Treasury Minister's Economic Warning

[Albert Tatlock]

According to MR there was a "stark warning from Treasury Minister Allan Bell" that "the Isle of Man's economy must continue to grow - or it will go into reverse. And he says, attracting so-called ' high net worth' individuals to the Island is a key strategy."

 

How should the economy be expanded? Should the economy be expanded by attracting high net worth individuals or perhaps could our economic strategy be better managed? What are the options?

 

Interested to hear people's views on what they think as to the best approach and what should go into the islands economic strategy.

[Chinahand]

High Net Worth Individuals are only one small facet of the Island's economy - the idea that Mr Bell thinks it is one key to our economic strategy is really frightenning.

 

There are simply not enough of this type of person going to be attracted to living on the Island - the communications, the climate etc mean that I would be amazed if more than say 100 such people relocated. They'd contribute, but the idea they will sustainably create a significant proportion of our economic growth over the long term is just ludicrous!

 

Rather obviously we need a diversified economy - high tech and internet business, services, finance etc. Light but repected regulation, taxation and governance have to be vital, to encourage people to relocate and/or build businesses here.

 

One real problem in my mind is that government projects can dominate the Island and genuinely distort the labour market - projects such as the prison, the hospital etc have sucked up excess labour and pushed up wages. A major issue is that the Island has grown more quickly than its population base - the result is a serious shortage of workers in certain sectors: work permit reforms are vital or will will not be able to recruit the workers, both at the top end and craftsmen, to solidify our growth. Without flexibility the gains we've made will be transient.

 

We've a good resource base, but from what I know the Manx worker has a reputation for being fickle - if the Island gave insentives for training schemes and really getting the IOM Business School to contribute to upgrading our skills it will be a good thing, but also stopping people walking out of a perfectly good job every 6 months to a year would massively improve our reputation as a business centre.

 

I can't see conferences or tourism really becoming major sectors - its just too expensive to get here.

 

While agriculture has to brand itself and promote itself as wholesome, sustainable and healthy. As a small market with expensive communications they have to go up the value chain and add value - premium meat, veg and dairy - make us willing to pay their high prices!

[copycat]

if there are too many older super rich paying no more than £100,000 income tax - that will just suck up the housing prices making the prices rise too much for young people to get on the housing ladder and I'm not convinced that the wealth of older retired super rich will substantially trickle down.

and did i hear someone (alan bell) say that these people are not all interested in big houses out in the country but may take apartments on the seafront for when they are here. Is that saying they don't really expect them to be living here all the time and just enough so they don't have to pay UK tax. i.e these sort of people are hardly going to set up new businesses are they.

[Pragmatopian]

The point about government projects is spot on. For an Island with a population of <100k we have embarked on some huge infrastructure projects over the last decade (IRIS, Hospital, Prison, Waste Incinerator). We have to act a bit more responsibly if we want to leave the younger generations with something worth having. Kuwait is a good example - its leaders realised that its oil wealth was finite and has invested a substantial proportion of that wealth to provide a sustainable future for the country as it transitions into new industries.

 

Realistically, we need to be planning for a transition too: it's not as if we haven't done it before. After centuries of agricultural subsistence, we moved to exploit mass tourism in the 19th and early 20th centuries, and subsequently repositioned ourselves as a offshore financial centre with a smaller scale tourist industry. Regulatory pressures on offshore centres are now growing, so we have to ask ourselves 'What can we do competitively over the next fifty years?'. What are the key strengths of the people and the location? We mustn't be afraid to think expansively and unconventionally.

[ynsheltyn]

And he says, attracting so-called ' high net worth' individuals to the Island is a key strategy." ...

 

Interested to hear people's views on what they think as to the best approach and what should go into the islands economic strategy.

 

I have some difficulty in understanding how a few more millionaires living on the island contributes to the Manx economy. Perhaps someone will enlighten me.

 

These people generally don't run businesses on the island, they don't employ a local workforce, they don't manufacture anything or provide any 'value added' services. Is it the suggestion that their 'high net worth' provides substantial tax income? From what I've seen, such individuals employ high-powered tax accountants to ensure that they pay less tax than you and me (the plebs).

A 'high net worth' individual still shops at M&S and Shoprite, and doesn't contribute anything special in the way of increased spending. They'll probably purchase goods from outside the Island and pay taxes and VAT to other jurisdictions.

Nothing for the Manx economy in this 'key strategy' unless the high net worth individuals bring their factories and businesses with them.

[Roger Smelly]

Well looks like the isle of man is out for some millionaire shoe shiners

 

Is the isle of man that bad that even tax breaks don't attract the high rollers ?

