Look to Guernsey for a model of a post-EU Britain
St Peter Port, Guernsey. Wolfgang Kaehler / LightRocket via Getty Images
In politics, whenever you offer a foreign example, in however narrow and limited a context, you are guaranteed – guaranteed
– to be told an unrelated fact about the country you’ve cited. You
admire Estonia’s approach to shale extraction? “You can’t compare us to
Estonia: they’ve got Putin on their border.” You think Singapore has got
a useful system of individual healthcare accounts? “Yeah, and I suppose
you want to live in a semi-dictatorship.”
It’s a mystifyingly effective put-down. We
might usefully learn from Sweden’s school voucher system? “Britain
isn’t Sweden!” Cue moronic applause from the BBC audience.
There are more than 40 states and
territories in the European common market, stretching from Iceland to
Turkey. Only 28 of them are in the EU. So, you’d have thought that, if
we want to consider what Britain might do after leaving, the non-EU
states, especially the developed ones in Western Europe, might be a
useful place to start.
When you look, you can hardly help
noticing that these countries are doing extraordinarily well. According
to the United Nations, which measures not just GDP per head, but also
literacy, longevity and the like, Norway and Switzerland are the two
best places in the world to be born. Both trade freely with the EU while
retaining their parliamentary sovereignty.
“Ah, but you can’t compare us to Norway,
they’ve got oil and fish!” Well, OK. I mean, Britain has oil and, but
for the wretched EU, we’d have fish, too. Still, if you really don’t
like Norway, what about Switzerland? It has no natural resources to
speak of. Like us, the Swiss became world leaders in financial services:
maybe that’s a useful parallel? “Yeah, well, the Swiss took Nazi gold!”
I won’t argue the point. I’ll just offer
my last-ditch example. If Norway and Switzerland are too exotic for you,
how about Guernsey? If we can’t draw a parallel even with the Channel
Islands, we are truly lost to introversion. Guernsey is an
English-speaking, common law, parliamentary democracy. Its currency is
the pound. Its head of state is the Queen. It is, for certain purposes,
in political union with the UK. Its political system resembles ours in
every way. Except one. Guernsey is outside the EU.
The bailiwick is thus a handy guide to how
we’d fare after Brexit, and I’ve just made a visit there to find out
how it works. Essentially, Guernsey opts into the economic aspects of EU
membership, but opts out of everything else. Under Protocol 3 of the
UK’s accession treaty, the Channel Islands are covered by the EU’s trade
and tariffs policies. But they are outside the Common Fisheries Policy,
outside the Common Agricultural Policy (except for import duties on
non-EU produce), and outside the common rules on justice, home affairs,
foreign policy employment law and environmental regulation.
Guernsey is part of a free-movement area
with the UK and Ireland, but controls its immigration policy. Indeed,
startlingly to British eyes, it has an immigration policy: its
legislators vote on whom to admit, on what terms and in what numbers.
They are currently, for example, debating how many Syrian refugees they
might take in. They set an annual population target, and issue their
residence permits accordingly, mainly taking in temporary workers from
Latvia and Madeira.
Parliamentary sovereignty evidently suits
the Guerns. Their economy has been growing steadily at around 3 per cent
a year, their GDP per capita is one of the highest in the world,
unemployment is in the hundreds and crime is virtually non-existent.
While I was there, some vandals damaged the wing-mirrors of six cars.
The item led the local news, where it was reported in scandalised tones.
I can already hear the scoffers. “You
can’t compare us to Guernsey: it’s tiny”. Look, let’s nail down this
surprisingly common objection. Are we seriously supposed to think that
small nations can thrive outside the EU but large ones can’t? It’s
extraordinary how quickly EU supporters switch from “Britain has to be
part of a bigger bloc” to “You can’t compare us to small countries”.
Apparently we’re simultaneously too large and too small to prosper.
“Ah, but Guernsey is a tax haven.” In the
sense that it has low taxes, yes. And why does it have low taxes?
Because it is well-governed. As late as the 1980s, Guernsey had no
financial services industry, and its economy rested on tomatoes and
tourism. Since then, it has built up a highly successful services sector
without being covered by most EU directives. That’s the really key
point. Like Switzerland, but unlike the UK, Guernsey is excluded from
some aspects of the single market in services. But the flip-side is that
it doesn’t have to apply idiotic Brussels rules that threaten managed
funds and smaller banks.
Guernsey’s relationship with the EU is not
perfect. Many of its business leaders and politicians told me that they
felt that Britain was pressuring them to accept too many EU-inspired
rules in areas from fish quotas to financial regulation. Still, at least
they have the right to say no – unlike Britain where EU law has
primacy, and where these rules are enacted automatically.
Parliamentary supremacy should be the key
to any EU renegotiation. We might not want to copy Guernsey’s deal
precisely. For example, our global trade links give us more incentive to
be able to negotiate bilateral deals outside the Common Commercial
Policy. Still, an economics-only deal, inside the market but outside the
political structures, is attractive.
The Chief Minister of Guernsey is a hugely
impressive man called Jonathan Le Tocq, one of the last islanders to
have been brought up speaking the local Norman French dialect. He
studied in Paris, and feels very European. But what he prizes above all
is the sense of accountability intrinsic in the island’s parliamentary
system. “People know that they’re in control,” he told me. “If they
don’t like a policy, they can get it changed”.
Extraordinary, really, that such a thing should need saying. How diminished our own democracy has become.
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