A week ago I published here the weekend essay I had written for the Jersey Evening Post, published by them on June 26. I made the suggestion that Jersey has a future, but not with its finance industry, which I think is moving into its twilight zone in the Island as its markets are progressively closed down by the advance of tax justice.
It would seem that Jersey's former Chief Minister and current Minister for External Relations (they do love their titles in Jersey) Senator Ian Gorst did not like what I had to say. The response came this weekend. This was the headline:
I would, of course, reject that suggestion. It was elaborated in Senator Gorst's letter (click on the image to expand it: you may need to do this more than once):
I think Senator Gorst doth protest far too much, not just about what I said but also in his angry outburst at the Jersey Evening Post, which as I have noted came out very strongly in support of my argument that the Jersey tax haven has not been run in the interests of the people of Jersey.
The reality is that Jersey has, contrary to what Senator Gorst says, been dragged, kicking and screaming out of its darkest days as a tax haven. It was forced to end its abusive tax regime by the EU in 2005. It was finally forced to be compliant with EU requirements in 2010. It fought information exchange long and hard from 2005 to 2013. It opposed beneficial ownership disclosure. Even a few weeks ago it very publicly opposed Biden's tax plan; now it applauds itself for signing up to a plan they could not beat. The suggestion that Jersey has ever been enlightened or has ever taken action to improve transparency is absurd. It simply has not.
And there is good reason that. Offshore is not a reference to geography. Offshore refers to a regulator presuming that a transaction does not need to be regulated because it is deemed to happen ‘elsewhere', which is anywhere beyond the boundary that a government chooses to draw around itself. In other words, the whole purpose of Jersey, as an offshore centre, is not to be geographically separate from places like the UK, but to instead be regulatorily separate from the UK and other countries. Its aim is to offer lighter touch regulation to attract business, knowing that in the process it undermines the law and regulation of the countries where the transactions recorded in Jersey should really be disclosed. That is the only reason why Jersey's finance sector exists; it offers light touch, low tax regulation that undermines the law and regulation of other places. The cost of recording transactions in Jersey cannot be explained otherwise.
Ian Gorst claims that this policy is good for Jersey. He justifies it by that claim. But what he ignores is the external pressure on Jersey that has steadily closed down successive parts of its business offering, as I have detailed. That pressure will continue. As I predict, the remaining business available to Jersey is in steady decline because tax justice is winning. Ian Gorst refuses to recognise that. He has no plan for that eventuality. Instead, as I said in my article, he follows ‘the Jersey way', which is to pretend a problem does not exist and to tell those who point it out that ‘there is a boat in the morning', suggesting that they should go away.
Senator Gorst would like me to go away. I won't. I will still point out that what Jersey is offering is internationally unacceptable to most countries, who are steadily (too slowly for me, far too quickly for him) closing down what he thinks to be Jersey's lifeblood. He can deny it, but all the evidence is on my side.
The Senator needs a macroeconomic plan, rather than a tinkering at the edges of its tax policy, to which he refers. But he has not got one. Nor has anyone else in the Jersey power elite. And that is why the Island is in trouble.
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Richard, how meaningful are these OECD and other assessments which he quotes ?
Politics…..and all appraised against rules that are out of date by the time they are out in place in the fast moving world of tax reform
Thanks. And I second Pilgrim.
That this man has such a title in the first place (‘senator’) tells you all need to know about the corruption of politics by money.
And good for you BTW Richard.
After reading “the finance sector – run almost entirely by those who have come to the island to service that tax haven and who have no allegiance to it” in your linked post I was struck by a recent JFSC Commissioner appointment and the announcement of it dated 28 June 2021.
Ms Bowes arrived on island from the UK in May of last year, presumably because she appears to be partnered to someone who at that time took up the role of CEO with a company that provides professional, fiduciary, governance and structuring solutions to the sophisticated wealth market. Ms Bowes was selected by a sub-committee of Commissioners made up of off-island Mark Hoban, off-island Annamarrie Koerling and on-island Monique O’Keefe, who only came on-island in 2015 because she was partnered to someone returning from UK to provide specialist entity management, governance, regulatory and consulting services on-island.
So, not only does the finance sector appear to be run almost entirely by those who have come to the island to service that tax haven but it is almost entirely regulated, supervised and policed by others who either don’t reside on the island or only reside there because they have an intimate connection to key players in the finance sector they met in the UK.
At least Mr Gorst’s reason for being on-island is an intimate connection with someone in the health sector.
I remember once debating with a panel supposedly from Cayman and representing that island
When I challenged them none had been there for more than seven years
It was just a job
What about the voters of Jersey fighting back against these carpetbaggers?
That takes considerable courage in a small community
To be eligible to vote in Jersey you must over 16 and either have been ordinarily resident in Jersey for the last two years or have been a resident in Jersey for the last six months plus additional periods that total at least five years. So, many of those who have come to the island to service that tax haven get to vote as well. Not Ms Bowes for a year yet or Mr Hoban and Ms Koerling at all but for the rest; turkey’s and Christmas spring to mind.
Further investigation into Mr Hoban, Ms O’Keefe and Ms Koerling provides an interesting insight into suggestions of carpetbagging or at least of cronyism. Mr Hoban is a former UK Financial Secretary in the 2010 UK Coalition government and was preceeded in that post by Lord (Paul) Myners. Myners has been Chair of Cevian Capital since 2011 and he was joined there by Ms O’Keefe around about the same time she became a Commissioner in 2017. She appears to do a fair bit of business for Cevian in the Cayman Islands, the closest competitor of Jersey in the race to the bottom but that hasn’t stopped her becoming Deputy Chair of JFSC in April 2021. To work for one former UK City Minister on an offshore tax haven is surprising but to work for two such is downright suspicious.
Ms Koerling was on the Queens’ College Investment Committee when she was appointed to JFSC in 2018. She was welcomed there by the JFSC Chair, Lord (John) Eatwell. Eatwell at the time was also President of Queens’ College, which can’t have hindered her appointment at JFSC much. Eatwell and Myners are not unknown to each other of course. As Myners said of Eatwell in 2011 in the House of Lords “I would always defer to the advice and conclusion of my noble friend Lord Eatwell”. Did he recommend O’Keefe to Eatwell, I wonder?
Richard at least you’ll think twice before blasting Jersey’s Finance Industry again.
I told you last week that people within the Industry could not relate or understand you because business in the Island is absolutely booming.
I am greatly encouraged by such a feeble response that reveals such inability to address the issues
Indeed. Some people have paid quite a price for doing so.
Richard if you want to carry on making a fool of yourself in the Jersey press then be my guest.
https://www.bailiwickexpress.com/jsy/news/zero-ten-will-not-be-affected-jersey-joining-global-tax-pact/#.YOLRZ-hKjIU
The JEP sided with me
Well what have you got to say about today’s story in the Bailwick Express?
I can’t see anybody in Jersey taking you seriously again.
Given I never made the claim that Jersey would be heavily impacted by this (although its government made an enormous fuss over something it now says insignificant) what do you want me to say? That they made themselves look silly and I was spot on right, as usual?