Three months have passed since the Brexit vote and much water has passed under the proverbial bridge.
The English media narrative has lurched from predicting imminent catastrophe to expressing cautious optimism about the future. The UK government has recovered some of its equilibrium although, viewed from the outside, there is little clarity about which lines will be taken in negotiations with the EU.
David Davis, the UK Government’s Secretary of State for Exiting the European Union, explained to the House of Commons that Brexit meant that the UK would leave the EU, though it remains unclear how the UK plans to retain full market access while introducing meaningful restrictions on migration from EU countries.
In the EU itself, Member States seem to have accepted Chancellor Merkel’s view that the UK must be given time to think through what its future relationship with the EU should be. However, the meeting of 27 Member States in Bratislava revealed deep divisions on the EU’s response to key issues such as immigration, as well as how to treat the UK once negotiations begin.
The consequential uncertainty is unhelpful for the economies of both the UK and Jersey, which increases the possibility of some investment decisions being postponed. That said, we have not seen the dramatic slowdown that many were predicting, and I am confident that Jersey is well placed to deal with the repercussions of the Brexit vote.
The fundamentals of Jersey’s economic stability are unchanged: we will continue to have strong trade links with the City of London and will remain a “third country” outside the EU for financial services trade. Our approval for the AIFMD (Alternative Investment Fund Managers Directive) passport that allows Jersey to trade in EU markets a few weeks after the referendum indicates that we are considered a valued trading partner by the EU and its Member States.
Working with the UK
The Ministry of External Relations have been working hard to ensure we are ready for whatever comes out of the Brexit process in the UK.
The Brexit planning unit is coordinating efforts across Government to map out the implications in detail – and they are numerous. I expect that scores of Laws and Regulations will require amendment, although our task pales into insignificance in comparison with the UK. We will, however, make sure that no stone is left unturned.
We will establish working groups to analyse risks and map opportunities, focussing on four themes – mirroring the process adopted by the UK government:
1. Free movement of people and the Common Travel Area
2. Agriculture and Fisheries
3. Financial Services
4. The EU Customs Union and Market Access
We will then present our conclusions to the UK Government at regular meetings with the Cabinet Office, and DEXEU (the Department for Exiting the European Union).
From the Prime Minister down it has been made clear that we will be involved in the process whenever our interests are at stake. We are looking forward to the imminent visit by Sir Oliver Heald, the UK’s Minister with responsibility for the Crown Dependencies, following positive initial conversations.
We live in a changing and challenging world but it is worth repeating that Jersey is in a relatively strong position.
We have no debt to speak of, we have substantial reserves, and we are on course to return to budget surpluses. Our economy is diversifying and we are laying the foundations for future prosperity by nurturing relationships all around the world. Our resilience to economic shocks has been bolstered by the Government’s prudent approach to public funds. It will be important to ensure that these benefits are felt by the whole population.
As the great English poet John Donne wrote four centuries ago, “No man is an Island, entire of itself”. We remain vulnerable to actions and events over which we have no control. We cannot wholly insulate ourselves from global trends nor from political storms with which we may have no connection. Nonetheless, the work we have undertaken lays the foundations for future success, and we can be confident that Jersey is as prepared as it is possible to be in these uncertain times.