Stuart Clark fears that any consumption tax will reduce economic activity in the island.
‘Taxes do not just raise revenue – they change behaviour. GST is not a costless way of transferring money from the public to government. It raises prices, alters decisions and suppresses activity at the margins,’ he said.
‘That matters in a small economy where many businesses depend on discretionary spending by residents and visitors – meals out, retail, services, events, tourism, trades and small purchases.
‘If those transactions become more expensive, some will not happen at all.
‘That is the problem of deadweight loss. GST does not simply take money out of residents’ pockets. It can prevent activity from happening in the first place.
‘A transaction that does not happen does not support a shop, a cafe, a tradesman, an employee, a supplier, a landlord or the wider island economy. It simply disappears.’
The chairman of Alderney’s Economic Development Committee says while the island might be a low tax jurisdiction for the wealthy, many ordinary people were paying more in tax and social security than if they lived in the UK.
He wants to see any attempt to rebalance public finances in the bailiwick to focus on driving government efficiencies.
‘What is needed is not another permanent bureaucracy, but a time-limited efficiency and productivity commission with teeth – a small, independent team tasked with challenging costs, cutting duplication, speeding up decision-making and forcing government to justify what it does, how much it costs, whether it delivers value, and whether it could be done better.
‘Any existing savings programme should be accelerated, independently tested and reported publicly before households and businesses are asked to pay more.
‘A new tax should be the last resort, not the first instinct.’
He said that Alderney faced bigger issues with structural problems including weak transport, fragile connectivity, a shrinking working-age population, limited enterprise and insufficient investment.
‘Those problems will not be solved by adding another layer of taxation. They will be solved by making Alderney easier to live in, easier to work in and easier to do business in. For those reasons, I cannot support the introduction of GST.’
Alderney is taking an increasingly strident position against GST. The island is hosting members of the Policy & Resources Committee for a public meeting on Monday.
The island’s Chamber of Commerce came out strongly against with a survey earlier this year, describing the prospect as ‘catastrophic’ for business in Alderney.