Tax crisis as EU attacks
Wednesday 14th October 2009, 3:00PM BST.
Chief Minister Terry Le Sueur was in talks with the UK Treasury yesterday
JERSEY’S whole tax strategy could be rewritten after coming under attack from the EU.
Chief Minister Terry Le Sueur held crisis talks with UK Treasury officials in London yesterday, after indications from some EU countries that the new ‘zero-ten’ corporate tax structure did not fit the requirements of the code of conduct on harmful tax practices.
But rather than lodge a specific complaint, the EU countries have just said that Jersey’s new corporate income tax system – also being used in Guernsey and the Isle of Man – does not ‘meet the spirit’ of the code.
It is likely that any changes to the corporate tax system will have to be carefully balanced to keep the Island attractive to the financial services industry, but not pass more of the tax burden on to workers, rather than companies.
And the Island has time to sort the problem out – there is no prospect of emergency changes having to be pushed through by the end of the year in response to an immediate threat from Europe.
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It was obvious that 0/10 was/is a hustle.
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Informed persons within the Jersey Finance community have for years raised concerns with the States regarding the compliance of the zero ten policy with EU principles. These have always been brushed aside by the States. The truth of the matter is that Le Sueur got it wrong from the very beginning and failed to obtain the EU’s opinion on the zero ten strategy. Zero ten has cost millions to implement and has cost millions in lost revenue. Heads need to roll over this gross mismanagement of the Islands fiscal policy starting with the now Chief Minister.
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Just what I’ve been saying for years, hardworking people should be given priority over flybynight companies.
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For much ore on this story please note the commentary on my blog http://www.taxresearch.org.uk/Blog/2009/10/14/the-crown-dependencies-do-not-comply-with-the-eu-code-of-conduct/ which includes a link to the report I wrote for a Shadow Scrutiny Committee of the States of Jersey in 2005 saying this would happen.
Jersey preferred to heed the advice of PricewaterhouseCoopers and an enthusiast for flat taxes on this issue. It has now paid the price.
This crisis for Jersey could have been avoided if Walker and Le Sueuer had listened to me and my colleague John Christensen in the Tax Justice Network. They chose to ridicule us instead. Unfortunately, we were right.
But if they want advice on what to do now they know they can ask – we have a proven track record on this issue now.
Richard Murphy
richard.murphy@taxresearch.org.uk
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In fairness he cannot say that nobody warned him that this would be the case.
Perhaps it would help if we were to adopt a low profile such as Switzerland instead of allowing our Civil Servants to brazenly advertise how many billions we have invested through Jersey, much of this is double counted to stay ahead of Guernsey. Of course “Jo public” in the EU are going to get their backs up at such conduct.
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That’s what happens when Jersey prostitutes itself to attract inward investment.
When will CoM ever learn?
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Well of course its against the spirit of the code. The levies charged by the JFSC are in reality a thinly disguised tax on financial firms so all the Exempt companies can continue to claim a zero tax rate. Its not even smoke and mirrors, its so obviously a ruse.
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“And the Island has time to sort the problem out – there is no prospect of emergency changes having to be pushed through by the end of the year in response to an immediate threat from Europe”
No rush? Next year is only 2 1/2 months away and the States hardly move quickly. Well, apart from when the free dinner bell rings.
Keep calm everyone, there is nothing to worry about …. didn’t the Captain of the Titanic say that?
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Terry Le Sueur is, of course, the perfect ambassador for the island………..
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Is Jersey above the EU? Well thats what some finance types over here seem to think. The EU can easily bring the finance industry down and what it says will go, no matter what the rose tinted spectacle wearers over here think.
Like I’ve said before diverify before the bubble bursts. I believe 0-10 will end up being challenged by the EU anyway.
Good post Richard but unfortunately I’ve noticed common sense goes out the window when anything to do with finance is raised over here. It wouldn’t surprise me to see posts attacking you as you don’t tow the CoM line on how things should be done. However it doesn’t mean you are wrong. No doubt the spin doctors will be spinning away merrily in the back ground…..
I have always though that passing the burden of tax onto the poorer in our community was ethically and morally wrong. So what did our government do? Yes bring in a regressive tax called GST under the pretext that it was the best/only way to go.
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As I have said before lets have 0 rate corporate tax no divided tax and just have 10% GST that would fit the bill perfectly. EU could not argue nor could Richard Murphy and his very few supporters.
And before everyone gets carried away this is still less than the 17.5% VAT in UK and lower than all EU VATs
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With great political power comes even greater political responsibility.
Terry Le Sueur needs to step forward and present himself as being fully accountable for this state of affairs, and with that accountabilty take the full weight of repercussions for his actions.
Anything less will reveal him as being unfit to continue holding the job of Chief Minister.
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Thats what happens when you put all your eggs in the same basket,nothing left to fall back on.all other industry gone.
tourism just about dead in the water.
farming land all bought up by developers for more housing.
the sinking ship looms ahead and with no life-boat to rescue us we will certainly be in dire straits.
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Ouch, did anyone say sorry? Will we get a sorry we were wrong from the people who decided to go this route or not?
Vote them all out!
Looks like Jersey is being destroyed not by the HDLG scandal but by our fiscal policies.
Oh well up GST to pay for it.
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Is there anyone who doesn’t think that the 0-10 scheme is anything but an extremely unsophisticated smokescreen which does not come close to the sprit of the code of conduct on harmful tax practices?
