Jersey independence from the UK 'not government policy'
Senator Sir Philip Bailhache said relationships with the UK had been "strained" over the past five years.
Chief Minister Senator Ian Gorst said: "I struggle to think of the conditions that we would want to go independent."
He added: "The benefit to us of being a Crown dependency I think is very strong.
"It helps to underlie the stability we have politically and legally and it is certainly helpful for our finance industry because we have got this link into London and the markets."
'A little time' But Senator Bailhache 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."
UKIP MEP Nigel Farage said he sympathised with Senator Bailhache's concerns and that if regulation got too much Jersey would have to consider independence.
He said: "Please give us a little time. The political pressure in Europe is building up for us to have a referendum.
"If we left Europe then the pressures making Jersey think about independence would go away."
Jersey is bluffing: independence would ruin its tax haven status
Bailhache's threat is not new, and it is pure bluff: he merely wants to take the heat off a jurisdiction that has been caught red-handed, yet again, facilitating abusive tax schemes.
A bit of history helps put this in context. In 1972, Carl Gerstacker, chairman of the Dow Chemical Company, said he dreamed of buying an island "owned by no nation, and of establishing the world headquarters of the Dow company on the truly neutral ground of such an island, beholden to no nation or society". That same year, some American libertarians dumped a large pile of sand on a reef near Tonga in the South Pacific, proclaiming the Republic of Minerva as a tax haven with no taxes, and a society based on "rugged individualism", where "nothing will be illegal". Soon afterwards, the Tonga defence force tore down the Minerva flag and destroyed the sand platform.
Since then, several efforts have been made – usually led by white, male libertarians, gun nuts, drug-runners, Klansmen, arms dealers, mobsters, former CIA agents or ex-Nazis – to set up free-standing, self-governed tax havens in enclaves in the Bahamas, Costa Rica, the Azores, Haiti, Dominica, the Dominican Republic, Anguilla, Vanuatu, and even Libya.
Every attempt failed. What these adventurers did not understand is that successful tax havens are created, nurtured and protected by large, powerful nation-states and their rich and powerful elites, who wish to use these offshore zones to escape the rules, laws and taxes that they resent.
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.
The people of Jersey wouldn't wear it either. Most Jerseyfolk want to be British. At a conference in Jersey in 2010 to discuss Jersey's constitutional options, there was, in the words of the Jersey Evening Post, a "total lack of participation by politicians" because "there is no groundswell of public opinion in favour of any kind of break with the status quo and no sign of any political momentum in that direction".
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.
Lenny Harper, an outsider appointed to be Jersey's deputy police chief until his retirement in 2008, gave a flavour of the small island's mouldy governance in an affidavit in 2009, following a high-profile child abuse investigation. "There are no checks and balances on power and the abuse of it," he wrote. "It was like nowhere else in the British Isles … this is obvious each time one tries to make a complaint against any member of the government … With such an absence of controls, such an absence of accountability, the ordinary decent people of Jersey are helpless."
The controversial former Jersey senator Stuart Syvret summarises clearly: "There is a kind of tatty credibility that clings to the public administration here, which comes from operating under the skirts of the establishment in London," he says. "If Jersey became independent as a quasi-banana republic in Europe, there would soon be serious doubts in the minds of offshore clients."