Rumour reaches me the Foot Report will be out tomorrow.
It’s interesting to speculate on what this report can now add to the issues the Crown Dependencies and British Overseas Territories now face. Since it was announced almost a year ago the Turks & Caicos Islands have passed into British control, Cayman has seen its economic wings clipped and has been ordered to tax, all three Crown Dependencies have been told their system of corporate taxation is unacceptable and must be reformed and the Isle of Man has had £140 million of its VAT subsidy withdrawn leaving it in economic turmoil — but definitely delivering a clear message to those in the place who responded rather aggressively to Alastair Darling’s comment that it was a tax haven.
And yet, there is much still to be done. Regulation in these places has a long, long way to go. They remain secrecy jurisdictions - places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain that is designed to undermine the legislation or regulation of another jurisdiction. They do in addition create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so. If they are to be sustainable that needs to be tackled.
For details of what needs to change read the individual jurisdiction reports here.
Let’s hope Foot does something to shine light into these very dark places, because that’s very necessary.
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Frankly an odd posting, Mr Murphy. Whilst I agreed with your earlier posting that a political narrative probably links the recent actions the UK Government has taken against the Crown Dependencies and Overseas Territories, I find it bizarre that you cling to the notion that the UK is a colonial power, capable of overturning small democracies at will and negotiate with the natives over a loaded gun.
Specifically, no attempt has been made to integrate Turks & Caicos into the UK, or even into the UK tax system, as this would be illegal. The Governor-General his simply exercised his right to suspend the local legislature whilst endemic corruption can be investigated and a genuinely democratic election set up.
Similarly, the Cayman Islands have not had their “economic wings clipped” and the UK is constitutionally unable to dictate its tax system or rates (unless it transgresses its international agreements). Chris Bryant merely pointed out, quite correctly, that the Cayman Government appeared to be running a structural deficit, and that the UK would not guarantee any large scale loans until it had clear plans to move towards a balanced budget.
As for zero-ten, the position is somewhat cloudy, since the general consensus was that permission had appeared to be given from the European Union (and in fact, may actually have been given in the case of the Isle of Man). Of course, the new ring-fenced regimes here and in Jersey muddied the waters, but if the UK were to argue the case (which is what we pay it to do), then it is not entirely clear that zero-ten would be ruled illegal by the EU.
Finally, I consider the suggestion (if I have understood you correctly) that the Isle of Man’s VAT share was reduced as a rebuke to anyone who dared to speak against Alastair Darling strangest of all. If any large scale subsidy existed, then surely it was curtailed simply because there was no reason for it to exist in the first place.
As for the Foot Report, based on the skeletal interim draft — which said nothing and could have been compiled via an afternoon’s desk research and a couple of telephone interviews — I do not expect it to contain much of substance. But if it proposes further UK action against the Crown Dependencies and Overseas Territories, it could hopefully be the straw that breaks several camels’ backs simultaneously, leading to progress to a number of independence referenda.
Iliam
Frankly an odd response
The UK is responsible for international dimensions of the tax affairs of all the Crown Dependencies and OTs – and as they’re, in the casese I name, all secrecy jurisdictions that means just about all their tax affairs
Their laws require UK approval
The constitutions of the OTs are statutory instruments of the UK
They could ask for independence – and then sink without trace, which the UK coould readily ensure happened – especially for the Crown Dependencies by simply deducting tax at source on all payments to them
So stop the semantics – the reality is the power is with London and it has played a game of letting these places play independent whilst it has suited London to allow this to be the appearnace
Now it does not. So things might change
That’s realpolitik and real economics
Why not address that reality
And so long as the UK provides for them as it does I see little problem with this – although if the quid pro quo was a member of the UK parliament each I could live with that
Richard
I’m sure you could live with Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman Islands et al returning a single member apiece to Westminster, and being governed from hundreds or thousands of miles away. However, I suspect that the vast bulk of residents of these islands could not, as they value their own democracies. For instance, what right do you imagine the UK Government would have to dissolve Tynwald — the world’s oldest continuous parliament, with a heritage stretching back hundreds of years earlier than the Commons — and do you really imagine the Manx people would take this lying down?
As for the notion that the UK could follow through with its obligation to honour successful independence referenda and then attempt to destroy the newly independent microstates through unilateral sanctions — now, that really would be the act of a “robber baron state” (to quote Bill Henderson’s recent words).
Thankfully, there are international bodies — the UN Committee on Decolonisation for one — that would slap the UK down hard if it attempted such bullyboy tactics. Just as the Crown Dependencies and Overseas Territories cannot operate as they please without regard to international laws and norms, nor can the UK, despite its vastly larger size.
Iliam
I am actually proposing extended representation – MPs in addition to the current devolved lo
al parliamentsThis happens in Scotland and Northern Ireland and Wales to some degree
Why not in the Crown Dependencies and OTs?
Wouldn't is recognise the symbiotic relationship between the two and the mutual responsibility inherent within it?
Richard
Ah! Sorry to have misunderstood you there.
Of course, the Scottish, Northern Irish and (even more so) Welsh Parliaments have far less autonomy, particularly with regard to internal taxation, than the Crown Dependencies and Overseas Territories.
Are you suggesting that reduced autonomy would be the trade-off? And what if residents of the various islands voted against such a proposal in a referendum, preferring to retain total control over internal matters?