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11, you obviously have money to burn then, the cost of living over here bears no resemblance to the uk,even taking into account 17.5 %,!
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11) tom h, really clever that, it will ensure that everyone with any sense leaves just to be able to survive, this new financial strategy!!!
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Hopefully the UK will pitch in and give us a hand against the EU so they do not end up with an offshore basket case to support.
The States have been getting up the EU’s noses for years with their boasting about how successful we are as an offshore financial centre and now they seem surprised when the sleeping giant gets riled and lashes out!
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European Union countries should get their own houses in order. They advocate competition when it suits them. Why should we change our policies. Let them compete with us & lower their taxes. Would these countries bully us if we were as powerful as them? No, they make a mess of their economies & then look for scapegoats.
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Oh my goodness, the UK are leaving Jersey ‘to fight this one themselves’. Smacks of 1939 – 45. Do not trust the UK, especially this Labour government. The only thing one can count on is their disloyalty. I have lost count of how many times have we experienced this in the last 40years?
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Time to take stock of whether Jersey should bow again to the EU.We have bent over backwards so far. We have constitutional rights, embodied and caste in stone in the Treaty of Rome, as well as a thousand years of fiscal independence. Jersey and Guernsey should not take this further challenge to those rights lightly.Our finance industry was built with the full acquiescence of the UK.Now that we have been delegated to a Crown Dependency, ruled by Jack Straw, a political appointee in a UK government, where we have no rights and no vote,and whose government have removed the Privy Council,stopped health repricosity and made Jersey and the rest of our islands pay overseas rates of university fees, it is time to examine the option of independence as we can longer depend on a thousand years of loyality to the Crown.
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On one hand Jersey does not want anything to do with the EU And the UK and on the other Jersey once again bows to pressure from the UK.
I agree with 19. Let the EU compete with Jersey.
Jersey is not part of the EU, its not part of the UK. The UK are slowly cutting its ties with Jersey so Jersey should do the same.
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Ha! no prizes for guessing where “myview” was born and bred! Yeah! Jersey great place for hiding taxable funds away from prying European countries …..who probably house feed and care for half the offshore account holders, still! we’ve got some great beaches if it all gets dimantled!!
C’mon the game is up and well you know it No 19
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The U.K.has effectively abandoned the crown dependicies to the world, s financial thug,s it,s not so much “John Bull” more “John Bullyboy”, so what happended to the western world,s ideaology of free market economie,s
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Pip Clement wrote:
“Hopefully the UK will pitch in and give us a hand against the EU so they do not end up with an offshore basket case to support.”
Yes – but at what cost to the citizens of Jersey? Everything has a price – not necessarily in terms of money.
On the other hand, intervention in and direct management of this island’s political and economic affairs from Westminster might just save Jersey from its current sorry state of affairs.
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‘Would these countries bully us if we were as powerful as them?’
It is always the way that big neighbours affect or even control small neighbours.
The USSR and Finland, the USA and Canada, Germany and Luxembourg.
It is basic real politic!
Christmas reading for all States members and senior civil servants; My Prince by Nicoli Machiavelli
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If you sell your soul to the devil there will be consequences.
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Tom h (comment 11)VAT is currently 15% in the UK and has been for several months now but if you are under the impression that this is deducted from Jersey prices then I assume you have not shopped much in the last few years.The vast majority of Jersey stores leave this tax on their prices and some now add GST also.I visit the island regularly but buy nothing as everything is cheaper here in the UK.
I think the days must be numbered for Terry Le Sueur and if the information provided by Richard Murphy at comment 4 is correct then heads should roll.Once again.
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I love how everytime there is a criticism of Jersey, the nationalists jump up to unequivically defend the island ands its practises as a pure defensive reaction. Pathetic.
Just because we live here and like this island does not mean it is incapable of doing wrong, and the sooner those morons realise this the better. We have countless immoral practises going on in the island and occasionally the UK and EU point it out to us. We should look at each point they bring and then make a judgement, and not just jumping to the ridiculous conclusion that they must be wrong be “Jersey is so wonderful”.
I for one hope the EU sweeps through this island and leaves no survivors (metaphorically speaking of course)
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#24 c.roberts
Do you by any chance contribute to “From the message boards” in Private Eye?
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Looks as if Terry Le Sueur and the finance committee will have to get back to the drawing board, now that the “zero-ten” corporate tax structure has failed to satisfy the EU.
So much for the euphoria after the last G20 meeting!
Such is the danger of allowing your economy to rely on one leg such as financial services, especially when crisis looms.
Britain has made a similar mistake, much to the cost of ordinary working folk who have lost jobs, as a result of the bankers’ “gambling” activities.
In this uncertain World, every nation should diversify their economies, power sources, and food supplies as much as possible, in order to survive.
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Julie 28 as a Jersey retailer of a long time trading in Jersey I challenge you to prove your wild accusation.because I DO NOT now nor have I EVER paid VAT on goods imported from the UK or european tax on goods imported from their. my prices are always calculated from a NETT supplied rate.
and secondly as a jerseyman, it’s time we stuck two fingers up to Europe and the UK, kicked out all the UK Civil servants that are forcing us to bow to the non accountable european government and went totally independant, lets not forget we dont have to align our currency with the UK or europe, we could align to the U.S. Dollar.
when Europe accepts me as a Jerseyman and not as an illegal immigrant I will be more willing to accept Europe.
should anyone doubt that Channel Islanders are treated as un welcome immigrants please visit the French Consulate web site
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Why should Chief Minister Le Sueur accept the blame. Just because he happens to be the person who is in charge at the moment during a global recession. He is doing just a fine a job as Prime Minister Gordon Brown in exceptional circumstances.
