ECONOMIC DEVELOPMENT, TOURISM, SPORT AND CULTURE
Draw down of dedicated Brexit funding from Treasury
Purpose of the Report
To provide the rationale for the Minister to request draw down dedicated Brexit funding from the Treasury to provide the necessary additional capacity to enable Jersey to negotiate the most favourable possible outcome for Jersey in the UK’s negotiations to exit the EU in the context of trade, agriculture and fisheries.
Background
In the light of the decision on 23rd June by the UK electorate to leave the EU, a core Jersey Brexit team has been formed, which draws in and co-ordinates with Ministers, Chief Officers, advisers, and officials from across government. In conjunction with other departments, the External Relations team has undertaken a detailed look at the call on resources that will be needed to manage Jersey’s engagement in Brexit, both in terms of immediate needs, and having the resources available to deal with requirements as the negotiations progress.
It is vital that Jersey is included in discussions before and throughout the process of negotiating the UK’s withdrawal, and that in any new relationship with the EU our position and interests are taken into account.
The Government of Jersey has been in regular contact with the UK Government on these matters at both Ministerial and official level thus far and are keen to ensure that this continues in the months and years ahead.
A successful Brexit both for the UK and Jersey will need to be based on the continuation of the fundamentals of the relationship between the UK and Jersey; these fundamentals include, inter alia, the perpetuation of:
- monetary union with the UK with freedom of movement of capital
- freedom of movement of people between the Channel Islands and the UK without formal border controls in (a recognisable version of) the Common Travel Area
- freedom of trade within a Customs Union with the UK
- external trade on the basis of external tariffs in common with the UK
- constitutional autonomy, including our ability to set our own fiscal policy.
Jersey has, along with the other Crown Dependencies, established with HMG priorities for the negotiating strategy which includes trade, agriculture and fisheries.
Ministers have acknowledged that new resources would be needed to protect and promote Jersey’s interests. Ministers agreed that the Economic Productivity and Growth Drawdown Provision (EPGDP) would be the most suitable channel for funding which has been approved.
These new funds will be used to enable Jersey a) to negotiate the most favourable possible outcome for Jersey in the UK’s negotiations to exit the EU, and b) to broaden and deepen commercial and political relationships with non-EU global markets in the future.
Jersey’s current relationship with the EU and the UK includes:
a) free trade in goods with the UK and EU Member States, including agricultural products (that is, trade unrestricted by tariffs or quantitative measures, while accepting the need to meet certain standards, such as those relating to specific products or the environment).
b) our non-EU (“third country”) status for trade in services with EU Member States, including existing third country equivalence rules and treatment for access to EU markets for financial services.
c) de facto monetary union with the UK, which enables us to move capital freely between Jersey and the UK, and between Jersey and EU Member States via the UK.
d) the Common Travel Area and the free movement of people between Jersey and the British Isles and Ireland.
e) provisions for the employment and housing of those who come to Jersey to work.
f) constitutional autonomy, including our ability to set our own fiscal policy.
Details
Agriculture and fisheries sectors and a range of associated trade issues will be directly affected by BREXIT. Resources required to manage repercussions of this work stream are outlined below and have been approved by Ministers and the Treasury.
| | 2017 | 2018 | 2019 |
Agriculture and fisheries | Backfill Director EMRE and AD Marine Resources | 80k | 80k | 80k |
| Research and sector specific consultancy | 40k | 40k | 40k |
| Travel and sub | 5k | 5k | 5k |
Total | | 125k | 125k | 125k |
It should be noted that while there are significant opportunities for collaboration with HMG, there is also a need for diplomatic handling to ensure that areas of potential conflict between Jersey and UK objectives are appropriately managed. Funding will be used not only to enhance our reputation and ability to access markets but also to ensure our place in the multilateral trading system.
There was no requirement to draw down resources for Brexit in 2016, as this was met from Departmental budgets, on the basis that the amount of new work required in 2016 was minimal and could be dealt with within existing budget limits and staffing. In 2017, work streams are now much more expansive, detailed and demanding of time and money, requiring significant senior Officer time to be spent providing specialist advice within Government to Ministers and other officers, on the detail of the issues associated with the agriculture and fisheries work stream, but also in supporting policy development in other work streams, such as trade and services.
EDTSC is now in a position to draw down funds to commission consultancy and increase staff capacity in the areas of agriculture, fisheries, trade and services. This will both provide dedicated capacity to deliver Brexit priorities, but also free up capacity for existing specialist officers to dedicate to essential Brexit activity and coordination. Additional resources may be required as work stream business progresses.
In addition, detailed and extensive stakeholder consultation is required, which necessitates an ongoing dialogue across the arable sector, the dairy sector, capture fisheries, aquaculture and the up and down-stream businesses that support these sectors of the economy, such as merchants. This is time consuming work as it requires research and facilitation. There is also a requirement for scenario mapping in relation to the type and nature of Free Trade Agreements negotiated by HMG. This work is necessarily supported and coordinated by a specialist consultancy, which also has links into the Brexit process in the UK and as such provides the necessary scope and expertise.
There is a requirement for officers to travel to London as needed to meet with HMG Departments and other Crown Dependency officials at roundtable meetings on EU exit, which involves significant preparation, liaison and research.
Recommendation
The Minister to request draw down dedicated Brexit funding as described.
Written by: | Head of Service |
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Approved by: | |
Ministerial Decision Case Ref:
26 Sept 2017
gov.je