Brexit: The Crown Dependencies (European Union Committee Report)

Lord Northbrook Excerpts

Tuesday 23rd January 2018 Lords Chamber

[Lord Northbrook (Con)]

My Lords, we are all grateful to the European Union Committee for its report Brexit: the Crown Dependencies, and I am delighted to welcome back the noble Lord, Lord Boswell of Aynho, after his illness. The report is very detailed and the conclusions are clear. In the time available, I will be able to focus mainly on the conclusions, together with the government response to the report and the briefings I have received from the Governments of Guernsey and Jersey.

As stated by the noble Lord and in the summary, the Crown dependencies are part of neither the EU nor the UK. Nevertheless, they have a unique constitutional relationship with the UK and, as encapsulated in Protocol 3 to the UK’s treaty of accession, with the EU. The consequences of Brexit for the Crown dependencies are therefore significant.

As the report states, there are three major priorities for the Crown dependencies in the context of the Brexit negotiations: maintenance of their centuries-old constitutional relationship with the UK; retention as far as possible of the existing relationship between the Crown dependencies and the EU; and the evolution of the Crown dependencies’ international identities, while respecting the UK’s constitutional obligation to represent them in matters of defence and international relations.

So how are the dependencies faring thus far? I have received most helpful briefings from the Governments of Guernsey and Jersey, giving their reaction to the report. For the Isle of Man, I am relying on the Chief Minister’s evidence. Starting with the Government of Guernsey, they have set out their four Brexit priorities. These are: customs and trade; free movement of people, including immigration and the common travel area; fisheries and agriculture; and financial services.

In the Government’s response to the report, David Davis, the Minister, places great emphasis on the regular meetings that have been established between the Chief Ministers of Guernsey, Jersey and the Isle of Man, and Robin Walker, Under-Secretary of State at DExEU. The response states:

“We will continue to engage with the Crown Dependencies on these areas, ensuring they remain fully involved as negotiations proceed”.


However, the Guernsey briefing conclusion takes a more pragmatic and cautious view of the current situation, stating that the UK Government have been delivering on their commitments to engage with the Crown dependencies and ensure that their interests are taken into account. It goes on to say that the Crown dependencies are waiting for a number of clear positions in terms of the future partnership and implementation period to be able to make strategic and legislative decisions, including on matters relating to entering into a customs union and the future immigration regime, as well as on fisheries and trade policy. With this in mind, it will be important to understand the timeline for the implementation of any new agreement in making strategic and legislative decisions.

The main features of the Jersey briefing echo those of Guernsey. It gives its four major objectives for Jersey as a result of the Brexit negotiations. These are, first, to continue the fundamentals of its existing relationship with the UK. This includes membership of the common travel area, a common customs territory, freedom of movement of capital and external trade based on tariffs in common with the UK.

Secondly, it wishes to continue the benefits of its relationship with the EU, as under Protocol 3. These include: access to EU goods markets on terms no less favourable than the UK has; access to EU markets for financial services through meeting requirements of equivalence; mutual recognition of regimes for third countries; and securing a no less favourable deal on movement of persons in the EU for British nationals resident in Jersey than for British nationals generally.

Thirdly, Jersey wishes to ensure that it has the right agreements and international relationships to benefit from global opportunities. This includes extension of the World Trade Organization application to Jersey. Guernsey also wishes for this, unlike the Isle of Man, which is already, through the UK, a member. It also includes strengthened relationships with non-EU global markets; an expanded network of international agreements; and entrustment to negotiate bilateral investment treaties between Jersey and key trading partners.

Fourthly, Jersey wishes to mobilise the UK Government to ensure: the uninterrupted functioning of relevant law in Jersey related to EU legislation; that Jersey will still control access to its housing and labour markets; and that it will work with Guernsey and the Isle of Man to exercise maximum influence on the UK’s Brexit negotiations.

The Isle of Man, as I mentioned, has different needs. As set out in the report, it already has a customs and excise agreement with the UK, signed in 1979, which provides for the sharing of VAT and other revenues between the island and the UK. Also, the Isle of Man is part of the UK’s membership of the WTO. The Chief Minister of the Isle of Man told the committee that one of their two key concerns related to the freedom of movement of goods. He also informed the committee that the impact of Brexit on agriculture, exports and animal welfare was key. Another of his major concerns was the manufacturing industry, particularly in the area of aircraft parts. His other main worry was about retaining, as far as possible, the current freedom of movement of people from the EU, because of the island’s ageing population.

Like the noble Lord, Lord Boswell of Aynho, I ask the Minister for a response to the noble Lord’s letter of 22 November, which includes many of the questions posed by the Guernsey and Jersey briefings and the Isle of Man evidence. It seems discourteous that no reply has yet been forthcoming, although it was requested by 5 December last year.

Paragraph 113 of the report sums up very well, emphasising the,

“Crown Dependencies’ continued ability in trade freely in goods … The financial services sectors in the Crown Dependencies, and … The ability to continue to attract EU citizens to live and work in the Crown Dependencies”,

as well as,

“Existing data protection cooperation, transport and communication links, and energy cooperation between the Crown Dependencies and the EU”.

This has important implications for Brexit.