While States members and the public still call for savings and ideas to help the economy in order to avoid further taxation to fund public services, we seem to have a fairly blase attitude towards a relatively large group of people who may well be working here but contributing nothing.
I’m talking about visiting traders.
Recent reports of off-island traders going door to door offering to work on people’s properties have prompted me to write about this.
Some residents will be familiar with the knock at the door from someone offering to ‘do the job today for cash’. Sometimes the work is legitimate, but the wider question remains the same: Who is checking whether these businesses are properly registered and whether they are contributing to the island’s social security system while they are working here?
This isn’t a new idea, but it is one worth revisiting.
Alongside painting Liberation Day murals and illustrating Richard Graham’s political sketches, I also spent four-and-a-half years as a non-voting member of the Employment & Social Security Committee. During that time I raised the issue more than once of visiting traders and the role that Social Security could be playing in registering them.
My perspective came from running a labour hire business where we regularly supplied staff to companies coming to the island to carry out work.
Quite often off-island firms would contact us when pricing jobs here. Sometimes we would end up supplying local labour when they won the work, which at least meant some of that money stayed on the island.
But it also gave us a clear view of just how many firms were coming over here to work.
At one point I asked Social Security staff if they were aware of a list of more than 60 off-island firms that we had supplied labour to over the years who had been working in Guernsey.
They weren’t aware of them.
They wouldn’t have been, because Guernsey has no proper process to identify who is coming here to work. There is no register.
During one meeting I asked how Social Security could know whether visiting traders had the required certificate of continuing liability from UK HMRC.
If a visiting company has one of these certificates in place, they continue paying national insurance in the UK. If they don’t, they are supposed to register here and pay Guernsey social security contributions.
The obvious question is: How do we know whether they have that certificate or not?
The honest answer was that without a register or any form of notification process, we simply don’t know.
That leaves a loophole where people may be working here without contributing locally, and potentially without contributing properly elsewhere either.
There are examples where the system has clearly failed. In 2017 a firm called G & D Brickwork Contractors was taken to the Petty Debts Court twice by Social Security for unpaid contributions totalling £22,519.67 after working on the Oberlands mental health unit.
That was a States construction project with civil servants and deputies regularly visiting the site, yet the contributions issue still slipped through the net.
If it can happen on a government project in plain sight, it raises the obvious question of how many other jobs go completely unnoticed.
To get some idea of how another island deals with this, I submitted a freedom of information request to the government of Jersey.
The headline figures were interesting.
Jersey issues licences to non-resident businesses coming to work on the island. Over recent years they have issued between roughly 95 and 315 licences per year to visiting firms.
Those licences alone generated between about £120,000 and £294,000 per year in fees, and the government says the fees cover the cost of administering the system.
In other words, the scheme largely pays for itself before you even consider any tax or social security contributions that may arise from the work being carried out.
Most of those visiting firms come from the UK.
Jersey has a population of around 107,000, while Guernsey has roughly 64,000.
If you crudely scale Jersey’s visiting trader figures by population – and it is only a rough guesstimate in the absence of any proper registration data – you might reasonably expect somewhere in the region of 60 to 180 visiting businesses each year working in Guernsey.
To put that into context, the construction sector in Guernsey employs only a few thousand people in total. Even a relatively small number of visiting firms can therefore represent a noticeable share of the workforce on major projects.
The more significant number, however, is the potential social security contribution.
If even 100 workers from visiting firms during a year were working here without a certificate of continuing liability and therefore should have been paying Guernsey contributions, the sums become meaningful very quickly.
At roughly £150 per week per worker in combined employer and employee contributions, just six months of work from 100 workers would represent somewhere around £390,000 in contributions.
If the number involved were 200 or 300 workers across different projects during a year, which is entirely plausible given construction, specialist contractors and seasonal work, the potential figure quickly climbs toward £750,000 to over £1m.
These figures are clearly rough estimates, but that is exactly the problem. Without any form of registration we simply have no way of knowing the true scale.
And the loss is not just the contributions themselves. When work is carried out by resident businesses, the money paid for that work circulates within the island economy. It pays local wages, which are then spent in local shops, restaurants and services. That spending supports other businesses and creates further tax revenue.
When work is carried out by off-island firms with off-island labour, much of that money leaves the island almost immediately.
So the loss is twofold: the government potentially misses contributions that should have been paid, and the wider economy loses the local spending that would otherwise circulate through it.
My suggestion at the time was actually quite simple and designed specifically to avoid creating a large new administrative burden for government.
Rather than building a complex licensing system, place the responsibility on the customer or property owner hiring the visiting contractor to notify Social Security if the trader cannot provide a local social security number.
That single step would at least give the authorities visibility of who is working here and allow them to check whether contributions are due.
Over the years I’ve seen visiting firms working on major projects even during quiet periods for local trades.
Around 2015 two of the largest jobs on the island were being carried out by off-island contractors. One of them, working on the St Pierre Park health suite, had sign-written vans driving up and down the Rohais every day on a very prominent site. Inspectors were apparently unaware they were even working there months after work had begun.
Along with the situation on the Oberlands project, it shows there is a fairly obvious gap in the system.
This issue has been raised in discussions with government before, so it isn’t something that should come as a surprise.
But at a time when the States are searching for savings and debating new ways to raise revenue, it seems worth asking a simple question.
If we need locals to pay more to keep public services going, shouldn’t we also be doing something to make sure we collect from those visiting the island who are supposed to be contributing too?
