Guernsey needs ambassadors to quell talk of ‘tax havens’
Tuesday 3rd March 2009, 11:30AM GMT.
GUERNSEY needs independent ambassadors to help fight off increasing attacks on the island as a ‘tax haven’.
The call came after the TUC became the latest organisation to turn the spotlight on Guernsey as economic pressure mounts around the globe.
GuernseyFinance chief executive Peter Niven was yesterday in London reinforcing the island’s message with business journalists, but said he was talking to people who already knew what Guernsey was all about.
‘The issue we’ve got is getting to other opinion formers like politicians and others who feed the media, but with misinformation and perception,’ said Mr Niven.
‘That’s a government role. When I spoke to the Institute of Directors, I made the point we need to have some ambassadors who aren’t from Guernsey that plead our case in international forums and with politicians in the UK and Brussels.’
People were needed who were independent from the island, such as Lord Digby Jones (pictured) , who visited last week.
‘He’s an independent person with an understanding of the job we’re doing. He would be listened to by the public and politicians in the UK and Brussels and would be a good ambassador and force for good for Guernsey if we could harness his potential,’ said Mr Niven. ‘We have to work with others and through others to get this message across. These attacks on so-called tax havens are only going to increase over the next few months and years.’
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At last there seems to be some sort of recognition of the need to actively defend our finance industry rather than assume everything is going to be alright.
I appreciate that there are many people both on and off the island who would like to see us “shut down”. There are may reasons for this and most of them are based on misinformation and a complete misunderstanding of the services we provide.
The fact is that the finance sector completely underpins our island economy and without it there will be mass unemployment and significantly reduced tax revenues (which in turn means no money for healthcare, schools, roads etc). Worst of all there is no viable alternative industry we can turn to rectify those problems – if we do get shut down the collapse of our economy will be with us for generations to come.
Whoever these so called “ambassadors” are going to be they will need to be able to do a lot more than hand around the Ferrero Rochers. These spokespeople will need to be highly knowledgeable, articulate and able to argue our case in the face of open hostility from governments, trade unions and media around the world. This is no easy task, global misconceptions about offshore finance are deep rooted and, I suspect, being deliberately distorted by ‘onshore’ governments seeking to increase their tax revenues.
Whoever gets chosen to represent us please can it not be Bernard Flouquet.
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CD
Will they, like GuernseyFinance, be funded from the public purse, when it is in effect an umbrella of private enterprises?
Giba made no bones about it at election time. Vote for finance friendly deputies or else the banks will all leave.
So the people of Guernsey will be led by the foreign corporations on pain of ‘mass unemployment etc’? This is just corporatism.
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Fast Robert;
I call it blackmail!
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It looks to me as if the Mainland are trying to take a leaf out of the USA’s book and want to run the WORLD !!
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I take it back, you’re right Fast Robert. Lets just sit back and leave the finance industry to its own devices. Who needs it anyway. Better we were all out of work with no money to pay for our schools and healthcare than to be part of the evil global corporate machine eh.
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Maybe the UK should concentrate on auditing the billions given to the EU rather than destroy our banking system because they dont like our fiscal policies.
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CD
Why can’t the finance industry fund its own PR? Guernsey is NOT the finance industry, it’s merely an island that has the historic ability to create a tax regime that favours a certain industry in the current global regulations. The major finance employers are non local and can leave at a drop of a hat whatever taxpayer funds are thrown at them to stay. Nobody really wants them to ‘leave’ but the locals would like to think they are not part of anything immoral and they would like to hear this from people who do not have vested interests. Therefore external investigations are welcome.
I agree that the visible services we offer are not illegal because the rules say so. But who makes the rules and are those rules beneficial to the rulemakers’ country’s taxpayers and who regulates the rulemakers. These are all completely valid points that any country has the right to investigate.
The finance industry is petulant, typified by the bosses that peer around in bewilderment when any questions concerning best practice are directed at them. “Who? Me?”
Like Trott’s ‘misrepresentation’ quote, it is this cynical, smug glibness that does as much harm as the perceived actuality.
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CD – Exactly. Because even with the much feted finance industry we don’t have enough money to pay for our state schools, healthcare and road transport strategies.
The fact is that the finance industry has underpinned our island economy but at an unrealistically high and unsustainable level. We had roads and healthcare before finance and I’m sure we’ll have roads and healthcare after finance. Finance isn’t our saviour, finance is the cross we’ve nailed our island to.
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I can’t understand why we don’t sue newspapers when they print such unresearched or possibly deliberate rubbish.
