Guernsey Press

‘Fairer alternative’ leaders disappointed by third GST bid

THE leaders of a group of deputies who put forward alternative tax proposals earlier this year – which they called ‘the fairer alternative’ – are disappointed that P&R has returned to GST for a third time.

Deputies Gavin St Pier and Heidi Soulsby at the launch of their fairer alternative to GST in March. (Picture by Luke Le Prevost, 32502825)

‘It demonstrates that P&R has wasted another 10 months’ unproductive work, without having taken on board the concerns expressed in the previous two tax debates so far this term,’ said Gavin St Pier, who seconded the alternative package in February.

‘It’s not obvious whether P&R’s obstinacy is being driven by inexperience or incompetence.

‘In any event, if this really is the best they can do, it’s likely to be necessary for others to consider putting forward alternative options.’

Some of the secondary proposals in the alternative package were approved by the States, but the main tax-raising part was lost on a tied vote.

Heidi Soulsby, who proposed the alternative package, said GST had become even less attractive since it was last defeated by the States.

‘Given that P&R’s previous proposals were comprehensively defeated, and only those which we put forward were successful, it seems rather a strange move to bring back the cornerstone of their package again,’ she said.

‘Since then the cost-of-living has only got worse and the value of the mitigations will have reduced, which just makes nonsense of the claim that their GST package is progressive. It just won’t stand the test of time.

‘That significant borrowing is now proposed at the same time as GST just adds insult to injury. Borrowing at the levels suggested now makes no sense and could very well lead to taxes having to go up again further down the line.’

Deputy Soulsby was waiting to read P&R’s policy letter, which is due out early next week, before deciding whether to work on another alternative package ahead of next month’s debate.

P&R has told deputies it cannot deal with a hole in public finances projected to grow to between £50m. and £100m. a year in the next decade, and fund major building projects at the Princess Elizabeth Hospital and Les Ozouets, without borrowing at least another £200m.

Deputy St Pier said proposals to borrow had ‘woefully missed the boat’.

‘The Bank of England’s base rate has risen rapidly from its all time low of 0.1% in 2020 to 5.25% today, with further rises in the coming months anticipated by the markets,’ he said.

‘Now is the wrong time in the interest cycle for anyone, including the States, to borrow if it can be avoided.

‘Having squandered the opportunity to lock into record low interest rates, they have also lost the chance to implement GST this term.

‘As we said at the time, it was already too late when the States debated GST in January and February this year.’