LISTEN: Deputy Garry Collins talks tax returns, spending cuts… and why setting up P&R was a “mistake”

This is a transcript of the podcast episode. We’ve used AI to help us create it, and removed obvious “ums and ahs” as well as tidied things up. It’s intended to make the podcast more accessible to disabled people, rather than being a 100% accurate record of the conversation.

Jack Silver (Express): So I’ve got Deputy Collins with me to talk all things tax. Deputy Collins, you’re a second-term deputy; you had a bit of a break and have come back. I imagine you spent a large part of your political career talking and thinking about all things to do with revenue and tax.

Deputy Garry Collins: Yeah, firstly, thanks very much for having me, Jack. Please call me Garry, that’s fine. All this “Deputy Collins” feels a bit much. I stood in 2012 and got elected, surprisingly, in the Vale in the number seven seat. Then in 2016, I decided to take the brave decision to vote to reduce our government from 45 to 38 members. Therefore, my seat, number seven in the Vale, would go. I stood in 2016 and finished seventh again in the Vale, so I wasn’t returned to the Assembly. Even though I gained votes, I always felt like I wasn’t really ousted. I did the noble thing of sacrificing myself to reduce the numbers, and sometimes I think it could be reduced further.

But you’re absolutely right. When I came out in 2016, I really wanted to give something back to the community again. I do a lot of things with sport, but I got involved with the Vale Douzaine in 2016 and got elected there, serving nine years on that. More recently, over the years, I got involved with the Parish School Committee and the Parish Church. It’s quite unusual, because normally you’d go the other way around: you start with parish committees, work your way up to being on the Douzaine, and then become a Member of the States. I’ve done it the other way around, but here I am at 45. I thought perhaps I could have another term to bring something else.

For me, I’ve come back refreshed, but also feeling really positive about being able to think about things for a long time. Having been on Treasury and Resources back in 2012 looking at the numbers, I saw how we got into the deficit that we were left with from the 2008 change in our tax structure to where we are today. Looking in from the sidelines has been really interesting to see where the government has gone. Personally, I’ve come back thinking we do need to look at all of this again, and that is what made me really want to be on ESS (Employment & Social Security). To be honest, it’s a really complicated system. Unless you get your head into it and really understand all the parts and mechanisms that make it up, you don’t really understand how the two systems work together, and there is a lot of crossover.

Express: Let’s just get on to income tax. In Guernsey, pretty much everyone has to do an income tax return unless you’ve got explicit written permission from the States, from the Head of Revenue Service, to opt out. Now, in the UK, and many would argue probably most other parts of the world, tax returns are for business people, self-employed people, people with complex investments, and obviously high-net-worth individuals. Your typical person who works in a pub or a retailer, who rents, and who doesn’t have anything particularly complex going on wouldn’t do that. In the UK, they have self-assessment. We’ve also got this massive backlog of unprocessed tax returns. So, my question is, why are we making people who work in the Co-op do tax returns?

Deputy Collins: You’re absolutely right, and that really dawned on me when I returned to the States last year. I started asking Treasury some complex questions about why we are doing this, especially when I was on Employment & Social Security. I kept hearing the message that we’ve got to widen the tax base because we’re relying too much on people’s earnings, yet we’ve got this really complicated tax form. When I was doing my own tax forms over the years, I thought, “I don’t own a home, I don’t do this, I think I fill in about three boxes.”

It really started last December when I began asking these questions to Treasury officials to find out the makeup of this. We went round and round in circles, and it got to the point where I said, “Right, that’s it, I’ve had enough. I’m going to put in an official Rule 14 question.” I asked for the data to tell me the split across all of these income streams and allowances, to see how the nuts and bolts come together. Instantly, they wrote back and said, “We don’t, unfortunately, capture that data like that.” I said, “Okay, so you can’t tell me if somebody has a rental income and no other income, whether their personal allowance wipes all that off, meaning we don’t get any more money.”

When they officially replied to my question, it brought out some really interesting numbers. As expected, 87% of people in the income tax system are there through employment and self-employment. That is actually collected already through the ETI system, or through assessments for the self-employed. You give an assessment at the end of the year, state what you worked, and pay the difference in tax. Those things are actually quite simple.

When you look at the other 13%, 9% comes in from pensions. That is a big number: £32 million. But when you start thinking about it, a third of our pensioners now live off-island. They are here during their working life, we give them a tax allowance because they are paying into a pension, and then they disappear off the island and we don’t get that clawback. Strangely enough, in Guernsey, we tax your States pension as well as your personal pension. We set the level of the personal income tax allowance roughly the same as an OAP States pension, so we’re not taxing them on that alone, but it does mean we are getting money from pensions overall. Long story short, that was interesting, but what could I do about it?

