Island still needs to plan for no-deal Brexit, says St Pier
GUERNSEY needs to continue to plan for a no-deal Brexit on 31 October, says P&R president Gavin St Pier.
The island’s most senior politician, who yesterday spoke to Brexit minister James Duddridge, said that there was still much to do to ensure an ‘orderly exit’ of the UK from the European Union after the two sides signed a new withdrawal agreement at a governmental level.
In an update on Twitter, Deputy St Pier thanked Mr Duddridge for ‘taking time to call to brief on developments in relation to Withdrawal Agreement. Agreed that there’s much still to do ensure an orderly exit and we need to continue to play for no deal on 31st.’
Deputy St Pier also said that he took the opportunity to raise the issue of ‘level playing field’ commitments in any final trading arrangements between the EU and UK – having stressed the importance that any commitments applicable to Guernsey were proportionate.
Meanwhile, an economist visiting Guernsey said Mr Johnson was unlikely to get enough MPs to vote for his deal in today’s sitting of the House of Commons – although it could be ‘very close’.
That could lead to a potential further delay to Brexit to the end of January and open up the prospect of an early December general election in the UK, said Samuel Tombs, chief UK economist for Pantheon Macroeconomics.
‘On my reading of what MPs have been saying is that I don’t think this is going to get through Parliament. It is going to be very close. But I think Boris Johnson is going to come about 10 votes short.’
While a general election threw open a range of Brexit options, Mr Tombs added: ‘The one really encouraging development really in the last week or so has been that Boris Johnson has clearly shown that he favours a deal and that even if they fall short by a few votes [in parliament], the Conservatives will be campaigning on the basis of getting this deal through.
‘So, the real downside to the economy of a no-deal Brexit in just a few months’ time, I think, has largely gone away.’
But with Mr Johnson’s deal, there was still ‘plenty of uncertainty over where we are heading’ with a transition period lasting until December 2020 – with negotiators supposed to draw up a UK-EU free trade agreement in that time.
‘There will always a tension between whether we’re heading a no-deal Brexit in a year’s time where we don’t have a free trade agreement in place or whether we’ll roll forward the transition period,’ said Mr Tombs, who was in Guernsey for an event with investment services group Ravenscroft.
‘Just because the withdrawal agreement could be ratified in a couple of months doesn’t mean Brexit uncertainty is going to go away.
‘There will still be plenty of reasons for firms to be cautious and holding off on investment.’
However, he did downplay the possibility of the UK becoming a ‘Singapore-by-Europe’ that would challenge Guernsey as a low-tax jurisdiction – a prospect that has been raised in some quarters.
‘I don’t think the UK is going to be seriously threatening Guernsey’s position in terms of attractiveness of living here in terms of taxation.
‘Yes, there could well be further cuts in corporation tax that the Conservatives are keen to implement. But I think a radical restriping of the [UK] state’s obligations is not on the table, so income taxes are going to have to remain high,’ said Mr Tombs.