push it down the line to 1 January 2024 to let Islanders recover from the current cost of living’ .
Mr Walker said: ‘We believe that prices are yet to slow down in Jersey and this week we have seen a warning from the Bank of England that interest rates could climb even higher while we get the current crisis under control. This spells more bad news and hard times for Islanders as we are intrinsically linked to the UK economy.’
Dominic Egré, a supervisor at the St Vincent de Paul food bank, said that a reduction in the de minimis level would have a ‘massive effect’ on the Islanders the charity supported.
He added: ‘We have a lot of clients who order online from places like Amazon because these are much cheaper than in the Island. They buy a lot of domestic non-food products like cleaning supplies and pet food, and that is going to be a massive issue when the de minimis reduction comes in.’