The biggest one that got me was net property rental, which they estimated at around 1% to 2%. Doing the roundings, it’s probably 1%, which worked out at £3.6 million. But when you start doing the simple math—and I sit on the Housing Committee—we’ve got 7,000 private rentals. The average rent is £2,000-odd, and if you multiply that in theory by the 20p tax rate, we should be getting £36 million.

This proved to me that a lot of people on this island who have rental homes are possibly using their personal allowances to offset that income. Yet, when you talk to certain landlords, they claim, “I’ve got to pay 20p in the pound tax on my rental income, plus I’ve got TRP, plus this and that, which is why I set rent levels so high.” But that’s not true, because 90% of income coming in through rental properties isn’t actually being taxed.

Express: So just on that, what we’re saying is you have the amount of work it’s giving Revenue Service, and we all know about the problems there. I know some people who work in there and they work really hard. I also know they don’t even get their milk provided—team leaders have to provide milk—so I’m not by any means having a go at those people. But on top of that backlog these tax returns are creating, there is also the perception from landlords that they need to whack the rent up by 20% to cover their tax, when that shouldn’t be the case if things were done correctly.

Deputy Collins: Well, that’s what I said. The numbers would bear out if everybody was not getting an allowance on their taxable income. The information I had was that perhaps more than 40% pays through companies, so the majority comes back to you personally where you’re offsetting tax. It goes back to the fact that rents are much higher because of that perception.

Take for example a couple—and I’ve done some detailed plans here—let’s call them John and Jean. They have no other income, but they do have a rental income. They offset their personal tax allowance, which combined is £31,000, and pay no tax. But you’ve got another couple, say Pete and Paula; they actually work, so their tax allowances are offset against their employment income. They have another property which they rent out, meaning they are paying 20% on that rent, which equates to over £5,000. They, of course, set that rent level high.

How could I change that? Personally, I thought we could scrap collecting tax on rental income across the board and just charge a flat fee. We are talking about creating a rental register anyway, because we don’t have one, and you can’t identify areas where there are problems until you create a registry. Why charge a £25 fee over two or three years? Why not make it £500 a quarter? That sounds like quite a lot—yes, it’s a couple of thousand pounds per rental unit—but when you look at it, I’m saving you £5,000 by not charging you income tax on it. That would create £4 million.

Express: Just to get this clear in my head: for somebody who was retired or didn’t otherwise work, meaning they don’t have an active income, they wouldn’t have to pay tax on it. But if you had somebody who was working and also had a property, it is treated as part of their overall tax, so they’re effectively paying five grand a year in tax depending on the level of the property rent.

Deputy Collins: Yeah, so you’ve got two different scenarios: somebody paying nothing on their rental income, and somebody paying five grand. What I’m saying is level that playing field by taking rental income out of the income tax system entirely, and just charge them a flat fee of £500 a quarter by direct debit. That is the most efficient way for the government to collect charges, fees, and taxes; we’ve seen that from the TRP bills. You get a bill and it’s collected over 10 months. My TRP bill is £225, collected over 10 months, so it’s 20-odd pounds a month, and that’s fine. It’s really efficient. You just get a letter every year if it’s going up, they’ve got my direct debit mandate, and it’s an easy way for the government to collect it.

When you look back at the collection of income tax forms and the cost of that, we’ve just spent £42 million on two systems needed to handle those income tax laws: MyGov and the Revenue Service systems—and we’ve probably got to spend that again. You have to ask yourself why we need all these systems when you could do something completely different.

It is really difficult to get this into one conversation. We’ve tackled employment and we’ve tackled rent. The other income we have is £10 million worth of bank interest. When you add those together, it’s about £45 million coming through income tax forms that isn’t otherwise collected through ETI and assessments, because those are on a different process. My thought was to squash that, stop collecting tax forms, close that part of the office, and move to a combined employment tax set at much higher levels. That’s why I’m suggesting a greater universal allowance of £400 a week, which would help low earners right away.

Express: 400 a week doesn’t equal 20,000 a month to me, unless I’m mistaken.

Deputy Collins: Sorry, £20,800 a year! My mistake, that’s politics for you. As I say, there are lots of numbers in this, and it was really difficult to get it over without a complete package. At the moment, this is really just an idea, and it’s an idea I wanted to work with somebody on. But they told me, “Garry, you are but one deputy.” I do not have research assistants or formal support like UK MPs do. I am a standalone deputy, and in a short period of time, we have to draft amendments.

