At the December 2013 States meeting, Commerce & Employment presented a report requesting additional funding to Guernsey Finance from the Strategic Development Fund. I am delighted that it received unanimous support and topped off a successful couple of weeks for the Department. My speech is below.
Sir, A few months ago we gave the go ahead in this Assembly for approximately quarter of a billion’s worth of pipeline capital projects. That was the easy bit. The hard bit is finding the money to pay for it. Yes we can look at taxing more but that can only go so far. If we want to spend money on new schools, deep water berths and maintain and improve our health and education services, we need to be proactive and bring more money into the island.
While we do need to focus on developing new industries, and it will be giving nothing away to say that this is a key part of the Economic Development Strategy that will be made public early in the new year, such initiatives are not going to result in immediate changes to our economic structure. Neither can we expect them to completely replace our finance industry. An industry we should be proud of by the way.
So what do we mean by the finance industry? Well its not one amorphous lump. Just as we talk about retail as being one sector but in actuality covers a huge variety of different business types, so too the finance industry is incredibly varied and probably more so in Guernsey than anywhere else in the world. The depth and breadth of Guernsey’s offering is an extremely big selling point and explains why the multiplier effect of new business in this sector is so great.
This goes beyond the 4 main sectors of banking, funds, insurance and fiduciary. Just a quick review of the Guernsey Finance website provides a clear understanding of what we can offer. These include cleantech, family offices, captive insurance, intellectual property, investment management, custody services, foundations, private equity, commercial insurance, managed trusts, limited partnerships and a recent addition, image rights.
It is this breadth and depth that has probably protected the Island during the recession better than many other jurisdictions.
And the entrepreneurism and innovation continues to evolve.
On Monday I attended the launch of the new Channel Islands Aircraft Registry, an initiative that has the very real potential of delivering positive benefits to our finance industry. However, it’s all very well having a great new product, but we have to tell the world about it and demonstrate that Guernsey can provide a full suite of support services for the high net worth individual and others on the back of it.
We need to get our message out there. What we have on our side is the years of expertise, local talent and innovative approach but we have to actively demonstrate it’s worthwhile coming to Guernsey versus all our competitors across the globe. We can’t expect to have business beating on our door anymore.
Life is very different from a decade ago. There is more competition for a start and sources of new business have shifted. We need to be constantly ensuring we adapt and are not left behind.
And the value of Guernsey Finance is showing a joined up approach. It is all very well businesses going out there individually, which many do and will need to continue to do, but what Guernsey Finance can do is show Guernsey is open for business – demonstrate stability in the jurisdiction and a welcoming attitude to those that provide business opportunities that will benefit us.
The present funding levels might be ok if nothing had changed but it has. We have to seek out new markets whilst at the same time maintaining our existing relationships. If we are going to fund Guernsey Finance we need to ensure it is funded properly for today’s reality. Otherwise we end up with an unsatisfactory compromise when our competitors are pouring money into their equivalent organisations. These include Luxembourg, Dublin and Malta. Closest to home of course is Jersey Finance, which earlier this year was granted £4m and we are told it can expect more.
To me paragraph 47 in this report says it all. The application of resource at the right time is a key factor in success that is widely recognised. GF’s assessment is that delays in initiating work to raise awareness and establish networks in target jurisdictions is placing the Island at a competitive disadvantage. Entering markets later is more difficult , more expensive and less effective.
Speaking to senior members of the finance industry it is clear that they believe GF has a major role to play. In particular the following 3 areas of work were considered crucial;
1. by adding significant value to the various Industry associations such as AGB, GIIA and GAT.
2. by organising forums where industry can come together to discuss new opportunities for the jurisdiction, including issues such as where new market opportunities are emerging and considering where Guernsey could introduce new legislation to take advantage of developments internationally. Here GF both facilitate and provide insights from their international discussions especially based on their access to foreign governments and industry associations (this is especially the case in places such as China where regular visits and high level contacts have developed relationships which would not be accessible to industry representatives directly.
And finally 3. Through international Seminars and workshops GF delivers events where local industry professionals can showcase the finance sectors’ key attributes particulary new developments and local responses to international developments such as AIFMD or FATCA.
So, it is not just about selling Guernsey. It is finding out what is happening in the marketplace, what our competitor jurisdictions are doing, where the gaps are and ensuring Guernsey is on the ball.
If Guernsey is to continue to be the innovative centre it is in the future, we need to invest now.
If a job’s worth doing its worth doing well and I urge members to support this report to enable Guernsey Finance to do just that.