The committee published its report on Brexit and the crown dependencies on Thursday, calling on the UK government to ensure that the Isle of Man and the Bailiwicks of Jersey and Guernsey are fully involved and engaged in the UK’s Brexit negotiations with the EU.
Prime minister Theresa May will trigger Article 50 on 29 March 2017, which will start the clock on the two-year negotiation period for the UK for formally leave the EU.
One of the crown dependencies’ priorities, as identified by the committee, is its financial services sector and securing regulatory equivalence.
However, the Lords’ report identified it as a potential source of conflict during the negotiations.
"I am afraid there are some grey zones where we do not quite know what the outcome will be. It is in the lap of the gods”.
Conflicting priorities
The report said that, while the crown dependencies are not part of the EU or the UK and their residents did not vote in the referendum, Brexit will have a significant impact on them and their relationship with both the UK and the EU.
The islands have a limited relationship with the EU that is set out in Protocol 3 to the UK’s Act of Accession, the report stated. As such, Brexit is set to bring an end to the islands’ relationship with the EU, at least in its current form.
The crown dependencies’ number one priority is to maintain the strength of their close relationship with the UK.
However, the committee highlighted the potential tensions between this priority, and the desire to maintain as much as possible of the benefits of their existing relationship with the EU.
Other areas where these priorities could come into conflict include:
- The ability to trade freely both with the UK and the EU including in fisheries, agriculture and manufacturing; and
- The ability to continue to attract EU citizens to live and work in the crown dependencies while maintaining the Common Travel Area with the UK.
Financial services
In giving evidence to the committee on 20 December 2016, Jersey chief minister Ian Gorst and his Guernsey counterpart Gavin St Pier were both confident that their existing third country relationship with the EU post Brexit could continue.
St Pier, however, said that the challenge was “to what extent the rules of the game around equivalence change because the EU is now dealing with a larger third country – namely, the UK”.
