Charles Parkinson, President of the Economic Development committee, defends his use of a subsidy to Flybe (for providing a single flight a day to Heathrow for a number of months) on the basis of a resulting £3.3 million contribution to the economy. Hmm. Well, we do know for sure that it initially cost the taxpayer £800,000 (for 7 months, or about £114k per month). It is still running – since October 2019 – and we do not know (because ED won’t tell us), what the cost of that further subsidy is. However, it is safe to assume it will be around the same level (3 months @ £114k), so about £340,000. Let’s be generous though and say that to date – the subsidy has been £1 million.
Now Deputy Parkinson disputes the suggestion that the provision of the Heathrow service has damaged Gatwick passenger numbers and that instead, Aurigny have scored something of an own goal by competing on the Southampton route. He cannot currently demonstrate that to be the case of course and all we have to go on is Aurigny stating quite categorically that Heathrow certainly has hit their Gatwick numbers. Logic suggests that there has to have been at least some impact – if your connecting flights in London are from Heathrow instead of Gatwick, obviously you are going to switch. Or, if your business meetings are reached more easily from Heathrow via the available tube or rail link, why wouldn’t you also switch? But the fact is, we don’t yet know, so we will give Deputy Parkinson some leeway on his assertion.
So, let’s turn to the basis of Deputy Parkinson’s maths. He maintains that 11,000 passengers have used the service to date. That much must be fact? Assuming so, he then goes on to state that maybe two thirds will be locals and it follows that one third must be non-locals. He further suggests that all of this third (3666 passengers) must therefore be visitors (not business people of course, who wouldn’t be spending much more than a couple of taxi fares, perhaps an overnight and a meal). He tells us that “we reckon the average visitor …. spends about £560” (so £2,052,960 to date). So, deducting the (conservative) £1 million cost of the subsidy, the Island has ‘earned’ hard cash of £1,052,960 – at best.
Now we have to believe his ‘reckoning’ on there being an average £560 spend per visitor and we have to believe his ‘maybe’ one third of the passengers were these same visitors. We also don’t know for sure if the 11,000 passengers were all incoming, or if this represents a journey in both directions. No matter., we are being generous here. However, Deputy Parkinson then introduces his ‘1.5x multiplier’ concept, whereby that ‘hard cash’ of £1,052,960 is spent locally by those receiving it (not banked of course, or spent off Island on Amazon….). That yields £1,579,440 (less any subsequently proven loss to Aurigny and the taxpayer).
Of course, this is largely ‘back of a fag packet’ maths. But so clearly is £3.3 million…….