I’d like to thank Adam and Murray for giving me the opportunity to speak to you this afternoon.
I know that some of you will not know much about me, so a few words of introduction. I have lived in Jersey since 1996 and spent some 20 years in the private sector here. I was Legal Director at the RBS International Group and a partner of Mourant du Feu & Jeune, where I focussed on advice to local businesses. I also spent 7 years as the Viscount, before resigning that role to stand for election last year.
My ministerial responsibilities run across both Social Security and financial services. Although I have had contact with many individual businesses across all sectors over the last year, it is great to have this opportunity to set out some of my key priorities for next year as well as updating you on some existing projects that I know will be of interest to you.
I don’t intend to speak for very long and I’m happy to take questions at the end.
My appointment as Social Security minister was something of a baptism of fire as the new council of ministers got to grips with the cost-of-living crisis and published a mini budget just 3 weeks after we were elected.
I’m proud of the measures put forward both in the mini budget itself and in the 2023 Government Plan. The aim was to support households at a time of rapidly rising prices, and I believe we took bold and timely action. While the focus was on supporting family budgets, the impact of these measures will also have helped businesses by maintaining local spending power.
At around the same time, the minimum wage rose to £10.50 an hour and we brought the effective date of the increase forward to November. I’m sure that most of you already know that I have just accepted the recommendation of the employment forum to increase the minimum wage next year to £11.64, in line with the recent latest RPI increase, with effect from 1 January 2024. This will protect the lowest paid workers from experiencing a real term loss in earning power. The offsets for food and accommodation will also increase by 10.9%, following a significant increase last year, to catch up with inflationary increases.
It is positive that many local businesses have moved significantly away from minimum wage rates in recent years. Across all private sector jobs, we have seen a drop from 6% of workers on minimum wage in 2016 to just 2% in 2022. I recognise, of course, that increasing wage bills are a challenge for all businesses but the move upwards from the minimum wage is an indicator of the demand for staff in some sectors.
There has been much debate recently about the role of a living wage in Jersey.
At present, Caritas has an agreement with the UK living wage foundation to endorse employers locally against the living wage standard. To date over 40 businesses have been approved as living wage employers, including the government itself.
I will be bringing a report to the States assembly before the end of this year on the pros and cons of moving to a more formal living wage structure. Clearly there is a great deal to consider here but I do assure you that the needs and impact on employers will be a key factor in this work.
In respect of other changes to employment law, yesterday the Assembly approved a small change to provide a statutory right to unpaid leave to a parent following the death of a child. This will be accompanied by a separate payment scheme, provided by government, to ensure that there is no additional financial burden on businesses.
Looking forward, I will shortly be publishing a separate change to allow an employee to request that their contract reflects their established pattern of work. This is particularly designed to support an employee who has been engaged on a zero-hour contract but actually works regular hours.
Next year, I have made a commitment to provide for whistleblowing rights within employment legislation.
As part of my response to the publication of the zero-hour contract review by the Employment Forum earlier this year, I made a commitment to engage with businesses, employees and third sector organisations to look at how employment law is working in Jersey. As an example, I’d like to discuss how we can work together to help employers and employees stem the flow of claims to the Employment Tribunal which relate to simple breaches of the Employment Law, for issues such as the provision of wage slips and terms and conditions of employment, which take up a lot of the Tribunal’s time. I’d also like to explore what more we need to do to strike the right balance of protections and responsibilities for employers and employees. I’ll be inviting organisations – including Chamber – for round table discussions in the next few weeks. I hope that many of you will be able to participate in those discussions.
Earlier this year I published actuarial reviews of the three funds for which I am responsible.
The long-term care fund is less than 10 years old. The actuaries looking at this fund confirmed that it is working well but, as anticipated, additional contributions will be necessary in the next few years as the number of people needing long term care increases.
My team are currently working with local domiciliary care providers, gathering information through an independent third party, to gain a better understanding of the cost pressures within the local care market and the appropriate level at which to set future support towards care packages. I will also be reviewing the contribution income into the fund next year, although there is no immediate need to raise more funds.
Turning now to a new service which I hope will prove very useful to employers:
Many of you will be aware of the rigid rules around employees who are signed off sick. Historically there’s been no opportunity for a worker to do any work, including part-time or voluntary work, whilst still under a medical certificate.
