Select a region
This political term may only have seven months left to run, but the business of the States of Deliberation is not ramping up much yet – at least compared to the same period in previous terms. Most of the agenda for last week’s meeting was mundane, with two and a half matters of interest.
The first came when the President of the Policy & Resources Committee (P&R), Deputy Lyndon Trott, delivered an unplanned Statement to the Assembly.
Ostensibly, this was to break the news that the States’ financial position was in a worse condition than expected.
He had previously told Deputies that revenue was estimated to be around £16m shy of expectations for 2024, because of a profit shortfall from one bank. This time he said things had gotten a whole lot worse, with another likely £15m hit from the same institution claiming back overpaid tax for the last six years.
From the questions and answers that followed, it became clear this was not an error on Revenue Services’ part, but one from the bank’s tax accountant.
It sounds like they understated the bank’s profits taxable at 0% and therefore overstated the profits taxable at 10%, probably by misallocating expenses to the wrong pot.
However, the underlying reason for the Statement appeared to be manage expectations and soften up Members for an unpleasant 2025 Budget due to be published next week.
Pictured: Deputy Trott warned that tax changes are coming...
Deputy Yvonne Burford boldly asked what others may have been thinking, whether all this meant P&R would be recommending income tax increases.
Deputy Trott, having defended the 20p in the pound rate for most of his political career, has in the last 12 months or so become a Damascene convert for an increase of 2-3% in income tax rates to 22 or 23%.
Given the Isle of Man have recently moved to 22%, arguably there is less constraint in following suit, although there are still plenty of good arguments for not doing so.
Ironically, perhaps, any such move could be a rerun of the introduction of the zero-10 corporate tax regime in 2008, when Deputy Trott was last in charge of the island’s finances and followed the Isle of Man’s earlier adoption in 2006 of the regime and ahead of Jersey in 2009.
Whether Jersey would choose to follow any increase in Guernsey’s income tax rate in due course, it is quite certain that Jersey Finance and Locate Jersey would in the meantime exploit any difference in their marketing of their island.
Pictured (l-r): Deputies Gavin St Pier and Lyndon Trott.
The second item of interest was manifested in a full day’s debate on the Sure-Airtel merger and the proposal to suspend competition legislation to smooth its passage.
Everyone seems to have accepted that our mobile market is just far too small to sustain more than two Mobile Network Operators and, therefore, the withdrawal of Airtel was an inevitability. The only question was how it was going to be allowed to happen.
The Guernsey Competition and Regulatory Authority (GCRA) seem to have indicated that they were not minded to approve the merger, given the significant reduction of competition in the market.
In light of this, there seemed to be three alternative routes.
Firstly, just let Airtel give notice of withdrawal under their licence and then watch JT and Sure battle it out to attract Airtel’s customers.
Secondly, for government to use the existing competition law to wave the deal through.
Or thirdly, to write a new law to create new legal route.
For reasons that were not particularly well articulated in either the policy letter or the debate, the Committee for Economic Development had concluded that the existing route did not ‘feel’ quite right, so they were punting for the third option. This comfortably won the day, and the merger will now proceed.
Given that the rationale presented to the States was this merger was needed to unlock the vast ongoing technological investment required by a modern Mobile Network Operators, it does not seem beyond the realm of possibility that JT, with its tiny 20% market share, may also one day decide it isn’t getting an adequate return on its investment, before it too pulls stumps.
Whether that day comes or not, the island needs a robust, well resourced, and experienced GCRA to protect consumers’ interests in a market with a dominant supplier.
Pictured: The Sure/Airtel acquisition was approved.
The final item of the meeting was to quite quickly approve legislation which means the States are vicariously liable for the actions of individual police officers, overturning a 2011 Court of Appeal decision.
This brings officers into line with pretty much every other employee for whom their employer is vicariously liable for their actions. This will, at least, stop hundreds of thousands of pounds being spent engaging private advocates to defend claims against individual officers. This work will be taken over by the lawyers in St James Chambers, who perform that role for claims against other public servants.
Members did, however, express concern for a quite separate set of Regulations adopted by the Committee for Home Affairs (HA) in August, which are due to be laid in front of the States in November.
These Regulations change the process by which members of the public can get a fair hearing for complaints against Guernsey Police.
Given the inherent imbalance of power that exists by the very nature of police powers in dealing with the public, it is clear that some members of the States are anxious to ensure that complainants can have their complaints properly investigated, particularly in a system which is subject to urgent review before the end of this political term, precisely because everyone involved has acknowledged it is not entirely fit for purpose.
This was the matter of interest that only half engaged interest last week but might yet get more interesting.
