I note the Bishop of the Isle of Man has issued a new year statement which is reported as follows:
Bishop Robert is calling on the whole community in the Isle of Man to work together, to weather what he fears will be a very difficult year.
In his new year's message, he says he's deeply concerned about the impact the loss of government revenue, due to the new VAT deal with the United Kingdom, will have on many Manx people.
Bishop Robert says those with the least to start with will probably suffer most when cuts are made in public spending, and he is hoping for tolerance all round, as painful decisions are made.
He hopes the Island's well-known community spirit will continue to flourish
He should have mentioned the simple solution to the Isle of Man’s problems: it should raise taxes.
The place is very under taxed and yet wants public services.
The equation is easily squared but the stranglehold of the finance industry will, if it continues, drive the poor of the island to desperate poverty. That’s what offshore finance does: it imposes cost on the poor to benefit the rich. The Bishop should have said so. It was his Christian duty to say so. I hope he does so in future.
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Not really the kind of thing the Bishop should be commenting on though, is it?
As you said in your post above about education, its retailers that pay the low wages that entrap people. Its having the finance sector that brought the Island out of the desperate poverty it endured in the seventies and eighties.
Sure it’d be nice to be less dependent on a sector that draws so much controversy, but the Island has no natural resources, little potential for tourists and the cost of shipping limits the potential for manufacturing.
@triskelion
It is exactly the thing a bishop should be commenting on
If religion and faith have no application to the real world they have no use
Of course those who want them to be of no use say exactly what you have done
But the reality is they only have meaning in relation to the real world
Which is why you are wrong
That’s rather a blanket assumption isn’t it? Just because I feel its inappropriate for the Bishop (indeed a foreign appointee who infuriatingly sits by right in the Island’s parliament) to comment publicly on the Island’s taxation policy doesn’t therefore mean I consider religion and faith to have no application in the real world.
There are a great many areas where I believe religion and faith play a positive role in the real world; charity, community, the bereaved, education.
Which is, Richard, why you are wrong.
Richard, While Religious, group leaders and indeed interested individuals should offer their opinion of possible solutions to any problem, statements by Religious leaders are often regarded as unwanted interference in State affairs and could serve to have the opposite effect to that you desire.
It could be that the devout would adopt the view as their own, irrespective of sense or that the majority would question his qualification to express such views?
If we were to consider that the Church should have a socialist viewpoint, then taxing those least able to afford it would, surely, be far from it’s collective thoughts? JWK.
@triskelion
The classic argument – just tend to societies wounded and don’t you Christians dare ask why they’re wounded
You might have noticed a certain Jesus Christ got very angry when confronted with abuse
So should all Christians now
That’s not socialism
That is Christianity
It came first
As an atheist myself I none the less agree with Richard. Religious leaders are surely duty-bound to comment on moral concerns. Tax is a moral issue.
@jwk
Your comment makes little sense
But if you’re saying the Church should steer clear of state affairs you deny the essential nature of what it is to be Christian
I can’t answer your question though. I cannot fathom what you mean
Richard
Have to agree – perfectly reasonable for the bishop to make such comments exhorting manx folk to apply a more Christian ethos in the difficult economic environment ahead for the IOM – thats his job.
But the following is perfectly valid – and applies equally to the CI ( except the tourism bit)-
Sure it’d be nice to be less dependent on a sector that draws so much controversy, but the Island has no natural resources, little potential for tourists and the cost of shipping limits the potential for manufacturing.
The tax base for the CD’s will have to broaden – zero/ten is dead – unfortunately IOM and Jersey seem to be slow in realising this. However over 2010, a new tax regime will be designed that will be ‘EU- compliant’, hopefully with some inter-island cooperation and the finance industry in the CD’s will evolve and adapt.