The policy letter was published on the 8th of June. That gave deputies—backbenchers like myself—only four weeks, and the deadline has actually passed; it was an hour ago. It gave us four weeks to put together alternative packages. In my second year on this, I’ve talked about this—and this isn’t Haley Camp, this is a different amendment—and they were like, “Garry, this is great, you’ve got a 100-page policy letter here, but the trouble is we need Treasury and we need people to really work with that.” They don’t have the time, and we don’t have the time to do this kind of detailed analysis.

There was a scrutiny hearing this morning with P&R (Policy & Resources) in front of the Scrutiny Management Committee. They had a hard time because even P&R couldn’t really justify the numbers in the policy letter, the assertions they’ve made, or their predictions, because the data is so far out of date. We don’t even know exactly who is living on this island. All of that creates challenges.

Express: Don’t you think, though, that there is potentially a problem here where we’re trying to do everything at once? A very good analogy I always use is from years ago with Ross Brawn, who was Michael Schumacher’s engineer at Ferrari during their huge period of success. He was asked how they always managed to get the Ferrari in front of the other cars, and his answer was that the other teams were half a second behind, so they were always trying to catch up that half second by changing the tire pressures, the differentials, and all the different variables on the car all at once. Meanwhile, Ferrari was rigorous about tackling one issue at a time. They would look at the tire pressure, add 0.5 psi, see if it made a difference, and if it made it quicker, they’d add more; if it made it slower, they’d go the opposite way. They gradually tested and refined.

Whether it’s your proposals or P&R’s proposals—and I think we’ve seen from the huge amount of scrutiny and criticism that P&R has faced over the numbers—when you tackle everything at once, you don’t know which bits are working. Whether it’s Plan X or someone else’s proposal, there might be four things in there that are absolutely fantastic and one thing that isn’t going to work. But because you’re considering it as a whole package rather than at a granular level, you risk losing the good parts. In a startup, you don’t just build the whole app and hope it works; you try the first bit, and if it’s successful, you tweak and improve it over time until you end up with a Facebook or a Microsoft Teams. Do you think part of the problem is the way in which these proposals have to be presented as a “Big Bang”?

Deputy Collins: Yeah, you’ve answered the question. That is, unfortunately, the nature of the beast. You have to submit a formal letter, it has to stand up to scrutiny, and it has to go in front of the States Chamber where you have 40 elected members—38 from Guernsey and two from Alderney. Unfortunately, you need all that homework in there to understand how it works. You’re absolutely, fundamentally right that some parts might work and some won’t.

But if you’re going to make a big-bang change like P&R is proposing—they are talking about creating a 15% tax rate alongside a 20% tax rate, creating a social security allowance for social insurance, and introducing GST—that is four major changes at once. From where I sit, listening and looking at the systems and receiving a report every two weeks, our systems are really being held together at the moment with sticky tape and plasters. Trying to make all these changes through that framework isn’t helping; you’re making the tax system more complicated. That is part of the concern out there. We aren’t even on top of this backlog of income tax forms.

Personally, when we independentized married men and women’s tax, it was absolutely fine in theory, and I use my parents as a prime example. My parents used to have one really complicated tax form that probably took an assessor a week. They now have two really complicated tax forms that take the same assessor two weeks exactly. Going back to keeping it simple is where the Chief Executive has come in as a real breath of fresh air, getting back to basics. If you start doing things more simply, you realize the only way we’re going to catch up on tax forms is to stop doing them this way. People are waiting two, three, or even five years. We’ve got a 20,000-form backlog, and the trouble is that every year tens of thousands more are added to it.

Unless you change things with a “Big Bang” theory—saying we’re going to stop doing that, collect it in this new way, create a new team, and migrate people over—you can’t clear it. Someone said to me the other day, “Garry, why don’t you just call it quits wherever you are with the current income tax system?” But people would object, saying, “Hang on, I’m owed a couple of refund checks, I want my money back.” I’m not prepared to write off what’s owed or offset someone who owes money, so we’ve really got to get through those tax forms, bottom them out, and finish them off.

In government, unlike a startup business where you can spend half a million pounds on a product that doesn’t work, close it down, move on, and make a profit elsewhere, we have to be transparent because it’s taxpayers’ money. We have to justify and show our workings. P&R has attempted to do that, but the problem is it’s all based on assumptions. At the present moment, we don’t even have up-to-date population data, so how can we possibly know what the solid data is for a GST system? What is the actual household income expenditure? How far back does that model go, and what are the assumptions regarding people arriving and leaving the island?

