A challenge for finance
WRITING here yesterday, we highlighted the rather arbitrary 'standards' demanded of the low tax jurisdictions by prime minister Gordon Brown - but it has taken publication of his letter to the Crown Dependencies to show just how much the goalposts have shifted.
WRITING here yesterday, we highlighted the rather arbitrary 'standards' demanded of the low tax jurisdictions by prime minister Gordon Brown - but it has taken publication of his letter to the Crown Dependencies to show just how much the goalposts have shifted.
Never mind gaining OECD 'white list' status, that is not good enough for the PM. The islands, he said, have to put clear water between themselves and those jurisdictions which only just meet international standards.
What he has not said is why. Or what happens if the dependencies do not.
While it is possible, as Jersey's chief minister has done, to read the letter as 'fairly non-committal', it is also possible to see it as nakedly hostile and threatening.
Although there are clear standards to follow - and the islands do - Mr Brown now wants us to meet unspecified targets with unspecified penalties for failing to hit an invisible goal.
What makes this playground bully 'watch it, or else...' approach worse is Mr Brown's further threat that 'it is vital to the interests of the Crown Dependencies' that they meet any new international standards on tax avoidance.
By switching emphasis from illegal evasion to perfectly legal avoidance, Mr Brown seeks further to make these islands' position untenable by introducing another unquantifiable 'acceptability' test.
It is a far cry from the signing last December of the so-called international identity document in which the UK pledged to recognise that the interests of Guernsey might differ from those of the UK.
The reason for Mr Brown's antipathy towards these islands was highlighted at the weekend by the director of the Adam Smith Institute, the UK's foremost free-market think-tank: the tax competition they provide.
Since the average person in the UK will work from January until June purely for the benefit of the UK Treasury, having an island with a 20p tax rate is not something Mr Brown wants, particularly with an austerity Budget looming.
What Guernsey needs to do now is to convince No. 10 that it needs us. How? By quantifying the huge flows of money from here to the City of London and the tax that is generated in the UK as a result.
Making a compelling case is the finance industry's biggest challenge.