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Am I wrong in thinking that whatever new corporate tax system we decide upon will be designed to be of benefit to us. Therefore, by defintion, it will not be advantageous to other European countries.
Surely these ‘undisclosed European countries’, who are now apparently objecting to our system will continue to ‘move the goal posts’ until we have a system equal to their own?
I do feel very uncomfortable with the way in which EU unelected plutocrats seem to decide, absolutely, what other countries can & cannot do – even those who are not part of the EU.
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Let me get this straight. The States have brushed aside the concerns of the Jersey Finance community for years and they have ridiculed the Tax Justice Network for their views and yet all the above have turned out to be correct.
GST was only brought in to fill the ‘black hole’ left by this tax strategy. The stategy was the responsibility of the then Treasury Minister and now Chief Minister Terry ‘there will be no recession in Jersey’ Le Sueur; who was also involved in the incinerator scandal.
Isn’t it ironic that he donated his specs to an African chap who is apparently shortsighted!
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We have 2 options only——either go independant
or join the EU
If we choose the latter we will be run by unelected unsackable faceless M.E.PS,who will eventually have their way.
Just look at Ireland,coersed twice for the “right”vote”
Jersey will be forced to change its income tax structure consequentely investers will lose confidence and will move their money elsewhere with a press of a button.
this will not go away.
The uk have no loyalty to us anymore.
The two wealthiest countries in europe are non EU members(switzerland Norway)
We should go it alone
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Time to stand up to our full height and go independent…………..
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Or regress to our usual thinking and throw a cordon of new bollards around the problem….there sorted.
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Marx 29
You might be right but let he … cast the first stone and all that
It’s a fact the EU are involved in far more mal practice and immoral dealings than Jersey… You only have to look at some of the EU countries leaders to see that. Once they’re squeaky clean they can come bully or small economy.
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“Terry Le Sueur needs to step forward and present himself as being fully accountable for this state of affairs, and with that accountabilty take the full weight of repercussions for his actions.”
We can but dream, Nathan.
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Another bout of unthinking nationalism.
Jersey as a Crown Dependency has its monetary policy controlled and I would argue underwritten from London.
If Jersey abandoned its ties to the UK it would quickly fall under the aegis of the EU, particularly with the budget deficits we look like running an independent fiscal stance would be impossible.
Its fate would have more in common with Monaco and Andorra than Switzerland which has many advantages that has allowed it to pursue a more independent path.
Look at Lichtenstein, the Germans decided to ‘lean’ on it over taxation policy it caved in pretty quickly!
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Another thing – what these EU pocket lining bureaucrats don’t realise that is the sooner you remove legitimate Western off shores the sooner all this type of practise moves to the far east.
Does this mean once the EU have dealt with the pesky UK dependencies they’re promising to stand up to China etc when they set up their own nice little dependencies and ancillary islands to ‘legitimate’ business… Don’t make me laugh (as much as I’d love to see Berlusconi being front line cannon fodder).
What are Richard Murphy and John Christensen going to do then? Rub their hands at wiping out UK dependency economies only to find the most powerful nation on earth to now deal with. May be their well aware of this and are very happy as it will keep them gainfully employed for the rest of their lives. The saga will continue and no mistake.
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We have known about this since it was introduced. Its an unfair system that only supports off island companies with a small branch on island. Typical Jersey! states dont really do anything for homegrown companies, is this the reason the states tender there buisness to companies based off island, all because the overheads are too much over here, thus making quotes higher.
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Marx, thank you for your comment. I thought I was the only person in Jersey who shares simular views. It is sad though that we have to disguise our true identities, for if we reveal who we are there would be a witch hunt and we would be burnt at the stake. Metaphorically speaking.
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Simple answer diversify away from finance why stay in the frying pan? It is only going to get hotter and more uncomfortable for all over here.
Why wait until the economy is destroyed or seriously damaged by outside pressure? Jersey is only staving off the inevitable as far as I am concerned. The EU has been cranking up the pressure for quite some time now this is why Jersey has been looking for new sources of income from further afield like India and China.
Jersey has had a good run for its money and lots of people have had a feast over here, unfortunately times of plenty are always followed by lean years. How many will stay and face the music in the lean years? Not as many as now thats for sure. When this happens traffic congestion will be a thing of the past.
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To 11.87 (comment 32) My “wild accusation” comes from living in Jersey from birth to 48 years of age and knowing full well that the MAJORITY of stores, as I said in my first comment, do not deduct VAT which they should.They like to say that it equals the cost of freight charges to the islands which I know,because I also ran a business for many years in Jersey,is untrue.I raised 2 children in Jersey and so know only too well the high cost of just about everything but my main complaint was always the major high street stores not deducting VAT from their prices.
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And what would George Orwell say about all this?
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I also agree, Terry Le Sueur should stand up and be accountable for the actions taken by a group of shoddy ex accountants who think they know whats right for the island. Pander to the rich to penalise the poor. Why do we have to go by the EU laws anyway, Where not in Europe, and the kick in the teeth is, if you are a local Jersey person you have no say in Europe, let alone get the chance to work in Europe? what i would like to know is what agreement have the States made on our behalf with the big wigs in Brussels, We will never know!