If you had a blank sheet of paper and were starting again, you might start with a consumption tax and think that’s a good idea. But Guernsey is the way it is. We’ve always protected property. In my first term, that was because TRP was virtually nothing compared to the UK, where council tax might be several thousand pounds a year. In Guernsey, people say, “Don’t touch that.” Like I said, I personally pay £225 in TRP. What I was suggesting as a way to move away from income tax is finding a much simpler way of collecting it. We’ve got a TRP system that works really well; you would just be increasing the amount. I totally understand some people will say, “Oh, I have to pay £500,” but I am perhaps giving you a higher tax allowance to balance it, so it is a joined-up package.

I’ve got a 20-page slide deck explaining all of that which I haven’t published because this is not on the table for this week or next week. The amendment I’ve put in is actually to create an Appropriations Committee, because it comes back to the same fundamental question: before we ask for a penny or a pound more in taxes, we need to prove to the public of Guernsey that we have turned over every stone.

Express: I will come back to that, but I just want to stick to the income tax side of things for now, particularly regarding the landlords. It sounds like there are differences in your proposal and P&R’s proposal, but part of what you’re saying is that P&R has come up with a complex solution to a perceived problem. If we park the question of whether there are efficiency savings to be made or whether we should be raising more tax, and just work on the assumption that we need to raise this £50 million of extra tax, it sounds like P&R’s method is too complicated. It has too many variables and is based on assumptions from massively out-of-date data. I understand that the spreadsheets the calculations were based on are from 2019 and earlier, which completely excludes the impact of COVID. Back in 2019, rents were affordable here—they weren’t cheap, but they were affordable—whereas now they’re some of the most expensive in the world.

Deputy Collins: Absolutely. And the point is they’ve gone from a 5% to a 3% GST proposal, claiming that will help inflation by keeping it to only 1.9%. Hang on a second: most rents are linked to RPI, so while rents might be excluded from GST directly, they are not excluded from the automatic inflation rise. On a £30,000 annual rent, you’re still paying an extra several hundred pounds.

Of course, we all know that even though they haven’t put it on paper, they really wanted 5% anyway and are just bringing in 3% for now. This whole idea of doing a review in 2030 just means they can up the rate later. At the moment, it’s going to cause a lot of pain for businesses, and unfortunately, it might be the end for some. They’ll just say, “I’m out, I can’t afford to live in Guernsey anyway, it’s too much. GST is going to break me, I’m going to close.” Because they know that 5% is coming eventually, people might just put up their prices by 5% or 10% early to anticipate it, creating an inflationary bubble.

Express: When you buy your coffee, you think, “Okay, the coffee’s gone up by 3% because of GST, but the milk’s gone up, the coffee beans have gone up, and my staff are asking for more.” If cost prices go up, the consumer pays. Take energy prices: oil prices go up because of a war, and everybody gets charged more for their gas and electricity. When the war stops and oil prices come down, those charges don’t drop as quickly, or at all.

Deputy Collins: It’s absolutely that point about having a second and a third hit. Electricity prices go up because oil has gone up, but then your supplier says, “My electricity bill has gone up, so I’m going to put my bill up too.” It costs more to do everything, and that filters all the way down the line as a secondary effect two or three times over.

Express: Just to help an ordinary member of the public who’s not an accountant and isn’t going to look through the various spreadsheets on the States’ website: sticking to the income tax side of things, what in a nutshell is being proposed regarding fewer people filing returns, parking your proposal versus their proposal? My understanding of your proposal is that you wouldn’t do an income tax form at all. What about historic ones?

Deputy Collins: Absolutely, you would need to close those cases off.

Express: So if I am owed a couple hundred quid from three years ago, I’m not going to lose that?

Deputy Collins: You’re going to get it. We can put that on the table and see the backlog number come down to zero as people are assessed. If you move to an employment tax where you are charged on your salary, I’ve suggested separating it into four distinct pots so you can actually see where your money goes. For instance, I’ve come up with a figure showing that about 16% goes to healthcare.

Realistically, the figure you pay in Guernsey right now is 20p in the pound on income tax and 8% on social security, which is 28p in the pound on what you earn after allowances. If you put it all together, my proposal is a simple answer to a complicated question: you have a slightly higher threshold across the board to help low-income people, and you raise the bar slightly at the higher end.

Express: In terms of going forward, how many people currently have to file a tax return every year in Guernsey?

Deputy Collins: I really don’t know the exact answer to that, but it seems so many people are facing complications. Take pensioners: if they’ve just got a States pension, they shouldn’t have to do it.

