NEWS FROM THE CELTIC LEAGUE
When I wrote the earlier post about the Chief Minister sipping wine (or fruit juice) with the glitterati of the finance sector today I just knew he would give somebody a good telling off. Allan loves telling people of Anyway he excelled himself today as the BBC, a group of villagers from South Wales and for good measure Lib Vannin Councillor, Catherine Turner (pictured), got both barrels.
Their heresy was to in infer that the Isle of Man is a tax haven and as Allan keeps telling us this is not the case.
Turner who actually uttered the ‘H’ word is definitely going into the government ‘naughty corner’.
Listening to Allan ‘playing to the gallery’ I was reminded of that exchange between Thomas More and Cromwell in the film ‘A Man for All Seasons’
“More: You threaten like a dockside bully
“Cromwell: How should I threaten?
“More: Like a Minister of State”
Bell is definitely in the ‘dockside bully’ league when it comes to dealing with opponents of his master plan to woo the business community.
Anyway in case you didn’t hear the message relayed by Manx Radio – we are not an ‘offshore tax haven’. We are a ‘offshore money centre’ there is a difference but you would probably have difficulty explaining this to the Canadian Revenue Commissioners who are currently pursuing a case following the revelations by CBC about what CBC described as a tax sham perpetrated here which cost Canada millions in lost revenue.
Sadly Allan chose to illustrate his point by citing David Cameron as a reference source although how much notice we should take of a man who did curious things with a dead pig I don’t know!
Other commentators interestingly have focused on the fact that whilst this offshore money centre is doing a great job for Allan and his mates we – the hoi-polloi – are bearing the brunt of austerity and cuts.
This article from August 2013 written for Voxeurop:eu analysed how in effect governments in all three dependencies are taking from the poor and giving to the rich. It’s lengthy but well worth reading.
Of course since author Rafael Ramos Marin wrote the item the process has been ratcheted up here with another £50 million of our money destined for the ‘back pockets’ of the business sector (see below):
“A few kilometres off the coast of the European Union, the Isle of Man, Jersey and Guernsey welcome billionaires who want to cheat the tax man. But campaigns against tax evasion have eroded these tax havens’ revenues and even they have been forced to resort to budget cuts.
Rafael Ramos Marín
The flow of refugees never ceases on the Isle of Man. They do not arrive on makeshift crafts, however, as they do at Tarifa on the coast of Andalusia, but in private jets. They are not greeted by the Guardia Civil [police], but by chauffeurs opening the door of the required Bentley, Porsche or Ferrari. (The island has the highest concentration of luxury vehicles on the planet.) They are fleeing not from hunger or misery but from the United Kingdom’s 50 per cent income tax rate on high revenues as well as the government’s obsession with taxing them.
The Isle of Man has not been affected by the crisis. It has benefited from continued growth for the past quarter century – 2.5 per cent last year. Nonetheless, it has not been spared from budget cuts. Jersey and Guernsey are also feeling the impact of the international campaigns to turn the screw on tax havens, to force them to be more transparent and to reduce their privileges. The result is loss of revenue and a budget deficit paid for, not by the multi-millionaires, but by the workers. It is the Robin Hood effect backwards – taking from the poor to give to the rich.
“If we destroy our financial system, we will become a kind of Liverpool, but with a worse climate,” claims Manx Prime Minister, Alan Bell. During the last G8 meeting, he promised to participate in the fight against tax fraud and to “take into account the concerns of London and the European Union,” but did not commit to anything concrete. This makes sense. The financial sector accounts for a quarter of the island’s economy, there is an advantageous corporate tax rate and the highest tax level is 20 per cent, capped at €125,000 annually no matter the amount of revenue declared. There is no estate tax, not even on capital gains – all a boon to the millionaires.
Purely digital wealth
A tax haven located in the middle of the Irish Sea, the Isle of Man is a very peculiar place. It is known for its motorcycle races, for two active moon exploration programmes, a flourishing private space sector and a company, Excalibur Almaz, which plans to organise the first trip to the moon since the Apollo 17 flight, more than 40 years ago. Pensioners are hired as extras on the numerous film and television productions that are filmed there (more than 50 to date) to benefit from the low tax rate.
The seaside promenade of Douglas, the capital, is a far cry from the Croisette
But the wealth theoretically found on the island is purely digital and those that own it spend it in London, New York or Saint Tropez. The seaside promenade of Douglas, the capital, is a far cry from the Croisette [in Cannes on the Riviera]. Here there are no mansions because the wealthy are simply headquartered here. The houses and the shops are identical to all the others in northern England. The wages of the 80,000 residents (nearly all white) are close to those of the UK, but the cost of living is clearly higher. Rents are higher and food must be shipped in by boat or flown in by airplane.
In addition, budget cuts totalling €35m will be applied to all ministries other than health and education. The cuts will affect seasonal workers (five years of residence are required to benefit from health care). This is because London has decided to reduce the island’s share of VAT receipts on betting revenues, which represent €500m per year (60 per cent of the budget). As for raising taxes on the wealthy, that is clearly out of the question. “This is the worst crisis I’ve ever known, and I’m no spring chicken,” says pensioner Norma Cassell in a tea room in downtown Douglas.
The Channel islands of Jersey and Guernsey, located just 15km from the French coast in the English Channel, have the same status as the Isle of Man – they are not part of the EU or of the UK. They are neither overseas territories, nor colonies but are British crown dependencies, with their own flags and national anthems. They swear alliegience to the Queen, pay London a fee for services linked to defence and to diplomacy but they make their own laws, especially regarding taxes.
Poor subsidising millionaires
More than half of the 98,000 residents are bankers, accountants, lawyers or financial advisors
It is estimated that Jersey alone, holds €600bn of revenues that are evading taxes, hidden in the accounts of some 50 international banks. More than half of the 98,000 residents are bankers, accountants, lawyers or financial advisors. It is like a giant country club in which, to join, you have to live on the island for 11 years, be worth at least €8m and own a property costing at least €2m.
At the Saint Helier airport, there are ads for tax advisors and property managers but none for fast-food outlets. Yet, as with Douglas, the capital of Jersey, has no particular charm. It offers run-of-the-mill homes (some poorly maintained) and the same chain stores as everywhere else. The per capital revenue is €22,000, higher than in the UK, but those that are not millionaires or do not work in finance are furious at the 3 per cent hike in VAT, aimed at compensating the drop in revenue due to the greater pressure being put on tax havens. “If we were in France, there’d already have been a revolution. It’s unbelievable that we, the poor, have to subsidise the millionaires,” complains pharmacist Edith Newman, at The Admiral, a pub in James Street. It is the same story as on the Isle of Man.
“There is a lot of talk about the crisis but if tax havens exist it’s because the elites and the governments have decided that they will,” says a fund manager operating out of an office on Royal Square. “We are steeped in hypocrisy. Jersey alone provides €200bn in liquidities to the British banking system, a release valve that was very useful during the financial crisis. If States need money, they will get it from pensions and wages, without touching the very wealthy,” he explains. But on these treasure islands, that is an open secret.”
Treasure Island indeed but we all know who is getting the buried treasure and it’s not me or you!
Issued by: The Celtic News
THE CELTIC LEAGUE INFORMATION SERVICE.
The Celtic League established in 1961 has branches in the six Celtic Countries. It promotes cooperation between the countries and campaigns on a range of political, cultural and environmental matters. It highlights human rights abuse, military activity and socio-economic issues