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This article from
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Our friends in the north
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ANDREW LEWIS
Chairman, Institute of Directors, Jersey branch
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There has been a growing momentum in recent months to promote greater co-operation between the islands of Jersey and Guernsey. This is something the IoD supports wholeheartedly.
It was at the 2003 IoD Debate in Guernsey that Senator Philip Ozouf first proposed closer links between the islands. In truth he articulated, and gave energy to, an idea which many members of the business and political communities in both islands have supported for a number of years. Both Jersey and Guernsey face more external challenges to their sovereignty than ever before. Indeed the world as a whole is globalising into larger power blocks. It is no accident that suggestions of greater co-operation are being taken more seriously now. Neither island can afford to be entirely isolationist any longer.
The islands already make joint representations to the UK and EU in relation to finance issues. This is likely to be a model for all future foreign policy. Individually we are much weaker in negotiations than we are together. Our finance centres will continue to compete for business, but at a global level it is important that offshore jurisdictions work together to negotiate with those who oppose legitimate tax competition.
At a local level there is also already a significant amount of co-operation between Jersey and Guernsey. A number of our major businesses and financial services organisations have operations in both islands for example. I regularly see the commercial reality of operating under two very different legislative structures. Senior members of the finance industry in both islands have warned about the cost of doing business in the Channel Islands for a number of years. Indeed it was a principle factor in the eventual decision of Barclays to domicile their offshore operations in the Isle of Man. Our governments must take greater heed of these words and make a concerted effort to create the most business friendly environment possible.
Where the cost of business administration can be reduced it should be reduced. With this in mind, there are massive potential benefits from closer co-ordination of legislation in the islands. Shared regulatory principles, for instance, would instantly make the business environment more friendly. If we are to retain our finance industries at their current strength looking for efficiencies of this sort must be a priority. The IoD is also committed to campaigning for the most efficient government possible. As Jersey seeks to amend its fiscal structure we recognise that lower public sector spending will reduce the tax burden for businesses. The Finance and Economics Committee has shown that it wants to reduce public sector spending and it must be ruthless in backing up words with action. The IoD will be supporting them every step of the way in this.
There is no doubt that the islands can both reduce public sector spending by working more closely together. We understand that some States departments are already leading the way by sharing facilities and, in some cases, carry out joint buying. This concept could easily be extended to other parts of government. The sharing of specialist functions with some services provided by Jersey and some by Guernsey could also be extended. If we can agree closer legislative principles, then there are also potentially cost savings to be made in the law drafting process. Recently, for example, very similar data protection legislation has been introduced in both islands. There could well have been a cost saving in sharing the law drafting process. If co-operation in this area enables our overworked law draftsmen to turn around work faster then this would also be a great additional benefit in creating more efficient government.
At a recent meeting between Senator Frank Walker and the Chief Minister of Guernsey, Deputy Laurie Morgan, it was suggested that Jersey and Guernsey could form a joint financial services commission or perhaps a joint competition regulatory authority. While I am hugely supportive of the principle, implementation of such things could be more problematic. It is not impossible to envisage joint bodies one day, but we must walk before running. Senator Ozouf has proposed the initial forming of a joint Channel Island Commission to promote greater efficiencies and economic development. In the short term this must be the priority. Once a commission is established, more robust structures need to be created and developed. At the centre of this will have to be the development of a culture and an ethos of co-operation, sharing and trust, not only between politicians and civil servants, but also by our respective island communities. There is still room for healthy banter, but there needs to be a shift away from a mutual suspicion which sometimes pervades relations, particularly at the political level. Until the minds and motives of the men and women involved are underpinned with mutual trust progress will continue to be sporadic and stunted.
Politicians in both islands know they will have the IoD’s full support as they progress with this idea. Indeed, representatives from the committees of both branches of the IoD have met senior representatives of the islands’ governments in recent months to make the business case for greater co-operation. We are keen to show tangibly that greater co-operation is possible and so have formed a Channel Islands Co-operation subcommittee made up of representatives from both branches. This subcommittee will shortly be making representations to Guernsey’s Public Account Committee to discuss progressing ideas on greater co-operation. It envisages holding similar meetings in Jersey in due course.
However, while we are in favour of exploring greater co-operation a Channel Islands Federation should not be contemplated. A federation is not IoD policy. This concept would be confusing and an impediment to co-operation; our identities as separate Bailiwicks are strong.
There is no doubt that competition, particularly for financial services companies, will be intensified in coming years. Because of this we must ensure that everything possible is done to reduce costs, increase efficiency and make Jersey as business friendly as possible. For this to happen we will need to work more closely with our Sarnian neighbours.
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