Express: But they’ve probably got five or ten grand in bank interest. Because bank interest rates have gone up—classically they were at next to zero—they might now be at 3% or 4%. So the £10,000 they saved is probably taking them over the threshold where they now need to declare it. They have to fill out a form just because they have £51 in bank interest, so the States can claim 20p of that because the first £50 is exempt. If you just value the person’s time to do that, it seems crazy. Obviously, there will be exceptions and some bad apples who aren’t entirely honest, but that’s what spot checks are for. Essentially, from the figures you gave me earlier, it was high 70s or 80% of current people who wouldn’t end up doing a tax return anymore.

Deputy Collins: Well, under my plan, nobody would do tax forms. Nobody.

Express: Not even a high-net-worth individual?

Deputy Collins: No, because you’re going to tax them another way.

Express: Okay.

Deputy Collins: So under this idea, we’re going to stop taxing bank interest altogether. You might think, “Hang on, that’s £10 million.” Yes, but who are you taxing? You’re taxing people saving up to buy a house—because let’s be honest, once you’ve bought a house, you don’t have much spare money left to generate interest—or you’re taxing retired people trying to live off their savings. That’s why bringing pensioners into it matters. Yes, £10 million is a lot of money, but my personal perspective is that if you own a house in Guernsey, you are probably wealthier than those who are trapped in the rental market. Therefore, you could double or increase TRP to make it fair, take that £10 million deficit, and spread it over TRP, which currently collects about £38 million a year.

I totally get what you say about high-net-worth individuals, but that’s why I’m talking about adjusting the tax cap. Currently, we draw a line and say, “If you reach that line, just write us a check and that’s fine.” If you make adjustments to that cap and ask for just a little bit more, we’re not going to scare them off, because they value having that cap.

Express: Not everyone who is a high-net-worth individual is a trillionaire, but there are plenty of millionaires and a decent number of billionaires on the island as well. Knowing some of them personally, I would imagine the difference between £10,000 and £20,000 is irrelevant to someone who owns a private jet.

Deputy Collins: Exactly, and you actually make it easier for them because they literally just get a bill collected by direct debit. They don’t have to talk to an accountant to figure out if they need to put a complex tax form in because of their rental properties. If someone has 10 rental properties, that would be collected via a quarterly fee. They don’t have to declare what their rents are or pay an accountant; it just comes out of their bank account. It’s an easy job and sounds reasonable. You’re taking away that massive complication and going back to basics.

Why are we having a really complicated system when you’ve got all those caps in? A States pension is a benefit that people have contributed to throughout their lives through social security. Why are we then saying we’re going to tax you on that?

Furthermore, we have now fully introduced the new secondary pension law, meaning people are required by law to pay into a pension scheme and employers have to contribute. Since we now have that “stick,” do we still need the “carrot” of tax relief? Throughout someone’s life, they could work their entire career here, benefit from paying a couple grand less in tax every year because they put money into a pension scheme, and then say, “I’m finished in Guernsey, I’m off to a jurisdiction where I don’t pay any tax at all.” We gave them an incentive so we could claw it back later in life, but then they leave. As we know, 31% of people receiving a States pension now live off-island, and we are contributing that money outside Guernsey.

Then you bring in GST, which is going to put up the cost of living, so you’ll have to increase pensions to match it, meaning you are effectively increasing the money sent to that 31% living off-island.

Express: If you’ve got somebody in Spain, for argument’s sake, who worked here and decided to retire there because the weather is a lot nicer, we’re going to end up putting their pension up despite the fact that they aren’t paying GST here.

Deputy Collins: Exactly. Social Security did a “basket of goods” exercise three years ago. When I joined the committee, I read the paper, and it showed in black and white that a pensioner couple in the UK lives 43% cheaper than they do in Guernsey. Yet, they both get the same pension, and we increase that pension every year based on Guernsey’s RPIX figures. If it goes up 4%, everyone gets 4%, even though the people over there are living much cheaper. No wonder we look at these schemes and think they’re not affordable anymore.

Somebody told me, “Garry, you’re thinking the unthinkable.” Yes, but when you look at the data, you realize this isn’t right. I only know some of this because I sat on Employment & Social Security and got into the nuts and bolts of the data. I’m thankful to the office because I’ve asked lots of difficult questions, and it really has come together. If the States didn’t have that data at their fingertips, they didn’t know the answers, which means people haven’t been asking the right questions and we’ve been trying to resolve the wrong problems.

Express: Bringing it back, it sounds like P&R is coming up with a complex solution to a problem, and you’re proposing a much simpler one. Some of the things you’re talking about seem pretty radical. Is there anywhere else in the world that has done part or all of this?

