IN the UK, falling house prices, job losses, low consumer confidence and poor stock market performance have begun to paint a picture of an economy running into trouble.
Consequently, people have been warned that they are likely to have to tighten their belts.
So far, the position here in Jersey is very different. House prices continue to rise – albeit at an alarming and perhaps unsustainable rate – unemployment is at a very low level and the mainstay of the economy, finance, continues to prosper.
There is, however, one feature of the adverse situation in the UK that is beginning to bite here too: rising prices at the supermarket check-out. The latest price check conducted by the Consumer Council points to a seven per cent increase since May.
Council chairman Deputy Alan Breckon noted that the increase applied to the period since the introduction of GST.
However, he is on firm ground when he suggests that the new tax is not the only reason for rising prices. Part of the problem can certainly be attributed to the general increase in commodity prices and the impact of rising fuel costs on the retail sector.
In spite of this, the suspicion that the introduction of GST was seen as a golden opportunity for price hikes above the three per cent at which the tax is levied will linger among consumers who now find the pound in the pocket buying less than it did only a few weeks ago.
Meanwhile, though world markets are clearly beyond their influence, the political architects of GST are unlikely to win many converts to the idea that the tax is a vital element of fiscal policy while prices continue to rise. They are, in all probability, cursing an incidence of bad timing which, to be fair, was not of their making.
But any regrets about timing must not deflect political attention from another aspect of increasing bills at the supermarket and elsewhere – the disproportionate impact that these have on the less well off. Wealthy as this
Island is, it is also a place where the division between the haves and have-nots is particularly wide.
Practically speaking, the attention which is now required should focus on the income support scheme introduced to compensate the least prosperous for the effects of GST. Politicians must ask if the scheme is functioning as anticipated. If it is not, swift action must be taken.
Bad time for a new tax
IN the UK, falling house prices, job losses, low consumer confidence and poor stock market performance have begun to paint a picture of an economy running into trouble.
Consequently, people have been warned that they are likely to have to tighten their belts.
So far, the position here in Jersey is very different. House prices continue to rise – albeit at an alarming and perhaps unsustainable rate – unemployment is at a very low level and the mainstay of the economy, finance, continues to prosper.
There is, however, one feature of the adverse situation in the UK that is beginning to bite here too: rising prices at the supermarket check-out. The latest price check conducted by the Consumer Council points to a seven per cent increase since May.
Council chairman Deputy Alan Breckon noted that the increase applied to the period since the introduction of GST.
However, he is on firm ground when he suggests that the new tax is not the only reason for rising prices. Part of the problem can certainly be attributed to the general increase in commodity prices and the impact of rising fuel costs on the retail sector.
In spite of this, the suspicion that the introduction of GST was seen as a golden opportunity for price hikes above the three per cent at which the tax is levied will linger among consumers who now find the pound in the pocket buying less than it did only a few weeks ago.
Meanwhile, though world markets are clearly beyond their influence, the political architects of GST are unlikely to win many converts to the idea that the tax is a vital element of fiscal policy while prices continue to rise. They are, in all probability, cursing an incidence of bad timing which, to be fair, was not of their making.
But any regrets about timing must not deflect political attention from another aspect of increasing bills at the supermarket and elsewhere – the disproportionate impact that these have on the less well off. Wealthy as this
Island is, it is also a place where the division between the haves and have-nots is particularly wide.
Practically speaking, the attention which is now required should focus on the income support scheme introduced to compensate the least prosperous for the effects of GST. Politicians must ask if the scheme is functioning as anticipated. If it is not, swift action must be taken.
Article posted on 9th July, 2008 - 3.00pm