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Crown Dependencies: Contributions

Volume 813: debated on Thursday 1 July 2021


Asked by

To ask Her Majesty’s Government when they next intend to review the adequacy of the contributions made by the Crown dependencies towards the cost of their access to the United Kingdom’s (1) public services, (2) provision of security, and (3) international representation.

My Lords, the Crown dependencies are responsible for their own domestic affairs, although islanders sometimes make use of UK public services such as health or education, for which payment is made according to bespoke arrangements. The UK is responsible for the Crown dependencies’ defence and international relations, in recognition of which they each make a voluntary contribution. The Government are content with the present arrangements.

My Lords, it is general government policy to recover costs through charges for services provided, particularly for those who do not pay taxes in the UK. It seems odd that the wealthy Crown dependencies are exempt from this, particularly given that Brexit imposes extra costs, as we have seen in fisheries protection and certainly representation overseas.

I was interested to hear that educational charges are going to be extended. Is the Minister aware that the one announcement made by the Department for Education since January has been the extension of home student fees to all students from the Crown dependencies?

I am amazed that, in his letter to me of 10 May, he repeated the absurd suggestion that Guernsey’s contribution to the defence of the UK is

“the cost of maintenance of the breakwater in Alderney.”

Has the Ministry of Defence not told the Ministry of Justice that the Alderney breakwater, which was built in the 1860s to provide an anchorage for the British fleet in the event of a French threat, ceased to be of interest to our defence before the Second World War?

My Lords, I hope I would never make an absurd point, either to the noble Lord or anybody else. I am certainly aware that there is no current or perceived future requirement to use the Alderney breakwater for operational military purposes, but it still needs to be maintained to preserve the facilities in Alderney’s only serviceable harbour. The Government previously retained responsibility for maintaining the breakwater because it was built by the UK for naval purposes and the Bailiwick of Guernsey could not be expected to subsidise the cost at the time.

When we requested that the Crown dependencies start making contributions towards the cost of defence in 1987, Guernsey assumed responsibility for maintaining the breakwater alongside remitting passport fees for British passports issued in the bailiwick. Irrespective of whether the breakwater serves any defensive purpose, by meeting the maintenance cost that would otherwise fall on the Government, Guernsey contributes to the cost of its defence and international relations.

My Lords, the UK is formally responsible for representing the Crown dependencies in the United Nations Framework Convention on Climate Change, including during the COP negotiations. Given that small islands are particularly vulnerable to the impacts of climate change, can the Minister confirm how Her Majesty’s Government are engaging with the Crown dependencies in the lead up to the COP 26 summit?

The noble Lord raises an important point. My role in the Ministry of Justice is essentially to be the point Minister for the Crown dependencies regarding the Government. Just as I make sure that the Crown dependencies’ relations with, for example, the Department for International Trade, are secure when we talk about international treaties, I also make sure that discussions on environmental and climate issues are close between the Crown dependencies and the relevant government departments.

My Lords, I recognise that this is a matter for the Crown rather than Parliament, but can my noble friend tell this House what the actual costs of defence and international representation for the Crown dependencies have been over the last few years?

My Lords, the UK has a constitutional responsibility to represent the Crown dependencies internationally. We discharge that responsibility irrespective of cost. As I said, however, the Crown dependencies have been making voluntary contributions since 1987. As these are general contributions in recognition of our overall responsibilities and it is in our interest to represent the whole British family internationally, they are not intended to reflect the exact costs of defending the Crown dependencies or representing them internationally. We are satisfied with the current arrangements.

My Lords, during the debate on sanctions regulations in February I asked how we would ensure that sanctions apply in full to the Crown dependencies and overseas territories. The Minister’s response was that the Government were

“lending technical support to the overseas territories”.—[Official Report, 8/2/21; col GC 22.]

What has the outcome of that “technical support” been? Is the Minister in a position to confirm the full application of sanctions within the Crown dependencies?

My Lords, as sanctions are a tool of foreign policy, it is government policy for UK sanctions measures to be given effect in the Crown dependencies to make those sanctions as effective as possible. The Crown dependencies apply UK sanctions, including, for example, the Global Human Rights Sanctions Regulations 2020 and the Global Anti-Corruption Sanctions Regulations 2021. The FCDO and Her Majesty’s Treasury ensure robust implementation of sanctions. There is considerable sanctions-related engagement with the Crown dependencies, including meetings and webinars, to make sure that all the sanctions legislation is properly applied throughout the Crown dependencies.

My Lords, a voluntary contribution is unusual and presumably could be withdrawn unilaterally; it depends wholly on good will. Does the Minister agree that transparency is important to allay any UK taxpayer concerns that these overseas tax havens are being treated unfairly? How regularly is there an audit of that financial relationship? Presumably, that also contains any contingent liabilities.

My Lords, I take issue with the reference to tax havens. That is a tendentious term and we can perhaps debate it on another occasion. The Crown dependencies have a long-standing relationship with the UK via the Crown; it is not a quid pro quo relationship—using “quid” in both the Latin and the colloquial sense. It is a relationship based on constitutional convention and respect for domestic autonomy. We reiterated in the recent integrated review of security, defence, development and foreign policy that we will continue to defend and represent internationally the three Crown dependencies.

My Lords, is it not clear from the answers we have just heard, that the Crown dependencies are getting an increasingly good deal, but it is a bit of a one-way street? Is it not time to discuss with them their constitutional relationship with the United Kingdom?

My Lords, the Crown dependencies have a long-standing relationship with the UK via the Crown, and the Government currently have no intention of reviewing their constitutional position. They are self-governing jurisdictions with democratically elected Governments. They are responsible for fiscal matters and set their own policies to support their economies, but they do so within international standards. It is in that context that they determine their own tax rates. They co-operate with us on taxation, fighting financial crime and countering terrorist finance, and they are committed to meeting international standards on tax transparency, illicit finance and anti-money laundering.