Update 22 July 2016
A week is a long time in politics; the last four weeks have changed the landscape politically, economically and constitutionally.
It would normally take a decade to create so many shifts. Some have described it as the political earthquake, and if that earthquake has an epicentre, it is BREXIT.
When it became clear in the early hours of the morning on the 24th June that the voters of the United Kingdom would vote to leave the European Union, this was not the result that most people unexpected.
It seemed that most governments around the world, including dare I say it, the United Kingdom, had not even contemplated a BREXIT decision.
Hindsight is always a great thing and today people will often say that of course they knew, but the wise words of one of our highly respected members of the Fiscal Policy Panel sums the situation up well –
“nobody has evidence of the future”
However, it is important that even without evidence of the future, that there is always cool, levelheaded realistic assessment of risk. At the end of the day, most opinion polls were narrow enough to have at least considered an exit result as an option. And government should always have ad two plans – a plan for remaining and a plan for exit.
In Jersey, we are more cautious than some places, because our size and constitutional nature means we must take care to protect ourselves against the radical shifts of external markets.
18 MONTHS OF PREPARATION
That is why, 18 months prior to the BREXIT Referendum, we set up a Political Oversight Group, to consider the possible outcomes and to have a plan for both of them.
The report issued on the Monday following BREXIT had not been written over the weekend as some have suggested, it had been developed in consultation with industry and political stakeholders for over a year.
Jersey has a strong track record of long-term planning and considering risk. The risks of a BREXIT vote were real and we were in a situation where we could not meaningfully influence the outcome. So we remained neutral, and prepared for both eventualities.
Our carefully considered plan is now being used and it is working. In a world of turmoil and widespread uncertainty Jersey’s government, its institutions, its regulators, its companies and most importantly of all, its people have been able to remind themselves that they do live on a granite rock of stability.
The plan we have put in action over the last four weeks has not received a significant amount of media attention, but behind the scenes officials and ministers have been working extremely hard on behalf of our island to ensure that any downside risks are understood and mitigated as much as possible.
Beyond the risk though, there are also opportunities that are now appearing for a jurisdiction like ours, which is secure, unruffled and stabile. Individuals or institutions reassured by our prudent, long-term approach to planning approach is more interested than ever in working with Jersey.
EUROPEAN MARKET ACCESS
Just this week, the European Securities and Markets Authorities agreed in principle that Jersey should be one of five jurisdictions to access the passport for access into EU markets for alternative investment funds. This is a huge vote of confidence in Jersey’s well-regulated and stable financial services market.
On top of this, our strong relationships with the EU mean that our financial and professional services industry will not be directly affected by the outcome of the UK’s negotiated relationship with the EU.
FINANCIAL SERVICES – OPPORTUNTIES
Our market access for financial services will stay the same and those Jersey companies that currently trade into the EU will not be subject to new controls as a result of this negotiation.
The UK, more than ever, depends on our role as a provider of liquidity for their economy, something which the Bank of England has paid great attention to in recent pronouncements.
Our close relationship with the UK will, if anything, strengthen as a result of our relationships with the BREXIT vote. The City of London (in the widest sense of Financial Services) will remain the wheel to St. Helier’s cog for years to come.
Digital industries are of central importance to our post BREXIT future. FinTech, MedTech and Internet of Things are all increasingly clustering at the heart of Jersey’s economy, bringing associated benefits to our industries and customers.
This has exposed more than ever the need for a diverse economy, both in terms of sectors and in terms of our trading partners. That’s why we don’t rely solely on the UK and the EU, but are building new trade networks with our friends in Africa, the Middle East and further afield.
Most importantly, BREXIT has also strengthened our internal collaboration. None of this progress could have been made without the significant efforts of the nameless public servants in the Chief Minister’s Office including my own unit of Competition, Digital, Financial Services and Innovation and the Jersey Government London Office as well as our Channel Island office in Brussels and France.
Additionally our regulators the JFSC and the Data Protection Commissioner as well as our promotional agencies, Jersey Finance, Digital Jersey and Jersey Business has all also worked tirelessly to ensure we had a way forward through BREXIT, whatever the outcome.
We are entering a new era of politics, a new era of diplomacy and a new era of opportunity for Jersey.
While BREXIT creates challenges, it is also a chance for Jersey to play to its strengths on the global stage.
Our job now is to make sure that we make the most of this new world order for the benefit of our home.