P R O C E E D I N G S

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1 T Y N W A L D C O U R T O F F I C I A L R E P O R T R E C O R T Y S O I K O I L Q U A I Y L T I N V A A L P R O C E E D I N G S D A A L T Y N HANSARD Douglas, Tuesday, 28th June 2016 All published Official Reports can be found on the Tynwald website: Supplementary material provided subsequent to a sitting is also published to the website as a Hansard Appendix. Reports, maps and other documents referred to in the course of debates may be consulted on application to the Tynwald Library or the Clerk of Tynwald s Office. Volume 133, No. 14 ISSN Published by the Office of the Clerk of Tynwald, Legislative Buildings, Finch Road, Douglas, Isle of Man, IM1 3PW. High Court of Tynwald, 2016

2 Present: The President of Tynwald (Hon. C M Christian OBE) In the Council: The Lord Bishop of Sodor and Man (The Rt Rev. R M E Paterson), The Acting Attorney General (Mr J L M Quinn), Mr D M Anderson, Mr M R Coleman, Mr C G Corkish MBE, Mr D C Cretney, Hon. T M Crookall, Mr R W Henderson and Mr J R Turner with Mr J D C King, Deputy Clerk of Tynwald. In the Keys: The Speaker (Hon. S C Rodan) (Garff); The Chief Minister (Hon. A R Bell CBE) (Ramsey); Mr G G Boot (Glenfaba); Mr L I Singer (Ramsey); Hon. W E Teare (Ayre); Mr A L Cannan (Michael); Mr R K Harmer (Peel); Mr P Karran, Mr Z Hall and Mr D J Quirk (Onchan); Hon. R H Quayle (Middle); Mr G R Peake (Douglas North); Mr W M Malarkey (Douglas South); Mr C R Robertshaw and Mr J Joughin (Douglas East); Hon. J P Shimmin and Mr C C Thomas (Douglas West); Hon. R A Ronan (Castletown); Mr G D Cregeen (Malew and Santon); Hon. J P Watterson, Hon. L D Skelly and Hon. P A Gawne (Rushen); with Mr R I S Phillips, Clerk of Tynwald T133

3 Business transacted Leave of absence granted Matter of Urgent Public Importance Urgent motion presented under Standing Order 2.8(1) Leave to debate granted Result of UK Referendum on EU Membership Council of Ministers actions to protect future interests of Isle of Man Motion carried unanimously The Council withdrew House of Keys The House adjourned at p.m T133

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5 Tynwald The Court met at a.m. [MADAM PRESIDENT in the Chair] The Deputy Clerk: Hon. Members, please rise for the President of Tynwald. The President: Moghrey mie, Hon. Members. 5 Members: Moghrey mie, Madam President. The President: The Lord Bishop will lead us in prayer. PRAYERS The Lord Bishop 10 The Lord Bishop: We pray today that our thoughts and words may be so guided for the good of the people of this land, of the United Kingdom and of Europe, that those words and thoughts may bring glory to God s holy name. Amen. Members: Amen. Leave of absence granted 15 The President: Hon. Members, leave has been given to the Hon. Member for Douglas South, Mrs Beecroft, who is unwell. Matter of Urgent Public Importance Urgent motion presented under Standing Order 2.8(1) Leave to debate granted 20 The President: This sitting has been called under Standing Order 1.1(2), Hon. Members, at the request of the Chief Minister. The only Item on the Order Paper is the urgent motion presented under Standing Order 2.8(1). I have received written notice of the motion and I call on the Chief Minister to stand in respect of the request that he has made to me T133

6 25 The Chief Minister (Mr Bell): Sorry, Madam President, do you want me to actually move the? The President: You are required to stand, sir, and ask if four Members will support will you in this motion. Several Members rose in their places. 30 The President: It is clear that you have four Members in support, sir. On that basis, I do not think we need to go to an electronic vote. The motion is that we allow the Chief Minister to move: That Tynwald notes the outcome of the United Kingdom s Referendum on the membership of the European Union, supports the actions being taken by the Council of Ministers following this decision and calls upon the Council of Ministers to continue the work underway to protect the future interests of the Isle of Man. If Hon. Members wish to debate that, please say aye; against, no. The ayes have it. The ayes have it. Result of UK Referendum on EU Membership Council of Ministers actions to protect future interests of Isle of Man Motion carried unanimously The Chief Minister to move: That Tynwald notes the outcome of the United Kingdom s Referendum on the membership of the European Union, supports the actions being taken by the Council of Ministers following this decision and calls upon the Council of Ministers to continue the work underway to protect the future interests of the Isle of Man The President: Chief Minister. The Chief Minister (Mr Bell): Thank you, Madam President, and can I thank you for your forbearance in allowing us to go ahead this morning. It is such an important issue, I think it was only right and proper that Members have the opportunity to express their views on what has happened. (A Member: Hear, hear.) Madam President, I have brought forward this motion to give Hon. Members the opportunity to reflect on the outcome of the United Kingdom decision to leave the European Union, and to consider how the Isle of Man can move forward in the months and years ahead. As we have seen from the events rapidly unfolding since Friday, the political situation in the UK is very unsettled. The decision to leave the European Union is likely to have a long-lasting effect on the economy and politics of both the United Kingdom and in Europe. With the UK as our closest and most important trading partner, we cannot expect to be immune from the effects. Despite the current uncertainties, as the nation s political leaders, our message to the people of the Isle of Man, to our business community, and to the world beyond our shores must be that: the Isle of Man remains a diverse, outward-looking international business centre. We have a proven record of resourcefulness, resilience and innovation in successfully adjusting to a changing world. Our ability to create our own laws and respond quickly to new opportunities has resulted in over 30 years of unbroken economic growth, low unemployment and good standards of living for our people. Whatever the outcomes from the 1760 T133

