Shining a light on Jersey

Kate Nutt spoke to Elizabeth Stewart about how the new Jersey Office in London plans to channel relations with the UK and the diplomatic community.

The question of Scottish independence may be grabbing the headlines of late, but it’s not the only place asserting its international identity.

Jersey, part of the Channel Islands, has been taking steps to make itself more visible on the world stage.

“There has been a push for some time now, for Jersey to do more with its international presence,” says Kate Nutt, the head of the newly-opened Jersey London Office.

Diplomatic status
Gaining official diplomatic status for the new office is a priority for Nutt. “We’re aiming for representative office status, in the same way that the Overseas Territories have,” she says. But no matter what the official status of the office is, it is unequivocally Jersey territory, decorated with floor-to-ceiling posters of iconic scenes of the island, including the famous Jersey cow.

And Nutt has wasted no time in acquainting the diplomatic community with the Island – the year kicked off with a Spring Reception, co-hosted with the Young Diplomats, celebrating everything Jersey has to offer, from its cuisine and produce to its unspoilt beaches and fascinating history.

Economic attachés in the AERL also got the opportunity to learn how Jersey has maintained its status as the highest-rated offshore jurisdiction at a presentation by Senator Alan Maclean, Minister for Economic Development, and Joe Moynihan, the Director of Financial Services. The period of intense activity was crowned with a Jersey Day celebration hosted by the Island’s Chief Minister, Senator Ian Gorst, which was held at One Whitehall Place (the grand Old Liberal Club) and attended by ministers, diplomats, parliamentarians and officials from the City of London.

In between these marquee events, the Jersey Office has been meeting with regional groups of ambassadors to explain what the Island has to offer, and its unique constitutional relationship with the UK, which can be baffling to outsiders.

Constitutional complexities
Jersey is a self-governing Crown Dependency, but it’s neither a Realm country nor an Overseas Territory; it’s not part of the UK, EU or Commonwealth, but has a special relationship with all three.

To understand how this came about, you have to go back to 1204, when the Channel Islanders chose to remain loyal to the English King John instead of the conqueror of Normandy, the French King Phillipe-Auguste.

In exchange, the loyal islanders gained considerable autonomy – including their own parliament and powers over their tax and judicial affairs. Nowadays primary legislation passed by the Jersey Parliament gains Royal Assent through the Privy Council, so good contacts with the Ministry of Justice are vital.

If legislation looks set to affect the international obligations of the British Crown, the Justice Ministry will consult the relevant British government department to ensure consistency . So an important function of the London Office is to maintain a good working relationship with all Government departments so any legislative wrinkles can be ironed out quickly.

The only areas where the Crown (nowadays through the UK government) takes full responsibility is defence and, in some circumstances, international affairs.

“We have to work very hard to make sure that any directives coming out of Europe are not detrimental to the Island, and that our interests are considered as new policies are developed”

International personality
But as Jersey’s reputation as a leading international finance centre has grown, it has increasingly needed to act in its own right, particularly regarding tax information exchange agreements with other countries.
The need to define Jersey’s competence on foreign policy resulted in a Framework Agreement, signed in 2007 between the UK Government and Jersey.

“It sets out that Jersey has its own international personality and that the UK cannot act internationally on behalf of Jersey without our prior consent,” explains Nutt. “It also recognises that Jersey can sign certain agreements with foreign countries.”

In line with its growing international identity, Jersey appointed a new Minister for External Relations, Senator Sir Philip Bailhache, in September 2013. The London Office, meanwhile, is taking advantage of being in one of the world’s largest diplomatic hubs, with no less than 164 resident missions.

“It’s about making connections,” says Nutt. “Having good relationships in place gives you a good springboard from which to discuss more serious issues.”

As the issue of tax transparency has climbed up the political agenda, it has become increasingly important for Jersey to set itself apart from so-called ‘tax havens’ and to communicate that the Island has some of the highest international standards of financial regulation.

It works closely with the OECD on transparency standards and has signed more than 30 tax information exchange agreements with other jurisdictions.

Jersey’s continued success as a financial services centre benefits Britain too, adds Nutt. According to a recent study, Jersey supports an estimated 180,000 jobs in the UK and adds £9bn to the economy, while it is a channel for half a trillion pounds of foreign investment into the UK.

The EU and Brexit
Jersey is not an EU member but under Protocol 3 of Britain’s Treaty of Accession, it is part of the customs territory of the EU, but not the single market in services, although Jersey tends to mirror EU directives that relate to improving financial regulation.

So any EU policy in this area – and there have been many since the eurozone crisis – needs close monitoring. “We have to work very hard to make sure that any directives coming out of Europe are not detrimental to the Island, and that our interests are considered as new policies are developed. This necessitates close working with our Channel Islands’ Brussels office, as well as relevant Government departments in the UK,” explains Nutt.

Jersey is also keeping “a close watching brief” on Britain’s relationship with the EU, to ensure the Island is prepared in the event of any future changes.

Commonwealth club
And like other small islands, Jersey is perhaps more vulnerable to external shocks, such as global financial crises or the Brexit. These vulnerabilities they share with many of the Commonwealth nations and Jersey would like, in due course, to pursue the opportunity of associate membership of the organisation, reveals Nutt.

“I think we favour more of an observer-type association, but with closer links. We share an affinity with many of the Commonwealth members – including our size, the Queen, historical links with the UK – so some form of membership would be a good thing for the island.”

Going it alone?
The Commonwealth Games in Glasgow reinforced the sense of family among the Commonwealth nations and a sense of pride among Scots. Just what impact it will have on the Scottish Referendum on Independence in September is an open question.

But the Scottish vote hasn’t stirred any strong pro-independence feelings among the Jersey islanders, says Nutt. “I think the general feeling is that things work well as they are, and that we’re happy with the relationship.”

JERSEY BASICS
Geographical area
45.5 sq miles / 118 sq km

Population
99,000

Capital
St Helier

Gross National Income
£4bn

Gross Value Added
£3.6bn

GVA/capita
£36,700

Main language
English

Currency
British pound sterling / Jersey currency of same value

Government
Parliamentary democracy

Source: The States of Jersey Statistics Unit