Deputies behind the unsuccessful proposal for a real-terms budget freeze claimed that the vote flew in the face of committees’ pledges to restrain expenditure.
Although the policy was accepted at amendment stage, it lost 15-22 when put to a final vote just before 7pm on Friday, at the end of the States’ landmark tax and spending debate.
‘I was really disappointed with that because we’ve got to walk the walk,’ said Mark Helyar, who proposed the move at amendment stage.
‘If the States is going to tell the public that we’re spending money sensibly, just throwing out any kind of spending restraint at the outset is really quite a bad idea.
‘I think it sends totally the wrong message.’
Matt Fallaize spoke to Deputy Mark Helyar outside the States following Friday’s vote
The amendment was originally submitted by Andy Sloan, when the tax and spending debate started in July, but when family commitments forced him to leave the meeting it was taken up by Deputy Helyar, who won an initial vote directing that growth in total States expenditure should not exceed the rate of inflation in 2027, 2028 and 2029.
When States members resumed their debate last week, they first agreed to loosen the spending policy by exempting £350m. of social security annual expenditure, and then threw it out altogether.
‘Once the amendment went one way it was quite clear that this States clearly does not want any constraints on spending,’ said Deputy Sloan.
‘It is happy to tax and spend more, and then tax again.’
In a bizarre twist, Friday’s defeat of the proposal for inflation-only expenditure increases has resulted in the States maintaining an even tighter spending policy, having directed earlier in the year that future years’ budgets should allow increases of inflation minus 1%.
P&R therefore remains under a direction to develop an efficiency programme targeting a 1% real-terms annual reduction in public spending in each of 2027, 2028 and 2029.
It is unclear whether these implications were fully understood by all members when they voted late on Friday.
In any event, members who favour a more conservative fiscal policy felt the vote was important as an indication of spending discipline.
Deputy Helyar voted in favour of Policy & Resources’ tax package and for a new 3% goods and services tax to rise to 4% in 2031 and 5% in 2033, but wanted it coupled with a tighter rein on expenditure.
Deputy Sloan voted against the senior committee’s plan, despite being openly in favour of consumption taxes in principle, saying that cost-of-living pressures made it ‘a bad time’ to introduce GST and that the pathway to 5% would be ‘horrendously inflationary’ and was unnecessary.
‘We are taxing and spending more, as we have been for the best part of 10 to 15 years,’ said Deputy Sloan.
‘We are carrying on along that path. We are just doubling down on the approach which is leading us to becoming poorer.’
Deputy Helyar said he was quite surprised when the States voted down the real-terms spending freeze policy but Deputy Sloan said it was not a shock.
P&R members were split on the issue, with the president and vice-president abstaining, the treasury lead voting against and the other two members voting in favour.
Deputy Helyar speculated that some committees with the highest budgets may have co-ordinated a vote against the proposal, even though doing so left them facing an even stricter spending policy.
‘I haven’t looked at the voting, but I suspect it was probably Employment & Social Security members and Health & Social Care members being whipped to vote against it.’
The voting record from Friday evening showed that votes against included all five members of ESS and four of the five members of HSC.
The BBC reported last week that P&R’s draft 2027 budget, due to be published tomorrow, would include two spending options – one with a 1% real-terms reduction and one without.
How they voted
... on the proposition to hold spending increases to no more than the rate of inflation in 2027, 2028 and 2029, excluding social security expenditure.
For (15): Deputies Blin, Cameron, Falla, Gabriel, Goy, Helyar, Inder, Laine, Malik, Montague, Niles, Van Katwyk and Vermeulen, and Alderney Representatives Hill and Snowdon.
Against (22): Deputies Bury, Collins, Curgenven, Dorrity, Gollop, Hansmann Rouxel, Humphreys, Kay-Mouat, Kazantseva-Miller, Le Brun, Leadbeater, Matthews, McKenna, Oswald, Ozanne, Parkinson, Rochester, Rylatt, Sloan, St Pier, Strachan and Williams.
Abstained (3): Deputies Burford, Camp and de Sausmarez.
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