7 UK s decision, the Isle of Man Government will continue to work closely with the private sector to create an environment for business to flourish. Madam President, work is already taking place to identify opportunities for sectors of the Island s economy that stand to benefit as a result of Brexit. The unprecedented vote is the start of a journey into the unknown for both the United Kingdom and the Isle of Man. In the short term, it is very much business as usual, as it will take many years for the UK to fully withdraw from Europe. Fortunately, the Island is well prepared for this journey and our reputation and relationships externally are stronger than they have ever been. We have been working for months, with many meetings in London, to make clear our position that it is vital our interests are not overlooked as the United Kingdom begins its negotiations with the European Union. And it is heartening, Madam President, that the current Prime Minister of the united Kingdom made reference to the needs to consider the Crown Dependencies in the speech in Parliament yesterday. (A Member: hear, hear.) We have built a network of good relations with contacts in London and Brussels, as well as Scotland, Ireland and Wales, and with our fellow Crown Dependencies of Jersey and Guernsey, and also with Gibraltar. We will need to draw on the strength of these relationships and work hard to maintain them, while remaining vigilant in the defence of our Island s national interests. The Government has already been active in positioning the Isle of Man and promoting awareness of the Island s position, and in gathering information and building understanding both on and off the Island. Hon. Members will be aware that in April this year, the Council of Ministers published its first report explaining for them and the Island s residents the potential consequences of Brexit for the Island. A second report was issued earlier this month, setting out how a new relationship between the United Kingdom and the European Union might function, as well as explaining how other small European jurisdictions manage their relationships with the EU. I would urge everyone to read those two excellent reports. In short, Madam President, they show that although the Isle of Man is not part of the UK s membership of the European Union, there will still be consequences for us, flowing from the vote to leave. There will be uncertainty over future trade arrangements and potentially more difficult trading conditions. There could be a reduction in free movement of people, to and from the EU and potential reduction in the strength of the City of London and the financial services industry in the UK as a whole. This might have a knock-on effect on Island businesses, particularly in the financial services industry. Although the Isle of Man is not included within the UK s membership of the EU, we have benefited indirectly from it, by way of: Isle of Man businesses have been able to trade freely with the EU because of Protocol 3 which is annexed to the UK s Treaty of Accession to the EU; and as British citizens, we have been able to move freely throughout the EU although those without a link to the UK though a parent or grandparent may have faced some restrictions. With the decision to leave the European Union, these arrangements are now cast into some doubt. We intend to stay very close to the negotiations to ensure that the Island s needs are known and protected. Madam President, I would like to briefly set out for Hon. Members the constitutional and legal steps which we can expect in the months ahead. Article 50 of the EU Treaty, which sets out how a Member State can leave the Union, will be triggered once the UK formally signs that it will leave. The UK Prime Minister has stated he will not do this immediately, and suggests that the new Prime Minister, likely to be in place by September, should carry out this process. Article 50 provides the departing Member with a two-year window to negotiate its withdrawal agreement. The UK s withdrawal agreement will amend the European Union 1761 T133

