Tax Review lead bemoans "lack of understanding" ahead of key debate

Friday 01 October 2021

The "most important debate of the States term" has begun, with deputies tackling the propositions raised in Policy and Resources’ Green Paper on tax reforms.

P&R is asking for the Assembly to support its committee in developing a tax-based strategy for tackling an estimated £80m annual deficit by 2025.

That strategy could include the introduction of Guernsey’s first Goods and Services Tax (GST) or the introduction of a 3% 'health' tax.

A policy letter will then be developed with the detailed proposals for implementation no later than July 2022.

Treasury Lead for P&R, Deputy Mark Helyar, kicked off the debate by emphasising that “this is the start of a detailed process, not the end of one.”

“More public consultation is obviously required, because there is an obvious lack of understanding or comprehension of the extent of the financial challenges we face,” he said.

He took the opportunity to “shoot some foxes” and shut down any misconceptions he said some members of the Assembly may have about the scale of the island's financial position. 

Pictured: “Spreading the load through GST is in our view the best way to see ourselves through,” said Deputy Helyar, who openly supports its third option of tax reform, an income-based and consumption tax combination.

Deputy Neil Inder spoke next, convinced that Guernsey has more to offer than just tax rises.

“I don’t like the idea of GST at all – I think we can do more as an island, and somewhere in that there are some more ideas,” he said.

Deputy Inder alluded to import taxations on goods from Amazon, and a potential windfall tax as an alternative to simply implementing GST.

“We [the government] effectively saved Guernsey’s economy [during the pandemic, with business support], but that wasn’t for free and neither should we have just given it away, I genuinely believe we should look at some kind of windfall tax. 

“I’m fairly irritated that some people have done remarkably well out of it, and I don’t think it would be unreasonable that those who have done well - and been saved by the management of both governments - for us to go looking for some money,” he said.

Pictured: “I always knew GST and VAT were coming down the track,” said Deputy Inder.

It’s a sentiment that has been repeated throughout the run up to the debate, with both the Institute of Directors, and the Guernsey Party publicly announcing their support of reviewing other options before any firm decisions are made on taxation.

“No stone should remain unturned,” added Deputy Steve Falla, echoing the position set out by four Guernsey Party Deputies in an open letter this week that the States should first review all expenditure and every element of the 'status quo' to discover where savings could be made.  

To allow more ‘free flowing’ debate, Deputy Andrea Dudley-Owen laid a motion under rule 25 of the assembly’s rules of procedure, to ‘sit in committee’.

Deputy Dudley-Owen proposed a motion that the States sit "in committee" (see below for what this means).

After discussion, the States voted against the motion and debate continues under the usual Rules of debate. pic.twitter.com/1ZEWb1jB5r

— States of Guernsey (@Govgg) September 30, 2021

This would mean that deputies could speak more than once, and civil servants could potentially be called to answer questions or offer advice. 

“It just seems that you could start to tease out some of the misunderstanding if you allow people to speak more than once,” she said.

The motion was lost and the debate continued until 17:30, resuming this morning at 09:30.