Brexit: The Crown Dependencies (European Union Committee Report)

Lord Boswell of Aynho Excerpts

Tuesday 23rd January 2018 Lords Chamber

Asked by

[Lord Boswell of Aynho]

To ask Her Majesty’s Government what is their response to the Report from the European Union Committee Brexit: the Crown Dependencies (19th Report, Session 2016–17, HL Paper 136).

[Lord Boswell of Aynho (Non-Afl)]

My Lords, I am delighted to introduce this short debate on the EU Select Committee’s report, Brexit: the Crown Dependencies. I preface my remarks by being even more vehement and enthusiastic than is perhaps my habit in thanking colleagues and members of my committee and the staff, both for producing this report and for the immense support they have given me, along with Members from all sides of the House, during my recent illness, for which I deeply grateful.

The report is part of a series of inquiries undertaken by the committee into what Brexit means for the United Kingdom’s various constitutional relationships, both internally and externally. We have also examined the impact of Brexit on UK-Irish relations, devolution, Gibraltar and the UK’s Overseas Territories. The report discussed tonight was published in March last year and drew on evidence received in a valuable joint appearance before the committee by the Chief Ministers of Jersey, Guernsey and the Isle of Man, as well as evidence received from academic and legal experts and the Parliamentary Under-Secretary, Robin Walker MP.

The Isle of Man, the Bailiwick of Jersey and the Bailiwick of Guernsey—which includes the three jurisdictions of Guernsey, Alderney and Sark—each have a unique relationship with the UK. They are not part of the UK but are self-governing dependencies of the Crown with their own directly elected legislative assemblies, administrative, fiscal and legal systems and their own courts of law. They are not represented in, nor accountable to, this Parliament. The UK Government are responsible for the defence and international relations of these islands. Citizens of the Crown dependencies hold British citizenship under the British Nationality Act 1981, and the islands are part of the common travel area. They cannot sign up to international agreements in their own right but can have the UK’s ratification extended to them or sign specific international agreements if—this is the technical word—entrusted to do so by the UK.

The Crown dependencies also have a unique relationship with the European Union, set out in Protocol 3 to the UK’s 1972 Treaty of Accession to the European Community. The dependencies are not part of the EU. However, under Protocol 3, they are nevertheless part of the customs territory of the Union and therefore Union customs matters, the common customs tariff, levies and the prohibition against quantitative restrictions apply. There is free movement of agricultural goods and derived products between the islands and the EU, and measures relating to trade in such goods with third countries are also included.

However, other EU rules do not apply. The implementation of the provisions on the free movement of persons, services and capital is not required. Only this morning I was discussing with the Latvian Minister and her ambassador the position of Latvian nationals who are resident and working in Guernsey, as an example of the complexity of this. So they are not required to implement the free movement of persons, services and capital but, equally, they are not eligible for assistance from EU structural funds or under the common agricultural policy. EU tax instruments, justice and home affairs measures and the Schengen acquis do not apply, although the dependencies have applied for equivalent status in a number of legal and policy areas.

The citizens of the Crown dependencies did not as of right participate in the EU referendum. Nevertheless, the consequences of Brexit for the Crown dependencies are significant. The evidence that we received drew attention to three intertwined and potentially conflicting priorities for the Crown dependencies in the Brexit negotiations. The first is the maintenance of their centuries-old constitutional relationship with the UK. The second, notwithstanding the loss of Protocol 3 on the UK’s withdrawal from the EU, is the retention so far as possible of the benefits of the existing relationship between the Crown dependencies and the EU. The third is the evolution of the Crown dependencies’ international identities while respecting the UK’s constitutional obligation to represent them in defence and international relations.

While each of the Crown dependencies has its own specific priorities—they have been assiduous in keeping us in touch with their concerns as well as, I am sure, the Government—the implications of Brexit appear most significant in a number of areas. The dependencies wish to continue to trade freely in goods, including fisheries, agriculture and manufacturing, with both the UK and the EU.

They are also cognisant of the impact on their important financial services sectors, particularly the Crown dependencies’ continued ability to secure regulatory equivalence where appropriate. The Crown dependencies wish to continue to attract EU citizens to live and work there, particularly in sectors such as agriculture, health, financial services and tourism, while at the same time retaining the common travel area with the UK. The Crown dependencies also have important links with the EU in data protection co-operation, transport and communication, and energy co-operation.

There is a wider concern that the priorities of the Crown dependencies will be overlooked in the Brexit negotiation, or that we will run out of time to give them sufficient attention. This fear is to some extent informed by memories of the European Community accession negotiations. In the words of the Chief Minister of the Isle of Man, Howard Quayle, while it had ultimately served them well,

“the drafting of Protocol 3 was done almost as an afterthought”.

The UK Government have a constitutional and moral responsibility to represent the interests of the Crown dependencies in the Brexit negotiations, and our report called on the Government to ensure that the Crown dependencies remain fully involved as negotiations proceed and that their concerns and priorities are properly taken into account by the UK negotiators.

I therefore conclude with a number of questions for the Minister. First, how are the Government engaging with the Crown dependencies in relation to Brexit? What steps are they taking to address the dependencies’ specific policy concerns? How will the Government ensure that the Crown dependencies are able, as far as possible, to retain the benefits of their existing constitutional relationship with the UK and the EU? How will our Government ensure that the Crown dependencies are kept fully apprised of, and given the opportunity, where appropriate, to participate in, future free trade agreements with third countries? Are they supporting Guernsey and Jersey in their efforts to ensure that the UK’s WTO membership is extended to cover them, as it already does the Isle of Man? Can the Minister give a commitment that the Government will continue to fulfil their constitutional obligations to represent the interests of the Crown dependencies in international relations, even when these differ from those of the UK, both during the Brexit negotiations and beyond?

I raised many of these issues in a letter to the Secretary of State on 22 November, to which we have as yet received no reply. Can the Minister give a commitment on his behalf that a reply will be provided as a matter of priority?

In conclusion, our report is a matter of raising awareness of the complex constitutional issues and indicating the importance of the Government’s engagement on them. I make no accusations—I think that at the moment there is a good working relationship—but it is essential that it continues through the negotiations and beyond.

I look forward to this evening’s debate, and to the noble Baroness’s reply.