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News analysis | 19
Welcoming the launch of the review, the
Financial Services Secretary, Paul Myners,
said:
I welcome the appointment of Michael Foot
who brings significant experience in financial
regulation to this task. Offshore financial cen-
tres must play a responsible role in the global
financial system.
This review will take a serious and con-
structive look at the challenges these centres
face in the current economic climate, and how
they can best respond to these.”
The Minister for the Crown Dependencies,
Lord Bach, commented: “This review is an
opportunity for the Crown Dependencies to
demonstrate their strong track record in the
regulation of their financial services indus-
tries. The review will allow the Crown
Dependencies to participate in an open debate
about how they can best be equipped to with-
stand the current difficult economic climate
without calling into question their constitu-
tional arrangements. In this regard, I am Vince Cable is currently the Liberal Democrats Shadow Chancellor and Deputy Leader.
pleased to see that the review specifically
excludes constitutional change from its scope.” He was Acting Leader of the Liberal Democrats in 2007 before Nick Clegg was elected
The Minister for the Overseas Territories, Leader in December of that year. He is Member of Parliament for Twickenham and has
Gillian Merrion MP, stated: “I am impressed been the Liberal Democrats’ main economic spokesperson since 2003, having previously
by the positive discussions I have had with served as Chief Economist for the oil company Shell from 1995 to 1997.
the Overseas Territories on financial services
regulation recently, and hope that the review Vince was talking with Investment International Editor Jonathan Ball.
may be helpful to those overseas territories,
with significant financial services industries, Investment International: What do you think is the future for the offshore financial centres,
to prepare for the challenges of the future.” particularly given the apparent hostility of figures as diverse as Barack Obama and Alistair
Michael Foot expressed his enthusiasm for Darling?
his new role. “After working as a financial reg- Vince Cable: The issue has certainly grown in prominence of late. I think most people feel it
ulator in the UK and overseas, I have direct is untenable to have small tax havens, especially if they appear to have been structured
experience of the achievements of the Crown solely as a mechanism of avoiding paying UK taxes. The arrangements certainly cause a
Dependencies and Overseas Territories. I am great deal of resentment.
looking forward to working with them to see I also think there is the danger of money laundering in a situation where there is a lack of
how best the important contribution of their transparency and accountability.
financial sectors can be underpinned and
strengthened for the future in these challeng- Investment International: So you feel the current situation needs to be reviewed?
ing economic times.” Vince Cable: Very much so. The present structure cannot reasonably be described as stable
Isle of Man Chief Minister Tony Brown has or satisfactory.
welcomed the review of Britain’s Crown Also, I feel there is a lack of clarity regarding the question of domicility. It appears in some
Dependencies and Overseas Territories instances to have been used simply as a means of avoiding tax. Since many of the
announced by the Chancellor of the individuals involved in these arrangements are decidedly wealthy this has been a further
Exchequer in his pre-Budget statement. source of dissatisfaction.
The Chief Minister commented: “The
announcement of this review across the three Investment International: What do you think is likely to happen with regard to the
Crown Dependencies and 14 Overseas depositors on the Isle of Man who had accounts with the Icelandic bank Kaupthing Singer &
Territories is understandable in terms of the Friedlander?
turbulent economic climate being experienced Vince Cable: This is a complex area and here I’ve been working closely with my colleague
around the globe. Sir Alan Beith, Chair of the Justice Select Committee. As you are doubtless aware, the
“As far as the Isle of Man Government is bank’s Isle of Man operations were frozen along with the rest of the bank when it was
concerned we welcome this exercise as another taken over by the Icelandic Government. The final outcome depends upon negotiations
opportunity to show that the Island is well between the Governments of the Isle of Man, UK and Iceland and there are attendant legal
regulated, financially stable and international- issues. I’m afraid I suspect it will be a lengthy process.
ly responsible.
“The Isle of Man has a strong record of Investment International: Finally, do you regret leaving the Labour Party in the early
compliance with the highest global standards 1980s? After all, if you had remained with Labour, you might very well now be Prime
in the areas of financial regulation, taxation, Minister.
transparency and international co-operation. Vince Cable: I very much doubt that and in any case it would not have been for me to
This has been confirmed by bodies such as the decide! I am pleased to say I enjoy good relations with politicians in all parties.
IMF and the OECD.”
www.investmentinternational.com January 2009 Investment International
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