Minister failed to consult before breaking up CICRA, report concludes

Saturday 14 August 2021

Economic Minister Lyndon Farnham failed to consult with industry in Jersey before deciding to withdraw the Island from joint competition regulation with Guernsey last year, a panel of backbenchers has concluded.

In April 2020, Senator Farnham announced - to the surprise of many - that the decade-old Channel Islands’ regulator, CICRA, would revert to its island components three months later.

This, he said, would better address the different competition issues faced in Jersey and Guernsey.

Also in the dark prior to the announcement, the Economic and International Affairs Scrutiny Panel decided to carry out a review into the demerger and how the reconstituted Jersey Competition Regulatory Authority will operate in future.

Its Chairman, Deputy David Johnson, said: “The panel noted a number of recurring themes in the written submissions it received from key industry stakeholders and found a lack of stakeholder engagement by the Minister in relation to the decision to demerge; concerns about cost increases; and a potential of increased administrative burden, as a result of the demerger.

“However, the panel also found that some stakeholders believed the demerger of CICRA could lead to a renewed focus on matters concerning each authority in its respective jurisdiction, with it being viewed as a positive step forward for the islands’ businesses.”

Pictured: Economic and International Affairs Scrutiny Panel chair David Johnson.

The panel also found that Chief Minister John Le Fondré transferred legislative responsibility for competition policy to the Economic Development Minister in July 2020. 

However, it noted that political responsibility had been transferred much earlier, in January 2020. 

“The panel believes that legislative responsibility should have been transferred at the same time to avoid confusion over responsibilities,” said Deputy Johnson.

Following the demerger, the panel said evidence it had heard suggested that the “JCRA had maintained a positive level of engagement with industry stakeholders and was open and transparent in sharing its future plans.”

In terms of recommendations, the panel suggests that “the Chief Minister should ensure that any future transfer of political responsibility is undertaken in a timely manner with advance notice provided to the relevant Government body”.

It adds: “Following concerns expressed by stakeholders, the Economic Development Minister should conduct a review of the JCRA’s current remit as the singular authority for competition regulation in Jersey, recommending that “the JCRA should publish details of its collaboration with the GCRA at the end of each calendar year in its annual report.”

Deputy Johnson said: “While it may be some time before a proper judgment can be made as to whether the demerger has proved to have been beneficial for the Island, the panel accepts that it does provide the JCRA with the ability to chart its own course for the benefit of island residents and to become more ‘Jersey-focused’.

“To that end, the panel will continue to monitor progress but, in the meantime, is pleased to note the terms of the new Memorandum of Understanding which hopefully reflects a better working relationship between Government and the Authority, while at the same time recognising the latter’s independence."