“zero/ten is dead – unfortunately IOM and Jersey seem to be slow in realising this”
Don’t believe this is true. I think the Islands are extremely savvy and they know perfectly well that zero/ten is “dead” but it works for them so why bury it any faster than they have to? Here in IOM I am pretty sure that when they first proposed it they knew the full package wouldn’t pass EU muster and that is why we only found out about the distributable profits charge on resident companies 3 years later. Another 3 years on when that hit the buffers we got the attribution regime and now a full 10 years on the rumblings are that zero/ten doesn’t cut it at all. Another model will be on the drawing board as we speak. It is a game of chess in which the Islands work out their next move AND the opposition’s next move in the fairly certain knowledge that it will take the lumbering, corrupt, bureaucratic giant a good while to reach the same conclusion.
[…] commentator on this blog has said, referring to the UK’s requirement that the Crown Dependencies drop their zero / ten tax […]
[…] commentator on this blog has said, referring to the UK’s requirement that the Crown Dependencies drop their zero / ten tax […]
Hello Richard,
Some corrections relating to Jesus.
Jesus didn’t have much interest in taxation policy : he demonstrated his disinterest in the subject with his response when asked whether jews should pay the Roman head tax. His answer (Matthew 22:21 if you’re not familiar with it) demonstrated he was more concerned with people’s spiritual pursuits.
I think you might be confusing this account with his anger at the money-changers in the temple – that wasn’t tax policy, rather the desecration of Jehovah’s house that made him lose it.
Just the facts – but it’s important to get them right when using religion as your platform to discuss worldly matters.
@Carol
On the subject of Christians and the state – I have to suggest that Christians should be primarily concerned with repairing the damage society does to people and tending to their own spirituality and behaviour.
Once religion starts to gain influence in the state, we aren’t too far away from witch burning, the Spanish Inquisition and stoning people to death for adultery – religion and politics have always been unhappy bedfellows (Just read the Accounts of Samuel if you don’t believe me).
@RMR
Wrong
Christian teaching is very specific about tax
Try reading Romans
And your comment in Matthew is simplistic in the extreme
Your facts are wrong
@RMR
Ah, the old one – feed the starving man but don’t ask why he is starving
Are you a Pharisee or a hypocrite
Please let me know
If religion does not ask why the man is poor then it fails
You’d like it to fail, quite clearly
@Richard
No Richard, not wrong.
At no stage does a man’s worldly wealth take precedence over his spiritual health. Don’t be lazy in debate : Cite your quotation (chapter and verse) and I will explain its meaning to you.
If you want to discuss Matthew in more detail, let’s do that.
Cures for ills don’t happen in this world, they happen in the next and they happen as a result of faith. Jehovah sweeps away all the injustice during Armaggedon and it is utterly beyond man’s power to do so. Do you think Jesus enjoyed watching the poverty around him – no. Did he have the power to sort it out – yes. He didn’t because he needed to instill faith, not a fix.
Pharisee or hypocrite : I’m going to go for hypocrite. I suspect you’re one too if you’ve the honesty to admit it.
Finally, do I want religion to fail? I don’t have an opinion, I’m not a believer.
@RMR
‘(Just read the Accounts of Samuel if you don’t believe me)’. I already said I’m an atheist so entirely uninterested in Samuel – he’s old testament isn’t he? I have far better things to do with my time.
@RMR
Very kind of you
But if I need guidance I’ll go to those with more insight than you
I’d start with my parish priest
And then with two supporters of my work of late – my Diocesan Bishops
Hyporcite? No. Sinner? yes
@carol
The Bible’s just another book – you don’t have to believe in God to be allowed to read it.
If I understand you correctly, you’re saying you don’t have the time or inclination to read it and yet you’re happy to pronounce on the duties of Christians – I’d be interested to know if you think your opinion should be taken seriously when it’s not researched.
And Richard, if you want to know the Bible, read the Bible – don’t rely on your priest or your bishops or Google.
I’m sorry if I seemed to accuse you of being a hyporcite(sic). If you have one enduring fault which will hobble all of your work, it is that you argue to win rather than to influence men’s hearts.
