Treasury Minister taken to court over payroll scheme

Thursday 14 May 2020

The Treasury Minister is this morning appearing before the Royal Court after an islander who was denied access to the co-funded payroll scheme launched a legal challenge.

Jonathan Tindall Scott is making an application for leave to apply for Judicial Review after he had his application for covid-19 support turned down.

The hearing is taking place this morning in Royal Court.

The first phase of the co-funded payroll scheme was launched by the Government on 1 April to provide subsidies of up to £200 per week per employee for the period 20 to 31 March 2020. 

Phase 2 of the scheme came into force on 1 May, covering a wider range of sectors.

Under the £138m scheme, which aims to keep 27,000 islanders in employment, the government will refund employers a maximum of £1,600 per employee (80% of a worker’s salary up to £2,000) per month in April, May and June 2020. 

To be eligible, a business needs to prove they have suffered "material detriment" - meaning they have seen a drop in turnover of at least 30% in 2020 or the same month in 2019.

The scheme is being administered by Customer and Local Services (CLS), who is cross checking claims with Social Security contributions, CRESS and Income Support. 

CLS is also sharing data with the Treasury Department to cross check claims against Tax returns and assessments from 2019.

As of 8 May, 880 claims for 6,680 employees had been made under the payroll scheme and other packages of support. So far, nearly £2m has been processed and paid to local businesses. 

10% of claims submitted as part of Phase 1 of the scheme were rejected, mostly because the business belonged to a sector that was not eligible. 

The co-funded payroll scheme has also given rise to a dispute with Jersey Gas, who said they had no choice but to put their prices up by 6.5% temporarily as they were ineligible for it, like all other utility companies.

A proposition to get the company onto the scheme failed earlier this week in the States Assembly amid accusations of "bullying" and suggestions that its multi-million parent company should instead pick up the bill. 

Just six States Members voted in favour of the proposal – which would have seen the government pay most of the wages of Jersey Gas's employees over the coming months, rather than the company or its shareholders, at a cost estimated to be in the region of £200,000 - while 25 voted against.

Jersey Gas said it won't be reversing its 6.5% price hike as a result.