Businesses on the Channel Island of Guernsey are warning of the negative effects of a system that seeks to control its population and at the same time divides its housing market.
In April 2017, new immigration laws took effect on the 25 square mile island of 62,000 people. The new laws were designed to restrict migrants from living and working on the small island. All newcomers, whether low paid essential workers or senior executives, are subject to the restrictions.
Guernsey’s housing market is divided into two sectors, known as Open Market and Local Market. Each has a different set of rules, but residents cannot live in a Local Market home unless they have an existing right to do so.
The rules that apply to the Open Market housing are much more relaxed. This makes it more expensive to rent or buy the 1,450 family homes, 52 hotels, ten care homes or 170 HMOs (houses in multiple occupation) that comprise the Open Market.
Those coming to the island to work, and living in Open Market properties, are issued with an Open Market Employment Permit which can only be applied for by an employer. The permit is only valid for a maximum of five years and, unless the employee is housed in a family home, cannot be extended without a break in residence.
As a result of the changes, migrants are no longer able to build up residency rights which means they must leave the island at the end of the permit period.
Some politicians are now calling for the removal of the restrictions, warning of the negative impact it is having on labour. EU workers comprise the majority of staff working in the hospitality industry such as hotels and restaurants, and low skilled businesses, such as cleaning companies. Forcing the replacement of these workers every five years, often after they have become valued members of staff, is having a negative effect on the labour market. Additionally, skilled employees such as nurses and teachers, aren’t willing to work in a place in which they cannot settle, forcing employers to take on lower qualified staff for higher wages.
House prices and wages are failing to keep in line with inflation. A 5% fall in house prices over the last two years, stagnating population numbers and the flatlining of economic growth have all been blamed on the policy.
Ministers have now agreed to relax some of the restrictions and there will be a review of immigration rules on 29th November 2017.