Justice Committee
Oral evidence: Constitutional relationship with the Crown Dependencies, HC 30
Wednesday 15 November 2023
Ordered by the House of Commons to be published on 15 November 2023.
Members present: Sir Robert Neill (Chair); Tahir Ali; Dr Kieran Mullan; Edward Timpson.
Questions 1 - 58
Witnesses
I: Mike Freer MP, Minister for Courts and Legal Services, Ministry of Justice; the right hon. Greg Hands MP, Minister of State, Department for Business and Trade; Richard Mason, Deputy Director for Constitutional Policy, Ministry of Justice; and Dr Gaynor Jeffery OBE, Director for Core Policy, Delivery and European Region, Department for Business and Trade.
Witnesses: Mike Freer, Greg Hands, Richard Mason and Dr Jeffery.
Q1 Chair: Welcome to this session of the Justice Committee. We are taking our final round of evidence in relation to the constitutional relationship with the Crown dependencies and the UK Government inquiry that we have been carrying out.
We are very grateful to the Ministers and officials who have come along today. It is good to see the right hon. Greg Hands, the Minister responsible at the Department for Business and Trade. Thank you very much, Minister, for coming when you have only returned to the Department at about a day’s notice. I am grateful to you for keeping the diary commitment. It is always good to see Minister Freer, who looks after the Crown dependencies in his role at the Ministry of Justice. You have officials with you as well, which is very helpful. Perhaps you would like to introduce yourselves and your roles in the Departments.
Dr Jeffery: I am Gaynor Jeffery, a director in our trade policy implementation and negotiations group. One of my responsibilities is for our constitutional affairs team.
Richard Mason: Good afternoon. I am Richard Mason. My job title is deputy director for constitutional policy within the policy group in the Ministry of Justice. The CDs are part of my bailiwick, as it were.
Q2 Chair: Thank you very much. We will kick off with the two Ministers and your responsibilities and those of your Departments towards the Crown dependencies. We will start with Mr Freer, because, in effect, the MOJ is the lead Department in relation to this.
Mike Freer: Thank you, Sir Robert. We are largely the penholder for the constitutional relationship between the Crown dependencies and the Government. Our role is largely to ensure that their voice is heard across Government and that we spend time to understand their particular issues, needs and concerns. Our job is also to ensure that should issues arise between Government Departments and the CDs, in terms of interests not perhaps being aligned, we talk to colleagues across Government so that any disagreements can be smoothed out. I have to say that the team in the Department are well versed in ensuring that the views of the Crown dependencies are heard. It is fair to say that the level of engagement and knowledge across Whitehall of the governance and position of the CDs in the British family is much better understood now than it has been for many years.
Q3 Chair: I must say that the evidence we have had refers to your personal engagement as being continuously positive and supportive. I know that that is appreciated. I think you meet quite regularly with the CD Chief Ministers.
Mike Freer: Indeed. I have visited all the islands with some form of jurisdiction. I also have regular contact, either face to face when they are in London or online. Of course, they have my personal mobile number, so should they feel the need to bend my ear, within the rules of transparency and governance, they are able to contact me directly.
Q4 Chair: You do that, of course, on behalf of the Secretary of State, the Lord Chancellor, who is the Privy Councillor with responsibility for the CDs. How often does the Lord Chancellor meet them?
Mike Freer: The Lord Chancellor met formally with the CDs very quickly after his appointment. I think he met them in April. There has been one other meeting since. I cannot recall the exact date. Certainly, again, he has made himself available. Equally, they know that should they need to get to see him the door is open to them, but he met them very quickly after his appointment.
Q5 Chair: How would you say that engagement with your Department and the CDs has changed in recent years?
Mike Freer: It is true to say that, while I have a lot of interest in the CDs, and try to ensure that they get the attention that they deserve, my predecessor Lord Wolfson was equally interested and spent a lot of time nurturing the relationship.
In terms of access, I think it has improved. The quality of engagement has improved. That is a testament to the CD team of officials, and to the fact that the Department has raised its game in understanding its role as a penholder to protect the constitutional relationship between us and the CDs. I think it has improved.
Q6 Chair: Mr Hands, from your perspective perhaps engagement has increased because areas of trade policy, post Brexit and so on, have raised their prevalence. What is your responsibility for the CDs in the Department, and how is that discharged?
Greg Hands: Thank you, Sir Bob. Thank you for having me in front of the Committee. I think I have been in government for almost all of the last 12 years and this might be a debut appearance in front of the Justice Committee. Thank you for that opportunity.
First of all, obviously there is a very significant responsibility in terms of the inclusion of the Crown dependencies in trade agreements. We enter into negotiations on behalf, of course, of the UK and the wider British family. We completely understand the importance of the CDs and their interests in international trade negotiations. They are not always identical to the interests of the UK. That is the first thing to note. We fully respect the autonomy of the Crown dependencies and the differences from the UK, and indeed—something that we are all very keenly aware of but our negotiation partners sometimes have more difficulty understanding—the differences between the Crown dependencies and the fact that they are constitutionally entirely separate from each other; Minister Freer might correct me. That is sometimes an interesting thing for our negotiation counterparties.
The Crown dependencies bring something real to offer to the table. They are a great asset in trade for the British family overall, but we have to be careful, Sir Bob, in assuring compliance for the UK and for the three Crown dependencies. It is technical and complicated. It can take considerable time and resources, not only in the UK Government but in the Crown dependency Governments. Ultimately, as you know, the UK is the name on the international treaty. Obviously, we have to bear responsibility if there is a lack of compliance. In my experience, that is well understood in the Crown dependencies. We bear the risk of compliance and potential trade disputes. There are important decisions to be made by ourselves and the Crown dependencies when we sign up to trade agreements.