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joker 39. Of course he who is without sin should cast the first stone, but when it comes to economics, no country in the world is without sin, so does that mean we should all keep our criticisms to ourselves and not make an effort to change the world and make it a better place? Of course not, thats just sheer lunacy. If we listen to their criticisms and work on what they say, we could make this island a better place, and simultaneously give ourselves far more legitimacy to make criticisms right back at them, with out looking like complete fools.
Thanks Mr Titmus 44.
To all these people who made statements regarding making Jersey independence, I respectfully ask that you wake up. If we were “independent” these fools in the States would be top dog number 1 and would not have a legitimate organisation like Westminster (who have far more wealth knowledge and experience then us) to look over us and make these suggestions.
The idiots that put forward this ridiculous tax would have to answer to no one and would get away with murder. For gods sake think it through.
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I have real concerns when the EU start interfering in Jersey’s business. The EU would remove our quallies system overnight if we were members, so the fact they are having increasing influence over us anyway is a massive worry
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11.87 “when Europe accepts me as a Jerseyman and not as an illegal immigrant I will be more willing to accept Europe.”
Come an.
a) This is of course partly due to our abusive tax system! Why should they accept us with open arms when people are avoiding paying tax in their country by shovelling it into Jersey.
b) Don’t compare yourself with alledged illegal immigrants in the EU, they have a very different situation to deal with than you do.
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If you see somebody dip their hand into your pocket you are liable to react. The reaction may be a defensive move which the pickpocket finds unpleasant. Come on JEP; since when has a defensive move been an attack?
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Hey! fellow Lilliputians we still have hilarious pound notes (which you can’t tender anywhere else) an apartheid housing sytem, great beaches, roads with odd surfaces, 12 driving authorities and a big house full of myopic middle aged people who periodically blast out hot air like a coal fired power station …..who cares about 0/10?
“No worries” (as they say over here)
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It is laughable that some people think Jersey can ‘tell the EU where to go’. Most of our finance industry is EU controlled and most of our income (epecially non-finance income)is EU based, we will have very little to live on if we do not comply and the EU imposes sanctions.
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“Ann
Posted October 15, 2009 at 9:50 am Why should Chief Minister Le Sueur accept the blame. Just because he happens to be the person who is in charge at the moment during a global recession”
Because he was one of those responsible for designing the tax, and went ahead with it despite advance warnings of the very problems we now see.
He is not an innocent bystander who just happens to find himself in charge when the spaghetti hits the fan.
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Realist 21 and Bella 32: absolutely spot on!
What everyone has not spotted is that this stalking policy to establish an all powerful European Federal Super-State has been going on for years! It is “Slowly,slowly catch the monkey” and if democracy goes against you with a majority “No” vote (as in Ireland) then increase the “Bung of bananas” and insist on another vote until you get a “Yes”!
Blind everyone with over complicated bureaucracy and hope it will escape their attention that the whole corrupt operation is wholly “Undemocratic”, structurally and economically “Unworkable” and as much of an idealistic piece of political dogma as “Communism ” or “Fascism”.
Not only that, a huge and administratively cumbersome central Government structure is so much more easily overrun and controlled by a dogmatic political minority than twenty or thirty democratically elected National Governments!
So they want to criticize us and bully us in to submission?
“No change there then from 1914-1918 or 1939-1945, or the Napoleonic Wars or any of the other inward looking, self serving European Historical conflicts!” only now it’s done through bureaucracy not the gun barrel (For the moment)
So let’s join Ireland, Scotland (Probably independent Wales,Cornwall, and Yorkshire)and ultimately England and Northern Ireland (If still in existence) and form a line for all those development handouts that go with EU membership in the early years!
Shame that as time goes by you suddenly discover that it’s not all “Take, take” but your National status changes to that of “Contributer” (And if you have any natural advantage as in the UK such as natural oil,gas coal or fish then you are a “Contributer” from the outset) and then it is all “Give, give”.
And the advantage of “Devolution” well it breaks up the power of a Nation’s vote, U.K.100mn,a devolved England 44mn (That will nobble any majority they might seek in a European Parliament).
So how about breaking up Germany and devolving it into it’s constituent parts ?
“Independent Prussia” or “Independent Bavaria” they have only been “United” as a country since the early 1900′s?
Why am I not hearing huge cheers of support from the enormous “United” German population to that suggestion?
And France maybe “Acquitaine”, “Provence”,”Midi”? No cheers there either, but maybe, if it’s about tax avoidance and being “In the Spirit!” we should go direct to Brussels and mention Monaco rather loudly along with French Polynesia to name just two, what about North Africa?
So let’s ignore the “UK” they are in more of a fix than we are due to the lies and platitudes of successive UK Governments to their own electorate on the EU issue over the years since Ted Heath in “Survival Mode” signed them up!They, poor sucker’s, are not even going to get a promised “Referendum”!
As for our local politician’s handling this, they did not even notice the difference between a Constitutional relationship forged with the Queen in Privy Council (A representative body) and a relationship with the Lord Chancellor’s Office, a body which has been subverted by that beacon of democracy Jack Straw as Secretary of State for Justice!(A political appointee and one man mot a council)
Well we can always appeal to our Peers? Oh sorry The Supreme Court (Jobs for Life?)who are the nine Justices?and who appoints them? Federalism by the back door? How many British Electors even noticed it’s creation.
If I was Her Majesty I would be picking out the retirement home in Worthing now!
