Yet another narrative being promoted by GST supporters – that Guernsey faces an inevitable credit rating downgrade by Standard & Poor’s (S&P) unless it introduces GST – requires a significant leap of faith.

Much like many of the conclusions presented in the Tax Policy Letter, the argument relies heavily on asking Islanders to trust the interpretation being offered, rather than examining the evidence for themselves.

What GST supporters are effectively asking us to do, once again, is to accept a conclusion built from carefully selected quotations from carefully selected reports.

So, rather than relying on the political interpretation, I decided to go back to the source and read what S&P actually said.

The reality is very different from the impression being created.

S&P does not recommend that Guernsey introduces a Goods and Services Tax. In fact, GST is not mentioned anywhere in the report. 

Instead, S&P makes a much simpler and more practical point: if the States chooses – chooses – to increase spending, particularly on major capital projects, it must also ensure it has sufficient revenue to fund those decisions. That seems pretty common sense to me. Something every business owner knows Something the States should be doing already. 

The report goes on to say that “new tax-raising measures should facilitate the execution of the large capital expenditure program.”

But notice what S&P does not say:

  • It does not say those measures must be GST.
  • It does not say income tax cannot be used.
  • It does not say spending cannot be reduced.

And it certainly does not say Guernsey will be downgraded unless GST is introduced.

The message is about financial balance: if government chooses to undertake a significant programme of capital spending, it needs a credible way of funding it. Those are two very different things.

S&P explains the circumstances in which a downgrade could occur, highlighting that negative rating action could happen if fiscal pressures “eroded Guernsey’s general government liquid assets.”

It specifically refers to the risk of government “increasing its capital spending plans substantially without adequate offsetting revenue-raising measures.”

Readers may have noticed two words.

Only two, but they matter enormously: “large” and “substantial” capital spending.

Those words were not accidental. They do not refer to normal government capital spending or routine investment. They refer specifically to major projects that would materially affect Guernsey’s finances.

Again, the key issue is not GST. The key issue is the balance between spending and income.

The States controls spending. I should perhaps rephrase that and say that the States should control spending, for it does not do a very good job.  

It decides which capital projects proceed, when they happen, and how they are funded. Presenting this as an unavoidable ultimatum – GST or a downgrade – is simply not supported by S&P’s own words.

But perhaps the most important part of the report is also the part you never hear quoted by GST supporters.

S&P explains what could actually lead to an uprating in Guernsey’s credit rating.

An upgrade could be considered if Guernsey’s economic performance exceeded expectations, fiscal outcomes strengthened, the government’s balance sheet improved, or the quality of national income data increased.

In other words, S&P’s message was clear: a stronger credit rating comes from building a stronger economy, improving productivity, and modernising our systems.

These are positive, constructive goals – and they are exactly the areas many critics of GST have been calling for long before this debate began.

Yet the Policy Letter is silent on this part of S&P’s report.

GST supporters are quick to quote S&P when they believe it supports their argument, but the wider context is rarely mentioned. The caveats, qualifications, and positive pathways to an upgrade are left out.

That matters.

Because quoting only the parts of a report that support one conclusion does not give Islanders the full picture.

Whether Deputies support or oppose GST is ultimately a political decision. But that decision should be based on what S&P actually wrote – not on the simplified claim that an international ratings agency has backed Guernsey into a corner.

It hasn’t.

Once again, we are being presented with only part of the picture: a carefully selected interpretation designed to support one outcome.

A decision of this importance deserves better. It deserves the full facts, not a narrative built around fear and incomplete information.

Deputy Rob Curgenven