The interview: Mark Boleat

Born and raised in Jersey, Mark Boleat’s broad-ranging career saw him become the political leader of the City of London, a role he held until last year. With a view across Jersey, Guernsey and the City, he spoke to Businesslife about the strengths and weaknesses of the islands

How did you get to where you are now?

Opportunism! I never had a plan. I was born and went to school in Jersey. I left Victoria College with poor A level results and failed to get into university, so I went to a college of technology. Ultimately, I did manage to get a degree in Economics and a Masters in European Studies. 

I struggled to get a first job, so I spent a year teaching at Dulwich College then went to work for The Industrial Policy Group. 

I got my first big break when I joined the Building Societies Association in 1974, ostensibly to work in public relations. I quickly discovered that it was a sector in the middle of a political storm because of what was happening in the housing market at the time.

Yet there seemed to be nobody who understood either politics or economics – and as I understood both, I found myself in the right place at the right time. In just over 10 years, aged 37, I was appointed Director General. 

Having run the association for eight years, I moved on in 1993, when I was headhunted to become Director General of the Association of British Insurers – a position I held for six years. During this time, I still kept strong connections with Jersey – I chaired a working group on immigration policy in 1995, and I also prepared a report on housing policy for the then Housing Minister. 

In 1999, I decided to move on to a portfolio career – consulting on a variety of subjects, such as public policy, regulation and housing finance. And I picked up a few Non-Executive Directorships, including the Gibraltar Financial Services Commission. 

I was then asked if I would like to become a Councillor of the City of London. I accepted, and in 2002 I became an elected Councillor.

In a matter of a few years, a number of things came together. In 2010, I became Chairman of the Jersey Competition Regulatory Authority (JCRA), which subsequently merged in practice with its Guernsey counterpart. A year later, I was asked to become Chairman of the Jersey Development Company (JDC), which I did. I chaired the JCRA for six years and the JDC for four.

In 2012, I was elected political leader of the City – we call it Chairman of Policy and Resources, but it’s effectively political leader. I ceased being Chairman a year ago as there’s a maximum five-year term, and served as Deputy for a year, which is the City’s custom.
 
While I no longer have a formal position, I’m still very involved in the City and I sit on major committees, so am heavily involved in discussions around Brexit. 

I also chair the Governors of the City of London Academy Highbury Grove, and I chair a working group which aims to deliver a housing programme of 3,700 units in 10 years. 

Since I ceased being political leader, I’ve become Chairman of Link – the cash-dispenser network – and that’s my current main position. 

That’s quite a background, and covers both the Channel Islands and the City. What’s your view on the relationship between the two?

The islands complement the City. Jersey did a very good report a few years ago on its value to Britain – it followed the format of publications we’ve done in the City on the value of London to the UK economy.

In our case, we have to convince some people that what goes on in the City is of value to the whole of the UK economy – it creates jobs, tax revenues and helps develop prosperity throughout the country. And I think the Channel Islands fill the same role.

There’s an instinctive view that offshore finance centres – or ‘tax havens’ as some call them – are about taking money from Britain. I think that report, which was an authoritative report by respected analysts, met a very real need, and I’ve certainly been able to use it when people have challenged me about Jersey.

What’s your current view on how Brexit will affect the City? And how do you see that affecting Guernsey and Jersey?

Given that Jersey and Guernsey have finance industries that are international, they’re liable to be affected by international developments. So, things happen that are completely out of the control of the islands that can benefit them or adversely affect them – and that can certainly be said for Brexit.

I actually did my Masters degree thesis, 35 years ago, on the Jersey economy and the European Economic Community – and I did a sequel for the Jersey Policy Forum a year or so ago, on the implications for Jersey of Britain leaving the EU. 

At first sight, the implications should be modest because the Channel Islands aren’t in the EU. On the other hand, given the uncertainly that’s been created – and that the islands have very strong links not only with the City but also with other centres in the EU – anything can happen, and the islands need to be prepared for that.

As far as the City is concerned, there’s more than a negligible chance that Britain will be a third country from March next year, so City institutions are preparing for that – and they’ll do whatever they need to do to continue providing the service they want to post-Brexit. 

They will take longer-term decisions about location when everything settles down and the relationship between Britain and the EU is clear. I doubt it will finish up as a straight, third-country relationship – such as Peru or South Africa – but on the other hand, it will clearly be very different from the current arrangement.

What’s your view on registers of beneficial ownership and the different treatment of the overseas territories and the Crown Dependencies?

When you’re dealing with public policy issues, logic goes out of the window, or at least takes second place. The Channel Islands know they have to be squeaky clean on everything, and squeakier than everybody else because they’re offshore finance centres – even if there are onshore jurisdictions with laxer regulations. 

Jersey and Guernsey have to be prepared to deal with issues that are thrown at them, where they can legitimately point to any number of international studies and say their arrangements on money laundering and the sharing of information are among the best in the world – and in many cases better than Britain and America. 

However, that doesn’t alter the fact that they’re going to be a target – people do tend to lump together the overseas territories and the Crown Dependencies, yet they’re very different in the nature of their business, and the nature of their relationship with the British government. 

