Brexit: The Crown Dependencies (European Union Committee Report)

Lord Teverson Excerpts

Tuesday 23rd January 2018 Lords Chamber

[Lord Teverson (LD)]

My Lords, I declare an interest as a board member of the Marine Management Organisation because I want to mention fisheries during my short speech. From these Benches I also want to warmly welcome the noble Lord, Lord Boswell, back to his seat in this House and as the chair of the European Union Committee. We have greatly missed him and we all welcome him back.

The thing about the Channel Islands in particular, but also the Isle of Man, is that they are probably the communities that will be most affected by Brexit but that they did not have a vote on that decision. The effects will probably be equal to or even more than those on the citizens of the Republic of Ireland. That is why this debate is so important, because that vote and the measures which the Government are taking at the moment towards Brexit will affect those communities. We have a particular moral and ethical need to make sure we represent those communities strongly in our negotiations, even where some of those interests divide.

One of the great things about the report of the committee chaired by the noble Lord, Lord Boswell, is that it explains some of the constitutional differences that so many of us on this island do not understand. I was interested in the term “customs territory”, rather than customs union; I have not come across it in the lexicon before. The report somehow tried to explain this relationship. I was particularly reminded—my noble friend Lord Beith mentioned this—that back in 1972 this was pushed into the negotiations to enter the European Economic Community at the last minute. We should remember that, as far as those communities and the UK’s relationships with the Crown dependencies are concerned, they were an afterthought at the time.

I want to say a little about fisheries. Indeed, a number of noble Lords talked about the trade in fisheries, but that is not the only issue. The Crown dependencies have their own territorial waters, but they have a strange relationship with the common fisheries policy: although they are not part of it, they share quotas with it. A number of conflicts can happen there. I am interested to hear from the Minister whether the Channel Islands will set their own quotas and fisheries management in the new regime, or whether there will still be a relationship. As the report outlines, there was a breakdown in relationships between Guernsey, Defra and the UK over fishing quotas last year or the year before. How will that be resolved? Will we still make sure that the Channel Islands have access to the markets, as well as to their own fishing territories?

Coming back to the argument on the customs union, as a number of noble Lords pointed out, the Channel Islands are not members of the WTO. I am interested to understand whether the Government have made any decisions as to whether they will encourage, allow or help the Channel Islands to become part of the UK’s WTO membership, as the Isle of Man is. What is the Government’s position? I hope it is one of enabling the same relationship if that is what the Channel Islands want. Do they have the authority to negotiate their own independent membership if they want it? I am not sure whether that comes under foreign relations and therefore UK jurisdiction or whether it is a matter they have as sovereign. I would be interested to hear the Minister’s view on that. There is clearly a difficulty there because some of the trade relationships with the continent and the remainder of the EU are important, and trading relationships with the UK are important as well. They will have a great dilemma until they know what the future trading relationship between the UK and the EU—and, indeed, the rest the world—will be.

I was particularly struck by the comments of our witnesses from the Channel Islands, who pointed out that once the UK starts to negotiate its own trade agreements worldwide—the EU already has 50-plus that we are a beneficiary of—how will the Channel Islands and the Isle of Man manage to keep involved in all of them, let alone in the Brexit negotiations with the European Union? It is of great concern to them.

I come back to the financial sector, which the noble Earl, Lord Kinnoull, mentioned so well. Part of the evidence we took for this report was that the issues around equivalence that have been dealt with since Brexit in terms of financial regulations have become more difficult, as have the political decisions. Certainly, I have a concern that as time goes on the equivalence that they have managed to benefit from over the years while we have been a member will become ever more difficult. Indeed, I question whether the Channel Islands, not through their fault or because they are behind the curve—they are ahead of the curve—will face greater risks around blacklisting on certain lists than they have to date. I will be very interested in the Minister’s view on how the British Government can include equivalence in their negotiations around future financial services with the European Union and its single market.

I mentioned, as have other noble Lords, Protocol 3, which is quite unique and was written at the last moment before our accession to the European Economic Community, as it was at the time. The fear, I think, from many of us around the House is that in the fast and very hectic negotiations that we will have during the next year, up until March 2019, the issues of the Channel Islands and the Isle of Man are likely to be marginalised, as they were at that time. I hope, like many others, that Ministers can assure us that that will not be the case but I will be very interested to hear from the Minister whether the Government intend to include the Crown dependencies in any agreement around transition.