GST Modelling: Fresh questions over firm checking P&R’s tax numbers

Fresh questions have surfaced over Policy and Resources’ (P&R) decision to appoint an external firm to check its tax calculations.

Express exclusively revealed last week that P&R brought in Dorey Financial Modelling to validate the figures behind its latest tax package, which includes a 3% GST.

Now the focus has turned to whether the firm hired to check the government’s homework helped create the modelling in the first place.

Deputy Lindsay de Sausmarez, P&R President, told Express the firm had been “engaged to check the computational accuracy of the modelling – not to provide any opinions on tax reform, and so the identity and views of any individuals at the firm are in any case immaterial to the work that they have been tasked to do”.

Express has asked P&R a series of further questions, which we’ve included below.

P&R’s modelling figures underpin claims that GST will net more than £50 million a year, while increasing inflation by less than 2%.

Deputies, journalists and the public spent months demanding to see the underlying workings in the run up to July’s tax debate, but were told the data was too sensitive to share.

Checking its own work?

Around ten years ago, the firm’s founder Martyn Dorey worked with the States to launch the ‘Guernsey Economic Model’ (GEM).

The tool was built under the ‘SMART Guernsey’ project specifically to crunch island data and project long-term tax yields and population trends.

It remains unconfirmed whether GEM was directly used to construct P&R’s latest tax package.

P&R President Deputy Lindsay de Sausmarez previously confirmed the tax modelling relies on Rolling Electronic Census data.

That is the exact type of confidential population data GEM was engineered to handle in Guernsey.

Crucially, an audit would be likely to look at two key issues: checking whether the basic arithmetic in a spreadsheet is correct, and validating whether the underlying economic model itself is fit for purpose.

If GEM or its methodologies were used to build P&R’s tax package, asking Mr Dorey’s firm to validate the model means assessing an engine it built.

The public may well ask how likely it is that Mr Dorey or his firm would conclude that their own framework contains fundamental flaws.

‘Secret data and backed policy’

The appointment also shines a spotlight on P&R’s controversial stance on data privacy as well as the perception of potential bias.

Mr Dorey is not an impartial bystander on fiscal policy, having previously spoken out publicly in support of GST.

He’s also the figure behind an ambitious plan – which has yet to materialise – to build a £2.6bn Eurostar-style undersea tunnel to Jersey and on to France.

P&R has also repeatedly refused to release the raw tax workings to deputies or the media, claiming they contain ‘sensitive personal data’.

In fact, the committee has gone as far as to argue it would be illegal to do so.

Deputy Burford, P&R Vice President, previously told Express: “We cannot publish the model that calculates the aggregate numbers, because it contains very detailed and extensive individual and household data which is protected by census and income tax legislation.”

That position leaves questions hanging over what legal framework permits P&R to share those exact datasets with a private company – but not with the island’s elected deputies.

‘Public owed an explanation’

Deputy Rob Curgenven, a vocal GST opponent, said the public was “owed a clear explanation” of why it was legal to share the models with a “commercial contractor”, when “same information couldn’t be shared with elected members”.

He told Express: “That question matters more, not less, given the firm’s founder helped build the government’s own economic modelling tools years ago and has spoken publicly in support of GST.”

“Checking a model you may have helped build, while holding views on the policy it supports, is not what most people would recognise as independent scrutiny.”

“Guernsey deserves those answers before it’s asked to vote, not after,” he added.