8 Treaties to change or remove references to the UK, and deal with the technical aspects of withdrawal. It may also set out the UK s new relationship with the European Union. In addition, the UK will have to renegotiate trade deals with 53 countries, if it is to replace those which it has currently as an EU Member. The UK itself has stated that this could take up to ten years to resolve. However, in spite of all this, I would like to stress that the Isle of Man s underlying relationship with the Crown and the United Kingdom will not change. In terms of the economic impact, the areas of the Manx economy which are most likely to be affected are those which benefit the most from our current relationship. Exporters of goods those in the manufacturing, agricultural, and fisheries sectors may see the cost of their goods increase and their competitiveness affected by the imposition of tariffs or quotas and additional costs. Most goods produced in the Isle of Man are exported to the UK, however, but exports to the EU and the rest of the world may incur increased costs through tariffs or additional bureaucracy. Aircraft, shipping and yacht management may be affected by changes to their ability to access the European Market, as the relationship between the EU and the UK on VAT is altered. This could in turn have an impact on Corporate Service Providers and other professionals who support these sectors. For financial services, we are already classed as a Third Country and do not enjoy automatic right of access to the Single Market. For this reason, the UK leaving the EU is unlikely to have a significant direct impact in this area. However, we need to be vigilant to any significant indirect impact because of the knock-on effects of the situation in the City and the financial institutions in the UK. The UK financial services industry is likely to be outside the Single Market, and will need to meet the requirements of Third Country equivalence to ensure continued market access. There could be less foreign direct investment through the UK, and international financial institutions which currently headquarter in London, precisely because it is in the EU, may see a greater appeal in a move to Dublin or to other EU financial centres. This of course also would impact on the Island. Similarly, although e-gaming is not currently regulated at an EU level, and access to EU markets is governed by national rules, it is unlikely to be directly affected in the short term. But losing the UK as a voice within the European Union will impact on decisions, and any moves to regulate or restrict access at an EU level in the future could affect businesses on the Island. While there are concerns for some business sectors, we must also recognise there will be an impact on the typical Island resident, the man or woman on the street. Free movement through Europe could end; the cost of living could climb. Economic volatility in the UK has led to the pound losing value which in turn can make holidays, fuel, imported food and goods all more expensive. Before considering what next for the Island, it is worth considering how the leaving process might work. The first thing I would say is that the UK would not, and could not, leave immediately. Article 50 of the Treaty on the Functioning of the European Union sets out the withdrawal process. This process is extremely complicated. It allows for a two-year negotiating period while agreement is reached to decouple the Member State from the EU and its obligations. The agreement will need the approval of the UK Parliament, the heads of all 27 remaining EU states and the approval of the European Parliament and the parliaments of all 27 remaining countries. A very complex, complicated and risky venture. The UK Prime Minister has indicated that Article 50 is unlikely to be triggered until at least October or November, although there are many in Europe, including its Parliament, who are pressing hard for that to take place immediately. It is likely that the UK will negotiate its new relationship with the EU in parallel with the withdrawal negotiations. The UK would also, in parallel, wish to enter into trade negotiations 1762 T133

9 with a number of third countries. The withdrawal agreement will already be highly complex, but the deal on a new relationship will complicate matters further. However, Protocol 3 will still remain in force until the UK s Treaty of Accession is repealed or replaced, and that is unlikely to happen, as I say, for at least two years. Looking ahead, there are several possible models the UK may follow in terms of its new relationship with the European Union. It could choose to be like Norway, and join the European Free Trade Area and sign up to the European Economic Area Agreement. It could be like Switzerland, and negotiate several bilateral agreements; or it could negotiate a Free Trade Agreement, like Canada. Further it could enter into Customs Union, like Turkey; or it could choose none of these and rely on World Trade Organisation rules known as the WTO option. As yet, Madam President, it is very unclear as to which direction the UK Government might wish to move. The EU may be very reluctant to offer favourable terms to the UK, and the prospect of more Member States leaving the EU could mean that they will not want it to appear that leaving the EU is a suitable or easy alternative option either for a larger country like France or a smaller one like Sweden. So what relationship will the Isle of Man have with the European Union? At this stage, Madam President, it is impossible to say. The choices open to the Isle of Man are limited, however. Because we are not a sovereign nation, we cannot become a member of the European Union, of EFTA, or a signatory to the EEA Agreement, nor can we negotiate an Association Agreement with the EU like the micro-states of Andorra, Monaco and San Marino. Our future relationship with the EU will be determined by what the UK negotiates. The Isle of Man will have to consider carefully what it wants from any new arrangement whether we want to maintain the status quo, or to have the new agreement applied to the Island. And this then would also be subject to the agreement of the UK, and of the European Union. How this will be done will not be clear until the talks begin on the UK s withdrawal agreement. I have, together with the Chief Ministers of the other Crown Dependencies, written to the Prime Minister requesting that we retain the ability to trade in goods with the EU on a tariff-free basis, and expect to be included in any relevant discussions and negotiations. As well as discussing how we will handle the withdrawal, renegotiation, and trade talks process, we must also address some current and upcoming EU issues. Of the current EU issues, there are three key priorities. First, ensuring continued equivalence in terms of EU Data Protection rules: many Isle of Man firms do business with the EU, or they have clients who live in EU countries. This means that Isle of Man businesses must comply with the terms of the EU Data Protection rules. We have imported the provisions of the EU Data Protection Directive, which dates from the mid-1990s and as a result, we were granted an adequacy ruling, which means that EU companies can export personal data to the Isle of Man. The EU has just updated its Data Protection rules to meet the requirements of the digital age. We will need to comply with the new rules if we are to maintain our adequacy decision, and we have begun work already on that. The only difference is that now, presumably, the UK will need to demonstrate adequacy as well. In terms of tax there is also considerable activity at the EU and OECD levels. Although EU tax measures do not extend to cover the Isle of Man, we do voluntarily comply with the EU s Code of Conduct rules on Business Taxation, as well as exchanging information automatically with all EU Member States. The EU plans to establish a tax-haven blacklist by the end of Although we are hopeful that we would be unlikely to be included on the list, the process may mean that many jurisdictions are subject to what the Commission is referring to as screening. We and the other Crown Dependencies may be included within that process. The detail as to how that will work has once again yet to be made clear. However, one thing which is clear is that 1763 T133

