It was chaired by Brian Groom, the FT's business and employment editor.

On the panel were Treasury Minister Allan Bell, Phillip Dearden, chairman of the Association of Corporate Service Providers (ACSP) and managing director of PKF Isle of Man; John Coleman, finance director of Microgaming and Courtenay Heading, business development director of engineering company Bladon Jets based in Douglas.

One of the first questions asked the panel members about their thoughts on the Isle of Man's relationship with the UK, particularly in light of the recent cuts in the VAT revenue sharing agreement.

The general consensus on the panel was that although the relationship was strained the benefits of maintaining the connection with the UK, and of maintaining the VAT revenue sharing agreement, were too great to give up.

Panel chairman Mr Groom asked the Treasury Minister if he could ever see the day when the Isle of Man would join the European Union (EU).

Mr Bell said the question was two-fold: Would the Isle of Man want to join the EU and would the EU want a country as small as the Isle of Man to join it?

He added that the Isle of Man would have to become an independent state before EU membership could ever be seriously considered.

But he said that the Isle of Man's relationship with the EU and the European Economic Area (EEA) were things that the government had a responsibility to explore.

A question from Paul Blake of Dougherty Quinn raised a laugh from the audience when he asked the panel whether they would be happy to see their own personal rates of income tax increase in order to offset the government's revenue shortfall.

Mr Quinn said it would be a good thing 'if only to see Mr Tilleard go berserk' - a reference to a quote attributed to the Callow's Yard developer on the front of the FT's Isle of Man supplement in which he was quoted as saying he would 'go berserk' if the Isle of Man government put up his income tax rate.

In reply, panellist Mr Heading said he was cautious about the merits of increasing tax on top earners.

Mr Coleman said it was a 'difficult' question and suggested that in Microgaming's case if the top rate of income tax was higher there would have been members of staff that the company could not have recruited.

But he added that in his personal view he accepted that he had a social responsibility and if he wanted to live here and enjoy the benefits of the Island there was a price to be paid that would be decided by the Treasury.

Mr Dearden said that no one wanted to pay more tax and that the Island had an 'attractive tax position' and should be careful not to damage it as it may cause some individuals to leave the Island.

He added that lots of wealthy people who move to the Isle of Man brought investment and jobs so it was important not to introduce tax rates that would 'scare them away'.

Emma Allard, chief executive of the Hamblin Employment Group, raised the issue of work permits asking the panel members for their opinions on the system and its effects on businesses which were trying to attract the most talented employees.

Mr Bell said the work permit system attracted strong views for and against and reflected the desire to protect jobs for Manx residents on the one hand and the needs of businesses which sometimes needed to employ staff from overseas with particular skills.

He said businesses often needed to bring in key people who would then help businesses expand and create more jobs for workers already living here.

Mr Bell said that the current work permit system worked well, but there were problems with 'over zealous' use of the system and the government was currently looking at ways of tackling that problem.

Mr Dearden said he could understand the political reasons for bringing in the work permit system in that it acted to prevent staff being brought in from overseas when there were Manx residents who needed jobs.

'Both myself and clients that we have employ local people where we can,' he said.

'We don't have to pay relocation costs, they are not going to demand London salaries and are more likely to stay in the Isle of Man.

'My experience is that businesses usually would employ a local worker if there was one good enough.'

Mr Dearden said there were problems with the work permit system when those who implemented the rules didn't accept that a company had done all it could to try and find a local worker with the relevant skills and experience for a particular role.

'While it is politically difficult I'm not convinced that we should continue with it (the work permit system],' he added.

'If it forces businesses to sometimes employ someone that wouldn't be the best for the job then that is damaging to the economy.

'I don't think that happens a lot, but it does happen sometimes, so I think the work permit system does deserve looking at.'

The final question came from Andy Davies of Barclays Wealth who asked what the panel thought the Isle of Man could do to better in order to maintain and expand its economy.

Courtenay Heading said that the best thing the Island could do was bring in as many business leaders to the Island as possible.

'When people come here they love the place,' he said.

Mr Coleman said the cost of travelling to and from the Island was an issue that needed to be addressed as did the run down state of the shops in Strand Street.

Mr Bell said the government had set up a town centre regeneration fund with the aim of funding improvements to Strand Street and other areas.