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Marx 49
In answer to your question… Yes you get your own house in order first before pointing the finger – how else are you to gain respect or be seen as a leading country/consortium on the matter, or more importantly, prevent major financial catastrophes such as the one we’ve just witnessed in your own back yard – that is not lunacy, it’s common sense and preservation. America has spent the best part of the last 10 years pumping (sorry wasting) trillions of dollars into illegal wars, wild goose chases stamping down in the name of democracy and justice when actually it was all about securing financial stability through guaranteed oil supply and keeping hundreds of thousand of people employed in the despicable and far more immoral (than offshore) arms industry. The irony of all this is that whilst it was concentrating so hard on foreign affairs and adding to its own debt the biggest financial meltdown was building on their on soil. A financial meltdown that would have major ramifications for the world it keeps saying it wants to protect! What is that if it isn’t lunacy?! So yes sort out and maintain your own house first.
Don’t kid yourself that this EU tax move is all about morals anyway… it’s about EU countries and America squeezing money from where they can get it because of their own foul up.
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What we need to do is to establish a tax regime that retains the attractiveness and competitiveness of Jersey as an international offshore financial services centre whilst being acceptable to the likes of the OECD and EU. The EU would not advocate or require every jurisdiction to have exactly the same tax system or rates – that would be le poppycock – so we must find the right balance, the right level, to preserve our prosperity and our future, within the bounds of acceptability. There are a number of human variables there – the good folk of the OECD, of the EU, those who decide where to place their wealth (and other people’s money), our ability to outsmart the opposition, etc, etc, and now is the time for us to hold our nerve, exercise our brains and put ourselves on the front foot. There has been a change of mind, or at least of message, from the EU, which a number of commentators here have leapt upon almost victoriously to shake out their prejudices and gripes. Carry on with your knee jerks – I hope that many others will be exercising their wits to help us all.
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58. Mike posted “I hope that many others will be exercising their wits to help us all.”
By this do you mean that “this is a time for parallel calm and parallel patience in the ranks of the finance industry, many of whose professionals will know full well that there is more than one way of skinning the taxation cat.”?
What people are failing to mention is that offshore centres/tax havens are affecting other countries tax returns. Why should someone overseas be affecting your level of tax you have to pay? Taxes are raised to pay for things like hospitals and schools, is it right to take some of this money away? I don’t think it is right to meddle in another country’s affairs like this. It appears others think it is fine and dandy to do this as “if we didn’t do it someone else would”.
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Walker when he was our esteemed leader said that if Europe got too nosey with our affairs he’d tell them to get lost. Well Le Sueur why don’t you do it or are you not man enough cos the last time i looked we were NOT in the european union
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Me thinks Jersey protesteth too much ….does the outside world really care if Jersey sinks or swims.
I mean circa. 95,000 greedy souls against the rest of the world Who cares about Jersey other than Jersey itself????
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#61 Quentin Smythe – you are spot on. We are not concerned about the welfare of the finance industry, we are only concerned about Jersey. I have grave reservations about our future here. The States seem to think nothing will ultimately change, but it will. In 20 years from now, I think we will have lost either finance, or our quallies, possibly even both
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We will get a Tory Government in soon and then we will be in a better position to tell the EU to get stuffed! N.B. Richard Murphy of the Tax Justice Network has always hated Jersey’s finance industry so just take his views with a pinch of salt. All this “I told you so” poppy cock is laughable.
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57 joker
And as I said in my previous post, by nobody telling anybody whats wrong with each other we will all just continue to sit on our backsides and fix nothing.
Nice thinking brother.
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One man who could say “I told you so” is senator Stuart Syvret. He might not do that but i will on his behalf.
TAXATION POLICIES: A TRANSPARENT ENQUIRY Lodged au Greffe on 9th March 2004 by Senator S. Syvret.
EXTRACTS…having spoken to people in the finance industry, the more optimistic of them imagine that the 0%/10% proposals will keep the wolves of external pressure from our door for up to 10 years. The less optimistic give it 5 years….there is a very real possibility that the 0%/10% proposal will not placate the E.U….
I felt absolutely compelled to post this comment. Please read the propostion TAXATION POLICIES: A TRANSPARENT ENQUIRY & in future please at least take the time to listen to Senator Syvret when he speaks in our States Assembly.
Syd
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(61) quite true , jersey is like a “shrimp in the ocean” compared to the bigger global picture.
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The Chief Minister Terry Le Sueur should not be blamed for what is happening all around the world. Noone could have foreseen the global downturn in economics and tax is all part of the economics whether we like it or not.
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Can people stop blaming the UK for the removal of the health agreement and for being charged overseas student fees?
Health and education in the UK are paid for by the taxpayer! Those of us in Jersey are NOT UK taxpayers. It’s simple, it’s sensible and it’s the only thing the UK could have done frankly, they have subsidised Jersey for far too long and for those that do want Jersey to stand on its own feet, the removal of these financial benefits moves another step closer to seeing whether or not Jersey can actually afford to do so. If we cannot afford our own healthcare and our own edcuation then frankly we are not capable of being independent!
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Well said Ann-at least you know your facts.
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#63, God forbid we get the Tories!
They put in place the systems that were, in part, responsible for the banks ultimate failure. Mind you, like the States of Jersey, they love the rich and hate the poor.
Labour were not responsible for this recession, and by all accounts the UK is starting to move out of recession under Labour’s leadership. I’ve never seen a party be so heavily criticised for bringing a nation through a recession with ‘relatively’ minor damage.
