FCO Minister Henry Bellingham meets Ewart Brown, former Premier of Bermuda
Britain’s Overseas Territories and Crown Dependencies have been boosting their lobbying strength in the UK and Brussels in recent years amidst growing criticism of tax havens.
NGOs such as Christian Aid have argued that the Territories’ image as tax havens puts them at ‘serious reputational risk’ and if they continue with their current policies ‘then their international profile as facilitators of corruptions and tax evasion will increase’.
Jersey, Guernsey and the Isle of Man have also come under fire, most recently from Labour leader Ed Miliband, who said the Dependencies must reveal the identities of tax evaders with money hidden on the islands.
‘I wouldn’t describe Bermuda as a tax haven. I’d describe Bermuda as being a very well run country that is able to have low taxes because it’s got a very strong economy.’
Henry Bellingham, Conservative Minister for Overseas Territories
In an attempt to counter such attacks, these offshore jurisdictions have been ramping up their PR and lobbying endeavours. They have also been lobbying in Brussels on European financial regulation.
One recent example of this stepping up of ‘reputation management’, as revealed by the Bureau this week, was the hire of Lord Blencathra by the Cayman Islands as its UK representative. Appointed in November 2011, his remit was to lobby in Westminster and Brussels and to fight off attacks on ‘tax neutral jurisdictions’. He told a press conference the financial services industry had to ‘justify its existence’ and that European financial regulation posed a threat to the Islands.
The Islands’ financial services industry lobbyist, Cayman Finance, has been represented separately by PR firm Media House International since April 2009. Chairman Jack Irvine is regularly quoted in the island press attacking critics of tax havens such as the Tax Justice Network and Labour MP John Cryer.
Media House has also employed Lord Blencathra as a public affairs consultant since 2008, though the peer told the Bureau his work for the firm did not involve the Caymans.
Business Bermuda, an organisation working with Bermuda-resident companies and the government, has also made moves to deflect criticism. It hired financial PR and lobby firm Pelham Bell Pottinger in February 2011 with a remit to ‘develop and promote Bermuda internationally as the jurisdiction of choice’.
Henry Bellingham, the Tory Minister responsible for Overseas Territories, was quoted in the island press saying the Territory was not a tax haven.
‘I wouldn’t describe Bermuda as a tax haven,’ he said. ‘I’d describe Bermuda as being a very well run country that is able to have low taxes because it’s got a very strong economy.’ He added: ‘The UK could do well to observe very closely the successes of the Bermuda fiscal system.’
Closer to the UK, Guernsey and Jersey set up a joint PR office in Brussels last year. In September they also tendered jointly for a public affairs firm to ‘support the promotion and protection of the Channel Islands’ interests with influencers and decision-makers in the UK.’ The procurement was never completed, which a Guernsey government spokesman said was due to ‘internal factors.’
Separately, the Government of Guernsey has recently hired a director from PR firm Grayling, part of Lord Chadlington’s Huntsworth Group, which has been advising Guernsey for several years.
Steve Wakelin, the state’s new head of international relations, was formerly head of Grayling’s public affairs team. The appointment followed a visit to the UK by the Chief Minister Lyndon Trott during which he met, amongst others, Conservative peer Lord Sheikh. Will Wallace, a senior Grayling staffer who carried out ‘reputational management around sensitive economic issues of tax’ for Guernsey was a former speechwriter for Lord Sheikh.
The Jersey financial services’ sector has its own lobbyist, Jersey Finance, which is part-funded by the Government.
‘Massive liquidity [that] is pumped into London as a result of Jersey’s offshore status… Not enough is known in the UK about the hugely important financial benefits that we get from Jersey.’
Daniel Kawczynski Conservative MP for Shrewsbury
In August last year Conservative MP for Shrewsbury Daniel Kawczynski visited Jersey at the expense of its government. He declared the trip on the Commons register of members’ interests and said it was ‘to meet officials to hear about the current political and economic situation faced with mainland Britain.’
While on the island he also met Islamic finance specialists, Jersey Finance and ‘representatives of the general financial services sector’, according to a Jersey government press release.
The Jersey Evening Post quoted him as saying: ‘I am staggered by the amount of support that the City of London has had from Jersey, the massive liquidity that is pumped into London as a result of Jersey’s offshore status and the work that you do here. Not enough is known in the UK about the hugely important financial benefits that we get from Jersey.’
The MP, who is parliamentary private secretary to two agriculture ministers might seem an odd choice for the invitation. But he is also chairman of the All Party Parliamentary Group for Saudi Arabia and of the Conservative Arab Network. Jersey holds more than £20bn in deposits from the Middle East.
Kawczynski’s visit to Jersey was followed by a meeting in London with Jersey’s then assistant chief minister, UK and international relations, Senator Freddie Cohen. The press release announcing the meeting said it would ‘focus on building relations between Jersey and Saudi Arabia’. It added: ‘During Mr Kawczynski’s recent visit to Jersey he extended an invitation to the Island to include a representative on a forthcoming official visit to Saudi Arabia.’
A Jersey Finance official accompanied the Lord Mayor of London on a trip to the Gulf the following February.
Isle of Man
Finally, the Isle of Man appointed its first director of European affairs in April 2011, with the remit of ‘lobbying on behalf of the government, strengthening relations with key decision-makers, promoting the Island’s economic and cultural interests, and gathering intelligence on relevant issues.’
Patrick Rourke was recruited from the UK Ministry of Justice where he was ‘the principal conduit for the Crown Dependencies’ relationship with the UK government.’
The Isle’s Department of Economic Development and Chief Secretary’s Office are represented by five consultants from public affairs firm Lansons, a contract recently revealed to be worth £450,000. The firm’s contract with the island was renewed in 2012 after an independent poll of the Manx public found 60% backed the use of a ‘well-connected lobbying company to put forward the Island’s perspective at UK Cabinet level and [to] senior civil servants’.
The island also has a long-standing supporter in Conservative MP Mark Field. Field has increasingly made his voice heard, recently arguing that tax havens benefit the economy. He has also attacked Ed Miliband over his criticism of the Crown Dependencies.
Field, who is Conservative MP for the Cities of London and Westminster, was appointed adviser to Manx law firm Cains Advocates in 2011. The role, for which he earns up to £40,000 per year, involves ‘assisting the firm with its international strategy, ambassadorial work and advising on government and parliamentary aspects of financial services’.
Sign up for email alerts from the Bureau here.
Sign up for email alerts from the Bureau here.