On Wednesday it was reported that rival developers Dandara had claimed that the Jersey Development Company project at the Esplanade was doomed to lose nearly £74 million.
However, Treasury Minister Alan Maclean, the States’ shareholder representative on the JDC, said that independent experts from BNP Paribas using the latest figures available had concluded that the development was expected to make millions.
A copy of their report has been included with the JDC’s submission to the Corporate Services Scrutiny Panel, which is currently reviewing the development.
It was in a similar submission that Dandara made their claim about the development, which the JDC says currently has 13 tenants interested in taking office space.
Senator Maclean said: ‘Independent property professionals have assessed the scheme and have predicted a profit in excess of £50 million. This is not some politician saying it is going to make a profit, it is not the JDC, it is an independent professional assessment that has been undertaken. There has been more than one of them, actually.’ He added that Dandara had ‘manipulated the figures to their own commercial advantage’.
The minister has written to Corporate Services asking them to make public the findings of a report commissioned by them which is said to broadly support the progress and actions of the JDC. He has yet to receive a response.
Senator Maclean also warned that speculation and opinion such as that expressed by Dandara and other critics of the scheme could put off potential tenants. ‘All this speculation is obviously going to be very disruptive to get the project up and running,’ he added. ‘But from everything I have seen, I have no reason to believe it won’t go ahead. There is a lot of interest and I have seen the evidence of that interest.’
Asked if the States should be competing against private developers in this way, he said that the States Assembly had made a democratic decision that it should when it approved the establishment of the JDC.
‘It is Dandara’s view that the proposed development does not in any way represent the best (indeed any appreciable) socio-economic value to the States of Jersey on behalf of the people of Jersey.
It’s not every day we receive threats from senior UK politicians, but it’s not unheard of. The latest was the Labour Leader’s criticism last month of a perceived lack of tax transparency and disclosure of beneficial ownership by Jersey and other Crown Dependencies and Overseas Territories.
He threatened that if he wins the General Election he would give Jersey and the other British territories six months to introduce a public register of beneficial ownership of offshore companies. Those territories who failed to do so would face the full might of the the OECD and unspecified sanctions.
Now the Labour Leader couldn’t expect to win many votes in the territories he targeted and who responded with various levels of protest. The Gibraltar leader, for example, was particularly incensed by the fact that the contents of the letter ended up in the media before it got to the addressees.
The Labour Leader might garner a few votes from electors still confused about the differences between a tax haven and an international finance centre. But even if he doesn’t, he had nothing to lose by raising what we must admit is legitimate concerns about the level of transparency offshore.
Unfortunately for us, it brings us into the spotlight once again and raises some uncomfortable questions. Yes, of course, we have a fantastic track record and a strong commitment to fighting financial crime, as the Chief Minister pointed out in his reply to the Labour Leader. However his response received nothing like the media coverage surrounding the initial attack. This proves that although we have spent years developing a good reputation, the message is still failing to get through to the man who could be prime minister, let alone the man in the street.
The ironic thing about this fuss over beneficial ownership, is that the Leader of the Opposition and the Prime Minister appear to be in agreement on the need for a public register which Jersey does not have and doesn’t think is necessary.
Quite rightly Jersey’s Chief Minister pointed out in his reply that the Island is one of only a few jurisdictions ‘with an effective, fit-for-purpose central register of beneficial ownership already in place’ even though it’s not a public one. The Premier of Bermuda is also quoted in The Royal Gazette as being ‘surprised and disappointed’ that Bermuda was included on Labour’s list, ‘especially since the Island has operated a central registry of companies since the 1940s’.
So we’re not alone, and we will have allies in the threatened battle between the UK and others who want a publicly-accessible register, and the offshore centres such as Jersey and Bermuda which already have registers that work but are not public registers. This could be the cause of further friction at a time when we thought things were calming down in the war against offshore centres.
It certainly won’t be easy to reach an international agreement as jurisdictions have different kinds of register covering different information. Perhaps the Jersey authorities are hoping it will be so complex that we don’t need to worry too much about it now. Indeed in his letter the Chief Minister points out that it would require ‘an agreed change in international standards to require public registries of beneficial ownership’. But that is precisely the object of the exercise, so I hope that the Jersey authorities are not underestimating the determination of some leaders to tackle this important issue.
The bottom line for Jersey is that there is very little to be gained from another spat between the UK Government and its supporters, and the offshore centres. In fact there is further potential to highlight any failings in Jersey’s system, despite its leadership position.
So how does Jersey fight continuing bad publicity (deserved or otherwise) and project the image of a quality international financial centre maintaining the highest of standards?
Well the first thing is to continue to maintain those standards, which is no mean feat for a small jurisdiction. That means we had better face up to the possibility we may have to change our beneficial ownership requirements, even if we don’t consider it necessary. The only alternative would be to build a coalition of finance centres strong enough to resist the onslaught of the world’s major players, and I don’t see that happening.
Another way is to actively go out and do something that will change our image, rather than sitting back and reacting to whatever is thrown at us. We have a good story to tell but we’re still not telling it clearly enough. In particular we need to demonstrate that the recent research showing the contribution we make to the UK economy, actually means something for the rest of the world.
Perhaps Africa, with its vast potential, could be the next place where we demonstrate that we’re not just interested in what we can get out of the world; we want to make a contribution too.
