Chief Minister welcomes findings of economic report

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CHIEF Minister Allan Bell has welcomed the findings of a newly-published economic study, describing it as an important part of the island’s ‘defence armoury’ against critics.

The government-commissioned Economic Research Report was compiled over many months of research, case studies and interviews by Ernst and Young LLP, as is part of an effort to discredit accusations of the island being a drain on the UK economy.

This is very much the tone of the 30-page report, which uses Bank of England statistics to illustrate that the island provided $38.9 billion in net financing to the UK in the second quarter of 2011, and charts the Manx economy’s transformation from being based on agriculture, tourism and fishing.

Chief Minister Allan Bell MHK said: ‘The idea was to put facts and figures behind the claims we make about the Isle of Man being a positive contributor to neighbouring economies. The report gives us weight against uninformed criticism from politicians and the media.

‘It is a changed world we live in since the credit crunch of 2008. Everyone is battling to do the same thing as the Isle of Man, and to stand out we need these concrete facts and figures.’

Does Mr Bell believe such a report is enough to silence critics?

Mr Bell admitted: ‘The cynicism toward offshore business centres, especially ones with a competitive tax rate, is not likely to diminish, so it is vitally important we have this information as part of our defence armoury.

‘Our critics in the UK aren’t just going to roll over because we have this report, but it’s about stepping up our case. This won’t be the end, I will use and refer to this report, as other ministers will and I hope businesses too.’

Ernst and Young’s John Hopes believes the report will not fall on deaf ears. ‘Economically literate politicians in the UK will understand,’ he said. ‘A key conclusion is the diversity of the Isle of Man economy. Within it there are sectors like e-gaming, film and space which sets it apart. It’s most unusual to have this range of activity in a jurisdiction this size, though this is not routinely recognised away from the Isle of Man.’

Mr Hopes did not agree that the fact the government-financed the report – with a specific goal in mind – would undermine its findings.

‘Ernst and Young has an international reputation,’ he said. ‘Plus we shaped the direction of the report.’

Mr Bell echoed the sentiment: ‘It is robust, and it is defensible. It’s fact-based and clearly sourced, and research is backed up. This isn’t the end of the exercise though. Areas of the report will need to be addressed and updated, in line with the ebb and flow of sectors of the economy.’

Chapters look into the structure and functioning of the economy, an assessment of the Isle of Man’s tax regulations, benefits of the Isle of Man to the London, wider UK and world economy.

Mr Bell pointed to areas of the report which show examples of co-operation between the island and the UK.

He said: ‘We work very closely with the north west of England, one of the most economically deprived areas of the UK. There are a lot of serious investors in the Isle of Man, who invest heavily in the north west, and sectors we focus on, like ICT and clean technology, are the same sectors highlighted by the UK Chancellor.’

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