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Statement by the President of the Committee for Economic Development

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Wednesday 27 June 2018

On behalf of the Committee for Economic Development, I am very pleased to have the opportunity to introduce the States of Guernsey Economic Development Strategy.

I use that phrase because, as the policy letter affirms, it was the States Assembly that tasked the Committee with the following:

"To secure prosperity through the generation of wealth and the creation of the greatest number and widest range of employment opportunities possible by promoting and developing business, commerce and industry in all sectors of the economy."

I note that the objective goes beyond simply growing GDP. We could grow our GDP simply by expanding our working age population, but that might not lead to an increase in GDP per capita. The key to raising living standards lies in productivity, in making the best use of the resources available to us. This will probably require selective immigration, to allow recruitment of those with special skills and the ability to act as catalysts to enterprise and innovation. But the key to greater prosperity lies in enhancing the productivity of the island population.

Our strategy therefore focuses on high-value-added businesses, and the economic enablers that will allow us to compete in those areas. It is not a simple task to exploit the opportunities and there are many factors that need to be addressed to make this possible. Our strategy therefore contains 20 priority areas. Some have criticised this as too many 'priorities' - of lacking focus. But there are no magic bullets. If fixing 5 issues would deliver the more productive economy that we want, we would concentrate on those projects. But if it was that simple, every government in the world would have cracked the problem of raising productivity. And manifestly that isn't the case.

In order to achieve increased productivity, the strategy we have set out proposes:

The strategy has been welcomed, by the business sector. The Guernsey International Business Association, GIBA, said:

"We are encouraged by this ambitious strategy document and the recognition that targeted investment in the economy is appropriate. Many of us have a "glass half empty" attitude and to the extent that this spills out of the local community, from the letters page of the Guernsey Press to social media and the wider international community, this certainly doesn't help in attracting business here - indeed, it has the opposite effect. Whilst there are undoubtedly many challenges, there is still plenty to be positive about. We therefore welcome the recognition of the need to promote the many reasons to be positive."

I am pleased to inform the States that partnerships are already in place in many areas:

So we have set out 20 actions. But we are not at ground zero with all of them. In fact we are already making progress with many of them.

Next month the States Assembly will debate the Air Transport Licensing Framework policy letter. Over the past six months we have consulted with commercial operators and businesses on the framework, and we are proposing taking a big step towards open skies. We believe this approach can play a part in attracting operators and developing new routes. A tender document on the PSO routes is being finalised and will be published within weeks.

On sea links we are planning for every eventuality, depending on the situation following the proposed sale of Condor by Macquarie. Officers are in regular dialogue with their counterparts in Jersey, and I have already spoken to their recently re-elected Economic Development Minister.

Last week we published the telecommunications sector strategy, the result of close consultation with the telcos and CICRA. We have stepped up the work on the digital strategy, investing in the Digital Greenhouse from the Future Guernsey Economy Fund. This work has been undertaken in close collaboration with the Committee for Home Affairs, and the Policy & Resources Committee.

We are re-evaluating the scope and objectives of Locate Guernsey. The types of businesses that we most want to attract are 'scale ups' in high value added industries. In this context, the term 'scale-ups' means existing businesses that are seeking to expand. The types of people we want to attract are ambitious entrepreneurs who want to take advantage of the work/life balance Guernsey offers - a high quality of life in a safe, conveniently-connected location with a low-tax and professional environment. We are already discussing with the Open Market Forum how we can make the open market more attractive to high net worth individuals. And Locate Guernsey will be repurposed to focus on the people and businesses that we want.

We are now developing a revised tourism strategy, which will build on the PwC review that was commissioned by the previous Committee. It will also be informed by the P&R-sponsored strategic review of air and sea link infrastructure.

We are in the process re-evaluating the retail strategy, working with the Chamber of Commerce and retailers.

We are finalising a skills strategy, through the work of Skills Guernsey and in consultation with industry. We will be meeting with representatives of the Committee for Education, Sport & Culture to discuss this in July.

And not only are we close to finalising the terms of reference of the red tape review panel, we are also putting in place the foundations to begin a long overdue piece of work, with Policy & Resources, on a establishing a jurisdictional risk appetite.

In short, there is progress on many fronts, and it is progress built on partnership. We will be taking steps not just in the next two years of this term, but in the next six months of this year.

Sir, there is much that Guernsey can feel positive about.

Our critical strengths will continue to include constitutional stability, the rule of law, substantial human capital through a well-educated, highly-skilled population, nimble decision making, the English language, a safe and secure environment, a time-zone convenient for global business, and world-class digital connectivity.

But we must also be mindful of external challenges. We face the fallout from Brexit, the European Commission's Code Group, changing international standards, and geopolitical turbulence to which our economy will not remain immune.

These challenges mean we need to think long-term. We need to maintain and grow what we have, but we also need to diversify.

That is why we are recommending further and more focused work on a number of new or emerging opportunities.

These are not unconnected areas or disparate ideas. Many of them are synergistic, and would therefore support each other. Much further work is needed before we can form a view on where our resources would best be focused, but we plan to exhaust every avenue in our investigations.

The policy letter is intended to be high level. Much of the detail will come back to the States, as policy letters, or update statements, and that is set out in the schedule which was circulated to States Members by email at the beginning of this week. Hard copies of the schedule are available in the Members' Room. A full and detailed delivery plan is also being finalised by officers, which will set out how the actions and strategy will be delivered. These are operational plans, which do not form part of our Policy Letter and we don't propose to debate them.

Two final points I want to emphasise on behalf of the Committee. The first is that whilst the Committee is part of the States of Guernsey, it recognises our economy is linked closely to that of Alderney - with which we are effectively in fiscal union - and of Sark. The Committee will remain cognisant of the mutual benefit of Guernsey, Alderney and Sark working together in areas of mutual interest.

The second follows on from a meeting that members of the Committee Deputy Tindall and Deputy De Lisle, and officers, had with representatives of the Equality Working Group last week. The Equality Working Group set out how greater diversity and inclusion can also be a contributor to economic growth and increased productivity, and we will work with the group to support their aims, so as to create an inclusive as well as a successful economy.

To conclude, we have a clear set of objectives. We have a plan of actions that will help us to achieve those objectives. We have a commitment to partnership and collaboration that is already being established. We are already making progress.

The States Assembly has the opportunity today to send out a signal to stakeholders in our economy and to our important markets - Guernsey is open for business.

I invite Members to join with us in taking that opportunity.

 

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