Minister: new waste charges may be unfair

Thursday 07 July 2016

Plans to force hospitality businesses to pay new waste water charges have been questioned by the Minister responsible for the tourism industry.

Senator Lyndon Farnham said the proposed new levy, unveiled in the States most recent financial plan, may be unfair to smaller businesses.

Senator Farnham is one of the ministers responsible for the new plan, which sets out how the States plans to fill a major deficit in the Island's finances.

But speaking at a hearing of the Economic Affairs Scrutiny Panel, he said that while he agreed to the charge in principle, and had supported the Medium Term Financial Plan in which it was proposed, he still worried small business might suffer unfairly.

“I am concerned about the impact of the charge to the hospitality sector,” he said. “We have to make sure the levies are fair.”

He said a small coffee shop, for example, which uses a lot of water, might end up facing a levy of thousands of pounds in the future.

“I am concerned about small businesses, because not many have thousands of profit to play with,” he added.

Under the proposal, an average-sized restaurant may be expected to pay an additional £2-3,000, he said. However, large businesses, protected by old legislation which govern their corporate taxes, “...do not make a contribution."

Yet, these larger entities may consume more water in their large office buildings and are in a better position to pay.

The details of the proposed charge have yet to be finalised but Infrastructure Minister Eddie Noel has said a flat tariff or usage charge based on how much water a business used is probable.

Senator Farnham, who declared an interest as the owner of the Royal Yacht Hotel, said larger hotels will pay more in charges but will not be as dramatically affected.

The Minister also answered concerns expressed by Panel Chair Simon Bree, about Jersey’s falling number of hotel beds.

Senator Farnham said some of the recent hotel closures are indicative of an industry “shake-up”, where the market is correcting itself from an old States policy of the 1980s and 90s, which “restricted tourism premises from leaving the industry."

He said some of these properties were forced to continue in operation yet saw little or no investment in the premises.

The removal of that policy means these properties are now closing, but the Minister said new opportunities are created, other hotels are making significant investment and new properties such as the Premier Inn at Charing Cross will supplement the number of hotel beds the Island can offer.