Jayne Ozanne: Islanders don’t believe the GST-plus spin

I believe that trust will only be achieved by showing that we are trustworthy with islanders’ money. By this I mean in terms of how we have spent it, how we intend to spend it and – perhaps most importantly of all – how we collect it.

This regaining of trust will take time and effort. Not all islanders will be convinced, but I believe it is paramount that we first earn the right to be heard by showing what we say is trustworthy, before trying to tell islanders what they think they need to hear. This is particularly true in relation to whether we should have a goods and services tax.

That is why I was so keen to delay last month’s debate on GST, as I for one believe we need more time to show that we are seriously looking at alternative tax options and that we are also clear about our current financial situation. The ‘surprising’ good news in the 2025 provisional accounts that we are actually £70m. better off than expected should have given us pause for thought, but instead we continued to press ahead – further risking our credibility and jeopardising public trust.

I believe this was very short-sighted given, as I told the States, we cannot ‘drag islanders kicking and screaming’ into believing that GST is the right solution for our island’s woes. A significant part of the problem is that there are many deputies who are convinced that a large proportion of islanders do not yet understand how the proposed ‘plus’ part of the GST package is intended to positively impact their lives. They are wrong. The real problem is that the vast majority of islanders just don’t believe the graphs and tax calculators that the States has made available. Given trust is so low, many see them as gimmicks and spin, an opinion reinforced by the lack of evidence that what they are told is correct – as the recent surprise in the provisional 2025 accounts show. Quite simply, the financial goalposts move far too often,

Perhaps the biggest irony is that while deputies bemoan the fact that they are not being listened to regarding the ‘plus’ part of the package, many islanders are simultaneously bemoaning the fact that their concerns are being dismissed, leading to an unhelpful stalemate. While islanders’ concerns are manifold, a common thread seems to be that many just do not believe the financial modelling reflects the way they live their lives, particularly in terms of their cash flow, nor the way GST will be implemented by retailers – whom they fear will increase prices by more than 5%.

My personal concern is for two large groups of islanders who sit on either side of our benefit system and who I believe will be hit the hardest by GST. I’m thinking of the people who either sit just above the level for being able to claim benefits, often referred to as the ‘squeezed middle’, or those who sit outside of the social security system, who I will refer to as our ‘invisible workforce’.

Those in the squeezed middle are horrendously overly extended right now. They have either stretched themselves beyond capacity to get a mortgage, or are struggling with even higher rental costs, which have increased by more than 50% in the last five years. They have seen their utility bills, transport and food costs rise significantly, while they now also need to contribute to new pension schemes.

Those who are self-employed have also seen their social security contributions escalate and all have begun to feel the uncertainty associated with a world that has become far less stable. If they have children, many are wondering how to ensure they give them the best education they can, including worrying about whether they can afford to send them to university. Some, but not all, will benefit from a proposed reduction in income tax, but many do not believe it will go nearly far enough to cover their outgoings, especially as they fear retailers are likely to increase prices by more than 5%. After all, groceries are too often pounds higher per item than in the UK.

My greatest concern, however, is for those who are working in Guernsey and sit totally outside our benefits system.

This invisible workforce comes over to work as migrant workers, with the primary goal of trying to send money home. They rarely have access to our benefits system, as they live in ‘free’ accommodation, which in itself often leaves a considerable amount to be desired. I am hearing reports that some do not even have a contract, as their employers believe it easier to risk the improbable scenario of legal action than the administrative hassle of providing one. Most will never be able to open a bank account or produce a utility bill, so they work in a ‘cash in hand’ system that operates outside of our tax structures.

We are all aware of their existence, not least because various sectors of our economy would collapse without their willingness to do jobs that few islanders wish to do. However, we do not seem to worry that they will be the ones most impacted by the increases that GST will bring. As we saw across in Jersey recently, this can have very real and tragic consequences.

I therefore remain staunchly opposed to introducing GST, in any form. I, like many, believe it is a punitive tax that will hit the poorest the hardest, despite steps to try and mitigate that risk. I continue to believe that what is needed is root-and-branch tax reform in order to produces a much fairer tax system – where businesses, high-net-worths and ordinary working people all contribute. However, even this will require islanders’ trust to implement – and it is this priority that we must first focus our attention on, otherwise the stalemate of ‘You just don’t understand’ will continue.