ONE of the aspects of the coordinated attack on the Crown Dependencies’ zero-10 taxation regimes that has not received sufficient attention is the role of the UK in triggering it.
Whether the unnamed EU member states were the drivers or merely Britain’s willing accomplices is, to some extent, irrelevant.
The real – and frightening – issue is the disregard with which islanders’ livelihoods are now regarded by the UK Government, certainly in comparison to its own interests.
Britain’s refusal to press the case on behalf of the islands is in contravention of its constitutional obligations. It is also counter to the international personality agreement that Guernsey was pressurised into signing and contrasts starkly with Winston Churchill’s ‘our dear Channel Islands’ speech of freedom of 8 May 1945.
Today’s reality, however, is that the UK is happy to pull substantial amounts of funding out of the Isle of Man irrespective of the damage that causes or the unemployment it triggers. How or why the IoM should have the funding is also irrelevant (for this argument) but the point remains that the UK has total control of the timing of its removal, and thus its effect, but is nevertheless removing nearly one quarter of the Manx government’s funding.
The effect, as the island’s chief minister outlined on Tuesday, will be devastating – but also deliberate and entirely political.
Guernsey’s States will be debating its own response to the zero-10 bombshell on Tuesday and members need to keep the IoM’s treatment in mind.
Despite the centuries of loyalty to the British Crown, the letters patent, the constitutional conventions and even signed understandings, there is at senior government level no love or respect for these island communities. They are now sacrificial as circumstances dictate.
As uber-critic and recipient of HM Treasury leaks Richard Murphy said of the zero-10 rejection and the Manx VAT changes, ‘…it puts off the day Jersey and Guernsey might go bust whilst putting the Isle of Man at serious risk [and] it means that the “tax havens” might be seriously undermined. All in all, very good news.’
Ending the zero-10 crisis is merely the start of a hostile new relationship with the UK.
Article posted on 22nd October, 2009 - 3.48pm
2 Article Comments
“contrasts starkly with Winston Churchill’s ‘our dear Channel Islands’ speech of freedom of 8 May 1945″
Ah, yes, but then we were wholesome market garden exporters and toilers of the sea. We aren’t so liked now that we are a haven for their tax avoiders, especially since the credit crunch put us under the microscope once more. Can’t have it both ways, I’m afraid. The way they see is that we’ve got a better standard of living than them on the back of money they believe lawfully belongs in their coffers. No wonder the love affair is turning sour. If the boot was on the other foot and our money was bleeding ONshore what would we think/do?
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The validity of the comment “Britain’s refusal to press the case on behalf of the islands is in contravention of its constitutional obligations”, depends on whether or not you were too optimistic that the risk of zero 10 was worth taking, or whether you were realistic and doubted the validity of the claims that zero 10 was complaint.
Cost the taxpayer in excess of £200 million.
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