Guernsey retail sector urges government to prioritise economic growth in tax reform debate
- Guernsey Retail Group urges deputies to prioritise economic growth alongside tax reform proposals
- Group warns that tax reforms are framed too narrowly around revenue extraction without addressing economic leakage
- Retail sector employs more than 3,500 people and plays substantial role in island's economic vitality
- Every £1 spent locally creates around £1.40 of local economic value through multiplier effect
- 2024 consumer survey shows 70% prefer in-store browsing and 46% recognise buying locally supports economy
The Guernsey Retail Group has called on States deputies to place greater emphasis on economic growth as they consider tax reform proposals put forward by the Policy & Resources Committee.
The group's response, originally circulated to all States deputies in early June and reissued following a recent presentation on the planned implementation of GST, argues that measures to secure the island's long-term public finances must be matched by policies that strengthen the economy, encourage investment, and support local business growth.
Whilst recognising the need to address Guernsey's long-term fiscal challenges and maintain sustainable public services, the GRG believes 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 group 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, which achieved over 1,500 responses, indicated that nearly 70 per cent of respondents enjoyed browsing in-store to see what is available, and less than 25 per cent preferred to buy online. Furthermore, 46 per cent 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.
Q&A
Q: What is the Guernsey Retail Group's main concern about the tax reform proposals?
A: The GRG believes the proposals are framed too narrowly through the lens of taxation and revenue extraction alone, and warns that fiscal sustainability cannot be secured solely by broadening the tax base if the same policies weaken consumer confidence, suppress local spending, and reduce business investment.
Q: How significant is the retail sector to Guernsey's economy?
A: Retail is 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 across St Peter Port, The Bridge, and community centres throughout the island.
Q: What does the 2024 consumer survey reveal about shopping preferences in Guernsey?
A: The 2024 IGR Consumer Survey, which received over 1,500 responses, showed that nearly 70% of respondents enjoyed browsing in-store, less than 25% preferred to buy online, and 46% recognised that buying locally supported the local economy.
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