10 our position in the process is undoubtedly weakened without the UK s potential veto there to support us. In addition, the European Parliament has established an Inquiry Committee in the wake of the Panama Papers revelations, and is likely to look very closely at the role of so-called tax havens in tax avoidance, and money laundering and terrorist financing. Again, although we do meet with all relevant international standards, this will not prevent us being subject to scrutiny by the Parliament, and to some hostility from certain groups within that Parliament. Madam President, as I have said, following the vote to leave, we also have to deal with the consequences, and manage the process, from an Isle of Man perspective. To help manage this, we have established a Senior Officer Group drawn from the Cabinet Office, the Attorney General s Chambers and Treasury, as well the Departments of Economic Development and Environment, Food and Agriculture, under the chairmanship of the Chief Secretary. This group will report directly to the Council of Ministers. They will ensure that the legal and administrative issues surrounding withdrawal are dealt with, and they will engage with UK officials over developments in the negotiating process and also with the Island s business community in order to understand their needs. I emphasise that point, Madam President: it is vitally important that Government and the business community in particular fully understand the implications of all aspects of the negotiations as they go forward, to make sure that we get the best deal for all concerned. I and my colleagues in the Council of Ministers will have an active role, too, meeting with colleagues in the United Kingdom Government, across Westminster, and in the Devolved Administrations and the other Crown Dependencies. We will be involved with the negotiations as required, although we have to remember we are a small addendum to what is likely to be lengthy, complex, and quite likely acrimonious negotiations. Any new relationship the Isle of Man enters into with the European Union will require the approval of Tynwald, and more than likely, more legislation to support that change. I should point out, though, Madam President, that should it be necessary, I am prepared to request another special Tynwald session between the July Tynwald and 11th August when the House of Keys is dissolved, if that is deemed necessary in the process. Following that date, after the Keys is dissolved, the work of the Officers Group and Council will continue. In addition, I will be asking the group to consider where there may be advantages for us, which we may seek to pursue. It could be that the UK leaving the EU will offer us an opportunity to work more closely with the UK, as it will no longer be subject to EU rules, and so, from a UK perspective, we might not necessarily need to be treated as a third country. However, I cannot deny that we are entering an extremely challenging time economically, politically and socially. But we will ensure that we work hard, with our many political contacts and with our business community, and with our community at large, to protect the Island s best interests in the months and years ahead. We have no choice if we are to continue to deliver a successful Isle of Man. I have already had the opportunity to speak to a number of representatives in our business community and urged them to keep talking to Government, and tell us where and how we can support them, and how we can together create the right environment to support future growth. Together we will be seeking new opportunities, so that the Isle of Man can continue to prosper. Madam President, as I said, this is an exceptionally challenging time. It is completely new territory. It is uncharted territory for the European Union, for the United Kingdom and for the Isle of Man and it is going to be a test of the abilities of all parties engaged in this. But I do thank you, Madam President, for giving me the opportunity just to make these few comments to Members today, and I look forward to hearing any observations Members might have on this issue. I beg to move. Thank you T133

11 The President: The Hon. Member for Rushen, Mr Watterson. The Minister for Home Affairs (Mr Watterson): Thank you, Madam President. I beg to second and build on the Chief Minister s remarks, but certainly not repeat them. As the father of a six-week-old child, my thoughts should be at this point on the future, and the future of our Island not going into the dissection of the result but looking forward to securing the future of our Island. Relations and relationship building are going to be more important than ever in facing this unique external challenge. These are important at all levels, at Chief Minister, Minister and Member level, through Government and parliament, and through the connections afforded to us by institutions from the British-Irish Council, British Islands Parliamentary Assembly and the Commonwealth Parliamentary Association. Our close but competitive relationship with our cousins in the Channel Islands will also be key. Our ability to work together in our mutual interests will be vital to all our Islands in Britain s unfolding relationship with the world. We should be thankful that we do not suffer the neighbourly aggression that our colleagues in Gibraltar do. Government s relationship with business will also be critical. And as issues arise close communication and swift action will be required to preserve and promote Manx business. This will require a team effort from all of Tynwald to rally behind Team Isle of Man. (A Member: Hear, hear.) Domestically our resilience will be tested but supports what Government has said for some time, our ability to provide for ourselves, especially feed ourselves, will cushion some of the impact of the external pressures that face us. Despite lamentations in some quarters, and jubilation in others, the world will not change overnight. This represents a new chapter of opportunity as well as threat. The Manx nation has always flourished when things have got difficult, often reinventing ourselves in order to face an ever-changing world. There is undoubtedly much work ahead, and if there is a challenge which we all as a nation face together, but if we can harness our team spirit, our pride and our identity in nationhood, I believe we can continue to thrive, have confidence and provide opportunities for our children. I pledge myself to that cause and I am confident that other Members will do likewise. A Member: Hear, hear. The President: The Hon. Member for Castletown, Mr Ronan The Minister for Environment, Food and Agriculture (Mr Ronan): Thank you, Madam President. I share the views of the Chief Minister and the Minister for Home Affairs that the recent UK vote to leave the EU has many implications for the Isle of Man, some of concern and others of significant interest. However, I think we should all accept that this is a complex political matter and there is a long way to go before any future Brexit comes to pass. Whatever the outcome of the next couple of years, the final detail will be critical, and therefore we unfortunately face a period of uncertainty which may slow both investment and the economy. Obviously this uncertainty is unwelcome, but inevitable, Madam President. Regarding our food sectors, including agriculture and fisheries plus the food chain above them, there are concerns about future market access in the medium-term as they both supply food products to the EU and compete with EU products both at home and in the UK. However, in the short-term the reduced strength of sterling against both the euro and the dollar, whilst increasing import costs will importantly improve our product sales during this transition which is an ironic benefit of this uncertainty. As we move away from EU-controlled regimes there will be many opportunities to look again at how we manage our valuable territorial sea fisheries. Similarly, there are many opportunities 1765 T133