Deputy Collins: There are lots of places that have an employment tax, but you’ve got to look at Guernsey and its uniqueness and where we are today. We are in the middle of a housing crisis. The States tried to bring in GP11 eleven years ago, just before I left the government in October 2016, with the idea of getting developers to contribute some of their buildings to help the affordable market. But developers just responded by choosing not to build. It reminds me of the story of Pharaoh and building the pyramids without straw. That’s the scenario we’re in.

If we fixed the housing situation, we would be in a much better place. I’m on the Housing Committee, and we have extensive plans to hit affordable targets. We know 2,000 properties are needed on this island in the next three years. Whether we can deliver that is uncertain, but we’re making headway. We’ve got plans for Leale’s Yard, the Braye du Valle site, and others. The Island Development Plan (IDP) has identified seven sites for affordable housing, so it’s not a case of someone becoming a multimillionaire overnight wanting £200,000 for a parcel of land; we are negotiating based on affordable land prices to offset high building costs. If we can do a lot of these projects together, it will be cheaper. We know concrete is expensive, so perhaps we need our own concrete plant. I am thinking outside the box here.

Express: Just bringing it back to tax reform. Your and Haley Camp’s proposal for next week is to set up an Appropriations Committee. Before we get into what that would do, I want to talk about those underlying figures. My understanding is that yourself, Deputy Rob Curgenven, and Haley Camp went in and spoke to the States’ Lead Economist, who showed you some of the spreadsheets. Now, journalists, deputies, and the public have been told by various sources, including Deputy de Sausmarez and Deputy Burford publicly, that those figures cannot be released because they contain confidential, private information about individuals. Is that true? Were there people’s names or bank details on there?

Deputy Collins: No, absolutely not. The spreadsheet we saw was anonymized. It had a load of numbers with a unique identifier for each entry in the system. There is certainly no question of a data breach. It is simply a massive database spreadsheet. The problem is that the data is so old.

It goes back to P&R being a bit tired. Back in 2012 when I was part of Treasury, they thought the answer was GST. They’ve been waiting for us to bring in GST before moving to a zero-15 structure or something else. But government is about scrutiny and ensuring assumptions are accurate.

Express: Forgetting the fact that it’s out of date, it’s a large data set, and I understand it takes half an hour for a single change to filter through because it’s being modeled on Excel, which probably isn’t the right tool for a data set that size. Regardless, the public and deputies have been told that even deputies can’t look at these numbers because they are too sensitive, leaving people to just “trust us.” If there is private information, absolutely don’t publish it in the Guernsey Press or Bailiwick Express. But it sounds like that’s not the case. Are we being lied to on this subject specifically?

Deputy Collins: The spreadsheet I saw on screen could have easily been given to colleagues to go through because it was just a bunch of numbers. They gave the example that you might be able to identify someone because you know how much they pay in TRP, find that amount on the spreadsheet, and work out that was their line. But I don’t know what my neighbor pays in TRP, so how could I possibly identify them from a code number and household assumptions? As someone who has worked with a lot of data over the years, it didn’t make sense. If I sorted the list and saw someone paying £10,000 in TRP, I might guess it’s a big house with lots of land, but we already know who owns those houses. You couldn’t really justify withholding the spreadsheet based on that.

I wanted to put my numbers into their spreadsheet, but they said, “It’s really complicated, Garry, we haven’t got the time, and we can’t share it with you.” They close a lot of doors. Unfortunately, the President and Vice President of P&R are determined that this is the best thing for the island. Even though they might have voted against GST in the past, now that they are in power in the senior committee, they are insisting this is the only way to go. This is despite the fact that last year we had a £106 million surplus, and £20 million the year before. Why do we need to rush into this now when we don’t even know what Pillar Two will bring?

Express: This goes beyond the GST argument; this is about transparency in government, which the Head of the Civil Service spoke eloquently about to the Chamber of Commerce. It’s about the fundamentals of democracy. If you tell me you can’t give me data because it contains sensitive individual information, and that is not true, how can the public trust anything else? It should be public information.

I understand there might be aspects of calculations in Revenue Services where you are looking at rejigging staff and individual names are involved, but when we’re talking about working out the inflationary effect of a 3% GST, I do not believe the UK government looks at everybody’s tax return individually when they alter VAT. They use high-level GDP and retail data. They aren’t looking at your personal tax return to calculate a 3% GST inflation effect. It doesn’t make sense.

Deputy Collins: Exactly. These are simple spreadsheets where if you put different numbers in, it creates different outcomes. I was surprised by the levels they’ve gone into, and the trouble with that data is that if you get one element wrong, it can have a massive ripple effect, and nobody is there to check their work. In science, that’s why you have peer review so other scientists can verify your assumptions.

