Reform Jersey: we will pay for uni fees by taxing top earners

Tuesday 16 May 2017

With exactly one year until the next General Election, Reform Jersey have unveiled plans to squeeze top earners in order to pay students' university fees.

In a bid to appeal to 'Middle Jersey', it's one of a raft of policies announced today, effectively firing the starting pistol on the race for seats in the States next May.

Reform Jersey say their policies have been checked by the Treasury to confirm they add up. Under the proposals, they would use £6 million generated from a “simplified” income tax system to put undergraduates into higher education – regardless of their financial background.

At present, fully covering the tuition fees (in addition to the money already paid by the States) of the current cohort of over 1,500 Jersey university students would cost the States around £4.3 million. Reform say they would anticipate an increase in university attendees if their policy gets through, but remain “confident” that the increase in students applying would be gradual and could be covered by the remaining £1.5 million.

Reform Jersey's proposed system would see all undergraduate degrees fully funded by the States, and complimented by a student loans system to cover living expenses.

Under this system, Reform claim the new tax proposals would actually see over 90% of taxpayers with either either the same, or a lower, tax liability, with a two-child family on average wages enjoying a cut of £365 per year.

Only islanders at the top end of the pay scale – not including those under the high value residency scheme – would see their tax contributions increase, which is believed to affect fewer than 5,000 people in total.

They would also simplify the tax system by axing ’20 means 20’ and applying the marginal tax relief calculation at a lowered rate of 25%, rather than the current 26%.

According to Reform Jersey Chairman, Deputy Sam Mézec, the proposed funding system also seeks to promote social mobility and alleviate Jersey’s present graduate gap by making them feel “more loyal” to Jersey.

Deputy Mézec told Express that the prioritisation of higher education funding was inspired by the Council of Ministers’ inaction over what he has described as a “huge issue” that has seen some parents resort to re-mortgaging their homes to afford rocketing tuition costs, now at over £9,500 a year. 

“It’s an issue the Council of Ministers has completely buried its head in the sand on… When, as an Island, we depend on having high-skilled people working here, contributing to our economy, to let our education funding fall to the wayside, and prevent talented people from going and getting that education, we’re shooting ourselves in the foot. We need a solution to this, and now seems as good a time as any to say that we’re committed to a system that allows every single young person to achieve their aspiration irrespective of their financial background.”

The policy also comes as part of a move to better look after “Middle Jersey”, who were found to be squeezed the most by the current student loan system and who the party admitted were not as well catered for under their previous tax policy.

“Over the past two years, [Reform Jersey] has done a lot of work speaking up for people at the bottom of the income scale who have been affected really badly by the Council of Ministers’ policies, pensioners who’ve had their support cut, disabled people who’ve had their support cut, and it’s really important that we carry on speaking up for those people. But there are people in the middle of the income spectrum who are finding it harder and harder to get by, and too often they feel like nobody is speaking up for them politically.

“I want Reform Jersey to be speaking up for all Islanders who believe in fairness and want to see a government that makes their lives better.”

Despite raising taxes from the wealthy, Deputy Mézec maintained that Jersey would still remain competitive as a low-tax jurisdiction and that the proposals would not cause 'high-net-worth' individuals to migrate:

“Jersey is a wonderful place to live. You might pay more tax if you live somewhere in England, but Jersey is nicer than England. We’re nicer than Guernsey as well. We have a huge amount to offer in terms of the safety, the quality of public services, the quality of life here. I don’t think that raising tax by a small amount on those people means they’ll go.

“The other part of that is that a lot of the high net worth people in Jersey are not here for our income tax regime, they’re here for our corporation tax regime and that policy doesn’t affect that. We’re not proposing abolishing zero-ten, if we were proposing abolishing zero-ten, that is what would provoke an exodus of people from the Island, but we’re not proposing that so we don’t see any reason why people want to leave the Island as a result of this. In fact, those people who would be paying more tax would actually be benefiting from better public services as a result of that.” 

For their policies to become reality, however, Reform will first have to gain enough seats at the next election to hold influence within the States Assembly. They have not yet announced how many representatives they expect to get in, but say they are already aware of a number of prospective candidates.