Guernsey's 2026 States budget is approved

Gavin St Pier said his committee will publish a plan for the States medium-term finances

Personal income tax allowances are set to go up, alongside the tax on property and the cost of registering vehicles.

A new tax on vape liquid of £2.20 per 10ml has also been adopted by Guernsey's States, as it approved the 2026 budget.

Moves to reduce the proposed increase in fuel duty failed, alongside an attempt to freeze States budgets at 2025 levels.

A late motion to ensure work was done in the next year to bring forward measures to support first-time home buyers in the 2027 budget was also approved by deputies.

The States has approved £4m of savings, which will be overseen by the island's top civil servant, Boley Smillie, who said he would focus on the use of consultants to reduce spending.

States overall spending next year is set to increase to £749m - an £8m increase in real terms.

Scrutiny Management Committee President Andy Sloan has criticised the budget for spending £115m out of States reserves.

The budget estimated the States would end 2026 with an operating deficit in day-to-day spending of just over £9m and a structural deficit of £77m.

Proposals to reform the island's tax system are set to be published before June next year, with the States set to decide whether to increase corporate taxes, introduce the GST [goods and sales tax] reform package agreed last year, or agree a mix of both.

Vice-president of Policy and Resources Gavin St Pier said following that decision his committee would publish a plan for the States' medium-term finances, which would include what big building projects would be funded.

The main changes

• Personal income tax allowances will increase by £600 to £15,200

• The extra rate of document duty for transactions that are not people's principal private residence will be removed

• Tax on commercial property will increase by 5%. For domestic property, it will go up by 8.3%

• Tax on tobacco will go up by 13.3%, which equates to an extra £1.14 on a pack of 20 cigarettes

• Fuel duty will increase by 4.3%, equating to 3.7p per litre of petrol

• An above-inflation increase in vehicle first registration duty, ranging from £5 for the least polluting cars to £214 for the most polluting.

• Mortgage interest relief will remain at £3,500 after a successful proposal from deputies Aidan Matthews and David Goy

Deputy Lee Van Katwyk voted against the 2026 budget

'Children leaving in droves'

Deputies Liam McKenna and Lee Van Katwyk spoke out against parts of the budget and said they would oppose different sections.

In his maiden speech, Deputy Van Katwyk took aim at proposals to cut document duty.

He said: "We did not have the time to prioritise those struggling to buy a first property, but we did have the time to prioritise those buying second properties."

Later in his speech, he talked about how he felt States policies had led to local people leaving the island, saying: "Guernsey's sons, daughters, fathers, mothers, even grandparents are leaving their island home in droves."

Despite this, net migration, according to the latest States figures, was 910 people in 2023 - however, those figures are under review.

Alderney States Member Edward Hill criticised the amount spent on overseas aid and said the States should look at bringing it down to about £1m.

He said: "I just don't think a population of 64,000 can afford to spend £5m on overseas aid."

Next year, the Overseas Aid and Development Commission has a budget of £5.6m.

President of the States Trading Supervisory Board Mark Helyar was another who said he could not support the budget, and described it as "an abdication of responsibility" by anyone who did.

Deputy Sally Rochester said she would be supporting the budget and criticised those voting against it for not bringing forward alternatives.