Thursday, October 15, 2009

The Isle of Man stands between the devil of its own creation and the deep blue Irish Sea

Allen Bell, Treasury Minister, does well to warn of tough times ahead for the Isle of Man. Unfortunately he views it simplistically by saying without explaining that a new world order is determined to stop the drift of money from high to low tax jurisdictions. That situation is a small part of the larger picture which is about why this drift needs to be stopped in the first place.

Following the international financial tsunami of 2008 there is now increasing international pressure on offshore financial centres that operate as secrecy jurisdictions. The Isle of Man has been shown not to be as transparent as it has tried to make out in overtures to the OECD, the World Bank, the IMF, Washington & the Commonwealth. Voices of reason in the international financial arena are calling for morality to become the cornerstone of the way financial systems operate, & places like the IoM, Guernsey & Jersey are now being put under the microscope.

Has anyone in high places on the Isle of Man every used the word 'moral' to describe the way this offshore financial centre operates? It has demonstrated that it seriously lacks any sense of morality or keen sense of justice in its whole approach to the KSFIoM debacle in particular & the way it conducts its banking business in general.

What comes across so strongly is that the IoM government is hell bent on looking after & protecting its own interests, determined - even before the Select Committee inquiring into the reason for the failure of KSFIoM has completed its deliberations - to claim that the collapse of KSFIoM was not on account of any wrongdoing on the part of the directors or the FSC but on the actions of others elsewhere in Whitehall & Iceland.

This extraordinary immoral arrogance tells dispossessed depositors that they can sing for the return of all their money as the Isle of Man has chosen to stick solely to its defective compensation scheme & treat the fiasco as an unfortunate 'one off' that the government now wants to put behind it so as to carry on 'business as usual'. It was not a 'oneoff'; KSFIoM is the third bank to fail, & there is no reason to believe that others could not do likewise. Indeed the Chief of the FSC has said that non-core banks should be allowed to fail.

Business as usual is business that continues to threaten the livelyhood of anyone who puts their life savings in the trust of the Isle of Man, because the island does not have the infrastructure to respect & honour the trust of those who deposit in its banks. It is morally bankrupt because for all its protestations to the contrary its culture is still rooted in banking secrecy by which megga rich individuals & companies can evade their own social responsibilities to pay their fair share of tax in the places where it should be paid.

The IoM is morally bankrupt because it does not agree with the words of the UK Prime Minister when he said: "where there is unfairness we will act." It is morally bankrupt because it sees no reason to vouchsafe deposits in its banks. It is morally bankrupt because it uses high interest rates to suck in gullable people by telling them what the banks want them to know rather than what they should know about the risks to which they are exposed.

It is morally bankrupt because it has banking regulations that provide an outward cloak of responsibility & respectability whilst hiding the inner secrets of how business is done behind tightly closed doors that have locks but no keyholes. It is morally bankrupt because it has church leaders who do not stand up for righteousness in the financial affairs of the island. It is morally bankrupt because it conspires to increase its own wealth with scant regard for the poor of the world who lose out because of the gross injustices in the systems of taxation in the world's wealthiest nations, especially offshore jurisdictions.

Back in the 1980's the people of the Isle of Man rose up in angry protest at the way the island was being taken over by rich immigrants. Those wealthy invaders won the day and now 25 years on there is an acceptance of the island's status as a haven for rich people from the UK who relocate here to enjoy the benefits of living in a low tax regime.

There are clear signs that this is going to have to change, but instead of there being a revolt against the government it is more likely that the government will lead an orchestrated protest against the United Kingdom & the international community in the same way as it has ducked responsibility for the KSFIoM affair by blaming the bank's demise on Whitehall & Iceland.

The Isle of Man now stands between the devil of its own creation & the deep blue Irish Sea in which it will struggle to keep afloat. Tony Brown, Chief Minister, says the government has contingency plans. Now what sort of lifejackets will they be ?

1 comment:

  1. I hope the Bishop of Sodar will stand up & speak up in support of what you have said here, but I seriously doubt that his own sense of morality will be that keen for him to stick his neck out and say "hear! hear!" He too probably stands between the devil & the deep blue sea, but then I doubt that he believes in the devil anyway..