Population Office: Consultation on Fees - Fees that May be Levied Under the New Control of Housing and Work (Jersey) Law 201-

STATES OF JERSEY

POPULATION OFFICE: CONSULTATION ON FEES – FEES THAT MAY BE LEVIED UNDER THE NEW CONTROL OF HOUSING AND WORK (JERSEY) LAW 201-

Presented to the States on 7th June 2012 by the Chief Minister

STATES GREFFE

2012   Price code: B  R.70

The Chief Minister's Department Population Office

Consultation on Fees:

Fees that may be levied under the new Control of Housing and Work (Jersey) Law 201-

Purpose and type of consultation

To seek the views of members of the public, businesses and other organisations on the introduction of fees under the Control of Housing and Work (Jersey) Law, and the level of any fees:

Closing date:  25th July 2012

Summary

The new Control of Housing and Work Law is being introduced to control population  levels  and  to  secure  housing  and  work  for  people  with  strong connections to Jersey. The Law will support our Strategic Priorities:

• "Get People into Work"
• "Manage Population Growth and Migration"
• "House our Community"

In particular, the new Law will support the employment of long established residents, while also ensuring that Jersey remains "open for business" where immigration  adds  significant  economic  or  social  value.  The  Law  will  be applied alongside other measures to support employers and local employment, for  example  the  "Back  to  Work"  initiative,  and  to  complement  economic growth and diversification strategies.

The new Law will replace the following Laws:

• The Regulation of Undertakings and Development (Jersey) Law 1973;
• The Housing (Jersey) Law 1949; and
• The Hawkers and Non-Resident Traders (Jersey) Law 1965.

The new Law will be more streamlined than the old Laws, for example:

• Businesses no longer need permission to employ Entitled people;
• Requirements are reduced for a business wanting to change ownership;

• Businesses will not need to prove the residential status of prospective employees  –  they  need  only  see  their  registration  card  and identification.

At  the  same  time,  more  work  will  be  done  to  ensure  that  immigration  is controlled effectively. In particular:

• Existing  resources  will  be  used  to  ensure  businesses  comply  with licence conditions that limit the ability to employ migrants;
• New powers will enable the authorities to impose new conditions to support local employment, and to order activities to cease where a licence is not in place;
• A Population Register will provide an ongoing record of our population and immigration levels, and enable Departments to share name and address information to support service provision and compliance.

The new Law will be administered by the Population Office. The annual costs of administering the new Law, plus depreciation charges, will be £900,000 per year – that's slightly less than the cost of administering the existing Laws.

The Migration Advisory Group and Council of Ministers have said that the costs of managing immigration should not be met by the taxpayer as they are now, but by user pays fees instead. For example, by:

• migrants that come to Jersey;
• businesses that bring migrants into Jersey;
• visiting contractors and traders.

This  consultation  outlines  a  range  of  possible  fee  options,  and  asks  for comments. At this stage, these are merely options outlined to obtain comment from respondents.

In making decisions on introducing fees, great care will be taken to ensure that fees do not discourage valuable economic activity and do not materially affect the ability of local businesses to operate profitably, to contribute to our Island and to employ entitled people.

• This is why it is  not proposed that any charges will be levied on businesses which employ only entitled people. Nor is it proposed that fees be charged for new businesses or applications. Of course, we will listen to the views of respondents.

Fees will also be designed to ensure that collection costs are modest and to prevent delays in the application process. In reviewing our options, it has also been noted that fees are charged for permits and licences in the Isle of Man and Guernsey so this proposal would not affect our competitiveness.

Finally, it is worth noting that the Population Office currently charge £70 for a housing  consent  before  property  buyers  can  transact.  This  currently  raises £130,000 per year. This fee will be abolished under the new Law. It is not proposed that Entitled persons pay any fees for their property or any other matter.

Further information: You can download this Consultation Paper from the States of Jersey website at: www.gov.je/government/consultations.

You  can  find  more  information  about  the  Control  of  Housing  and  Work (Jersey) Law 201- in the following Reports and Propositions presented to the States,  which  you  can  find  on  the  States  Assembly  website: www.statesassembly.gov.je.

CONFIDENTIALITY: YOUR SUBMISSION

Please note that consultation responses may be made public (sent to other interested parties on request, sent to the Scrutiny Office, quoted in a published report,  reported  in  the  media,  published  on  www.gov.je,  listed  on  a consultation summary, etc.).

On completing your consultation response, you can indicate if you prefer your comments to remain confidential.

Please send your comments:

By post to:  Director

Population Office

PO Box 843, Jubilee Wharf 24 Esplanade

St. Helier

JE4 0UT

Or by email to:  managingmigration@gov.je

How to contact us:  Telephone:  01534 448997 Fax:   01534 448988

WHAT HAPPENS AFTER THE CONSULTATION IS FINISHED?

The Migration Advisory Group will consider all responses and a Findings Report  will  be  presented  to  the  States  together  with  any  proposals.  The Migration Advisory Group is chaired by the Assistant Chief Minister, Senator Paul  Routier,  and  includes  the  Minister  for  Economic  Development,  the Minister for Housing, and the Assistant Minister for Social Security.

GLOSSARY: The new Law will introduce a variety of new categories:

FEES THAT COULD BE LEVIED UNDER THE NEW LAW

1. Registration Cards

Migrants coming to live in Jersey, and existing residents moving house or starting a new job, will need a Registration Card.

These registration cards will contain a person's name, social security number, residential status and any conditions, for example, when the card expires.

These cards will not include a photograph, unless the States direct otherwise.  These  cards  are  designed  to  enable  a  person  to  obtain housing and work based on their residential status and need not be carried at any other time.

The cards will be combined with the existing Social Security card so you only need a single card. The cards will belong to the person to whom it has been issued – and will not be held by employers.

