2 Relationship between the UK Government
and the Crown Dependencies |
Role of the
Ministry of Justice
|2010 Recommendation: Given that the Crown Dependencies team at the Ministry of Justice appears to struggle with the resources it has, we suggest that a reappraisal of the constitutional duties of the Ministry of Justice might be a timely step in the right direction. The Ministry of Justice should prioritise those duties and restrain itself from engaging in areas of work which are outwith its constitutional remit. (Paragraph 17)
2010 Government Response: We agree with the Committee's recommendation that the Ministry of Justice should prioritise its core constitutional duties and should disengage from areas of work which do not directly engage this primary role.
5. The Ministry of Justice is responsible for administering
formal contact between each of the Crown Dependencies and the
UK Government. At the
time of the 2009-10 inquiry, the team in the Ministry of Justice
dedicated to the Crown Dependencies comprised three operational
staff dealing with Island legislation, Crown appointments and
honours; three policy officials dealing with policy issues and
providing advice and support to the Crown Dependencies; and four
lawyers, who advised the policy team and other UK Government Departments.
The authorities in the Crown Dependencies believed the team to
be under-resourced, causing it to be reactive, rather than proactive,
and to create bottlenecks.
However, the team was also engaging in activity which duplicated
work done by the Island authorities themselves, and in our predecessors'
view, went beyond constitutional requirements. Therefore rather
than recommending an increase in team capacity, the Committee
recommended more effective use of existing resources.
6. Such an approach was given added impetus by the
requirement on Government Departments to make spending cuts. Lord
McNally told us that:
Since 2010 the Ministry of Justice has had to
cut back, initially, in the first spending review by 23%, and
in a subsequent review by 10%. That has meant that we have had
to employ a leaner team, able, we hope, to deliver more for less,
but I do not think that there have been pressures on delivery
that have affected our performance.
The Crown Dependencies team now consists of four
policy officials, supplemented by three lawyers who work on the
Crown Dependencies and other policy areas.
Cathryn Hannah explained that:
We have tried to streamline our focus on the
areas where we, as the Ministry of Justice, demonstrably add value
and are the core of the constitutional relationship. It is a team
that works well and is adequately resourced for what we are doing.
This view was supported by the Crown Dependencies.
7. As part of this process, and in line with the
direction suggested in the 2010 Report, the MoJ has encouraged
the development of direct relationships between the Crown Dependencies
and other UK Government Departments.
According to the Policy Council of the States of Guernsey, this
has "reduced its reliance on the MoJ acting as an intermediary",
although the MoJ remains the channel of formal communication and
assists when relationships with Departments become strained;
the Jersey and Isle of Man Governments reported similarly positive
McNally explained that:
We have become very adept at identifying the
individual and the Department where the solution to a problem
is, directing the Crown Dependency there, and making sure that
the response is a positive one.
8. These new ways of managing the relationship appear
to have been successful. Elected representatives and officials
in all the Crown Dependencies described a considerable improvement
in the relationship and we explore the various manifestations
of this elsewhere in this Report. The Jersey Government, for example,
said that its relationship with the MoJ is "strong, due to
good communications between the Minister and officials in the
MoJ and their counterparts in the Island."
The Crown Dependencies gave credit to our predecessor Committee's
recommendations for this improvement.
Lord McNally considered that our work in this area provided a
good model for interaction between select committees and the departments
they scrutinise and told us that:
Your 2010 report set a number of tasks [and]
made it easier for me to know where my priorities should be.
9. This improvement was also to a large extent attributed
to the personal commitment of Lord McNally and Cathryn Hannah.
We sought assurance that the success or otherwise of the relationship
was not too dependent on personalities, with the potential for
back-sliding in the future. Lord McNally reassured us that:
I do think that we have set in place contacts
and relationships and a template for working, which anybody following
me or following Cathryn will be able to take forward.
10. We welcome the general improvement in the
relationship between the UK and the Crown Dependencies, as
attested to in this follow-up inquiry. We are pleased that the
conclusions and recommendations of the previous Committee's Report
provided the basis for this shift, and we pay tribute to the way
in which they have been implemented by the Ministry of Justice,
with particular credit due to Lord McNally and Cathryn Hannah.
The Ministry team dedicated to dealing with the Crown Dependencies
is operating with fewer resources than in the past. However, in
our estimation it is using them more effectively, in line with
the Committee's recommendation that the Ministry limit its activities
to key constitutional duties, and the Department's reduced budget
has not caused tangible difficulties.