12 to look again at how we support the key food sectors to ensure they are best placed to compete in a global market, though we still expect to meet our world trade obligations and should remain focused on how best to stimulate productivity, innovation, and therefore grow resilient profitability. These are areas we will need to balance carefully and how we obtain access to EU markets while optimising our local support policy. As a major regulator we will also need to review much of our regulation, which currently aligns to EU standards, as this may not be appropriate in the future. This covers matters such as food safety, environmental protection, plant, animal health, waste management, state aid and a whole raft of other aspects, through assuming we negotiate EU market access we may accept compliance with some or all of these standards. It is also important to acknowledge that, as I mentioned regarding our world trade obligations, we have a wide range of international obligations which would be unchanged by any adjustment to our relationship with the EU. So, in summary, Madam President, I would suggest the likely Brexit provides both opportunities and challenges and our role is now to keep monitoring and thinking and spotting how best to position ourselves on each of these issues so we can get the possible result for the Island s community and economy. This is what we have excelled at for centuries, and in that way I would suggest that it is business as usual. Finally, Madam President, I would like to add that the Isle of Man is, and always will be, an inclusive society. (A Member: Hear, hear.) With a long history as a trading, seafaring nation, our whole fabric is built on immigration, whether that is from Ireland, Scotland or more recently from further afield. We have always embraced and welcomed all that will enrich our community and economy. Long may that continue, (A Member: Hear, hear.) as without it there would not be a thriving Island as we know it today. Thank you, Madam President. The President: The Hon. Member of Council, Mr Henderson Mr Henderson: Gura mie eu, Eaghtyrane. I wish to thank the Chief Minister for his statement and recalling Tynwald for such an important occasion, and possibly one of the most important debates or observational debates anyway, that we have had, probably we have had ever, and the implications of the UK vote with regard to Brexit. I would like to thank the Chief Minister for his measured and considered statement and with special emphasis on communications, representations, support, a steady and considered practical approach. And indeed, for outlining the setting up of a working group which will now sit and bring ideas and observations together as we go forward, and I am very pleased that that has happened. I would say, Eaghtyrane, that we need to look on this as an opportunity and with positivity, rather than some of the sceptical comments we have been seeing throughout the press and some of the, what can only be described as hysteria. I think we need to have, as the Chief Minister and Hon. Member for Castletown have outlined, a resilient, strong, positive approach to this and start looking out for opportunities in the background. Good communication is key to this, good gathering of information, intelligence information, is key to this situation which will enable us to understand how the situation is developing as we go forward, and that is critical for our position. I am certainly fully supportive of the Chief Minister s initiatives with regard to making contact with other Devolved Assemblies and so on, and the other Crown Dependencies, and ensuring that our representations and situation is put forward in all the right places. I would like to point out, Eaghtyrane, that those that over the years who have favoured referendums and so on, this is a good example of a referendum at work both positive and negative and certainly the fallout that is a consequence of it should give food for thought for 1766 T133

