Note of discussion on low income in Jersey at Policy Centre Jersey meeting on 26 April 2024

Note of discussion on low income in Jersey at Policy Centre Jersey meeting on 26 April 2024

On 26 April 2024 the Policy Centre held a discussion meeting based around the Centre’s research paper Low Income in Jersey . Simon Soar, Director of the Centre, chaired the meeting.

Sir Mark Boleat, Senior Adviser to the Centre, opened the meeting by summarising the report. Comments were made by –

• Deputy Lyndsay Feltham, Minister for Social Security
• Sam Ray-Chaudhuri, Research Economist, Institute for Fiscal Studies
• Fiona Vacher, Executive Director, Jersey Child Care Trust.

Following the presentations there was an open discussion.

65 people attended the meeting – members of the Centre’s Advisory Council and representatives from business, the charity sector, education and the States Assembly.

Summary of presentation by Sir Mark Boleat

• Relatively low income” is defined as income below 60% of the median; “absolute low income” in the UK is defined as 60% of median income in 2010/11, adjusted for inflation.
• The composition of those in relatively low income has changed over time from pensioners to children and people in work.
• Causes of low income generally include poor education and skills, weak relationships and the operation of tax and benefit systems. Specific factors in Jersey are the high cost of housing, grocery costs –the absence of big supermarkets – and policy towards immigrants.
• 16% of households in Jersey have relatively low income before housing costs and 24% after housing costs . The proportions are slightly lower than in the UK and have fluctuated in a fairly narrow range.
• Policies for treating the causes of low income include support for early years, raising educational standards, equipping people for the world of work, promoting competition and dealing with weak relationships.
• The two broad options for treating the effects of low income are reducing the cost of those goods and services that low-income people buy and increasing the income of low-income people.
• Raising tax thresholds does not help people in the lowest income groups as they pay no income tax; tax thresholds in Jersey are very high compared with Guernsey and UK.
• Income support meets most orall rent for low-income tenants, but tenants in otherwise similar circumstances are treated very differently depending on whether they are private tenants or tenants of social landlords, and in the case of Andium tenants, how long they have been tenants.
• Reducing the cost of food gives the greatest benefit to households that spend most on food but the greatest proportionate benefit to low-income households.
• The tax and benefit system redistributes income but for those not receiving income support the effect is largely negated by housing costs.
• Only 2% of workers are on the minimum wage but increases in the minimum wage have a significant effect further up the income scale.
• Ideally, the issue of low income should be considered as a whole rather than specific issues being considered in isolation.

Summary of comments by Sam Ray-Chaudhuri

• The Institute for Fiscal Studies (IFS) is the UK's leading Research Institute. It is a non-profit non-political organisation which receives its funding largely from research councils, government, foundations and charities. It works with academic institutions and experts from the public and private sectors to produce high quality research and academic papers.
• In the UK the official data show little change in poverty indicators in recent years notwithstanding the pandemic and the consequences of the Russian invasion of Ukraine, but self-reported indicators show a significant worsening in the position. Official statistics do not take account of different types of household and it seems that inflation has been higher for pensioner and low income households.
• Comparing the UK to Jersey the proportions in relatively low income are broadly similar after housing costs but significantly lower in Jersey before housing costs. This suggests that housing costs are more of a burden to lower and middle income households in Jersey than in the UK.
• In Jersey, unlike in the UK, the proportion of pensioners in relatively low income is higher than the proportions of working families and children.
• It is important to note that in making comparisons that the higher incomes are the higher the measure of relatively low income. Incomes in Jersey are significantly higher than in the UK so those in relatively low income in Jersey have higher incomes than those in relatively low income in the UK.

Summary of comments by Deputy Lindsay Feltham, Minister for Social Security

• To understand the issues facing people coping with the high cost of living I have visited food banks and organisations such as the Shelter Trust and Brighter Futures so as to understand the realities facing many people in the Island.
• The cost of living is one of the key drivers behind the government's recently published Common Strategic Policy.
• Within my area of responsibility is implementation of the decision of the States Assembly to bring the minimum wage to two thirds of the median wage by 2026.
• The minimum wage is not sufficient for many people so I am working on other support measures to help people struggling to cope with the high cost of living.
• For those on income support I want to make the system more accessible and understandable.
• The cost of living in Jersey makes life very difficult for some pensioners. We are considering this and also the effects of the ageing population and how the government needs to prepare for that.
• To tackle the issues we need to work collaboratively across government. I am part of the ministerial group dealing with the cost of living as a whole.

Comments by Fiona Vacher, Executive Director, Jersey Child Care Trust

• The vision of the Jersey Childcare Trust is to ensure that all children have access to the nurture, care and learning that they need to thrive.
• Why do we need to focus on early years? 80% of a person’s brain is developed by the age of 3 and 90% by the age of 4. It is hard work to catch up later.
• The best spend of anyone’s money is to ensure that our youngest citizens have their best experiences in their earliest years.
• My dissertation in 2021 was on the workforce for childcare; since then the position has deteriorated. This means that for children things have got worse.
• Staff in nurseries are often unaware that some of the children they are looking after are living in poverty and of what they can do to help. They are often unaware of foodbanks and what social security could do. Training of nursery staff does not cover such issues.

Comments in open discussion

• Although tax thresholds are high many low income people do pay income tax.
• People living in poverty are disadvantaged compared with people in higher income groups in many respects, not just housing and food.
• While the IFS report suggests no significant change in poverty levels in the UK since 2021 the evidence of charities in Jersey is that things have got much worse. Use of foodbanks has grown exponentially. More Jersey-specific information is needed.
• Visiting food banks and other charities helps people understand what is currently happening.
• The cost of electricity and baby products are particular problems for low income families.
• Consideration should be given to the living wage which is higher than the minimum wage.
• There is a need for more data on the use of foodbanks. While is there are data on the number of people using foodbanks there is no published breakdown of their characteristics since 2017.
• Charities need a clear sense of direction from the government. Charities are all doing great work but much of it is done in siloes.
• There is no map of what charities are currently doing. The Minister has met the Association of Jersey Charities to discuss how to work together and to map all that is currently being done so that the gaps can be identified.
• Who in government is taking a holistic view of everything to do with poverty? At ministerial level it is the Cost of Living Group, and then working collaboratively. Collaboration is easy to say but difficult to do – but it is very important.
• Much poverty is driven by disability and other health issues. Poverty cannot be addressed without addressing the health system, starting with preventative healthcare. Where people are unable to work because of health issues we need to assist them to return to work.
• It is really important to address physical and mental health issues promptly to prevent worsening problems which then become more difficult to address.
• The minimum wage is now much higher than the state pension. People on just the state pension are entitled to income support. However, it is important to address the expectation gap in respect of what people will get from their pension and what they need to live on.
• It is important to have a “safe space” where all sections of the community can discuss key issues, such as low income, on the basis of high quality research. The meeting today does that with people attending from many different sections of the community.

‍