The Policy & Resources Committee is days away from revealing the final proposals from its corporate tax sub-committee, which has been studying four options previously estimated to be worth up to £16m. a year of additional income to the States.
At the same time, the senior committee will present more information about how spending cuts could be achieved following a recent States direction to hold budget adjustments to inflation minus 1% in each of the next three years.
The corporate tax proposals and ideas on spending restraint will be presented before Liberation Day in a wide-ranging update from P&R as it looks at alternatives to the GST-plus package approved in principle by the previous States but not yet introduced.
‘Work is continuing, and we have a lot more information than we did at the start of the political term thanks to the work exploring alternatives, for example through the tax review sub-committee,’ said P&R president Lindsay de Sausmarez yesterday.
‘We are intending to publish the sub-committee’s report during the week commencing 4 May. We’re also still in discussions with other committees to explore expenditure reduction.’
P&R is preparing for a landmark States debate this summer about how to deal with a black hole in public finances estimated to be growing towards £100m. a year.
Speculation is increasing that P&R wants to avoid a ‘take-it-or-leave-it’ approach to GST-plus and will instead ask the States to vote on a series of alternative packages. That would allow each of the main options – a consumption tax, company tax increases, other taxes and spending reductions – to be presented in some but not all packages, and may lessen the risk of the Assembly failing to agree a strategy to deal with its deficit.
P&R confirmed yesterday that it was still to agree its final proposals but insisted it was ‘confident’ of going ahead with the States debate on 15 July, the Assembly’s final meeting before its summer adjournment.
It said it anticipated unveiling its proposals to other States members and the public in a policy letter around 8 June, just five weeks before it wants the Assembly to debate them.
‘Ahead of that we will be publishing information in the coming weeks to explain further the variety of options we are considering,’ said Deputy de Sausmarez.
‘This information, including the report by the tax review sub-committee, will provide a focus for engagement and feedback and will inform the policy letter ahead of publication.
‘We will not be relying solely on the publication of the policy letter to stimulate that discussion. There will be various opportunities for colleagues and the public to consider the information that will be informing the recommendations ahead of the publication of the policy letter, including published information, public presentations, drop-ins and Facebook live Q&As.’
P&R said it had not yet made ‘a formal decision’ on which of its members would lead the States debate in July but that it was ‘a reasonable expectation’ that it would be Deputy Gavin St Pier, the committee’s vice-president and treasury lead.
More information about P&R’s tax review is available at www.gov.gg/taxreform.