Chief Ministers react as transparency critic ascends to House of Lords

Monday 08 July 2024

Jersey and Guernsey’s Chief Ministers have said they are open to further discussions on the islands’ transparency with a former MP critical of offshore finance centres after she was promoted to the House of Lords.

The Rt Hon Dame Margaret Hodge was made a peer in the dissolution honours list, nominated by her own party and now the governing party of Britain – Labour.

She has long been a vocal campaigner inside and out of parliament on offshore finance centres and tax avoidance and has for years called for more transparency from the Crown Dependencies, particularly through beneficial ownership registers.

Dame Margaret – who recently reiterated her views about the islands in an op-ed for The Times – will now be able to lead her campaign from the upper chamber of the UK government.

Her views have often frustrated Jersey and Guernsey politicians, who have always maintained that the islands are well-regulated.

I feel humbled, honoured & delighted to be asked to go into the House of Lords.

Having immigrated here as a young girl, neither I nor my parents would have ever dreamt that I would become a Peer of the Realm.

I am looking forward to continuing my commitment to public service.
— Margaret Hodge (@margarethodge) July 4, 2024

Asked about Dame Margaret Hodge's elevation to the Lords, Jersey's Chief Minister said that he had no concerns.

“While we have had our differences, we are in a very good position. Our register of beneficial ownership is one of the oldest and most established registers in the world, which has been independently evaluated in relation to its transparency and I am happy to discuss it with anyone,” Deputy Lyndon Farnham said.

His opposite number in Guernsey, Deputy Lyndon Trott, went a step further and encouraged Dame Hodge to visit the island – something she has done previously with co-campaigner, Conservative MP Andrew Mitchell – to aid her understanding of local financial practices.

"There is an open invitation to her to come to Guernsey for a working day to see how the regulatory environment operates in the island,” he told Express.

"I am very pleased to learn of her ascension to the House of Lords and repeat my sincere invitation to her to spend time in Guernsey with direct exposure to our well-regulated financial services industry."

Meanwhile, Guernsey's former States Chief Economist Andy Sloan posted on X (formerly Twitter), saying Dame Hodge would “continue her crusade against offshore".

“We’ll need a much-improved defence,” he warned.

Pictured: Guernsey's Chief Minister, Lyndon Trott, encouraged Dame Margaret Hodge to visit the islands.

Dame Margaret has been a vociferous campaigner on the need for public access registers, long arguing that the UK not only has the power to but should legislate to force the islands to act.

This breaks a long-standing constitutional position that the UK will only extend its legislation to the islands with the express consent of the Bailiwicks.

She argues that the Crown Dependencies facilitate secrecy in which the tax avoidance, tax evasion and economic crime flourishes. Russian money flowing into the islands was cited as a matter of national security.

As early as last December she told the House of Commons: “Crown Dependencies in particular are acting in a completely dishonourable way. Their role in facilitating economic crime and tax avoidance is indisputable, and their protestations to the contrary are simply untrue.

“Their behaviour in providing public assurances that they will move towards public registers but claiming that the European court ruling prevents them from doing so is, in my view, unforgivable.”

Pictured: Jersey's Deputy Lyndon Farnham welcomed the new Labour government on Friday.

The Crown Dependencies jointly announced in 2019 that they were committed to opening a beneficial ownership registry to the public in a controlled and timed way in response to external pressure from all angles.

But when a ruling came from the Court of Justice of the European Union in 2022 stating that unrestricted public access to beneficial ownership information was incompatible with the right to life, the commitment shifted.

The islands have now said they will allow access for 'obliged entities', businesses required to conduct customer due diligence, by the of this year and then look at a legitimate interest test which would allow the media and campaign groups access.

Both Chief Ministers have welcomed the new Labour Government, whose manifesto pledges: "Labour will... work with our allies and international financial centres to tackle corruption and money laundering, including in Britain, Crown Dependencies and in British Overseas Territories."

Deputy Lyndon Trott added: “Over the next few days we will liase with as many contacts as we can to promote... our significant value to the UK economy”.

Deputy Farnham commented: "We have worked closely and collaboratively with consecutive Conservative governments and look forward to building a close and productive working relationship with the Labour government."

Guernsey’s Chamber of Commerce said: “We are keen that our States of Guernsey continues to engage constructively with the new UK government to ensure that the interests of Guernsey businesses are considered in the UK's future social and economic policies."