 

The trouble with the isle of man is the climate, most people with money live in the likes of monaco where they have everything they need.

 

Maybe Alan Bell can give away Gucci bobble hats and scarf's to attract them in

 

This is would be funny if it was not so sad.

[GD4ELI]

Is the isle of man that bad that even tax breaks don't attract the high rollers ?

 

The trouble with the isle of man is the climate, most people with money live in the likes of monaco where they have everything they need.

 

Maybe Alan Bell can give away Gucci bobble hats and scarf's to attract them in

 

This is would be funny if it was not so sad.

I would say the disadvantages of the Island are:

• Climate,
  
• Culture,
  
• Wretched standard of catering in general,
  
• General run-down appearance,
  
• Quality of housing.
  

If you've got the money then you would only live permanently on the Island if it's the nature / sailing / history side you are interested in, or if you're local and have familiy on the Island.

[Cambon]

I have some difficulty in understanding how a few more millionaires living on the island contributes to the Manx economy. Perhaps someone will enlighten me.

 

These people generally don't run businesses on the island, they don't employ a local workforce, they don't manufacture anything or provide any 'value added' services. Is it the suggestion that their 'high net worth' provides substantial tax income? From what I've seen, such individuals employ high-powered tax accountants to ensure that they pay less tax than you and me (the plebs).

A 'high net worth' individual still shops at M&S and Shoprite, and doesn't contribute anything special in the way of increased spending. They'll probably purchase goods from outside the Island and pay taxes and VAT to other jurisdictions.

Nothing for the Manx economy in this 'key strategy' unless the high net worth individuals bring their factories and businesses with them.

 

Although you may be right about the factories and jobs bit, there are a couple of things people are missing. It is £100k tax cap for a single individual, £200K for a married couple. Your talk of high-powered tax accountants is exactly why the tax capping is attractive. An high powered tax accountant can cost £200k per year on their own, let alone any tax payable and the constant scrutiny by authorities. Being Manx resident for tax purposes will effectively save money and simplify their affairs. Very attractive indeed.

 

It is then up to local business to pull up their socks and keep them here.

[lectro]

If you had a few million kicking about in a bank account or won the lottery would you live here or feck off to the South of France?

[When Skies Are Grey]

If you had a few million kicking about in a bank account or won the lottery would you live here or feck off to the South of France?

 

It wouldnt be France dude...not with their wealth and inheritance tax rules....oh and its full of French people!!

[Cambon]

If you had a few million kicking about in a bank account or won the lottery would you live here or feck off to the South of France?

 

Regardless of where you would go, the first thing you would do is secure the money out of the taxmans immediate grasp - legally. with EU regulations that is becoming more and more difficult to do. Living here and placing it in a managed accumulation fund either here or outside the eu is one way.

 

However, this £100K/£200K law is not looking for that sort of person, it is looking for people with 10 times that, plus.

 

Keep in mind that these people already have houses in the south of France, Italy, Bardados, Florida, etc. It is simply a tax situation.

[Roger Smelly]

Well thats ok if your into walking, knitting and paying a fortune for your food.

 

But in monaco they pay no income tax at all and its a bit better when bragging to your mates

 

If you were a multi millionare would you want to come here ?

 

Monaco

[matty]

Well thats ok if your into walking, knitting and paying a fortune for your food.

 

But in monaco they pay no income tax at all and its a bit better when bragging to your mates

 

If you were a multi millionare would you want to come here ?

 

Monaco

 

You would need to be a millionaire to live in Monaco, the price for a beer worked out around £8!

 

Keep the millionaires & their inflated prices there!!

[Cronky]

I would say the disadvantages of the Island are:

Climate,

Culture,

Wretched standard of catering in general,

General run-down appearance,

Quality of housing.

 

If you've got the money then you would only live permanently on the Island if it's the nature / sailing / history side you are interested in, or if you're local and have familiy on the Island

 

The Cronky family love the place to bits. It's the friendly locals who make it for us.

[GD4ELI]

I would say the disadvantages of the Island are:

Climate,

Culture,

Wretched standard of catering in general,

General run-down appearance,

Quality of housing.

 

If you've got the money then you would only live permanently on the Island if it's the nature / sailing / history side you are interested in, or if you're local and have familiy on the Island

 

The Cronky family love the place to bits. It's the friendly locals who make it for us.

Locals - real locals - are always friendly IMO. I'm up in a small Swiss village which in winter is a major ski resort. Some say the Swiss are the most boring people on the planet - I disagree. The locals are charming, it's those with holidays homes / pretensions of grandeur who are a real pain in the neck.