Cuts fightback: Jersey workers prepare to fight

Submitted by Newcastle on 5 November, 2009 - 10:33 Author: By Mary Burgess

The tiny island of Jersey may be about to host some major class struggle. This year the island’s States (Parliament) decided to withdraw the money budgeted for public sector pay rises, over the head of the States Employment Board, which usually negotiates with the unions.

At the end of October, a motion to reinstate free collective bargaining fell, with Chief Minister Terry La Souer commenting: “At a time when private sector jobs are being frozen or cut, a pay rise for States staff is not viable.”

What was previously on the table was not a pay rise at all, but a real-terms pay cut. At the same time, workers’ living standards are being cut further by the introduction of the Goods and Services Tax, a new indirect tax of three percent levied by the States to fill the hole their “zero-ten” tax policy has created.

This system, also operated by Guernsey and the Isle of Man, means that financial institutions operating from a permanent place of business and utilities companies pay ten percent corporation tax, while other firms are exempt.

In addition, bizarrely, profit-making companies eligible for their tax can come to an arrangement with companies making no profit to reduce their tax bill!

Richard Murphy, a tax consultant for the Jersey government, describes “zero-ten” as follows:

“What can one say? They’ve voted for a tax strategy which if translated to the UK would read like this:

1. We’re going to cut government revenue by £100 billion - that’s more than the cost of the NHS. We have no idea how we will make good this deficit, if we ever can;

2. You will be paying much more tax despite this cut in our revenue, and the inevitable cuts in services that will follow on everything from health to education to pensions to transport and social welfare;

3. We’ve done this so that residents of other countries who are evading or aggressively avoiding the tax they owe to their own governments can continue to do so in your country - for which you are now paying a very high price.”

Jersey also has a flat-rate income tax of 20 percent!

Treasury Minister Phillip Ozouf has announced a whole range of inflation-busting taxes in his budget, and the freezing of tax allowances, bringing more low earners into the tax net.

It is clear that the government intends to take on the unions Thatcher-style, whatever the cost.

A workers’ committee including all of the public sector unions is considering its choices carefully. There is a danger of it falling prety to the government’s delaying tactics. Year on year negotiations have been dragged out until workers get demoralised and give in to another pay cut.

Jersey workers must fight now, and fight hard, or suffer another cut this year and open the way to further attacks in the future.

There is every possibility for such a fight. The mood on the streets is rebellious. Everyone you meet complains about the government and is willing to discuss how to change things.

What workers in Jersey need to learn is to rely on their own strength to make that change. With 7,000 public sector workers edging towards action, and private sector workers angry at tax increases and the rising cost of living, now is the time to strike.

Comments

Submitted by Bruce on Wed, 11/11/2009 - 14:50

There is a major economic crisis in a number of semi-British tax havens.
The Cayman Islands are bankrupt and considering having to (shock, horror)introduce taxes; there is also a crisis in the Isle of Man following cuts in UK subsidies (see
http://www.accountancyage.com/accountancyage/news/2251671/isle-man-faci… which also explains the tax structure there).

We should tie our demands for Jersey up with demands in the UK along the
lines of 'Tax the rich' requiring a major crackdown on tax havens and link it with demands for 'real jobs' there. In practice, I imagine that the tax status only means jobs for accountants, lawyers and a few clerical workers with most others outside the public sector dependent on servicing the rich or tourism.

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