LIBERAL Democrat Treasury spokesman Vince Cable has warned that major governments are preparing to move against offshore ‘tax havens’ such as Jersey.
And he said that the failure of the British government to offer protection to Islanders who had money in Icelandic banks which are now in administration spoke volumes about a growing lack of patience with territories that engage in tax avoidance.
Mr Cable (pictured) was reacting to criticisms levelled at him by Jersey’s Chief Minister, Frank Walker, for making ‘inaccurate and ill-informed’ comments about the way in which the Island’s finance industry is regulated. However, Senator Walker is even more annoyed at Mr Cable’s latest outburst. ‘There are none so deaf as those who do not want to hear,’ he said.
Mr Cable, who some believe could end up as a future UK Chancellor in a coalition government, was uncompromising in his message, saying: ‘Rather than react to pompous statements from the Chief Minister, I would simply point out that far more important people than me are preparing to move against offshore tax havens. US President-elect Obama has made clear his intention to do so.’
Article posted on 20th November, 2008 - 3.00pm
22 Article Comments
The Chief Minister’s statements pompous? You see what fun we miss out on not having a proper system of opposition checks and balances in our local politics? Pompous, eh – who would have thought.
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Once again the Chief Minister demonstrates his inadequacy in handling a delicate situation by just irritating those who hold the real power. I know he’s stepping down, but is it too late I wonder!
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fast now before its too late build a big financial center spend all the money on it before we find out we are done for and all the people who would use it go away. Dont wait spend spend now and a bigger yachting marina for those bigger yachts, and a big golf course, sell all our heritage to pay for it. Oh maybe you did that already. Thanks
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Mr Walker is a small fish in a big pond. When is he going to realise this
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Calm down people. Vince is with the Liberal Democrats… it only becomes a problem if they win the general election and how many of them have they won in their history… I’ll give you a clue: it’s less than 1.
I’m glad Obama won the US elections but I’ll be suprised if he does as much as the hype are saying he will with finance centres.
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President Elect Obama should be very careful…not only has a senior Minister in Guernsey ridiculed him, but he has yet to lock horns with Terry.
We’ll show the world that you can’t mess with us Channel Islanders just because you are in the right, bigger than us and we are fundamentally corrupt.
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Joe: You’re right, Obama won’t be pressured by little Jsy or Gsy – he’ll be pressured by the rich and powerful corporations who use offshores and London to invest in.
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Joker,
The Liberals won a landslide General Election in 1906, so no, not “less than one”.
But, as stated in the article, some believe Mr Cable could end up as a future UK Chancellor in a coalition government. He’s certainly a man of that sort of calibre, so you underestimate people like him at your peril.
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I don’t know why our Chief Minister doesn’t tell him to take a running jump.
We are not answerable to these people and thats that.
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All Obama has to do is tell banks etc that if they do business in the CI they will be penalised on the business they do in the USA. Even better make it a condition of financial support in troubled times (like now).
Not a difficult threat and bound the have the desired reaction; all of a sudden plenty of parking spaces, no traffic a little like school holidays everyday with no queues on Wellington Hill. All the banks and Trust Companies have to do is plug in their router in a different jurisdiction, their corporate hearts will not even miss a beat, their clients will not notice the difference.
Just think of the finance industry as a bit like a New Age Traveler parked in a layby (UK 1980’s concept), kids, cars, camper vans, motorbikes and pedal cycles. They are there for as long as they like, you drive passed them every day on the way to work; then one morning they are gone, vanished, leaving only a dead dog, potato peelings and a burnt out BMW.
The trouble is that unlike property prices going up with the disappearance of the traveler, ours will go down. However on the bright side; once the removal men have made a fortune clearing offices; Jersey can go back to relying on its booming Tourist Industry, turning all those offices and apartment blocks into hotels, supplementing its income selling tomatoes and Jersey Royals to UK supermarkets (sorry forgot that industry has gone as well). Happy Days are here again……
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Tintin, there would be massive repercussions if the USA were to take such an action, including damage to the Anglo relationship.
