Guernsey politicians propose cuts to government spending instead of GST

The potential introduction of GST has been controversial in Guernsey. Credit: ITV Channel

A group of Guernsey politicians have put together an alternative tax plan in an effort to stop the introduction of GST. Deputy Gavin St Pier and Deputy Heidi Soulsby want to reduce government spending first and change allowances for high earners.

Deputy Soulsby said she was concerned about people above the benefits threshold who "are really struggling at the moment."

She said: "We've got food prices rising above wages and people are really struggling. Bringing in GST at this time will not help."

It comes as Guernsey's politicians prepare to vote on 25 January on whether to bring in a 5% tax on goods and services as part of proposed tax reforms.

Today (16 January) deputies Charles Parkinson and Liam McKenna will be holding a public presentation at St Pierre Park to explain their GST proposals.

The Guernsey Retail Group (GRG) says GST would have a hugely detrimental effect on local retailers.

Korinne Le Page, Head of Retail Development at the GRG, says timing "could not be worse".

"Even if this comes into effect in two years, we have learned that the impact of inflation is long lasting and yet another hurdle for businesses to overcome, in addition to increased import costs, staff shortages and the ongoing threat of online shopping."

The GRG says the introduction of GST would completely ignores the value retail brings to the Island. Credit: ITV Channel

Deputy Peter Ferbrache, the president of Guernsey's top political committee, has published an open letter defending the GST proposal.

He said "the world is watching to see if we will do the responsible thing and agree a plan that puts our future funding of public services and the balance of public finances on a sure- footing.

"Some say they simply don’t believe it, which I’m sorry to hear, but I’d encourage them to look at the detail of the proposals.

"I hope we do take seriously the urgent need to secure the future of our essential public services as demand rapidly grows, with a competent plan that restores confidence in our Island and protects our economy."

The tax plan from the Policy and Resources Committee have proved controversial so far.

In December, the island's top politicians hit back at accusations they have been "making threats and scare-mongering" over proposals to introduce the tax.

The Committee wrote an open letter to islanders responding to some of the "comments, criticisms and misconceptions" members have been sent from islanders concerned about the rising cost of living.