Aviation Strategy

Written evidence from the Government of Guernsey (AS 96)

I am writing on behalf of the government of Guernsey in response to the Transport Select Committee’s call for evidence relating to its inquiry into UK aviation strategy.

The Committee’s advice on providing evidence is to keep submissions short and relevant; therefore this submission is deliberately concise. However, we would value the opportunity to elaborate on the issues below and further discuss aviation issues of relevance to Guernsey, and will be in touch to arrange a meeting in due course.

The government of Guernsey is simultaneously responding to the UK Department for Transport’s (‘DfT’) consultation on a draft Aviation Framework. In responding to the Committee’s call to evidence, we would reiterate the main points we will be making to the DfT:

· The maintenance and development of air links between Guernsey and the UK is to the economic advantage of both jurisdictions. These links, particularly between Guernsey and Gatwick, enable significant business flow between Guernsey and the UK and in particular the City of London. The relationship between London and Guernsey as international finance centres is beneficial not only to the island but also to the City of London and wider UK economy. Evidence for this can be found in the 2009 HM Treasury-commissioned independent ‘Review of British offshore financial centres’ undertaken by Michael Foot CBE ("the Foot Review"). The Foot Review explained that the Crown Dependencies of Guernsey, Jersey, and the Isle of Man make a "significant contribution to the liquidity of the UK market". The Foot Review found that at the end of June 2009, UK banks had net financing of approximately $74.1 billion from Guernsey in addition to $218.3 billion from Jersey and $40.1 billion from the Isle of Man. The finance industries in the Crown Dependencies also generate significant professional fees for UK lawyers, accountants, fund managers, compliance and advisors, and the Crown Dependencies are an important factor in London’s pre-eminence as a global financial centre. However, Guernsey is also connected to the wider "UK plc" and there exist clear mutual economic benefits in areas such as renewable energy, creative industries, intellectual property and the digital economy.

· The central role of economically viable links to a London hub/gateway airport, particularly Gatwick, in the economic relationship between Guernsey and the UK cannot be underestimated. However, the financial pressures placed by the operators of Gatwick Airport on short-haul regional carriers such as those serving Guernsey present a real challenge to the economic viability of these routes. The government of Guernsey acknowledges the ability of Gatwick Airport Limited to set charges under the Civil Aviation Authority’s price cap. However, the government of Guernsey would reiterate that current slot allocation arrangements at major UK airports, London Gatwick in particular, must take into account the economic and social interests of regions such as Guernsey by reserving slots for existing regional services and enabling a proportion of any slots released to be reserved for new entrants that wish to extend such services.

· As a small island community, Guernsey depends on commercially provided regional air services to the UK for a significant amount of its economic, cultural and social well-being, as well as for the support of public service delivery in areas such as health and education. Guernsey depends upon its connections with the UK mainland and specifically into London Gatwick. Last year, 177,533 passengers flew from Guernsey to Gatwick. Guernsey passengers use the Gatwick route not only to access the capital city but also for onward connections to other areas of the UK and around the world.

· In developing an aviation strategy, we would respectfully encourage the UK Government to balance economic, social, and environmental issues. The government of Guernsey would take this opportunity to reiterate that Guernsey’s year-round lifeline air links with the UK are provided by regional airlines, which operate smaller, quieter, and less polluting aircraft than those used by long-haul international carriers.

24 October 2012