Jersey Could Go It Alone

[Cronky]

From the Jersey Evening Post:

 

Jersey could go it alone

[tameelf]

Forvik has

 

http://shetlandconversation.squarespace.com/forvik/

 

I have recently become the owner of a tiny island off Papa Stour, which itself (for the benefit of non-Shetlanders) is a small island off the west coast of Shetland. I am returning to the Nordic tradition by re-naming it Forvik Island (strictly speaking, it should be Fårvik) - Island of the Bay of Sheep. On 21st June 2008, Forvik, by my Declaration of Dependence, reverted to Shetland's true constitutional position - that of a Crown Dependency. Other Crown Dependencies include The Isle of Man and The Channel Islands.

[Albert Tatlock]

Jersey could go it alone

Time we looked at it seriously IMO - and at least started a public debate about the possibility - and possibilities.

[localyokel]

Jersey could go it alone

Time we looked at it seriously IMO - and at least started a public debate about the possibility - and possibilities.

 

I doubt that the IoM could have any viable plan to go independent; particularly in the current fiscal climate. You have to consider how the Island (as opposed to Jersey and Guernsey) balances the books. I understand that about 2/3 rds of the income the IoM raises comes from the VAT agreement with the UK, with 1/3rd coming from the direct taxation of Islanders and Island based businesses.

 

In Jersey or Guernsey 100% of government revenue comes from direct taxation so they are at least more in control of their destiny fiscally than we are which makes it easier to play the independence card. On this basis they have a better chance of successfully going it alone (although I doubt even then it would be viable as it would change their relationship with the rest of the world and may isolate their economies further).

 

The IoM has no option but to keep the link with the UK unless we can find a magic way of raising £300m or more in extra tax each year.

[triskelion]

Aren't they introducing GST this year? I agree their tax structure simplifies things though.

 

This document, however, is designed to assess whether or not, if forced to, Jersey could survive on its own, rather than it being a kind of blueprint for achieving full independence.

[localyokel]

Aren't they introducing GST this year? I agree their tax structure simplifies things though.

 

This document, however, is designed to assess whether or not, if forced to, Jersey could survive on its own, rather than it being a kind of blueprint for achieving full independence.

 

The GST is their own version of VAT though, it does not rely on a share with the UK so its still a local tax paid for using local goods and services (ie, they control it). What we have relies on a close interaction with the UK VAT system with our take being linked to a share of total VAT take in the UK.

 

I agree that it reads as an assessment of whether it would be viable. The problem is that all such 'assessments' seem to do is generate friction between the Island and the UK which ultimately makes the relationship between the Dependency and Westminster more chilly. I think the IoM probably has an opportunity to use this to its advantage I seem to remember a few years back when Guernsey raised the issue of independence in its parliament that all of a sudden the UK's attitude towards it as a financial centre appeared to change.

 

They were furious when the Telegraph exposed their 'secret' discussions

 

http://www.telegraph.co.uk/news/uknews/154...n-Guernsey.html

 

I can't see that the IoM has any basis for even looking at the viability of becoming independent much as many of us might like it.

 

edited to add link.

[triskelion]

Having read through the document, it doesn't actually comment on whether independence would be beneficial or not to Jersey, but rather if it is possible, which they obviously conclude it is, pointing out that Jersey has been mostly autonomous for centuries and is but a few steps from full sovereignty anyway.

 

The largest obstacles identified seem to be negotiating full membership of international organisations, and the establishment and maintainance of a foreign office. Additionally they invisage a requirement for a second chamber given there current unicameral structure and no party system.

 

To be honest, I can't see how the Island is in THAT much of a different position, except as regards the taxation structure, which is obviously a substantial obstacle, but not one that could be claimed 'insurmountable.'

[Albert Tatlock]

I can't help but wonder how much of this £300 million would need to be 'found' in reality, how difficult it would really be to find it, and how much this is propaganda used by those against independence.

 

The island is relatively more affluant compared to the UK.Much of our salaries goes in VAT. But don't forget that independence offers more opportunity for independent taxation too - the right how or whether to charge VAT/GST or whatever and on what. Indeed much of that £300M could possibly be made up by attracting all sorts of operations here following a subsequent change in the economy.

 

Following the same formula would likely lead to problems, but with considering independence comes many other unique opportunities - many potential new markets - all which require new thinking.

 

Again, I still think we should debate and analyse the possibilities, not just be blinkered by the 'apparent cost' - as though there would be 'nothing we could do about it'.

[pongo]

If Scotland breaks away from the UK - which is beginning to seem possible - then the UK won't really exist anymore. And at some point soon there will inevitably be a majority of nationalists in the 6 counties.

 

If the UK breaks up and Ireland becomes a single country - then the viability of sterling will be undermined IMO. Scotland would join the Euro.

