Theresa May has moved to protect Jersey, Guernsey and the Isle of Man from new financial transparency rules, incurring the wrath of campaigners and the House of Commons speaker John Bercow.
More than 50 MPs — including 22 Conservatives — had backed an amendment calling for the three crown dependencies to introduce public registers revealing who owns companies registered there. Facing near certain defeat on Monday, Mrs May’s government dramatically delayed the scheduled parliamentary debate.
Margaret Hodge, a Labour MP and co-author of the amendment, called the delay “outrageous” while Commons speaker Mr Bercow said it was “a rum business” and blamed the “inexperience” of government whips.
However, the respite for the crown dependencies appears only temporary: Mr Bercow said the MPs’ amendment was “perfectly proper” within parliamentary rules, and that the debate would have to “come back”.
Jersey, Guernsey and the Isle of Man had predicted a constitutional crisis if MPs legislated for public ownership registers, saying that as crown dependencies they were not represented at Westminster.
The prime minister had agreed with their argument. “They have separate jurisdictions and their own democratically elected governments,” Mrs May’s spokesman said on Monday. “They have responsibility for their own fiscal matters.”
The UK government also fears that any clash could undermine co-operation in tackling money laundering and other financial crimes. One official said the Home Office “has a good relationship with” the crown dependencies.
Oxfam, the development charity, said the crown dependencies were “at the heart of a global network of tax avoidance that costs poorer countries and regions $170bn a year”. It called for MPs to be given a vote on imposing public registers as a matter of urgency.
The incident underlines Mrs May’s weak grip on parliament. Her government now has a working majority of just eight in the Commons, and she faces an uphill battle to win approval for her Brexit deal by next Tuesday.
The amendment on crown dependencies relates to the financial services bill, a piece of legislation intended to prepare the UK for a possible no-deal Brexit. “Obviously [the bill] cannot be delayed forever and there are other bills that would lend themselves to this sort of amendment,” said Andrew Mitchell, a former Conservative minister who has teamed up with Dame Margaret on the transparency push.
Mr Mitchell and Dame Margaret won a similar battle last year to force British Overseas Territories, such as the Cayman Islands, to publish ownership registers. But they were irked by a Foreign Office attempt to push back the deadline from 2020 to 2023.
Mr Mitchell said that was “an egregious sleight of hand”. Hilary Benn, chair of the Brexit select committee, warned that if the government could change a date laid down in law, it could alter “lots of other pieces of legislation” without the consent of parliament.
Crown dependencies already share some information privately with UK law enforcement, but campaigners argue that only public registers, which can be searched by journalists and advocacy groups, are effective in highlighting potential wrongdoing.
The government is committed to passing the financial services bill before Brexit day, currently March 29. “We have said we will have the statute book ready in the event of no-deal and we will do so,” the prime minister’s spokesman said.