LIVE / States: 2027 Budget

This move would freeze the budget of the Overseas Aid & Development Commission at its 2026 level, as opposed to the above-inflation increase by Policy & Resources.

Deputy Kazantseva-Miller’s ‘feel good’ move is carried 20-16, with two abstentions and two members not in the chamber.

It limits increases in alcohol duty to inflation only, rather than the above-inflation increases proposed by P&R.

A lively debate on this one.

Some members have been surprised to hear support for this amendment from Health president George Oswald - whose committee prompted the proposal for above-inflation increases according to Deputy Parkinson.

But Deputy Oswald says he will now back it.

‘Realistically, the way to tackle problem drinking is minimum unit pricing, and there’s quite a lot of evidence to showed that is the only effective way to tackle it. And so I was convinced by the argument that I read in the amendment to change my mind about this, which I’m entitled to do,’ he says.

Another amendment from Economic Development president Sasha Kazantseva-Miller - this time to limit increases in alcohol duty to inflation only, rather than the above-inflation increases proposed by Policy & Resources, and also extend the inflation-only policy to 2028.

‘The committee believes we should strike a better balance between raising revenue and supporting our local economy and community.

‘The budget does little to respond to the real cost of living pressures that our community is facing. Keeping costs down so that islanders can continue to afford the little luxuries of going to their local pub is the least we can do,’ she says.

No debate to speak of on this move from Deputies Kazantseva-Miller and Laine - it’s carried 37-0 and increases the production limit under which duty relief is available to small, independent distillers from 20,000 to 30,000 litres of pure alcohol.

Deputy Aidan Matthews’ move to maintain mortgage interest tax relief at its present level is carried 25-14.

P&R had been proposing to reduce it from £3,500 per person next year before withdrawing it completely in the next few years.

Deputy Garry Collins, speaking in debate on mortgage interest tax relief:

‘House sales are through the roof, conveyance and clerks are busier than ever. Document duty, absolutely through the roof, and I said this in the tax debate, receipts from document duty will be much higher again this year. We will see the benefit of that in the tunes of millions of pounds.

‘So for me, I don't think this is having an effect on people getting onto the ladder. I had to find £19,000 in fees. I certainly wasn't worried about whether I was going to get £58 per month relief from tax. That wasn't at the forefront of my mind.’

Deputy Andy Sloan speaking in support of Deputy Matthews’ amendment:

‘The burden on the middle classes, on working families, has massively increased. Not just since Covid, but the last 10, 15 years. And I see nothing wrong with a tax break on home ownership, I see nothing wrong in being supportive of families, and I see nothing wrong in being supportive of people that earn above the average, and all I hear in this chamber is of handing out welfare payments, and I would like to have a fiscal system that is designed for all islanders.’

Members are back from lunch and picking up where they left off with debate on mortgage interest tax relief.

Two amendments down, plenty to go...

We’ll be back after lunch as debate continues on Deputy Matthews’ amendment on mortgage interest tax relief.

This amendment calls for the States to maintain mortgage interest tax relief at its present level of £3,500 per person, rather than reducing the relief next year and withdrawing it completely in the next few years which has been proposed by Policy & Resources.

Deputy Matthews, introducing it, says this is the worst possible time to make such a change.

‘This will be felt very directly by those affected by it. That includes, of course, those who have recently bought homes and prospective first time buyers. The very groups we say we wish to help in these difficult times’.

After an hour or so of debate on charitable giving, members have voted down the move from Deputies Strachan and Laine which was to allocate up to £350,000 a year to expand the commissioning of initiatives to charitable and third sector organisations.

On to Amendment 24 on mortgage interest tax relief...

From our senior reporter Matt Fallaize:

States members have just overwhelmingly backed Policy & Resources’ bold move on the senior staffing of committees.

The replacement or regrading of senior officials and the creation of new senior roles will now require the approval of the relevant committee - elected presidents and members. For far too long, they’ve had no input at all, let alone the right of approval. 

Though this would be uncontroversial elsewhere, make no mistake that in Guernsey it’s a major shift of control and accountability to political committees, not least over a big part of their budget.  

It was opposed by only nine deputies - all four members of Forward Guernsey, all three members of the Scrutiny Committee, and two others. The 29-9 vote was a clear indication that deputies have had enough of being held accountable for senior staffing with little to no influence over it. It will be fascinating to see how this develops in the months ahead.

This would allocate up to £350,000 a year to expand the commissioning of initiatives to charitable and third sector organisations and direct Policy & Resources to look into measures to encourage charitable donations.

A big win for P&R.

Its move to make committees responsible for approving the replacement or regrading of senior staff roles and the creation of new ones is passed 29-9.

‘This is a step in the right direction for greater visibility, greater transparency, and ultimately greater accountability,’ said president Lindsay de Sausmarez in summing up.

From our senior reporter Matt Fallaize:

States members pushing back against Policy & Resources’ bid to tighten time limits on speeches just now is not insignificant. 

There are already time limits, introduced in the previous term, and during the highly unusual circumstances of the recent tax debate the Assembly was prepared to impose even stricter limits.

But P&R went too far trying to impose tighter limits right at the start of this budget debate. It gave the appearance of wanting to dispose rapidly of the amendments against its proposals, even at the expense of proper parliamentary debate. 

The rejection of P&R’s move was an example of the Assembly asserting its role and, frankly, putting the senior committee in its place. That’s a problem if it happens all the time, but is healthy for democracy now and then, and it was today.

Up first for debate, a move from P&R...

This amendment would make all committees, rather than the civil service, responsible for approving the replacement or regrading of staff roles and the creation of new roles at pay grade SO1 and above and direct Policy & Resources to develop a framework for committees to publish their decisions.

Well, unlike the big tax debate, a move to limit speeches this week has failed.

Members had been asked to shorten the limit on opening and closing speeches to seven minutes 30 seconds and other speeches to five minutes or, alternatively, on opening and closing speeches to nine minutes and other speeches to six minutes.

The first suggestion lost 13-26 and the second 19-20.

Writing in today’s Guernsey Press, Deputy Parkinson says ‘the problem is not so much that our expenditure is growing too fast, but that our economy is not growing fast enough’.

He says the 2027 budget does three things to help strengthen and diversify the economy...

Read his full article here.

This week’s budget debate is under way, with more than 30 amendments on the agenda.

We’ll bring you updates throughout the meeting to help you keep track of another big week at the States.

Deputy Charles Parkinson has already introduced the budget as treasury lead for Policy & Resources - but the first decision for members will be whether, like the tax debate, to agree to shorter speech limits this week...