 

The Isle of Man's relationship with the EU will be the big issue - especially after we ultimately adopt the Euro (either deliberately or, initially, effectively) . Personally I hope that ultimately the island becomes fully integrated into the EU with some sort of micro nation status. I believe that the island could do quite well out of gradually moving in that direction. Gradual change is a good policy end in itself IMO. Nothing needs to be finished.

 

I fully accept that others here will think I'm talking ****

[localyokel]

I can't help but wonder how much of this £300 million would need to be 'found' in reality, how difficult it would really be to find it, and how much this is propaganda used by those against independence.

 

The island is relatively more affluant compared to the UK.Much of our salaries goes in VAT. But don't forget that independence offers more opportunity for independent taxation too - the right how or whether to charge VAT/GST or whatever and on what. Indeed much of that £300M could possibly be made up by attracting all sorts of operations here following a subsequent change in the economy.

 

Following the same formula would likely lead to problems, but with considering independence comes many other unique opportunities - many potential new markets - all which require new thinking.

 

Again, I still think we should debate and analyse the possibilities, not just be blinkered by the 'apparent cost' - as though there would be 'nothing we could do about it'.

 

I agree with what you said but also note triskelion's comments - we're a bit further on constitutionally than Jersey (we already have an Upper Chamber that could be revised etc) and would also have to consider a Foreign Office etc but I'd still argue that the taxation structure is the obstacle that needs to be addressed before you look at all other matters.

 

If you cannot self support yourself fiscally all other matters become secondary. There is no point in wasting time commissioning a report on independence if you have no clear idea how your going to fund it.

 

Politically £300m would be very hard to find particularly at this part in the business cycle: you'd have to raise personal taxes (never a vote winner) and then take away all sorts of existing reliefs and incentives and then re-model / replace the VAT and other indirect tax structures with alternative mechanisms.

 

I also don't buy the fact that we could attract all sorts of operations here following a subsequent change in the economy as it has not happened so far in our history. We do not have the capacity to scale up too far; in particular the Island still offers no access to Europe for financial services and until this changes it is only ever going to be a niche player in international markets and will not get the scale of operations it needs to replace what it gets in VAT share. As Pongo says the EU is the key really rather than independence from the UK.

 

I accept your argument that we could easily increase some revenue though. If it were me I'd have put up personal tax years ago. Its too low at the higher earners end, I'd also have capped mortgage interest relief and taken away many of the other subsidies. But politically that's no go territory as its a total vote loser.

[John Wright]

First you can have a customs union with another country and be independent. Benelux did it for years. So we could be independent and have a VAT and customs duty agreement with the UK, or another country, say ireland or Scotland if it became independent

 

Second the EU is a customs union anyway in that a percentage of the VAT take goes to the centre

 

Third by being in the EU we open up a huge market for our financial services, 500 million extra people where we are currently excluded

 

Fourth, do you really think the UK is subsidising the IOM by giving us a bigger share of VAT than we are entitled to? It just makes it esaier to collect than if we had our own customs and VAT and carried on at the same rates

 

Fifth mortgage interest relief cappng was forshadowed in the last budget,see extract from the speech here

 

"As I announced last year, a general limit on the amount of interest that can be deducted from a

person’s income for tax purposes will be introduced from 6 April 2008. The limit is £15,000 of

interest for a single person and £30,000 for a jointly assessed married couple, and includes

interest on both mortgage and personal loans."

 

Sixth we are actually much more constitutionally advanced than Jersey, we have a proper separation of powers. A second chamber is not necessary. We have more openness and transparency than much local governmemt in UK and much central government. Thats seriously the case. The OKW and lodge is almost a thing of past here but not so in Jersey or Guernsey.

 

Yes we will have to choose a currency. I see all prices in UK being quoted in £ sterling and Euros in ten years time any way even if they stay out of the Euro. problem is which cycle do we want to be in the Franco German economic cycle or the UK US cycle. Of course, whilst roaring, celtic tiger economies such as IOM and Ireland don't actualy follow anyones cycle

 

Yes we will have to have representation at Brusssels and also the UN and some other internationaal bodies but we can continue to pay someone else for general diplomatic and consular services. We pay UK at the moment. It could be Iireland or an independent Scotland.

 

Uk will have no problem as long as it is what we want. So a referendum. This was established by the Kilbrandon report in late 1960's which looked at how EU membership woud affect IOM, Jersey and Guernsey. It came up with protocol 3. The options were independent outside UK and EU, In EU with UK or protocol 3. It was never considered that we could go in as an independent state.

 

We should do well in the Europe of the regions with funding for IOM language and heritage and culture. Of course as a richer nation we will have to pay in. 30 yeras ago we woud have got the breakwater and the incinerator and the hospital funded by EU, we are off the gravy train now as we have done so well

 

Our tax is not a problem. Including employment taxes such as NI we are at the higher level of taxation with between 30 and 40% of income going in direct taxes plus 17.5% VAT (which is about half way in the European bandwith.)

