CONCERNS in Alderney that a Guernsey decision to introduce a VAT-style tax could force the northern island to do so as well raises some interesting possibilities.

The first is how, as an independent island with its own parliament, Alderney can be forced to do anything by Guernsey.

As we report today, there is apparently widespread reluctance even to consider enabling legislation on the basis that it will act as a foot in the door for the tax, yet this matter is to be reconsidered even though the States of Alderney has already ruled it out.

The second is what happens if Guernsey’s neighbour sticks to its guns and refuses to legislate as asked. In the short run, it matters not. But if – and given the States reluctance to reduce its spending, perhaps that should be when – this island adopts GST, the harmonised tax and duty regime between the two islands will be seriously out of step.

There are clear ramifications from that but the key principle here is whether a self-governing, democratic territory can be compelled to adopt policies it believes are wrong.

Alderney’s States members are independently-minded and it is clear that the economic situation there is different from Guernsey’s. Introduction of the one-size-fits-all tax on rateable property has already created friction and hardship there and a GST may well be a step too far.

When Sark, also a self-governing territory, was irritating the Ministry of Justice for its slow progress from a feudal to a democratic society, London’s reaction was to restrict the progress of Guernsey legislation in order – wrongly – to encourage this island to strong-arm its tiny neighbour into submission.

Is that a tactic Guernsey would adopt in the case of Alderney and GST?

There are many ways pressure could be brought to bear: a suggestion that without GST this island would be unable to maintain the £600,000 subsidy to keep Alderney’s airport open would be a prime candidate under this situation.

Yet Alderney needs to hold its nerve. In the context of Guernsey’s £350m. budget, a shortfall of £40m. doesn’t need to be replaced by GST but by cutting expenditure.