2.2p fuel duty increase on the way

Thursday 05 September 2019

It has been announced that fuel duty in Guernsey will go up by 2.2p next year.

This was revealed as part of Deputy Gavin St Pier's financial update for the year in the States yesterday, a speech he made ahead of the release of the full budget for 2020.

The new hike will be implemented in two parts, with 1.1p being added to the cost of petrol when the budget letter is released later this year, and a further 1.1p being added in January. 

Thanks for sharing news of price drop! Listen out in tomorrow's States' meeting for financial update statement - will have more to say on fuel duty changes following States' direction in July to Policy & Resources Committee on what to do in this year's Budget: it's not all on me! https://t.co/V9CfjDlJqD

— Gavin St Pier (@gavinstpier) September 3, 2019

Deputy St Pier said in his statement that the duty on both fuel and tobacco was being increased to help generate more revenue. This was in the face of expenditure rising to challenging levels. 

"The States agreed the policy for fuel duty increases in July and we now know that this will result in a 2.2p increase. The Policy & Resources Committee will be recommending that half of this increase should take place upon budget publication with the remainder from 1 January 2020, in order to mitigate the change," he said.

"I am pleased to be able to say that (subject to any economic downturn, Brexit driven or otherwise) revenues are forecast to remain relatively buoyant, although (as previously reported) receipts from a specific settlement which totalled over £5m in 2019, will cease in 2020. We do not underestimate the challenge of raising further revenues from our economy, whilst also ensuring we remain competitive in tax terms, particularly for low and middle income earners. The Committee has considered the revenue raising measures which it will recommend in the Budget.

"Other than the routine increases to keep pace with inflation and in accordance with policies, none of the revenue raising options could be categorised as 'easy'; and none of them will be popular or welcomed by our community. Despite the electoral cycle, my Committee will not shirk from making those difficult decisions in presenting our recommendations to Members in the Budget Report."

HSC are now forecasting an overspend for 2019, which is one of the areas putting pressure on the government's purse. 

Overall, the good news Deputy St Pier could give in his update was centred on how revenues had remained buoyant, and they were in line to exceed budget. 

But expenditure was 'not as good'.

"Firstly, although the majority of Committees are forecasting expenditure to be in line with, or below, budget, the notable exception is the Committee forHealth & Social Care. That Committee is experiencing pressures in multiple areas, leading to a forecast overspend in 2019 of £5m or some 4%. We understand that the majority of the cost pressures are in pay, with increasing use of agency staff being used to cover gaps, particularly in Community Adult Services," he said.

"Secondly, it is now clear that the savings budgeted for 2019 will not be realised in full. A total of £4.6m of savings were budgeted to be delivered in 2019. The forecast now indicates a shortfall on this target of £3.2m." 

To read Deputy St Pier's full statement, click here. 

Pictured top: Deputy St Pier.