States rejects GST but deputy says it'll be back

Yesterday's vote sparked celebrations from shop owners and some business leaders, but Social Security minister Allister Langlois, pictured, who jointly led the proposals, predicted the controversial tax would return to the States.

Richard Conder, who led the amendment which ruled out the sales tax by 28 votes to 18, said it was one of the most important, if not the most important decision of this States.

Treasury and Social Security had wanted further investigations into GST, which its Personal Tax, Pensions and Benefits Review suggested could raise some £50m. at 5%.

'This gives a clear signal to this government and future governments that GST is not suitable for our island, with an economy such as ours,' said Deputy Conder.

Deputy Langlois and Treasury minister Gavin St Pier said the loss of GST had not sunk their review's 10-year action plan, despite the significant cash shortfall.

However, the ministers admitted that rearrangements would have to be made and it could affect other measures and benefits, such as proposed increases in personal tax allowances.

Deputy Langlois said there were only two ways to rebuild.

'One way would be that some benefits that would have come from the overall package may have to be introduced more slowly or withdrawn. The other is the amount you may have to draw down from other sources may have to be increased.'