Jersey – an “independent” financial centre?

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There was a conference last week in Jersey, the aim of which was to explore the possibility of the island (and Guernsey) becoming independent of the UK.

The idea has been mooted before. Some of Jersey’s “old families” seem behind the move. But what was intriguing about the conference was referred to by the Jersey Evening Post in an editorial on the conference:

There is certainly no groundswell of public opinion in favour of any kind of break with the status quo and no sign of any political momentum in that direction. In fact, one of the most striking features of last week’s sovereignty conference was the total lack of participation by politicians.

Granted, States Members were fully occupied with the week-long Business Plan and the unaccustomed quest for spending cuts instead of spending plans, but their absence was noted.

Indeed, some might wonder why so much of the running is being made in this vital area by the Island’s legal establishment, with the close participation of the finance industry, rather than by visionary politicians capable of creating a new place in the world for these small and special islands.

Political involvement at some stage and at some level is certainly desirable – indeed essential – particularly in respect of one concrete idea floated at the conference, the advancement of the Bailiwicks’ common interests through a federation of the Channel Islands.

There’s much more to this than meets the eye. What this editorial really reveals is who has the power to make the big decisions in jersey. It’s not the politicians: they’re bogged down in the nitty gritty of admin. The big decisions are being taken by finance and their legal friends. And as the JEP notes, there’s no evidence that local people want this at all. But what do local people matter to finance? This is an island still occupied after all – by finance, who exploit the place for their own ends.

Finance is worried. Worried by the implications of the EU Code of Conduct on Business Taxation and that it will force change on Jersey’s abusive corporate tax system. And it’s worried by the European Union Savings Tax Directive – which will open the place up to all EU enquiring tax authorities. So what does finance want, despite the lack of desire from anyone else? Independence from such demands, of course.

The battle lines are set. I suspect this will tear the place apart.