Select a region
One deputy proposing the Fairer Alternative has attempted to turn a Policy and Resources argument back on itself.
The deputies behind the Fairer Alternative (FA) tax strategy – which would negate the need for an immediate goods and services tax (GST) - announced this week their intention to try and introduce a three-year pension contribution holiday to the public sector superannuation fund.
It’s the second time the fund has hit the headlines this week, as P&R and the FA deputies clashed over a claim that the introduction of GST would actually cost the taxpayer £90million instead of the previous estimate of £42million.
The argument from the FA deputies was that the inflationary impact of GST of 3.5% on public sector pensions would see the pot depreciate by £50million.
Pictured: The deputies promoting the Fairer Alternative; (L-R) Deputies Soulsby, Kazantseva-Miller and St Pier.
Deputy Gavin St Pier has since come out saying he agrees with P&R’s argument but suggests that this should mean the FA deputies’ proposal for a three-year holiday should also be feasible.
“P&R can't have it both ways, they can't say GST is a £50million diminishment in the value of a £1.3 billion fund, therefore it doesn't matter, and at the same time, using the same logic, go, we can't afford a £76 million diminishment by failing to contribute for the next three years.”
It’s important to note that P&R hasn’t specifically come out in opposition to the FA deputies’ three-year holiday proposal yet, however it is buried within a larger tranche of proposals that have been pitched as an alternative to P&R’s tax plan.
Deputy St Pier said the £90 million figure quoted earlier in the week was never meant to be taken as cash “going out the door”.
"All we were doing was tossing up all the implications of introducing GST, including the £50 million diminishment in the value of the pension fund... so our position hasn’t changed, we are now just pointing out that...if £50 million is a drop in the ocean... then £76 million [is equally] affordable in the context of the £1.3 billion fund,” he said.
"We'd be better off using that £76 million to help fund our capital programme, rather than just taking the £50 million loss of the fund by introducing GST.”
Comments
Comments on this story express the views of the commentator only, not Bailiwick Publishing. We are unable to guarantee the accuracy of any of those comments.