GST ruled out as Guernsey politicians warn of severe spending cuts

Guernsey's top politician has rowed back on plans to introduce a Goods and Services Tax.

Deputy Peter Ferbrache, the head of the island's Policy and Resources Committee, said the unpopular proposal would not be introduced under the current States Assembly.

It comes after fierce opposition from some of his fellow politicians and thousands of protestors.

• Deputy Peter Ferbrache has warned that "severe cuts" to public spending may be needed as an alternative to GST

But with all plans to reform Guernsey's tax system thrown out earlier this month, he says the only way to plug the island's £85 million financial "black hole" is through severe cuts to government spending.

"There will be restrictions on what can be spent," Deputy Ferbrache explained.

"We are looking again at the capital investment programme, there's about £480 million of that outstanding still.

"We are going to look at every single item by the end of March and decide whether we think that can go ahead or not and refer that to individual presidents of committees."

The cuts could put plans to modernise the hospital and education building work under threat.

Ultimately the final decision comes down to the Assembly which will have to decide where resources are needed while also balancing the books.

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