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The Government is “exploring” the suggestions of hospitality representatives after the sector previously slammed proposed increases to alcohol and tobacco duty, the Treasury Minister has confirmed.
The Corporate Services Scrutiny Panel yesterday questioned Treasury Minister Ian Gorst on the finer details of the proposed Government Plan for 2024 to 2027.
Published in September and due to be debated next month, the plan sets out firm public spending plans for next year and indicative spending for the following three.
It proposes increasing duty on beer, wine and spirits by 8.9% in 2024.
The Jersey Hospitality Association (JHA) criticised the move, with its co-chief executive Marcus Calvani arguing that the proposed rise would add up to 50p on to a pint and "unfairly hit ordinary businesses and islanders".
Pictured: Marcus Calvani said the Chief Minister and her colleagues were "turning their backs on hospitality".
Responding to questions from panel chair Deputy Sam Mézec yesterday, Deputy Gorst said: "We are in the world of balance here.
"We have the health protection argument which says alcohol duty should be raised substantially above that which we are proposing, and then we have the hospitality sector who are quite clearly finding things difficult with the cost-of-living crisis and the state of the economy.
"Since the Government Plan was lodged, I have met again with the hospitality sector and heard their views and they have made some suggestions to me which we are exploring."
The plan includes a 15.9% increase on tobacco products – the sum of June 2023 RPI (10.9%) plus an additional 5%.
Pictured: The proposed tobacco increase would see a 50g pouch of hand-rolling tobacco cost over £40.
The proposed increase would see a standard packet of 20 cigarettes cost £10.09, whilst a 50g pouch of hand-rolling tobacco would cost £40.37.
Deputy Lyndon Farnham, another panel member, challenged Deputy Gorst on whether "exponentially increasing duties on tobacco is working".
Deputy Gorst defended the proposal, but said: "Because of the nature of our geography, there is an unintended consequence that people buy these products duty-free and we see more and more of that happening."
After freezing road fuel duties in 2023, Ministers are also proposing to increase this duty by 10.9% in line with inflation.
Pictured: Panel chair Deputy Mézec said that fuel duty increases would "disproportionately affect those on lower incomes".
Deputy Mézec asked Deputy Gorst if he was aware of "knock-on" issues from fuel increases which would "disproportionately affect those on lower incomes".
The Treasury Minister revealed that the Council of Ministers discussed extending the freeze for another year but decided against it on the grounds of moving forward Jersey's Carbon Neutral Roadmap.
Total duty, including on fuel and tobacco, is forecast to provide £73 million to the Treasury next year, which would be enough to fund the States police (£27m), Environment Department (£10m) and Economic Development Department (£35m) in 2024.
A Treasury spokesperson said that if alcohol duty was frozen at its current level instead of increasing by 8.9%, it would deny the Treasury £2.6m of revenue.
If no duty was levied at all on alcohol next year, he added, it would cost £25.5m.
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