Beneficial Ownership Registers: Overseas Territories and Crown Dependencies

Robert Neill Excerpts

Thursday 7th December 2023 Commons Chamber

[Dame Margaret Hodge]

The right hon. Member makes a really important point, which I will come to later. He is right: this is a national security threat as well as a threat to our economy.

The Government have yet to comply with the legislation by making an Order in Council to mandate compliance by the overseas territories. After discussions between the Crown dependencies and the right hon. Member for Sutton Coldfield and myself, the three Crown dependencies —Jersey, Guernsey and the Isle of Man—announced in May 2019 that they were committed to introducing public registers and set out a plan to do so. Although I welcomed that in principle, I was concerned that their commitment was qualified and that their action plan contained a number of opt-out clauses. However, on the basis of their commitment, we chose not to legislate but to trust them. It now seems that our trust was misplaced. They are reneging on that commitment and using every excuse not to comply.

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

I understand how strongly the right hon. Member feels. May I point out that, as a matter of constitutional fact, we have no right to legislate for any of the Crown dependencies? Constitutionally, they are not subject to the jurisdiction of this Parliament.

[Dame Margaret Hodge]

I have enormous respect and time for the hon. Member, but I have an opinion from a renowned KC that we sought at that time—I will come to it later—which contradicts entirely his point and says that we do have the constitutional right to legislate.

--- Later in debate ---

[Sir Robert Neill (Bromley and Chislehurst) (Con)]

It is a pleasure to see the right hon. Member for Barking (Dame Margaret Hodge) in her place and I congratulate her on securing this debate. She and I have agreed on many issues and have worked together closely in the past. I happen to support the concept of a public register of beneficial ownership in the United Kingdom, and I supported it when it was first introduced.

I declare my interest as chair of the Gibraltar all-party parliamentary group. As the right hon. Lady has observed, Gibraltar has established a public register of beneficial ownership. It is right, therefore, that we should not treat all the overseas territories as homogenous. In one respect, Gibraltar, with its particular links both to the United Kingdom and Europe, has chosen to go in that direction, and we should support it in having done so. That was its decision as a self-governing overseas territory. It has continued to do that, even though it must be observed—and we should not make light of this fact—that the ruling of the European Court of Justice has now meant that some 23 of the 27 EU states have closed their registers. We should be careful about dismissing that. It does not apply to us anymore, because we have left the European Union, but we should not dismiss that fact and simply pooh-pooh it, because it has an impact on others. Gibraltar chose, despite that, to continue with its register.

That brings us to the position of the Crown dependencies. I refer to this matter, of course, as chair of the Justice Committee; we have to remember that the constitutional position of the Crown dependencies is totally different from that of the overseas territories. They are not part of the United Kingdom and never have been. I say that with due respect to any legal opinion that can be produced—frankly, though, one legal opinion counts for very little against centuries of constitutional convention and the views of successive British Governments of all parties.

The simple fact is that the Crown dependencies have never been subject to this Parliament. They are not represented in this Parliament. They have their own legislatures, which are sovereign in those matters. We should not allow good intentions to lead us into arrogance as an institution and purport to legislate in areas where we have no right. I happen to think that, if I were in one of those legislatures, I might well be making the case for broadening out their registers, but it is not for us to presume to do so.

There has been some progress. As a Select Committee, we took some evidence from the Crown dependencies in our role of scrutinising the Ministry of Justice, which handles the relationship—it is not the Foreign Office that does so. I am delighted to see the Under-Secretary of State for Justice, my hon. Friend the Member for Finchley and Golders Green (Mike Freer) in his place. He has established a very constructive relationship with the Crown dependencies.

What we have is this: the Crown dependencies have chosen at the moment not to go down the route that we have gone down. If we want them to go down that route, we must persuade them to do so of their own volition as sovereign independent countries. That may well be where they get to. At the end of the day, there has been some movement. As a matter of fact, were they here, they would say that they do have central, fully compliant, authorised and accurate registers of beneficial ownership. They are not open to the public as of yet, but they do meet international standards. They are subject to the Moneyval monitoring process of the European Union and they comply with all the international standards. We have chosen to go further than those standards, but they have gone as far as that.

Secondly, all three of them, in lockstep on national interest matters and money laundering, transpose into their domestic law all the sanctions that we have brought in as the UK in relation to Russia, and it is no good pretending otherwise. The national security argument is therefore, frankly, a rather thin one. There are better arguments to make, such as good practice. None the less, they told us when they gave evidence to the Committee that there has been an intention to move towards a greater degree of openness in their registers. They have taken the view, and it is their choice at the moment, on their legal advice—their legal system is as good in their sphere as ours is in ours—that they wish to take stock of the decision of the European Court of Justice and the impacts it may have on them, not least because they have a data adequacy agreement with the EU.

When they read the detailed decision of the ECJ, as I have, the Crown dependencies found difficulties in both a disproportionality between general public access and rights to privacy—those rights under the charter of fundamental rights, I might observe, mirror exactly those in the European convention on human rights, which, as it happens, binds us still—and in relation to data protection. They were concerned about a potential risk to their data protection equivalence with the EU.

Let us hope that we are able to find a way in which we can all agree a sensible step forward. As I understand it, the Crown dependencies are committed to making an announcement later this month that they will be extending their work further. They are looking first of all at obliged entities—people who need to carry out due diligence—and then at the concept of legitimate interest. That is a step forward. Let us perhaps wait and see what they say. We will get more progress with our Crown dependency friends by co-operation and discussion than we will, with respect, by lecturing.