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rfmcdonaldMy attention was caught by the news that one, Philip Bailhache, a serving parliamentarian and minister of the Channel Island of Jersey, called for considering the full independence of his self-governing island off the French coast from the British Crown.
The Channel Islands' unique constitutional structure is one of the few remnants in western Europe of medieval polities; the Channel Islands are the only territories of the Duchy of Normandy that remained under the Crown of England, later the United Kingdom, after the Hundred Years War drove the armies of the monarch regnant in London from the French mainland. In most respects, these islands have been fully internally self-governing, granting the bare minimum of power to the British government, in foreign and military affairs. Lately, these islands have taken advantage of their ambiguous sovereignty--critically, in the European Union's customs area but otherwise outside, with stable governments and convenient locations--to attract financial industries, including tax shelters.
The idea's a non-starter, of course. The people of Jersey seem, by and large, happy with their constitutional status, of near-independence under the rule of the British monarch. The people of Jersey seem concerned with their island's economic future, but it's just not easily reducible to the financial industries alone. Writing in the Daily Mail, for instance, Michael Hanlon argues that independences would impose extra costs on Jersey--how would it manage its economic policies? what would they even be?--while cutting off the ordinary people of Jersey from accessing the mainland. The well-off might do well, granted.
Nicholas Shaxson in The Guardian argues that the overall uncertainty of things in an independent Jersey would even put off the financial industry that would supposedly benefit from independence.
Senator Sir Philip Bailhache's comments came after the UK government said it was cracking down on tax avoidance.
He said: "Independence is quite a long way down the road, but I do feel and I have been saying for quite a long time, that we should not close our eyes to this possibility."
[. . .]
Sir Philip said Jersey had not been marketing itself as a tax haven nor a place where people could ignore their fiscal dues.
He said Jersey had signed a range of tax information exchange agreements with countries in the European Union and elsewhere to demonstrate it was a transparent jurisdiction.
[. . .]
Sir Philip said: "If Jersey was faced with a stance by the UK or the European Union which meant the finance industry was going to up sticks and leave the island, then that clearly would be an instance where we would have to consider very carefully where our best interests lay.
"We should be ready for independence if it was obvious that it was the right thing for the island to do."
The Channel Islands' unique constitutional structure is one of the few remnants in western Europe of medieval polities; the Channel Islands are the only territories of the Duchy of Normandy that remained under the Crown of England, later the United Kingdom, after the Hundred Years War drove the armies of the monarch regnant in London from the French mainland. In most respects, these islands have been fully internally self-governing, granting the bare minimum of power to the British government, in foreign and military affairs. Lately, these islands have taken advantage of their ambiguous sovereignty--critically, in the European Union's customs area but otherwise outside, with stable governments and convenient locations--to attract financial industries, including tax shelters.
The idea's a non-starter, of course. The people of Jersey seem, by and large, happy with their constitutional status, of near-independence under the rule of the British monarch. The people of Jersey seem concerned with their island's economic future, but it's just not easily reducible to the financial industries alone. Writing in the Daily Mail, for instance, Michael Hanlon argues that independences would impose extra costs on Jersey--how would it manage its economic policies? what would they even be?--while cutting off the ordinary people of Jersey from accessing the mainland. The well-off might do well, granted.
[W]ould an ‘independent’ Jersey set its own currency, be responsible for defence and have to renegotiate new trading and rules with the EU and jettison Her Majesty the Duke? If it set its own currency how would this be backed? Does the Euro appeal? Thought not. So who sets interest rates? An ‘independent’ Jersey would lose its beneficial relationship with Britain, including the automatic right of abode in the UK (and the rest of the EU in fact) for Jersey passport holders. Independent Jersey citizens would therefore not be able to travel to the UK or France to claim benefits or healthcare, for instance (indeed there are already curtailments on the latter in place).
This it would seem that the immediate beneficiaries of ‘independence’ would be limited to the hyper-rich and the corporations who have made Jersey their (usually nominal) home. The ordinary people, the 90,000 or so islanders, would either be worse off or notice no difference. But that would only be the case if things stayed hunky dory with the financial sector.
Nicholas Shaxson in The Guardian argues that the overall uncertainty of things in an independent Jersey would even put off the financial industry that would supposedly benefit from independence.
The world's financial actors come to Jersey because of the rock-like stability and predictability that stems from its umbilical relationship with the UK. While Britain's crown dependencies (such as Jersey) and overseas territories (such as the Cayman Islands) do have their own quasi-independent politics, their governors and some other officials are appointed by the Queen, Britain is responsible for their (supposedly) good governance and defence, and no laws can be passed in Jersey without final assent from the privy council in London. Has the Duke of Normandy – that is, our dear Queen – even been asked if Jersey may become independent?
If this reassuring bedrock were removed Jersey could still be a tax haven, but a more marginal one. When the Bahamas won full independence from Britain in 1973, its (then mostly criminal) financial sector decamped almost wholesale to the Cayman Islands, which remained a British overseas territory. If Jersey went it alone, its financial industry would be similarly devastated.
[. . .]
Statements like Bailhache's are not driven by Jersey's people, but by its financial sector – a sector with which Bailhache's family law firm has had a very profitable relationship over the years. If Jersey lost all the protections provided to it by the British establishment, it is likely that the seething and widespread corruption on the island – which I am not seeking to link to Bailhache – will be vulnerable to greater exposure.
