It is not possible to predict how Brexit – the process and the eventual outcome – will change in the coming weeks and months. However, it is more certain what Brexit will mean for Guernsey, whatever decisions are made in the UK and EU.
Here’s an excerpt from Policy & Resources Minister, Gavin St Pier’s article recently published in our Open Market Review which highlights how the Island is planning for all scenarios.
‘These are extraordinary times for the British body politic. The political atmosphere in the UK is febrile. Every day another twist is added to the plot. Novelists and screenplay writers will try to recreate this level of political high drama and political scientists will analyse it for decades to come. Closer to home, the government of Guernsey is engaged with the UK Government as it develops its position. We try to be one step ahead by planning for a range of outcomes and are ready to react to whatever results from the UK parliamentary deliberations. This helps us plot our own path; one that works for Guernsey’s own interests. Guernsey’s system of government relies on consensus and compromise to make decisions. We do not have a formal organised opposition. The consensus and political stability that Guernsey has is something that the UK Government is now seeking for itself.
Guernsey and Europe
The Bailiwick of Guernsey is not part of the UK, is not part of the EU and was not part of the Brexit debate for the 2016 referendum. This means that we face different challenges to the UK. The UK is constitutionally responsible for the island’s formal international representation and so has a role to represent our interests in the UK’s exit negotiations with the EU and in any negotiations for a new economic partnership with the EU.
Our relationship with the EU is described in Protocol 3 to the UK Accession Treaty, it places us in the EU Customs Union with the UK and provides for free movement of goods. Other parts of the EU treaties do not apply directly to us.
This relationship has served us well, from the years of horticulture and hothouses, electronics and e-business booms, family holidaymakers and honeymooners, right through to the mature, well-respected and diverse financial services sector we have today.
Deal or No Deal – creating certainty from uncertainty
Over the last two years, the States of Guernsey has been working with the UK Government to carry out extensive preparations for all scenarios, including ‘no deal’.
The UK’s exit will end the Protocol 3 relationship with the EU; which will end the relationship the Crown Dependencies have with the EU Customs Union. In order to safeguard the customs relationship with the UK, the government of Guernsey signed a new customs framework with the UK Government in November 2018, to take effect when the UK leaves the EU. This ensures that Guernsey can continue to enjoy tariff-free trade with the UK, whilst maintaining regulatory autonomy and fiscal independence. This provides continuity for Guernsey and certainty for businesses and consumers.
The terms of trade with the EU will be dependent on the outcome of the UK’s negotiations with the EU. The Guernsey and UK Governments are in dialogue in order to seek the extension of the UK’s membership of the World Trade Organization (‘WTO’) after the UK has established itself as an independent member outside of the EU. The new customs arrangement protects a centuries old constitutional relationship which allows for the free movement of goods with the UK, described in a series of historic Royal Charters. This same relationship also allows for the movement of people within the UK.
Guernsey is part of the Common Travel Area with the UK and Ireland, alongside the other Crown Dependencies. The UK, EU and Crown Dependencies have all committed to protect the Common Travel Area, and so we will continue to enjoy free movement within the UK and Ireland whatever the outcome. We are working closely with the Home Office on a future immigration regime that respects the Common Travel Area and takes into account Guernsey’s interests.
We have already made a political commitment to respect the rights of EU nationals resident in Guernsey on ‘exit day’ and will be bringing forward a ‘settled status’ scheme like that being launched in the UK. Those citizens are a welcome and important part of our community. Guernsey is a third country to the EU in respect of services and so its trading relationship will be unchanged by the UK’s exit from the EU. Market access based on ‘equivalence’ has been negotiated on a case-by-case basis. This provides stability. We are looking to work in partnership to embrace the opportunities created by the UK having an independent trade policy, including considering how we could take part in Free Trade Agreements alongside the UK. This could offer new opportunities for preferential access to new markets. Whilst this planning has been undertaken with a range of outcomes in mind, we are considering the practical effect that a ‘no deal’ Brexit would have. We are working in lock step with the UK and other Crown Dependencies to ensure that our contingency planning will minimise any possible disruption that a ‘no deal’ Brexit would have on supply chains. This includes the logistical challenges that may occur in respect of the movement of goods into the UK and onwards to Guernsey.
In the autumn of 2018 in an exchange of letters with the UK Prime Minister, the UK Government repeated previous assurances that the longstanding constitutional relationships between the UK and the Crown Dependencies will not change. The Prime Minister recognised the long-standing close trading relationships that we share. Guernsey is an important economic partner to the UK; just last year the UK’s Office of National Statistics reported that it was the fastest growing market for UK imports of goods and services between 2010 and 2017, with increases of 456% to £2.4bn.
Whilst we are uncertain about the outcome of the UK Brexit debate, we can be certain about the stability that Guernsey inherently has and that Guernsey’s government has created during the last two years. We stand ready to respond to whichever path the UK choses to take as it leaves the EU.’