If therefore, for the reasons above stated, the figure of £156,000,000 is increased to £273,634,000, the proportionate allowance to Jersey under the Memorandum would be £307,800, whereas if the cost of the National Debt is also added, the allowance would be £701,503. In the former case (assuming the acceptance of the estimate of £479,000 as representing the adjusted Revenue figures), the suggested contribution from Jersey would be reduced to £171,200 per annum, whilst in the latter case nothing would be payable at all under the formula advanced by the British Treasury. It is presumed that the additional contribution of £870,000 which it is suggested Jersey should make, relates to Pensions arising out of the Great War and that Pensions of Jerseymen, who in the ordinary course of events enlist in the British Forces, and of ex-servicemen, who have taken up their residence here on retirement, are not included in this figure. In this connection we would mention that when the Island was requested to provide men for the Forces engaged in the Great War, the British Government assumed responsibility for the expenditure in connection with all Jerseymen who enlisted in the British Navy, Army and Air Force, as distinct from those who served with the French Forces. Having examined the Treasury Memorandum in detail we would add that, should it be decided to make an Imperial Contribution, we are most emphatically of the opinion that any such contribution should be based upon the economic position of the Island and not on any such formula as that advanced by the British Treasury. It is clear that any attempt to export annually from the Island more wealth than is introduced into the Island must lead to financial disaster. We desire to add that a comparison of the non-recoverable expenditure in Jersey for the year ended the 31st January, 1914, with that of the year ended the 31st January, 1925, shows that the expenditure has increased four times during that period. A similar comparison between the British Estimates of 1913-1914 and those of 1924-1925 discloses the fact that the increase in the British expenditure is four and a quarter times the amount that it was in 1913-1914. The Jersey figures, however, do not include any sums, paid by residents to the British Exchequer, in the form of Income Tax and Death Duties. 30th November, 1925. R. R. LEMPRIERE, Esq., Jurat, President, and to The Members of the Committee nominated by the States of Jersey to consider the question of an Imperial Contribution. GENTLEMEN, Since last reporting to you, I have been able to collect more definite information which renders it possible for me to amplify my former reports and to reply to the Treasury Memorandum more fully and in greater detail. As I understand that the Committee of the Privy Council, appointed to consider the question of contributions to the Imperial Exchequer from the Islands of Jersey, Guernsey and Man, will shortly be completing their report, I have pleasure in appending my additional observations on the Treasury Memorandum, in case you should desire to make use of them with the Privy Council Committee. (a) Liquor Duties. Existing Revenue £78,000, suggested additional Revenue £67,000. The actual amount collected during the last financial year from Liquor Duties was £84,528. The Treasury Memorandum states that experience in England shows that the increase in the British duties, above the pre-war rates, has been accompanied by a reduction of 40 per cent. in the consumption of beer and 50 per cent. in that of spirits. It is suggested that these ratios would apply to Jersey, but your attention is drawn to the fact that any attempt to impose taxation in this Island on a level with that obtaining in Great Britain would undoubtedly result in a very large proportion of the residents leaving the Island. Hence it is considered that these proved percentages in the case of Great Britain are inadequate in the case of Jersey, and that they should be increased to at least 50 per cent. and 75 per cent. respectively. If the English rates of duty are applied to the actual quantities consumed in the Island last year, and the above percentages of decreased consumption are allowed, the resultant additional Revenue would only be £8,035, as against £67,000 suggested by the Treasury. (b) Tobacco. Revenue £80,000. Existing Revenue £32,000, suggested additional was The actual Revenue raised last year from this source £33,027. The reduction in consumption suggested in the Treasury Memorandum is approximately 22 per cent. For the reasons stated in the preceding paragraph dealing with Liquor Duties, it is considered that the reduction in consumption would be at least 37 per cent., and that, in addition, a considerable amount of revenue would be lost by visitors ceasing to take tobacco away with them when returning to England. Applying the English duties to the different categories of this commodity consumed during the last financial year, the increased taxation would, under these circumstances, only yield an additional £38,965, as compared with £80,000 shown in the Treasury Memorandum. (c) Other Indirect Taxes. Existing Revenue £32,000. The actual Revenue raised last year under this heading was £34,627, but it is observed that the Treasury does not suggest any increase from this source. (d) Income Tax (excluding Super-tax). suggested additional Revenue £142,000. Existing Revenue Nil, The Treasury estimate in connection with Income Tax is based on the figures for Guernsey, with an allowance of 40 per cent. to cover loss from residents leaving the Island and increased abatements. The taxable capacity of Guernsey, on English standards, is as follows: At full standard rates £ If this taxable capacity is increased by one-fourth (as representing the difference in the population of the two Islands), and an allowance of 45 per cent. is made in respect of loss of revenue from residents going elsewhere, the result would be an additional Revenue of £86,556 and not £142,000, as suggested in the Treasury Memorandum. (e) Other Direct Taxes (Super-tax, Death Duties, Stamps, Licences, &c.). Existing Revenue £4,600, suggested additional Revenue £41,000. The actual Revenue raised last year from this source was £33,647; this amount includes the Rât d'Occupants, which is a tax entirely devoted to the general purposes of the States and not to Parochial purposes, as suggested in the Memorandum. If the Treasury estimate of £46,000, as possible revenue under this heading, is accepted, the additional Revenue derived from this source would only amount to £12,353, as compared with £41,000 shown in the Memorandum. It will therefore be seen that the additional Revenue of £330,000, estimated by the Treasury as arising from the levelling up of taxation, should be reduced to at least £145,909, in the following manner : Turning now to the allowance, suggested by the Treasury, to cover the more economical Government of the Island as compared with that of Great