I’m considering cancelling my UK daily and taking the Beano instead
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Yes Student Bob we had roads and healthcare before the finance industry but we also had the growing, industry tourism and companies like Tektronix, we have none of those now so we need the finance industry to help fund our roads and healthcare
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well said student Bob, it is a sad fact that Guernsey has nailed its self to this industry and the Island is perceived as a tax haven no mater what you do.
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John – Thanks, this is exactly my point – If you take a look around you’ll see that you still have an agricultural industry (I can buy Fresh Guernsey Herbs in my local market up here in the north of England!!), tourism and companies like Specsavers. They’re just being suffocated by the stain of the finance industry.
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Fast Robert
So the major players of the finance industry aren’t local ? You don’t know what you are talking about.
Those of us who own the trust companies and the fund administration companies, along with many, many partners of the law firms and accountancy firms, were born, brought up or educated here in Guernsey. Not local ? Check your facts. Who do you think is paying the bulk of local income tax ? People just like this- high earners who then spend their after-tax money here on the island.
Get your facts straight before you make such comments.
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Who? Me?
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well said fast Robert….
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Student Bob – Specsavers are hardly being suffocated by the finance industry. Their success has been built over the same time period that finance has been a primary industry on Guernsey. They are one of the island’s big success stories.
Likewise agriculture & horticulture – correct they still exist however at a much lower scale than previously and certainly not enough to employ even the “local” workforce should finance leave. I believe this decline was more to do with cheap imports from abroad than suffocation by the finance industry. These cheap imports have pretty much put any ideas of a resurgent agriculture and horticulture industry to bed – they will never be primary industries on Guernsey again, finance or no finance, not unless something drastic happens that cuts supply from abroad.
Tourism – again the blame for the decline in tourism cannot be laid at the feet of finance. The increase in cheaper holidays to more exotic destinations is the primary cause of this. Let’s face it – the average UK tourist would much prefer a week in Cyprus with guaranteed good weather than a week in Guernsey which climate wise, isn’t much better than Devon and costs more. Of course, with the recession biting and poor exchange rates, we have the opportunity to grab some tourists back to the island if we advertise wisely and make travel more affordable.
The task for Guernsey is to find and attract other sustainable industries to the island so that in the event of the finance industry collapsing we have alternatives. This task is not easy – light industry and manufacturing will never be economically viable here with cheap labour available elsewhere and shipping costs – it’s a matter of scale and Guernsey isn’t big enough.
Perhaps using our sustainable natural resources is an idea – such as generating power through tidal energy. It won’t answer all the island’s economic questions however perhaps a broader diversity of smaller industries is not such a bad idea.
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will said Paul Le P. When will we get it into our heads that we have very limited control over the forces of global commerce and market dynamics, we are a leaf on the sea, and at very best we can sail with the wind, that is the only control we have, we cannot direct the wind, and although there are probably deputies who think they can, we certainly cant still the storms. We should focus on becoming as self sufficient and sustainable as possible, whilst intergrating into the international network that we are part of in an effective and integrated manner where it will be beneficial. The environment actually is one of the few industries that is projected to grow year on year…..lets go for a green economy, maybe that might even make us a few friends, rather than increase our list of adverseries. We need friends and partners, to help us through these times!
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At the risk of repeating myself for the umpteenth time, before this ambassador sets out to convince the world that we are not a tax haven, he needs to agree a definition of ‘tax haven’ with each party that he attempts to convince.
I am getting heartily fed up with the ’tis – ’tisn’t kind of arguments that are published almost daily by the Press.
You only need to spend a few minutes on the internet to find several, differing, definitions of tax haven.
And then the situation is made even more complex by some people talking about ‘harmful tax havens’.
Come on, this isn’t a pub punch-up: it’s moderately serious.
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I hear there is an Emperor who has some very good spin doctors. So good, in fact, that they convinced him that he was wearing the finest clothes you could find. Perhaps if we employ them, we will convince everyone that we are not a tax haven?
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David Cranch makes a sound point when he pleads for an agreed definition of tax havens.
The big problem is that tax havens argue a restricted definition, whilst those who want some restrition on tax havens and or offshore finance centres, argue a far wider definition.
The recent flurry of activity coming from the Guernsey Government adopts a limited definition that suits the island, but which is also guaranteed to offend the big hitters such as Uncle Sam who see the problem as far wider than the “Policy Council spokesperson” or similar.
Talking of “Policy Council spokesperson” why does the Press allow letters from “Policy Council spokesperson”?
If the Policy council or one of its members have something to say, they should have the guts to put their naame(s) to any letter. Then, we will know who is behind the letter.
If the answer is that its from the Poicy Council then why don’t they just say so?
