Yesterday Tax Research, today the FT

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Chris Steel offered a guest contribution on poverty in Jersey here yesterday. Today he is quoted extensively in the FT on the same issue along with Rosemary Pestana, another key member of TJN / ATTAC Jersey.

The FT charges for its on-line content and so full access will not be available to many. but this gives some flavour of what is said:

"It's screwing the locals to look after the rich," protests Ms Pestana, a hospital cleaner. Mr Steel, who is unemployed, adds: "It's more expensive to live here than in the centre of London."

Their strength of feeling highlights a historic shift in tax policy that Jersey plans in response to competition from other offshore financial centres and pressure from the European Union and other bodies to scrap levies that "discriminate" in favour of foreign investors.

Frank Walker, chief minister, suggests it is "completely and totally wrong" to suggest the changes will hit the poor disproportionately. The changes simply reflect moves worldwide towards indirect taxes, he says.

"In philosophical terms, it's quite a change - no question of that," he says. "But in reality it's a change that most other countries have gone through at some point."

Mr Walker does not, of course, know what poverty is. The tax system in Jersey guaranteed that when he sold his interest in the Jersey Evening Post, the island's only paper, he would not have paid any capital gains tax at all, whatever the proceeds. But hospital cleaners and the unemployed are seeing tax increases to allow such profligacy for the richest members of Jersey society, and for others who abuse the secrecy space it provides. Walker's defence that Jersey is moving the same way as others is also inappropriate. Since when did more of something that's wrong mean you were doing something right?

In fact, the FT, covers the Jersey story in another other article as well today, which cover other themes familiar here, for example:,

At issue are the measures the government proposes to fill a resultant hole in the public finances of between £80m ($157m) and £100m.

The deficit is of course bigger than that, but the point is clear. Jersey's in a mess. The reason is also explained:

The Channel Islands, for example, have come under particular pressure from the Isle of Man, which could reduce its corporate taxes without suffering a large deficit. Its champions claim it has a competitive advantage because it draws most of its revenues from the UK's value added tax system.

I couldn't possibly comment on how they found that out.

As the FT concludes:

The controversy over how many tax breaks to give business and the rich may be far from unique to Jersey, but the island's small size and its dependence on the finance industry make it a particularly vivid illustration of the forces shaping fiscal systems worldwide.

I couldn't have said it better myself.