£800K subsidy is madness, says Blue Islands chairman
Monday 9th February 2009, 2:29PM GMT.
TAXPAYERS’ money is being used to subsidise airlines whether they want the extra cash or not.
Blue Islands chairman Derek Coates (pictured) said the blanket States policy of granting airlines a £1.05 concession for every passenger was an inefficient and inappropriate use of islanders’ cash that bordered on insanity.
He has decided to redirect his substantial share to local charity Les Bourgs Hospice.
‘If the government is willing to put money into a dustbin, I’m willing to take it out of the dustbin and put it to a worthwhile cause,’ he said.
He said he had been writing to States deputies, including former ministers Stuart Falla and Bill Bell, since 2005 about the issue.
The £1.05p per passenger concession, which used to be called route development funding, is awarded to airlines operating key routes excluding inter-island flights. But Mr Coates told the States he disagreed with the £800,000 system and did not want his airline to take part.
‘I believe that it is a complete waste of taxpayers’ money – I can see no benefit in it whatsoever,’ he said. ‘I don’t believe the subsidies will encourage new routes – it would be wrong for me to accept funds from the public purse if it would not be of benefit to our island.’
- To read Guernsey Press stories in full click here for subscription details. Individual editions are now available online.
Campaigns
Voice For Victims
Voice for Victims is a campaign aimed at promoting the rights of those affected by child sexual abuse.
The States may well need every bit of taxpayers cash, to help out Aurigny. Having already guaranteed the commercial £4.2m loan that Aurigny has fully utilised, combined with large losses for the year and the need for Aurigny to arrange further loan/s by March 2009, I cannot help thinking somewhere down the line the States may well be called upon to honour the guarantee thereby costing all taxpayers a lot of money.
Report abuse
A question!!
Have the States renegociated the loan interest rates for the Aurigny loan in light of all the recent interest rate cuts?
Similarly, States loans for other major projects (for example those in Health and Education). Have the rates been renegociated??
If they haven’t, then they are robbing Peter to pay Paul.
Report abuse
Good on you Mr Coates have you ever considered standing for deputy? maybe Chief minister.
Report abuse
Nice one Derek! I think standing for Deputy is also a brilliant idea.
Report abuse
AQ – The loan was arranged commercially, with the States as a guarantor, so if Aurigny are unable to repay the loan, the States will have to as they have underwritten it. The States therefore are not the ones setting the interest rate.
The States paid £5m for Aurigny, plus a potential liability for £4.2m, and as Aurigny require further funds, which I guess will also be underwritten by the States, further interest costs will add to the expenses.
I do not know how much of the grant money goes to Aurigny, but they will be needing as much as they can get whilst Blue Islands gives it away!!
Report abuse