Jon Bond

Small Island, Big Ideas

Author: Jon

  • The GST Debate Goes to Half-Time: What Three Days in July Actually Settled

    The GST Debate Goes to Half-Time: What Three Days in July Actually Settled

    Guernsey’s biggest tax decision in a generation is now on a summer break. After three days of debate on 15–17 July, the States ran out of road before reaching a final vote on Policy & Resources’ tax reform package — the 3% GST, the accompanying income tax and social security changes, and the corporate tax extensions attached to it. Deputies will pick it back up on 30 September.

    That pause is worth reflecting on. Nothing has been decided, but a lot has already happened, and the shape of what’s left to debate has changed in ways that matter more than the headline “no vote yet” suggests.

    What was actually on the table

    P&R’s package, published in June, centres on a 3% GST alongside higher income tax allowances, a reformed lower income tax band, and modest extensions to corporate tax — including bringing the 10% rate to cover the full profits of regulated businesses. Taken together, the committee says the package raises about £42m a year gross, or roughly £39.5m net once running costs are stripped out. That is the number to hold onto, because most of what follows is a fight over how that £39.5m gets found and who carries it.

    The kill shots that didn’t land

    Three attempts to stop the package outright were all defeated in the first two days:

    • A sursis from Deputy Liam McKenna and Deputy Mark Helyar to delay the whole debate, pending a new States Treasurer’s advice and a clear-out of the Revenue Service’s backlog, fell narrowly, 17 votes to 22.
    • An amendment to drop GST from the package entirely (McKenna) was defeated more heavily, roughly 28 votes to 10.
    • A call for a binding referendum on GST (McKenna and Simon Vermeulen) was rejected 25 votes to 14.
    • A separate bid to scrap the package for a new Appropriations Committee tasked with finding savings first (Garry Collins and Haley Camp) lost 29 votes to 11.

    P&R came out of those votes able to say, fairly, that its core proposition is intact. Treasury lead Charles Parkinson told the Press he believed there was “clearly a majority in favour” of the package; P&R President Lindsay de Sausmarez was more circumspect but agreed the numbers looked to be there. Neither claim has been tested – the substantive vote hasn’t happened, but the pattern of the July votes doesn’t contradict it.

    What did land

    Three amendments were carried, and each of them changes what P&R will actually be implementing if the package eventually passes:

    1. A Child Responsibility Tax Allowance (Andy Sloan and Munazza Malik) – a direction to P&R to introduce a new income tax allowance for each dependent child. This wasn’t a request for a report; it was an instruction. Gavin St Pier made the sharper point in debate: this is a directive, not a study, and the most likely funding source for it is more revenue – quite possibly more GST.
    2. An instruction to investigate a flat tax rate as an alternative structure.
    3. A three-year cap on growth in total States expenditure, including social security spending, to inflation (Sloan, moved by Helyar in his absence), which passed by the narrowest margin of the sitting, 15 votes to 12.

    The spending cap is the one worth watching. It was framed as a discipline measure, but its scope, explicit inclusion of social security spending, not just departmental budgets, has already drawn a public warning from the Committee for Health & Social Care that it risks real-terms cuts to services, and Bailiwick Express has since run a fact-check on the more alarmist claims doing the rounds about pensions being at risk (their verdict: the amendment doesn’t force pension cuts, but it does tie ESS’s hands in a way that could force difficult trade-offs). This is exactly the kind of measure that sounds costless in a sound bite and isn’t: capping headline spending growth to inflation while service demand, health and care in particular, runs ahead of inflation is a structural squeeze, not a saving.

    There’s a genuine tension buried in July’s results that P&R will have to reconcile before September: deputies voted, in the same sitting, to add a new tax allowance (a cost) and to cap spending growth (a constraint on where new costs get absorbed). Both carried. Neither amendment’s proposers were required to reconcile them with each other, and it’s not obvious P&R’s £39.5m net figure survives both being implemented as instructed.

    The procedural oddity

    Under the Assembly’s normal rules, adjourned debates don’t reopen for new amendments. Officials have indicated they’ll take a different view here, effectively reopening the amendment window until 22 September – which all but guarantees the 22 amendments considered in July will be added to before the Assembly reconvenes. Deputies campaigning against GST, including Garry Collins, have already signalled they’re preparing further amendments over the recess.

    Reading the numbers

    The vote margins across July tell a story in themselves. The sursis and the flat “no GST” amendment both lost by comfortable double-digit margins – this is not an Assembly on the verge of rejecting reform outright, in the way it did in 2023. But the spending cap amendment passing 15–12 is a different kind of signal: on a genuinely contested, ideologically loaded question about the size and shape of government, the numbers are close enough that a handful of switched votes moves outcomes. If the substantive GST vote in September comes down to a margin like that, this is not settled business, whatever the confidence from Treasury and P&R leadership suggests.

