States urged to look beyond tax increases

The chances of taxes rising or a goods and services tax being introduced after deputies meet this week appeared to be in the balance last night after the Institute of Directors and Chamber of Commerce both issued statements concerned about significant tax increases.

The Guernsey Party – without political leader Deputy Mark Helyar, who is leading the tax review and has said he will support the proposed tax rises as a ‘last resort’ – also issued a statement demanding the States do much more to avoid the need for a GST.

Chamber accused the tax review report of being a fait accompli.

‘There will be a hole, it will need to be filled. This, we are told, is how to fill it. Not how to avoid the hole, not how to minimise the hole, just how to fill it,’ it said.

‘Minimising and avoiding the hole just don’t seem to be in the States vocabulary, let alone given serious consideration as a solution.’

Chamber recognised that demographic pressures may well see a need for some tax rises, but urged the States to decide on population policy first, and look to increase the working population.

IoD said it wanted the States to fully examine options to make savings and to grow the economy before moving to increase taxes. It said it was prepared to consider both GST and increased income tax and would seek the views of members on their impact.

The Guernsey Party again outlined its opposition to GST and said the States should ‘leave no stone unturned’ in a comprehensive review of its expenditure.

‘It is very hard for the Assembly to entertain a deeper exploration of tax increases in the absence of a full picture of the potential, and the appetite for, the removal or reduction of any existing services,’ its four remaining political members said.

But Deputy Peter Roffey, a member of the tax review steering group, described the four-page statement as ‘recycled nonsense’ and ‘populist rubbish’.

Policy & Resources Committee president Deputy Peter Ferbrache said the committee was prepared for a wide-ranging debate in the States this week but was ‘running out of runway’.

‘The option will be [next year] either increasing tax or cutting services. There is no alternative,’ he told BBC Guernsey.

‘I’d rather we reduce taxes, I want growth, I want people to be inspirational, but we’ve got to face the fact we’ve got bills to pay.’

Businessman Jon Moulton also spoke to the Guernsey Press, advising the States to examine its finances more closely, and to look at expenditure, borrowings, investments and its legislative plans.

‘Find out what you need to do before you talk about what you’re going to do,’ he said.