Environment Minister Disregards Widespread Industry Concern about a Jersey Infrastructure Levy

Thursday 26 October 09:32

The Jersey Chamber of Commerce is deeply concerned that the Minister for the Environment, Deputy Steve Luce, has lodged his Jersey Infrastructure Levy (JIL) Proposition, despite widespread industry concern.

The Jersey Chamber of Commerce is deeply concerned that the Minister for the Environment, Deputy Steve Luce, has lodged his Jersey Infrastructure Levy (JIL) Proposition, despite widespread industry concern.

For the last twelve months, our Building and Development Committee has met with, written to and lobbied the Minister against the introduction of JIL. On each occasion, Chamber has outlined its member's very grave concerns regarding the negative impact this levy will have on the construction industry in Jersey.

Most recently Chamber responded to the JIL Consultation, submitting a joint industry letter that outlined our concerns regarding the introduction of JIL, which is yet another business tax on the construction industry. A new tax that unquestionably overlaps with pre-existing Planning Obligation Agreements (POA’s), that already provide funds to offset the impact of a development.

It must be pointed out that with the consultation only having closed on the 11th September, Chamber does not believe the Minister or his team have allowed adequate time to fully review, reflect or discuss the consultation responses.

As previously outlined to the Minister, JIL will not increase the value of land, quite the opposite. In conventional valuations, the value ascribed to land is what's left after all costs: construction, professional fees and developer profit have been deducted. Applying a levy such as JIL will reduce the residual amount available for land and landowners won’t sell their land at a reduced price. As a direct consequence of JIL, loans secured on the value of land will be reduced. Projects, such as those agreed in the Island Plan, may not go ahead, house prices will likely increase, and Jersey will be left with a two-tier land value structure, those valued before and after JIL.

At the September Chamber of Commerce Lunch event, which the Environment Minister spoke at, Deputy Luce agreed to send JIL to scrutiny. Chamber has since been invited to attend a JIL hearing with Scrutiny on the 6th November 2017. The very fact that the Minister has chosen to push ahead with lodging his proposition, before allowing Scrutiny to carry out and submit their own report, shows contempt for the structure of government in Jersey. Moreover, it exudes a lack of respect for the Jersey Chamber of Commerce, its members and those business leaders willing to give up their time to provide evidence and feedback regarding a government proposal. A proposal, which will have a negative impact on construction, jobs and the wider Jersey economy.

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