2010 Recommendation: We believe that, in agreeing to answer Parliamentary Questions on topics which are essentially domestic matters for the Crown Dependencies, the Justice Secretary is clouding the issue of what, constitutionally speaking, is properly the responsibility of the UK Government and what should properly be left to the Island governments. The Justice Secretary should make explicit in his answers to Parliamentary Questions whether or not he considers the matter addressed falls within his constitutional responsibilities. (Paragraph 15)
2010 Government Response: The Ministry of Justice will restrict its responses to those questions which relate to the Ministry of Justice's constitutional responsibilities in respect of the Crown Dependencies. For domestic matters that are the responsibility of the governments of the Crown Dependencies, the Ministry of Justice will now simply state the matters are outside the Department's remit.
11. We did not receive any evidence expressly on
this point. However, analysis of the answers to questions tabled
under the current Government indicates that it appears to be acting
in line with the recommendation. Where questions have concerned
the relationship or actions of the UK Government in respect of
the Crown Dependencies, they have been answered substantively;
where questions relate to internal matters for the Crown Dependencies
and are therefore not the responsibility of UK Government Ministers,
they have not. The following example demonstrates this dual approach:
Channel Islands: Dietary Supplements
Jim Dobbin: To ask the Secretary of State
for Justice (1) when Ministers in his Department next plan to
discuss the implementation of the Food Supplements Directive and
the Nutrition and Health Claims regulation with the (a)
Chief Minister of Guernsey and (b) Chief Minister of Jersey;
 (2) what his policy is on the desirability of Crown Dependencies
implementing EU legislation that applies to the rest of the UK.
Mr Kenneth Clarke: The Minister of State
(Lord McNally) and officials are in regular contact with the Jersey
and Guernsey authorities on a range of matters, including the
implementation of EU legislation in general and this directive
and regulation in particular. Both Crown Dependencies have confirmed
they are taking steps to implement these specific measures at
the earliest opportunity.
The Crown Dependencies' relationship with the
EU is governed by Protocol 3 of the UK's Treaty of Accession to
the European Community. The Crown Dependencies use their domestic
legislation to implement EU legislation falling within the parameters
of this Protocol. Under Protocol 3, the Islands are part of the
customs territory of the Community and the common customs tariff,
levies and agricultural import measures apply to trade between
the Islands and non-member countries.
However, other EU legislation does not generally
apply. The Crown Dependencies are not part of the UK and it is
for their own Governments to decide whether they wish to introduce
such measures within their jurisdictions.
12. We welcome the fact that, as a general rule,
the Ministry of Justice is no longer providing substantive answers
to Parliamentary Questions on issues pertaining to the Crown Dependencies
for which their own governments are responsible, in line with
the Committee's recommendation. This more accurately reflects
the constitutional relationship.
Relationship with other UK Government
|2010 Recommendation: [UK Government Departments] should be left in no doubt about the limits of legitimate intervention in Island policy and legislation and about their duties in considering [the Crown Dependencies'] interests. In achieving these aims, we believe that it would be helpful if more use were made of secondments of officials between UK Government Departments and the Crown Dependencies in order to increase mutual understanding. (Paragraph 27)
2010 Government Response: We agree that secondments by Crown Dependencies staff to central Government Departments could bring benefits in terms of increased mutual understanding and would be happy to help facilitate these.
13. As noted above, the MoJ now facilitates direct
contact between the Crown Dependencies and UK Government Departments
more frequently and this is judged to be a success. The MoJ has
also taken steps to remind Departments of their responsibilities
to the Crown Dependencies. Lord McNally advised that:
Within a few weeks of taking office as the Minister
in 2010, the Prime Minister gave me clearance to write to every
ministerial lead to say that it was expected that they should
have cognisance of the problems or issues relating to the Crown
Dependencies and should be expecting to give them access. In the
main that has worked.
14. There have been various initiatives since 2010
aimed at improving mutual understanding between the Crown Dependencies
and UK Departments, including the use of "road shows",
whereby officials from the Crown Dependencies explain who they
are and how they work to UK civil servants, and secondments between
the MoJ and the Islands, as recommended by the Committee. The
first "road show" was held in December 2012 at the FCO
and was judged to have been a success.