RMR
I do read it, quite often
Some even think I understand it quite well too
But by and large this is not a theology site
And of course I seek to win
I know I can’t win some men’s hearts
I have to win enough to achieve a democratic goal
Nothing else is good enough for those in need who too many would ignore
Richard
Off topic? – for taxation, this thread always was.
The real topic here is intellectual rigour and intellectual honesty.
Good luck with your quest – you’re doing it the hard way and you’ll need every break you can get.
As a Manxman I believe that everyone, including the Bishop, has a right to comment on the way tax is raised and disbursed. I note that he has also spoken out in the LegCo for the inequities of the “tax-cap” of £100,000 to be addressed in the forthcoming budget. I fully support him in this.
One issue that needs thinking about, Richard, when you imply some countries don’t have high enough tax rates is “what is the right tax rate?” Clearly it is not at the level of the UK though no doubt the UK Government would like it to be. As long as the UK has such an inefficient public sector, poor administration of public funds, involvement in very questionable wars, over-government and unsustainable borrowing it will have to tax at the upper end of the scale. This surely does not mean that every other legislature has to inflict on its people the UK levels of tax if they are better run countries or indeed need less public services? I would say that in the case of the Isle of Man the correct rate has to be the amount of tax needed to provide the services acceptable to the population within the legal requirement of a balanced budget. You are better positioned (perhaps) to estimate how much the previous agreement between HM Treasury and the Manx Treasury overpaid to the IoM – though your figure of £200 million does not seem to match either the UK and Manx Governments numbers. There is no doubt that the response to any future revenue reduction in the Isle of Man will be a combination of further significant improvements to the effectiveness of the Manx Public Service to cut expenses, possibly in the medium turn greater governmental efficiency (maybe even politicians paying for their pensions), some reductions in public services and increased tax – but nothing like the levels charged in the inefficiently adminstered United Kingdom.
When you make a broad comment that the IOM is ‘under-taxed’ do you have a view on what the correct level is?
Richard you have to remember that not all countries are the same. The IOM has things to clean up. So, I understand from things you have written, have the UK and the USA. The IOM as a small nation has a much higher level of public interest and involvement in its historic political system. The Manx are not panicking at the thought of change but equally they do not want to end up in the kind of inefficient and expensive (to the UK taxpayer) mess and bureaucracy that the UK has sunk into.
a) You are not a country.
b) You were enjoying OECD average state spending which relies on tax at broadly OECD levels – i.e. about UK average rates
c) You tried not to pay for it yourselves
d) Of course there is inefficiency in HMG – that describes human activity. It is not abberational
It is not chance around 40% of GDP is about European consensus on state spending and so tax – it is what people want
It will go up. Aging populations and the inability of the young to access housing will require that
Richard
You are talking averages and averages do not apply to specific situations anywhere.
The UK runs a very high tax rate and an enormous deficit paid for by massive borrowings, the servicing of which has to be paid for by UK tax payers. The IOM will clearly have to increase both government efficiency and ome taxes to continue to produce balanced budgets but the levels will be nothing like the UK rates. Most of us look on this as an opportunity for greater efficiency in government – maybe a model the UK can (will have to) adopt?
For correctness, it was the UK and the IOM that agreed together between them the previous VAT sharing arrangements – not the IOM on its own. Obviously this agreement has outrun its time. Your comment ‘You tried not to pay for it yourselves’ overlooks the fact that there was an agreement in place between two governments – not one small government trying to hoodwink one large one.
Possibly the term ‘nation’ is more appropriate for the Isle of Man – being made up of people deemed to share common customs, origins, and history, that is self-governing and not part of the United Kingdom.
In fact, a local councillor in the Isle of Man has just made the point that those in social housing are paying too LITTLE.
I agree. And it WILL change. Means testing is on the way.
The Isle of Man IS a country to all intents and purposes. The fact that we choose not to embark on illegal wars (like the Labour Party in Britain did) saves us money, and while the public sector is pretty bloated on the island (and they’re about to get a nasty taste of reality soon), it’s nothing like the level of bloatedness (nor the VERY nasty taste of reality that is coming) in Britain.