13 those who have been very keen on referendums in the past. This has to be very carefully managed and, as we see, the disruption that has been caused now has sent shockwaves round the planet, to put it bluntly. However, what is certain is that nothing has changed and nothing is likely to change for some considerable time. If and when Article 50 may be activated that in itself, as the Chief Minister has pointed out, will take further considerable time, so there is plenty of breathing space at the minute for planned, staged management to this situation, not panic. I would certainly put the message out that we have an element of stability here in the background with regard to the fact that nothing is likely to happen for some considerable time. It is business as usual, and that is the message that needs to be put out very strongly as we go along. The only query I would have, Eaghtyrane, is this peculiar situation whereby we think that the UK Parliament may have to vote on a repeal of the 1972 European Communities Act. The Chief Minister made a small reference in his statement, and it would be good to get a little more clarity on that, because there are two camps: one camp says maybe not and it is just a case of the UK Government issuing a formal, clear and decisive statement to the EU outlining its wishes very clearly that it wants to activate Article 50, that is what one camp would have you believe. But on the other side, if you look at this in technical detail, it would seem, and certainly to me on further investigation, that in fact it would require a Westminster vote on the actual 1972 European Communities Act to repeal it before we go anywhere. And as to what the outcome of that may be, at this point in time, given the different political factions and uncertainties within the UK, is anyone s guess, Eaghtyrane. So I guess a little more clarity on how we view, or what our best advice is, as the UK going forward on that. Because, as I say, as I see it there needs to be a UK Parliament vote first on what they wish to do or ratify the referendum in other words and then, obviously, we may see an activation of Article 50 sometime after that. But, Eaghtyrane, I would, again thank the Chief Minister for placing this important debate here today, and for putting a steady nerve on the situation and positivity. Gura mie eu. The President: The Hon. Member for Ramsey, Mr Singer Mr Singer: Thank you, Madam President. As the Chief Minister says, we are in unknown territory, and by that I mean the whole of the British Isles. So I really think we have to look at what is the UK position at this time, firstly, to reflect on the present position and the seriousness of the state of that nation, the fact that that nation is tearing itself apart at this moment. There is no leadership at this time in the UK, no plans, certainly in the public domain there are no plans. The promoters of Brexit have been shown to be working off a blank piece of paper. (A Member: Hear, hear.) There is a movement in the Conservative Party of anyone but Boris, there are hardly any original members left in the Shadow Cabinet, the kneejerk reaction from Nicola Sturgeon and Angus Robertson with grand plans that they have said they will not allow Scotland to be taken out of Europe are these plans viable or not? We do not know. David Lammy says that the Referendum is only advisory, Boris says nothing of substance, Michael Gove has suddenly lost his tongue. Four million people sign a petition for a re-run of the Referendum because they do not like the result of the first one. France says the potential immigrants to the UK will no longer be interviewed in France, but will have to come to the UK before they are interviewed, so no doubt the camps will transfer from Calais to Dover and Folkestone. Racial hate attacks have greatly increased on minorities who are legally settled in the UK, or who are actually British. And then Standard & Poor take away the AAA rating, saying the outlook is negative, whatever George Osborne has said, this hitting investors confidence. There are now recriminations of I told you so and no we did not say that. So it is somewhat of a land of madness, and that is probably the good news after the England result last night! 1767 T133

14 So where do we stand as onlookers on the whole fiasco? We can either wring our hands, cry doom and gloom or we can look to positives from our position. Accepting there will be no quick fix, and this is a massive challenge to our future, we have to be positive in facing that challenge. We are still actually within the first few days of this shock result. We do not know if the actions and comments are kneejerk reactions and will settle down or whether the reactions are going to continue pushing the UK, and our economy, in a downward direction. So whilst this debate does give Members a chance to comment, I think it is far too early to decide how to specifically react until we know what direction the UK actually moves in. But firstly, we have to keep close to our political friends. We have to be figuratively on the doorstep of the negotiators, in their line of sight, reminding them that our interests should be protected in future agreements. We have to continually confirm to our Island businesses that we are fully supportive, that we are here to help and I am encouraged by the reaction of some business people looking at the situation in a positive way, thinking that there is an opportunity here, particularly this morning, when I spoke to some of the corporate service providers. What we have got, and what is most important is that we have a government here, and a parliament that is united in wanting to find the answers. The financial and professional services achievements are mentioned, given that the financial service industries have not, apart from special arrangements with the UK, enjoyed free access to Europe over this period, much of its overseas growth has arisen from servicing other markets such as the Middle East and Asia, therefore reducing, hopefully, the direct impact of Brexit. The Isle of Man does remain linked to the City of London, so we must wait until the UK s positon with the EU is clear before we can understand that full impact. E-gaming has also been mentioned, but this has a large percentage of East-facing business, so Brexit is unlikely to have an immediate impact on the industry. I know that DED has spoken to several leading Isle of Man e-gaming companies since the decision, who have voiced the view that it is unlikely to change their investment plans. The lowering of the pound s value can boost exports, the seismic effect on the British economy could attract high net worth to the Island, and certainly tourism could be given a boost. So we are having this discussion today; there is nothing I think at this very moment we can really contribute, other than to express our views on what has happened in the last few days. But as and when this situation becomes clearer we must be prepared to move quickly to protect our economy, to protect our Island and our people. And I am grateful to the Chief Minister that he is going to continue to include the backbenchers in all the information and the decisions. Thank you, Madam President. The President: The Hon. Member for Douglas West, Mr Thomas Mr Thomas: Thank you very much, Madam President. Hon. Members, I believe I am right in saying that there has been a bit of a mission creep, an escalation of this motion, since we were advised about it just before six o clock yesterday. When we got the yesterday at six o clock, it was that this debate was about Members noting and debating the outcome of the referendum. This morning, around half past nine, we actually got the Order Paper and the actual motion, and now, not only are we noting and debating the referendum, we are also calling upon the Council of Ministers to continue the work underway to protect the future interests of the Isle of Man, and also and this is very important supporting the actions being taken by the Council of Ministers following this decision. Well, we have had a very clear statement, I believe, from the Chief Minister that any decisions would come back to the appropriate place to be decided. But supporting the actions is a bit further and a bit beyond what I initially thought I was turning up for this morning to debate, 1768 T133