Britain, it will be found that it is based on the cost of Government in Great Britain (exclusive of Debt charges, all Imperial services and the Post Office) being assessed at £156,000,000. It will, however, be found that an amount of approximately £30,000,000, in connection with grants for such matters as the upkeep of roads, has apparently inadvertently been omitted from this figure. If this amount is added, it is clear that the cost of Government in Jersey, on the British standard, should be £209,809, as compared with £176,000 allowed in the Memorandum. In order to ascertain the existing cost of Government in Jersey, it will be found that the actual Tax Revenue raised last year was £185,829, but that out of this sum expenditure, amounting to £52,071, was met in connection with Debt services and the Militia. Under the Treasury Memorandum similar charges have been deducted from the cost of Government in Great Britain; therefore the existing cost of Government in Jersey should be taken as being £133,758. It follows that the allowance to be made to Jersey in connection with the more economical cost of the Government of the Island, should be £76,051, arrived at as shown below: Cost of Government on British Standard £ ... 209,809 76,051 On the basis of the formula contained in the Treasury Memorandum, should Jersey decide to make a contribution, it would therefore be as follows: It must not, however, be overlooked that a considerable amount of Imperial Income Tax is already paid by residents in the Island, and that, in any comparison of the relative taxable capacity of Great Britain with that of Jersey, this factor must be taken into account. In Guernsey the amount of Imperial Income Tax paid is £35,160. If this amount is increased by one-fourth, as representing the difference in the population of the two Islands, it would show that an allowance of £43,950 should be claimed by Jersey under this heading. Therefore the figure of £69,858, arrived at on the basis of the Treasury Memorandum, should be still further reduced by £43,950, leaving a net result of £25,908, as the result of the application of this formula. It cannot be denied that the introduction of taxation at English rates in Jersey would cause an infinitely greater shrinkage in the taxable capacity of the Island, and also a far greater diminution in the consumption of commodities upon which Indirect Taxes are levied, than was occasioned in Great Britain by increasing taxation in that country from the pre-war level. It is therefore confidently thought that the reductions made in the foregoing reply to the Treasury Memorandum, are the minimum to be expected under such conditions. I have the honour to be, Your obedient Servant, E. P. HELLYER, Accountant Auditor to the States of Jersey. STATES OF JERSEY. REPORT ON THE ECONOMIC POSITION OF THE ISLAND OF JERSEY, IN CONNECTION WITH THE REQUEST OF HIS MAJESTY'S GOVERNMENT THAT THE ISLAND SHOULD MAKE AN ANNUAL CONTRIBUTION TOWARDS IMPERIAL EXPENDITURE, BY E. P. HELLYER, M.B.E., F.C.A., ACCOUNTANT AUDITOR TO THE STATES OF JERSEY. R. R. LEMPRIÈRE, Esq., Jurat, President, and to The Members of the Committee nominated by the States of Jersey, to consider the question of an Imperial Contribution. GENTLEMEN, In accordance with your instructions, I have examined the Official Correspondence on the subject of a Contribution by the States of Jersey towards Imperial Expenditure, and I have pleasure in attaching to this report the following Exhibits containing statistical and other information relative to the economic position of this Island: Exhibit I. Exhibit II. Exhibit III. Exhibit Exhibit Statement showing the estimated increase in the economic wealth of the Island during 1924 (excluding introductions and withdrawals of capital funds). Statement of imports and exports for each of the years from 1903 to 1924. Statement showing the annual number of passengers arriving in the Island for each of the years from 1900 to 1924. IV. Statement showing the Foncier and Mobilier Valuations (in sterling) for each of the years from 1900 to 1924. V.-Statement showing the movement in the Cash Balances and Stock Holdings (at nominal valuations) of the depositors in the Jersey Savings Bank for the period from 1900 to 1924. Exhibit VI. Summary of the Revenue of the States for the year 1924-1925, together with the rates of taxation then in force. Exhibit VII.-Statement showing the Island expenditure for each of the years from 1907-1908 to 1924-1925. Exhibit VIII.-Statement showing the variation in the Public Debt of the Island during the period from the 1st February, 1908, to the 1st February, 1925. Exhibit IX. Statement showing the Revenue of Great Britain It will be observed that in the Memorandum enclosed with the letter received from His Majesty's Secretary of State for Home Affairs, dated 30th January, 1923, that His Majesty's Government base the request for an annual contribution of £325,000 on the estimated result of increasing certain local taxation to the level of that obtaining in Great Britain, as follows: In making the request upon the above basis, allowance has not been made for the fact that a contribution of this nature would entail the actual withdrawal of the funds contributed from the Island, and that such funds would pass into circulation in Great Britain and would be lost to Jersey. Similar taxation, raised in Great Britain, would, to a very large extent, circulate in Great Britain, and so, although individuals might be poorer, collectively Great Britain would not be impoverished to the same extent as Jersey. Assuming, however, that it is desired to make some contribution towards Imperial Expenditure in connection with the War, I am of the opinion that it is essential that any such contribution should be based upon a figure within the economic possibilities of the Island, as represented by the annual excess (if any) of the influx of money (apart from that of a capital nature) into the Island, over the amount of money passing out of it. A statement setting forth the economic position of the Island must of necessity to a large extent be a matter of conjecture, but I have endeavoured to estimate the position, to the best of my ability, from the information and data I have been able to collect. In arriving at such estimate, I have been guided by the following factors: 1. The declared annual value of the Exports. 2. The estimated annual amount spent in the Island by Visitors. 3. The estimated annual income flowing into the Island from investments, pensions, &c., held, and receivable from sources, outside the Island. 4. The estimated annual amount flowing into the Island from other sources. 5. The declared annual value of the Imports. 6. The estimated annual amount flowing out of the Island for services rendered (Breton labour), and in respect of income on internal investments held by people outside the Island. 7. The estimated annual amount spent by residents, when visiting places outside the Island. |