Policy & Resources will come back with a plan to help first time buyers as the only major change to its budget plans which were approved by the States after two full days of debate.
The top political committee steered its tax and spend plans for next year through the Assembly despite strong opposition to hikes in spending and concerns over the States’ negative financial position.
Deputy Gavin St Pier, P&R’s treasury lead, brought a late amendment to investigate tax relief for first time home buyers after deputies rejected its plans to withdraw mortgage interest relief.
Otherwise, above inflation rises in committee budgets and modest tax rises across domestic charges such as TRP, and duties from alcohol to fuel and tobacco, were approved.
A bid to freeze government spending at 2025 levels was rejected earlier this week.
The States also backed non-contributory benefit rates for next year from Employment & Social Security, which will see inflation-linked increases to income support, disability benefits and family allowance.
Deputy Aidan Matthews successfully stopped the withdrawal of mortgage interest relief, but P&R came back quickly with a move to work with the Housing Committee to investigate tax relief for first time buyers and struggling homeowners.
Deputy St Pier said P&R would come back by next year’s budget debate with recommendations to support home ownership and said it was a “positive affirmation” that the States is taking the issue seriously.
Budget measures for next year…
- 4.3% increase in public spending
- 8.3% increase in domestic property tax
- 5% increase in commercial property tax
- 4.3% increase in fuel duty – 3.7p on a litre of petrol
- 13.3% increase in tobacco duty – £1.14 on a pack
- 3.3% increase in alcohol duty – 1.7p on a pint
- 8.3% increase in first registration duty
- A £2.20 tax on every 10ml of vape liquid from late 2026
- Personal tax allowance increase to £15,200
- £4m worth of new recurring savings
- Remove 2% additional document duty on buy-to-lets
- Continue with mortgage interest relief at £3.5m annual cost
Several deputies stood to criticise the budget, saying they couldn’t support the States spending more than it brings in and noted the financial pressures being felt by the community.
Deputy Mark Helyar, a former treasury lead, heavily criticised the public sector saying the bureaucracy can thwart the desire to cut spending.
He said “we don’t have the executive tools to respond” but politicians should “have the courage to say no” to excessive spending.
But others said decisions of the Assembly have pushed up costs, with P&R member Deputy Yvonne Burford taking aim at committee members who insist on savings but refuse to recommend cuts to their own budgets.
Deputy Sarah Hansmann Rouxel warned new deputies of the consequences of well-intentioned but costly initiatives, saying new drugs and treatments at health and the three-school model were examples of structural costs being “hardwired” into budgets forever.