UK Chancellor Alistair Darling says one of his priorities is reviewing the crown dependencies and overseas territories and their roles as finance centres.
In its pre-Budget report, unveiled this afternoon, the UK Government lists its 'international priorities' in the light of the economic crisis.
It lists as one of these: 'reviewing the long-term opportunities and challenges for the UK's crown dependencies and overseas territories as financial centres'.
The review will look at the role of offshore financial centres in the global economy and work with the crown dependencies and overseas territories to 'identify current and future opportunities, risks and mitigation strategies'.
It will cover financial supervision and transparency; fiscal arrangements; financial crisis management and resolution arrangements; and international cooperation.
But it will not consider the Isle of Man's constitutional relationship with the United Kingdom.
The last time the Island's position as an offshore finance centre was reviewed at the instigation of the UK Government, the Edwards review actually proved to be largely positive for the Isle of Man.
Treasury Minister Allan Bell has expressed fears the UK Government is looking for a scapegoat.
However, Chief Minister Tony Brown has welcomed news of the review.
He said: 'The announcement of this review across the three Crown Dependencies and 14 Overseas Territories is understandable in terms of the turbulent economic climate being experienced around the globe.
'As far as the Isle of Man Government is concerned we welcome this exercise as another opportunity to show that the Island is well regulated, financially stable and internationally responsible.
'The Isle of Man has a strong record of compliance with the highest global standards in the areas of financial regulation, taxation, transparency and international co-operation. This has been confirmed by bodies such as the IMF and the OECD.'
It is understood Treasury Minister Allan Bell will make a statement to the House of Keys tomorrow (Tuesday), following news of the review.
Interim conclusions will be produced for next year's UK Budget, with fuller conclusions later in the year.
In his pre-Budget report, Mr Darling said the recent financial turbulence highlighted 'potential problems' with overseas territories and crown dependencies.
He said: 'They attract banking customers with lower taxes - without contributing to the UK Exchequer. But at times of stress, depositors need to know who will compensate them. The British taxpayer, cannot be expected to be the guarantor of last resort.
'So I have asked for a review of these regulatory arrangements, which will report to me in the spring.
'Second, we must resolve the situation highlighted by the Icelandic bank - Landsbanki - where billions of pounds of British savers' money can be deposited in a foreign bank with branches in the UK - with insufficient safeguards for these depositors.
'They were not adequately covered by the compensation scheme of the Icelandic authorities, so we had to step in to guarantee UK savers' money.
'So we are taking the lead, at the European Union, to tackle these shortcomings in international compensation arrangements.
'We can't allow this to continue and we have asked the European Commission to come back with recommendations by the spring.'
Gordon Brown targets Isle of Man in BBC interview
The pre-Budget report states that the UK Government recognised the progress made by most offshore financial centres to improve financial regulation and transparency, and tackle financial crime.
But it adds that the 'severe financial turbulence' has raised questions for all jurisdictions, while there was 'growing international pressure to line up standards of financial regulation and meet international norms with regards to taxation.'
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I am a British depositor in the KSF IOM bank and like thousands am still waiting anxiously to hear when, or if, I will see any of my money back.....Alastair Darling's comment in IOM Today that...."the British taxpayer cannot be expected to be the guarantor of last resort...." might be true in a general sense, but is wholly misleading when it comes to the crisis affecting Kaupthing Singer and Friedlander in the IOM In this case, NOBODY is asking the British taxpayer for a bailout, or to be the "guarantor of last resort." The British Government has frozen our money in London, plain and simple. All 550million pounds of it. So all we are asking for is OWN MONEY BACK! So this has nothing to do with the British taxpayer, but the rightful return of our hard earned savings.!!! Plain and simple,
Just to quote one line from Mr Darling's further misguided tirade against us. "He said: 'They attract banking customers with lower taxes - without contributing to the UK Exchequer...".. The last six words are utter rubbish. The UK has benefited enormously from IoM subsidiaries of UK banks and building societies, as all monies are shovelled back to the UK parent. Withholding Tax recompenses the UK Exchequer for any loss of direct income tax. If the short-sighted Messrs Darling and Brown frighten away depositors from the IoM the UK Exchequer will get nothing as the money will be deposited well outside these islands - we would all be losers. In fact, the UK gets a wonderful deal at present as they don't cover deposits made through these IoM subsidiaries, and expect the island to cover it under our savings protection scheme - which is not as good as the UK's as it contains no timescale. It's about time our politicians spelled the benefits out to the Westminster.
