The Isle of Man Today web site has noted:
THERE will be a public announcement if any changes of substance are to be made to the VAT sharing arrangement, the Chief Minister told the House of Keys.
Tony Brown revealed in an exclusive interview with the Examiner last month that the UK continues to press to take another substantial slice off our VAT revenue.
He said the UK had made its intentions quite clear that the VAT share the island should receive should be no more than we would collect if we were independent.
And he said if the UK pressed ahead with this, it would mean a substantial cut in government revenue on top of the 25 per cent loss resulting from the last VAT bombshell.
Well, let me make the announcement for him then, since he seems so reluctant to do so.
My information makes it very, very clear that this reform is going to happen.
Rumour reaches me that we should shortly see announcement of a massive increase in GDP in the Isle of Man.
Why could that be? Well, the VAT sharing agreement with the UK happens to be based on ratios related to relative GDP. So if the Isle of Man manages to report a significant GDP increase whilst the UK's in the doldrums of near recession guess who wins significantly? Yes, our friends in the Irish Sea.
But surely they wouldn't do such a thing, would they?
They were stupid enough to go ahead despite the warning as to how it would be received in the UK Treasury that I gave. And as I showed, their claim that the resulting revised GDP was 'correct' was utterly spurious - despite their furious briefing to the contrary.
Well, more rumours reach me, and yet again they suggest that I'm right on this issue. The UK Treasury is furious with the Isle of Man for this blatant attempt to re-jig the data on which the Common Purse Agreement governing the sharing of VAT revenues is based. And as a result they're not just looking at revising the agreement using the data I have noted, they're arguing the Isle of Man has been blatantly manipulating its VAT, for example by encouraging the film industry and yacht registration to distort its apparent VAT position.
The result is that The UK ate not just arguing the GDP data is wrong - they're seeking to take these other factors, which are seen as tax haven abuse, out of account too.
It's the price you pay for playing fast and loose, and as a result the peope of the Isle of Man will pay a heavy price.
It's time their Chief Minister told them the truth - because if I know this you can be sure he does too. But only one of us is saying it.
I have not yet worked out what the change may be - I have the data to do so, but not the time. But if it's as tough as I suspect the impact on the Isle of Man this time may be as significant as last time. After all - it's just not true as the Isle of Man claims that for VAT purposes income per head there is £45,000 - some £17,000 or more a year in excess of the UK. And even if it was - the UK should not be subsidising it!
There are tough times ahead in the Irish Sea - and it's all the fault of the Isle of Man politicians who tried to pull a fast one.
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As long as the UK stick it to us before September, so the right people get the blame for it, I’ll be happy enough. It will be awful for all those public sector workers who have to get sacked, and I daresay their unions won’t be thrilled, but if there isn’t enough money to pay a colossal public sector, they will either need to take big pay cuts or big redundancies.
It makes you wonder why those of the island’s public sector pay union fees when their unions really cannot protect them against this sort of thing.
[…] Research: In case they haven’t noticed, all the Crown Dependencies are in deep financial trouble, unable to balance their books and are in possession of tax susyems ruled illegal by the European Union. But what the heck, why […]
Given enough rope and Mr. Anthony Brown’s government will eventually hang itself.
Regrettably not before the island suffers irreparable harm placing the future welfare of the vast majority of decent Manx people in jeopardy.
There are indeed tough times ahead in the Irish Sea — and again it’s all the fault of the Isle of Man politicians who tried to pull a fast one. When will this nonsense end?
Interesting post. Income per head is quite likely to be somewhat, maybe even significantly, higher on the IOM than in the UK. This is because of a number of factors. The unemployment rate is 1/3rd of the UK’s, the presence of proportionately more financial sector and specialist jobs and the probable presence of more HNW individuals as a percentage of the poulation than in the UK ‘average’. Per capita income is a very blunt instrument and somewhat irrelevant to use when comparing the average for a population 84,000 people with the average for 60,000,000 – to state the obvious the UK average takes account of an enormous range of regional variations. If you compared the IOM with London and the South East the numbers might look much closer. Even then low paid jobs are probably a higher percentage of total jobs in the South East than on the IOM,
It is however becoming evident that the Chief Minister either does not know or is unwilling to say what Treasury is forecasting in terms of possible additional revenue losses. My guesstimate is that it will be less than you are probably thinking – even if you have not calculated a number (if you are basing it on per capita income) but it would be interesting to get an idea of the range of possibilities given that an election is coming soon.
Peter Karran, our equivalent of Jersey’s Stuart Syvret, tried his best in Tynwald this morning to get Annie Craine (Treasury Minister) to admit the truth that we all know alraedy – although we don’t have the numeber of millions yet – have a look here http://www.tynwald.org.im/papers/early/tynwald/ept210611arhc.pdf. She didn’t quite answer!!!!!
BTW, and I know that I may have caused some confusion, I am not THE Juan Watterson, I am the Juan Watterson.
