I spoke at a meeting of the Centre for the Study of Financial Innovation last week. It was a pretty unpleasant experience, surrounded by those who seemed to take no objection to the chair’s suggestion that there wasn’t enough tax evasion in the world.
Whilst there I sat next to Richard Hay, a lawyer well known in the offshore world who argued strongly in favour of Jersey being a great place in front of an audience that included at least three Jersey funded representatives – all of whom bleated about how misunderstood they were in the wider world.
The next day, I now note, Richard Hay was at a jersey Finance funded event in St Helier. How incestuous! And how unremarkable that he beat the same drum. As the Jersey Evening Post reports, he said:
Jersey is in danger of ‚Äòmaking many friends but having no food’ by negotiating away its autonomy over tax and financial regulation to placate the UK, Europe and other global bodies, an international law expert warned yesterday.
And he added:
Jersey was, for example, getting very little in return from agreeing to share tax information with other jurisdictions, and should seek reciprocal benefits such as double taxation agreements.
And, in support of his free market credentials he suggested:
More money should be pumped into bodies such as Jersey Finance, which promotes the Island as a finance centre globally and which he described as the best in its field in the world [because] ‚Äòthe whole strategic direction of financial services is extraordinarily under-resourced in Jersey,’ he said. ‚ÄòJersey’s leading financial services industry will require committed resources to defend it [from European pressure to amend its tax structure].’
And he continued in the same tone warning Jersey of the forthcoming apocalypse and impending annihilation of they did for a moment cooperate with the EU, tax a company or exchange any information with another state (I exaggerate only very slightly).
This is absurd advice. Firstly – when as Hay recommends Jersey must remain part of the UK (he argued against independence) Jersey has no choice on this issue.
Second, if Jersey has no choice on this issue proactive cooperation is likely to win a lot more business than active opposition which will drive punters away because of the instability that will cause – which is anathema to finance.
Third, arguing against tax on companies will doom Jersey to ongoing deficits and eventual bankruptcy.
Fourth – it shows an adherence to the old models of finance that are dead in the water.
Last, it shows these people have no Plan B.