The first full secondmentfrom Jersey to the MoJtook
place between October 2012 and April 2013. The MoJ has said it
is open to further secondments.
Lord McNally said that:
Cathryn [Hannah] has worked extremely hard at
[...] making sure that there have been seminars and workshops
with the Crown Dependency civil servants and civil servants coming
into Whitehall to get a better understanding of how Whitehall
works. That is a process that I would like to see continue and
develop, because the more they have civil servants who understand
how the Whitehall machine works the better.
15. However, there have been a number of occasions
since 2010 where the UK has acted in ways which the Crown Dependencies
judged to be inappropriate, wrong or unfair, and which have strained
the relationship. These include instances where the UK has made
decisions which impacted on the Islands without prior consultation
(explored in more detail in chapter four); the decision by HM
Treasury to disapply Low Value Consignment Relief;
the refusal of HMG to allow the Crown Dependencies to sign up
to the US Foreign Account Tax Compliance Act (FATCA) unless they
concluded a similar agreement with the UK (see chapter five);
rhetoric from 10 Downing Street and HM Treasury about the Islands'
financial services and taxation regimes which they claim had seriously
misrepresented them; and pressure applied to the Crown Dependencies
to sign up to taxation-related agreements in the lead-up to the
G8 summit. The Channel Islands and the Isle of Man are quite different
from UK Overseas Territories not only in being part of the British
Isles but also in their distinct constitutional status as Crown
Dependencies, and the high rating accorded to their compliance
with international regulatory standards.
16. Lord McNally agreed that the Crown Dependencies
feel justifiably aggrieved in relation to some of these cases.
However, he added that:
What has been good is that, since we had a couple
of incidences where the Prime Minister was showing you his determination
to address financial service regulation globally and the Crown
Dependencies thought that they were being unnecessarily fingered,
No. 10 and the Treasury have become much more aware and the Chief
Ministers of the Crown Dependencies were invited over for discussions.
Lord McNally described the relationship as "like
a good marriage; it has to be worked at. It is not a finished
product; it is work in progress."
He also explained the MoJ's mediation role. Where the Crown Dependencies
seem to be overlooked, he has intervened "either by phoning
or writing to Ministers concerned, saying, "Can I remind
you that the Prime Minister has asked that you give this priority?"
Usually, that little nudge has been enough to get the wheels turning."
This chimed with what we were told by the Crown Dependencies themselves.
17. The Ministry of Justice, in partnership with
the Crown Dependencies, has taken a number of initiatives aimed
at improving mutual understanding amongst officials in UK Government
Departments and the Crown Dependencies about their respective
roles and responsibilities, the impact of which we explore further
in the following chapters. Although there have continued to be
occasions where the Crown Dependencies have felt poorly treated
by the UK, often with some justification, we are content that
the Ministry of Justice has mechanisms in place to fix the relationship.
18. Owing to the general rate of turnover in the
civil service, the Ministry of Justice must ensure that efforts
to raise awareness of the Crown Dependencies across Government
are ongoing, and we would like to be kept updated on this point.
In our view, Lord McNally's communication with Ministers across
Government after the last election to remind them of their obligations
in relation to the Crown Dependencies, as sanctioned by the Prime
Minister, has proved particularly helpful and we hope that this
process will be replicated by future Governments.
The constitutional relationship
2010 Recommendation: We recommend that the Ministry of Justice redoubles its efforts to produce a simple account of the constitutional position of the three Crown Dependencies. This should highlight their essential independence from the UK, their independence from each other, and the fact that their interests need to be considered routinely by all UK Government Departments. (Paragraph 27)
2010 Government Response: The Ministerial foreword to this response answers the Committee's recommendation that we produce a simple account of the constitutional position. We intend it to be a blueprint for UK engagement with the Crown Dependencies and to bolster the recognition of their separate identities.
19. The Ministerial foreword is appended to this
Report. It sets out "how the Government believes the relationship
between the Crown Dependencies and the United Kingdom should operate
to meet current needs, taking into account the growing ability
of the Islands to represent their own interests within the UK
and abroad", but "is not intended to change or challenge
the existing constitutional relationship". Guernsey's Policy
Council described it as one of the "helpful reference documents"
available to assist them "when explaining the constitutional
relationship" and which are "regularly used when dealing
with UK Government officials".
