Crown Dependencies

Lord Beith Excerpts

Thursday 16th January 2014 Westminster Hall

[Sir Alan Beith (Berwick-upon-Tweed) (LD) (Select Committee Statement)]

Thank you, Mr Bone. It is a pleasure to have you presiding over these proceedings, which as you say are a parliamentary first. It is one of three reasons why I am particularly pleased to be presenting the Justice Committee’s report “Crown Dependencies: Developments Since 2010”. I am also pleased to be doing it because the nature of the historically fruitful and evolving relationship between the UK and the Crown dependencies is not always understood, even in some Departments, and we can shed light on it. The Isle of Man, Jersey and the Bailiwick of Guernsey, including Alderney and Sark, have a unique status, which we describe. Thirdly, it is a good thing for Select Committees not merely to publish reports but to look back on and evaluate their results. In this case, we think that we can report a success story on the implementation of our 2010 report.

In order to review our 2010 report, during the course of this year Committee members visited the Isle of Man, Jersey and the Bailiwick of Guernsey, including Sark. Although fog stopped us from landing in Alderney, we had a telephone conference with representatives there. We took oral evidence from the then Minister, the noble Lord McNally, and received written evidence. We are indebted to our then second Clerk, who has just moved on to become Clerk of the Public Accounts Committee, for her excellent work throughout the inquiry, and to all the Committee staff.

The report we are publishing today goes point by point through all the recommendations we made in 2010 and shows how in almost every case, they have been successfully implemented by the Minister, Lord McNally, and the very small team of civil servants led by Cathryn Hannah. Much credit is due to them for what they have done, and that view was expressed to us in all the dependencies.

To give the House a few examples, we argued that if the Ministry of Justice concentrated on those things for which it had constitutional or international responsibilities and relied more widely on the preparatory work done by the Crown law offices in each of the dependencies, delays could be avoided and island legislation could achieve Royal Assent more quickly. That has been done successfully. Secondly, we argued that the Ministry of Justice should encourage closer co-operation, better understanding and timely consultation between Whitehall Departments and their counterparts in the dependencies. There have been significant improvements as a result of the Ministry of Justice’s efforts to implement that recommendation, although there are still some examples of where policy changes with a significant impact on the islands could have been the subject of more timely consultation.

The only area where the Government disagreed with us was in respect of our view that when the UK takes part in international negotiations, such as those following the Icelandic banking crisis, and there are differences between the UK’s view and the dependencies’, there should be a clearer mechanism for ensuring that the dependencies’ case can be put in the negotiations. We still think that ways can be found to do that without undermining the UK’s position or the constitutional relationship.

We also argued that the UK should exercise its power to intervene on grounds of a breakdown in good government only in the most serious circumstances. The dependencies are mature democratic societies with the rule of law and free media. Problems, whether real or perceived, can arise from the relatively small size of the jurisdictions, but they can be dealt with by bringing in, for example, judges, lawyers or police officers from outside the jurisdiction to demonstrate independence. We are satisfied that both the island authorities and the UK Government have adequate means of assessing whether that may be required in particular instances.

We received submissions from some dependency residents who felt that their grievances had not been satisfactorily dealt with and that that constituted grounds for UK Government intervention on grounds of good government. Our view was that the legal and other processes of the dependencies were the appropriate mechanism for seeking resolution, and that the UK Government had adequate means of assessing whether any of those grievances raised good government issues.

The situation in Sark is one that we said in 2010 required a watching brief on the part of the UK Government. That responsibility has been carefully exercised by the Minister, with help being given to the island’s Chief Pleas, which is both its Parliament and its Government, to strengthen the administration and consider how best to secure the economic future of the community. Tension and hostility between the Barclay brothers, those who manage their investments on the island and the community’s elected representatives, is a problem and a distraction. We wish the newly appointed administrator well in her role.

We saw no reason and heard little support for any fundamental change in the constitutional relationship between the UK and the Crown dependencies. We can see areas for improvement, such as a more rapid process for extending trade treaties, which the dependencies need, but I emphasise most the need to maintain and build on the work that Lord McNally and his officials did in response to our report. He has now stepped down from his ministerial post and there will be changes in the civil service team. We hope that Lord McNally’s successor in the role, Lord Faulks, will carry on the work in the same spirit and with the same commitment. I commend the report to the House.

[Mr Peter Bone (in the Chair)]

We will now take questions on the statement.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Does the right hon. Gentleman agree that two points came across clearly in most of our meetings in the Channel Islands? First, the lines of communication must always be kept completely open between their legislatures and this place in order to streamline legislation. Secondly—I am sure that he is pleased—the Ministry of Justice is now exploring the greater use of letters of entrustment enabling the Crown dependencies to conclude some international agreements themselves.

