‘Nice’-to-have sets direction on tax rises

GOVERNMENT’S worst kept secret is finally out – islanders are going to be hit with more, and possibly new, taxes. Less than two months after criticising the ‘gold-plated’ decision-making of the ‘Jurassic States’, leading to higher costs, treasury lead Mark Helyar has spilled the beans.

Policy and Resources has ‘pretty much’ no choice other than to take more off us because of insurmountable financial problems, not least yesterday’s decision to extend the range of NHS-approved drugs provided here.

That outcome damages the Government Work Plan’s central contention, that limited resources means the Bailiwick cannot do everything and prioritisation inevitably means disappointing some people. Deputy Helyar’s colleagues don't agree.

Taxpayers should be in no doubt where this leaves them. Previous assemblies acted on the basis that few financial or civil service constraints existed and policies and strategies could be adopted at will.

That led to a 2019 report from Policy and Resources on policy and fiscal pressures which warned the scale of demands on public finances was estimated at between £79m. and £132m. and that ‘substantial’ tax changes were required.

Under a new P&R, this Assembly offered the hope of an island more willing to live within its means, more prepared to take ‘difficult decisions’. Yesterday, however, showed that new leopards quickly acquire old spots.

The difficulty now facing the island is that funding the £100m.-plus estimates of pent-up departmental expenditure – Nice drugs among that – was before meeting the costs of dealing with Covid and its effects on the economy.

P&R offered a compromise amendment, rejected without regard to the financial consequences.

That is troubling because the 2019 fiscal review was softening islanders up for substantial tax increases. After all, it said, Guernsey collects ‘just’ 21% of GDP in taxation while Jersey collects revenues equal to 26% of its GDP and the UK 38%.

The choice was imposing some uncomfortable discipline and easing back on nice-to-haves, or heading towards UK-levels of taxation. It seems that decision has now been made.

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