 

The real problem is do we want to join a club whose rules were designed for 6, strained at 9, worse at 12 and 15 and now at 27 don't work, when thye cannot agree new rules and the rules they do agree seem so anti democratic.

 

My ideal is a directly elected European parliament with real powers in very limited areas, Regional assemblies, again directly elected based on country groupings, Nordic, Iberian, Balkan, etc Nation state natiaonal assemblies, autonomous regional /federal assemblies at sub state level we and other mini states are at that level and we could go stright into the super regions, an anglo irish scots welsh council.

[manshimajin]

Is much of the debate 'emotional' rather than 'rational'? Can we identify the actual benefits of additional independence? This might be a good starting point for any analysis. What are the cost/benefits of Manx independence?

 

On the plus side if the IOM could introduce a more attractive VAT and tax regime it could possible attract additional investment.

 

Unfortunately 'more attractive' often seems to mean shifting the tax burden further onto the middle and lower echelons of individuals away from corporations and very high net worth individuals - so would it be a better deal for the hoi poloi?

 

The Island would also need a better transport and communications infrastructure/connectivity to support business investment. We would need to host flights from beyond the UK - what chance of doing this? This would cost money (viz. £40 million for a small extension to the airport runway).

 

The EU would (most probably) not want a statelet of 80,000 people and all the administrative hassle and cost that is entailed for them. Pretty sure we would be told to go in under a UK umbrella of some kind. The cost of membership to the IOM would also be very high.

 

Do we have the population base to have sufficient skilled people to manage a greater level of independence and more complex business? We are the size of a smallish town and the Public Service here already seems to be at or beyond its competence limits. My recollection of the hannel Islands was that they suffered badly from skills shortages?

 

Our best hope is to find copious amounts of oil in Douglas Bay....then we might have the funding to go it alone (but would probably be invaded by the UK to seize the platforms).

[Albert Tatlock]

Is much of the debate 'emotional' rather than 'rational'? Can we identify the actual benefits of additional independence? This might be a good starting point for any analysis. What are the cost/benefits of Manx independence?

Naturally there are an enormous number of subject areas that would need to be looked at: everything from VAT, immigration, types of businesses operating here and their customers and potential customers, how the island could perhaps benefit separatly/jointly from the EU/UK from globalisation, citizenship, immigration, skills to health provision etc. etc. The table of contents would be quite involved - but a table of contents would be a good starting point for any assessment.

 

What I would like to get away from though, is the argument that it all seems to revolve around this £300M VAT figure, when that is, albeit an inportant factor, but still only one factor.

 

One major difficulty I suspect, to paraphrase Nigel Farage, who I thought summarised it quite well on his recent visit, is that "most MHKs don't know where their breakfast comes from" i.e. they know little about the finance sector, and seem to expend much of their time on simplistic issues such as the differences between white and brown dog poop. Until we get a few knowledeable MHKs looking at things seriously, then any discussions/assessments regarding independence will remain a long way off. One way to get the debate going might be for a group such as PAG etc. to actually come up with a study, with input from business and Joe Public - but even if all it did was identify the actual table of contents that would at least be a start.

 

But I think the debate does need to start properly, regardless of the conclusion.

[pongo]

to paraphrase Nigel Farage, who I thought summarised it quite well on his recent visit, is that "most MHKs don't know where their breakfast comes from"

 

Nigel Farage is a supercilious nincompoop. It's bizarre that the Liberal Vannin people have become involved with UKIP and their hysterical single issue obsession with all that is wrong with the EU.

 

The EU isn't going to be disbanded and it isn't going to be remodeled for the benefit of the sort of people who think that Nigel Farage has anything useful to contribute. He represents the sort of loonies who call 'Any Answers'.

[triskelion]

One major difficulty I suspect, to paraphrase Nigel Farage, who I thought summarised it quite well on his recent visit, is that "most MHKs don't know where their breakfast comes from" i.e. they know little about the finance sector, and seem to expend much of their time on simplistic issues such as the differences between white and brown dog poop. Until we get a few knowledeable MHKs looking at things seriously, then any discussions/assessments regarding independence will remain a long way off.

This is partially why I have remained unconvinced as to the benefits of a directly elected upper-chamber on a consituent basis. Rather than having an expensive and worthless revising chamber, the LegCo should contain people who actually know about finance, international trade, economic theory, industry etc.

 

Right now we have an ex-SPC man, two radio bods, four former MHKs (one of whom was a banker) and a former police officer. Its a fairly mixed bag, and although I do not wish here to criticise any of them, I'm not sure they make up a second chamber conducive to sound government and parliamentary progress.