Counting the cost of a collapse
Saturday 22nd October 2011, 3:00PM BST.
From Keith Shaw.
While it is often interesting to see how some politicians gravitate to business prize winners and entrepreneurs presumably to bask in their moment of glory, it can take a brave person to question what basis is the business founded upon.
When I originally came to Jersey, letters to the UK cost approximately 60% for exactly the same journey handled by Jersey Post and British Mail – so a niche market existed for large mail shots to be bulk freighted to Jersey, in order to be addressed, stamped and dispatched back to the UK.
That was a nice little earner until …?
Now that same journey from Jersey to the UK is considerably dearer than the UK to Jersey and our postal services have taken a considerable hit for a number of reasons, despite a number of initiatives that have been introduced over the year, including the fulfilment industry.
However, now the fulfilment industry is under pressure, from the UK government …why?
I guess that they are feeling the pinch for a number of financial reasons. They apparently do not like the fact that they are losing millions of pounds of VAT revenue, that they can ill afford to lose and the gentle squeeze that may have been possibly manageable, may well now be strangulation.
I suppose that the industry has actually lasted longer than many sceptics expected, who would have naturally been stating that old phrase ‘It seems to be too good to be true’.
On the plus side the local business owners will have profited quite well while it lasted and the tax income from profits of the business, and its employees etc plus Social Security contributions etc will have all helped Senator Ozouf fill one of his many black holes that we keep hearing about.
There now appears to be some confusion about how many are employed in the fulfilment industry. The recent headline referred to ‘more than 1,000’ and a June 2011 statistical figure of 770 down by 180 from 2010 was quoted. Apparently the final figure may well be much higher!
What we also need urgently are accurate unemployment figures now, as the last figure of 1,350 surely cannot include recent school leavers and returning graduates.
We need to begin to calculate exactly what the inevitable collapse of the fulfilment industry and its ancillary services will cost the Island.
Similarly, does it really make sense to be adding to the pool of available workers, when there is growing unemployment, insufficient adequate accommodation available and the pressures on our finite resources water, sewage, hospitals, primary and secondary schools, housing, benefits etc that have been stretched for many years and are now almost at breaking point?
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You ask “fulfilment industry is under pressure, from the UK government …why?” The answer is available on the internet (or for anyone who remembers when it was first raised) and that it has nothing to do with VAT, Taxation or any loophole.
The UK government were petitioned by high street music retail outlets that suggested that business for them has dropped considerably in the past couple of years, leading to redundancies in large retailers and small retailers going out of business. The reason for this, was argued, is down to the availability of goods online at a cheaper price, the finger, of course, was pointed at the VAT issue as the cause of this.
The fact that this has happened in a recession where all forms or business have suffered was ignored (remember Woolworths?) Many different organisations have had to make cutbacks, redundancies or have simply closed. It did not help that with the choice available online, the ease of searching for a desired product and the lack of ignorant or aloof staff has caused more people to shop online, and of course, when doing that, Overheads are cheaper anyway.
The coalition of retail stores actually wanted the government to force websites to charge the same price as physical stores. Something that could not reasonably be argued for in Government, price fixing of media!
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