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Gov reveals £56.5m cost of living 'mini-budget'

Gov reveals £56.5m cost of living 'mini-budget'

Tuesday 02 August 2022

Gov reveals £56.5m cost of living 'mini-budget'

Tuesday 02 August 2022

Tax thresholds will rise and Social Security contributions will fall as part of the new government’s ‘mini-budget’ to help islanders cope with rising prices - but a change in fuel duty does not feature.

Headline measures include a 12% increase in income tax thresholds from 1 January, which should leave a family of four with a £50,000 household income around £1,200 better off next year, and a three-month 2% reduction in SS contributions on the employee, or self-employed, side.

Ministers say its "timely, targeted and temporary" approach follows the advice of its economic advisers and best serves individuals and families.

Businesses will also benefit, they argue, by people having more money to spend. There will be more business-specific measures included in the Government Plan, which will be debated at the end of the year, according to the Treasury Minister.

The 12% increase in thresholds and allowances, including Child Allowances, Additional Allowance and Child Care Tax Relief, is on top of an inflation rate of 7.9%.

Other measures include a six-month delay to reducing the GST threshold on internet sales, which was due to fall from £135 to £60 on 1 January but will now come in on 1 July.

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CLICK TO ENLARGE: Proposed allowance rises for islanders included in the mini-budget.

Ministers will also double contributions from the ‘Cost of Living Temporary Scheme’ from £20 to £40 per person per month from this month to December and double the Community Cost Bonus to £516 in October. 

Only 1,000 islanders are currently taking advantage of the Community Cost Bonus – which is not dependent on receiving Income Support – yet the Government believe that up to 7,000 people could be eligible.

It will therefore mount a campaign to publicise it further.

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CLICK TO ENLARGE: Government estimates of how islanders will be better off following the rise in tax thresholds. 

The States pension will also increase by 7.7% - in line with the pension RPI – from October. That equates to a £18.13-a-week increase for a single person and a £30.10 rise for a couple.

Cold weather payments will rise £70 per month from October 2022 to March 2023 and won't be temperature-dependent as it is now.

There will also be an extra Income Support rise in January to reflect the September RPI figure, which the Government say will return £6.4m to lower income families.

It has also pledged to develop a scheme to support families with children who have not lived in the island for at least five years, as all other schemes require five years' residency.

The ‘mini-budget’ – which Chief Minister Kristina Moore promised as part of her ‘100-day plan’ – will mean that £14.7m will stay in the pockets of islanders and not go to the Treasury this year.

Next year, and following years for recurring measures, the total cost of the package is £41.8m, although that falls to £30m when forecasts for increased revenue are factored in. 

The Government say that it discounted cutting fuel duty following the advice of the OECD, which recommended that “jurisdictions with administrative systems that can roll out targeted measures which support income should focus on these measures rather than on measures that support price”.

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Pictured: The Government say that they want to review the fuel market before committing to any duty cuts.

This is because supporting income-focuses measures are more progressive, their impact on Government revenue is more phased, and cutting fuel duty runs counter to carbon-cutting initiatives. 

This week, however, an official petition launched by the head of fuel provider ATF calling for an immediate reduction in fuel duty surpassed 5,000 signatures, meaning it will be debated in the States Assembly.

Addressing this, Treasury Minister Ian Gorst said: “That is the reason why there is no change in this package of measures, because ministers will have to consider fuel duty then.

“Also, we have seen in the last week, when we were finalising measures for this mini-budget, that there were some falls in prices at the pump.

“To some extent, these mirrored declines in the crude pride but strangely we also saw some retailers increasing their prices. We didn’t have enough time to ensure that, if we did bring forward reductions in fuel duty, they would be sufficiently passed on for a sufficient length of time.”

He added: “Ministers have committed to doing a quick review into what is happening in the fuel market, because some strange things seem to be occurring. 

“We want to engage with fuel providers to understand what is happening. We don’t want to reduce fuel duty for it to go into their pockets.” 

