Why businesses lack confidence in the economy

Businesses in the island have told the BBC red tape and public sector spending were their main economic concerns.

It follows the Institute of Directors reporting earlier this month that business leaders lacked confidence in the economy.

Last October, the Chief executive of Jersey's government told the Public Accounts Committee that the fiscal position of the government was precarious and a report by the fiscal policy panel the following month found that Jersey's government was spending more than it earned.

The Chief Minister, Deputy Lyndon Farnham said "we have a good balanced position" and added "we have started to curb growth in public expenditure".

A survey of business leaders by the Institute of Directors found that 63% were pessimistic about the economy while only 17% were optimistic.

In St Helier, Richard Blampied of Aurum Jewellers said that while he was cautiously optimistic about the economy, he had concerns about government spending.

"I think Jersey and Jersey government have a big issue they need to address - it seems the civil service increases year on year with no control at all.

"The salaries and pension are eye watering and certainly not something we could see in the private sector, it's not reasonable.

"We need people to take tough and unpopular decisions."

When asked what the government could do to help business, Mr Blampied said that "cutting red tape" would make a difference.

"There are so many forms to fill in, so many things you have to do with employment, it is difficult to see young people come in and start businesses now."

Those views were shared by Debbie Vautier who owns the bistro, Blakes.

Ms Vautier said: "It took a lot longer to open Blakes than originally planned."

She said there were "just lots of hurdles to jump over and red tape to get around but we eventually got there".

Ms Vautier said less red tape would be good but she did not expect it soon.

"That's not the direction life is going in, just more health and safety, more civil servants with jobs to do, it's not going backwards in any sense."

In their survey, the Institute of Directors found that business leaders felt the biggest issues holding them back were weak economic conditions, rising labour costs, the difficulty of finding skilled staff and red tape.

Uncertainty over government investment plans also continued to cause frustration, the survey found.

The Fiscal Policy Panel, which reviews how the government generates and controls its money, said in its 2025 annual report that the government was spending more than it was earning.

Meanwhile, the Chief Executive of the government, Andrew McLaughlin admitted in October 2025 that the government's financial situation was precarious "because we are spending more than we are bringing in."

Deputy Max Andrews is a member of the Economic and International Affairs Scrutiny panel and voted against the government's budget for 2026.

Deputy Andrews said: "We are spending far too much.

"We hear from the Council of Ministers continually that they want to curb public sector growth, however in the latest government budget they have increased government expenditure with the approval of £52 million in growth bids.

"That's reoccurring expenditure and that's absolutely ridiculous."

The Chief Minister, Deputy Lyndon Farnham disputed claims that the government's finances were in a bad position.

"I don't agree with a lot of the rhetoric and misinformation that's being peddled," he said.

"We have a good balanced position, revenue has started to go up, we have started to curb the growth in public expenditure and our reserves are strong.

"We have to keep our reserves strong and not dip into them.

"The challenges we face with confidence in the economy is due to geopolitical situations at the moment.

"The world is a very unsettled place, what happens around the world does come back and have an impact in Jersey."

Follow BBC Jersey on X and Facebook. Send your story ideas to channel.islands@bbc.co.uk.