Wednesday 05 February 2020
General Update
Sir, I will provide an update to Members on some of the key areas of the Economic Development Strategy where progress has been made.
Transport connectivity remains one of the Committee's critical priorities.
Since the introduction of the policy of quasi open skies agreed by the Assembly in September 2018, we have seen the launch of a number of new air routes, including: London Heathrow, Edinburgh, Southend and the announcement of a new Newcastle service for summer 2020. We will also see new charter services launching from 16 German airports including: Berlin, Hanover, Dortmund, Dresden and Frankfurt.
During 2019, overall airport traffic has seen a number of record months, with a total of 858,000 passenger movements through Guernsey Airport in 2019 - that is an increase of 6.1% compared to 2018, after many, many, years of decline.
The London market, in particular, has shown strong passenger growth of 4.5% in 2019, following the launch of the new routes to Heathrow and Southend, in addition to the existing routes to Gatwick and Stansted. Southampton also saw a significant increase, with an additional 28,300 passenger movements in 2019, compared to 2018, an increase of 24%.
The Heathrow service saw over 27,600 passenger movements on the route to the end of December 2019. The service is currently scheduled to operate until the end of March, but unfortunately, the route will not continue into the summer season due to a lack of available take-off and landing slots at Heathrow airport. The Committee will continue to work with Virgin Connect to identify slot opportunities for the 2020 /2021 winter season, and will aim to resume the Heathrow service if an appropriate opportunity arises.
With so many new routes being trialled it was inevitable that some of those new routes would need to be reviewed. Last month Blue Islands announced that they would cease operating their services to Southend and Liverpool. However, I am pleased to report that Flybe has announced that it proposes to operate the Southend route from the beginning of May.
Overall, consumer choice, connectivity and passenger numbers have all increased significantly since the introduction of the quasi open skies policy agreed by the Assembly in September of 2018.
The Committee is developing a business case and cost benefit analysis for the extension of the runway at Guernsey Airport to create a runway of at least 1,700m. I would like to take this opportunity to pay tribute to Deputy Kuttelwascher who laid the requête that led to this work.
I can announce today that the Committee has commissioned Frontier Economics to undertake the Economic Impact Analysis and the Social and Environmental Impact Analysis of the runway extension. Consultancy firm RPS has been commissioned to undertake the Cost and Engineering analysis. The total cost of these three pieces of connected work will be £181,650, which is significantly less than the £360,000 approved by the Assembly. Once the Committee has received these reports, it will report back to the Assembly by the end of this political term.
Members will be aware that the Committee oversaw the tendering of the Public Service Obligation for the Guernsey to Alderney air route. The Committee has made a recommendation to the Policy & Resources Committee, whose President has confirmed that it intends to bring a Policy letter to the Assembly by April 2020.
The Assembly will also be aware that a consortium of Brittany Ferries and Columbia Threadneedle Investments has bought Condor Ferries, although the sale is still subject to regulatory approval. In the meantime, the Committee continues its dialogue with Condor and the States of Jersey to agree the service level improvements and fleet investment and re-tonnage plans necessary for both governments to consider an extension to the current 2014 Condor Operating Agreement, and for Guernsey to become signatories to that agreement.
The Committee has engaged with industry representatives and has agreed a Guernsey Tourism - Ten Point Plan 2020-2025 which was published recently.
I am pleased to report that the high value Staying Leisure Visitors numbers were up by 2% to 123,000, for the period January to September 2019, helped by the additional marketing around the Guernsey Literary and Potato Peel Pie Society movie and the reopening of Hauteville House. The Committee has also made a modest investment in the new Toilers of the Sea film, based on Victor Hugo's book, which is intended to be filmed in Guernsey.
Total visitor numbers, including cruise and visiting yachtsmen, was very slightly down by 1%, when compared to the same period in 2018. The Total visitor numbers were impacted by a high number of cruise ship cancelations due to adverse weather, however a very healthy 47% increase in visitors from France to 28,000 contributed to the slight increase in Staying Leisure Visitors.
General confidence in the Tourism sector is improving, with firm proposals to develop buildings owned by the States in St Peter Port for the benefit of tourism. I am also pleased to see that the work by Premier Inn to build a new hotel in St Peter Port has commenced and, if all goes to plan, we understand that they are aiming to open the hotel later in 2021.
The Committee continues to look at ways of diversifying the economy, including the development of plans for an international university presence in Guernsey. In May 2018 the Committee welcomed overseas representatives from universities from Australia, Slovenia, Canada and the UK, as well as other local stakeholders who are interested in working in partnership with Guernsey on this exciting project.
The Committee has now agreed to commission a study from Oxentia, Oxford University's global innovation consultancy, into the feasibility of the International University. Oxentia have a strong track record of undertaking research in the higher education sector and based on the outcome of this work, the Committee hopes to bring more detailed proposals back to the Assembly.
The finance sectorremains the engine of our economy, with excellent work being performed by industry, Guernsey Finance, the GFSC and government - in partnership - to develop our offering, in order to maintain and grow the sector.
The Committee has also commissioned an update of the Capital Flows report, which sets out the contribution made by Guernsey's fund sector to the UK and EU economies. This will enable Guernsey's world-class finance centre to demonstrate its positive contribution to growth and prosperity in the UK and Europe - a critical task in the post-Brexit economic landscape.
The Committee has made amendments to competition legislation to enhance the governance of the Guernsey Competition and Regulatory Authority and will present a policy letter to the Assembly to ensure that the competition regime remains fit for purpose in the medium to long term.
Legislation implementing amendments to the insolvency provisions of the Companies Law have been enacted and, at the request of industry, the Committee has been progressing the development of Limited Liability Companies and intends to present a policy letter to the Assembly, before the end of this term.
The Committee, in conjunction with the Policy & Resources Committee, will bring a policy letter to the Assembly, in respect of a new Credit and Finance Law designed to provide better consumer protection, in relation to the non-bank provision of credit and will present legislation, before the of the term, to increase depositor protection in the event of bank failure.
Locate Guernsey continued to promote Guernsey to high net-worth individuals and business owners. In 2019 it was directly involved in 35 relocations with a total financial benefit to the island of at least £1.2 million in document duty alone. Enquiry levels also increased significantly, demonstrating rising interest and confidence in Guernsey, as well as growing awareness of the Locate Guernsey brand. The agency has ambitious plans in 2020 to build on the success of the past four years.
In the Economic Development Strategy a commitment was made to review Guernsey's approach to supporting start-up and scale-up businesses. Having undertaken that review, the Committee announced a new partnership approach to fostering entrepreneurship by establishing a collaboration between the Digital Greenhouse, Agilisys and Barclays Eagle Lab, along with potential involvement from the Chamber of Commerce.
This new model provides a significantly greater breadth and depth of support to local entrepreneurs than was previously available. The activity is co-ordinated by staff at the Digital Greenhouse who will be the first port of call for local entrepreneurs.
The Economic Development Strategy prioritised digital connectivity and the acceleration of next generation digital infrastructure in Guernsey. In May 2018 the Committee set out its telecoms strategy objectives which include the provision of high speed residential broadband; the process for the roll-out over time of an island-wide 5G network, including setting out licence conditions and criteria; and the provision of fibre to businesses. I can announce today that the Committee will bring a policy letter to the Assembly by the end of 2020 on the policy on 5G technology, with specific reference to the licence conditions and criteria.
As you will appreciate, there are many other work streams being undertaken by the Committee, but I trust this has been a valuable update for Members of its main areas of focus.
