THIS column comes to you from sunny Spain – you know, the country where tomatoes still taste like tomatoes even if they don’t look pretty.

I might therefore be a little out of touch with the latest happenings at the centre of the universe on that rock off the coast of France.

When I left the Island a few days ago, nearly everyone appeared to be in the grip of panic about what the G20 summit was going to do to us. Some were even predicting that the deliberations of world leaders in London next month could be the beginning of the end for our principal, if not our sole, industry.

So should we be afraid, or should we be confident as our political leaders insist we should? As usual, the answer is probably a bit of both.

We should certainly be afraid about what a new group of leaders with new determination to sort out the anomalies of tax havens can do at a time of crisis. After all, everyone seems to be against us.

The most powerful man in the world (Barack Obama), the most influential man in the world (the Pope), the leader of the country that is our protector (Gordon Brown), the leader of Europe’s biggest economy (Angela Merkel) and the president of our near neighbour (Nicolas Sarkozy) all seem to have it in for us. Even the TUC and, so I understand, the likes of Christian Aid have had nasty things to say about tax havens and the need to tackle ‘the problem’ they cause.

Now there is a certain amount of hypocrisy in the air. You might feel that Obama’s criticism of tax havens is a bit rich in view of the well-known attractions of Delaware. Some of Gordon Brown’s criticisms also ring a little hollow when you consider some of the tax haven activities of the City of London, which has also played no small part in the proliferation of tax havens elsewhere. Mainland Europe is hardly a shining example of countries trying to avoid competing with their neighbours in tax matters either fairly or unfairly. Even the Vatican City can be described as a tax haven in some respects.

But in Jersey we have become used to double standards and the apparent determination of the big countries to make sure that the small countries don’t make money out of providing financial services at a competitive tax rate, which is one definition of a tax haven.

So the immediate problem is one of definitions, and here both sides of the argument have got it wrong. Perhaps the leaders of the free world shouldn’t describe Jersey as a tax haven (if, indeed, they have). But then our Island leaders shouldn’t insist that Jersey is not a tax haven, when in the eyes of most people we most certainly are. Yes, of course we don’t meet some criteria of a tax haven and we can prove it (should anyone want to listen).

But that misses the point. To most people Jersey relies on a tax advantage, and there’s not much point in trying to use semantics (such as the contrived phrase ‘tax neutrality’) to try to prove otherwise. Therefore, when the likes of Obama and Brown refer to tax havens, they include us.

But that’s not the problem. The problem is proving we are a good tax haven which plays by international rules as opposed to the bad ones who don’t.

We can certainly prove that we are co-operative and transparent. After all, legislation in many other areas of Island life has suffered because of the high priority given to ensuring that our finance centre rules and laws are up to date and competitive.

So we’re not into money laundering and terrorism financing and we steer clear of tax fraud, but then I don’t know many tax havens who can’t claim the same thing.

It’s just that times have changed and keen new world leaders are looking for new standards of behaviour. Tax havens are an all too obvious target at a time of financial crisis when most people realise that there needs to be a new global financial system encompassing both onshore and offshore activities.

Jersey’s problem will be to convince the rest of the world that we are a responsible tax haven whose activities actually contribute to national wealth and the global economy, rather than merely deflecting undeserved wealth to us. Perhaps every member of Jersey Finance could come up with concrete examples of how their activities have benefited the economy and society, not just in Jersey but everywhere.

It will certainly require more than a TIEA or two to convince some critics. Of course it is essential that Jersey continues to enter into tax information exchange agreements, because that has become the international standard by which offshore finance centres are judged. Well, at least it was up to now.

So far there is little evidence that the TIEAs that Jersey has signed have produced any acknowledgement that we deserve recognition. Various officials such as the Secretary General of the OECD have praised the Island for its efforts and said that we should be rewarded for the political risks we have taken in adopting standards that have largely been ignored by some of our competitors. But you don’t hear Gordon Brown or his Chancellor saying that.

Perhaps the best outcome of the G20 meeting for the Island would be if President Obama or Mr Brown did made a similar statement which perhaps could be justified, but I don’t think so, somehow.
That’s because the goalposts are moving again and there will be a whole new set of hoops for us to jump through.

That shouldn’t present too much of a problem just so long as everyone else has to jump through the same hoops, and in this respect the determination of world leaders to tackle the problem of tax havens may actually be encouraging for Jersey. Hopefully their determination will remove the double standards and the precipitous pitch of the playing field that we’ve had to fight against.

What will hopefully be left at the end of this long process (which will only begin next month) is a clear set of rules which will be part of the new global financial system the G20 meeting aspires to create.

But we can’t take our relatively strong position for granted. Much more effort has to go into convincing people like Obama and Sarkozy that we’re the good guys. Perhaps a good starting point would be convincing Gordon Brown.

After all, it looks like we desperately need an ally.
Peter Body is editor of Business Brief magazine