Guernsey’s Chief Minister has been accused of “arguing black is white” after a bruising Scrutiny hearing in which deputies claimed Policy and Resources’ (P&R) own tax figures showed some working families with children would be hit hardest by the proposed tax reforms.
The explosive exchange came during a two-hour Scrutiny Management hearing, with the committee’s President – Deputy Andy Sloan – repeatedly challenging P&R members over their claims the proposals would leave most islanders better off.
Deputy Sloan sarcastically suggested P&R could be awarded “a Nobel Prize in economics” for being the first people in history to sell “consumption taxes” as a way to redistribute wealth to poorer people.
Deputy Sloan is the latest person to cast doubt on P&R’s figures, which have repeatedly been challenged in the run up to next week’s debate.
P&R member Deputy Steve Falla defended the reforms, saying the package would diversify Guernsey’s tax base while leaving households only around £4m worse off collectively, once income tax cuts and other measures were taken into account.
But Deputy Sloan rejected that argument, saying it “doesn’t hold water” because only a small portion of households would end up paying more net GST overall, arguing the figures failed to demonstrate genuine tax diversification.
Heated argument over heat map
The hearing reached a boiling point when Deputy Sloan grilled Deputy Lindsay de Sausmarez, P&R President, on a statistical “heat map”, buried deep in an appendix of the tax policy letter.
He argued that the chart proved that a working family earning just below the island’s average income would be worse off if they had children – while a childless household on the exact same wage would walk away 1.5% better off.
Deputy de Sausmarez strongly rejected the claim, saying: “I’m telling you, as a mother of four children, yes, it is blooming expensive raising a family.”
But Deputy Sloan fired back, saying: “You’re not giving relief to families, you’re hitting them harder.
“Please do not argue black is white – your chart shows you there in a heat map, children are impacted more.”
Driving home the point, Deputy Sloan argued that a family with children whose income was below that of 60% of islanders was “not in the upper income distribution”, but would still end up worse off than comparable childless households.
However, P&R members repeatedly argued that the heat map should not be viewed in isolation.
Deputy de Sausmarez insisted the reforms had to be considered “in the round”, arguing that most households would still end up better off overall once income tax cuts and social security reductions were taken into account.
She said even where some family households appeared less well treated than comparable childless households, the package would still leave many with more disposable income than they have under the current tax system.
Failing to bring public along
Scrutiny member Deputy Haley Camp also questioned why so many islanders remained unconvinced by the reforms despite months of P&R promoting them, asking why the committee had failed to “bring the public along”.
However, Deputy de Sausmarez insisted the problem was communication rather than the policy itself.
She said people often became more supportive after discussing the package in detail and urged critics to look at the proposals “in the round” rather than focusing solely on GST.
Throughout the hearing, Scrutiny members also targeted P&R’s promotional “ladder diagrams”, which showed a total financial improvement of £62m.
Deputy Camp pointed out that a third of that headline figure – £20m – relied entirely on aspirational public sector efficiency targets that have not actually been found yet.
When asked what happens if those savings were missed, Deputy de Sausmarez said it was the “collective job of the assembly to deliver them”.
Deputy Sloan questioned whether the package genuinely solved Guernsey’s long-term funding gap, arguing the States’ own projections showed a significant deficit remained under the central assumptions by 2035.
The tense hearing came ahead of next week’s States debate on one of the biggest overhauls of Guernsey’s tax system in decades.
