Guernsey Press

P&R welcomes further debate on States’ spending priorities

Policy & Resources has welcomed another States debate about which capital projects should go ahead this term, but has not said if it will vote for more borrowing without additional tax increases.

Deputy Peter Ferbrache speaking at a public Q&A about the island's finances last month. (Picture by Sophie Rabey, 32692190)

The Assembly recently spent four days debating numerous tax, borrowing and spending options.

Deputies rejected P&R’s flagship plan to introduce a goods and services tax and borrow £350m. for capital projects with a total cost of about £600m. Instead they agreed a lower level of spending alongside potential tax increases on motorists and company profits.

However, Education plans to use a Budget amendment this week to ask the States to back additional borrowing of up to £200m. and reverse last month’s decision to de-fund its £130m. reorganisation of secondary and further education, but without re-introducing the proposal for GST.

‘P&R is supportive of these matters being considered, recognising they need to be urgently and clearly resolved one way or the other, to give certainty to the community, including on the costs facing the States,’ said P&R president Peter Ferbrache.

The senior committee’s draft 2024 Budget now faces 15 amendments. Debate on them is due to start tomorrow morning, although some deputies hope to reschedule the States’ order of business and defer the Budget until a vote has been held on a motion of no confidence in P&R which was submitted last week.

P&R has identified some Budget amendments which it said it would support. These include those led by Deputies Victoria Oliver and Peter Roffey, in relation to unoccupied properties which seek to help ensure there are clear definitions.

Deputy Roffey is proposing that a new higher rate of TRP on unoccupied properties should start after they have been vacant for 12 months, instead of six months as put forward by P&R. Deputy Oliver wants the definition of unoccupied property to exclude those undergoing renovation.

P&R said it was ‘broadly not supportive’ of amendments which would reduce States income in 2024, of which there are several, including attempts to cut TRP and introduce more tax breaks for environmentally-friendly transport subsidies offered by employers.

‘The Budget is designed to raise additional revenue from those who are most able to pay and reduce the burden on middle and low earners, but it also recognises that there are significant cost pressures, particularly in the area of health and social care, which cannot be ignored.’

P&R has said it will ‘strongly oppose’ amendments which seek to make fundamental changes to income tax.

‘These have been laid without any consultation or analysis, but they could have a very significant impact on the amount of revenue raised from high earners, putting even more pressure on the average taxpayer,’ it said.