Hansard of Oral Evidence: 10 Oct 2012 Department Of
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S T A N D I N G C O M M I T T E E O F T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L B I N G V E A Y N T I N V A A L P R O C E E D I N G S D A A L T Y N ECONOMIC POLICY REVIEW DEPARTMENT OF ECONOMIC DEVELOPMENT HANSARD Douglas, Wednesday, 10th October 2012 PP116/12 EPRC-ED, No. 1 All published Official Reports can be found on the Tynwald website www.tynwald.org.im/Official Papers/Hansards/Please select a year: Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. © High Court of Tynwald, 2012 STANDING COMMITTEE, WEDNESDAY, 10th OCTOBER 2012 Members Present: Chairman: Mr L I Singer MHK Mr D M W Butt MLC Mr R H Quayle MHK Clerk: Mr R I S Phillips Business Transacted Page Procedural ................................................................................................................................... 3 Evidence of Hon. J P Shimmin MHK, Minister for Economic Development and Mr C Kniveton, Chief Executive, Department of Economic Development ............................... 3 The Committee sat in private at 4.11 p.m. _________________________________________________________________ 2 EPRC-ED STANDING COMMITTEE, WEDNESDAY, 10th OCTOBER 2012 Standing Committee of Tynwald on Economic Policy Review Department of Economic Development The Committee sat in public at 2.30 p.m. in the Legislative Council Chamber, Legislative Buildings, Douglas [MR SINGER in the Chair] Procedural The Chairman (Mr L I Singer MHK): Can I welcome everybody here. The Standing Committee is taking evidence today on the matter… well, certainly to mention the development of the space industry in the Isle of Man and other matters relating to the responsibility of the 5 Department. I would like to welcome the Minister of the Department of Economic Development, Mr Shimmin and also the Chief Executive, Mr Kniveton. The members of the Committee are myself as Chairman, Leonard Singer; Mr Dudley Butt MLC; Mr Howard Quayle MHK; and our secretary, Mr Roger Phillips. 10 Can I ask, first of all, if anybody who has a mobile phone turns it off because they do in fact interfere with the recording for Hansard and can I also ask – I do not think it will happen today – members and witnesses not to talk over each other, because of the sound recording. The Committee covers the policies of the Department of Economic Development, Treasury and the Chief Secretary's Office and at least once a year, we do interview the Minister from each 15 of these Departments. We can see them as well during the rest of the year, if we wish. EVIDENCE OF HON. J P SHIMMIN MHK AND MR C KNIVETON 20 Q1. The Chairman: So, in welcoming you today, Mr Shimmin, could I ask you, first of all, to outline to the Committee what you have been doing within the Department within the last 12 months? We know that you have got a great responsibility on your shoulders for economic development, for bringing in new business to the Island. Can you tell us what you have done over 25 the last 12 months, particularly relating to new streams of business and what are you looking to in the next 12 months, which is obviously a very important time of this Government session? The Minister for Economic Development (Mr Shimmin): Thank you, Mr Chairman, thank you, Committee. 30 We are in unprecedented times and the Department that I am delighted to be heading at the moment has spent the last 12 months across a whole range of the 20-plus sectors that we are responsible for and much of that in the Isle of Man, like in other countries in the Western world, is going through difficult financial times. The ability in the past for the Island's private sector and indeed Government to benefit from a strong economy, has meant that we have had almost full 35 employment and that we have been successful in whole range of areas of growth. Our employment levels have been at record highs and indeed, there was a significant change since 2008 and increasingly again with the impact of the VAT, which means that Government, my Department and the private sector have all had to adjust their operations in order to deal with the effects and factors outside of our control. 40 The Department has strategically been attempting to ensure that our business that exists on the Isle of Man, whilst looking to rationalise its own propositions, makes sure that they see the Isle of Man being the centre of the whole of their business, which is particularly important in those businesses that have multi-jurisdictional operations and for that, you could think of the banking as _________________________________________________________________ 3 EPRC-ED STANDING COMMITTEE, WEDNESDAY, 10th OCTOBER 2012 a clear example, but indeed, many of our businesses have satellite or headquarter operations 45 elsewhere. So the priority from my side is to understand the issues affecting all the diversity of the private sector areas, to ensure the stability of those businesses that are already here, while at the same time attempting to grow and invest money coming to our Island by those wishing to develop business opportunities. 50 At the Liberal Democrat meeting that I attended last week at their conference, I was sitting at a table with Vince Cable and about 20 business leaders in the United Kingdom and it was very clear that none of them had solutions to the economic problems facing the UK in particular, but indeed the whole European area. There is no solution to the difficulties we find ourselves in. Businesses large and small are adjusting to a new regime, where their expenditures are constantly under 55 pressure and their income streams are being squeezed from a variety of factors. So it would be unrealistic for the Isle of Man to consider that we are not going to be impacted, as much of our business operates through and with the United Kingdom and therefore any of the economic challenges they have will have an impact on many of our businesses. What we have therefore been doing is developing and finalising our country strategy to 60 identify those opportunities that exist both in the United Kingdom, but almost globally to see where there is new business can still be successful and be attracted to the Island, to work with my colleagues in Treasury and the Chief Secretary's Office in order to ensure that there is working cohesion with the banking and financial services sectors on the Island to deal with the many international factors that are affecting us and we have been, we would argue, successful in 65 stabilising many of the situations in the Island, but also having a regular amount of contact with people on and off the Island looking to invest and to develop opportunities. The fruition of those will be the real acid test. Many of those are beginning to come forward already with regard to some of the movement of high-value individuals bringing business to the Island. There are areas within the clean tech, 70 biotech area that are very keen to centralise and headquarter in the Island and they are making progress. We have had success with one of our best coping sectors, which is engineering and we are again growing new business in that area. But each of these opportunities and challenges throw up risks and we can talk quite happily about many of those with regard to engineering and the demographics of the workforce. We have a 75 conference today, which is attended by 160 business and educationalist leaders around the Island to try and ensure that our education service provides employers with what they require to be successful and, indeed, to assist the schools, to ensure that they give young people the best chance and opportunity of getting on the ladder. So if I was to summarise – I could talk for hours as you are all well aware – the reality is that 80 jobs are the fundamental biggest challenge that we have on the Island at the moment. Protecting what we have already got, growing and finding ways of getting the skills necessary of our young people, and indeed attracting those skills that will develop the economy of the Island. So we are working closely with our partners inside and outside of Government to deal with the problem for those not in employment, education and training. We are working with the schools and with the 85 College, to try and ensure that we can provide and equip our young people with the opportunities to be successfully contributing to society, both for their benefit and also for the general economy. If I stop at that point, you can try and see if anything there was interesting enough to come back and ask me about. 90 Q2. The Chairman: So that was in the past, really. Tell us what you are now projecting for the next 12 months. If there is anything different or new streams etc. The Minister: Yes, there are, but a number of these are at a sensitive stage and I will reflect on the successes, whenever the Committee calls me in, that we have actually achieved and landed 95 some of these. I do not wish to pre-empt certain aspects where negotiations are at a delicate level because it would be inappropriate and some of the companies, and indeed the sectors that we are working with, will be able to be identified.