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The finance industry has given a lot to this Island
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From John Boothman.
I SUPPOSE, in these troubled times, we should welcome a little light relief wherever it comes from – even the veteran anti-tax haven campaigner John Heys (JEP, 9 June). And he certainly deserves some credit for managing to squeeze so much nonsense into so few paragraphs. But there, I’m afraid, the praise must stop.
Mr Heys now states – presumably through gritted teeth – that ‘the finance business is a great asset to our economy’. But readers with long memories will recall that for many years he was a pillar of Attac Jersey – an affiliate of the Tax Justice Network – who once threatened local bankers with ‘resistance you never imagined both from the floor and from the streets’, while deriding ‘the old excuse of how much finance has contributed to the economy’. This sounds to me less like a real change of heart than a cynical deceit.
The TJN likes to pretend that it is not opposed to offshore financial centres as such, but only to the nefarious goings-on that supposedly take place there. In Mr Heys’ version this translates into an assault on tax evasion, the illegal failure to declare income or gains on which tax is due. Most reasonable people would agree that tax evasion is abhorrent, but as he well knows the TJN goes far beyond this, attacking the entirely legitimate use of differential corporate tax rates to lower the overall tax burden on a client or business transaction. Its long campaigns against the Island’s offshore company regime, and the zero-ten regime that replaced it, are clear evidence of this and indeed the TJN seldom differentiates between condemning avoidance and evasion.
For Jersey, though, the distinction is vital because its efforts in the last twenty years have been directed towards shifting the finance industry onto higher moral ground – firstly by weeding out undesirable clients, and bearing down heavily on the laundering of illicit funds; next by extending these safeguards to fiscal offences; then by improving and strengthening regulation across the board; and finally by moving away from aggressive (though still legal) tax avoidance schemes altogether, towards less controversial areas of business. The success of this transition has been repeatedly, albeit sometimes grudgingly, acknowledged by dispassionate bodies of global importance, including the UK Treasury and the International Monetary Fund.
The finance industry of today therefore bears little resemblance to the same industry in the 1970s and 80s. Yet this transformation is ignored by the TJN, and by its supporters like Mr Heys and his moderate friend Ted Vibert. For them, despite a few hollow protestations to the contrary, any stick is good enough to beat a Jersey banker.
The TJN is fond of quoting gigantic numbers intended to illustrate the damage caused by offshore centres – Mr Heys mentions £90 billion – but most independent observers regard such figures as fanciful. Another widely perpetrated myth is that greedy Jersey institutions are leeching potential tax revenues from already impoverished countries, particularly in sub-Saharan Africa. In fact Jersey does little or no business in less developed countries, for the simple (and surely obvious) reason that wealthier markets offer more attractive opportunities.
Moving on to politics, Mr Heys surprisingly alludes to the infamous 2005 manifesto of the Jersey Democratic Alliance, which he says ‘would have been an absolute boon for Jersey’. Mercifully, this theory was never put to the test as the JDA received a thrashing from voters at the ensuing election. In the circumstances he might have done better to keep quiet about that particular episode. Of course, Mr Vibert – now standing as an independent candidate – may have more luck this year. Time will tell.
It pleases Mr Heys and Mr Vibert to paint me as a sycophantic apologist for the finance industry, but this is quite wrong – critical friend would be nearer the mark.
In the past it had plenty of faults, and some of them remain. It is not given to man-made enterprises to achieve perfection, here or anywhere else. But the industry has given a lot to Jersey, as well as working hard over many years to correct its own shortcomings, and to learn from its mistakes.
I wonder whether Mr Heys and Mr Vibert can say the same?
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