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Yes or no vote on GST proposed in a bid to resolve tax impasse

Yes or no vote on GST proposed in a bid to resolve tax impasse

Monday 30 January 2023

Yes or no vote on GST proposed in a bid to resolve tax impasse

Monday 30 January 2023


States members will be given a yes or no vote on GST under the latest bid to try and get a decision on tax.

Last week members finished three days of debate having failed to resolve how they intend to fill a looming £100m. blackhole being driven by cost pressures from an ageing population.

Policy & Resources has proposed a package which includes a 5% GST to raise revenue, with changes to income tax and contributions in a bid to protect those on lower incomes.

The States rejected options pushed forward by other deputies last week, including what has been labelled the "Fairer Alternative" which promoted immediate savings, getting more money from the corporate sector and reviewing the work of government while delaying any decision on GST until next term once those actions had taken effect.

Now the group behind that has revised its approach.

"We were not remotely surprised that our Fairer Alternative amendment was defeated," said Deputy Heidi Soulsby, who proposed it with Deputy Gavin St Pier.

"As we suspected, there are some members who just will not support anything we are suggesting, which is rather sad."

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Pictured: Deputy Heidi Soulsby walks through anti-GST protestors on the first day of the tax debate last week.

Deputy Carl Meerveld has been a figurehead for the anti-GST movement and been promoting cuts to services instead.He failed with both a sursis, which is a delaying motion, and a last-minute amendment during the debate.

"The promise of a 'lifeboat' amendment from Deputy Meerveld was used as a reason for some deputies to withdraw the support they had previously offered," said Deputy Soulsby.

"Of course, when it emerged, it was full of holes and promptly sank, but its objective of taking our amendment with it was achieved."

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Pictured: Deputy Carl Meerveld tried twice to change P&R's tax package without success. 

Deputies opposed to the original Fairer Alternative were in different camps.

Some wanted GST ruled out completely. Others were unhappy the reviews it promised of government and corporate taxes would be a waste of money and take power away from P&R.

While those who backed GST feel it is the only way to begin to raise enough revenue and help fund changes to the benefit system.

Three of the Fairer Alternative group met with the Policy & Resources Committee during the recess on Friday to try and decide on a way forward.

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Pictured: Deputy Gavin St Pier.

Deputy St Pier said: "Deputy Soulsby, Deputy Sasha Kazantseva-Miller and I approached the committee to suggest a meeting. We will keep trying to work with all sides of the Assembly in an attempt to arrive at a workable solution. We suggested and drafted a composite amendment which would enable a clean vote and a clear decision on GST or no GST.

"Importantly, it would include the key parts of the corporate tax and spending reviews which the Fairer Alternative offered, along with some immediate revenue raising measures and social security reform. We worked through an amendment line-by-line, reflecting the debate up to that point."

It is understood that the Policy & Resources Committee will be considering the matter further at their next meeting tomorrow.

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Pictured: An anti-GST protest marches along the seafront. Deputy Peter Ferbrache, right, will be among those discussing alternative approaches to P&R's tax package when the committee meets tomorrow. 

On Thursday afternoon P&R itself drew up a potential amendment which would have asked the States to back not raising GST for ten years, dropped the target for the minimum amount of money being put aside for building and IT projects and identified more savings.

During debate the next day they decided not to pursue it.

Deputy Kazantseva-Miller said: "As things stand, the ball really is in their court. We think it's important that there is openness and transparency about what's happening between now and the continuation of the debate. We've already seen how damaging backroom deals producing wrecking amendments can be to a viable alternative set of proposals."

Deputy Sasha Kazantseva-Miller

Pictured: Deputy Sasha Kazantseva-Miller believes that GST is not necessary now.

The Fairer Alternative group will not be supporting any proposals that include GST at this time, something they moved to clarify on social media at the weekend after rumours swirled about what they were proposing.

"We remain firmly of the view that it is simply not necessary now and more work is required, particularly to build the community's confidence that government genuinely has done everything else first, before it heads down the GST path of no return."

The group believes that there is still a risk of the tax review debate concluding without any meaningful decisions having been made.

Deputy Soulsby said that everyone knows that P&R's package including GST is doomed to fail.

"So we need to work on an alternative solution that salvages the situation and provides us with a positive way forward. This should include an option for deputies to expressly vote for or against GST, so the decisions are clearly recorded for the public to see. We were encouraged by P&R's response to our composite amendment and to hear that they are also keen to work on a way forward. We hope that this continues. If we care about Guernsey's future, we can't continue in this state of uncertainty. It's essential we restore order from the chaos."

The Meerveld amendment would have removed GST and could have led to savage cuts in services to find up to £60m. a year.

When it was voted on, three members of P&R abstained: Deputies Peter Ferbrahce, Mark Helyar and David Mahoney.

Earlier in the meeting an amendment by Deputy Charles Parkinson to introduce corporate income tax on a territorial basis with a general rate of 10% to 15% to raise a minimum of £20m. a year was rejected.

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Pictured: Deputy Charles Parkinson shows off his anti-GST badge. He unsuccessfully proposed a new corporate income tax regime.

The tax debate resumes on Wednesday 15 February.

READ MORE...

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

Case made for alternative course of action on tax

Act now on tax call from Ferbrache as States losses mount

WATCH: Highlights from the GST rally

Deputies urge P&R to drop GST plans

Thousands say 'no to GST'

"Unacceptable" and "damaging" service cuts if States reject GST

Alternative tax package promises greater States savings

Social security changes help poorer families and 'middle Guernsey'

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

Why States leaders STILL think GST and tax reform is needed

 

 

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