    What to watch for in September

    • Whether P&R chooses to adjust its own package before the debate resumes, as de Sausmarez has hinted is possible, rather than defend it unamended against a fresh round of amendments.
    • How P&R proposes to reconcile the child tax allowance and the spending cap, both now carried, both pulling in opposite directions on the same £39.5m.
    • Whether the reopened amendment window produces anything that changes the arithmetic, rather than simply adding volume to an already long list.
    • The roughly ten to eleven amendments left over from July that still haven’t been debated at all.

    None of this changes the structural point that’s been the throughline of this year’s tax debate: Guernsey has a funding gap that isn’t going away, reserves that are being run down to cover it, and a package on the table that raises real revenue but does so by reshaping who pays and how. Three days in July didn’t answer whether the States will accept that reshaping. It mostly confirmed that the fight over the details, allowances, caps, who bears the transition, may end up mattering as much as the headline GST number itself.

    Sources: Guernsey Parliament (parliament.gg), States Meeting 15 July 2026, Billet d’État XII; Guernsey Press, 15–22 July 2026 and 17 August 2026; Bailiwick Express, July 2026; States of Guernsey, “2026 Tax Reform Package published.”

    Jon Bond is Founder and CEO of Evans Bond Limited, an accountancy and advisory practice in Guernsey, and principal of Melius Consulting Limited – a business consultancy. He is also a non-executive chairman of CI Co-op and Sark Shipping. The views expressed here are his own.

  • GST – The Big Debate

    GST – The Big Debate

    Deputies will spend part of this sitting debating the Policy & Resources Committee’s Tax Reform 2026 package – the outcome of the Tax Review Sub-Committee’s work on making the Bailiwick’s finances more sustainable.

    It’s rarely a single up-or-down vote on something this size: one member has proposed shelving it entirely (a “Sursis”), and 22 separate amendments have been laid, ranging from small technical exemptions to wholesale replacements of the entire package.

    This post summarises the core proposal and every amendment that’s been laid, and gives you a searchable table to explore them.

    The Main Proposal

    Brought by the Policy & Resources Committee, the proposition asks the States to agree, having considered the Policy Letter “Tax Reform 2026” dated 8 June 2026:

    • To direct the Committee to implement the package of tax reforms set out in sections 9 and 10 of the Policy Letter, covering income tax, social security contributions, a goods and services tax (GST) and other measures, with rates and thresholds as set out in Appendix 7.
    • To add the Tax Reform Programme to the Major Projects Portfolio and delegate authority to Policy & Resources to approve up to £10.6m of implementation funding from the General Revenue Reserve, subject to business cases.
    • To direct Policy & Resources to return to the States with an assurance review in 2030 (section 12).
    • To direct preparation of the legislation necessary to give effect to the above.
    Ref ↕ Category ↕ What it does ↕ Proposers ↕
  • A Busy Week in the Chamber: What the States Debated and Why It Matters

    A Busy Week in the Chamber: What the States Debated and Why It Matters

    The States of Deliberation sat across two days last week – a special meeting on Tuesday to debate the 2025 Group Accounts, followed by an ordinary sitting on Wednesday with a packed agenda. Taken together, the sessions gave a clear picture of where the island’s finances actually stand, committed serious capital to long-deferred infrastructure problems, and quietly made some decisions about planning and employment law that will matter to businesses and residents for years to come.

    Here’s a rundown of what happened, and what I think it means.

    Tuesday 23 June: The 2025 Accounts — Surplus, Deficit, or Both?

    The special sitting existed for a single purpose: to debate the 2025 Group Consolidated Financial Statements. But the headline number, a £45 million operating surplus, needs unpacking, because on its own it is genuinely misleading.

    Policy & Resources President Deputy Lindsay de Sausmarez has been admirably clear about this. The surplus is real, but it was driven significantly by one-off factors: around £34 million came from one-off banking sector tax adjustments, investment valuations jumped by more than £100 million (but those are paper gains, not cash income), and Pillar II global minimum tax on large multinationals contributed roughly £39 million to a revised group surplus figure of over £100 million for the year. Strip out the one-offs, and the picture is materially weaker.

    The structural deficit – the ongoing gap between what the island routinely collects in tax and what it routinely spends on services, has narrowed slightly from £58 million to around £50 million. That is progress, but it remains a very large number for an island of this size, and it is the number that actually matters for the long-term fiscal position. As Deputy de Sausmarez put it, two things can be true at the same time: a good year on paper, and a continuing structural problem underneath.