[Sir Alan Beith]

I very much welcome the help that I had from the right hon. Gentleman in working on this report and the particular perspective that he brought to it. He is entirely right, and he makes a point that I did not have time to make in my statement. Letters of entrustment are one indication in the Government’s response that they are willing to enable the islands to reach international agreements that fit within the framework of their responsibilities. It is a necessary process, because the islands have trading links around the world. Given that so many of the United Kingdom’s trading links are now through the European Union, of which the islands are not members, it is often necessary for new treaties to be put together and agreed, and letters of entrustment are a way to achieve that.

[Mr Philip Hollobone (Kettering) (Con)]

Can my right hon. Friend confirm that the Crown dependencies are not members of the European Union, and therefore clarify their relationship, in justice matters, with the Europe convention on human rights and the European Court of Justice?

[Sir Alan Beith]

I can indeed confirm that they are not members of the European Union. That is a decision that each has made separately. It is quite a complicated situation in some ways, because so many of their links are with the United Kingdom, which is in the EU. They are signatories to the European convention on human rights and subject to it. One of the United Kingdom Government’s responsibilities is to ensure that the treaties are complied with. In the case of Sark, of course, that led to significant constitutional changes that derived from responsibilities under the European convention on human rights.

[Andrew Rosindell (Romford) (Con)]

I congratulate the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) and his Committee on the publication of this report. It is important to ensure full recognition and understanding of the Crown dependencies and how what we in Parliament do affects them. I know that they will be delighted that the Committee has highlighted some important points in its report.

Does the right hon. Gentleman agree that the word “dependency” no longer reflects what the Crown dependencies are? They are not dependent in the sense that Britain subsidises or props them up in any way; on the contrary, the financial centres, especially Jersey, Guernsey and Isle of Man, provide benefits to the United Kingdom in many ways, particularly via the City of London. Is “dependency” the correct word for the Crown dependencies, or should we think of a name that is more appropriate to modern circumstances and their contribution to the overall British family?

[Sir Alan Beith]

That is an interesting point, which the Committee did not consider. The hon. Gentleman takes a close interest in the affairs of the Crown dependencies. The term “Crown dependency” is an important way of distinguishing the territories I have described and the United Kingdom’s overseas territories, with which they should not be confused. The constitutional relationship is different and in every case they have a high level of compliance with international, financial and other regulations, which they are keen to emphasise. The Crown dependency territories are a distinct group with a special relationship to the Crown. Any regular traveller to any dependency will know that loyalty and that link to the Crown runs strongly in all of them.

[Mark Field (Cities of London and Westminster) (Con)]

For the past three years, I have been an adviser to the Isle of Man law firm, Cains. Referring to a point made by my hon. Friend the Member for Romford (Andrew Rosindell), I want to put on the record the fact that there is terrific cross-fertilisation between the Crown dependencies and particularly the City of London. A huge amount of trade from China, India and so on would not come to this country if it did not come via our Crown dependencies.

I know that the hon. Member for Hayes and Harlington (John McDonnell) takes a great interest in these matters. It is fair to say that Jersey, Guernsey and the Isle of Man submit themselves to the highest level of regulation—higher than in many EU states—so we can be confident that the money that comes via the Crown dependencies to the City of London is of the highest quality.

[Sir Alan Beith]

The hon. Gentleman is rightly representing his constituency and the City of London by emphasising the fact that significant benefit arises from investment via the City from the Crown dependencies and that that brings in money from many parts of the world. Clearly, from time to time, issues arise that have to be resolved in discussion between the UK and dependency Governments, and sometimes statements are made that do not accurately reflect the islands’ degree of conformity with international and other regulation. In all these things, as the right hon. Member for Dwyfor Meirionnydd (Mr Llwyd) indicated, communication is important and necessary.

--- Later in debate ---

[Mr Hollobone]

I am grateful for the chance to remind the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith) that, although he gave a good answer to the first part of my question, it was so detailed that he forgot the answer to the second part about the relationship between the Crown dependencies and the European Court of Justice.

[Sir Alan Beith]

I would need notice before giving a definitive legal answer, on which I would probably have to take expensive legal advice from people such as the hon. Member for Cities of London and Westminster (Mark Field). However, because the dependencies engage in significant trade with the European Union, they may sometimes come up against issues that have been subject to litigation in the European Court of Justice. To facilitate relations with the EU generally, the dependencies have been opening offices in Brussels, which by general consent has helped. If the hon. Member for Kettering (Mr Hollobone) needs to know more about the potential of the European Court of Justice to be involved in their affairs, I would have to look further.

[Andrew Rosindell]

Does the right hon. Gentleman believe that the UK is properly looking after the interests of the Crown dependencies internationally, bearing in mind that no one in this House has been elected to represent them? There is no formal Committee, apart from the Select Committee, that deals with them. Internationally, they are not part of the European Union—some would say that they are fortunate to be outside the EU—and they are not part of the Commonwealth. They probably have more long-standing connections with Britain than anywhere in the Commonwealth, yet they have no status of their own and are not allowed to join the Commonwealth, even as associate members.