The fact is that pro-taxers can bleat all they want about wanting to soak the rich for 80 per cent of their money, but there will always be somewhere that is prepared to soak them less. And they will go.
Hopefully the rich ones in England, fed up of a UK government that was losing money even in the good times, will come to the Isle of Man. They are welcome here. They will keep our tax rates LOW
@Gutbucket
Your tax rates were low becasue you were subsidised
I guarantee they will rise
And as for government inefficiency – I note Cameron and Osborne have so far found £1.5bn of cuts – that’s 0.3% or less of government spending
The reality is that no one has ever found those cuts – because the need is real and the spend (overall) efficient – not perfect, of course, but as good as probably can be expected
You forget that systems are human
It’s a common failing of those who live in goldfish bowls
Richard, of course the Isle of Man is a country, as we are and Guernsey too. The Crown Dependencies don’t have all the trappings of being a state [yet], and that is perhaps what you allude to.
As I observe the situation from down here, the IOM does need to ask itself how much of its income it manages. Here we have our income tax, our goods and services tax and our social security contributions. Thus, we can honsetly talk about ‘tax’ to GDP ratios etc. In the IOM, they have their own income tax, but the VAT and National Insurance systems are wholly imported from the UK. That is a big risk for them, IMHO, and allows observers like you to chip away at the veracity of some of their government’s statements.
Girrly
Richard, you are correct to say that taxes will rise on the IOM. That is a self-evident truth but a broad generalisation. The fundamental question is , by how much? I can generalise too and say that I guarantee that they will not increase anywhere close to UK rates because they do not need to.
You may be aware that at present the Public Service have been asked to identify cuts of 15%. I cannot talk for all departments but I had a meeting with the head of one of the bigger spending departments and they had identified the options to achieve this. If this is happening in all departments of government it will cut costs by about £75 million which would be a good start. There is of course a political decision as to what happnes next but there are plent of options. Time will tell whether it is 0.3% or 15%!!!! Whilst there is concern in the PS about cuts those of us in the private sector welcome it.
The Manx I talk with on a day to day basis are not phased by what is heppening (except some public servants). They recognise that the previous VAT agreement, negotiated and agreed between the UK and the IOM governments, was due for review. Frankly if this means some increase in tax we will still be a reasonably taxed state and we will still be balancing our books. What we need to ensure is that any increase in tax is spread equitably across the population.
You and I can hypothecate for all it is worth but the Manx Budget will be the real indicator of how the Island will move forward.
@Paul Kerruish-Kelly
It’s going to be very tough on the least well off in the IoM
As in all tax havens
Rich exiles exploit the place
Real local people suffer
It’s called capture of the state
You seem to be changing tack Richard. At least you are recognising the IOM as a state!! In fact when you consider that 70%+ of UK legislation has to be EU compliant these days one wonders if the UK is an independent country in the sense of having control over its own destiny.
To come back to the Bishop’s statement. In my opinion the tax cap needs to be reviewed as part of an overall approach to balancing the budget. I do not think that this would lead to a mass exodus of the 90 people benefitting from it. Half, at least of them, are very long term residents who were happy to live here before the cap was introduced. One or two of the others might move but wen you think of the costs of relocation it would be a line ball decision. I know that one local ‘entrepreneur’ said in the FT that if the Manx Government increased his tax by one penny he’d be off but really does that matter – it’s all parade ground sergeant major bluster.
I hope that you will be proved wrong about the less well off paying for the better off (as no doubt you also do). The Manx budget will be the judge of that. But my point is that even if (as I hope) the lower rate of tax is left alone and in consequence the upper rate is increased more it will still probably be about half the UK top rate which is where it was approximately before the UK announced a move to a 50% rate. Clearly I would at least like to see the tax cap changed to reflect this too. There are other things than taxes that make places attractive to live. Adjusting government expenditures and revenue collection to reflect the change in the UK/IOM VAT agreement will not make the IOM any less pleasant a place to live.
