P&R's two-pronged budget approach under fire
Critics of P&R say it shows there is no commitment to making savings within the States.
**P&R’s two-pronged budget plan faces criticism**
**P&R has submitted two budgets for deputies to choose between**
Politicians have voiced concern over Policy and Resources’ (P&R) 2027 budget, saying it does not go far enough to help ordinary islanders.
Deputy Adrian Gabriel said, “I’m disappointed” as he criticised plans to cut tax caps, adding that he “would have liked to have seen their maximum liability, their cap, increase much more”.
Deputy Haley Camp said P&R’s decision to present two budgets showed it had given up on spending discipline altogether.
P&R Treasury Lead Charles Parkinson said he had never believed the instruction to cut spending by 1% in real terms — which deputies approved last year — was achievable.
Camp disagreed: “It is clear we’re only moving in one trajectory which is let’s just keep on spending money with abandon and at some point down the road someone else can fix it.”
Deputy Lee Van Katwyk said he and Deputy Rob Curgenven would bring forward a proposal to freeze fuel duty to “support struggling families”.
Former head of Start Up Guernsey, Deputy Jennifer Strachan, questioned P&R’s plan to introduce an entrepreneurs’ tax cap to attract new business to the island, especially alongside the States’ decision to close the Digital Greenhouse, a hub for digital and creative start-ups.
“I think they’re doing an easy thing, which is to say - here’s a tax cap, come live here,” she said.
“I think the hard work is actually developing the ecosystem for entrepreneurs to thrive.”
Deputy Rob Curgenven warned that last week’s decision on tax reform would result in higher government spending.
Deputy Rob Curgenven agreed: “We’ve got the windfall in for pillar two and obviously GST has been agreed in principle.
“It just feels now that the cap is off and the spending spree is ready for Christmas.”
Parkinson warned that simply presenting a budget with spending cuts would trigger “a flood of amendments”.
“We’re only suggesting under the Option B budget half of what States committees have requested.
“We’re not spending like a drunken sailor.”
P&R has put forward a budget that includes an inflation-linked rise in income tax allowances, lower taxes on a pint at the pub, a new £15m fund to promote economic growth, £6m for measures to encourage States savings, and the abolition of mortgage interest relief.
Deputy Aidan Matthews, who has previously fought to protect mortgage interest relief as earlier P&Rs have sought to remove it, said he would seek to reverse the move to abolish it by 2029.
He said: “I think that really the best thing that we should be doing is encouraging people to be able to afford to buy their own homes.”
Along with the Committee for Housing, P&R said it was working on initiatives to support first-time buyers.