“It’s not an issue at the moment,” Sir Philip said at a ministerial quarterly Scrutiny panel briefing. “We know that 40 years ago or so when the UK negotiated to enter the EU, the government of the day was presented with the possibility that, if it did not like what was being negotiated, it could become independent,” Sir Philip said. “The position did not progress beyond that, in the early 1970s, because the arrangements we negotiated in Protocol 3 were acceptable to the government of the day.”
Senator Bailhache said Jersey may find itself in a similar position in two to three years when the future relationship between the UK and the EU becomes more clear.
The States are more prepared now than it was in the 1970s to face such a decision, he said, if “necessary in the interests of the people of Jersey”.
“It would not be a matter for government or the States but for the people of Jersey,” he said, and a referendum would certainly be required.
Lack of sovereignty will hamper Jersey as it seeks to find its place within the new UK-EU relationship which is completely unknown at present.
The States cannot negotiate directly on its own behalf with the EU or any of its 27 member nations. Jersey must negotiate through London – yet in terms of what the UK has to negotiate, Jersey is but a small concern.
The Island is seeking more power over its foreign affairs, Sir Philip added, but those discussions are currently “stuttering”.
Nevertheless, Sir Philip said Jersey is well placed to meet the post-Brexit challenges as it was never a member of the EU.
Jersey is an “oasis of calm in what is indeed a world undergoing turmoil”, he said.
“We should be very thankful we are living in Jersey for two reasons,” he said, “Firstly, Jersey is already outside the European Union, therefore the decision of the UK to leave the EU does not, in substance, affect the position of Jersey. And secondly, the Government of Jersey has been planning for the eventuality [of the UK leaving the EU] for the last 2-3 years. We know what we want to achieve and we know what we should do to achieve it.”
Jersey will be making a case to London to duplicate the Protocol 3 arrangements in future legislation and looking to strengthen its relationship with France. The Island will also be establishing its own Monetary Authority, the Minister said, and setting up a Judicial Services Committee to advise on points of law.
Many of the aftershocks of the UK’s decision will remain “unforeseeable” for some time and Jersey needs to be prepared for “every eventuality”, he added.
“I think we all appreciate the decision of the UK electorate to leave the European Union represents a political earthquake almost off the Richter scale,” he said.
When the UK originally joined the European Economic Community in the 1970s a special deal was struck – Protocol 3 – which gave the Channel Islands unique status. In effect, it meant the islands were both ‘in and out’ of the Community. At the time, politicians claimed it allowed the islands to have the best of both worlds: they could trade with the EEC, but didn’t have to obey all the rules and regulations. It meant both agriculture and financial services flourished.
Now the States want to maintain that status quo and enshrine it in new legislation as the UK negotiates and defines it exit from the union.
Once the UK invokes Article 50 to officially terminate its membership, there will be a period of up to two years of negotiations laying out a new relationship between the remaining 27 member states and the UK. After that time, Protocol 3 will also be scrapped.
The Island will work closely with the other two Crown Dependencies – Isle of Man and Guernsey – to make its specific considerations known in London. But Sir Philip said Jersey’s interests may diverge from the others.
Jersey officials have spoken to the UK Minister of State “just to underline that we have very difference interests that need to be taken into account,” he said.
He noted that when Prime Minister David Cameron spoke on Friday, resigning following the shock Brexit decision, he made no mention of the Crown Dependencies. “We asked the minister to put that right,” Sir Philip said.
Jersey’s Common Trading Area status with the UK will remain in place and for the time being and relations with the EU as a “third party state” should be unaffected, he said.
But the ground in the coming years could be ever shifting.
Senator Bailhache said Jersey hopes to strengthen relations with France in order to maintain a “friend” in Europe after the UK departs. “We need another friend,” he said. ‘And France is the obvious candidate.”
Jersey will also need to review all its laws which have connections with the EU. The Judicial Services Committee will have responsibility for advising on and taking decision on points of judicial oversight.
And, he said establishing a Monetary Authority will enhance the States ability to steer economic policy. “At the moment there is no mechanism for dealing with macroeconomic issues and of thinking ahead in terms of price stability,” Sir Philip said.
When pressed by the panel about the potential effectiveness of such a body in light of the Island’s relationship with the UK, Sir Philip said Jersey’s needs an institution to “take responsibility”.
“A monetary authority can perform a useful function even if a country is in a monetary union with another country,” he said.