That system is now changing, and a new “WorkWell” service has just been set up.
Going forward, when an employee is signed off by a doctor, as part of that process, a referral can be made to the WorkWell service. The team will discuss the employee’s situation and try to agree a return-to-work plan with the employee and the employer. Under this plan, the employee might have flexibility to work shorter hours or amended duties for a short period while still receiving their sickness benefit.
There is good evidence to support this type of approach, which allows employees to make a smoother transition back into the workplace and, indeed, to help prevent short term absence turning into long-term sickness. The service has been designed with the needs of small local businesses in mind, acknowledging that many companies do not have access to workplace health advice or professional occupational health services. To start with, the main emphasis will be on common health problems including mental health issues such as stress and depression and physical health issues such as neck and back pain. If not addressed early, these can lead to prolonged periods away from the workplace.
The negative impact of sickness absence can affect businesses, making it harder to deliver high quality services and increasing costs. As someone who has been a manager of people, I also understand the concerns that arise when an employee is signed off for several weeks, particularly with mental health issues, and the anxiety that causes in terms of how to return them safely back into work. The new service will support employers and Jersey’s economy by helping to keep skilled and experienced workers in our workforce. It can also help people feel that they aren’t forced to retire early or take extended sick leave because of health problems.
I would also like to mention the work that I am leading on improving pension provision for individuals in Jersey. We estimate that only 30% of people have an occupational or private pension plan. I am aware that it can be difficult to find a pension provider in Jersey as an individual (particularly for those on lower incomes) and how daunting it can be for a business to set up its own pension scheme.
While we have very good coverage for our social security scheme, the old age pension was never designed to provide a full retirement income. Without their own occupational or private pension, an increasing number of people will need to turn to the government for financial support in old age. To address this important issue, I will shortly be publishing a policy paper setting out some principles for a new “Jersey Pension Saver” scheme.
The main aim will be to ensure that local workers can save towards their pension through their employment. For employers who do not already offer a pension scheme, a very simple system will be established to allow their employees to save (with the option to opt-out if it is not right for them). The scheme will also be available to self-employed people and others who want to save towards a pension.
Contributions will be kept as low as possible, by establishing a simple cost-effective scheme which will minimise administration costs but at a sufficient level to provide a meaningful pension income.
I want to reassure all employers that these proposals have been designed with the impact on local businesses in mind and the changes will be phased in over several years. There will be extensive consultation with business and other groups next year before the final details are confirmed.
Pension provision is an important area that we need to get right at this time of demographic change. This is a long-term strategic project, and it will provide long term benefits. But government also needs to look forward across all its services to make sure that they are well targeted and appropriate to the needs of the population over the next 20 years. A cross departmental group is just starting to look at this area and I hope that we can work with you next year to explore both commercial opportunities and public services to meet our future needs.
Turning briefly to my responsibilities in respect of financial services:
We have recently consulted on proposals to introduce a consumer credit regime. Under the proposals, lenders will be licensed by the Jersey Financial Services Commission and legally required to conduct checks to ensure that prospective borrowers can afford the loan and are not vulnerable to exploitation. Lenders will also be required to meet basic standards in areas including set up costs, the information they give to consumers, interest rates, and cooling-off periods. The proposals will also lead to unfair contractual terms being unenforceable.
If approved, the regulation will cover all forms of loans provided locally including Jersey mortgages, hire purchase agreements, overdrafts, buy-now-pay-later loans, and small business loans. JFSC licensing will also be required for ancillary activities such as debt collection, credit broking, and credit advice.
We are currently working through the feedback received to the consultation, which closed on 15 September, and a response paper will be published later this year. I expect that further discussions with business will be necessary before plans are finalised.
Over the past five years, there has been some withdrawal of credit card providers from Jersey. The Government has proposed to expand the way data is accessed by credit reference agencies to help Islanders obtain loans, credit cards, and other sources of credit. This proposal is a great step forward and should allow more banks and other financial services providers to offer credit to individuals and businesses in Jersey.
The proposal was debated yesterday, and I am happy to say was approved.
By early 2024, therefore, the Government is aiming to provide credit reference agencies with access to data from the People Directory, a central repository that holds address and contact details of the public. We hope that this will go a long way to ensuring continued credit card provision in the Island.
I hope that gives you a flavour of the work we are currently doing.