The mini-budget will be debated by the States Assembly at its sitting on 13 September, leaving just over a month for backbenchers and scrutineers to critique and suggest tweaks to it.

Reform Jersey has already said it has "concerns" about the measures, in terms of "whether they will provide adequate support for those who need it most."

In a statement, the party, which has 10 States Members, said: "Upon first inspection, it appears unclear whether the combination of temporary and permanent changes are focused enough to mean that those who are struggling the most will receive the greatest proportional benefit, rather than those on relatively higher incomes. There is a risk that these measures could therefore prove to be regressive and end up increasing inequality in the long-term."


Pictured: Reform Jersey's States Members.

They continued: "It is unclear whether the long-term costs of the structural changes to the tax system have been considered, and whether they risk creating financial pressure in the future to cut public services.

"The proposition also contains no tangible action to address one of the biggest inflationary pressures facing households, which is the increasing cost of private sector rents.

"Reform Jersey’s States Members will begin examining this proposition immediately, with a view to bringing amendments in time for debate in September, if necessary."



Over the coming months, Express will be focusing on how islanders are being affected by the rising cost of living locally and what is being done to resolve it.

Are you feeling the pinch? Are you leaving the island or know someone who is? We want to hear your story, and are happy to speak in confidence.



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The Jersey Consumer Council has created the following price comparison tools to help islanders compare the costs of different essentials...

Supermarket goods

Prices at the pumps

The price of oil

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Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.

Once your comment has been submitted, it won’t appear immediately. There is no need to submit it more than once. Comments are published at the discretion of Bailiwick Publishing, and will include your username.

Posted by Anthony Webber on
This is all making a positive effort so well done for that.
However, the most important factor in the cost of living crisis is the UK government's policy on Ukraine and Russia.
Nothing will improve until that policy is changed.
That policy is against the interests of the public both in the UK and the Crown Dependencies.
To help put pressure to change this policy please sign and share this new Petition:
promote this as it involves the future of our country:
Posted by john garner on
Unfortunately people are facing the shortfall now this week ...not sometime in 2023 not to get £20 quid a week of their own money taxed from them
Posted by Jon Jon on
I don't really think it will help much.A fair proportion of the population pay no tax already, or very little.They want to increase wages up to minimum ten pound an hour rising again next year, any wages costs will simply mean higher prices again, plus those not paying tax could find themselves hitting the tax bracket.Cut in SS,well again many on this Island don't pay it, population is old.The government say there is a further 7000 people eligible for this extra income support,well why don't they contact them.Internet threshold will never properly work, you just split up your goods.Fuel duty again was never going to be on the cards with so many greenies elected in last election, but its needed.I'm dreading filling up my oil tank come winter.

Alo have look how much more revenue is being generated by higher costs of everything, higher price more GST paid out.If this is best this Government can produce then nothing much will change from last time.Pretty disappointing to be honest.
Posted by Keith Marsh on
Report Card in First 100 Days = Very disappointing. Must try harder.
Also ~ how is this going to be paid for ? Or is this extra Government borrowing; because I'm certain it is not from Mr Parker's wonderful "magic money tree".
Would love to know HOW they produce RPI-P, as my shopping bill has increased by much more than 7.7%, and that is without Electric, Gas, Water & JT Increases.
Get to work guys and girls, you have a few weeks to put the icing on the cake.
Posted by on
Why hasn't the cost of fuel been addressed in this budget?

It affects everything we buy and use, which includes the delivery of food and essential services for the economy to run. Products get on shelves using trucks that run on diesel they are not electric and are years away from being so, a reduction in fuel tax is essential to curb the rampant inflationary cycle we are now in and put money back in our pockets.
Posted by Scott Mills on
remember politicians work exactly like magicians. While you watch one hand, keep an eye on the other hand. Ie above, giving us a little, but the other (bigger) hand will always take. Remember it's not their money, but they think it is and effectiviely treat is as such. Anyone for another £15 million nightgale hospital for the monkeypox? may as well splash the cash gov.
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