We always consult the Crown dependencies before acting on their behalf internationally. We spend a lot of time, and I personally engaged, in my previous stints at the Department—then the Department for International Trade, now the Department for Business and Trade—to make sure that their views are taken into account. When I was last at the Department, Minister Freer and I worked very closely together. He is himself a former Trade Minister as well. I recall that he and I worked very well together in this space, making sure that the Crown dependencies were satisfied with the position and that we took maximum advantage of the opportunities that were available.
In conclusion, Sir Bob, we are very proud of our relationship with the Crown dependencies. In Gaynor and others we have a team who are now very experienced in working with the Crown dependencies at official level, to make sure that we are all satisfied with our positions, all understand our positions and are able to maximise the opportunities.
Q7 Chair: We will come back to those points in a moment. Going back to the Ministry of Justice for a moment, Mr Freer, you talked about the Ministry being the penholder. You will have seen the evidence that we received about there being concerns by some of the CDs, variously and on different topics for different Crown dependencies. There have been some challenges in their engagement with some parts of the UK Government, although not necessarily the MOJ itself. What do you do, as a Minister, and what do your officials do when there is a perceived difficulty by the Crown dependencies in getting their concerns fully taken on board by one of the policy Departments other than yourself? How do you set about reconciling that?
Mike Freer: Obviously, our role is to ensure that the CDs’ interests are understood. It is not necessarily the role of the MOJ to ensure that their interests are delivered. Sometimes that misunderstanding has to be reiterated. We try to work closely to understand what they are trying to achieve. I work with my fellow Ministers to try to identify gaps and where those gaps can be closed. Sometimes it is ensuring that the CDs have access at an appropriate level. From that dialogue, they have a much better understanding as to why their particular ask cannot be delivered. They may not always be happy that their ask cannot be delivered, but at least they have understood that they have had a hearing and they have a detailed knowledge of why the interests of the UK and the CDs may not be aligned. The dialogue is the important part.
What we have found, certainly with Minister Hands—prior to that with Minister Huddleston, and prior to that Minister Hands—was the ability to close the gap in knowledge and, in some cases, we were able to get the CDs’ asks aligned with the UK. That sometimes means colleagues at DBT shifting position slightly, and the CDs shifting position slightly. Our job is largely to act as a facilitator.
Q8 Chair: We have DBT here today, but it could for example be DEFRA in relation to fisheries policy and other things. The point is this. You are the penholder, and trying to do that quite proactively, but is there a case for saying that perhaps there is an obligation, at least implicit, in the relationship that the MOJ has to go further and be an advocate for the Crown dependencies within Government? Advocates cannot always deliver what their clients want—I know that well enough myself—but there is a role that has to be done. Is there a case that perhaps you, or perhaps the Cabinet Office as a co-ordinating Department, should be tasked with a more robust approach?
Mike Freer: Technically speaking, obviously, the constitutional relationship does not have to rest with the MOJ. It could equally rest with the Cabinet Office or with DLUHC, which has a constitutional unit. In terms of being an advocate, as you say, we advocate on behalf of the CDs. We advocate in ensuring that their views are known and understood. Equally, we are very conscious that there is a line that we cannot cross. They are independent and, basically, it is not our job to force the rest of Whitehall to bend to what the CDs wish. Our job is to ensure that the dialogue happens, not to beat the door down on their behalf.
Q9 Chair: Would Cabinet Office be better placed to do that, or not?
Mike Freer: I couldn’t possibly comment.
Q10 Chair: It is a genuinely open question. You have done the job successfully for some time.
Mike Freer: I would be sad to lose the responsibility. I think it works well where it is. Could another Department that has constitutional responsibility take it on? I have no doubt.
Q11 Chair: The other thing I want to raise is this. The international identity frameworks were agreed with each of the Crown dependencies to clarify the relationship where international relations are concerned. Do you think it would be useful for those to be formalised more? Are they adequate, or do we need to put something on a more formalised basis, given that they are all different and vary from place to place?
Mike Freer: It is true to say that the Lord Chancellor and I have discussed whether we need to refresh the formula for how we represent the constitutional requirements of the CDs. Beyond that, it is an active discussion whether we need to revisit it and refresh that formal framework. It is a valid challenge, and one that I can say the Lord Chancellor and I are actively looking at. I think it is too early to say where we will go with it.
Q12 Tahir Ali: My question is to Minister Freer. Thank you for coming. Roughly how many matters are the CD team currently working on, and which Government Departments are they working with?
Mike Freer: In terms of the number of current matters, I might have to ask Mr Mason.
Q13 Chair: If Mr Mason wants to come in, that is all right.
Mike Freer: He will know much more, day to day, what his team are doing.
Richard Mason: There are always several matters under way at any one time and we deal with a range of Departments at any one time. For example, at the moment we are dealing with DBT, obviously; we are dealing with the Home Office on some issues; we are dealing with DEFRA on some issues; and HMRC. There are always several matters running and several Departments that we are engaging with, alongside all the engagement we are doing with the CDs on other matters that they may have that they would request our help on.
Q14 Tahir Ali: Minister, the CD team has been described in the evidence as “overworked and understaffed”. Why were the additional resources put in place for the UK’s departure from the EU stood down when work associated with negotiating international agreements was about to increase?
Mike Freer: First of all, the team was increased specifically to deal with the EU withdrawal workload. Having left the EU, that workload largely fell away. We are looking to increase by a further position to recognise some increase in workload, but I am not sure that it is entirely true to say that the workload to exit the EU continued in a different way outside the EU. As we pursue, particularly in terms of DBT, striking trade deals, we are stepping up extra resource to help on that. I am not sure that I would characterise the team as being under-resourced having lost the two members of staff specifically recruited for EU withdrawal.
Q15 Tahir Ali: It was in the evidence. That is why I asked the question. There are plans in place to increase the team. Do you know when that will be achieved?
