Tory majority "best result for Guernsey"

Friday 13 December 2019

A majority party in the UK will finally bring certainty to Guernsey's economy and investors.

Senior figures in Guernsey have welcomed the results of the UK snap election, which saw the Conservatives secure a clear majority, ending the prospects of a hung parliament.

Chief Minister Gavin St Pier said a government with a substantial majority in the UK should now mean greater stability in the UK and increased certainty in regard to the direction and progress of Brexit matters. 

"What is most important for Guernsey is that there is now a government that has a stable and secure majority. This will bring an end to the political uncertainty and chaos which has been an unhelpful headwind for Guernsey in operating in that environment."

Pictured: Deputy St Pier said trade arrangements for Guernsey once protocol three falls away will be the island's "chief negotiating challenge in 2020". 

“The States of Guernsey has had a good working relationship with the UK government since the Conservatives came to power in the 2010 coalition. That relationship has strengthened further during the Brexit process since the UK’s 2016 referendum. I welcomed the assurances of the Prime Minister, in his letter to me in September that we will continue to be fully engaged throughout the remainder of the Brexit process, as the UK negotiates its future relationship with the EU."

Kevin Boscher, Ravenscroft’s Chief Investment Officer, said the result was a turning point for the UK.

"I think it is the best result for Guernsey and the Channel Islands because it is the best result for the UK in terms of the economy, financial markets and, indeed, probably for Europe as well," he said. 

The government now has a clear mandate to "Get Brexit Done" and that clarity, in addition to other Conservative policies, ought to usher in a more "business-friendly" environment. 

"It should unleash pent-up investment and consumer demand which has been delayed by the political paralysis."

"The Conservatives' plans to implement an additional fiscal stimulus worth £20bn and tax cuts, together with their business-friendly policies, would also provide an extra boost to confidence and the economy."

Pictured: Mr Boscher said his team at Ravenscroft have identified "a number of very attractive UK investment opportunities, which we will be looking to take advantage of on behalf of our clients as events unfold."

Mr Boscher, a frequent commentator for CNBS and Bloomberg TV, said there were some caveats to that optimism. One is that once the Withdrawal Agreement from the EU is passed, Mr Johnson will still need to strike a new trade agreement with the EU and finalise transition plans. 

Secondly, the UK is not immune from the global economic slowdown and political problems elsewhere in the world, which have an effect on investor confidence. 

On the domestic front there are some issues as well. The country is struggling with many of the secular trends evident in other developed economies, namely ageing demographics, disappointing productivity, rising debt levels and weak median income growth.

Exceptionally good news for Uk, Guernsey, business and stockmarkets ???????? https://t.co/bTfYbvzIM9

— Pierre Blampied (@pvbsc1) 13 December 2019

Pictured: Pierre Blampied, Managing Director of SPF Private Clients, said it was a good result for Guernsey. 

A standout election result for the SNP will also lead to more calls for a second referendum over Scottish independence.

Any event that gives rise to uncertainty in the UK has a knock-on effect on the Channel Islands and Mr Boscher said the Prime Minister has the crucial and challenging task of healing divisions and re-uniting the UK. 

"From a local Channel Islands’ perspective, where Ravenscroft is headquartered, and of course putting aside any political allegiances, this is also a good result. It’s true that we face similar economic and social challenges to many developed countries and need to heed the warnings from global events and deal proactively with our own issues. However, the islands are generally considered to benefit from a stronger UK economy and higher sterling asset prices.

"Although it can be argued that a different result might have seen an influx of wealthy individuals into the Bailiwicks of Guernsey and Jersey, we can still compete very effectively to attract strong interest from people wishing to move to, or invest in, the islands.  In the meantime, low interest rates, a more stable UK political platform and improved confidence will also support our local economies. 

Pictured: Deputy St Pier recently had the opportunity for a brief conversation with Jeremy Corbyn, who has this morning resigned as Labour Leader after the party's worst election result in decades. 

"In conclusion, we believe that a Conservative majority is the best outcome for the economy’s  prospects and for UK assets. Indeed, it could be a watershed moment for the UK, although we are conscious of the challenging global macro backdrop and will be watching how policies evolve over the next few months. It should also remove some of the uncertainty around trade and Brexit policies for the wider European economy."

Pictured top: Boris Johnson.