I've been reading Mark Boleat's opinion piece in the JEP and this is a summary of part of what he says, with my comments.
The cost of living is expected to be a major issue in Jersey’s 2026 election. Surveys by the Policy Centre Jersey and Vote.je show that residents consistently rank it among their top concerns. However, Sir Mark argues that the real issue is not prices themselves but living standards - people’s ability to meet costs with their income. While costs have risen, real incomes in Jersey and the UK have barely grown for over 20 years, which is why households feel under pressure.
“The issue is not so much cost of living but rather living standards…”
This is a very succinct analysis but cost of living is important because higher inflation erodes the income of those on pensions, and eats away at their savings. In 2022, during the UK’s cost‑of‑living crisis, Major argued that without strong government support, the poorest households would be left “penniless” and could lose trust in the state. Pensioners, many of whom rely on fixed incomes, fall squarely within the group he was concerned about.
Major has also long emphasised that inflation erodes the real value of income and savings. As far back as his time as Chancellor in 1990, he described inflation as a direct threat to economic stability and to people’s ability to maintain their standard of living. For pensioners, this effect is particularly sharp: when prices rise faster than pensions, their purchasing power falls, and essentials such as heating, food, and rent become harder to afford. As a pensioner, I think this is important.
Jersey’s inflation closely follows the UK’s because the Island is tied to the British economy and monetary system. Jersey does not control its own interest rates, and its inflation rate has moved almost in parallel with the UK’s over recent years. Inflation rose sharply in 2022 but has since fallen, with forecasts suggesting a modest rise again in 2025–26.
“Statistics Jersey’s quarterly reports… show that they are closely correlated.”
Sir Mark stresses that government has limited ability to reduce the cost of living directly. Cutting GST or duties on alcohol, tobacco, and fuel would reduce prices temporarily but would create a £200 million gap in public finances, requiring tax rises elsewhere. Removing GST from food has been repeatedly rejected because it complicates the tax system and is less effective than targeted support. Jersey already provides direct help through the Community Cost Bonus.
“If these taxes were abolished… the £200 million hole… would need to be financed by tax increases.”
While Sir Mark emphasises that government has limited tools to reduce the cost of living directly, there are other avenues worth exploring beyond tax changes. One possibility is reducing the cost of imported goods through measures such as bulk‑freight coordination, shared logistics hubs, or streamlined port handling, all of which could lower the overheads that make Jersey’s food prices higher than the UK’s.
I do agree that removing GST from food would create a large gap needing a significant rise in GST. If GST were removed from food, the government would lose a substantial portion of the £132 million that GST currently raises, because food is one of the largest areas of household spending.
To fill that gap, the overall GST rate would need to rise sharply—likely from 5% to somewhere in the region of 7–8% depending on how broad the exemption was and how consumer behaviour shifted. In other words, the tax would have to increase for everything else in order to compensate for removing it from food.
If government tried to compensate for the lost revenue by expanding household support, it would still need to raise substantial funds through higher GST on all other goods and services, meaning most households would end up paying more overall.
Housing is the biggest contributor to household costs, but its impact varies widely. Those with paid‑off mortgages or income‑support‑covered rents pay little, while private renters and recent buyers face the highest burdens. Mortgage rates in Jersey are about 1% higher than in the UK, meaning homeowners pay around 25% more in interest. Sir Mark suggests the government should investigate why this is the case and consider options - including the radical idea of government‑backed lending - to reduce the premium.
“Jersey home buyers are paying 25% more in mortgage interest…”
For renters, Sir Mark argues that rent controls are ineffective and risk reducing supply. Instead, Jersey should focus on increasing housing availability by reforming planning processes and allowing more flexible development - such as small units without parking - to meet the needs of younger residents.
“The solution is not rent controls… the concentration should be on increasing supply.”
Sir Mark is right that rent controls often backfire by reducing supply, but that doesn’t mean other interventions are irrelevant. Requiring a percentage of new developments to be affordable can help, though only if the targets are realistic enough not to stall projects; otherwise, supply shrinks and prices rise further.
Housing is the biggest contributor to household costs, but its impact varies widely. Those with paid‑off mortgages or income‑support‑covered rents pay little, while private renters and recent buyers face the highest burdens. Mortgage rates in Jersey are about 1% higher than in the UK, meaning homeowners pay around 25% more in interest. Sir Mark suggests the government should investigate why this is the case and consider options - including the radical idea of government‑backed lending - to reduce the premium.
“Jersey home buyers are paying 25% more in mortgage interest…”
For renters, Sir Mark argues that rent controls are ineffective and risk reducing supply. Instead, Jersey should focus on increasing housing availability by reforming planning processes and allowing more flexible development - such as small units without parking - to meet the needs of younger residents.
“The solution is not rent controls… the concentration should be on increasing supply.”
Sir Mark is right that rent controls often backfire by reducing supply, but that doesn’t mean other interventions are irrelevant. Requiring a percentage of new developments to be affordable can help, though only if the targets are realistic enough not to stall projects; otherwise, supply shrinks and prices rise further.
I am also concerned about a two‑tier island: encouraging small, parking‑free units risks creating a divide between those who can afford cars and those who cannot.
As for rent controls, there are places where they have helped in limited, carefully designed forms, such as stabilisation policies in Germany or parts of the US that cap the rate of increase rather than the rent itself, but even these work best in markets with strong, steady supply. The lesson from elsewhere is that rent controls can protect existing tenants in the short term, but they are never a substitute for building more homes, ensuring fair access to them, and designing policies that avoid deepening social divides.
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