Policy & Resources (P&R) is bringing in an external firm led by a public supporter of GST to validate the financial modelling underpinning the latest in a long line of Guernsey’s tax reform packages.

Express has uncovered plans for Dorey Financial Modelling Ltd to carry out what P&R describes as “external validation” of its modelling.

Martyn Dorey, the firm’s Managing Director, is due to present the findings to deputies in three weeks.

The modelling behind the tax proposals, which include a 3% GST, became one of the most contentious issues during July’s States debate.

Deputies – along with journalists – were not given the underlying model and its workings, while detailed modelling was not released publicly because P&R claimed it contained sensitive personal data.

Now, an external firm led by someone who has publicly argued that Guernsey needs GST is being brought in to validate those calculations for an as-yet-undisclosed fee.

A familiar voice on GST

Mr Dorey, a former Chamber of Commerce President, has worked with the States on tax policy modelling and has previously been described as a long-term supporter of broadening Guernsey’s tax base.

He was also the driving force behind a yet-to-be-realised project to create a Eurostar-style tunnel to Jersey and on to France.

In February, he told the BBC: “Most people in Guernsey will actually be taking home more money after tax with the GST package.”

He also warned: “If Guernsey rejects GST, an under-resourced government actually hampers economic growth.”

Dorey Financial Modelling was founded by Mr Dorey and describes itself as an “international actuarial technology firm based in Guernsey“.

Documents seen by Express say the firm was brought in because of the focus on the modelling in the run-up to and during the July debate.

It says the review will cover the modelling used to estimate “the changes in revenue resulting from the planned changes”.

According to the firm’s website, its work includes providing regulatory risk reporting and investment data modelling for asset managers, fund administrators, and pension trustees to help them comply with strict European financial laws and optimise their investment strategies.

While Mr Dorey has advised the States of Guernsey previously, the firm’s website does not list any other experience of tax modelling for international governments.

Findings due after amendment deadline

The findings are due to be presented to deputies on 23 September – one day after the deadline for lodging amendments to the tax reform proposals.

The modelling matters because it goes to the heart of one of the biggest arguments against the tax package: whether P&R has properly accounted for the knock-on effects of GST and whether it will raise as much as hoped.

P&R’s case rests on modelling which predicts the tax package will raise more than £50m a year while increasing inflation by just 1.9%.

But those numbers have faced scrutiny because civil servants used spending data from 2019 to model them – before the Covid pandemic raised rents by more than 50% and changed household spending patterns forever.

Deputy David Goy called them “wildly optimistic”, while Deputy Rob Curgenven said he was met with “a smile, a finger held up in the air, and no explanation” when he asked how P&R came up with the figures.

There were separate criticisms about P&R’s unwillingness to share the modelling and its claim that it can’t release any of it because of data privacy regulations.

If Dorey Financial Modelling’s validation concludes that P&R’s assumptions and calculations are sound, the committee will no doubt claim it as further evidence to support its case for GST.

But it also leaves a question hanging over the exercise: how much weight should deputies and the public put on the findings of an actuary who has publicly backed GST and argued that rejecting it would hamper Guernsey’s economic growth?

Opponents of the tax could reasonably ask whether the exercise is testing whether the modelling is right, or simply confirming that the assumptions used to make the case for GST hold up.

And the person presenting those findings is the same actuary who has previously made the case publicly for broadening Guernsey’s tax base and introducing GST.

The question the public will be asking is: Is this a genuine attempt to find out if the modelling is sound? Or – as Scrutiny Management President, Deputy Andy Sloan put it – is this just another example of “anything to sell GST“?