Forget Edwards, this is a proper crisis

In Sark’s case, we know from the Ministry of Justice. It’s the UK being convinced that the island has sufficient capacity and access to the necessary skills, knowledge and experience to govern effectively.

In addition, decisions have to be made in a transparent way, based on objective advice; and democratic accountability of the government to the people of the island has to be restored, primarily through periodic contested elections.

Balancing the books always helps, of course, which brings us neatly to Alderney. There, the cost of independence, depending on how you do the sums, is around £8m. a year – the problem being that this is the amount the Guernsey taxpayer has to find annually to subsidise its northern neighbour.

It’s a lot, is steadily increasing and ultimately unsustainable. It has triggered a review of the financial relationship between Guernsey and Alderney, which itself hinges on something called the 1948 agreement put in place by the UK after the Occupation to help Alderney get back on its feet again.

It was to have been a temporary measure until, a bit like Sark, it sorted itself out and became financially self-sufficient. For various reasons Alderney hasn’t (I suspect largely because of the support agreement itself, which means that the key public services there are provided by Guernsey as though it was an 11th parish).

I had intended this week to look in some depth at the Alderney issue and suggest that when Guernsey proposed re-examining the 1948 agreement, it was unlikely to be to Alderney’s advantage.

Events, unfortunately, have rather overtaken us.

By events, I mean a full-blown constitutional crisis.

Not the 1998 frisson when the UK launched a hostile review of the Crown Dependencies’ laws, systems and practices relating to regulating financial services (the Edwards Report).

This latest is a proper crisis: an attempt by Parliament, as distinct from the government of the day, to legislate for these islands without their express consent.

We don’t have space to set out exactly why this is so serious but be assured by the dynamic, coordinated and frankly outstanding response to it by the senior politicians and advisers of Guernsey, Jersey and the Isle of Man that it was potentially A Very Bad Thing indeed.

So much so, we can safely assume if the Private Secretary to the Queen wasn’t actively involved, he was at least poised to murmur in the ear of government that legislating for the Crown Dependencies in this way was extremely unwise.

Ordinarily, the government of the day would be strong enough – i.e. command a sufficient majority – to flatten what the BBC’s Parliamentary correspondent called a backbench uprising led by a wily Conservative former chief whip and a dangerous street-fighting Labour grandee.

Alas, these are not ordinary days, which is why the unprecedented step was taken to pull the Financial Services Bill and prevent a government defeat.

It is also why Guernsey’s Gavin St Pier, who fortunately seems to thrive on crises and little sleep, has warned that the battle may have been won but the war is far from over.

Apart from being far more serious, this reminds me of the equally contrived storm over Guernsey’s low value consignment relief (aka ‘VAT loophole’) killing CD sales in the UK and destroying high street record shops.

It was baloney but, just like the shocking lies told in support of Brexit, when the street-savvy Margaret Hodge MP declares opening up these islands’ company registers to public gaze is ‘the next big step for tackling money laundering and tax evasion’, the gullible, the malicious and the axe-grinders choose to believe it.

And since Mrs May needs to get the Financial Services Bill through as part of the UK’s Brexit preparations, Dame Margaret’s supporters will have another crack at legislating for these islands.

That people have a legitimate and non-criminal right to keeping their affairs confidential – other than to the relevant authorities with due cause to enquire – is irrelevant to the argument. As, indeed, is approaching 1,000 years of history and the unique constitutional circumstances of these islands to a certain number of MPs and their bagmen.

Depressingly, that raises the likelihood of the islands having a strong case for refusing to embrace public ownership registers but the government being too weak to ensure that it’s heard or acted on.

Independence – and at what level – comes at a cost, as we saw with the introduction of zero-10 to retain what were then called offshore companies.

How this latest crisis will be resolved remains unclear, although I have my fears, but there are two certainties in the current row.

The first is that opening Guernsey registers to public gaze would have no significant effect on money laundering or tax evasion. The second is that supporters of the Hodge amendment seeking to force it through largely know this too.

But attacking ‘tax havens’ and denying people their privacy of ownership plays well on both sides of the political spectrum in austerity-torn Britain and it’s a game without cost to those playing it.

The reason for that, of course, given the government’s weakness, is there’s no one of stature in banking, regulatory or enforcement circles calling it out for the sham it is.

In turn, that leaves these islands in the court of public opinion with a defence no one wants to hear and an ‘alibi’ based on 800 years’ fealty to the monarch.

Time for Policy and Resources to break out Perry Mason I reckon.