Competition watchdog “terminated” by Jersey

Thursday 23 April 2020

Jersey politicians have disbanded the Channel Islands’ joint competition watchdog following a disagreement between the islands over how it should be run.

The move means that Jersey will now have to set up its own, separate watchdog, with a different Chair and Chief Executive.

It comes two years after a breakdown in trust between the Channel Islands Competition and Regulatory Authority (CICRA) and senior politicians in Jersey, which intensified in 2018 when the watchdog lost a high-profile and publicly-funded court case against ATF, which denied abusing a dominant market position by failing to supply an Airport fuel farm operator with fuel for resale.

In the wake of what was the fourth time Jersey's Royal Court had quashed a CICRA decision in under a decade, former Chief Minister Senator Ian Gorst expressed deep discontent with the regulator, suggesting that Ministers were led to believe the outcome would be different.

Other senior political figures including former Senator Philip Ozouf also made calls for its reform.

However, the organisation's Chief Executive Michael Byrne hit back, claiming that the public doesn't have a clear enough view of exactly what the organisation is tasked with doing, and that they are unaware of the many victories they have scored on behalf of consumers.

Despite the intensity of the battle throughout 2018, nothing happened in the two years since - until now.

Pictured: ATF and CICRA's court battle came at a significant cost to the public purse.

Guernsey's Economic Development President, Deputy Charles Parkinson, revealed yesterday that he had received a shock request from Jersey's Economic Development Minister, Senator Lyndon Farnham, for the islands to go their separate ways.

In a statement to Guernsey's States, Deputy Parkinson hit back, saying Guernsey will be better off from focusing solely on its own regulatory priorities.

He mapped out in the States how an insular regulator – the Guernsey Competition and Regulatory Authority – can be extracted from the current CICRA model by the end of June this year.

That each island now needs to set up its own individual competition watchdog boils down to a difference in mindset between Guernsey and Jersey politicians.

Deputy Parkinson said his committee believed that issues within the CICRA model could be resolved, whereas his Jersey colleagues felt the islands’ shared path could be followed no further.

“On 17 February, I received a telephone call from 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 joint operating model and revert back to separate insular competition and regulatory authorities in Jersey and Guernsey," Deputy Parkinson explained.

The decision was then confirmed in a letter from Senator Farnham last month.

Pictured: That each island now needs to set up its own individual competition watchdog boils down to a difference in mindset between Guernsey and Jersey politicians.

Deputy Parkinson continued: “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.”

Officers from the GCRA have since analysed the potential impact the separation of the two authorities will have and how the transition to the new set-up will work.

The GCRA has confirmed that the transition away from the CICRA brand can be completed by 30 June 2020 with no additional competition grant or telecoms licence fee funding needed for 2020.

And, despite the difference in thinking on this matter, Deputy Parkinson did not rule out working with Jersey in the future.

“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.”

Pictured: Jersey's own regulator will be up and running on 1 July. (Twitter/Government of Jersey)

In a press release, Jersey's government said the differences in political and legal systems, priorities and political cycles between Jersey and Guernsey meant that both islands have varied scope for competition and economic regulation.

They announced that Jersey's new Competition and Regulatory Authority (JCRA) would be up and running from 1 July under its own Board, executive and staff, with four employees being hired to operate it.

"It will continue to enforce competition and regulatory law, and seek to promote the best outcomes for consumers and businesses in Jersey’s markets," the government said, adding that the JCRA and GCRA would continue to co-operate where appropriate. 

Noting that CICRA had demonstrated "excellent cooperation", Senator Farnham thanked staff for their "hard work over the last 10 years".

Pictured: JCRA will focus on the consumer matters that impact people in Jersey.

He explained that, with a changing economic outlook, the decision had been made to enable JCRA to focus on the consumer matters that impact people in Jersey.

"A renewed focus by the JCRA on promoting competition can support Islanders’ living standards and improve the competitiveness of businesses," he added. 

“The decision to follow this course of action was taken before the covid-19 issue arose. We had discussed a postponement with Guernsey but the decision to proceed with a 30th of June implementation was needed to settle the regulatory structure there in keeping with their regulatory plans.

“Overall, unwinding CICRA will enhance the ability of the JCRA to be responsive, adaptable and in tune with the needs of consumers and businesses and is in the best interests of Jersey’s economy.” 

Pictured top: Senator Lyndon Farnham (Jersey), and Deputy Charles Parkinson (Guernsey).