If the Tories get back in power Scotland will be forced into independence and that will bring a lot of instability to the UK, instability that will have financial repercussions. Maintaining the status quo for a while longer would be the best choice in times of worldwide uncertainty.
Of course, we could always react with the FA mentality and take the knee-jerk reaction of ousting the leader rather than considering the behaviour of the many players in the team! And by players I am referring to every citizen within the UK, those whose combined behaviour can have a big influence on the economy!
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#61, you’ve hit the nail on the head.
No-one cares about Jersey except Jersey. The majority of the world may never even have heard of Jersey.
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syd,
A lot of people knew 0/10 was likely to be attacked by the EU. But what was different about SS was that he said so in 2004. Even with him agitating with Richard Murphy (who openly admits to advising SS at that stage) we have got through to 2009 without our main industry that pays for our entire Island materially suffering.
Here’s what will happen next – we’ll come up with another regime that seems to work. It will last for a period and it will need to be replaced again. Plus ca change.
But 0/10 succeeded – it got us through for several years. Now we can probably move to a 10% corporate rate tax for everything incorporated from 2011 onwards with 0% applied to regulated vehicles.
Most trust companies use non-Jersey companies so its not a huge problem.
What is funny is people who don’t understand the arguments pontificating about how Murphy or Syvret were right. That’s not the point. This is about politics, not right or wrong. And what matters is that it has taken Murphy 6 years, a Labour government and a global financial crisis to persuade people to give Jersey a kicking on this. Next time, he will be older, the Tories will be in power and the political view of banking and finance will be more balanced. So we’ll probably get 10-15 years from whatever new scheme we come up with.
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@32 11.87… here’s what really grinds my gears..
Co-Op Homemaker; Ecofurn Ridgeway 5ft bed £359 inc GST.
Co-Op on line in UK, same bed, £299 inc VAT (delivered to the door of lucky UK residents).
I asked why this was and was told ‘maybe they are on tighter margins’. Saying I wanted to try and spend money locally, I asked could Homemaker do a deal for cash if I bought a mattress as well. No dice. I pointed out that knocking the VAT off UK price would mean I could import the same bed myself from Co-Op UK cheaper than the Jersey store would sell me one. I got a shrug of the shoulders. I would love to spend my money locally but it appears I would be mugging myself.
In contrast; This week I got a matress (30kg in weight) & microwave (both VAT free), from Amazon. Delivery(down in 3 days) cost less than £7 pounds total. Slower delivery would have been free.
So forgive me 11.87, if I don’t have complete faith in Jersey retailers…
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11.87
Er! excuse me? as a third generation Jerseyman you may well be an illegal immigrant first and a Jerseyman second. What you/I callourselves is different to our legal status in another jurisdiction. The solution to your problem is for you to ensure Jersey joins the EU, whereupon your “stigma” will be removed ……along with your tax avoidance industry. Simples!!!
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mad foetus I like your idea of running an economy just keep bodging it until someone notices and takes action against your bodge then bodge it again.
This is not going to work. 0-10 hasn’t even got off the ground properly and it is confinded to the dustbin of economic history.
Murphy and Syvret plus others like myself knew this was doomed to failure but the top brass thought it would fly. Says a lot for our leaders don’t you think?
I think you and your ilk are clutching at straws. You haven’t even factored in the possiblity of another global shake down. The Dow is shooting through the roof what happens if this is a dead cat bounce?
We have the debacle in Iraq and Afghanistan on the political front with the repercussions being felt in places like Pakistan. Iran looks more like a candidate for the next US led invasion with each passing day. This isn’t even taking into account some more attacks closer to home.
Then you talk about the Tories, what do you honestly think they are going to do for Britain as a whole? If Joe Public votes them in they will end up with more taxes whilst the rich are well looked after.
The point is finance and banking aren’t balanced, this is why we are in this mess. People have finally seen through the smoke screen and they haven’t liked what they have seen.
10-15 years to come up with a new scheme? I wouldn’t bank on it. We may not even have a society in 10-15 years if the war mongers get their way, or we suffer a major catyclismic event like earth crust displacement.
One thing is for sure things aren’t going to be rosey in the coming years. Times of economic certainty are now passed.
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Almost everything we buy is imported from the UK, even gas, petrol and heating oil, not to mention everything from household goods, building materials and toilet paper. That means profit for UK companies, whose profits are taxed at source in the UK.Our finance industry attracts mainly non sterling investment and those holdings substantially bolster sterling and the UK economy.Any remittance of those funds to the UK and EU attracts tax on remittance.Jersey Customs and Excise collect taxes on non EU goods on behalf of the EU.We are British and feel strongly so, and yet we have no representation in a so called Parliamentary democracy, whose present government has stated that we are on our own, despite the provisions of the Treaty of Rome.
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Realist
A less realistic summary would involve aliens, but only if they looked like Michael Jackson.
I don’t think you work in the industry otherwise you wouldn’t be denigrating its ability to ‘make more efficient’ those pesky mitigatable expenses.
And when did people suddenly care about Westminster?
After decades of hiding the true source of our island wealth from evil-forces-that-attack (with lots of ‘they’re jealous’ or ‘they hate our way of life’ or ‘they want to impose their failed and corrupt dictatorship’ – nearly identical to warmongers describing Al Qaeda.) is this the sort of argument you are really prepared to believe?
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Jersey should just formally become part of the UK. Problem solved.
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“10-15 years to come up with a new scheme? I wouldn’t bank on it. We may not even have a society in 10-15 years if the war mongers get their way, or we suffer a major catyclismic event like earth crust displacement.”
