By Gavin St Pier
JUST before the year end, it was reported that a UK Home Office minister, Dan Jarvis, had given a parliamentary answer on the question of public registers of beneficial ownership. This is the latest in a long line of such Q&As. As I noted in this column last August, the new Labour government had barely got its collective feet under their ministerial desks before they were parroting the same responses as their Conservative predecessors. With the greatest respect to all the ministers concerned, they really couldn’t give a monkey’s about the issue. Each of them is, quite literally, reading the prepared lines and scripts handed to them by their officials.
The Channel Islands’ governments’ positions have not materially changed for a decade. Their view (rightly) is the UK’s publicly accessible register of beneficial ownership, the People with Significant Control register, which was set up in 2016 is barely worth the database on which the details are stored. There is no quality control on the data going in, making compliance voluntary. Our governments have correctly argued that the quality of our data is vastly superior, because of the requirement for it to be verified. Those who need to know or need to access the information held, even at very short notice, have been proven to be able to do so without impediment.
Our governments remain committed to introducing “obliged entity” access (such as financial-services businesses who are required to conduct due diligence) and access for those with a “legitimate interest”. This is not a clearly defined term with a readily agreed meaning. The UK’s interpretation is undoubtedly broader than our governments’. Given the rest of the world is lukewarm on this issue compared to the UK, the islands like to reference “international best practice”, knowing that our own regimes compare very well on a wider international stage. The commitment given was to have done something in 2024. That deadline has been passed without anything having yet entered the public domain. The conveniently timed parliamentary question and answer may simply be a way of keeping pressure up on us.
The islands may repeatedly prove themselves unable to work effectively together on operational issues, such as ferry contracts, but they are extremely unlikely to diverge on this issue. At some point in the near future, you can expect a joint statement to be released setting out how they intend to honour and implement the commitment already given in relation to “obliged entity” access. However, there was a sting in the tail of Dan Jarvis’s parliamentary answer, when he said the UK government “expects this to be an interim step to public registers”. In short, this is a shot across our collective bows that says, whatever is offered up in the days or weeks ahead, the UK is like a hungry cuckoo chick in the nest and it will be squawking, beak agape, wanting more.
The reactive, tactical approach which the island governments have adopted, amounting to a sophisticated duck-and-dive, may have served the islands well in pushing out the day of reckoning for a decade, but we are running out of road. Because it is being driven at official level without any real interest in the topic at UK ministerial level, there is no obvious political brake.
Would the forcing of public registers of beneficial ownership upon us when they are not the international norm be a ditch we are prepared to die in? Assuming we are not simply going to roll over when push comes to shove, the time may now have come for a strategic approach. This would require a discreet joint taskforce between the two islands to firstly establish, in dialogue with the financial-services industry, exactly what the red lines are and where they lie. Having done so, the next step would be to wargame the various alternative scenarios we may be presented with and the alternative responses to them. Fortunately, there is a precedent for this approach. Prior to the Brexit referendum, the islands were exemplars in preparing for the alternative outcomes from the vote. This methodical approach stood in stark contrast to the UK, whose civil service had, effectively and irresponsibly, been barred by UK Prime Minister David Cameron from contemplating a successful “Leave” vote.
The alternative responses might include, for example, insisting on greater respect for our history of self-governance in all domestic matters by actively pursuing greater autonomy. This would certainly gain the attention of the Ministry of Justice and might better gird their loins against Home Office ministerial overreach in our domestic affairs. However, such an approach could require considerable preparatory work. Our financial-services sector is wholly dependent on a UK-based payments system, from which the sector cannot afford to be denied access. Building contingency plans for an alternative payments system, with the devotion of time and resources to preparing for a doomsday scenario, might feel over the top. But without credible alternatives, the flip side of failing to prepare for doomsday might prove to be highly irresponsible – as Cameron found when he lost the Brexit vote.
Does this issue appear on our national risk registers? Is contingency planning going on? We plan for other contingencies, such as the risk of the next pandemic. So, I would hope that we are planning for the risk of UK overreach in its constitutional relationships with us, not least because it would stand us in good stead not only for the issue of public registers of beneficial ownership, but for whatever the next hot-button topic is that comes along. But frankly, I fear we may not be planning. In the absence of significant political involvement from the UK, most of the interaction will by default be at official level our end too. Our officials will be managing this day to day, but doing so among a raft of other issues, challenges and responsibilities. Without clear political direction to prioritise blue-sky thinking, more immediate priorities will always take precedence. The instinct from a conservative establishment will be to play it low key, keep our heads down and not risk rocking any boats. This is not bad advice. Indeed, it is often very good advice, so long as we have a Plan B in mind, just in case.
-
Gavin St Pier is a Guernsey politician. He previously served as the president of the island’s Policy and Resources Committee.