The other issue that I really do feel to be quite different beween the Isle of Man and the United Kingdom is the proximity between the people and their political representatives. I can go into the Chief Minister’s electrical goods shop in Castletown and be served by him and have a conversation about what is going on. Imagine trying to have an over the counter chat with his UK namesake! This does mean that our politicans cannot distance themselves too much from the masses, unlike in larger countries. This can be called parochial! It can also be called keeping in touch. The gulf between the so-called political class in the UK and the UK population in general is something we would not tolerate here – but you’d have to live here Richard to understand that!
@Paul Kerruish-Kelly
Paul
I guess that Richard would ask both of us what the distance is between the Chief Minister and the banks and trust companies; which – like it or not – is probably more crucial than the residents (in your case) of Castletown IOM.
Girrl
Jersey Girrl, It depends on the definition of crucial.
I would say the distance is probably shorter between the UK Government and the financial sector there judging by the curious largely taxpayer funded one-off bonus tax that Alistair Darling introduced. It was also interesting to be reminded in the FT today about quaestionable UK tax practice: “Quite why private equity billionaires pay lower rates of tax than their cleaning ladies do on their wages has long been a puzzle.” Certainly the UK Government is far from squeaky clean when it comes to sheltering the highest earners from the burdens of tax and from attempts to stop major elements of the UK economy from relocating elsewhere.
In the tight-knit community we have over here politicians have to try and balance their position between the business community and the voting population. The present situation, which requires firm action, is placing stress on the need to get this balance right! One gets the impression that the Channel Islands may lean a bit more towards the business community and your wealthier residents. Is that the case?
@Paul Kerruish-Kelly
Paul
Your final point may be true; although I don’t know enough about the IOM to be sure. Business here has spawned some of the political elite (think of Frank Walker), and it has been the internationally focussed major businesses. We would probably justify that by saying that those businesses are also the heart of our economy.
Your situation (I hear anecdotally) is that corner shopkeepers are the political elite. That may actually be a defence against influnece by big business, as Mr Brown is unlikely to understand it based on his knowledge of 5 amp fuses. Richard won’t accept that point, I am sure!
Girrl
It looks from here as if the UK people and their public representatives are very isolated from each other. As Rick Stein once famously said, the difference between an Irish politician and a British one is that the Irish politicians still know the price of a pig. I understand many of Richard’s concerns – although he should really be picking on the UK and the US first if he is after massive tax inequities. Maybe the fight is too big for him to tackle. However I am not sure is that from a distance he fully understands the close relationship in the IOM between the population and their representatives and the effect that this has on day to day political balance. I would encourage him to talk to the ordinary people over here as they don’t have two heads! I have no doubt that things have to change here to deal with the new agreement on VAT but maybe not as radically as he postulates.
Some ‘ordinary’ people in all the Crown Dependencies and many secrecy jurisdictions seem to like and talk to me
But it does not stop me thinking their politicians have been captured
Richard
What we are seeing – ordinary people and politicians – is a constant move towards ‘regularising’ the economy. As I have said on your blog before, our pace doesn’t suit you; but so be it. Jersey is a democratic country and must find its own way. If we get it wrong in the current world situation, we know that we are dead. If we get it right we can continue to play a small but important part in the economy of Europe and to a lesser extent the world. We watch your output for the occasional (very rare now) leak or genuine insight, but pay little heed to your agenda.
I am not naive, and can see that some aspects of what has gone on here in the past (and continues perhaps to a small extent) is clearly no longer acceptable. As commenters on another entry said about Montepelier planning and the Isle of Man (it was here too of course) – it was nasty stuff, and I certainly condemn it. As a person well-versed in this area, however, I see it as part of a dynamic tension that always exists between a taxing jurisdiction, its taxpayers and their advisers. The key is for countries to help each other to stop it: and Jersey does that in shovelfulls – even though you may not be able to see any public evidence.
The Girrl