Wednesday 22 January 2025
General Update
Sir, Members of the Assembly,
This will be the last update statement of the Committee forEconomic Development this political term. I will outline the Committee's main achievements over this term and the areas that will need to be pursued next term.
I would like to start by thanking my fellow Committee members for their support. I have been supported by Deputy Falla as the Committee's Vice-President and lead for business liaison. Deputy Kazantseva-Miller led the Committee's activities on digital, skills and enterprise. Deputy Moakes led the Committee's work on the finance sector and international trade and Deputy Vermeulen led the Committee's work on tourism, retail and construction.
I would also like to put on record my thanks to the Committee's two non voting members. Mr Andy Niles has assisted the Committee with its Review of the Office of the Public Trustee and Mr Tony Mancini has provided valuable insight from a business perspective.
Governments don't run economies - they create the environment for business to succeed. That has been the approach that this Committee has taken. We have put business knowledge at the heart of the Committee's work - establishing a Tourism Management Board, funding the Guernsey Retail Group and now working with the Committee for Education, Sport & Culture on the establishment of a Skills Board and giving Guernsey Finance, Visit Guernsey and Locate Guernsey the funding and backing to market the Island.
Finance Sector Development
One of the most significant decisions that the Committee made early in this term was to increase the funding for Guernsey Finance by an additional £1 million pounds per annum. The request was supported by the States Assembly and the funding uplift has been agreed until 2027.
From a business development perspective, that additional investment continues to represent excellent value for money with Guernsey Finance currently facilitating the introduction of four new life branches 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 pieces of new business for Guernsey including, notably, a trust company licence, two investment managers, a custody platform, two major fund structures, a currency management banking licence that is set to become a full banking licence in early 2025 and a further two new banking licences. That is very good news for Guernsey.
Members will recall that much 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 commissioned a strategic review of the banking sector and is now implementing the recommendations. The Committee is working with the Association of Guernsey Banks with a view to providing information on account opening times for locally licensed banks.
The Committee for Home Affairs continues to progress its work with providing access for credit reference agencies to Guernsey's electoral roll to address one of the issues affecting the issuance of domestic credit cards. It is anticipated that Home Affairs will present a policy letter to the States in March of this year.
During 2024 the Committee invested both time and resources in preparing for the MoneyVal Evaluation. A large investment was made to upgrade the Guernsey Registry's IT system, which supported the overall MoneyVal objectives, and is close to being concluded. I would again like to thank the officers involved.
International Trade
On international trade, the Bailiwick has secured baseline participation in all of the UK's post-Brexit free trade agreements and has agreement to take part in Digital Economic Agreements with Ukraine and Singapore. For trade across the Atlantic, the Bailiwick is to be included in the UK's trade Memoranda of Understanding with eight US states.
Digital Connectivity
In 2021 the Committee and the Policy & Resources Committee brought a policy letter to the States Assembly to accelerate the implementation of fibre broadband to improve the Island's digital connectivity that proposed up to £12.5 million of investment by the States of Guernsey, alongside an investment of £25 million by Sure.
The project has now reached a major milestone, with more than half of Guernsey properties now able to connect to the new fibre network. 18,000 properties can now sign up for fibre services and more than 10,000 islanders are enjoying the benefits of fibre broadband.
In September the Committee made the case to the States Assembly for the temporary suspension of competition law to enable Sure to takeover Airtel-Vodafone which secured up to £17.4 million in direct inward investment into Guernsey's digital infrastructure and into the local economy.
The Committee has also recently lodged a policy letter on deploying next generation mobile technology to the Bailiwick which is scheduled for debate at the February States meeting.
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.
Guernsey Enterprise Investment Scheme
In October the Committee launched a two-year pilot for a Guernsey Enterprise Investment Scheme. The scheme aims to encourage investment into high growth, early-stage businesses in Guernsey. Five applications have been approved to date and a total of £372,000 has been allocated from the £600,000 budget in the Government Work Plan, representing a potential £1.24 million of investment into innovative Guernsey businesses.
Air Connectivity
Last year the Committee commissioned an independent air connectivity and performance review. The review considered three critical success factors as set out in the Air Policy Framework - connectivity, reliability and affordability. Members have been briefed on the review's findings which will feed into the Committee's review of the Air Transport Licensing Policy Statement.
The Committee also provided financial support to establish a new direct air link to Paris for three years and the route has performed better than anticipated with 7,000 passengers using the route and average load factors of 67% from March to November. Other air route development opportunities are also being actively pursued.
Sea Connectivity
Of significant interest to Members and the wider community is that of our sea links. Progress has been made to secure the Island's sea connectivity with the introduction of the ramp licencing legislation and the signing of a new 15-year contract for Brittany Ferries to deliver Guernsey's ferry services.
There is still further work to be done to improve the inter-island sea connectivity and I have instructed officers to work closely with their Jersey counterparts and with ferry operators to come up with a workable solution. This work will be accelerated once Jersey is able to confirm its full schedule.
I met with Deputy Morel, Jersey's Minister, on Monday and we are both of the same mind in terms of the importance of inter-island connectivity.
Tourism
During 2023 the Committee established a Tourism Management Board and appointed Hannah Beacom as Chair of the Board, with six representatives from different sectors within the tourism industry. The Board provides oversight and direction to Visit Guernsey's marketing and promotion activities.
The Committee has budgeted £1.9 million for marketing Guernsey as a destination in 2025. The new direct ferry service to St Malo will offer opportunities to grow the French visitor market and work is being undertaken to take full advantage of this opportunity, in addition to marketing to a UK and a wider European audience.
In March 2024 the Tourism Management Board published its Framework for the Visitor Economy and the Board now allocates the Committee's Events budget in line with objectives within the framework.
Housing and regeneration
I am pleased to sit on the political oversight Board of the Guernsey Development Agency, along with Deputy Murray and Deputy de Sausmarez. Their plan for the north of the island is exciting and shows what can be done when the States lets other people and the wider community come up with a plan. Perhaps a similar approach would assist the housing problem, which continues to impact on the Island's competitiveness, and which appears to be bogged down yet again in the multiple and competing interests of the States. We need a different approach, and fast.
Review of the OPT and Review of Competition Law and Regulation
I am pleased to say that good progress has been made on the Review of the Office of the Public Trustee. The Committee recently considered a potential model that would move the risk of funding litigation away from taxpayers, whilst ensuring that the Office of the Public Trustee's functions are still carried out. The Committee will make a further announcement on the details in due course, but I hope that Members will agree that is potentially very good news for Guernsey's taxpayers.
The Committee was briefed yesterday on research that it commissioned from Frontier Economics and Island Global Research to feed into the Committee's review of competition law and regulation. The intention is to complete the review before the end of the political term.
Conclusion
I hope that Members will agree that the Committee for Economic Development has made significant progress during this political term, notably on finance sector development, international trade, digital connectivity and enterprise, on air and sea connectivity and in relation to facilitating greater input from the tourism industry into the promotion of our visitor economy and from the Guernsey Retail Group in driving the retail sector forward.
I look forward to answering any questions that Members may have.