Tuesday, November 3, 2009

Foot treads around the IoM wearing slippers

The IoMToday online journal [report here] was upbeat in reporting on Tony Brown's fulsome praise of the Foot Review. The Chief Minister will have known in advance that Sir.Michael Foot was not going to kick any goose that lays golden eggs for the benefit of both the IoM & UK economy.

Right from the start of the report there was recognition that offshore financial centres are intended to offer bait to suck in money from around the world which gets upstreamed promptly to the City & elsewhere to make lots of money for banks, corporations, & ultra-rich people. This financial industry is the heartbeat of the IoM's economy & the review had to tailor its comments to fit around that fact.

Of course Tony Brown was utterly predictable in pronouncing fulsome praise of the review. He's not going to focus on any of the critical elements of the report, even though they were penned in the soft language of diplomatic Whitehall scribes. Contrary to what was reported by the IoMToday journal the Review was in fact critical of the way the depositors' compensation scheme operated (see pages 50, 51 & 52), and he said that there was room for improvement in handling criminal activity.

The reality is that Foot could afford to be 'nice' to the Crown dependencies because he knows others in the world's financial hierarchy are ready in the wings to press hard for opacity in the way some offshore agencies operate.

The IoM trumpets that it is going to introduce automatic exchange of information in 2011, but why wait until then to do so? Because instant transparency would be sure to expose very many transgressors! Despite protests of being squeeky clean the powers that be in the IoM know that though they have shed the pejorative label 'tax haven' they have still to get rid of the equally damaging one of 'secrecy jurisdiction'.

The Foot Review addressed the subject in very general terms. Others are looking at it in detail and the government will have to use its new 'mindset' to work out how the island is to rid itself of that label as well. Very challenging times lay ahead for the IoM.

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