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Statement by the President, Committee for Economic Development

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Wednesday 08 September 2021

General Update

Sir, Members of the States

It's nearly a year since the Island's first Island Wide Election and our Committee has, over the last 10 months or so, bedded itself in well as a functioning Committee.

And I'm grateful for the commitment from all of my members for their efforts to push through our individual manifesto commitments on digital, tourism, skills, and finance. And it's those areas  that I will turn to today.

Finance Sector

The Committee has worked closely with Guernsey Finance to provide additional funding and to ensure that every pound spent will be focused on clear and measurable priorities. The additional funding will ensure that Guernsey remains a jurisdiction of choice for the international finance sector, but it will also be monitored to ensure public money is spent wisely.  I am confident that Deputy Falla, the Committee's nominated Board Member on Guernsey Finance, will keep his eye on that budget.

The Committee has marshalled a number of Policy Letters through the States, led by Deputy Moakes, on matters such as Block Exemptions, Consumer Credit and Low Value Debt Relief. Importantly for business and consumers we are working on reforms to Guernsey's Personal Insolvency law; by way of a Policy Letter we will ask the States to agree to the first stage of these much needed reforms in Q1 2022.  

Tourism

The hospitality and tourism sector accounts for only around 3% of the economy, but it's direct and indirect benefits to Guernsey and, importantly, the Island's carriers, cannot be underestimated.  A Guernsey without a vibrant tourism economy would be a lesser Guernsey indeed.

When I updated the Assembly in April this year, we were coming out of the second Lockdown. At that time the Committee had moved to an interim stage of tourism management and neither Deputy Vermeulen, as tourism lead, nor the Tourism Recovery Task Force had any idea what kind of season the Island would likely to have.

Happily, I can tell you that both Guernsey and Alderney are having a season.  I would like to thank members of the CCA and Public Health for their outstanding work in opening the borders and giving the industry what it so desperately needed.  

Occupancy levels for August are around 72%. And there is every indication that September will be at similar levels and the industry is reporting strong levels of interest for 2022.

Cruise Liners - 2022

I can also report to the Assembly that there are currently over 120 cruise liners booked in to visit Guernsey in 2022 and not withstanding border controls, it's looking like a bumper year. The world economy is bouncing back, Guernsey is a destination port, and this is indeed very good news for the Island.

Staff

I also want to thank the Committee for Home Affairs, the Population Management Office and the GBA for all the work that they are doing to support the hospitality sector and other sectors in terms of easing recruitment issues.

The Committee is working with the Guernsey Hospitality Association to develop a marketing campaign to help recruit much-needed staff for the sector. For general staff, the campaign will launch in January to help recruit for the 2022 tourist season.

For specialist roles within hospitality, the States will support efforts to expand into new markets.

Diversification

Guernsey's emerging cannabis sector provides us with the prospect of new businesses, new skills and new employment.

Since my last update, the States of Guernsey has successfully negotiated the Cannabis Memorandum of Understanding with the UK Home Office, formed the Bailiwick of Guernsey Cannabis Agency and announced that business can now apply for licences to cultivate for Cannabis Based Products Medicinal as well as CBD products.

We are pleased to note that the BGCA have already received seven license applications. These are the encouraging first steps of an innovative island opportunity.

2-Reg

I never thought I'd say this but I'm actually grateful for the challenge laid down by Deputy St Pier.

In my General Aviation update of November, he asked me if the Committee would review the 2 Reg offering; and I committed to coming back to the States with a response. With the help of Deputy Moakes, I can inform the Assembly that the review has been completed.

The objective be for 2-REG to generate direct profits for the State of Guernsey and for 2-REG to enable indirect incremental growth for the wider economy.

What that will mean - and what it will hang on - is our ability to renegotiate the contract with our service providers SGIG, who I must say are doing a great job in attracting new business.

I trust members will accept that I can't go into the detail publicly; but there is every indication that SGIG wish to work hard to make 2-REG an even greater success in the future.

The review has indicated that there will be some tough decisions along the way and we may not be able to provide all the services we have done to date. We are looking closely at the acceptance of new aircraft under 2700kgs in weight and are considering our position on Air Operating Certificates which are generally loss making. 2-REG will be remodelling itself with a strong focus on the larger, more profitable aircraft.

As 2-Reg has moved away from its original business model - the ability to sell private registrations to mainly local aircraft - to now becoming one of the world's leading on/off lease registers - it is right that we now look seriously at how we can leverage this unique position.

The Committee is of the view that the Registry is one of Guernsey's 'good will' generators and a jurisdictional differentiator; and I hope Deputy St Pier will be satisfied with that response.

The next step is now to conclude, with Jersey, the appointment of a new Director of Civil Aviation. I have directed officers to make this a priority. In the meantime, I thank the team who have stepped in for their effective and diligent approach.

Air Policy Framework

On the 26th of August the Committee agreed the draft terms of the new Air Policy Framework; it is a joint effort between Policy and Resources, our Committee and STSB.

What it will do is define the responsibilities for each of the Committees and give carriers - current and any others that may appear through quasi open skies - an assurance that there is a framework in place.

At a tactical level it will cement our Committee's position as route developers and will directs us to review the effectiveness of the current quasi open skies policy.

For Aurigny it will set out the long-awaited objectives for the airline and how it can support a future Tourism Strategy.

Runway

There isn't a speech that can pass through this Assembly that doesn't mention the runway extension at Guernsey Airport.

The work to update last year's Frontier Economics cost-benefit analysis in the light of the impact of the Covid-19 pandemic on air travel is completed. And there are changes to the modelling from the initial report, but the conclusions remain unchanged - over a 40 year period there is a projected net economic benefit from extending the runway.

However, we are working to understand how an extended runway of at least 1,700m could be delivered in practice and that includes looking into the technical and regulatory feasibility of options that would utilise an Engineered Material Arresting System (EMAS).

When we have the two reports the business case will be compiled and - as long as it stacks up - we will bring a Policy Letter to the States for your debate and final decision.

Telecoms and broadband

As the President of the Policy & Resources Committee has referred to earlier, the Committee and the P&R Committee will jointly submit the policy letter to the States on fibre to the premise. This comes from the work and recommendations of the Broadband Working Group.

The approach taken is a simple one. We have identified the most transparent and cost-effective way of accelerating the 100% roll-out of fibre. I hope that the States will take the opportunity to support this investment in our digital infrastructure. It builds on the work undertaken in the previous term and is, I am sure, a proposal that all of this Assembly can support.

Localisation

Deputy Falla has led the Localisation brief of the Committee. And the ship has started to turn. All external tourism contracts have been cancelled and that means to the local economy around and extra £500,000 being spent locally. Has the ship turned as quickly as I would have liked, the answer is 'no.'

But as we clear our decks in some areas of our mandate we will be taking a long harder look at the policies and procedures.

This Committee and its members are putting the Island before politics and will continue to work extremely hard to deliver on its mandate.

I look forward to questions from colleagues.

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