Option A or Option B: what Guernsey's 2027 Budget means for your household

Neither option sets a shop price. What the choice decides is who gets squeezed: how hard the States cuts health, schools and policing in 2027, and how much of a £16m bill is left for later. Inflation, and a short list of tax and duty changes that apply under both options, will move a household budget more.

Option A: who wins and who loses

Option A keeps the States' 1% real-terms cut. Committee budgets total £700m, and the General Revenue account shows a £4.2m surplus before investment returns. Pay awards are funded from a separate central reserve (£26.7m under Option A, £30.1m under Option B), so the percentages below understate what each committee ends up with. The 1% real-terms cut is the part each one has to find.

The losers are the services that miss out on the extra money Option B adds.

• Police, fire and prison services. Home Affairs falls 1.6% to £45.0m, the sharpest cut among the large committees.
• Schools, sport and culture. Education, Sport & Culture falls 0.6% to £96.0m.
• Patients. Health & Social Care rises 0.9% to £267.5m, which is £2.3m more on the biggest budget and £3.1m less than Option B gives it.
• People on Family Allowances, Carers' Allowance or Income Support. Their budget is formula-led and rises 3.3% under Option A, so it is not cut. Option B adds £2.2m because spending on these benefits follows claimant numbers. Our reading is that Option A's figure may prove too low, and the report does not say what happens if it does.

The winner is whoever pays tax in 2028 and later. The recurring funding gap stays at £47m instead of widening to £63m. Anyone who wants the States to keep its own savings resolution also gains.

Option B: who wins and who loses

Option B adds £15.7m, including £3.4m to the reserve. It turns the 1% real cut into a 1.3% real rise and the £4.2m surplus into an £11.5m deficit.

• Patients gain most in pounds. Health & Social Care rises 2.0% to £270.6m, which is £5.4m more than in 2026.
• Police, fire and prison services swing from a 1.6% cut to a 2.1% rise. Education swings from a 0.6% cut to a 1.1% rise.
• Benefit claimants get the extra £2.2m, taking the formula-led budget up 6.0%.
• The States' own back office also gains. Corporate Services, which covers finance, HR, digital and property, rises 2.6%.

The loser is the future taxpayer, who inherits a £63m gap. Option B also asks the Assembly to loosen the savings direction, so the £20m of recurring savings is found "as soon as possible thereafter" rather than by 2029. Anyone who wanted that deadline held loses.

Who wins and loses under both options

Several budgets are cut whichever option passes. Economic Development falls 9.1% under Option A and 6.0% under Option B. The Trading Supervisory Board falls 15.2%, the Development & Planning Authority 5.6% and Environment & Infrastructure 0.5%.

Households face the same changes under both.

• Drivers, smokers and drinkers pay more. Fuel duty rises 3.9p a litre to 94.4p, about £39 a year on 1,000 litres (our assumption on volume). Tobacco duty adds 89p to an average packet, and beer rises 4.1p a pint. Duty on vaping liquid is £2.20 per 10ml from 9 November.
• Homeowners with a mortgage lose tax relief. The cap on interest relief for a main home falls from £3,500 to £2,000 in 2027, to £1,000 in 2028 and ends from 2029. At the 20% standard rate, a taxpayer who pays at least £3,500 a year in interest pays £300 more tax in 2027.
• Higher earners get no inflation adjustment on one threshold. The £85,000 income level at which personal allowances start to be withdrawn stays where it is.
• Most taxpayers gain a little. The personal allowance rises £650 to £15,850, worth up to £130 a year at 20%, and the tax-free bank interest limit rises from £50 to £75.
• Shops, restaurants and warehouses gain from a property tariff freeze. Pubs gain a draught relief worth 5.6p a pint, though the report does not say they must pass it on.
• Overseas aid gains more than 10% towards the target of 0.2% of GDP by 2030.

Prices are driven by inflation, not by the Budget. RPI and RPIX both stood at 4.3% in June 2026, up from 4.0% in March. GST of 3% starts in 2029, not 2027, after the States approved Tax Reform on 2 October by 22 votes to 17. Income tax and social security cuts are expected from January 2029 to offset it.

What the difference costs a household

The two plans differ by £15.7m of committee spending. That is about £242 for each of Guernsey's 64,781 residents (Bridgehead arithmetic, using the population at the end of 2023), or roughly £970 for a family of four. It is not a bill you receive in 2027. It widens the recurring funding gap, which tax, charges, borrowing or cuts will have to close later.

The report does not say what Option A stops. It does not itemise the £33m of extra requests that committees made and Option A declines, so a parent, a patient or a police officer cannot tell from the Budget which services are on the list.

Option A's surplus is also thinner than it reads. It leans on Pillar 2, the global minimum tax on large companies, which the Budget values at £79m in 2027 and expects to decline as businesses adapt. Our own model, which is not a States forecast, turns the Option A headline negative in 2029 if Pillar 2 fades by 5% a year.

Our reading

Option B is the easier vote. It spares the services people use, and £242 a head is modest against a budget of this size. Option A is the more defensible one, provided the States says what it stops. B widens the recurring gap by £16m in a year when the books lean on revenue the Committee itself expects to fall.

For a household the choice is services now or a bill later. An islander who uses the health service every month has good reason to want B. An islander who expects to fund the gap through tax has good reason to want A. The Assembly owes both a published list of what Option A would cut.

Once the Billet d'État carrying the Budget is out, each deputy's vote for A or B will go on their profile on the Bridgehead scorecard.