    The Scrutiny Management Committee, led by economist Deputy Andy Sloan, added a pointed note ahead of the debate: their concern was not whether the accounts are technically correct, but whether they are sufficiently accessible and understandable to those for whom they are ultimately intended. That is a fair challenge. If the President of the Scrutiny Committee publicly says he struggles to understand them, there is a real question about whether the accounts serve their democratic purpose. States accounts have to be produced to IPSAS standards (International Public Sector Accounting Standards), and those standards are rigorous, but rigour and accessibility are not the same thing.

    A few other numbers worth noting from the 2025 accounts: income tax revenues rose by £110 million year on year, social security contributions increased by £16 million on the back of higher rates and rising wages, and document duty on property also picked up. On the expenditure side, the Aurigny operating loss came in at £6.3 million and the airport PFAS clean-up (more on that below) featured as a significant capital item.

    The broader context here matters enormously. The States is heading into a July debate on tax reform, the most consequential fiscal decision of this parliamentary term, with accounts that show a good year and an uncomfortable underlying reality simultaneously. The risk is that the headline surplus gets used to argue that urgency has passed. It hasn’t. The structural deficit doesn’t fix itself, Pillar II receipts are likely to decline over time as international tax rules evolve, and 75% of Guernsey’s revenues coming from personal income tax and social security contributions from a working-age population on an ageing island is a fragile base. The accounts are the starting point for that conversation, not the end of it.

    Wednesday 24 June: Infrastructure, Planning, and the Legislative Backlog

    The ordinary sitting on Wednesday carried a broad agenda. Here are the items worth paying attention to.

    PFAS at the Airport: Committing £16.5 Million to Clean Up an Old Mess

    The most significant capital decision of the week, and arguably the most significant infrastructure vote of the year so far outside the hospital, was the proposition to authorise up to £16.54 million to excavate, transport, and treat approximately 15,000 to 16,000 tonnes of PFOS-contaminated soil stored at Guernsey Airport.

    PFOS (perfluorooctane sulphonate) is a “forever chemical” – it does not break down in the environment and accumulates in the body. It got into the airport site through decades of use in firefighting foam from the 1970s until the early 2000s. The contaminated soil was excavated and stored in geotextile-lined bunds during the airport rehabilitation works in 2012, because at the time there were limited treatment options available. That bund is now failing. Regular monitoring has confirmed it is beginning to deteriorate, and the chemical levels in the soil are rising, presenting a direct risk to groundwater near the site and ultimately to St Saviour’s Reservoir.

    The preferred solution, approved by the States’ Trading Supervisory Board (STSB) after assessment of multiple options, is to excavate the soil, ship it to the UK, and treat it through a soil washing process. The contamination is then extracted from the wash water through carbon filtration and destroyed by heat treatment. Containing it on-island was deemed inadequate by the local waste regulator, Guernsey Water. Building an on-island treatment facility was ruled out as technically and logistically unfeasible. Exporting and treating the soil is the only route that actually solves the problem.

    The cost is striking. A provisional estimate of £3 million when the soil was first stored has become £16.5 million. That escalation reflects both the volume of contaminated material and the complexity of treatment. An amendment tabled by Deputies Adrian Gabriel and Andy Cameron added an interesting dimension, rather than simply approving the clean-up, they asked STSB and P&R to explore what the freed-up bund land could be used for once the soil is gone, with options including a multimodal transport hub integrating bus services, cycling infrastructure, rideshare and pedestrian access at the airport. Whether that ambition survives the inevitable budget pressures is another question, but the instinct to use a remediation project to think forward about land use is sound.

    This is a hard vote for some Deputies, purely on cost grounds. But the alternative is to leave a deteriorating hazard in place, risking far greater remediation costs and reputational damage to Guernsey’s environmental standards. Deferred problems compound. The States tried to recover costs from 3M, the manufacturer of the foam, however that action ultimately settled unfavourably, with Guernsey liable for £1.4 million of 3M’s legal costs plus its own £6.6 million in legal fees. The island has been carrying this problem for a long time. Approving the clean-up is the right call, even at this price.

    QEII Marina Gates: £10.7 Million for Critical Infrastructure

    The STSB also brought forward a proposition to authorise up to £10.7 million for the replacement of the QEII Marina gates and associated infrastructure, funded through a split of a £5.35 million grant from the General Revenue Reserve and a £5.35 million interest-bearing loan.