20. The relationship has evolved over time; most
recently the Crown Dependencies have each been pursuing a greater
international presence and the MoJ said that their desire "to
develop a more mature, arm's length relationship on some aspects
of their business with the UK [...] fits well with our own position."
However, certain changes affecting the relationshipsuch
as the UK's membership of the EU, to which the Crown Dependencies
do not belongas well as the unhappiness alluded to in paragraph
15, have led to calls by some groups in the Crown Dependencies
for a more radical re-evaluation. There has been public debate
in Jersey about the potential for independence, promoted by Sir
Philip Bailhache, previously Assistant Chief Minister and now
the Island's first External Relations Minister; and the States
of Guernsey resolved in September 2013 to form a Constitutional
Investigation Committee to examine the relationship with the UK.
21. The Ministry of Justice has been clear that the
extent to which it can apply a lighter touch approach is limited,
and that it has to take its responsibilities seriously. For example,
speaking in reference to scrutiny of insular legislation, which
is carried out by the Ministry of Justice and which we explore
in the next chapter, Lord McNally said that:
We also have to remember that, if we had got
this wrong in terms of UK terms, in Westminster terms, you would
have the relevant Minister down here immediately to ask why this
was not spotted or why we allowed this to go through. It is a
mutually dependent relationship and what happens in the Crown
Dependencies does splash over into our reputation, so we have
a responsibility to make sure that their legislation passes muster
but with as light a touch as we possibly can.
When asked if he saw the need for a review of the
constitutional relationship, Lord McNally replied:
No, it works, and I believe it is as strong as
or stronger than it ever was. As long as the Westminster Government
appreciate and understand the nature of that relationshipthat
they are not colonies and cannot be browbeaten and bullied but
have to be taken into account and discussed withand as
long as they realise that they have responsibilities both to the
United Kingdom and the global community in the observance of treaties,
agreements and such, it is a solid relationship and one that I
do not see needs any tinkering with in any fundamental way.
22. We note the pressure from some groups in the
Crown Dependencies towards re-defining the constitutional relationship
in a way that allows the Islands even greater independence from
the UK. While the relationship has evolved over time and will
rightly continue to do so, its very nature imposes certain responsibilities
on the UK which it cannot ignore. We are therefore not convinced
that any attempt to achieve a fundamental re-balancing would be
fruitful. We welcome the Ministry of Justice's response to our
recommendation that it produce a simple account of the constitutional
position of the three Crown Dependencies by publishing such an
account in the Ministerial foreword to the Government's response
to the 2010 report. The Ministry's exposition generally reflects
our understanding of the position both in theory and in practice,
although we consider that the final paragraph on international
representation should place a stronger onus on the Government
to consult the Crown Dependencies, as we discuss in chapter five.
7 See paragraph 11 of the Committee's 2010 Report for
a more detailed explanation of what this entails. Back
Justice Committee, Eighth Report of Session 2009-10, Crown Dependencies,
HC 56, paras 12, 16 Back
Q 1 Back
Further written evidence from the Ministry of Justice Back
Q 1 Back
Policy Council of the States of Guernsey (CDF 06), Government
of Jersey (CDF 09), Isle of Man Government (CDF 11), Policy Council
of the States of Alderney (CDF 23) Back
Ministry of Justice (CDF 01) Back
Policy Council of the States of Guernsey (CDF 06) Back
Government of Jersey (CDF 09), Isle of Man Government (CDF 11)
Q 1 Back
Government of Jersey (CDF 09) Back
See, for example, Policy Council of the States of Guernsey (CDF 06) Back
Q 16 Back
Q 2 Back
HC Deb, 25 June 2012, Col 56-57W Back
Q 1 Back
Policy Council of the States of Guernsey (CDF 06) Back
Government of Jersey (CDF 09),
MoJ (CDF 01) Back
Q 9 Back
Jersey and Guernsey judicially reviewed this decision. In 2012
the court ruled that use of LVCR was a legitimate trading opportunity
and that selective disapplication was discriminatory against the
Islands, however its application was within the discretion of
the UK. The Channel Islands argue this has had a negative impact
on genuinely local businesses, such as flower growers, as well
as those businesses which took advantage of the regime to offer
goods to the UK market without the tax which UK retailers had
to levy. Back
Q 8 Back
Q 5 Back
Q 2 Back
Policy Council of the States of Guernsey (CDF 06) Back
MoJ (CDF 01) Back
Q 15 Back
Q 10 Back