Budget is ‘a kick in the teeth for hard-working Guerns’

Deputy Andy Sloan last week suffered the double whammy of having an amendment he conceived to enforce even tougher spending cuts on government, agreed by deputies in July, thrown out in the final vote on tax reform and GST, and a bid to enforce economic competitiveness as a government priority not even debated.

Yesterday he said he was ‘disappointed and saddened’ by the Budget proposals.

‘I’m disappointed and saddened on behalf of the Guernsey public because it’s clear the commitment to restraint is non-existent,’ he said.

‘The States couldn’t vote for restraint as part of a quid pro quo last week, in part of a move to increase the size of the tax take, and it’s clear that Policy & Resources can’t even commit to expenditure restraint as part of the Budget.

‘It’s almost an “Inderesque signal” to the public.

‘The Budget proves what I was saying till I was blue in the face last week, and I’ve been saying for years – the States doesn’t have a revenue issue; it has a spending issue.’

Deputy Sloan said that being prepared to spend ahead of inflation in 2027, after all that has been said in recent months in the run-up to the GST debate, was ‘a kick in the teeth to hard-working Guerns.’

‘I really don’t understand the antipathy of this state to families and higher earners.

‘Anything above the middle seems to be fodder for taxation, and there’s nothing in this Budget for those people.’

He accused the senior committee of ‘chutzpah’ in claiming that revenue expenditure was being driven by demographics.

‘It’s all about the States’ appetite and the addiction to spending ever more of people’s money, and that has got to stop.’

Deputy Sloan said that he believed that P&R’s heart was not in expenditure restraint.

‘After presenting a tax reform package which included savings – as part of the visuals of the future numbers anyway – to then as soon as you open the front door say there’s nothing there in terms of any commitment to it.’

He said that his fellow politicians who were members of the big-spending committees remained committed to spending more and more and ‘nobody is taking the holistic view of spending in the aggregate.’

‘This is not a “Budget for growth” as they say – it’s to tax and spend more money.

‘A Budget for growth would be expenditure restraint and putting more money into the hands of people, and it would be controlling the costs on Guernsey business.

'That would be a Budget for growth.’

In their budget requests for next year States committees together overshot the States’ agreed spending target by £33m.

The States previously resolved to cut spending by 1% in real terms in each of the years 2027 to 2029.

But P&R revealed that when committees submitted their budgets, only five met or exceeded that 1% target, and just 73% of the overall savings required was identified.

In response, P&R is putting two Budget options to the States Assembly.

Option A sticks to the agreed 1% reduction.

Option B would allow an extra £15.7m. of committee spending – just under half of the additional money committees asked for – amounting to a real-terms increase of 1.3%, the opposite of the cut deputies signed up to.

Under Option A the budget shows a net surplus of £4.2m. before investment returns; under Option B that becomes a deficit of £11.5m. The island’s underlying funding gap, already put at £47m. under Option A, would widen to £63m. under Option B.

P&R insisted that Option B was ‘not intended to overturn or circumvent the States’ previous decision’, but described it as a ‘transparent alternative’ that reflected the committee’s prioritisation of genuine demand pressures, particularly in health and social care.

To soften the impact, Option B also carries a proposed new instruction to still deliver £20m. of cumulative savings over time.

The committee said that whichever option the Assembly chose, committees would have to review spending, reprioritise and find more efficient ways of working – and that it was ultimately for the States, not P&R, to decide whether to spend above the agreed target.