Steve Rodan, the Speaker of the Tynwald, the Isle of Man’s parliament has reacted angrily to Lord Wallace’s suggestion that the Isle of Man be brought under UK control. In a letter he said:
'The Isle of Man does not cost the UK a penny. We pay our own way in the world — every pound spent here is raised here; no block grants, subventions, special funding from the UK, the EU or any one else.
'By statute our Finance Minister is obliged to balance for a budget surplus — this is done consistently; with no external borrowing, and rates of taxation which actually encourage private enterprise and wealth creation, yet this little nation can still point to first-class publicly financed services in health, education and social security.
There’s just one problem with that.
The UK massively subsidises the Isle of Man to the tune of at least £230 million a year and it in total costs the UK not less than £1.5 billion a year.
I have shown this to be the case.
In other words, Steve Rodan is simply not telling the truth.
It’s not an endearing trait, but it puts him in the company of people like Tescos when it comes to inability to use statistics with any degree of accuracy.
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Mr.Rodan is not quite right when he says: “every pound spent here is raised here”. The IoM finncial services industry earns very little from the IoM. The banks are primarily places for taking deposits that are then upstreamed to an onshore parent bank to be put to work to make money, & the IoM simply taxes banks to raise revenue for its budget.
Mr.Rodan speaks as though the IoM has a self sufficient economy. Clearly
it hasn’t. It has an economy highly dependent on its financial services industry but it has no bank of last resort. It is out of step with the UK & the rest of Europe. As a Crown dependency it should be required to conform to international agreements in respect of the management of financial affairs that affect us all. Hopefully the two inquiries (Foot & the judicial commission) will expose the weaknesses in the IoM, including those that make depositing in the IoM a potential risk.
The Kaupthing fiasco illustrates well that the IoM is not capable of dealing with a banking crisis and expats & others are finding out that it is not as secure a place to deposit their life savings as it is trumpt up to be.
This and the increasing impetus by the OECD & others to expose those economies that rely significantly on tax evasion and avoidance to bolster them is going to force the IoM to rethink its whole approach to the way it operates as an offshore financial centre. However I don’t expect principles of morality & ethics will be central features of the exercise.
Jim
http://www.ksfiom-blog.blogspot.com
Richard
has the UK govt. confirmed / validated your assertion that the IOM is effectively a drain on the UK?
No
So what?
Does that change the truth of it?
Richard
So your free to make up whatever you want?
One drain on the UK taxpayer is the salary of the Lieutenant Governor. He appears to enjoy a significant salary for having a role that is little more than a sinecure. He has done nothing to my knowledge to speak up for UK citizens who lost everything when KSFIoM went bellyup in October 2008.
Todd
I have told what I believe to be the truth on the basis of the best evidence available
I wish all others would do the same
Richard
We need some whistle blowers, otherwise we will all be living in 3rd world countries run by despots. We must put some morality back into Government.
conned