'States will lose all credibility if more borrowing agreed' - Parkinson
The deputy leading a bid to unseat Policy & Resources has claimed the States will have no credibility left if it agrees to additional borrowing and spending of more than £100m. this week, after throwing out major tax rises last month.
The Education Committee is asking the States to back additional borrowing of up to £200m. and reverse its decision to de-fund a £130m. reorganisation of secondary and further education, but without re-introducing proposals for new or higher taxes to fund it.
‘If that is the outcome, I really think the States will have lost all credibility,’ said Deputy Charles Parkinson.
‘Our credit rating would be shot to pieces. Nobody would believe a word the Policy & Resources Committee says if it turns around now and supports Education in wanting to spend £111m. after all its strictures about running out of money and not doing any more unless we raise more revenue.’
Education, Sport & Culture needs three deputies to change their votes from last month to allow it to go ahead with a redevelopment of The Guernsey Institute alongside a new sixth form centre at Les Ozouets. De-funding the project was ‘pretty calamitous and short-sighted’, according to ESC president Andrea Dudley-Owen.
Speaking on the latest Guernsey Press politics podcast, Deputy Parkinson said he also wanted to see the project go ahead and had proposed ways of funding it which the States defeated last month, along with a range of other plans to raise significantly more revenue.
Listen: Deputy Parkinson joined James Falla and Matt Fallaize on the latest Guernsey Press Politics Podcast
‘This amendment does not propose any new revenue sources. It just says increase the borrowing capacity of the States and fund the project.
‘It would just simply blow a complete hole in the States’ fiscal policies... and would be seen as fiscally irresponsible.’
P&R has said it welcomes the issue being re-debated but has not declared whether it will support ESC’s amendment.
‘I would expect them not to because I don’t see how they could with any credibility say “oh, it’s all right, we’ll just go and write a cheque for £111m. and, you know, somehow it will get sorted out”,’ said Deputy Parkinson.
‘The reality is the States rejected various options for increasing revenue – Deputy [Lyndon] Trott’s move to impose a 23% basic rate of tax, my amendment to reform the corporate income tax system, and P&R’s proposal to introduce GST.
‘So the States had three options on the table to raise more revenue and rejected them all. I think it’s now not credible to say we’ll just go and spend the money anyway. I really cannot see how P&R can in all good conscience support the amendment.’
At its flagship tax and spending meeting in October, the States backed P&R’s third-choice scheme.
It included a direction for future debates about raising taxes on motorists and companies, spending reductions, and a cut-down list of capital projects with an estimated cost of £340m. rather than a longer list worth about £600m. proposed originally.
ESC believes that additional borrowing required for its project could be funded by any spending cuts and extra taxes on motorists and companies agreed by the Assembly.
Deputies Gavin St Pier and Carl Meerveld have also submitted amendments to this week’s Budget debate which propose that the States should not add to its approved list of capital projects without first removing other projects or agreeing new sources of income to fund the additional spending.