Two and a half days’ debate last week in the States of Deliberation on Goods & Services Tax (GST) as part of the tax review and, exactly as predicted, absolutely nothing was decided. How does it come to this? An analysis of how on earth the Policy & Resources Committee (P&R) have managed to dig themselves into this hole can wait for another opinion piece on another day. For now, the priority is to report and analyse the States’ debate – and attempt to predict what may happen next.
The President of P&R, Deputy Peter Ferbrache, opened the debate rather than the Committee’s designated treasury lead, Deputy Mark Helyar. Although everyone knew this was going to happen, nobody has attempted to explain why it’s happened. Leaving such a void is unfortunate, as it just leads to speculation.
Deputy Carl Meerveld led a sursis motive, which is a delaying motion, directing that further work be undertaken before a matter is debated. If lodged with the States Greffier in advance of a debate, a sursis is always debated before any amendments. Everyone in the States – including Deputy Meerveld – knew that the sursis was as dead in the water as P&R’s proposals for GST, but it still took nearly three hours of debate to issue its death certificate. Deputy Meerveld is a big fan of using a variety of parliamentary techniques to delay substantive decisions. He is rarely successful, but it often feels as if being seen to attempt it is all that really matters.
Pictured: Deputy Carl Meerveld, arriving to the States debate through the anti-GST protestors.
The Presiding Officer had decided that the Fairer Alternative group’s amendment, led by Deputy Heidi Soulsby would be debated next. This is probably because it was the most comprehensive amendment that had been lodged - notwithstanding that it could be argued that the Parkinson/McKenna amendment, which focussed on a territorial form of corporate income tax, actually went further because it swept away all the other parts of P&R’s package, rather than replacing them. As it happens, on this occasion, it really was not going to make any difference to the outcome in which order the amendments were debated. The strength of opposition articulated in advance on behalf of the financial services industry and the associated ‘fear factor,’ meant that when Deputy Charles Parkinson had his moment in the sunlight, it was once again no surprise to anyone in the Assembly that his amendment also crashed and burned.
Unsurprisingly too, most of the debate was taken up with the Fairer Alternative. There was a substantial amount of confected concern about some elements of this comprehensive amendment. For example, the amendment sought to use a tool provided for in our constitutional toolbox for the creation of two special committees – one to take an in depth look at spending and efficiency opportunities and another to lift the drains on corporate taxation. Notwithstanding the very narrow terms of reference proposed for these committees, they would, apparently, trammel the mandate of P&R and/or offer some kind of rival ‘centre of power.’ (This rather ignores the fact that our system doesn’t really have any centre of power in the first place, but no matter.) Every States’ Member knew that even if the amendment was approved, they could still go on to vote against these individual propositions (along with others relating to minor tax raising ideas for staying visitors and cruise ships, which some did not like) but the confection was to make out that these propositions were so threatening, the whole amendment could not be supported.
What was really going on? That became clear on Friday morning, when Deputy Meerveld – yes, I know, him again – let it be known that he had a ‘lifeboat’ amendment. Working in the shadows – and no doubt working the ‘phones too – on Thursday night, Deputy Meerveld had, by his own admission, ‘cut-and-pasted’ his lifeboat together. Not so much a compromise or consensus, but more cobbled. This was obvious during the debate on the lifeboat on Friday afternoon, when Deputy Meerveld strongly protested it would not trigger any spending cuts, until the Presiding Officer pointed out to no-one’s surprise other than Deputy Meerveld that is exactly what it provided.
Pictured: P&R are now working on new Tax plans.
So the paste quickly dissolved and the lifeboat sank with little trace, but its objective had been achieved in drawing some potential supporters away from the Fairer Alternative. Why had they left that sturdy vessel for the attractions of the cut-and-paste lifeboat? Because the Fairer Alternative group in the States, led by Soulsby and St. Pier, cannot be seen to ‘win.’ That, in some minds, seems to threaten P&R – a fear perhaps fed by a few well-placed rumours that one, two or more of its membership might resign if they ‘lose.’ Extraordinarily, three members of P&R – Deputies Ferbrache, Helyar and Mahoney – abstained when it came to this vote, notwithstanding that the lifeboat would have sunk their plans, rather exposing that the lifeboat was for them, not the tax plan.
The rock solid unity of the governing Coalition this term has been tested by GST, but it seems a few would rather that the debate emerges with nothing agreed than allow the even more distasteful outcome that a solution had been found by those outside the Coalition. That gives a direction for the outcome of the resumed debate on 15th February. It seems entirely possible that those same forces will seek another cobbled solution rather than support anything the Fairer Alternative group can offer. The fact that whatever the outcome of this debate, the community’s trust in P&R has been broken is either ignored or not recognised. Finding a solution to fiscal sustainability without GST may take a back seat to shoring up a damaged P&R.
Gavin St Pier is a Deputy in the States of Deliberation