Channel Islands: Too Much Red Tape Could Spell Bad News For Business

Lisa Ugur, Tax-news.com, London

20 July 2000

At a Guernsey Chamber of Commerce Luncheon, John Averty, the chief executive of the publishing concern Guiton Group, issued a stern warning to both the politicians and the buisnesses of the Channel Islands, stating that too much regulation from the Guernsey and Jersey local governments against monopolies could spell bad news for the islands.

A sombre Mr Averty said 'If our politicians get it wrong then it will be costly to the consumer and have a significantly adverse economic effect on the community, and nearly everyone who lives in it. At a time when competition restrictions worldwide are being reduced, and takeovers and mergers allowed on the basis of the worldwide rather than local competitive situation there is a significant danger in attempting to over-regulate a small community.'

Mr Averty, a former Jersey States member, said that there was already an indication that Jersey was moving towards a greater amount of red tape, mainly aimed at monopolies. Mr Averty himself works for a newspaper publishing monopoly in the Channel Islands and has witnessed first hand how businesses can be affected by government rules and regulations. He said that Guiton Group has to operate under a whole range of monopolies and mergers legislation not faced by other businesses within the islands. For example, Guiton, by law, is not permitted to own more than 20 per cent of Channel Television or 20 per cent of commercial radio in Guernsey, or five per cent of commercial radio in Jersey.

Mr Averty said that the governments of Guernsey and Jersey were only just dipping their toes into the water as far as discussions on the privatisation and commercialisation of state monopolies was concerned: 'However belated, the move to commercialisation has meant that our leaders have had to focus with greater clarity on their regulatory responsibilities. Where it was once acceptable for our island governments to effectively ignore monopolies, regulations and competition rules on the grounds that the most important of these were owned by the States, there is now a clearer understanding, perhaps prompted by the Edwards Report, that the state controller should not also be the regulator.’

Mr Averty was clear to point out that there is a very big difference between monopolies resulting from market forces, such as consumers gravitating towards one particular newspaper, for example, and those created by law. He said ‘I acknowledge that there need to be some changes, but I would start with those monopolies that are protected by law. I perceive a big difference between companies that are effectively monopolies because there is no economic alternative and those that exist because the law says so. But, given that most of those are state owned, will the turkeys vote for Christmas?’

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