Richard Mason: That will be achieved in the coming months. We are going to recruit a further grade 7, or a new grade 7, to the team. That will take us to a headcount of nine. We have a headcount of eight at the moment.
Q16 Chair: What is the vacancy level?
Richard Mason: If you discount the grade 7 we are going to recruit, we have one vacancy at the moment. That is at EO level. We brought in a new EO in the summer, who, unfortunately, disappeared on promotion almost immediately. We have just one vacancy.
Q17 Chair: Is that being recruited at the moment, too?
Richard Mason: That is actively being recruited, yes.
Q18 Edward Timpson: Minister Hands, welcome back to the Department. I think it is for the second or third time; I am not quite sure.
Greg Hands: Actually, the fourth time.
Q19 Edward Timpson: It gives me a chance to roll out the age-old quip, “Many hands make light work.”
Greg Hands: It is the same Hands, many times.
Q20 Edward Timpson: It leads me into my serious question, which is about officials in your Department. It may be that Dr Jeffery can help us with this as well. In the written evidence that was provided by your Department, it was not clear whether there were any officials with specific responsibility for the Crown dependencies. Could you give us a little bit more detail about how officials engage with Crown dependencies, both on a one-to-one basis and in negotiations, so that they get clear, consistent representation of their views and wishes in particular negotiations, especially trade?
Greg Hands: Thank you, Mr Timpson. I will bring in Gaynor Jeffery in just a moment. I will start by saying that the way we organise ourselves—again, I will be corrected if I am wrong—is with a constitutional affairs unit of just under eight people who deal with all trade aspects in relation to the Crown dependencies, the overseas territories and the devolved Administrations who can also have significant trade interests. Although within the UK, trade is a reserved policy area, it clearly has impact on areas of devolved competence, the most obvious being agriculture.
We have just under eight people working in that space under Gaynor’s lead. I don’t think Gaynor would specifically have Crown dependency officers within the eight, but she can tell us a little bit more about how the eight are organised.
Dr Jeffery: There are two sides of the team. One focuses more on engagement with the Crown dependencies and one on the devolved Administrations. It is all hands to the pump, depending on what comes up and what is live at the moment. We have expertise across all eight on the Crown dependencies and devolved Administrations. They all engage with their counterparts as needed.
Q21 Edward Timpson: How does the relationship that they have on a day-to-day basis with each of the Crown dependencies work in practice? I know it will probably be ad hoc, depending on what situations arise and the issues being dealt with, but who would they pick up the phone to and vice versa? How would they then nurture the conversation they have had to something of meaningful fruition?
Dr Jeffery: Our team leader talks to them on the phone when there are specific issues that need to be ironed out, and we work with them. There is a lot of deep working-level contact. It is a pick-up-the-phone and send-an-email type relationship. We have a regular drumbeat of engagements at specific points in a negotiation where we might bring in chief negotiators and negotiating teams, and we have a strategic six-weekly senior officials forum as well. Alongside that, there is a lot of working-level engagement. Sometimes it might be daily. Usually, at least weekly, there will be some contact between my team and counterparts in the Crown dependencies. I would describe it very much as a kind of pick-up-the-phone or send-an-email type relationship.
Q22 Edward Timpson: I want to go slightly off script, but it is still directly relevant to the initial question, and it may be relevant for the MOJ as well. Have you ever done work placement where someone from the Department spends some time in the Crown dependencies, to see things from their perspective and maybe understand how the relationship could be improved by a different way of working or a different type of engagement?
Dr Jeffery: Not yet to my knowledge, but it is something that has been discussed and we are looking at. It is something that the Government of Jersey have raised with me specifically, for example. It remains a possibility. The last senior officials forum—there was one in November; it was the one before that—met in Jersey. The team went out to Jersey to see the Government of Jersey in situ. I think that really helps with understanding.
Q23 Edward Timpson: That sounds like a good idea, yes. I want briefly to move to Minister Freer. First of all, I reiterate what you said, Chair. When we went to the Crown dependencies ourselves as a Committee, it was very clear that your direct engagement in going there, Minister, which goes to my last question, was hugely appreciated and had resonated quite widely. I am sure that is something that you will, no doubt, continue to do.
One of the things they raised was the contact that they had with senior officials in the Ministry of Justice: the director, director general and the permanent secretary. We have the deputy director with us today, which is fantastic. Is there a reason why they may be struggling to have a higher level of senior official engagement? Is there a way that it could be instigated, partly to reassure them that their messages are getting to the top?
Mike Freer: I am not aware that the door has ever been closed to them. Certainly, it has never been raised with me directly that they have sought access, and it has been denied. I am more than happy to reiterate it to the senior director, but certainly they have pretty constant access to the CD team. I would say it is on more than a daily basis. There is a constant flow between the CD team and the MOJ. If they wish to go higher, say to the permanent secretary, I am sure the permanent secretary would be amenable if she got the request. I am not aware that there have been requests at that level. Certainly, no concerns have been raised with me directly.
Edward Timpson: It sounds like the door is open to that if it has reached a point where it would be the obvious next step.
Q24 Dr Mullan: Back to you, Minister Hands. Again, I join in congratulating you on returning to the Department. I want to cover some questions around the trade negotiations, particularly the CPTPP agreement. We have had evidence from the Crown dependencies that they were disappointed not to be included in the services chapter from the outset. Can you or Dr Jeffery explain why they were not?
Greg Hands: Dr Mullan, I am keenly aware that I was very involved in this at the time. It must have been the back end of 2022 into early 2023. It is worth pointing out that the general assumption is that the CDs would be involved for goods. It is important to understand the difference between goods and services in this regard. Previously, when the EU was responsible for our trade policy, the CDs would never be involved for services—that is how I understand it worked—but always for goods. We are trying to maximise the opportunities to bring in the Crown dependencies for services.