STEVE HAMER, Kirk Michael
How can Tony Brown be so nave? This is what Mr. Darling is on record as saying: "In his pre-budget report, Mr Darling said the recent financial turbulence highlighted 'potential problems' with overseas territories and crown dependencies. He said: 'They attract banking customers with lower taxes - without contributing to the UK Exchequer. But at times of stress, depositors need to know who will compensate them. The British taxpayer, cannot be expected to be the guarantor of last resort." These are not the words of someone who wants reassurance on how "well regulated" the Isle of Man is against criminal activities, they are rather clearly the words of a person who resents the fact the Isle of Man exists at all because of the opportunity the island legitimately presents for legal tax planning. It matters not whether they force the Isle of Man to dance to their tune, or whether they make it illegal for UK companies to bank over here – either way the Isle of Man had better get good at fishing or farming very quickly, because they will probably represent the majority of our GDP if Darling and Tony Brown get their way. The only solution, both in the short term, and long term, since this threat will never go away, is pre-emptive action to sever all links with the UK and become a fully autonomous country ASAP. Even if the UK government make it clear to the press that they are closing this "tax loophole" the writing will be on the wall. If the IOM government does not have the courage or ability to take such action, then have a national referendum on becoming a fully autonomous country ASAP, and let the Manx residents decide on their own future and livelihoods. But better make it quick before it is too late, this is not the time for more procrastination.
The only reason that the British Government are reviewing the situation is because they have already made up their minds what the outcome will be. For the Chief Minister to welcome the review is crazy. The review will not only cover the Crown dependencies but those British colonies that are also tax havens. The UK, USA and the EU realise that they are missing out on tax on hundreds of billions of pounds that flow through tax havens and they are now going to stamp it out. Nobody has any sympathy for these places so if they do take draconian action who is going to shout or stop them? The constitutional position for the Crown dependencies is that their status can be changed overnight by Order in Council without any need to consult the UK Parliament or the insular administrations. There is an urgent need for the IOM and the Channel Islands to get the constitutional position in writing, ratified by the UK Parliament and the United Nations. Without such a move the position of the Crown dependencies is extremely week.
How wrong can Alistair Darling be. If KSF goes down, I stand to lose a huges sum of my life's earnings, which is capital on which every due penny of taxhas been paid to HMRC this year. What's more I have faithfully paid into the coffers of the UK Treasuryover last 40 years. And now I am being cheated by the very organisation that has caused the problem in the first place. Move back the 550k to the IoM and the problem will go away. It is about time Mr Darling takes responsibility for his Governments action.
Mr Darling never gave the Isle of Man or the Channel Islands a second thought when he used a power within the Anti Terrorism Crime and Security Act 2001 to freeze the assets of Landsbanki IceSave and place Kaupthing UK into Administration. It must have been an embarrassing shock to find that he had caused the collapse of these offshore banks and the resulting anger and resentment from the grave injustice served upon the depositors. The only defence for this pair is to go on the offensive and blow a big smoke screen in the hope of covering up their oversight. Would have been easier to say sorry and move on, but that's never the way of politicians. They will now guff on about tax dodgers to curry misguided opinion with the UK public in an attempt to deflect attention away from failing to return an asset of 550 million belonging to the Kaupthing IoM bank and its depositors. In this circumstance we are not asking for the UK taxpayer to be the 'guarantor of last resort' we just want OUR MONEY BACK.
Now is not the time to get emotional and most certainly not the time for a minister to make derogatory statements, trying to make us a scapegoat" about the UK Government. which may have been provoked because our government failed to recover any of the millions lost in the KSF debacle. .What is needed is coolheaded diplomacy and negotiation and whether we have someone in the government able to do this is a matter open for conjecture. Maybe our government should not panic by making such non productive statements and use diplomacy to find a way forward, an accommodation to both parties. To rely on our financial infrastructure, which, hopefully has improved since the last Edward's report which was very positive .If there has been no improvement then panic