‘UK looking to change environment on tax is biggest risk to islands’
THE UK changing the tax environment with Guernsey is the biggest risk facing the Bailiwick.
Lord Digby Jones said the UK exchequer needed to raise tax revenue post-Covid – just as every other economy around the world.
‘But every other economy on Earth is not in some sort of tax – relationship is too strong a word – but, environment with the UK like we are,’ said the former director-general of the CBI.
The UK Treasury could look to the Crown Dependencies, not necessarily in the Budget scheduled for March, but in coming years. ‘I think the biggest risk would be that the Treasury over three years, five years – I don’t mean March this year – tries to alter the tax relationship between the UK and Guernsey.
‘I think if you want the biggest risk, that doesn’t mean how likely do I think it will be, but I think that’s a bigger risk than global competition which I’ve talked about.’
Lord Jones, who was speaking at a Brexit seminar arranged locally by law firm Carey Olsen, went on: ‘The tax position, relationship, with the UK is not an opportunity. It is only a risk.
‘I think [Chancellor] Rishi Sunak will have his advisors saying: “We could do something with the Isle of Man, Jersey, Guernsey and the rest of them”. They won’t then go and do it in March this year, but I think we have just got to be careful.’
But he welcomed a letter written by the Lord Chancellor to the island’s top politician reaffirming the UK government’s commitment to the constitutional relationship with Guernsey.
‘The good news is that they didn’t have to write it,’ said Lord Jones. ‘Politicians, and especially those who advise them, will commit as little as possible to paper.
‘They’ll tell you anything, and they will get up and make speeches like you wouldn’t believe and they’ll go back on it the following day.
‘But committing it to paper is more serious, so I take it as a letter not a speech, as being a very good thing. I think the fact that it’s basically: “We’ll leave you alone” is a very good thing. But as always watch what they do, not what they say.’