With CPTPP, there was a particular complication. I should go back to the beginning, the inception, of the Department for International Trade after the vote to leave the European Union. It must have been late 2016 or early 2017 when the then Secretary of State, Liam Fox, and I were sitting down to map out what the future of trade agreements might look like. At that time, we were scoping around the world and having a look at who would do a trade agreement with the newly independent UK in terms of its trade policy. We took a great interest in what I think at the time was still called the TPP. Even late in 2016, the United States was still actively involved in TPP. We thought that TPP would be something the UK would want to join.
When scoping out the future trade agreements for the United Kingdom, CPTPP was always a strong and early contender for us to join. One of the meetings that I had—I think it must have been early in 2017—was when the Crown dependencies came to see me for the first time, led by a very capable man, Senator Ian Gorst, who the Committee may well know, who was then the Head of External Relations for Jersey and a former Chief Minister of Jersey. There was also the Chief Minister for the Isle of Man, Howard Quayle, and the External Affairs Minister for Guernsey, Jonathan Le Tocq. They all came to see me and were all, quite rightly, interested in the opportunities for the Crown dependencies with the UK having an independent trade policy. As I said in my opening remarks, we have always been keen to realise opportunities for the Crown dependencies.
On CPTPP, with your forgiveness Chair, there are two complications. One is that it is an existing trade agreement. There is a negotiation as well, but there is existing text and the onus is on the UK to comply, if you like, with the existing text. I do not want to relive that whole negotiation, but crucially that makes it a little bit different. It gives us a little less discretion, if you like.
The second thing is that the CPTPP is a group of 11 countries. The Crown dependencies know our view, and I think the discussion evolved in a friendly way. At times, the 11 struggled to understand the differences between the Crown dependencies. We had three different positions in the negotiations by Jersey, the Bailiwick of Guernsey and the Isle of Man. I will be corrected if I am wrong but, from memory, Jersey wanted to be in for goods only; the Isle of Man wanted to be in for all services; and Guernsey was somewhere in the middle. Complicating that was that Guernsey had a sub-position. They wanted a carve-out for Sark and Alderney within the Guernsey position. All of that they are constitutionally entitled to do. Minister Freer can correct me if I am wrong. They can all have different views.
The difficulty with the CPTPP 11 was getting 11 countries to understand that position and to understand, first of all, that there would be differences between the CDs and then within a CD. That was what caused a lot of the difficulty in the negotiation. I personally intervened to get the Crown dependencies a session in front of the CPTPP 11 counterparts—I think it was an hour or so—to allow them to explain more about themselves, the difference between them and why they had different positions. I think that was really helpful, both for the Crown dependencies and for the negotiation partner.
In all of these things we have to consider that there is an international negotiation. We not only have to consider the viewpoint of the UK Government and each of the Crown dependencies, but we have to operate in the space of what is negotiable. I think that is where some of the initial difficulties were in the CPTPP negotiation. We came to an amicable position during the course of the negotiation, and I think we are now more satisfied with where we ended up.
Q25 Dr Mullan: It is true to say that in the evidence they positively highlighted your contribution in that regard. For my own understanding, when it comes to the different Crown dependencies within the trade agreements—for example, activating the services chapters—can individual ones be activated? I assume it is not an either/or, or is it, when it comes to the Crown dependencies in the services chapter?
Greg Hands: An either/or for each CD or between the CDs.
Dr Mullan: Yes.
Greg Hands: For each Crown dependency. I think it would depend on what was negotiated in the first place. I will bring Gaynor in. I think the extension mechanism is an either/or. What has been put in the extension mechanism gets triggered or not.
Dr Jeffery: I think that’s right, but we will write if it is not correct. To clarify, it is all or nothing. It would be for all of the services chapters, not for part of one.
Q26 Dr Mullan: I also meant, would all three have to agree or one?
Dr Jeffery: I think that is the case. We will confirm if not.
Q27 Dr Mullan: Where are we with the activation of the services chapters?
Greg Hands: None of them has been activated yet. The CDs have been keen to put their resources into the further, live negotiations that are coming. We are all keen to move those activations forward, obviously when the CDs want to and, crucially, when the CDs are ready. You have to be ready and make sure that you are compliant at the same time. In the UK we have a strong interest in making sure that the Crown dependencies will be compliant at the point of activation. One of the additional reasons for having the mechanism is to give people time to make sure that they are compliant. We look forward to those extension mechanisms being activated in due course. Most of the focus now is on getting the new negotiations and making sure that those extension mechanisms are in place.
Q28 Dr Mullan: Would you dare to put a timetable on the activations?
Greg Hands: I would not put a timetable because it is probably a matter as much for the CDs as it is for us. We have extension mechanisms in the Japan deal, the Australia deal, the New Zealand deal, CPTPP itself and the EFTA deal. Those extension mechanisms are in place. My impression is that they are not time limited. It would be up to the CDs, and up to us, that we are satisfied that they are compliant and will be able to comply with the international treaty.
Q29 Dr Mullan: Are there one or two of those where you think the discussions are most advanced?
Greg Hands: Again, I probably would not want to put a timetable on it. I think that is as much a matter for them as it is for us. I look forward to all those extension mechanisms being activated really soon. I think it will benefit the Crown dependencies. I think it will benefit the British family overall. It will benefit those agreements as well. That is why we negotiated the extension mechanisms.
Q30 Dr Mullan: As you mentioned, the optimism would be that they are included, going forward. Are there any learnings you have taken from the existing negotiations where they have not been included from the outset, and how might you do things differently to try to secure that?