Those who may still be any doubt about the competence of the Isle of Man’s so-called “government” (Tynwald) should visit:-
http://www.tynwald.org.im/papers/early/tynwald/ept210611arhc.pdf
Read the transcripts of parliamentary debate (Tynwald Hansard) recording exchanges between the Chief Minister Mr Anthony Brown, the Hon. Member for Onchan Mr Peter Karran, the Minister for the Treasury the Hon Anne Valerie Craine accompanied by sycophantic grunts from the Hon. Member for Michael. and a member of the Legislative Council.
Read up to Para 680 – If you can stay awake long enough — or not collapse laughing.
Second Form debating society or the script for a children’s comedy programme comes to mind.
Hm… I may be going mad, but I can’t seem to find the link to the Tynwald papers for 21st June. I’m beginning to wonder why I’m surprised as I’m seeing a lot of mis-information and spin of late. If anyone managed to download a copy, I’d appreciate it if you could post it online as it is in the public’s interest.
If I let the anger simmer down a little, I would probably say it doesn’t really matter if the people in Tynwald change (although there seems to be a problem for these folks to change their view in light of new information, changing contexts or even whole ideological shifts). The situation needs a more systemic set of interventions – which is why changing the VAT agreement alone probably won’t change a thing.
I must apologise for the line I paraphrased/plagiarised from Sir Terry Pratchett – “when banks fail, it’s not bankers that starve” – part of a wonderfully pertinent speech from the TV/DVD adaptation of “Going Postal”.
Forgive me if I am mistaken but…
Was the VAT agreement favourable to the Isle of Man in exchange for the royalties over the gas fields in the Irish sea? The IOM did not argue too hard when the UK claimed the gas fields in the Irish sea that the IOM could have claimed.
If this is the case and I suspect I am correct then the gas fields are now fair game for a re-negotiation as well. Perhaps Tony Brown has been warned off and made to shut up, I am sure no Manx patriot would accept such a deal unless they were made to.
The Isle of Man has a coastline of 160 km, and claims 12 nautical miles (14 miles or 22 kilometres) of territorial waters, but only holds exclusive control of fishing, mining, oil exploration, rights in the first 3 miles.
The Isle of Man is not a sovereign state and although it likes to pretend it is self governing with its own parliament in reality it is subjugated to the UK in anything of any importance; to the extent that the Isle of Man is becoming increasingly dependent on the UK for its very existence.
To enter into an agreement with the UK to exchange royalties on gas production in return for a VAT sharing agreement based on ratios related to relative GDP appears the sort of dodgy deal that would appeal to the Isle of Man and/or inhabitants of Cloud-Cuckoo-Land.
Your guess that Chief Minister Tony Brown has been “made to shut up” is doubtless true — but perhaps not in connection with this myth.
The PSG would appreciate further information on this matter.
The official line on the restatement given the the Manx was to effectively bring the IOM statistics in line with international standards.
I’m sure the Manx public would be very interested in HM Treasury quotes on this.
If what you say is true – that is, there is evidence that the IOM Government was trying to swindle the UK – it suggests an issue of Governance. Governance is something the UK has authority to do something about, and I’d guess that many Manx folk – including myself – would support their action in this case.
No freedom of information on the Isle of Man means the only story we get is the one fed to the media! For example, the IOM has lower unemployment than the UK – in the long-run, this is actually not plausible without fiddling the statistics (accidental or otherwise).
…a bit like having a higher GDP/Capita than the UK or no Sovereign debt whatsoever are both evidence enough of parasitic (and self-destructive) economic policies.
The UK simply has to review the VAT situation as it can’t raise its rates of taxes to the optimal level of economic output to raise revenues to a sustainable point (i.e. no budget deficit) while havens exist. It has no choice.
As a side, the IOM Government has no idea how to deal with this or what good economic policies are (unless they’ve got round to reading a well-researched piece of analysis on all these issues delivered last year to the Treasury, no less,that concluded “the UK will be back on VAT, unless you do a, b, c” and has formative policy ideas inside, which I can easily build upon).
I suspect, therefore, that if negotiation were to happen with the current shower at the top of Tynwald, that the IOM will be in a dire mess in a few years time. The rich won’t starve. The ordinary population might.
This is blatent and perhaps terminal abuse of a Nation by the super-rich and the power-greedy. My Nation.
(I’m cross, sorry for ranting!)
An increasingly large number of people commiserate with the plight of the Manx people.
It is a wonderful island and the people are hospitable and convivial – one of our members often regales us with stories of the Easter Rugby Tournaments (where beer and partying was as popular as the rugby!)
Regrettably the island is now controlled by an authoritarian government which owns the media and allows no freedom of information to the people. The “finance sector” has come to dominate the island and exerts even more influence than the government itself; and a relatively small but powerful elite have taken control while the ordinary Manx people are left helpless.
As you write “The rich won’t starve – the ordinary population might.”
Fortunately people like Richard Murphy are campaigning on your behalf and there will be better days ahead. Getting rid of the wretched government in this year’s elections would be a good start.