The Crown Dependencies need to understand the 21st century – and move into it very soon

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The Guernsey Press is quoting a former adviser to David Cameron to suggest that our parliament has no right to impose legislation on the Crown Dependencies, and that if they do a petition to the Queen might follow.

The context is, of course, the desire of those MPs who have already demanded that the Overseas Territories create public registers of the beneficial ownership of the companies registered that this requirement be extended to Jersey, Guernsey and the Isle of Man. The government has pulled the Bill to achieve this goal today, precisely because they knew it would pass.

As The Guernsey Press notes:

The prospect of the petition [to the Queen] has been raised by Nikki da Costa, the ex-director of legislative affairs at No 10, in comments to the Guernsey Press.

They note that she has said:

The relationship between the Crown Dependencies and the UK has been founded on consent and self-governance, and they have no representation in Westminster. The government’s view has long been that the UK should only legislate in the most serious of circumstances, and the breakdown of good governance.

And that she added:

If the Speaker allows the amendment and MPs rebel to inflict this amendment, despite previously conceding the distinct relationship the Crown Dependencies have with the UK, the government can do little to stop them in parliament. In other times you could potentially abandon the legislation, but this is a Brexit Bill. It is a very serious challenge to the current constitutional relationship, one of essential independence from the UK, and raises the prospect of a petition to the Queen at the very least.

I have three comments to make.

First, there is a failure of good governance here. The Crown Dependencies do not, of course, create most of the companies incorporated there for the benefit of local people. They are created for people from other jurisdictions who want to know who owns them, as do other stakeholders in those other places, and who have this right in many other countries. So, what the Crown Dependencies are doing is deliberately undermining the good governance of the corporate world. If that is not a breakdown in old governance, what is?

Second, the piece does recognise that in that case the UK does have a right to legislate, as it always has when the foreign affairs of these places create risk for the UK as a whole, as this issue clearly does.

And third, the idea that the petition to the Queen might be relevant in this case is laughable. The Queen has no right whatsoever to intervene in the affairs of the Crown Dependencies, even if they are notionally linked to the UK through her office, because the entire political function of that office is maintained by the Privy Council, which is in effect the government, but of which there are, of course, many other members. And the government is bound by Parliament. The Crown Dependencies really need to get their basic constitutional facts right. Just as they also need to appreciate that in the twenty-first century their refusal to comply with new norms on corporate transparency do represent a significant failure on their part which creates risk for the UK as a whole and a more than justifiable reason for the UK government to intervene in their affairs.

To put it another way, the tin-pot politicians of these places, who live in fear of the financial services industry, need to wake up to political reality and adapt to it pretty fast, or face the consequences.