Sark – epitomising the degradation of governance in the Crown Dependencies

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It's been fascinating to read the acreage of newsprint about the Barclay brother's tantrums on Sark. And it's been good to note that most note how reprehensible their behaviour has been. Indeed, the ridiculousness of their poisition is apparent from their own words. These have been reported in their own Daily Telegraph, which says (in an article curiously filed under the heading 'law and order'):

The Barclay brothers' representative is to return to Sark to open talks on safeguarding jobs in the wake of their decision to withdraw their investment from the Channel island. The brothers decided to withdraw their £5 million-a-year investment after Sark's residents failed to back their supporters in the island's first full parliamentary election. Less than a day after the election result, the brothers took the decision to close down two hotels, a restaurant and other commercial premises, laying off most of the businesses' 140 workers.

The Telegraph added:

Gordon Dawes, their legal representative, last night reiterated that "the door remains open" for the island's political authorities to forge a new relationship with them. He stressed: "The Barclay family is very conscious that Christmas is approaching. They do not want anybody to suffer hardship."

He added:

They do not want to control Sark but they do expect some sort of cooperation - in the way that any major investor would - to facilitate and not obstruct their plans for the island, if that investment is wanted.

And

Many people on the island realise that they have shot themselves in the foot with this election result. All the Barclays want to do is to try to get rid of the feudal regime.

Absolutely none of which makes any sense at all. They could, for example, have stopped further investment if they wished. Few could have argued with that. But closing existing businesses, not all of which they owned, but which were located in their premises, is not closing down investment. It is acting with deliberate malicious intent to cause maximum harm to a community which they obviously intend to hold to ransom because if the situation persist the tourist trade on the island will be immensely harmed, so undermining livelihoods and the community itself. If this is not seeking to exercise control it is very hard to imagine what else it is, apart from seeking to seize control and utilise a feudal regime for their own benefit.

In that context the Guardian editorial today has noted that how this fits into the pattern of abuse that the Crown Dependencies have facilitated and which must now end. The argument is so well written I reproduce it in full and hope they will forgive me:

Events on Sark can seem like the stuff of an Ealing comedy. Last week the 474 adult inhabitants of Europe's last bastion of feudalism, ruled by a seigneur since the 16th century, held a democratic election to choose a 30-member government. The campaign was as ostensibly low-key as you would expect on a two-square-mile island with no tarmac road, motorcars or street lighting. The outcome, though, has been anything but quaint. When their preferred candidates were rejected by the voters, the reclusive billionaire Barclay brothers - sole owners and inhabitants of neighbouring Brecqhou - pulled the plug on their investments on Sark, throwing 140 workers on to the dole. What next? A peasants' revolt?

It is too easy to treat all this as an island-that-time-forgot soap opera, but in truth the saga is more disturbing than silly, and Sark's inhabitants deserve respect for standing up to the Barclays. At the root of the row is a modern issue that must be taken seriously - the continuing anomalous relationship between the UK and its offshore tax havens, notably the Channel Islands (including Sark) and the Isle of Man. For decades at a time, these anomalies exist without causing more than a theoretical difficulty. Then something occurs that concentrates minds. The global financial crisis - rather than the Sark election - is such an event.

Buried away in the pre-budget report was the announcement of a review by Michael Foot (no, not that one) of bank regulation in crown dependencies from the Channel Islands to the Caymans. It was needed, the chancellor said, because taxpayers cannot be guarantors to investors who have specifically chosen to avoid UK tax by putting their money in such havens. On the face of it, finance expert Mr Foot has authority to address the big questions - transparency, tax policy (but not rates), crisis management and international frameworks. Ministers have followed up with tough language. Offshore centres "must play a responsible role", says the City minister Lord Myners. But Mr Foot is a creature of the system and the real test for the Treasury will come in responding to the review.

Constitutional relationships are excluded from the review. This may prove short-sighted. Such relationships are already being rethought by some offshore centres - Jersey recently published a review of the possibility of declaring full independence. International pressure to clamp down on tax havens has begun to build, not least because of the support of Barack Obama. In today's global economy, not even an island is "an island, entire of itself". In any collision between tax havens and the modern world, the world must prevail every time. British policy must move with the times.

I hope someone is listening. I have already expressed my concerns about this review. If it does not deliver there will, I suspect, be something little less than an international incident. The world will no longer accept the UK providing cover for abuse.


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