Jersey Construction Council

JeCC response to Infrastructure Levy

JeCC seriously concerned by Minister’s stealth tax on Construction Industry

Responding to the recent announcements of a new Jersey Infrastructure Levy on developments, the Jersey Construction Council has hit back at what it regards as an unfair burden on one Jersey industry to fill a government spending commitment hole.

Commenting on the levy Martin Holmes, Chairman of the JeCC said: ‘Whilst we support the initiative of St Helier’s regeneration we oppose the Minister’s plan to saddle the Construction Industry and individual home owners with the sole responsibility to fund it. Surely all of Jersey's industries should be called on to contribute to what will be a gain for the whole Island. This new stealth tax is being planned at a time when the construction industry is slowly coming out of the worst recession of our generation.  Critically, it will increase house prices and make new homes in Jersey less affordable, exasperating the current affordable housing problem. To pile on additional cost can only hamper, and possibly stagnate, that early growth.

‘In principle the Industry is supportive of investment in St Helier and also to bring clarity and, hopefully, a more efficient planning process. However, as this will benefit all sectors of the Island’s economy, with the knock-on impact into the wider community, it is beholden to the Minister to find an approach to the funding that spreads the burden. There is no merit or wisdom in targeting only Construction for this new tax.

‘We remain concerned that, in the absence of a costed redevelopment plan, the Minster will soon come to regard the tax as a bottomless pocket into which he can reach at will to meet the costs of other government spending commitments. In addition experience tells us that the Minister’s belief that the levy will just force the land values down (and as such not drive house prices up) is fanciful given that most future development will be derived from brown field sites with an inherent residual value, not windfall agricultural fields. Any attempt to significantly drive down owners expected land values will simply mean that land will not come to the market until the policy fails and is scrapped. This looks like serious ministerial folly.

We accept that the Minister is committed to full engagement through this consultation with the industry and we look forward to commencing this dialogue forthwith to ensure that time and money is not wasted drawing up theoretical but impractical and ineffective proposals. However, there is a need for Government to support housing development in the Island, especially as we need over 1000 new homes by 2020.’