Monday, April 20, 2009

Tame the goose, not kill it!

20th April
Ironic, isn’t it, that some people will not vote for JDA candidates on the grounds that they are against the finance industry. Of course no candidate has adopted this position, as they know full well (in spite of accusations to the contrary) that the levels of welfare and public services that they seek to deliver have to be funded somehow. But change has been imposed from the outside, as we’ve suspected it would be and our aim of a well regulated and ethical finance industry may become a reality.

Lord Bach today has told Jersey that it must continue to tighten its regulation of the Finance Industry and improve transparency. Governments, and especially the US government, are no longer going to tolerate seeing the money earned in their countries, and needed for their welfare programmes, being leeched away. It is a shame that the meeting on tax havens, that took place before the G20 summit, was so poorly reported in the JEP. Harry McRandle left early, and chose to report little more than a list of who was there and a brief sound bite from each of the main speakers.

The assumption is that those who did attend must, of course, be enemies of Jersey – apart from Sarah Ferguson who patronisingly dismissed the meeting on Talkback as being like a student debate – though even when pressed she was unable to explain why. Was this because for the first time since her student days she was surrounded by intelligent and articulate young people?

The JEP failed to report what for me was the most striking message of the evening. This was that people in developing countries cannot be lifted out of poverty, in spite of the best efforts of the charities which Jersey people contribute to with such generosity, if offshore centres have mechanisms whereby the money earned in these countries can be siphoned off with minimal tax paid. The Christian Aid speaker claimed that a government’s ability to collect tax is intrinsically linked to democracy. Horrific to think that excesses like those of Mugabe may only be possible because of the existence of tax havens. And yet the press did not take the debate much beyond the level of ‘Oh look at that hypocritical protester, taking money out of a hole in the wall! See we need banks after all!’ As if anyone said that we didn’t.

Hopefully the finance industry will still flourish if it cleans up its act – but meanwhile, perhaps we should push forward with the JDA policy to have a well balanced economy.

Robert Kisch writes a letter in tonight’s JEP suggesting that the UK government is blaming the economic crisis on tax havens, which I do not believe is the case. He hopes that a change of government in the UK will give us a get–out-of-jail-free card. I think he’s missing the point here. It’s not about the politics of envy (though I certainly envy those that are earning several times more than me and paying a much smaller proportion of their income in tax – a situation that severely challenges my naïve view that life should be fair!) He finishes with that tired old cliché: that we mustn’t kill the goose that lays the golden eggs. But if that goose is making a racket that disturbs all the neighbours, and stealing the food of the subsistence farmers on the other side of the fence, and pecking at all the geese that lay honest edible eggs and only lets us have a small piece of gold from each clutch of eggs – well perhaps that goose needs to be brought under control!

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