Does the right hon. Gentleman share my concern that UK Ministers, not only in the Foreign Office but in other Departments, often forget the interests of our Crown dependencies? Indeed, when my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) became Secretary of State for Justice and I spoke in the House about the Crown dependencies, he had no idea they came under his Department at that time. It came as a surprise to him that they had been included in his Department’s remit. Is the right hon. Gentleman really satisfied that the UK Government fully understand their obligations to those loyal subjects of the Crown dependencies?

[Sir Alan Beith]

My right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) made the wise decision to appoint Lord McNally to take responsibility within the Department. Our report and the evidence we have seen are powerful testimony to the fact that that job was done well. We found a higher level of respect for the Ministry than we found in 2010, when we first engaged in this process.

Internationally, in general, two things happen: the UK Government represent the interests of the dependencies, and in many matters enable them to represent themselves by letters of entrustment and other processes. We indicate in our report that when there is real conflict of interest, there could be better ways of ensuring that the islands’ views are properly included.

Significant changes in the constitutional relationship—I suppose the ability to join the Commonwealth might be considered part of that—should be mooted only after careful consultation, and probably at the request of the dependencies themselves. We have an evolving but rather well balanced constitutional relationship. The Committee’s view, which is fairly widespread among people in the dependencies who study these matters, is that we treat that constitutional relationship with care and do our best to make it work effectively, but there is always scope for improvement.

[Mark Field]

May I assure my hon. Friend the Member for Romford that I know from my dealings with the First Ministers of both Guernsey and the Isle of Man that the Crown dependencies believe that they are better looked after under the Ministry of Justice than they would be as just a small state within the Foreign and Commonwealth Office’s ambit? It is to the great credit of the Select Committee that the report recognises the breadth of areas that need to be discussed.

May I put on the record the fact that, although we recognise that the Crown dependencies have a strong name for financial services, that is by no means all they do? That applies particularly to the Isle of Man, which believes that it is important that in the context of its location it embeds itself with the north-west. Its representatives have met many Members of Parliament for the north-west, particularly Opposition Members, and believe that that is a fruitful relationship to ensure that the Isle of Man is not regarded as just a tax haven, but as having a significant economy in its own right in a variety of areas.

[Sir Alan Beith]

The hon. Gentleman enables me to make two points about the Isle of Man. First, it has a significant high-technology, space-related engineering industry, which is a significant part of its economy. Secondly, like other Crown dependencies, it has offered assistance both in the Commonwealth and to other dependencies, most recently to the Turks and Caicos Islands. That illustrates the international presence of the dependencies, which is extremely beneficial.

[Andrew Rosindell]

Referring back to the right hon. Gentleman’s comments a moment ago about membership of the Commonwealth, as a point of information, he may be aware that the Crown dependencies submitted to the Select Committee on Foreign Affairs their interest in being members of the Commonwealth, under that Committee’s report of the year before last. Perhaps his Committee could look at that at a later date.

Finally, are the right hon. Gentleman and his Committee satisfied that the Crown dependencies are fully included, in the sense that there are ceremonial and British traditions from which they currently seem to be excluded? I give the example of the Remembrance Sunday parade and service in Whitehall. The Crown dependencies are still, to this day, denied the right to lay a wreath alongside other members of the Commonwealth. Not only that, but there is the importance of ensuring that the flags of the Crown dependencies are flown for state occasions such as trooping the colour and other special events. Does he agree that it is important that the Crown dependencies are always considered in all such important occasions, and particularly state occasions?

[Sir Alan Beith]

I gave the hon. Gentleman a guarded answer earlier, because both of the points he mentioned are not matters that the Committee considered. Speaking personally, however, I have a great deal of sympathy for what he said, not least in relation to remembering what happened in the second world war. All the dependencies, but especially the Channel Islands, have every reason to remember—they remember with gratitude, of course, their eventual liberation—and we in the United Kingdom have every reason to be reminded, as we have been by a lot of television coverage in the past year, of the dreadful experiences that the islanders went through at the time. It is something that we should not forget.

[John McDonnell (Hayes and Harlington) (Lab)]

I did not want to miss the opportunity to speak, lest my silence be taken as support for the Crown dependencies. As the right hon. Gentleman knows, I have just joined the Committee—the Labour Whips have been so careful not to overburden me for the past 17 years that I have not served on any Committee. Some of us retain concerns about the use of the dependencies as tax havens and may well wish to return to the matter at a later date.

[Sir Alan Beith]

That sounds like an ominous warning from a new member of my Committee. However, should the Committee in a future Parliament return to the matter to monitor progress, as we recommend they should, the hon. Gentleman will have the opportunity to visit the islands and to question officials of the islands and others in the financial services industry there. He will be able to satisfy himself fully on how the islands seek to manage and regulate the very considerable financial services that are administered from them.

[Mr Peter Bone (in the Chair)]

Thank you. Right hon. and hon. Members have set a very good example with the first Select Committee statement in Westminster Hall. We now move on to a debate on two reports from the Justice Committee—“Women Offenders: after the Corston Report” and “Older Prisoners”. It will be a single, combined debate on the two reports. That has been done before, but it is also somewhat unusual.