Half of Guernsey States say they will not back P&R tax plans

Guernsey faces a budget deficit - estimated to be £100m by 2040 - with P&R's plans projected to raise between £50m and £60m from households, businesses and visitors by 2025

More than half of Guernsey's States members have told the BBC they either will not support or are unlikely to back tax reform plans.

Nine deputies say they will be backing plans from Policy and Resources (P&R), while six members are undecided.

A decision on whether to introduce a 5% GST alongside changes to income tax rates and the social security system is expected next week.

With so many politicians against the plans they are currently set to fail.

Guernsey's States members total 38 deputies and two Alderney States representatives.

Twenty-one have said they would either not support or were unlikely to back the plans.

'Addressing the deficit'

A number of alternative proposals have been put forward.

Deputies Heidi Soulsby and Gavin St Pier have asked the States to back a review of current government spending, with 1% budget cuts across the board in 2024, except for Health and Social Care, alongside a new tax on cruise ship emissions and business parking.

Deputy Sasha Kazantseva-Miller is backing their plan: "It's essential that we can demonstrate to the community that government is playing its role in addressing the deficit and that we have a pragmatic and staged, rather than a slash-and-burn approach to achieving it.

"The recent Standard and Poor's downgrade in Guernsey's credit rating has made clear the importance of agreeing on a solution to move forward."

Earlier in January, Standard and Poor's, which publishes credit ratings as a measure of economic performance, downgraded the island's rating from a "very strong" AA-/A-1+ to a "strong" A+/A-1.

Delaying motion

The amendment proposed by Deputy Soulsby included a review of the island's corporate tax regime, something Deputy Charles Parkinson has said appealed to him.

He has proposed a review of corporate income tax for profits made by companies in Guernsey with a general rate of 10% to 15% to raise a minimum of £20m per year.

A delaying motion has been put forward by Deputy Carl Meerveld, asking for a discussion on tax reform to happen in 2024.

While Deputy John Gollop and Deputy Aidan Matthews have proposed measures to exempt food from the GST, and make changes to property taxes in Guernsey.

Deputy Gollop said without exempting food, he could not support Policy and Resources' plans.

Deputy Lindsay De Sausmarez is one of those who told us they remained undecided: "I'm not opposed in principle to a consumption tax, what I am worried about is how broad this one is.

"I understand there are fiscal reasons for that but I think the social impacts will be hard to manage."

Home Affairs President Deputy Rob Prow said he would back Policy and Resources' plans for tax reform.

"I'm not convinced by the alternatives," he said.

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