I feel all of this has been rushed. P&R wanted to get a tax package in because of political terms; you’ve only got four years, so unless you decide what you’re doing by year one, you only have a year or two to implement it before the next election. For me, P&R would have been better off sticking to their original 5% package and admitting they hadn’t done further workings, rather than bringing this 3% version.

Express: Doesn’t it also speak to waste within government? A tax review subcommittee spent the best part of half a year looking into alternative options, like what we would raise if we put a levy on all companies. To me, setting up a subcommittee to multiply the number of companies by £250 or £500 to find out it only raises half a million pounds is something you could have worked out on the back of an envelope in an afternoon.

Deputy Collins: I feel really sorry for Charles Parkinson because he has championed territorial tax. I think that’s why he finished third in the general election; he was backed by people because he said no to GST and wanted companies to pay the gap left when we changed the tax structure in 2008 and lost £100 million. The Assembly put him on P&R collectively, but they ultimately told him his territorial tax plan would close Guernsey down.

In the meantime, they haven’t moved the dial on any real alternatives, and they haven’t built any affordable houses—only one affordable house built in three years, which is a joke. That’s why we brought this amendment. I disagree with the Chief Minister; they have not turned over every stone. I sit on three major committees, including EDDIAC. We are reviewing corporate services and everything to do with schools across the board. We formed a subcommittee and found lots of savings, yet principal committees are being asked for 1% efficiency savings. At the end of the day, pay is handled by HR, not principal committees, so they can only cut services. But we’re being told not to cut services or increase charges, while also being told efficiency savings aren’t there.

Express: So yourself and Haley Camp are proposing an Appropriations Committee to look at savings across the board.

Deputy Collins: To look at everything and examine the expense side of the States of Guernsey, because that’s what people really want bottomed out.

Express: We keep being told by P&R that we have a very lean civil service and public sector, and there is nothing left to squeeze.

Deputy Collins: I don’t believe that. My first question when I came in as a finance lead was, “How much do you spend on postage?” They didn’t know and had to go work it out. The answer was one or two million pounds. Why are we spending £2 million on postage in an age of technology where a button can be pressed and a payslip arrives in an inbox? As a deputy, I still receive a paper copy of my payslip every month. What does that cost in staff time, printing, and postage? It’s just one example, but multiply that across 40 deputies and all staff. Payroll systems can easily talk to email systems.

Once the policy letter was published, I arranged a private members’ meeting on the 26th of June outside of the corporate buildings, which I chaired. We had 32 out of the 40 states members there. We spent over 90 minutes talking about the challenges of cost increases. It demonstrated that for 2027, they’ve only identified half of the necessary savings, and the headline bits are unpalatable—like stopping cutting lawns or weeding to save ten quid. Where is the investment in technology? Why, when I bought a house six months ago, did I have to email 15 different States departments to update my address? There should be a centralized system, but instead, someone has to manually print an email and update a physical file. They haven’t done the heavy lifting.

The President of P&R dismisses me straight away when I bring up these ideas, claiming they’ve already looked at it. But have they looked at it through the lens of someone challenging the system, or just through the lens of being told “it can’t be done”? We now have finance leads meeting every month, pushing the civil servants, and we are seeing quality data coming out. It annoys me that the current leadership has been in government for years and hasn’t asked these questions about data splits.

I’ve been having a debate with the Vice President about this. There was no reason not to bring States members and the public along on this journey. We had zero workshops and zero meetings about it. Workstream three was created out of nowhere and has just disappeared again. They suggest things like everyone having their £12 doctor’s fee paid for them. Personally, I don’t need that paid for me because I have private health insurance. That means taxpayers are paying for something my insurance would cover without me noticing.

We set up the Long-Term Care Fund 20 years ago, but it’s not fair on our generation because the fund is being used up by people who won’t be around to contribute to it in the future. By the time we need it, the fund will be gone. My system looks at that intergenerational fairness. You cannot have these conversations two days before a major tax debate. States members have not been afforded the opportunity to input properly.

Express: It sounds like there are two big issues: trust and transparency, and the siloed nature of the committee system. By having an Appropriations Committee looking at it across the board, your job is to find savings globally, rather than committees just protecting their own turf. Procurement is a simple example—schools, the hospital, and the ports all buying laptops separately loses collective bargaining power. If you went to a supplier to buy 1,000 laptops instead of small separate batches, you’d get a much better deal.

