Another line to be drawn

From Advocate Philip Sinel.

I READ, with something beyond bemusement, the headline in the JEP on 15 October regarding the ‘crisis talks’ which are about to ensue between members of our government and other unidentified persons within the European Union.

My bemusement stems from the fact that credence is being given, not to criticism, but to comments that Jersey is not entering into the spirit of what is in fact a policy of social and fiscal harmonisation.

A policy from which we were specifically exempted, when our limited participation in the EEC was agreed.

The old criticism in relation to the Island, and the reason for the zero-ten policy was that we were involved in fiscal piracy, by which they meant that we offered inducements to persons from abroad investing in or through our Island which were not available to our own domestic population.

In so doing, we were of course doing no more or less than following the example of America and indeed Britain, the latter being by design one of the largest tax havens in the world, if used correctly, albeit that we were doing it on a slightly larger scale, relative to our own gross domestic product.

As a result of external pressure, we bowed, I think probably unwisely, to calls to apply, more or less, the same system for non-residents as to residents. Thus our present fiscal policy was born, a policy which has been followed by some of those in other Islands.

Thus it was that people in foreign countries started to dictate to us what we did internally, despite the fact that we have no vote at Westminster let alone in Europe.

We now reach the scenario where members of the European Union are shouting ‘Foul’ because we have complied with the law but not with the spirit.

The spirit being that we should impose the same counter productive tax laws in relation to our citizens that they do in relation to theirs. Thus, notwithstanding the fact that we are outside of the EU treaty insofar as concerns social and fiscal harmonisation, we will shortly have imposed upon us, if we are not very careful, the horrors of VAT, capital gains tax, inheritance tax and other such things.

In the same way that a number of us stood on the beach recently to draw a line in the sand, I think that another line in the sand should now be drawn.

I spoke to another Islander in relation to income tax some years ago and he looked at me blankly and said, ‘What do you mean, income tax?’ The idea was completely foreign to him and to his fellow nationals; they had simply never had the concept of income tax. We have never had the concept of capital gains, inheritance tax, payroll tax, value added tax or any of the related horrors. That is a part of our cultural identity that we are entitled to hang on to.

I have not yet worked out which part of the European Convention on Human Rights is being broken when other countries dictate to us what we must do in relation to matters which fall solely within our own purview, however, I may yet work out that we have an ECHR remedy.