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Figures to confound the critics
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The furore over comedian Jimmy Carr’s tax arrangements, UK Prime Minister David Cameron’s insistence that the Crown Dependencies and Britain’s Offshore Territories should ‘put their houses in order’, plus the wider issue of major international companies’ tax contributions have fed the lie that this Island is a parasite, living the high life while depriving Britons of billions in lost revenue.
Now a technical, but actually very remarkable report, compiled by independent consultants Capital Economics, has set the record straight. There will, of course, be those who remain deaf to the report’s findings because they simply do not want to hear what it says. But, coolly and methodically, it explains why Britain is the net beneficiary of its relationship with Jersey, rather than vice versa.
The key figures are easily summarised. As many as 180,000 British jobs are supported by the Island’s activities, £118 billion of UK banks’ funding is channelled through this jurisdiction, and half a trillion in foreign investment, which would otherwise be unavailable to Britain, is mediated through our finance industry. In addition – and these are perhaps the seminal findings when it comes to myth-busting – more British tax is generated by Jersey than is lost through it and the Island makes a £9 billion contribution to the UK economy.
These headline statistics, which are backed up by an elaborate examination of the methodology used to compile them, should confound a principal criticism of the way in which we do business. It should also give David Cameron pause for thought. His attempt to make all the right noises on the tax front before the G8 summit are, at least as far as Jersey is concerned, beginning to look very much like hot air.
But the report and the investigation on which it is founded, poses a question. Why did Jersey Finance Ltd, the body which commissioned it, fail to elicit this vital information at a much earlier date? The simplest answer is that few thought that it could be done because of the difficulty of collecting reliable data, particularly from the trust sector. Now that the job has, in fact, been concluded successfully, we are in possession of powerful weapons that can be ranged against some of Jersey’s most persistent and insistent critics.
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