Deputy Collins: You’re absolutely right. When we had our first finance lead meeting, I asked to see what was going on in other budgets and faced immediate pushback telling me I could only look at my own. I could find 5% or 10% in service cuts if required, but if other committees aren’t looking for savings, why should I be the bad guy cutting benefits when others are spending freely?

Having worked for Specsavers as one of their treasury managers for a period, I understand procurement. If a private optician buys frames, it costs a certain amount, but if you order 100 million frames, you get them for a penny. I was really surprised by how States procurement operates.

HSC (Health & Social Care) gave us a presentation running through their budget to explain why the health budget is increasing. This comes back to why we need this tax review. P&R is using population assumptions looking ahead to 2030 and 2050, but have they factored in that we are trying to build 5,000 homes over the next 10 to 20 years? We have a housing crisis and we need homes to retain our youngsters on the island, which would widen the working-age tax base. Because of our local and open market structures, retired people from the UK can’t easily move here unless they buy an open market property at three times the price.

Those people should contribute more, but wealthy individuals can use clever accountants to pay minimal tax. You cannot hide physical property. We have 28,000 homes, and if someone like me pays £200 in TRP, I wouldn’t mind seeing that double to £400 if it means getting £1,000 back through a higher personal tax allowance of £5,000.

Deputy de Sausmarez told me that if I don’t like the package, I should bring an alternative. We’ve done our homework. The dial has moved on Pillar Two; it was expected to bring in £10 million, then £40 million, and today I heard it’s closer to £70 million as declarations come in. Why rush into a tax package that fragments our system into 15% and 20% rates with different allowances when we can’t even collect the current flat 20p rate efficiently? It will duplicate the workload. We all know how hard it is to get a personal tax coding notice when you change jobs. Under a universal allowance system, that complication disappears.

I put my hand up to a mistake we made in 2016 when we changed the machinery of government. We thought it was a good idea at the time.

Express: This was the 2016 change?

Deputy Collins: Yes. We changed from having a separate Treasury and Resources department as the finance arm with a Policy Council over the top consisting of the 10 department presidents. That structure worked. What we have now is fewer principal committees but far too much power concentrated in the hands of too few people. Asking P&R to handle their day jobs alongside a massive tax review means they haven’t had time to do the homework or look at the data modeling. The Scrutiny hearing showed their tax calculator couldn’t handle certain numbers without outputting weird results. They haven’t sold this as a package because five people are doing the work that ten people should be doing.

Express: Do you feel you have enough information on P&R’s proposal to vote on it?

Deputy Collins: No. And that’s why we put in an amendment to offer an alternative. It’s easy to just vote against everything, but a credible person brings solutions. I’m not saying implement my plan tomorrow; it needs more homework. The Appropriations Committee could focus on this one issue and deliver these tax changes by January 2029.

I stepped down from Employment & Social Security partly to show the Assembly my commitment to this. I work 60 hours a week on these numbers. Haley Camp has also served on these tax subcommittees and has valuable experience. We want the Appropriations Committee to report back by the end of next year with everything on the table. In the meantime, we will gain certainty about Pillar Two receipts by December 2027. If that global 15% corporate tax rate brings in a stable £100 million, it changes the dial completely. Why overtax the population right now?

If we rush into GST with our current fragile infrastructure, the systems could crash, benefits could turn off, and it will be overloaded. You don’t enter a marathon with a broken leg; you heal up first. That’s why I support Deputy McKenna’s sursis to delay this. We have just had a leadership change and we currently lack a permanent Chief Operating Officer / Head of Treasury Resources. It is a bad time to make these changes without a fresh pair of eyes. I am not behind P&R on this. I stood on an anti-GST platform. Let’s see what we can get from corporates and efficiencies before asking the public for more money. Our balance sheet gained £154 million from 24 to 25, and we have over £4 billion in reserves. Bringing in GST to generate £55 million, only to give £30 million of it back through a complicated mitigation system, is nuts. Companies will just pass the cost onto consumers. It doesn’t work for me.

Express: One final question: in one or two sentences, what is your message to P&R and to the rest of the States for next week?

Deputy Collins: My message to P&R is simple: thank you for the homework over the last year. The Treasury Minister has highlighted that if the Income Tax Office were a school, it would be in special measures. It is in a critical state, and we should not change the system until the backlog is sorted. Thank you for the homework, but unfortunately, it’s a D-minus. Go away and do it again—or rather, let the Assembly appoint a committee of seven people to turn over every stone independently while P&R carries on with the busy day job of running the government. When a policy letter is eventually published, it should have the majority of the Assembly united behind it, rather than being pushed through when people don’t even understand it.

Express: Deputy Collins, thank you very much.

Deputy Collins: Thank you.