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Statement by the President of the Committee for Economic Development

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Wednesday 22 April 2020

Statement on the Channel Islands Competition and Regulatory Authority

Sirs,

On the 17th February I received a telephone call Senator Lyndon Farnham. During the call Senator Farnham advised me of Jersey's intention to terminate the pan-island sharing of cost, expertise and administration support under the Channel Islands Competition and Regulatory Authority ("CICRA") joint operating model and revert back to separate insular competition and regulatory authorities in Jersey and Guernsey.

This decision was confirmed in a letter dated 3rd March from Senator Farnham.

Whilst the Committee was aware, during 2019, that the States of Jersey has a different view of the future role of the pan-Channel Islands CICRA model, these were felt to be issues which could be addressed within the existing CICRA model. In that context it would be fair to say that Jersey's request came as surprise to myself, and my fellow Committee members. Whilst this was not something which we would have wanted the nature of CICRA meant that we had to accede to Jersey's request.

In response to this request, officers and the Guernsey Competition and Regulatory Authority (the "GCRA") effected an analysis of how to effect the separation and the potential impact of the same.

Benefits of Separation

It has become apparent that there are material benefits to the Island in having the GCRA extracted from the CICRA operating model and the island having its own insular authority. These benefits are:-

  1. The Committee will be bringing a policy letter on the implementation of the States 5G and telecoms sector strategy in 2020. As part of that process, it is essential that we have a definitive, and clear, regulatory structure and approach in place to ensure certainty for the telecommunications companies and assist in the making of their investment.
  2. The States will be discussing its long term energy strategy, which will entail a significant, and material, role for the GCRA in reviewing and revising the regulatory framework for energy on behalf of the Committee.
  3. Prevention of conflicts caused by differences in regulatory priorities between the two jurisdictions leading to a clearer path for policy statements from the States of Guernsey to be acted upon by the GCRA.
  4. Focused support for the Trade Partnership Advisory Panel on Guernsey's interface with future UK trade agreements, particularly in respect of open markets and consumer interests.
  5. The ability to undertake extraordinary investigations as, and when, required that are focused on Guernsey market and consumer interests.

The Transition

The GCRA has confirmed that the transition, away from the CICRA brand, can be effected by 30th June 2020 with no additional competition grant or telecoms licence fee funding needed for 2020. The GCRA is currently working on the termination process, which is almost complete, and will require little officer time or resource to effect the same.

In addition, the separation provides an opportunity for the Committee to work with the GCRA in reconsidering the scope of its work, and on emphasising the role of the authority on making markets work for consumers. This will be done through a review, with the GCRA, in the second half of 2020. The GCRA is supportive of this approach.

Officers have discussed this development with the current chief executive of CICRA, and he is supportive of the benefits of developing a Bailiwick approach and of undertaking a review of the scope of the GCRA's work during the second half of 2020.

The Board

Both islands have been involved in a recruitment process for a new chairman for CICRA. However, in light of Jersey's decision this process has been paused.

A temporary chairman of the GCRA will be appointed shortly and it is proposed that the recruitment of a permanent chairman be effected during 2020.

Working together going forward

I would emphasise that, from our perspective, the termination of the CICRA brand does not mean the end of the islands working together in respect of competition matters where our objectives are aligned. In anticipation of this the GCRA is currently working on the development of a Memorandum of Understanding to allow for the two insular authorities to work together, where appropriate, going forward.

Conclusion

These proposals are intended to assist in the Island's economic recovery, post the COVID 19 pandemic, and are the right thing to do for all islanders as we look towards rebuilding our economy in the medium to long term.

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