‘Silent majority’ to foot tax bill

The previous States administration put the fiscal handcuffs on the present one by committing to policies which have to be paid for. This is pure Alice Through the Looking-Glass where she had to pass the cake round and cut it up afterwards. The States cannot contain its annual expenditure, like every household has to do, and of course it knows better how to spend our money. So it decided, after deliberating like the White Queen who believed as many as six impossible things before breakfast, that in future it must take at least 15% more of the annual wealth generated by the people of Guernsey (at least 25% rather than less than 22% of gross domestic product – GDP). This ‘one-off’ increase will compound over time.

The message from the top then was, and evidently still is, that GST is the only way to balance the books with all the exemptions and allowances to make it progressive and with all the bureaucracy, both in the already hard-pressed tax department and in business, to make it depressive.

Personal saving and tax from real economic growth are ultimately the only sustainable way that the increasing burden of health and age of the current population can be paid for. With control of annual spending, real economic growth would increase the amount of States net revenue. Had previous States contained their annual consumption expenditure and invested capital productively for the future the issue could have been resolved. Real growth, together with inflation through fiscal drag, would raise the tax take without new taxes. Can we not learn from the past rather than live in it?

Recently, a regular contributor to your paper invited us all to answer a question: would you prefer your island to be more like Monaco or Cornwall (Racing cars or clotted cream. 30 December)? The article made a surprising comparison between Cornwall, a county which is one of the poorest economic regions in the UK, and Monaco, a state with the second highest GDP per head of population in the world, zero poverty and robust social programmes. He chose Cornwall.

Neither location is Utopia, a word coined from the Greek meaning ‘no place’, and utopian experiments have invariably turned in to dystopia – a distressed society. But there is a middle road. Our deputies work hard to satisfy the real needs of our population, especially the most vulnerable in society, to encourage our charities which do phenomenal un-paid work and to enable the rest of us to go about our business freely. But I hope they understand, when they come to debate tax, that simply taxing more and more the top 10% of households who already fund the lion’s share of States’ expenditure won’t ultimately work: wealth has wings. It will inevitably and ultimately be the hard-working and silent majority in the middle, who have no option but to cut their own coats according to their cloth, who will most likely pick up this tab.

CHRIS RUSSELL

De Putron House

Fermain Road

St Peter Port