Hospitality firms in Guernsey say GST would weaken consumer confidence, reduce spending across the local economy, and place immense strain on an industry already fighting for survival.
The Guernsey Hospitality Association (GHA) said the States needed to restore public confidence through “meaningful public sector reform” before it introduced new taxes.
A survey of its members showed an “overwhelming” majority wanted the States to “improve government efficiency, restore confidence in public finances and support economic growth”.
A spokesperson said business owners were worried GST would further push up operating costs, including wages.
They said: “Guernsey’s hospitality sector is already operating under intense financial pressure, having absorbed substantial increases in energy, food and drink costs, wages, recruitment, rents and the introduction of the secondary pension scheme in recent years.”
Battle for business
The GHA’s statement comes amid an interesting subplot in the GST debate – the battle over who speaks for business.
Last week, three of Guernsey’s largest corporate groups – the Institute of Directors, the Guernsey International Business Association, and the Guernsey Chamber of Commerce – issued a blunt joint statement telling the States to “get on with it”.
Despite warning the States to cut back spending, the groups backed the 3% GST package, claiming that political indecision itself had become the greatest threat to the local economy, and urged deputies to pass the tax to avoid further drift.
Deputy Andrew Niles hailed this as a message to tax rebels to come up with a fully costed alternative or back the tax reforms.
“Their message is straightforward; the time for decision has arrived. Rejection without a credible alternative is not caution. It is drift and drift has a cost,” he said.
Deputy Niles – a member of P&R – argued that as the three groups had “600 resident companies, 700 directors, and almost 17,000 staff – more than half of everyone who works in Guernsey” their statement carried unprecedented weight.
“When organisations of that collective weight speak with one voice, it matters.”
Divisions
However, critics pointed out that the 17,000 staff had not been surveyed, and the statement represented a subset of business owners and company directors, rather than speaking for all businesses and everyone who worked for them.
Express has also learned that a handful of Chamber of Commerce members had threatened to leave the organisation in protest.
Now, the GHA’s intervention definitively shatters the illusion of a united front from the business community, exposing a deep friction between the island’s boardroom elite and its frontline traders.
While the finance sector and larger corporate groups may be willing to accept GST to secure economic certainty, hospitality bosses are fiercely shouting, “you don’t speak for us”.
Instead, traders are uniting around the belief that the government must clean up its own act first rather than relying on an already struggling service industry to cover the shortfall.
