The States of Jersey are about to decide whether or not to revise the Regulation of Undertakings and Development Law, and the business community is confident that the government will agree to an amendment.
Industries Committee president Deputy Maurice Dubras has confirmed that the government is taking a cautious stance in the review, which has been on-going since January. He said: ‘I am not promising any further tightening or relaxing of the law. Since the beginning of the year we have applied the law as pragmatically and appropriately as possible. After the debate tomorrow we shall have the benefit of input from States Members, and it will perhaps influence our thinking.'
The law, which controls and restricts the Island’s employment, has received wide-spread criticism from local businesses who blame the legislation for encouraging rising inflation.
The need for an anti-inflation strategy became clear in June and has been discussed as part of the Jersey Economic Forum's agenda since that time. In debating the anti-inflation strategy, the States have to consider how to prioritise the control of inflation alongside proposals to adopt a 2.5% inflation target or to limit construction activities in Jersey (aside from small projects and civil engineering) to £120 million per annum for the next 3 years.
The Anti-Inflation Task Force, an arm of the Jersey Finance and Economics Committee, is supported by the Policy and Resources Committee and the Industries Committee in its demands for action. Contained in its proposals is an explanation of the problem of rising inflation:
'Inflation in Jersey is currently 4.6% and seemingly on a rising trend. This compares with the UK rate, which has been around 2.0 to 2.5% over the past 18 months; although it rose to 3.1% in May 2000, it is forecast to remain below the target rate of 2.5%. Inflation in Jersey has been persistently a little above the rate in the UK since the early 1980s. The differential between the Jersey rate of inflation and the UK rate, however, began to widen significantly from the middle of last year to more than two percentage points so that the Jersey rate has generally become double or more the UK rate. The apparent persistence of this trend became clear at the beginning of this year. The need to tackle the problem of inflation in Jersey systematically and firmly has now become urgent.
'It is important in the context of an anti-inflation strategy to look closely at how the law impacts in practice upon the labour market, and the committee is anxious to respond to concerns expressed by many businesses in the Island that the law is regulating the local supply of labour in a manner that is not only pushing up wage costs as firms compete for staff in the same limited pool, but also perhaps reducing the intended focus on seeking to keep in check the supply of non-locally qualified labour from a population policy perspective.'
It is hoped the government will have made a decision by the end of this week.
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