Greg Hands: Over the years, we have really improved our ways of working with the CDs. Gaynor Jeffery outlined the official level, but one of the things that I did was to put in place a quarterly meeting, at political level, with senior representatives of the Crown dependencies. I mentioned the first of those. It was probably late 2017 by the time that happened. That is a quarterly mechanism put in place. I made a commitment before to meet the CDs before we start a negotiation, so that they can get as early sight as possible of what might be in it for them. Obviously, it is a negotiation of an international treaty. We do not know, when we start the negotiation, what is going to be in the treaty.
Q31 Dr Mullan: You mentioned your personal intervention to secure a meeting during negotiations previously. Is that not something that could be formalised? Could they not have representation as part of the negotiating team in a formal way?
Greg Hands: That is a really interesting question, Dr Mullan. I would say two things on that. First of all, we have to be mindful of the constitutional settlement. I am sure that Minister Freer would take an interest there. In the UK we have formal responsibility to represent the CDs in these kinds of negotiations. Both the CDs and we are satisfied with how that works.
On this occasion, it was a little bit exceptional. Particularly with the 11 counterparts, who had all come to London at the same time and it was not necessarily going to be straightforward to do it in any other way, I thought it was important, given the plurilateral nature of CPTPP, that they all had a chance to understand better. In a more conventional trade arrangement, it might not be necessary or best for that to happen, but I am open-minded. There is the quid pro quo of the UK having responsibility in international treaties for the Crown dependencies’ compliance. The UK represents the Crown dependencies in those negotiations. I think all sides are more or less satisfied with that position.
Q32 Dr Mullan: While I would not overstate their level of dissatisfaction, I think we can infer from the evidence that we have received that, although they are satisfied, they would see room for improvement, particularly around a more live engagement in negotiations. Perhaps even if somebody is not a formal negotiating party and talking to the opposing side, it is having somebody in the room who can listen and give live feedback. They also expressed some frustration that, because they are not part of the live discussion, they are sometimes given 48 hours to give feedback on an element of the negotiation. They see it for the first time and then have to get back within 48 hours. Is there a more formal structure that secures time, participation and ongoing involvement in the dialogue?
Greg Hands: I will bring in Gaynor for an official viewpoint, but in my experience of international trade negotiations, and it is something the UK has only been doing for the last seven years, unless anybody was around before 1973 doing these kinds of things—I am looking round the room.
Dr Mullan: Don’t look at anybody.
Greg Hands: Possibly nobody here. You have to operate in a corridor of what is deliverable and negotiable. Adding additional layers of complexity is not always in the best interests of the United Kingdom, the Crown dependencies or getting a deal done. Again, I think we would operate on the basis of what is negotiable and practicable. Let me bring in Gaynor from an official standpoint.
Dr Jeffery: When we get to the end stage of negotiations, or indeed at any point, the pace can be very tricky. One of the things we do is to aim to brief them immediately when we need to. For example, during the difficult stages of the CPTPP conversations, there was a point when we had daily downloads with them about what was happening. I don’t think they lose much in terms of hours by not physically being in the room. We always endeavour to do that when we need to turn things around at pace, but there is a point at which the pace of negotiations is so quick that it might be 24 or 48 hours. I think the Crown dependencies understand that that is the position. Clearly, we would never intend to give someone 48 hours’ notice if we could give them considerably more, but that opportunity is not always available to us.
Greg Hands: If I might add, Mr Mullan, my personal commitment to this is that I made a trade visit to Jersey in September 2021. I remember it well. It was to meet the then Chief Minister, John Le Fondré, and the then Minister for External Affairs, Ian Gorst, and their officials. I went round the island to see some of the capability there, which I was extremely impressed with. There was agriculture and financial services, and a lot of tech innovation is happening in Jersey. It was really helpful for me to see at first hand the incredible things in Jersey. I am committed to visit the other CDs. I made that commitment before I last left the Department, but I will keep it again. I will visit the other Crown dependencies over the course of the coming months to see their capability.
You might remember that there was a famous photo of me milking a cow in Jersey, Mr Mullan. As Member of Parliament for Chelsea and Fulham, it is not something you ordinarily get much opportunity to do. There is me milking one of those absolutely beautiful Jersey cows. The local newspaper wrote up that they had never seen anybody milk a cow so far away from the animal. There was even speculation that I was actually sat on Guernsey at the time when I was milking that cow in Jersey, as I was such a very urban Member of Parliament. It created quite a bit of interest, but it was fantastic to see at first hand the capability that was there.
Q33 Dr Mullan: Given, as you said yourself, that this is new to us as a country, and given the feedback we have received, might there be a more formal review internally in the Department about how we can better support services to be involved from the start in our arrangements with the Crown dependencies when it comes to negotiation. We have had a period of negotiations. It is new to us. Is there something you can do more formally to improve on that?
Greg Hands: I was last at the Department nine months ago. It has evolved, and for the better. Our engagement with the Crown dependencies has been very strong. Don’t forget that, with services, you are also talking about compliance. We need to be satisfied that the Crown dependencies themselves comply with the international treaty. It is a two-way thing, but I think our relationship is good.
Q34 Dr Mullan: In terms of compliance, what would you say is the approach when it comes to ensuring an understanding of compliance in the Crown dependencies from the Department’s perspective?
Greg Hands: Let me give you a couple of examples. Mr Freer can correct me if I am wrong. Crown dependency legislation is entirely independent of UK legislation. The way Crown dependencies regulate themselves and their legislative basis is entirely different, but obviously it is an international treaty. We cannot say to the Crown dependencies, “You must be compliant with UK law.” Our position is that they must be compliant with the international treaty.
Let me give two practical examples. The first is the intellectual property regime. Intellectual property is a big feature of international trade agreements. We do not set the intellectual property regime in the Crown dependencies, so we would need some degree of certainty that their intellectual property regime would match the treaty. My impression is that all three of the Crown dependencies have different intellectual property regimes.