15 because if we give our support for actions, I am not exactly sure, and I am not sure anybody else can be sure, exactly what it is we are agreeing to. In fact, this is what happened 42 years ago because Mr Nivison, in the Legislative Council, made a great speech about the fact that he thought it was a bit doubtful that we should be joining the European Community in one day, because that is actually what happened with the legislation to join the European Community. It was introduced in the Legislative Council first and all the sittings of both Branches went through in one day. So I am not exactly sure we know what our interests are. In the Chief Minister s speech there was an awful lot of mention of business, and that is very important: trade and products and production is very important, protecting services, making sure that the financial services industries interests are best served is very important. But there are other aspects that are not getting noticed so much in all of this. By that I am meaning principally people. Are we not forgetting the main lesson of the Referendum across, last week, which is if you take the people for granted they will respond in that way? They will make what is being presented to us as a sub-optimal, even sub-rational decision, but it was a rational decision and the people are not stupid; the people are smart. Therefore, I believe there is a degree of tautology in this motion, as presented. Supporting the actions being taken by the Council of Ministers, and also calling upon the Council of Ministers to continue the work underway, are roughly the same thing. There is not a lot of difference, except the first half is a bit more substantial and serious. The amendment that I have circulated is that we accept that they are roughly the same but this first part is a bit more substantial, and I am proposing that we actually delete the part of the motion that says, Supports the actions being taken by the Council of Ministers to show the Council Ministers that we are sending them off to actually continue the excellent negotiations and fact finding and preparing briefings that are underway; to come back to us in the period at the end of July or August, or any time over the next two and half years, which is the timescale of this process, and actually to make sure that we are taking the people of the Isle of Man with us. There was just one reference to the community at large in the Chief Minister s speech, and there was a list about Data Protection for business, base erosion and profit shifting, OECD Code of Conduct in the European Union and there was a reference to Panama Papers and taxing, but that is not the whole story. Our relationship with the United Kingdom, our relationship with the EU, our relation with the continent of Europe and the rest of the world, it is about our own national identity, it is about immigration, it is about the rights of Manxmen. It is about a lot more things than just the immediately apparent interests that were identified in that list. So I would encourage Members to actually take out the middle part of this motion, to send a clear signal that people matter, and if you do not take people with you, you will end up with a situation where they clamour for a referendum, which was a bad referendum in the sense that the government did not assume that it would go the way that it did. The people are not stupid, the people matter and that is the heart and quintessence of a democracy. I beg to move the amendment standing in my name, which I believe has been circulated now: To leave out the words supports the actions being taken by the Council of Ministers following this decision. The President: The Hon. Member for Onchan, Mr Karran. 510 Mr Karran: Eaghtyrane, I believe that at this point where the Island s future is concerned we have got to try and make sure that we support and work together. (Several Members: Hear, hear.) The situation is that the undermining of confidence and stability is something that we have already seen within the UK, with the currency changes with the pound and the stock market. All that has become is an opportunity for the rich to be able to exploit the poor. What we must 1769 T133