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Interestingly Richard Murphy, an informed campaigner against tax havens (or secrecy jurisdictions as he prefers to call them) believes that the OECD got the definition of tax havens badly wrong, enabling them (the tax havens) to wriggle out of the OECD initiative against tax havens.
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Hmm a Guernsey goodwill ambassador. How about Sir Fred G? Time on his hands and knows a little about the Finance Industry and you wouldn’t have to pay him much as the poor UK taxpayer is picking up that tab.
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I absolutely agree with David Cranch’s point about the need to define “tax havens”.
This is particularly difficult as the opponents of offshore finance usually have no idea what – specifically – we do here, let alone what crimes we are supposed to be guilty of.
I would question the definition of Richard Murphy as an “informed campaigner” though. He is one of the worst purveyors of misinformation that I ahve come across – lots of shocking figures and statistics with absolutely no grounding in fact.
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Trouble is, CD, is that there are no facts to counter Murphy with. Only hysterical rhetoric and pompous complacency.
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I agree with CD. Murphy has a remarkable talent for redefining the “truth”. He is also one of the most arrogant editors of a blog that I have ever come across. Dare to confront him by questioning “Murphy’s Law” and he takes his ball home as he doesn’t want to play any more. The only thing he has going for him is his tenacity.
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See, David, you’re doing it again.
If he is wrong, prove it and lay the matter to rest. Where are your numbers?
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Fast Robert – surely if Richard is accusing us of illegal practices the onus is on him to prove he is right not the other way round.
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CD
Isn’t that what he’s trying to do?
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Fast Robert
I could put any numbers out there which can be neither proved nor disproved. That’s exactly what Murphy is doing to suit his agenda, knowing that it cannot be disproved. But he goes nowhere near far enough in proving his numbers. He simply posts them and invites everyone to disprove them and until disproved he justifies his stance. Its a very cheap trick.
I was always under the impression that in most democratic places one is innocent until proven guilty. Murphy does not apply that rule. As far as he’s concerned all offshore finance centres are guilty until proven innocent.
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Well, RBS have just admitted into using £25bn in a tax avoidance merry-go-round in the Cayman Islands, costing the UK £500m in lost revenue. This kind of information was always rebutted in the past as ‘make belief’ on behalf of the campaigners.
You can see why there would be heat turned in our direction…all legal of course, but certainly very, very secret. Is it right?
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Fast Robert
And precisely what does that have to do with Guernsey’s reputation which Murphy is always trying to destroy ?
The very point made by Paul Meader in today’s Press is that we are fed up of being tarred with the same brush as Switzerland, Cayman, Liechtenstein etc. Guernsey should be distinguished from those types of jurisdictions but its all too convenient to deem us all to be doing the same things as them.
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David
So you’re saying the Guernsey DOES NOT involve itself with the instruments that other secrecy jurisdictions use? That’s some claim…
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Fast Robert
I was referring to your post about the Cayman Islands. Just because there was major use of the Cayman Islands by one bank doesn’t mean that Guernsey was doing the same type of work. The hard facts are that Cayman and Jersey had probably 99% of the offshore industry’s securitisation business. Why ? Because their major law firms went out and specialised in that industry. SPVs were more suited to those jurisdictions because Guernsey did not have a suitable purpose trust law which was necessary to own the SPVs and make them “orphan” companies. By the time the purpose trust legislation was adopted here, the market was already dominated by the likes of Walkers, Maples and Calder and Mourants. The first two don’t have offices here and Mourants only opened an office here around 3 years ago by which time their Jersey securitisations team dominated the market.
I am afraid that you have fallen foul of exactly the point I was referring to earlier, namely of deeming all offshore jurisdictions to be the same. They all have their own characteristics and that’s why they must all be looked at individually rather than adopting a naïve “one size fits all” approach.
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GUERNSEY needs independent ambassadors to help fight off increasing attacks on the island as a ‘tax haven’.
That’s as maybe but it does not really matter to entities that are not receiving monies they feel are due. They will have every justification in employing whatever means possible to ensure that monies that should be due them actually makes it into their revenue.
Guernseys’ political and civil service should increase their efforts in contingency planning, especially towards industrial diversification.
Blind hope is a poor hedge fund.
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David
You must be in deep anticipation that since we are whiter than white, those ethical ‘tax planning entrepreneurs’ come running to Guernsey from all those evil, bad jurisdictions that have sullied the name of ‘tax planning’ jurisdictions worldwide are seeking our ‘expertise’ where none other have thought to tread with such foresighted benevolence.
Think of the trickle down!
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Fast Robert
What on earth are you talking about ? Speak English please.
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