By Carl Parslow WE have all seen the headline: Style Group, one of Jersey’s oldest and most established construction firms, collapsed on 15 August 2025 with immediate effect. The group, which includes AC Mauger and other subsidiaries, joins a growing list of casualties in the sector. And it’s not just construction. Retailers are grappling with razor-thin margins and declining footfall. Hospitality businesses face rising costs and chronic staff shortages. Agriculture is under pressure from input inflation and limited market access. The crisis is not sector-specific, it is systemic. The collapse of Style Group highlights deep problems. Shipping costs remain stubbornly high, and the price of essential materials and supplies rises unpredictably. These pressures make it increasingly difficult for businesses to plan, price competitively or maintain stable operations. The result is a fragile market where even long-established firms are struggling to stay afloat. In this environment, firms don’t just struggle, they fail. When that happens, jobs are lost, capabilities diminish and the cost of recovery, both in practical and economic terms, becomes significantly higher. We are not witnessing isolated incidents. We are in the midst of a crisis. In Jersey, the cost of living is a persistent and corrosive force. It may not dominate headlines daily, but it gnaws at the edges of life for Jersey businesses and Jersey households alike. Groceries, building materials and basic goods are inflated, not by greed or inefficiency, but by geography. Being an island nation has its charms. Cheap freight is not one of them. And yet, the government remains curiously passive. Strategic reviews and stakeholder consultations no doubt abound, but the obvious truth remains unaddressed: shipping costs are high and they are hurting people. The solution is not radical. It is not untested. It is called a freight subsidy. And it works.Other island economies have already embraced it. Mauritius offers freight rebates for strategic imports. The Cook Islands and parts of Northern Australia operate freight equalisation schemes. These are not utopian experiments. They are pragmatic responses to the economic realities of island life. Jersey, meanwhile, continues to rely on the invisible hand of so called free-market forces which right now clearly is not working. A government-backed freight subsidy scheme would reduce the cost of imported goods, particularly essentials. That could mean lower prices for consumers, improved margins for businesses and a modest stimulus to demand. It’s not a silver bullet, but it’s a meaningful intervention. And in a political climate where meaningful interventions are rare, that’s saying something. Yes, subsidies cost money. A scheme of this nature could cost £20-40 million annually. That’s not pocket change, but it’s hardly ruinous. Jersey’s Strategic Reserve Fund stands at over £1.4 billion. Annual revenues exceed £1.2bn. The money is there. The question is whether the political will is. There are ways to fund it – targeted levies on luxury imports; a fraction of GST revenue, especially if the scheme boosts consumption. In fact, the scheme could be fiscally neutral. Increased economic activity means more tax revenue. Lower living costs mean less pressure on welfare. It’s almost as if good policy pays for itself, a concept that seems to elude many in government. Legal objections? The UK-EU Trade and Cooperation Agreement prohibits subsidies that distort trade, but Jersey isn’t trying to undercut the EU, it’s trying to make bananas affordable. Under the UK Subsidy Control Act 2022, subsidies are permitted if they pursue a legitimate public policy goal, are proportionate and minimise market distortion. A freight subsidy ticks all three boxes. WTO rules are similarly benign. The legal hurdles are surmountable. The real obstacle is bureaucratic inertia and political timidity. Designing a workable scheme is not rocket science. The scheme could be targeted, transparent, time-limited and collaborative. Focus on essentials and smaller businesses. Publish eligibility criteria and impact assessments. Pilot it for three years, with a sunset clause unless renewed. Engage logistics firms, retailers and consumers. A cost-sharing model, where businesses contribute a portion of the freight cost, could enhance sustainability and prevent dependency. The economic benefits are clear. Lower freight costs mean lower prices, which means higher consumption, which means more tax revenue. Businesses benefit from reduced input costs, which improves margins and encourages investment. Consumers benefit from lower prices, which improves affordability and quality of life. The government benefits from increased economic activity and reduced welfare dependency. It’s a virtuous cycle, if only someone in power were willing to turn the wheel. But perhaps the most compelling argument is not economic. It is moral. Governments exist to protect and safeguard their people. That includes shielding them from economic hardship caused by structural disadvantages. Jersey’s geography is not going to change. But its policies can. The freight subsidy is not a panacea. It won’t fix everything. But it could make life a little easier for all Islanders. And in a political climate where cynicism is justified and trust is scarce, that would be no small achievement. It would require courage: the courage to admit that the market is failing and that intervention is a necessity. So the questions: will the government act in the interest of its people? Or will it wait until the cost of inaction becomes too great to ignore? Born and educated in the Island, Carl Parslow is an experienced Jersey Advocate and notary public with over 25 years’ experience. He heads up Parslows LLP business legal services department, advising corporates and individuals on a range of issues with a particular emphasis on acting for Jersey owner-managed businesses. Outside of work, he enjoys rugby and cycling with Lasardines.