    The gates are 40 years old. The STSB is unambiguous: without action, they will continue to deteriorate and there is a high probability of failure beyond repair. The QEII is the island’s largest marina with over 700 berths. Failure would not just inconvenience berth holders — it would represent a serious financial risk to Guernsey Ports’ balance sheet and, frankly, a reputational hit to the island’s profile as a marine and leisure destination. Guernsey Ports cannot fund this from its own resources without significantly increasing user fees or sacrificing other investment priorities.

    The proposition asks the States to authorise the funding envelope, with the actual release of funds subject to P&R approval of a Full Business Case. That’s appropriate governance for a £10 million-plus commitment. If approved, construction could be complete by end of 2027.

    This is exactly the kind of capital maintenance that tends to get deferred during periods of fiscal pressure and then becomes an emergency. Better to act now than to explain to berth holders why the island’s premier marina is out of service.

    Island Development Plan: Extending to 2030

    The IDP, Guernsey’s foundational planning document, dates from 2016. That makes it a decade old at a time when planning backlogs, affordable housing pressure, and evolving land use needs have all moved substantially. The proposition before the States was simply to extend its validity until 31 December 2030, or until a replacement is formally adopted.

    This is uncontroversial as a procedural matter – you can’t let the planning framework lapse while a full review is underway – but it is worth flagging that a 10-year-old IDP is a genuinely blunt instrument in a housing market that needs finer calibration. The focused review currently underway, which covered affordable housing site allocation and other specific policy areas, went through a public hearing earlier in 2026 and is with the Development and Planning Authority. An Autumn debate on those changes is expected. But the broader IDP review, replacing the whole plan, remains work in progress.

    For businesses and developers, the extension provides certainty that the existing rules remain operative. That matters for planning applications and investment decisions.

    Prioritisation of Legislative Drafting and an Amendment That Reveals the Real Tension

    One of the more substantive debates of the day was the proposition to approve a schedule of prioritised legislative drafting, essentially, which laws get written and in what order. P&R brought this forward; Deputies Lindsay de Sausmarez and Adrian Gabriel put in an amendment.

    Legislative drafting is a genuine bottleneck in Guernsey’s system. The island’s legislative counsel resource is finite, and there is always more demand than capacity. Prioritising the drafting schedule is therefore a meaningful governance decision — whatever goes to the bottom of the list does not get done, at least not soon.

    The amendment by de Sausmarez and Gabriel is interesting for what it signals: two Deputies prepared to use the amendment mechanism to push for different priorities within the drafting queue. The July meeting is expected to be heavy with tax reform-related legislation; getting the drafting priorities right now is pre-work for that. Worth watching how this plays out in votes.

    Extending Employment Tribunal Jurisdiction to Alderney

    A straightforward but quietly significant proposition: extending the scope of the Employment and Discrimination Tribunal (Guernsey) Ordinance to include Alderney, specifically to allow the Tribunal to hear minimum wage cases arising on the sister island. Currently, workers in Alderney who have minimum wage disputes have no clear tribunal route.

    This is the kind of Bailiwick coherence measure that should not be controversial, and probably won’t be. It brings Alderney workers in line with protections available in Guernsey, which is both fair and logically consistent with the direction of travel on employment rights.

    Education Legislation

    Three education items came through: a commencement ordinance for the Education (Guernsey) (Amendment) Law 2025, a governance boards amendment, and application of education legislation to Alderney. These appear largely procedural, bringing law that has already been debated and approved into effect, and extending it to Alderney. Worth noting the pattern of Alderney items across this sitting: there is a quiet programme of legislative harmonisation underway across the Bailiwick.

    The Bigger Picture

    Two themes run through this week’s business.

    The first is infrastructure deferred. The PFAS clean-up and the QEII Marina gates are both examples of a pattern: problems that were identified, partially managed, and then left to compound while fiscal conditions made capital commitments difficult. The bill is now larger in both cases than it would have been with earlier action. That is the real cost of a structural deficit, not just the annual shortfall, but the tendency to defer maintenance and investment until deferral is no longer an option.

    The second is the pressure building for July. The 2025 accounts, the P&R general update statement on Wednesday, and the legislative drafting prioritisation all point in the same direction. The July States meeting, where tax reform proposals are expected to be debated, is shaping up to be the most consequential sitting of this parliamentary term. The decisions taken this week are in many ways the setup for that debate: the accounts give context for the fiscal case, the capital commitments give a sense of the investment needs the island cannot avoid, and the legislative queue sets the drafting priorities.

    If you want to understand where Guernsey’s public finances are, and where the real decisions are being made, July is the meeting to watch.

    Jon Bond is Founder and CEO of Evans Bond Limited, an accountancy and advisory practice in Guernsey, and principal of Melius Consulting Limited – a business consultancy. He is also a non-executive chairman of both CI Co-op and Sark Shipping. The views expressed here are his own.