The other example is what in trade agreements is called a mode for mobility, which is the mobility of professional service providers, because many services are actually delivered by human beings, typically professional human beings. The ability to deliver a service between two countries often depends on the ability of the person providing the service to get into that country. In many ways, the Crown dependencies have their own mobility regimes. In a practical way, making sure that there is a mode for mobility provision is something that the Crown dependencies need to do.
Q35 Dr Mullan: As you said, it is not for us to check their laws; it is to check that they are compliant with the international treaty. Who is responsible for that?
Greg Hands: It is not for us to dictate their law.
Q36 Dr Mullan: No, but to check that the outcome is suitable.
Greg Hands: I will bring in Gaynor on the actual process. I think that is something done co-operatively. It is in everybody’s interests to be compliant. It is a co-operative thing.
Dr Jeffery: We need to collaborate closely with the Crown dependencies to assess their compliance. Ultimately, it is a decision for the UK Government as to whether or not we view their compliance as being at the right level or not. At a practical level, we send out detailed tables with the text against an agreement, and they provide a return explaining their legislation. Lawyers look at it and then, when we think there is a bit of a mismatch, we have to enter into a more detailed conversation. We have not yet got to the end of that process on some of the services areas, but I can see that when we do, and once we have got over that stage, things will become a bit easier.
Q37 Dr Mullan: In the other direction, I want briefly to touch on letters of entrustment, with the Crown dependencies themselves securing their own agreements. As that area expands, how can we support them? Do we support them being used more widely, and what practical steps can be taken in the Department to encourage and support them to use them more widely?
Dr Jeffery: We only really touch on that in terms of bilateral investment treaties. I think it is a Ministry of Justice topic.
Mike Freer: We lead on the letters of entrustment. I am aware that the CDs would like a slicker process. It is difficult. I understand the frustration. We cannot issue a pro forma with each letter of entrustment, because each negotiation has to reflect the needs of the CDs and the third party. Therefore, they have to be drafted carefully. They have to be checked so that the text of the letter of entrustment is in accordance with our international obligations as well as their obligations. It is not really a cookie-cutter process. It is frustrating and it is slow, but it is inevitably slow because it is a legal document and it has to be right.
Q38 Chair: Is there no scope for a more general power of entrustment to be negotiated in some areas?
Mike Freer: Certainly, our view is that each letter of entrustment is largely bespoke. We are always willing to look at how we can find a better process. I don’t think that we are in a position to want to give an “Insert here” type of letter of entrustment, if I can use the vernacular. It is difficult to give a general letter of entrustment because of the legal complexities.
Q39 Chair: Understood, but might there be a case for saying, “Look, these are sophisticated jurisdictions with well-developed legal systems and civil services of their own.” Couldn’t we leave it on the basis that the bulk of the work is done by them and there is a level of checking just to ensure that the UK’s risk is covered, as Minister Hands said?
Mike Freer: Mr Mason may have more detail, but my view is that they largely provide the text for us to check against the legal obligations. It is not that it is dictated by us. It is led by them, and we do the cross-checking. There is a high level of trust between the various Governments, but because of the complexities I do not think a general letter of entrustment is somewhere we are ready to go.
Q40 Chair: Minister Hands, you explained in some detail to Dr Mullan the particular pressures during the FTA negotiations. Thinking about it now, is there also perhaps an issue that the UK has set itself some pretty tight deadlines? Frankly, there was a lot of political pressure to get FTAs signed to prove that Brexit was working, and that we were getting FTAs signed and not being left out in the cold. Do you think that made it harder?
Greg Hands: That is an interesting question, Sir Bob. I don’t really accept the premise, though. I think we have had enormous success at the Department in, effectively, having trade deals with 72 different countries, including for the first time deals that go further than the previous trade deal that the European Union negotiated in the case of Japan. We have done an Australia trade deal, which the EU has not managed to do. We have done a deal with New Zealand. Joining CPTPP is going to be fantastic news for the country.
As a former Minister, you will know that setting a good pace for our trade negotiations has been the right thing. Thinking back to when I joined the Department in 2016 and where we are today in 2023, if I were my 2016 persona looking at the Department in 2023, I would be very satisfied with what has been achieved in the space of trade and in rolling over almost all of those previous EU deals, doing the bespoke deals and going further and signing our digital economy agreement with Singapore. We are doing some really innovative things in the space. We have our own tariff policy. We have our own developing country policy. All of those have been huge successes of this Government and this Department over the last seven years.
I do not think that, at any point, we have suffered from setting too fast a pace in those negotiations. The fact is that the UK has managed to land, for example, some deals where others have not. We remain the only country to join CPTPP despite having not been a founder member. In the Australia trade deal, we have gone much further. We have done a lot more with Japan. All of those are things that we would not have been able to do as members of the European Union. Crucially, a lot of them are things that we have done in advance, and done better than other countries that have longer experience of trade negotiations. If I asked my 2016 persona whether I was satisfied, I am actually really satisfied at where the country is and the Government have been in the last seven years of doing those trade deals.
Q41 Chair: I understand that, Minister, from a UK perspective. What is sometimes put to us is that that is fine for the UK, but the Crown dependencies all told us from the start that they wanted to be in financial services. The concern is that because of the complexities—perhaps compliance and other things that have to be slightly different for each one—it was going to hold it up for longer to get them in initially than was acceptable to the UK’s political imperative.
Greg Hands: If I might, that is one of the beauties of the extension mechanism. We have already negotiated for the Crown dependencies to be able to join those agreements when they are ready, when we are ready and when our counterparts are ready in due course. I hope that those extension mechanisms will kick in sooner rather than later. I think the Crown dependencies will have the best of all worlds, in that sense. They will be able to enter when they are ready, and the time is right.
