Jersey has voted through its new 0/10 tax laws. What this means is that it will in two years time have a 0% corporation tax except on finance companies, which will pay 10%. As a result it will suffer a financial deficit of maybe £120 million from 2008 onwards.
I'm proud to have done as much a I could (which in this case was quite a lot ) to have made these tax changes fairer to the people of Jersey, more compliant with the requirements of the international community and better for the long term interests of Jersey. I'll be candid: I know I changed the first proposals for this tax, radically. But the UK government (quite inappropriately, as it has no power to do this) has now said it thinks the laws compliant with EU requirements and so the much revised package, introduced after I exposed the massive and deliberate abuses in the original package, has now been approved by the States.
I'm pleased to see that seven brave members opposed the move. I was touched to see that some had clearly been reading this blog as it appears numbers only available here were used in the debate. I'm delighted they took this stand.
For the rest, what can one say? They've voted for a tax strategy which if translated to the UK would read like this:
1 We're going to cut government revenue by £100 billion - that's more than the cost of the NHS. We have no idea how we will make good this deficit, if w ever can;
2 You will be paying much more tax despite this cut in our revenue, and the inevitable cuts in services that will follow on everything from health to education to pensions to transport and social welfare;
3 We've done this so that residents of other countries who are evading or aggressively avoiding the tax they owe to their own governments can continue to do so in your country - for which you are now paying a very high price.
I do not exaggerate one element of this: that's what Jersey has voted for. Why is it no surprise that the prime minister and finance minister intend to stand down at the next election? And is it any surprise that Senator Stuart Syvret, easily the most popular politician on the island, and a steadfast opponent of all that is wrong in the place has indicated he does not want to take over? It would be a poisoned chalice. That's because it's not too hard to see why I say it is inevitable that Jersey will go bust in the next five years or so. It cannot avoid it on this basis. Then watch the finance industry get out first.