Wednesday 25 September 2024
General Update
Sir,
I will provide Members with an update on the recent activities and future plans of the Committee forEconomic Development.
The finance sector remains an important driver of Guernsey's economic growth, reflected by the fact that the financial and insurance sector contributed the highest portion (£1.3 billion) or 37% of total GDP in 2023.
If you include legal and accounting activities, GDP increases to an estimated £1.5 billion. That equates to roughly 44% of the island's entire economic output; which is roughly the same proportion as it was in 2022. In addition, the finance sector employed 7,766 people making it also the largest employer on island.
The promotion and marketing efforts of Guernsey Finance continues to be an essential driver of the success and growth of the sector, ensuring that we remain competitive on that global stage.
From a business development perspective, it continues to represent value for money with Guernsey Finance currently facilitating the introduction of three new life branches on the Island and a new fiduciary licence. These have been the catalyst for numerous new trust, company and fund structures being moved to or formed on the Island. Guernsey Finance is also working on over 40 significant pieces of new business for Guernsey including, notably, the establishment of a new banking licence, a new insurance licence and also the establishment of a new fund manager to the Island. That is actually good news.
The work on the MONEYVAL continues, and I would like to take this opportunity to thank the team at the Guernsey Registry for their hard work and dedication on delivering the new IT system. This will impact positively on the MONEYVAL assessment and the Committee is grateful to the former and current Policy and Resources for their support throughout the three-year Registry IT upgrade.
Members will recall that significant work has been undertaken to better understand and address certain challenges for local banking services including a reduction in the number of licensed banks, concerns in relation to alleged delays in account opening times, for some local business customers, and concerns in relation to the availability of credit cards for local residents.
As previously reported, one of the barriers identified has been the difficulty which credit reference agencies have in confirming the names and addresses of local residents as part of their due diligence to issue those cards. The Committee for Home Affairs has continued to make real progress in this area and in March the Assembly approved a policy letter to establish an electronic electoral roll ahead of the 2025 General Election. Crucially, this will enable credit reference agencies to access data contained within the new electoral roll from December 1 st 2024.
Members will be aware that in July the Committee commenced a review of competition law and regulation in Guernsey. I am pleased to report that the Committee has, to date, received 19 consultation responses, including from key stakeholders and from Members and Committees of this assembly.
The Committee has also commissioned a review of the competition and regulatory frameworks in comparable jurisdictions from Frontier Economics and Island Global Research is undertaking consumer research to inform the review.
A number of key themes are emerging from the consultation and members will have received an update from those earlier this month. Crucially, respondents recognised that Guernsey is a small jurisdiction and that it needs a competition and regulatory framework that is proportionate to the jurisdiction's size.
Of significant interest to Members and the wider community is that of our sea links. I have been working closely with my Jersey counterpart, Deputy Kirsten Morel and my Committee, to ensure that we have considered both the short-term challenges and the long-term opportunities in respect of our lifeline sea links on a pan-Channel Island basis.
We are near the completion of that procurement process. Bids are being assessed by officers in both islands against agreed criteria including resilience, reliability, passenger experience and financial sustainability. I anticipate that the Committee will be able to make an announcement on the outcome of this process in October.
On air connectivity ,the Committee, like many Islanders, has been concerned by the level of disruption that passengers travelling on air services operated by Aurigny have experienced this year.
In response, the Committee commissioned an air connectivity and performance review from Frontier Economics, something entirely independent. The review will be looking at three critical success factors as set out in the Air Policy Framework - affordability, connectivity and reliability and the findings will feed into the Committee's review of the air transport licensing policy. The Committee will shortly be briefed on the findings and will then decide what further action may be required.
And importantly Members, the Committee has also recently written to the CEO and the Board of Directors of Aurigny asking them to prioritise the reliability of the route to London Gatwick and has invited the CEO and the Chairman to meet with the Committee shortly to discuss their plan for delivering this. When we came into this States, we all went into a presentation by I think it was the then-IOD. They spoke about connectivity, and we certainly cannot leave this term with this Island in a worse state than it was and this entirely has to be deal with very, very quickly.
The Committee budget for tourism is £1.6 million in marketing Guernsey as a destination. This is a significant investment and at an important time as we, like many other destinations, continue to recover following the COVID years.
The latest figures show that there were 58,000 staying visitors in Guernsey during the second quarter of 2024, an increase of 9% above Q2 2023, that is still recovering, but it is 14% below the level in Q2 2019 before the Covid pandemic. Our staying visitor numbers are recovering but have not yet recovered fully to the level that they were before the Covid-19 pandemic. Travel habits have changed and cost of living pressures are affecting disposable incomes. And it cannot go without comment that the twin issues revolving around our sea and air carriers have not helped that recovery.
Cruise passenger numbers have significantly reduced in recent years. This is in part due to two of the largest cruise operators no longer calling at St Peter Port. We have established a Cruise Steering Group with political and senior officer representation from both Economic Development and the STSB and the Ports Board to look at what service improvements could be made to encourage those cruise operators to return to Guernsey. This work is also likely to mean investment in port facilities and the Committee recognises that a path to greater recovery will require working in partnership with STSB and likely to mean some capital expenditure.
Already, we're seeing positive results and early indications for 2025 and 2026 are encouraging. Based on the confirmed schedule, the number of cruise passenger numbers for next year are already forecast to be up on this year excepting coming from a lower base. And two major cruise operators have reintroduced Guernsey into their itineraries for 2026. Together the two operators will visit four times, with capacity to bring more than 10,000 passengers in total.
The fibre broadband rollout continues at pace and is ahead of schedule. More good news. As at the end of August, 68% of premises are now fibre ready and 40% of households are now connected to fibre - that's 13,000 local premises now using fibre.
The Committee will be bringing a policy letter to the States Assembly before the end of the political term on deploying next generation 5G mobile technology to the Bailiwick.
The Committee has commissioned PwC Channel Islands to undertake an important study to measure the value of Guernsey's digital economy. PwC's survey is currently open to organisations across all economic sectors to input into the study.
There's an extremely good news story here; if the States gets all elements of its Digital aspirations lined up, by 2027 this Island will be one of the most connected jurisdictions in the world. A jurisdiction focussed on global business with a digital network to match.
The Committee has also launched a two-year pilot for a Guernsey Enterprise Investment Scheme, ably led and inspired by Deputy Kazantseva-Miller. The scheme aims to encourage investment into high growth, early-stage businesses in Guernsey by providing an investor benefit to those investing into start-ups and developing businesses. The scheme will be open for applications from October.
Work also continues on the implementation of the skills strategy. The Committee is working jointly with the Committee for Education, Sport and Culture to establish a Skills Guernsey Board that will oversee the implementation of the Human Capital Development Plan.
Following industry feedback the Committee has also commenced an independent review into Non-Government Early Childhood Education and Care. This work will combine with the Participation in Work project led by Policy and Resources and is expected to complete by the end of the year. Sir, Members, I'm coming to the end.
A key constraint for the economy is a lack of available housing. The Committee's view is that it is absolutely critical that real progress is made in delivering not just social housing, but also affordable housing in the private sector. The Committee is supportive of the plans for the East Coast and the Harbour Action Areas being developed by the Guernsey Development Agency and wants to support a real drive on housing and regeneration, not just next term but for the remainder of this term.
Building homes for "Guernsey folk" is critical; our sons, our daughters and their families deserve a place in their Island. I've said it before and I'll say it again. It is my view that there has been far too much emphasis on health workers and social housing.
The question we need to ask ourselves is - What's in it for aspirational Guernsey families?
I look forward to answering any questions