The cards will show the landlord or employer, and other parties, that the person obtaining housing or work has the necessary residential status and is properly registered. In this way, administration will be reduced for the States, businesses and private individuals. For example, housing consents will no longer need to be issued for every purchase or lease transaction, and businesses will no longer need to prove the residential status of a prospective employee.

Introducing a fee could deter people from registering, so care is needed. However, as the new legislation is designed to achieve immigration objectives, it is suggested that some new migrants should be charged for cards, for example:

• A person gaining Entitled status through high value residency could be charged a fee of £5,000.
• New Registered and Licenced migrants could be charged a fee of £75 when first coming to the Island (this fee would not be payable each time they return to the Island as their first card would normally remain valid).

It is  not felt that Entitled people who have completed a period of residence should be charged for obtaining a card – they should be able to obtain their cards for free.

These fees would generate £450,000 per year.

2. Annual charge for Licensed staff

These employees tend to be very high value - creating and safeguarding local  jobs,  supporting  the  competitiveness  of  our  economy,  and delivering  front  line  public  services,  for  example,  doctors,  nurses, teachers.

The average annual salary of a private sector Licenced employee is approximately £90,000. These employees are able to purchase or lease any property, including Qualified Property.

A  charge  of  £200  per  year  has  been  suggested  for  each  licenced employee for which a business has been granted permission. This fee would not apply to not-for-profit activities.

These fees would be collected alongside one of the periodic manpower return processes, if possible by way of electronic payment, with the first payments due on 31st December 2013, i.e. on completion of one full year.

This suggested fee level would represent 0.3% of the average annual salary of a Licenced employee. The largest employer of Licenced staff in Jersey would pay £10,000 per year.

This would generate £210,000 per year.

3. Non Resident Contractors – Application for a Licence

Visiting contractors support choice and increased competitiveness and do not add to the Island's permanent resident population. Nonetheless, it is felt that contractors should make some direct financial contribution when visiting Jersey to undertake work, while being mindful of any market effects this may have.

270  licences  were  issued  to  visiting  contractors  in  2011  under  the Regulation of Undertakings and Developments Law, of which 140 were licences  for  construction  activity.  80%  of  these  licences  were  for contracts of less than 3 months.

Devising a fee that is both reasonable and simple to administer for this type of contractor presents significant challenges. For example, some contracts  have  a  sizeable  labour  component  and  some  do  not,  so charges should not simply be levied on the length of contract, but also its size. Also, some contracts are more profitable than others.

One simple means of raising a fee would be to charge for the number of days and number of Registered workers that the non resident contractor

is licenced for. As an example, a fee of £10 per day per Registered worker licenced would result in:

• A fee of £100 for a 10 day licence for one worker; and
• A fee of £1,000 for a 10 day licence for 10 workers.

Any such fee could be capped, perhaps at £5,000. It is also likely that short stay contractors will not need a licence, so any fee would only apply to the number of days the contractor was working beyond the exemption  period.  In  addition,  not-for-profit  activities  would  be excluded.

This fee level would generate an estimated £230,000 per year.

4. Non-Resident Traders and Hawkers – Application for a Licence

Under the existing Hawkers and Non Resident Traders Law, a fee of £100 is charged for a licence for craft fairs, events, and exhibitions, and £2,000 for other purposes.

The new Law will also require traders to hold licences for offering to buy goods and the sale of services (the previous Law only dealt with the sale of goods). This means that traders coming to Jersey to buy precious metals or to sell smoking cessation services would need a licence.

Such  traders  bring  increased  choice  and  competition  to  the  Island. However,  such  traders  do  not  make  a  direct  financial  contribution through tax. Therefore, a flat fee of £250 per licence is suggested. Not- for-profit activities would again be excluded.

Hawkers currently require a licence, for which they are charged £100. In future, it is suggested that a fee be charged of £250 per licence. This would cover the administrative costs of confirming that the Hawker is a "fit  and  proper"  person  and  of  including  their  photograph  on  their licence (these safeguards are designed to protect householders from non licenced Hawkers).

These fees would generate £10,000 per year.

5. Other fees that could be levied – but which are not suggested at this time

Other fees could also be levied, although this is not actively suggested and the views of respondents will be listened to. Notably, fees could also be raised for:

• Review, Renewal and Variation of Licences

Licences for Registered or Licenced staff may require periodic review and renewal, commonly, every 3 years. Application may be made to increase the numbers of Registered and Licenced staff, or the Minister may decide to vary a licence following suitable notice. A fee could be levied for these applications, but as this would be a charge against businesses in the present economic climate, it is not suggested that such a charge be introduced at this time.

• Annual charge for Registered persons

There is concern about the impact of annual fees on businesses which employ  Registered  persons,  particularly  over  the  profitability  and viability  of  some  businesses,  especially  those  with  smaller  profit margins, or where additional costs could be passed onto the consumer resulting  in  inflation.  At  the  same  time,  very  modest  charges  are unlikely to have a material effect and could exempt small businesses.

• Applications by companies to purchase property

It is estimated that 10 applications for companies to purchase property would  be  made  each  year,  generally  to  buy  land  or  property  for redevelopment, with the completed units then being sold out of the company  to  individual  buyers.  Given  the  small  volume  of  these transactions, it is not suggested presently that fees be levied.

• Applications to change the residential status of a property from Qualified to Registered, or to apply conditions/concessions

It is estimated that 40 applications would be made each year to change a property  status  or  apply  a  condition,  for  example,  that  a  Qualified property or annex to such a property can be used by a family member who is Registered. Given these relatively small numbers, and in the interests  of  keeping  fee  schedules  and  processes  simple,  it  is  not suggested presently that fees be levied.