13 Jul Guernsey Retail Group Calls for Greater Focus on Economic Growth Alongside Tax Reform
The Guernsey Retail Group has urged deputies to place greater emphasis on economic growth as they consider the Policy & Resources Committee’s tax reform proposals.
The Group’s detailed response highlights the importance of ensuring that any measures to secure Guernsey’s long-term public finances are matched by policies that strengthen the island’s economy, encourage investment, and support local business growth.
The response was originally circulated to all States deputies in early June and was reissued following a presentation by the States of Guernsey to local retailers outlining the proposed reforms and the planned implementation of GST. The GRG believes that economic growth, business competitiveness and consumer confidence must be a key focus of the debate.
While recognising the need to address Guernsey’s long-term fiscal challenges and maintain sustainable public services, the GRG believes that the island’s future prosperity will depend not only on how revenue is raised, but also on how economic activity is encouraged and supported.
The GRG welcomes aspects of the proposals, including recognition of the pressures facing retail and other consumer-facing sectors, and the commitment to phasing changes carefully. However, it believes the conversation must now focus on how Guernsey can strengthen and grow its economy, support local enterprise, and encourage retention of more spending on-island.
Malcolm Woodhams, Director of the Guernsey Retail Group, said: “Our central concern remains that the proposals are framed too narrowly through the lens of taxation and revenue extraction alone. Fiscal sustainability cannot be secured solely by broadening and deepening the tax base if the same policy package weakens consumer confidence, suppresses local spending, reduces business investment, and does nothing to address the substantial economic leakage off-island.”
Retail remains one of Guernsey’s most significant economic sectors, employing more than 3,500 people and supporting a wide network of suppliers, logistics, service providers, and community organisations. The sector also plays a substantial role in the vitality of St Peter Port, The Bridge, and community centres across the island’s parishes. The GRG believes that supporting local businesses should be viewed as an investment in Guernsey’s wider economic resilience and future prosperity.
Mr Woodhams said: “Every pound spent locally works harder for Guernsey. There is broad recognition that money spent with on-island businesses generates a significantly greater return, with every £1 spent locally estimated to create around £1.40 of local economic value through re-spending across local businesses and supply chains – the “multiplier effect”. When local businesses succeed, the benefits are felt across the wider economy. It should be a top priority for government to address the substantial level of economic leakage. We have consistently been calling for practical measures, including incentives for business investment, improvements to town centres, productivity initiatives, and policies that help local businesses remain competitive. If Guernsey wants stronger public finances in the future, it must also focus on strengthening the economy that supports them. Local economic growth and fiscal sustainability go hand in hand.”
The 2024 IGR Consumer Survey* indicated that nearly 70% of respondents enjoyed browsing in-store to see what is available, and less than 25% preferred to buy online. Furthermore, 46% of respondents recognised that buying locally supported the local economy. There was also an overwhelming desire for a smart, appealing, and accessible St Peter Port Town Centre and Bridge, containing sufficient choice of retail options, along with hospitality, entertainment, and service-oriented businesses.
The GRG believes its proposals present an opportunity to develop a more ambitious economic strategy that supports entrepreneurship, encourages investment, and enhances Guernsey’s attractiveness as a place to live, work, and do business.
The Guernsey Retail Group looks forward to continuing its dialogue with policymakers to help ensure that any future reforms support both sustainable public finances and long-term economic success.