Adrian,
I meant that any new scheme would probably last 10-15 years, which is fine by me.
If there is global war or a major cataclysmic event, I don’t think it will be the result of the Jersey Finance Industry.
I agree that society is broken and would like nothing better than a new world, based on localism and people appreciating what they have, their families, local communities, local produce, local energy production and countryside. Jersey is fantasically placed to lead the world in this. But this is only sustainable if the population buys into the idea of being a self-sufficient community. That probably means a big drop in population and much less consumption of material goods (but that doesn’t make anyone happy anyway).
I think we should be trying to realign Jersey towards this sort of sustainable future. But I also think we need the wealth generated by the finance industry to provide those things that we can never be self sufficient in – healthcare and infrastructure being top of the list.
The tragedy of Jersey is the fiscal mistakes between 1980 and 2000. The right policies then and we would have a strategic reserve 3 or 4 times bigger than the current one. As it is, we don’t have enough wealth to stop working – and that means working to bring money into the Island. And the finance industry is the only game in town. For the moment.
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Ben 78,
How is that “problem solved”? What a stupid suggestion. Have the UK sticking their noses in even more sounds like a great idea….. I for one would not want Jersey to become part of the UK and would prefer it go the other way altogether.
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“nearly identical to warmongers describing Al Qaeda.”
Haha, so Arnie thinks that AQ doesn’t want to try and destroy the West? That there’s some form of “moderate” AQ? That’s all I need to know about him.
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Ann, Not to have a go but Our new chief minister was infact incharge of our economy whilst Frank walker was in power, so he was in charge of the financial system and the zero ten system, let alone the GST pack of lies we were told. GST is a stealth tax that can be put up whenever the money starts to run low. You have to also remember that the reaon the EU are putting there boot in is due to something our now Chief minister installed three years ago. So to say it is not the fault of Chief Minister Le Sueur is a joke to our intelligence and is to say we don’t know whats going on in our little island thats trying to rip us off through the fault of bad accountants.
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‘Oh my goodness, the UK are leaving Jersey ‘to fight this one themselves’. Smacks of 1939 – 45. Do not trust the UK, especially this Labour government. The only thing one can count on is their disloyalty. I have lost count of how many times have we experienced this in the last 40years?’
Maybe we should not have liberated you in 1945 then. Could of been the one and only German colony! Oh and thanks for years of hidding UK tax money from us in your ‘offshore’ bank accounts.
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Im sorry; Jub i have to agree with you, Ben (78), joining the UK is no where near problem solved, if we as a crown dependency give legislative power to the UK we will open a whole new can of worms, they will start trying to instigate everything that the UK has and Jersey will lose all independency and character as an island. This is simply not the answer, are you even a resident of the channel island?
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78. Ben
I 100% agree with you.
This would solve a huge amount of problems for Jersey in the long run.
We could have a taxing system that is seen as normal throughout the whole world, and get rid of all the stigma that Jersey currently has.
Of course thats not to say there wouldn’t be negative impacts, but hey, you got to crack a few eggs to make an omelette, and the UK would be constitutionally obliged to use their wallet to bail out what ever fails in Jersey.
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81
“Haha, so Arnie thinks that AQ doesn’t want to try and destroy the West? That there’s some form of “moderate” AQ? That’s all I need to know about him. ”
That’s good quality analysis, that.
In fact I said the opposite. I had to qualify the innuendo towards the Us Empire project with ‘warmongering’, whereas I knew that anyone with a basic education could understand that a ‘warmongering Al Qaeda’ would be a tautology.
The ‘warmongering’ UK/US led initiatives were nothing to do with protection in the homeland.
Are you a creationist?
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#80 Jub – How do you think going the other way will benefit us?
The EU is very damaging to Jersey.
As more and more countries sign up to the EU, creating a huge power on our doorsteps, we will become both pressurised and isolated by digging our heels in and wanting independence from everyone and everything.
I have no idea what the future holds for Jersey, but it’s extremely uncertain.
Whilst joining the EU, or becoming part of the UK will be signing our quallies system away, the ramifications for doing nothing might be considerably worse
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@J-Cat #73
“…In contrast; This week I got a matress (30kg in weight) & microwave (both VAT free), from Amazon. Delivery(down in 3 days) cost less than £7 pounds total…”
These shipping costs simply aren’t realistic; Amazon contract out their shipping to a UK agent, he gets paid ‘x’ to deliver that bed in the ‘UK’. However the cost of carriage to Jersey is considerably higher than carriage within the UK, and he lost money delivering your bed; he doesn’t mind though, because only a tiny fraction of Amazon’s beds are delivered to Jersey, and he’s just happy with the profit on the UK contract as a whole. A local retailer can’t use the economies of scale that Amazon’s shipping agent can to subsidize the carriage to Jersey, because, obviously, all his business is in the island.
Don’t be so quick to blame high prices on local retailers, it’s like expecting a corner shop to price match TESCO’s loss-leaders.
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Not all the above posts are from me. There are two Bens on here. Confusing. I’m the 78 one, not the 83 one.
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The Ben at 83 is not me. The others are. Get a new name you.
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87, Beaumont,
May I point out Norway and Switzerland who are both independent of the EU and are two of the most successful countries in Europe, with Norway even recently being rated the best place to live in the world.
Giving up independence to the UK is a horrible thought. Look at Isle of wight for instance, one of the highest unemployment rates in the south of england and one of the lowest wages in the south of england. This is what Jersey might end up like if we join the UK.