Q42 Chair: Was the extension mechanism put in specifically because you could not get them in ab initio?
Greg Hands: No, I would not say that. As with all these things, we have to get the balance right. I think it was in our overall interests. I do not think you are talking about negotiations that were perilously fast; far from it. They were negotiations that were done at a good pace, really seriously, in the interests of the United Kingdom, the CDs and the whole British family.
Q43 Chair: The only remaining thing there is that the extension mechanism will hopefully be of value, but it is untested, isn’t it? It is a little unclear, as Dr Jeffery said. It has to be all three unanimously or not. We are in slightly uncharted territory.
Greg Hands: But I think extension mechanisms have precedence in international trade agreements. In that sense, they have been tested before. Obviously, we are expecting the extension mechanisms to work well. We negotiated the text of the extensions on that basis.
Q44 Chair: So far we have never actually used them in practice, have we?
Greg Hands: It is still early days. We are expecting them to come in. That is why we negotiated them.
Q45 Chair: On learning the lessons, Jersey in particular has said, as well as the others, that they are particularly keen to be on the financial chapters in relation to the UK-Gulf Co-operation Council FTA. What is being done there to try to see if we can achieve a swifter outcome and get them in initially, as far as that one is concerned?
Greg Hands: Sir Bob, it helps us. Again, I respect the constitutional position. There is no reason constitutionally that the Crown dependencies need to have the same approach, but it certainly helps when they do. It certainly helps our counterparts. With the Gulf Co-operation Council, they have taken a much more unified and territorial ask between the three CDs, and that will help matters in the negotiation with the Gulf Co-operation Council.
Q46 Edward Timpson: I want to take us back to the issue of legislation and the legislative process. This series of questions is more directed at Minister Freer.
As we have already touched on, we know that UK primary legislation does not normally apply to Crown dependencies, but there are exceptions to that where there is a UK Act, and some extension of provisions is put into their jurisdiction. One mechanism is through a permissive extent clause. Specifically on that approach, one of the pieces of legislation that was raised with us where that became a thorny issue was the Fisheries Act 2020. At a late stage, and contrary to the wishes of the Governments of Jersey and Guernsey, there was a permissive extent clause included in the Fisheries Bill. This is an opportunity to understand why that was and why it went against the guidance of the Ministry of Justice, which is that permissive extent clauses should not be included in a Bill without Crown dependencies’ prior agreement.
Mike Freer: It is true to say that normally a permissive extension clause would be quite rare. On fisheries, from memory, it was not just about the needs of the sea; it was a wider international treaty for the UK. That is why it was applied. I think that is correct.
Richard Mason: That is correct.
Mike Freer: Where we are now, my understanding is that the CDs are in a much happier place, not least because the issue of quotas has been resolved to a large extent. Many CDs have actually seen an increase in their quota. While they were—shall we say?—grumpy at the PEC being applied, post the actual application of the quotas they are in a much better place, with increased catch limits. It is rare. It was explained and I think the CDs understand the position. The bottom line is that it has allowed us to give them a better quota.
Q47 Edward Timpson: I hesitate to suggest that the Government of Jersey may have been a little more than grumpy about the situation. In further written evidence to the Committee, they said that they did not agree that the insertion of the clause was justifiable; that it was “disrespectful of the islands’ wishes and superfluous”…“paternalistic”…“contrary to the constitutional relationship” and indicated “a lack of trust and a poor understanding of the constitutional position by some Ministers and Departments.” Is it of concern to you that that was their experience through that process?
Mike Freer: I understand that that is their point of view. Having visited Jersey and discussed at length some of the issues facing Jersey and their fishery sector, I can see why they took that view. The bottom line from the UK point of view remains that the PEC was justified because of the UK interest.
I would not want to dwell on how that PEC was implemented. The bottom line is that, moving forward, our relationship on fisheries and the relationship between the CDs and DEFRA on fisheries is now in a good place. I accept that at the time it was not well handled, and that Jersey was grumpy about it because they did not feel it was justified. We had a different point of view, but the bottom line now is that it has allowed us to negotiate better quotas for the CDs. I realise that there are some outstanding issues, particularly in Jersey with their relationship with Normandy, which was fraught, certainly post the leaving of the EU. I understand that the work that Jersey has done with the governance of Normandy means that a lot of those issues have now been resolved.
I accept all the points made by the CDs, but the bottom line is that it was legitimate action by the UK Government, and it has allowed us to get us into a better place on fisheries.
Q48 Edward Timpson: On that specific permissive extent clause, do you have any plans to bring it into force? If you do, what impact would that have on the constitutional relationship between Crown dependencies and the UK Government?
Mike Freer: I may have to seek guidance on this, but I am not aware of any plans to bring it into force.
Richard Mason: No, there are not at the moment. Our view is that the PEC that was put in the Fisheries Act is soundly within the constitutional relationship and that it is legitimate within that relationship. It is necessary in order to make sure that the UK’s obligations under the Fisheries Act can be enforced if the need arises.
Q49 Edward Timpson: But there are no current plans to bring it into force.
Richard Mason: Not that we are aware of, no.
Q50 Edward Timpson: Could I go on to the legislative process? When there is legislation that affects them, I want to understand how the Crown dependencies are kept informed and involved in a timely and comprehensive manner throughout the process. Once a UK Bill team is in direct contact with a Crown dependency, what involvement does the Ministry of Justice continue to have with them throughout the passage of that Bill to make sure that their interests are properly represented at every stage?
Mike Freer: Each Department is responsible for making sure that they engage directly with the Crown dependencies on all aspects of the policy. That includes legislation. The Cabinet Office guide to making legislation details the procedure that UK Bill teams should follow when drafting UK legislation, including when and how to consult the CDs. That is supplemented by the Ministry of Justice’s own “How to” note that we have provided on working with the CDs. That is also being refreshed.
