Thursday, May 20, 2010

Jersey: food parcels despite record national income

Tax haven Jersey boasts one of the highest national incomes per person in the world. Adjusted for purchasing power parity (which takes account of differing costs of living) gross national income per person in Jersey in 2008 was US$66,000, which doesn't place the island top of the league (Liechtenstein takes first place, followed by oil-rich Qatar, then Luxembourg) but near enough.

Which makes it all the more shocking that Jersey's welfare benefits rank amongst the lowest in Europe and according to today's Jersey Evening Post jobless migrants on the island are forced to rely on food parcels to survive.

But dig into the national income statistics and you realise the figures are something of a chimera. A large proportion of the £3.5 billion of gross national income recorded in Jersey in 2008 consisted of profits booked by banks and other multinational businesses. Those profits will be taxable in Jersey - currently at 10 percent - but otherwise have no links to the island. The majority of their shareholders live elsewhere and ultimately those profits will flow out in dividend payments.

So claims that Jersey ranks amongst the richest places in the world must be treated with scepticism. While there are plenty of extremely wealthy people on the island, and employees in the financial services sector are generally well paid, approximately one-third of the economically active population are employed in low skill / low pay occupations, and face one of the highest costs on living in the world. Unemployed people and those on state pensions are also squeezed by exorbitant prices and low incomes. The situation is even worse for migrant workers, who have no entitlement to welfare benefits: hence the food parcels.

Tax havens: trickle down in action!


Blogger James said...

You should have seen the editorial the following day, where the JEP editor said "we need to keep the 5-year qualification for income support to prevent 'benefit tourism'".

Benefit tourism, eh? Perhaps it's time to tell it like it is and call the "1.1.k"/"high net worth individuals" what they really are - tax tourists!!

12:55 am  

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