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Tax challengers unconvinced – fresh amendment expected

Tax challengers unconvinced – fresh amendment expected

Wednesday 08 February 2023

Tax challengers unconvinced – fresh amendment expected

Wednesday 08 February 2023

New tax options published by the Policy & Resources Committee represent “the least palatable options” and are “pie-in-the-sky undeliverable”, according to the deputies who proposed the ‘fairer alternative’ package.

P&R are still backing its original tax package but have put forward a GST-free option which would see social security allowances and contribution rates altered to raise additional revenue, as well as a 50% increase on domestic TRP, and a new transport tax.

It's third option suggests multi-million-pound cuts in frontline public services, which was baked into the original policy letter as a fall back to plug a projected £85m deficit. 

But Deputies Heidi Soulsby, Gavin St Pier, and Sasha Kazanatseva-Miller, who led the most successful challenge against the senior committee in the States, will continue to work on another alternative despite previous meetings with P&R members.

“Whilst we all can agree that there are real long-term financial challenges that need to be addressed, we don’t believe that all the decisions needed can or need to be taken next week.  There is more work needed in many areas,” they said.

Their original amendment, which promised greater States savings before any new consumption tax, was defeated 24-16 by States members.


Pictured: Deputy St Pier (left) and Soulsby will continue to try and convince States members to vote down P&R's plan.

Deputy Soulsby suggested changing social security contributions, as suggested in Option B, would be “extremely painful for employers and risk our competitiveness”. 

She also criticised a suggestion that certain people could be excluded from receiving contributory benefits within social security. 

“There seems to be a suggestion that the States’ pension (what people know as the old age pension) ought to be means tested too but all the evidence from previous work is that is almost as unpopular as GST,” said Deputy Soulsby.

P&R Vice President Mark Helyar is known to be interested in means testing the public pension.

Spending cuts as laid out in Option C were labelled “just pie-in-the-sky and undeliverable” by Deputy Soulsby.

She added that the group will meet with P&R President Peter Ferbrache on Friday but will also be developing a “composite amendment reflecting the public and political debate so far”.

That option was presented to P&R members during the January debate after their original alternative was defeated, and when it was also clear that States members would not back a tax plan by majority.

“We know that there are fairer alternative actions that can and should be taken in the short and medium term to mitigate the need for GST now or in the future and help set us on the right track to address the root causes of the long-term deficit,” the group concluded.


EXPLAINED: An acceptable way forward?

Alternative tax package promises greater States savings

Deputies warned against opting for "comfort blanket" of delay on tax

Case made for alternative course of action on tax

Tax plan includes 5% GST - but P&R says most families will be better off

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