Therefore highly unlikely.
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Sarah seriously, I would love to know what the repercussions would be? The UK is not overly happy with some business activities conducted in Jersey so do not expect much help from that quarter. The USA will do what it wants and the UK will toe the line. A close relationship did not stop the US invading Granada a few years ago, and before anyone starts I am not suggesting that they would do the same thing to Jersey, just destroy our economy
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Hi Tintin, I think it may be worth noting where our business actually comes from. The USA have no power to tell other states where to put their money, if you follow.
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Sara – remember Enron? Jersey was up to its neck in that little scam and I bet it hasn’t been forgotten in very large sections of the US of A. One little bit of blood in the water….
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Tintin & Sara,
The concept of disaster recovery isn’t a new one, but one that seems to escape the States of Jersey when it comes to losing our primary and some would say sole industry. Rather than emulating headless chickens and looking at the falling sky, we could look at the opportunities that really could lie in front of us. Jersey (and Guernsey) could reinvent themselves and create a university with the vacant buildings and empty apartments. The wind and wave energy generation schemes could be put in place quickly to generate far more revenue than the finance industry ever did.
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I’m glad that the minister doesn’t just bow to people like Vince Cable. He may be a very well regarded economist but he seems ignorant or hypocritical of the fact that the UK and the US are themselves tax havens for some.
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JJ it is a bit difficult to look up at the sky if you don’t have a head; having said that you are right in that the island can reinvent itself and have far more credibility as a result.
Sarah unfortunatly the USA does not have to tell other States where to put its money. It merely has to impose a penal tax liability (on USA generated profits) on any business (for example a bank) that does business in Jersey and the USA. The business would then have to decide which side its bread was buttered. Believe me no major financial institution will want to get on the wrong side of Uncle Sam, he is far more frightening than Uncle Terry.
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It will not happen and it will not change anything. We have been hearing the same doomsday rubbish ever since the Edwards Report and how many years ago was that?
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It’s not that the US or UK can just shut Jersey down. They will slowly remove the ecomomic/fiscal benefits for their citizens and corporations to keep their assets in offshore jurisdictions. Jersey’s finance industry won’t just disappear over night. It will be death by a thousand cuts.
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I’m with Jersey Joe – Jersey has huge potential for all sorts of ventures but in realpolitik terms nothing can compete with the revenue earning capacity of the finance industry. University – much needed; Art College? Organic farming? World class fisheries? Sustainable tourism? Energy generation? Internet-based industries? all have been suggested but when put against Big F they just fade. Our real problem is that we have no viable alternate source of income. When (not if but when) finance does change or is changed or leaves altogether, then what? All of the above ideas come back on to the table but the only way we will be able to survive in the short-term is to go for full Membership of the EU and get grant aid from them during the transition to a non-finance economy. And won’t that be popular! Not pie-in-the-sky by the way, the free money thing. It’s already been offered by the OECD as compensation for them shutting down the tax haven element of our economy (not that it exists of course) in the last big push they did around 1998.
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Very little business undertaken in Jersey derives from the USA. They have their own offshore centre – known as the Cayman Islands – which will be first in the firing line if Mr Obama wants to go after offshore centres. However, by doing so, he will simply drive billions of dollars away from the doorstep of the USA to other finance centres in the middle east and the far east. Better the devil you know than the devil you don’t – and the same applies for to the relationship between Britain and the Channel Islands.
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i agree this island is corrupt ,from the top to the bottom, .i could tell u dozens of things, that would make ur hair stand on end, no accountabillity for doctors mistakes,. data protection what for couldnt help me, over someone blabbing about my medical condition. ho yes its probably in place, to cover up our people in power, elite .wrongdoings.. thruth our government dose,nt know meaning of the word.M.
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