The UK government has pulled the key Brexit Finance Bill to avoid Parliamentary defeat on Crown Dependencies’ inclusion in public registers of Beneficial ownership.
Has the last-minute campaigning by the Crown Dependencies had the consequence of making MP’s furious with them?
The UK government, at the eleventh hour, withdrew the vital Financial Services Bill from debate in the House of Commons on Monday afternoon, because they expected defeat on the key area of beneficial ownership in relation to the Crown Dependencies and Overseas Territories.
MP’s across the House, already fed up with many changes to the Parliamentary programme, now feel a major part of the blame for this lays firmly at the door of the Crown Dependencies. They are particularly irritated by the delay in debating this Bill, which is one which has to be passed before the UK leaves the EU, and time is now incredibly short.
This Bill is one of a number of key pieces of legislation needed to prepare the UK for the possibility of a No Deal Brexit. There were clearly going to be a majority of MP’s voting for the cross-party amendment on Beneficial Ownership and this action by the Crown Dependencies is going to nothing except put these MP’s backs up.
Questions need to be asked about why the government caved in to the demands of three Crown Dependencies ahead of MP’s wishes. Also, the decision to campaign on this issue by the Crown Dependencies needs to be seriously questioned by other politicians in those jurisdictions.
It can easily be argued that what the small cliques of those in power in the Crown Dependencies have done has been reckless, and simply has to be called to account.
It is of vital importance that the Crown Dependencies have good relationships with the majority of MP’s, and not just those running the government of the day. This foolhardiness could all badly rebound on Guernsey, Jersey and the Isle of Man, and it is now essential to engage in a damage limitation exercise. This has to involve a re-think on what the priorities are and how to go about achieving them.
Should the Crown Dependencies be more financially transparent? We know that the governments of Guernsey, Jersey and the Isle of Man made last-minute efforts to oppose the UK Parliament’s attempts to impose public registers of beneficial ownership for all Crown Dependencies and Overseas Territories. The UK Parliament was going to debate an amendment to this effect by leading MP’s, Dame Margaret Hodge (Labour) and Andrew Mitchell (Conservative). They wanted the UK and its territories to lead the way on clamping down on money laundering. They still do. They described the British Crown Dependencies and Overseas Territories as tax havens, an accusation many of them would strongly dispute.
However, was and is fighting these proposals the right way for the Crown Dependencies to go about proving their financial transparency? A lot of MP’s are well aware of how advanced the Crown Dependencies have become, individually and collectively, in respect of improved financial regulation, so that particular argument has been well put across.
What some in authority in the Crown Dependencies do not seem to understand, is that all these improvements, even when some are in advance of other jurisdictions, are not sufficient in the eyes of MP’s. The last-minute efforts to influence MP’s to defeat this amendment have been successful because the Bill has been withdrawn for now, but it has left a dark taste in the mouth. It will come across that the Crown Dependencies are covering up full financial transparency, and therefore can only cause more reputational damage.
Unfortunately, it also causes the UK reputational damage too. It might even make more MP’s determined to legislate for the Crown Dependencies in the future on many even less contentious matters. In other words, these efforts by the Crown Dependencies are likely to backfire because of resentment caused to MP’s. All avoidable and unnecessary.
To make matters worse, the Crown Dependencies have been misleading MP’s on their constitutional position. The UK MP’s proposals have been described as “inoperable,” but specific reasons as to why this is so are not given. An argument that the Crown Dependencies “are not represented in the UK Parliament, and that it is a respected constitutional position that the UK does not legislate for the Crown Dependencies on domestic matters without our consent,” simply does not cut any weight at all.
The issue of UK Parliamentary representation is a separate issue, but certainly long overdue, but the reasons for the lack of it are as much the fault of the powers that be in the Crown Dependencies, as the fault of the UK government for not bringing it about. This issue simply highlights one of many areas where the Crown Dependencies do need Parliamentary representation, to fight their perceived corner.
Ed – Part two of this article will be published within the next few days.