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A 'snap review' into the local fuel market has been welcomed by the head of a fuel distribution company calling for a duty cut, after the Government decided against including the measure in its £57m cost of living 'mini budget'.
Jon Best of ATF Fuels – whose official online petition calling for a reduction has attracted more than 5,000 signatures – said that he still believed a duty-cut was still the right thing to do but he could see why ministers had not included it in their package of measures.
Treasury Minister Ian Gorst said that, having surpassed the 5,000-signature threshold, the petition would now be subject of a States debate so the matter would be discussed by all Members.
He added that would initiate a short review into the local fuel market because it appeared “strange” that a recent reduction in the wholesale price of fuel had not been applied to pump prices by all suppliers.
Pictured: ATF Fuels' Managing Director Jon Best: "It would have been rather foolhardy if ATF hadn’t dropped our prices when we could".
In reaction, Mr Best said: “I can understand the Government’s willingness to want to put things into context.
“We dropped our prices when the wholesale price fell the week before last and we maintained that lower price when the market rose again.
“That did not happen across the board, so something is not quite right. From our perspective, it would have been rather foolhardy if ATF hadn’t dropped our prices when we could, seeing that I created the petition.”
He added: “I am clearly delighted that more than 5,000 people have signed it and I can see the minister’s rationale in waiting for the debate to take place in the Assembly.”
The petition calls for a 2.5p per litre temporary cut in fuel duty, which Mr Best thinks equates to the additional GST being raised.
It also calls for an additional 3p per litre duty cut for biofuels to support the move to renewable fuels.
Pictured: ATF Fuels is calling for a 3p per litre duty cut for biofuels, which it argues supports the Government's Carbon Neutral Roadmap.
In a written response to the petition, prompted when it passed the 2,000-signature mark in May, the previous Treasury Minister said that fuel duty reductions were a “blunt way” of helping struggling households and there was no guarantee that it would be passed on to consumers.
Yesterday’s mini budget included raising income tax thresholds and allowances, and reducing social security contributions paid by employees and the self-employed for the last three months of this year.
The measures, which total £56.5m over two years, has been broadly welcomed by representative bodies.
Jersey Consumer Council chairman Carl Walker said: “The speed in which the new government has been able to table this new mini budget is extremely encouraging.
“In only a little over a month since the elections, ministers have got their heads together on a piece of work which should, on the face of it, help more islanders get through what is going to be a very tough winter indeed.”
He added: “While this budget hasn’t tackled the surge in fuel prices, or necessarily allowed for some direct financial assistance for this forthcoming winter’s energy bills, it does seem to be attempting to widen the net in terms of the number of people who will both receive help, while also increasing some tax thresholds to leave more money in some islanders’ pockets.
“This should, at least, buy both the Government and islanders some time while the full budget is prepared for November/December, when the full impact of this winter’s energy demands will be realised.”
Deputy Gorst said that the mini budget was “targeted at individuals and families who are struggling right now with the cost of living crisis” but added that there were secondary benefits to businesses.
He said: “By reducing, for a temporary period, social security contributions, and by increasing the tax thresholds, we are putting money into islanders’ pockets, so it alleviates some of the other pressures around our economy, particularly around the wage negotiations that will go on this year and next.
“Also, there will be at the end of this year another budget and I am absolutely committed to making sure that that will focus on innovation and economic growth, and you will see additional benefits for business coming out of that.”
I'm delighted with the mini budget. Raising tax thresholds to help islanders deal with the cost of living was a key manifesto pledge of mine and, along with the other measures included, the budget shows the Council of Ministers is acting strongly to help islanders. https://t.co/hXPFebO73w
— Kirsten Morel (@KirstenJersey) August 2, 2022
Pictured: Economic Development Minister Kirsten Morel yesterday Tweeted his support for the mini budget.
The Chamber of Commerce said it had recently met the Treasury Minister and had been offered assurances that the main budget would be more business-friendly.
CEO Murray Norton said: “We are clearly supportive of any help for our community and those individuals most in need, but issues such as rising costs are also faced by businesses.”
Mr Norton said that he was disappointed that reducing the GST threshold on internet goods from £135 to £60 had been delayed by six months.
“We’ve been told that it is because the largest internet retailer shipping to the island [Amazon] has asked for more time to update their systems to take GST at source,” he said.
“We support the move to selling platforms taking responsibility for collecting GST, but it is still disappointing that it has been pushed back by half a year.
“We appreciate that the delay does soften the blow for consumers in the short term but getting a level playing field for local businesses is far more important in the long term.”
Asked what support Chamber might like to see from the Government, Mr Norton said that it was still consulting with its 600 members and a survey would be sent out this week to capture their views.
Mr Norton added that one potential proposal could be varying the conditions around benefit-in-kind allowances to encourage more businesses to offer electric vehicles to their employees.
At the moment, there was no incentive for firms to support the transition to e-bikes, scooters and cars as they were not tax deductible for employees, he said.
Mr Norton added it was particularly important that small business owners were supported, therefore it was right to recognise the “positive step” made by the Government in reducing Class 2 Social Security contributions in the mini budget.
Under the proposals, the self-employed, and unemployed, will see their contributions cut from 12.5% to 10.5% for three months from 1 October to 31 December.
The mini budget did not include any proposal to cap or regulate private-sector rents, except a pledge to “encourage private sector landlords and estate agents to minimise rental increases.”
Explaining why this approach had been taken, Deputy Gorst said: “We think the best way is to work proactively with landlords to encourage them not to increase their rents by RPI and cost of living.
The Mini Budget says they will be "encouraging" landlords not to raise their rents by above inflation "if possible".
— Deputy Sam Mézec (@SamMezecJsy) August 2, 2022
They shouldn't be "encouraging" them not to do it, they should be ???????????????????????????? them from doing it. https://t.co/tTPoS4dThm
Pictured: Reform leader Deputy Sam Mézec believes that "encouraging" landlords is not enough.
“That is a conversation that we will continue to have over the next couple of days.”
He added: “With Andium homes, there is a 4% cap on the increase in rents and that will also influence market activity.
“I think this proactive engagement approach is the right one for us as we announce this mini budget.
“It could be easily argued that it is within landlords’ best interests to keep their tenants during a difficult time like this, and treat them fairly and appropriately.”
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