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I think we should join the EU, have income tax at 15% for all and have no corporate taxes. Any EU person could come and buy property and live here and we would be quids in.
All the locals and poor people would have to leave, but they spend all their time moaning about how rubbish Jersey is anyway, so its hardly a loss.
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Haha, “Us Empire project.” You’re a cracker, you are. Are you here all week? Sobbing about warmongering. It’s like being in 2003 again.
And no, I’m not a creationist, surprisingly enough. Real atheists don’t turn to the cult of socialism to fill the sudden void.
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ANN we really have to question just why it is that you continue attempts at defending the Chief Minister..whose track record and actions have spoken so loud we could no longer hear what he is saying………..
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Truthseeker-Chief Minster Le Sueur is doing a difficult job in difficult circumstances and deserves support to see the island safely through these difficult times.
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What happens if to get through these difficult times it requires the jettisoning of the offshore model?
An economic embargo would have dire consequences if the EU felt so inclined.
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Ann
Indeed, the CM certainly is finding it difficult to do the job.
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Adrian-the EU can feel inclined any way they like but it wont make any difference.
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Ann-not sure what you mean by comment on 98.
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91.
The reason why Norway is so successful is that it has massive oil reserves that funds the pension scheme, education etc. No wonder it can go it alone.
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Sadly Ann has been listening to far too much of the stuff spouted by the more zany members of island society about independence, small island nation, etc.
Jersey is a semi independent place with a pocket economy that is dwarfed by the UK and is gnat sized compared with the EU, not only that but we are heavily dependent on their continuing goodwill.
If they wished to make life very difficult for us they could without even the slightest inconvenience to themselves.
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Pip-thank you for clearing up point 98. Europe is most definitely bigger than Jersey.
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Oh this is funny. Stand up to the EU? Make the EU compete with Jersey? Many in the EU don’t really care, if Jersey wants to survive, it has to change. There are a number of ways to do it, which would mean you would have a far better chance of competing with small economies based on similar industry.
The fact is, you won’t, and the years of hiding behind the legs of the UK and leaving it to “defend” you seem to be well and truly over.
The UK tolerates Jersey so long as it doesn’t interfere with its own agenda in the EU. So why put up with that? Small states can compete very well with larger ones, so long as you’re realistic in your ambitions. You would be far better off independent, whether together with the rest of the CI, or on your own. But the fact is, Europe is your backyard, so whether you join the EU or not, if you want to use the EU as a market place, you’ll have to acccommodate the EU and its laws – just as Switzerland and Norway do.
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On the see-saw we have 370M on one side and 0.1M on the other side. Which way will it fall?
The world is going down the route of supersized states at present. Until this process is reversed any gnats left beyond the pale will be wide open for swatting when the big beasts get fed up having their bloods taken.
Eventually, unless certain things come to pass, a One World Government could well be the end result. Not that this will necessarily be good for the individual….
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Two thoughts?
1) IOM, was first with 2010 tax idea,which others have copied, and now has mysterious and significant annual handout payment from UK Government withdrawn, causing a fiscal crisis?
2) Is this a case of “Trap sprung, cheese no longer needed”?
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I hope that some people in this island’s government are beginning to realise that after:
1) The UK unilaterally ending the reciprocal health agreements
2) The EU turning round and stating that zero – ten was not acceptable
3) The UK ending the VAT agreement with the IoM
The UK and the EU are perfectly capable and willing to act in the interests of their own citizens above all else.
Everyone knows that a lot of pain in the form of tax rises and budget cuts are going to have to be shared out worldwide and if any government can get a few extra quid from anywhere to mitigate it then they will.
Any Tim nice but dim in Jersey that thinks that they are not going to have to pay their share is living in cloud cuckoo land.
The UK and the EU will force extra costs on to us and the Jersey Finance Minister will have to raise taxes to balance his or her budgets.
In my opinion you are even more foolish if you think that the Tories will come riding to the rescue after winning the next election. The last series of Conservative governments under Mrs Thatcher and Mr Major ended the tax treatment of gilt funds and demanded a defence contribution.
Governments are like princes in some ways, they may claim a democratic legitimacy that a monarch could never pretend to but at the end of the day they are hungry for treasure.
Here endeth the lesson from Machiavelli Clement
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Some more thoughts:
1)Norway can go it alone because it has the same if not more oil and gas offshore than the UK and a population of only 4 million!
They also have thriving fish stocks!
They know if they join Europe, because of their small population size, they will be sidelined and ignored and fleeced!
Norway are the Kuwait of Europe!
2)As far as Jersey goes, we are even smaller with a population of 100,000 (Circa) we have no oil, but our earnings per head (GNP per capita) is right up there with Norway and Kuwait!
Do European tax payers really want to take us on as a real “Dependency”?
If what has just happened in the IOM reflects European feeling, I don’t think so!
We need to express this politely and firmly, and at the same time accent the other advantages to neighbouring States of having a well regulated and competent low tax area on their doorstep, particularly in their dealings with other countries outside the EU.
The main one being as a secure area, governed by a respected legal system, where unnecessary and unproductive bureaucracy can be eliminated from complex transactions.
In short we are the RAM to Europe’s Hard Drive.
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A further thought:
If Scotland wants to go independent, claim what’s left of North Sea oil and gas,and is persuaded to do so on the basis of joining Europe for the handouts,they want to take a good look at Norway and establish why they are reluctant to join with a small population!
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