Brexit: The Crown Dependencies (European Union Committee Report)

Lord Beith Excerpts

Tuesday 23rd January 2018 Lords Chamber

[Lord Beith (LD)]

My Lords, the noble Lord’s analogy of the ticking clock is appropriate, especially as noble Lords have referred to the amount of time that has already elapsed without many of these issues being settled. We are indebted to the noble Lord, Lord Boswell, for the report and his clear presentation of it.

I declare a minor interest in relation to Sark but my real interest arises from having spent time as chairman of the Justice Committee in the House of Commons working out how we could improve the constitutional relationship and the way it operates. Thanks to colleagues in the then coalition Government a great deal was achieved, except in one area—to which I will return—which was how international representation is handled. That was the one subject on which the Government did not accept our recommendation.

I endorse what many noble Lords have said about the issues that will be important to the dependencies. The Crown dependencies are not in the European Union but a great deal of their trading activity is affected by the EU. They are in the customs union under Protocol 3 and in the single market for goods, although not for services because they did not want to be. They benefit from free trade in goods with the EU and from the free trade agreements which the EU has with third countries around the world. They will need to be involved in whatever trade deals the UK makes with the European Union and with third countries.

As far as the EU is concerned, this has a direct effect in areas such as fish exports. The fish caught by fisherman from Jersey, Guernsey and Sark are exported primarily to France. That is also true for the fisherman in Northumberland. The French consumption of shellfish in particular means that it is a good market on which the Crown dependencies also depend. These are important issues and need to be resolved.

The most important trade and common travel relationship that the dependencies have is with the UK, but even that could suffer adverse and unintended consequences if matters are not watched carefully. Only the Isle of Man currently has what amounts to a customs union with the United Kingdom and WTO membership so far applies only to the Isle of Man and not to the Channel Islands. There are other areas where international treaties will be important—for example, in relation to intellectual property.

All the dependencies will have considerable legislative provision to put in place. It will not be as massive as the withdrawal and other Bills for us because it is a bigger change in our situation, but they will have legislation to get through. That will include all five legislatures. As the noble Baroness, Lady Pitkeathley, said, the small legislatures of Alderney and Sark will have requirements placed upon them and the law officers of Guernsey will be advising all three of the bailiwick territories. There is a lot of work to be done. How is that going to be managed in the timescale? Surely some transitional arrangements will be required for the dependencies if decisions are not taken until a late stage in the negotiating process.

As several noble Lords have pointed out, the free movement of people has been important. This is because all the dependencies have significant numbers of EU citizens. Some of them are working for international businesses and it is beneficial that they can move freely between the various offices of those businesses; many are working in the tourism industry—the long links, for example, between the Channel Islands and Portugal because of Madeira provide many employees in the tourism industry; and all the dependencies have the demographic problem of not having enough young people in their populations to meet the requirements of their successful economies. This is another area at which we have to look carefully.

These are just some of the issues touched on in the Lords report and in a report published at roughly the same time by the Commons Justice Committee on the implications of Brexit for Crown dependencies.

The Government have earned praise from the Crown dependencies for the way that they have been handling things so far. There is no doubt that there have been quite warm commendations for the engagements that have taken place so far. The problem is that we have not got down to the difficult business yet. Many questions are being asked, particularly about what the Crown dependencies can do to get into the appropriate trade negotiations, but we are at the point at which the Government themselves do not know what the outcome of the trade negotiations will be. It is not even clear what the Government’s own position is on these issues. Besetting our whole Brexit discussion is the fact that the Government are unclear. Do they want to be in the customs union and the single market? Are they serious about not being in either of them? When the Crown dependencies try to work out what their position is in relation to that, it is doubly difficult, so the engagement will not be tested properly until we are much closer to the deadline, but that is the point at which the interests of the dependencies tend to be unintentionally forgotten. That is what happened when the UK entered the European Community. It was only at the last minute, almost literally at the 11th hour, that Geoffrey Rippon agreed under considerable pressure to take the steps that were necessary to produce what we keep referring to as Protocol 3.

It is going to be extremely difficult when there is no real difference between the interests of the United Kingdom and those of the Crown dependencies, and I think that that will be the case on a lot of issues. But imagine the difficulties, to which my noble friend referred, when there is a real difference. As I indicated earlier, previous reports from the Justice Committee have sought to set clearer arrangements when there is a difference of view so that, for example, we can be certain that representatives of the dependencies are either outside the room or preferably in the room when their particular interests are being dealt with. The idea that the Minister can wear two hats is not convincing unless he brings with him people from the dependencies who can speak more directly to their interests. That was properly lampooned by my noble friend.

The Commons report to which I have referred states:

“Engagement encourages—but does not entail—representation, which could become awkward were the interests of the UK and the Crown Dependencies to diverge. The current approach does not guarantee that such a scenario would be handled satisfactorily”.


That is from the summary of the report on these issues. It goes on:

“We recommend that the Government clarify its position on representing any of the Crown Dependencies’ interests that differ from the UK’s own”.


This is a longstanding issue which was highlighted during the Icelandic bank crisis. That led the Justice Committee at the time to pursue it in some detail, but it is still not properly resolved. In difficult negotiations the United Kingdom might need to use some negotiating capital to protect the Crown dependency interests. None of us would want to see a situation in which Crown dependency interests were either bargained away or indeed used by the other side of the table to create difficulties. It might then be necessary for the United Kingdom to give some ground.

The message of this debate is that amid all the issues that the United Kingdom faces, which are formidable if Brexit goes ahead because they will occupy the attention of Ministers and of both Houses of Parliament, we must not forget the Crown dependencies when the going gets tough.