16 make sure is everyone in this Hon. Court recognises that we have got to work together on this most important thing. The agenda is about, believe it or not, the Hon. Member for Rushen s six-week-old child and the weak, the poor and the sick, that we have created such a good environment for them to have a freedom to flourish from the poverty and deprivation that were about until recent years. I would have been very happy to support the amendment, and I would have been very happy to support it and let the actions of the Council of Ministers and there is nobody more critical in this Court, in this Administration and the previous Administration about the missed opportunities and issues like this and about the fact that we should be in a far fiscally stronger position. But one thing we need to be resolute about is confidence. Confidence is needed outside this Court in order to make sure that we stay a high-wage, low-unemployment area, and that is important. So I think that anyone who has read the reports and I am very critical of lots of these reports, because obviously there is no balance as far as the resources of Government towards trying to create some sort of parliamentary audit into the process. But the two reports the April report, the 80-page report, the first interim report; and the second interim report, as far as the EU is concerned and the implications as far as the Isle of Man are very good reports. I think today what we should be doing is we should be united. (The Speaker and another Member: Hear, hear.) I think we would have been criticising the Government if they had not put out a statement today. I believe that they have had the courtesy not to use this place as a rubber stamp, and that should be recognised. My consistent approach as far as my 30 years of being a Member of this House, is that we need to support when support is right, and when it is not right we need to address those issues. I do hope that when we do look at these issues, and particularly the issues of the stock market, that we will make sure that we are confident that there has been enough hedging as far as to avoid the severe effects that can be on the Isle of Man reserves as far as the reserves in the public sector pension fund and the likes. But I think the point is, it is about having the confidence that we will be consistent, and we will make sure that, obviously, we can hold on until the economic climate changes as far that is concerned. But these are little issues that we have been on about, about how we have got to make sure that these people who are supposed to be our professional advisers actually do the job, instead of what we have. I will be interested to know at a later date maybe, how that has affected us. But today, I believe, it is about being united. Today it is about business as usual. The details of issues, whether we jeeagh heear or jeeagh twoaie or we look hiar, as far as where we look with our constitutional position is with the United Kingdom, whether north with Scotland or with Ireland, the Irish Free State, are premature as far as any issues like that. I believe that the only people who can make sure that we have the right information and the right viewpoint has to be a well-thought out, if we are to make sure that we are going to see the likes of the children of today flourish and be brought up in the sort of society we want. One of things I am concerned about, Eaghtyrane, is that we have heard that maybe we will be able to drop standards, and that is something that I hope we will not do. One of the concerns that I have is I think we have seen a referendum result on the basis of heart and not head, on the basis of a society in the adjacent isle where such a large section of them feel that they have been divorced from any opportunity, any chance of freedom to flourish, and we need to learn those lessons. But also, one of the other things that we need to make sure, and I hope that the Council of Ministers will make sure, that one of the concerns that I have always had with the UK exiting from Europe, is that it will become potentially the sweatshop of Europe as far as the standards are concerned, particularly with these reactionary right-wing governments. What we must make sure is that our confidence, as far as giving the Chief Minister and the Council of Ministers, that we are as committed as we have ever been about having a Freedom to 1770 T133

17 Flourish that maybe does not always materialise, but that commitment to a Freedom to Flourish for all and the Isle of Man is open to business. But that Freedom to Flourish is not to be at the expense of when I came into this House, when they promoted the Island as a low-wage, no social legislation area. So I think today that this Court should be supporting the Chief Minister. We should be supporting the Council of Ministers, and we should have an open door policy that we can all bring our little bit to the table, in order to maintain and protect the excellent improvements we have seen in our social which is all on the back of our economic basis of our economy. I think that the only thing today that needs to be said is that we support the Government and we are resolute that the fact is that we have got to try and make sure that we have the confidence that people realise we are open to business, but our standards will not be dropped as far as the populace of the Island; that we have one society, and we all are part of that society and valued in that society. So Hon. Members, to me there is no reason to do anything but support the Council of Ministers. If the mist and the fog has not lifted in the adjacent isle with the United Kingdom and with the European Union as far as this affair is concerned, there is little point in us trying to attack Government, when with the resources that they have got in the United Kingdom and the EU it will pale into insignificance, what we have got as far as that is concerned. So today, we just watch. In my opinion, we have got to wait and see how we operate and how we can all work to contribute to make sure that this situation has minimum effect as far as the quality of life and the ability to operate on this Island. The President: Hon. Member, I would just like your guidance, please. I thought that early in your remarks, you seconded the amendment. However, your consequent comments Mr Karran: No, no, I did not second the amendment The President: Thank you, Hon. Member. The Hon. Member for Michael, Mr Cannan. Mr Cannan: Madam President, the Referendum process and the outcome have cast British politics into uncharted waters and the Isle of Man finds itself caught up in the storm of uncertainty. One of the reasons for the uncertainty, of course, is that is that there appears to be no roadmap to exit and of course no clarity as to what vision the Brexiteers have for Britain. We do not appear to have absolute clarity as to whether a vote in Parliament is needed to ratify the decision, although constitutional lawyers appear to be indicating that this will be necessary. We do not have absolute clarity, whether formal notice is needed to trigger article 50 or whether indeed the EU will act merely on the words used at the next EU meeting to force the issue, and indeed were a general election to be called at some stage with a party vowing to return Britain to the European Union, whether the success of such a party at a general election would cause the process to be reversed. The total lack of any roadmap for exit is unfortunate. We must also consider that we have a divided British nation: a nation divided not only by region, but also by generation. I took the time to speak constituents this weekend at a local event and I can report back to this Court that clearly the same generational divide or the same reported generational divide appears to exist on the Island as well. (A Member: Hear, hear.) There is a genuine frustration that the post-second World War baby boomers are making the lives of the younger generation harder: harder to get on the housing ladder, harder to save for a safe retirement, and now perhaps restricting their opportunities in a globalised world. (A Member: Rubbish.) We must consider therefore there is clear evidence of a divided society and the wounds of this result potentially also exist on the Island, irrespective of the fact that we did not have a 1771 T133