Air links issues could see business lost to Jersey
GUERNSEY could become an outsourcing centre for Jersey, unless the island’s air links issues are solved soon.
Guernsey International Business Association chairman Tony Mancini said that the perceived and real problems of the island’s air links – and how they compare with Jersey – came at a particularly bad time.
‘The unfavourable comparison with Jersey is crucial because of two wider and inter-connected developments in financial services,’ he said
‘Firstly, the new economic substance rules on both islands will require more business activity to take place on-island.
‘This will necessitate more travel to Guernsey and Jersey.
‘When a client has no other reason to choose one place over the other (and increasingly there are few differentiating factors), then they are likely to choose to put their business in the location to which they can travel the easiest.
‘Unfortunately, more often than not, this will be Jersey.’
A second factor of consolidation in the administration sector of the finance industry also came into play, said Mr Mancini, writing in the Business page of the Guernsey Press.
‘Five years ago, we had many locally owned and managed businesses who would automatically bring business to their home island. Now, those businesses are part of a global group with offices in most offshore finance centres and a centralised management function.
‘It is uncommon for those management functions to be centralised in Guernsey. This means that new business is likely to gravitate to the location where the service provider (the administration business) has greater capability, where it is easier to do business and where it is easier to travel.
‘More often than not this is not going to be Guernsey.’
Firms would still want to access on-island expertise for the foreseeable future, but Mr Mancini also said: ‘The real worry is that, if we cannot solve our air links problem soon, Guernsey will rapidly become an outsourcing centre for Jersey.
‘That is unlikely to be positive for the long term prosperity of Guernsey.’
Business Page 23