Prepare for the worst

THERE'S been some talk about whether Guernsey people should be able to vote in the forthcoming referendum on the UK staying in or exiting the European Union.

The right answer is 'of course not'. Any more than we should have an MP in the Westminster parliament. And for the same simple reason – Guernsey is not part of the United Kingdom. Full stop.

Those who suggest that the people of this island should be able to meddle in UK affairs should be careful what they wish for. With rights come responsibilities.

Act like a part of the UK and you'll be treated as such. The last thing we want to do is blur the edges of our autonomy any further – it already feels at times as if HMG isn't fully aware of our constitutional position.

How does that fuzziness manifest itself? Firstly, with British ministers not always remembering that when they discharge their duty to look after Guernsey's international affairs, they should consider our own interests separately from those of the UK.

Secondly, with Privy Councillors sometimes seeming to act as representatives of the UK political establishment when advising Her Majesty over draft legislation passed by the States.

A while ago, this subtle takeover by stealth was a real issue. It may have been well-meaning, like a big brother looking after a younger sibling, but it certainly wasn't welcome among those of us who regard Guernsey's autonomy as something very precious. More recently, these challenges to our historic constitutional rights seem to have abated somewhat. The last thing we should do is reignite them by trying to meddle in domestic UK affairs.

Of course the outcome of the referendum, due before the end of 2017, could have fairly profound implications for Guernsey. If the UK was to leave the EU, the shock waves would clearly be felt here too.

Doesn't that give us a right to be involved? No. It's simply the price we pay for being a micro-territory on the edge of – but outside – much bigger political entities. This is true of our relationship with both the UK and the EU. At times it can be frustrating and leave us feeling pretty much powerless. But looked at holistically, this quirky role on the margins has brought Guernsey sizeable benefits. We simply have to accept the rough with the smooth.

That's not to say that Guernsey shouldn't be preparing like mad to deal with the consequences of the referendum. Of course it should. In terms of our external relations, it's the biggest issue to arise in a generation and there are only two possible outcomes to try to prepare for.

At the moment, it seems likely the result will be the UK voting to remain within the European Union. The opinion polls show support for that position is at its strongest for years. But referendums can be unpredictable animals, as the recent vote on Scottish independence showed. Nor are opinion polls always right, as we saw in the UK general election. So we have to be ready for anything.

Strangely, I think the ideal outcome for Guernsey would be for the UK to stay inside the EU with us staying very firmly outside it. While our third-party relationship with the European Union – as defined in Protocol Three of the Treaty of Rome – is now very outdated, it has certainly served Guernsey well.

In many ways, we have had our bread buttered on both sides. That's a testament to the negotiating skills of those fighting Guernsey's corner back in the late 1960s.

I wonder if today's political leaders could do as well?

Of course, if the referendum goes the other way then the consequences are rather unclear, but they'll be considerable.

On a micro level, obviously Protocol Three will disappear as it is contingent on UK membership of the union. That might, for instance, make the export of some agricultural goods to the EU more problematic.

Of course that's less of an issue than back in the heyday of the Guernsey tom, but we still have some sizeable horticultural businesses. I suspect such issues could be overcome and at least it would (in theory) make it easier to prevent milk imports.

The macro level impacts are potentially more profound. Guernsey's economy is impacted by the UK's and our dominant finance industry is very much linked to the City of London's role as the premier centre for international financial services. So if either suffer, then so might we.

Why should they?

Well, many business leaders think that inward investment might tail off if the UK voted to leave the union. That at the moment, Britain is a hugely attractive place for international companies wanting to establish a base within the EU, but without the sort of restrictive labour laws seen in countries such as France.

If they're right, then the UK could lose some of its allure by quitting the union and as a result no longer benefit from such investment and job creation.

If that happened it would be bad for the UK, and when it sneezes, Guernsey tends to catch a cold.

To be fair, some business leaders (a smallish minority) take the opposite view. Also, the impact on financial services companies is far less clear. Would they want to be based in a financial centre within the EU, such as Frankfurt, rather than London? Or would freedom from EU rules, restrictions and possible levies on banking transactions make London more attractive?

I suspect the former, but these issues are way beyond my expertise.

What I do know is that Guernsey should be modelling and preparing for every possible outcome.

Then there is the possibility which doesn't even bear thinking about.

We know that some EU countries are very frustrated at the status of the Crown Dependencies. They don't understand how the UK allows what they see as 'British tax havens' on the very edge of the EU.

We also know that David Cameron is desperate to gain concessions from other EU leaders to appease Eurosceptics within his own party. He wouldn't consider signing away any of our rights as part of a compromise, would he?

Actually, I doubt he would sink so low. Nor does he have any legitimate constitutional right to do so.

But if I was on the Policy Council I would still be keeping a very weather-eye open to the possibility, no matter how remote.

That really could be a game changer for Guernsey – and not one for the better.