With the relationship between the islands under the spotlight of the new Bailiwick Commission and Guernsey having just confirmed its willingness to put up to £24m. into a new runway for the northern isle, its financial arrangements are of ever-increasing importance.
Alderney States member Alex Snowdon asked formal questions to try to confirm Alderney’s economic benefit to the Bailiwick exchequer.
He quoted figures from various sources estimating the e-gambling industry at between £32m. and £84m.
The best the States of Guernsey could do was tell him that ‘the economic contribution is likely to be higher than the last official published estimate (£27.8m.) but lower than the £84m. also published’.
‘Treasury has been engaged with the Alderney Gambling Control Commission over recent months and there has been an exchange of data and discussion centred on updating estimates.
‘However, data still requires testing and validation and agreement on a revised estimate has not yet been reached.’
The two islands have agreed to publish an annual estimate of the sector’s contribution to GDP, including personal tax and social security contributions.
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But this has become overly complex and Guernsey’s Policy & Resources Committee admitted that the last published figure was probably ‘significantly underestimated’. A new way of calculating the figure has not been agreed.
But data has shown that much of the sector’s tax contribution was paid directly to Guernsey.
‘It is estimated that there are at least 120 employees supported by the sector,’ P&R said. ‘Data suggests more than 90% of that employment is undertaken in Guernsey and it is estimated that the current tax and Social Security contributions total at least £2.5m. a year.’
Mr Snowdon said he had asked the question to clarify just how important the commission was to the economy of the whole Bailiwick.
‘Obviously there’s quite a big difference between those numbers, and I think we needed clarification,’ he said ‘However, whether it’s £27m. or £84m. or say halfway at £55m. it is still a lot of money for the Bailiwick. So I think it should really be welcomed, and it does show how important the AGCC is for Alderney as well as Guernsey and the whole Bailiwick, for creation of employment, taxation, and everything else.
‘If we’re looking at the whole taxation plan and where our incomes are and where our savings are, then I think understanding the economic benefits of the AGCC is an important factor. So I would welcome P&R, working with AGCC and the State of Alderney to have more of a detailed assessment made.’
The States said it was unable to confirm the provenance of the £84m. estimate of economic value. Alderney States member Edward Hill has admitted that he said it on stage at a European Bitcoin conference in Amsterdam last autumn.
He said it had come from preliminary figures shared with him by the AGCC and it showed that, contrary to what many believed, Alderney was very important to the Bailiwick economically.
‘They have still to be verified by Treasury but I have faith in them,’ he said.
‘Now Alderney’s gross income tax elsewhere is £8m. and our estimated deficit is £8.5m. but in fact we’ve been a massive contributor.
‘If you add these figures on to what was stated in the runway policy letter, a GDP of £61m., you’re talking about a per person capita contribution of about £135,000.
‘And the reason why this is so sensitive is because it completely changes the whole narrative about the deficit.’
Alderney paid £9m. into the Guernsey ‘pot’ in taxes and duties in 2024, and the AGCC contributed £1.59m.
Transferred services from Guernsey to Alderney cost more than £12m. and a further £2.5m. was paid in subsidy to Aurigny to operate the inter-island route, leaving Alderney in a deficit on paper of £8.2m.