Q51 Edward Timpson: The Government of Guernsey have raised a specific incidence with us in the passage of the Illegal Migration Bill. They raised concern about the level of consultation that took place, wherein after initially giving their consent to the proposal put forward by the UK Government, they were then not consulted further despite the fact that significant changes were made which affected them. The Home Office/Ministry of Justice did not continue that dialogue at a time when they should have, to establish their views on the change in clauses in the Bill. What discussions has the Ministry of Justice had with the Home Office to ensure that that type of situation does not arise again in the future?
Mike Freer: I will have to come back to you in writing on the exact details of the level of discussions with the Home Office on that.
Q52 Edward Timpson: I have one final matter, sticking with the legislative process. As you will be aware, Minister, there are different ways for Crown dependencies to achieve Royal Assent for their legislation. For the Isle of Man legislation, the granting of Royal Assent is delegated to the Lieutenant Governor for many non-reserved purposes, but for Channel Islands legislation it is granted by the King’s Council, the Privy Council. Guernsey’s particular concern is that there is often quite a delay in achieving Royal Assent because of when the Privy Council sits and whether or not it fits with their schedule. There have been discussions about changing that to bring Guernsey in line with the Isle of Man. What progress has been made in trying to achieve that?
Mike Freer: A draft prerogative Order in Council providing for the Lieutenant Governor in the Bailiwick of Guernsey to signify assent for the majority of bailiwick legislation on behalf of the King is nearing finalisation. There are a few minor queries to be resolved before we can put that order before the Privy Council. It has progressed significantly, and we are nearing the end of the process.
Q53 Edward Timpson: Fantastic. If you can keep us in the loop, that would be very helpful.
Mike Freer: Indeed.
Edward Timpson: Thank you.
Q54 Chair: I take it as a matter of principle that if the Government of Jersey were to ask for a similar approach, in principle, the Government have no objection to that, but it is for Jersey to initiate it.
Mike Freer: We would obviously look at the detailed request, but if it works for one, it should work for the others.
Q55 Chair: That is very helpful. There are a couple of concluding matters. This is for you, Mr Hands. It is pretty clear from the evidence we have, and I think it is generally accepted, that the Crown dependencies in their varying ways make a significant and worthwhile contribution to the UK’s overall economy, both in their contribution to trade and in being a channel for direct foreign investment into the UK. Are there any discussions going on about trying to make the most of that economic relationship, which is already well embedded? We know the connection through the City in the financial services sector and other things, for example. Is there a plan to see how we can build that further?
Greg Hands: It is a very good question, Sir Bob. One of the things we are all keenly aware of, particularly in the relatively recently merged Department, is that one of the ideas in creating the Department for Business and Trade was to ally those two things closer together, so that our trade strategy matched the needs of UK businesses. It would not be much of an extension to extend that to the businesses and exporters of the Crown dependencies.
Perhaps I might point out one opportunity, going back to the issue of fisheries. There is the ability for Crown dependency fish and fish products to be sold into the fast-growing markets in the far east. Japan, for example, has a real taste for high-quality fish products. That is a huge opportunity afforded by UK trade policy to exactly that kind of high-end, high-quality production coming out of the Crown dependencies. There is a similar case in relation to some of the agricultural produce and livestock, particularly in Jersey and Guernsey, but across the three CDs.
We have an ability to work well as a trade policy for larger companies. There are some quite large companies in some of the Crown dependencies. For example, Specsavers in Guernsey is a very good example of an internationally well-known brand that has significant operations in Australia, if I am not mistaken. That was an active interest in the UK-Australia FTA.
Clearly, we have more knowledge of the capability, and I think that knowledge has improved enormously, particularly since the UK took on responsibility for the independent trade policy. We know the very strong contribution made by the Crown dependencies to our offer when it comes to international trade negotiation. It is very much not just as part of the British family and going into bat, as we naturally would, for the Crown dependencies. There are real opportunities for Crown dependency businesses to get to the table and show more to offer to our trade counterparts.
Q56 Chair: Has any formal assessment been made of the economic benefits to the UK of including the CDs in the FTAs or not?
Greg Hands: I don’t think we have made a formal assessment. I can certainly take that away and give it some thought, working with the CDs to look at that. Obviously, all three CDs have different things to offer and different things to bring to the table. I can have a think about whether a more formal assessment is necessary. I will take that away and consider it, Sir Bob.
Q57 Chair: Thank you very much, Minister. Minister Freer, a lot of the evidence referred to the “British family” in terms of relationships. In the Ministry of Justice’s perception, what does British family mean? Is it a purely constitutional relationship? Does it include those economic and other ties as well?
Mike Freer: From our point of view, it has a legal definition. What we mean by it is that it allows all the component parts to come together. Sometimes, as in all families, there is disagreement, but it allows us to work for the common good and where we have shared interests. The British family to us means that we share common values, a common outlook and common interests. That is what we mean by the British family. We will work together for our common good, even if we do not always agree.
Q58 Chair: Do the UK Government as a whole have a particular vision for how the relationship between the United Kingdom and the Crown dependencies, as part of that bigger British family, will be developed in the future?
Mike Freer: My personal view is that I am not a great fan of vision statements. I think the relationship within the family is too dynamic to try to describe it. As fast as we would write something, it would be out of date. I prefer the more amorphous description, British family. The vision, of course, is that we continue to do whatever we can for the greater good of all the component parts.
Chair: Thank you very much, Ministers and officials, for coming to give evidence to us. We are very grateful to you. There are a few little follow-ups that we are going have, for which I am grateful. Many thanks. Welcome back, Mr Hands. It is good to see you again, Mr Freer, Mr Mason and Dr Jeffery. The session is concluded.