When David Cameron was Prime Minister, he said the Crown Dependencies could no longer be considered as tax havens – and I think that applied when this issue went through Parliament recently. The politicians who led it understood this point after representations, and Jersey did a good job of explaining that there’s a difference. 

It doesn’t alter the fact that there may be another go at Jersey and Guernsey. And people currently using the islands may take the view that this is all going to change – therefore they might want to look somewhere else. So far, the islands have handled it very well and I know they’ve got a favourable outcome for the time being. 

You mention the Channel Islands being lumped in with the overseas territories, indeed all other offshore jurisdictions, especially since the Panama and Paradise Papers. What can be done about that?

Geoff [Cook, CEO of Jersey Finance] does a very good job. I’ve attended meetings in the City where either Jersey was attacked and he’s responded, or where Jersey wasn’t openly attacked but he’s contributed usefully to the discussion. And I did the same when I was political leader of the City. 

The thing is, you can’t simply put people in the black and white categories of those who want to listen and those who don’t, because there are people in the middle. You can shift people from being a vocal critic to being a silent critic, and you can push some people from being neutral to understanding the Channel Island position. The islands have done very well in achieving that.

In light of Brexit, talk of the islands becoming independent has reared its head again. What’s your view on that?

I think it would be a disaster for the islands and I’ve said that publicly many times. The reality is that there is no rich independent island in the world. Full stop. They just don’t exist. Every rich, small territory of under half-a-million people is ‘semi-detached’ – that’s Jersey, Guernsey, the Isle of Man, Bermuda, Gibraltar and so on. The richest independent small island is the Bahamas, which is roughly half as wealthy as Bermuda. 

When businesses and individuals deal with the Channel Islands, they do so in the knowledge that they’re dealing with British territories and that ultimately nothing disastrous can happen. Jersey isn’t going to be taken over by a bunch of radicals that are going to nationalise the banks and impose military rule. 

Independence sounds great – we can be masters of our own destiny and not subject to anything the UK does. Fine, you can have that – as long as you’re happy not having access to UK universities or hospitals. It’s a nice thought to have total control, but we can’t have that if we want to interact with other people. 

Look at it from the perspective of financial regulation, which the islands have managed very well – this isn’t done in isolation, it’s done in accordance with international norms and close working relationships with other regulators. And if they didn’t do that, they would have a tiny finance industry.

Looking forward, is there anything you think the islands should be doing that they aren’t – or is there something they should be doing better? We often hear talk of the ‘next big thing’, but is that just an elusive Holy Grail?

I’m very sceptical of governments that think they can bring in the next big thing. Jersey has tried lots of things, like gambling, for instance, or the aircraft registry, which hasn’t really worked.

For those who say that the Channel Islands are too dependent on finance, there’s no industry that’s going to produce the returns that finance does. The notion that we can start knitting sweaters again and tinning potatoes and that’s somehow going to produce revenue? Well, it’s not.

Finance is absolutely critical and it’s really important that the Channel Islands continue to be major finance centres. The single most important thing here is to have a strong relationship between the industry, the regulator and the government.

It’s the people in the industry who are going to see the opportunities, not politicians or civil servants – and they then have to make a case, be that to the regulator or the politicians.

They need to say ‘we have a market opportunity here, we need to move quickly, this is what’s needed in respect of the law, this is what we need on regulation’. And it needs the politicians and the regulators to be sensitive, bearing in mind their interests are different. 

The regulators are going to ask questions that industry isn’t, and the political system in Jersey, I know, can be unreasonably slow, which is something that needs addressing – Jersey needs to be more nimble. 

What’s really important is that the islands should have a welcoming business environment – because you get sectors or industries that exist in a place which are entirely fortuitous.

The Isle of Man has a space industry. Why? Guernsey is one of the world leaders in captive insurance – there’s no particular reason for it being so, except that it is. And once you’re there and you’ve got the expertise, you attract more business. 

In order for Jersey, in particular, to create a welcoming business environment, it has to do a number of things. First, the quality of education remains poor – it needs to be absolutely world class and help produce top-quality staff. This will attract business. 

The high cost of housing in Jersey is a real constraint for attracting and keeping people in the island. This needs to be addressed, but that will only happen by building more houses. It’s an obvious trade-off that seems to escape some politicians, who simultaneously say we need more housing, but don’t take the necessary steps to enable that to happen. 

And then Jersey needs a political environment that helps attract businesses. At least the immigration policy is starting to look more sensible. There’s a recognition that Jersey needs a continually increasing population to have enough people of working age and to keep businesses going. But I still think the policy is in danger of being too restrictive. 

There is still a view in Jersey that ‘we don’t want any foreigners here’, so politicians have a real duty to explain why immigration is good for the island. If the people of Jersey think a rising population is a problem, you should look at the consequences of a falling population – Alderney is a good example of that. 

Is there anything else you’d like to add, perhaps on the relationship between the islands and the City?

The relationship is good. And I think it’s got a lot better because of the work of Jersey Finance and Guernsey Finance and Ministers on both islands. I’ve seen Ministers in London quite a lot, indeed I’ve hosted lunches for them. 

I’ve made a point of inviting current and previous Chief Ministers to City events in a way they haven’t been invited before. I’m still a Jerseyman at heart, and I’ve made it clear that if there’s anything I can do to help the islands’ relationship with the City, I will.