Mec Vannin

Yn Pabyr Seyr

Yn Pabyr Seyr is published by Mec Vannin, the Manx Nationalist Party. All articles are copyright Mec Vannin unless otherwise stated. Mec Vannin grants permission to reproduce articles from Yn Pabyr Seyr provided that the source is credited.

Yn Pabyr Seyr is published and distributed in hard-copy at least twice a year and archived to the internet.

Issue 33 - July 2004


Contents




Mount Murray Inquiry

Gelling, Bell, Toohey and Council of Ministers criticised in Part Two Report.

Ex-Chief Minister Donald Gelling, Treasury Minister Allan Bell and outgoing DTL Chief Executive Terry Toohey have been heavily criticised in the long-awaited Part Two Report of the Commission of Inquiry into Mount Murray.

The 295-page report, which deals largely with tax matters, will be debated at the July sitting of Tynwald.

In the damning report, the three-man Commission finds former Treasury Minister Gelling responsible for "failures of governance which, on the basis of contemporary information, could have cost the General Revenue sums in the order of millions of pounds which it had not expected to give up".

The effect of introducing and amending a 'tourist business incentive allowance' - implemented in part to benefit the Mount Murray development - was to provide substantial benefit for companies associated with the development whose business was not tourism.

The Commission says that a figure of £10 million in terms of tax foregone is "unlikely to be precisely accurate but it gives a reasonable starting point as to the feel for the possible extent of the loss."

But, in a bitter blow to those defending Government's actions at the time as a bid to boost tourism, the Commission finds that the Mount Murray development "would have proceeded to completion whether or not the tourist business incentive allowance had been introduced".

The Commission of Inquiry has taken over two years to reach its final conclusions. During this time, it has successfully defended litigation from the developer companies, and come under sustained attacks from politicians active at the time.

According to the Commission, which includes former Assessor of Income Tax Mark Solly, Gelling accepted pressure from former Tourism Minister Bell and Department Member John Orme to promote changes to tax legislation, when he did not understand the potential high cost of that legislation, notwithstanding that warnings had been given to him.

The Commission calls it "inexplicable" that Gelling took the relevant decision "without a single document to support or explain it".

It goes on to find that the introduction of the tourist business incentive allowance at the unprecedented rate at which it was introduced led to a tax revenue reduction of "very many millions of pounds".

At the time of writing, Donald Gelling remains a Member of the Treasury Department.

The current Treasury Minister, Allan Bell, survived calls for his resignation following publication of the Part One Report in July 2003, and his censure by the House of Keys for contempt in October 2003.

Bell also survived the Chief Minister's recent reshuffle, but his position is once again in doubt as he faces yet more severe criticism in the Part Two Report.

According to the Commission, he allowed and co-operated with the developer to obtain assurances on detailed tax matters from the Department of Tourism when there was "no right to do this".

Bell also misinformed the House of Keys in April 1992 when stating, incorrectly, that there was no government financial assistance for the Mount Murray development.

The question whether this statement was made deliberately was "very finely balanced". But the Commission decides it cannot make the finding beyond all reasonable doubt, and so calls this answer "a very serious act of carelessness which deserves serious criticism".

But, in a withering aside, the Commission adds that it enquired as to Mr Bell's health at the time "and this has not revealed anything which, at least as perceived at lay level, should have affected his ability to think".

Outgoing DTL boss Terry Toohey also faces heavy criticism "for allowing himself to be sidelined so that he was not in control of the executive aspects of his department".

The Commission concludes that, notwithstanding Mr Toohey's claims to the contrary:

"there was extremely poor management of the Department of Tourism at material times with regard to development matters. It was badly run, mismanaged, carried out actions which it had no right to carry out, and, when it was required, had poor, virtually non-existent communication within the department, and with other departments".

The lash of the Commission's pen does not end there.

The Commission strongly defends its use of the word "corruption" in the Part One Report, finding that what happened over Mount Murray went "way beyond simply accidental or inadvertent maladministration".

It rejects a submission by Treasury advocate Andrew Corlett that there were great dangers to the Island's international reputation in the use of the word "corruption" as "inappropriate and unjustified", since it implied that irregularities should be "suppressed" in the interests of the Island's reputation.
Mount Murray Inquiry

Gelling, Bell, Toohey and Council of Ministers criticised in Part Two Report

Pointedly, the Commission notes that "exactly the same view" was expressed by the Attorney General in the debate on the Part One Report in July 2003.

In what will be seen by many as a damning swipe, the Commission adds, immediately afterwards: "To suggest that the Commission might in some way temper the tone of its Report for reasons not associated with the matters being investigated is misconceived."

The Commission also blasts the comment, first made by Allan Bell on Manx Radio, that it was looking into a "minor planning matter".

It says that "the factually incorrect approach.... of regarding the affair as a minor planning matter which is all water under the bridge.... might do real harm to the reputation and image of the Isle of Man."

Government as a whole also does not escape criticism.

There is criticism of the failure to introduce subordinate legislation to restrict group tax relief.

There is also sharp criticism of aspects of COMIN's response to the Part One Report, including the Commission's proposals to introduce an independent Audit Commission and to improve access for emergency service vehicles on the Mount Murray estate. The Commission says that there is a "continuing fire risk to health and safety of lives".

Stingingly, the Commission finds that COMIN's response to the Part One Report did not properly reflect the evidence it reported and its findings.

Recommendations in a number of cases were regarded as having been implemented "which, on the basis of the evidence available to the Commission, appeared either exaggerated or simply incorrect".

At the time of writing, the Chief Minister has yet to respond to the Part Two Report. Donald Gelling has hit back at the Commission, whilst Onchan MHK Peter Karran, who called for the inquiry, has called on Messrs Gelling and Bell to resign and spoken of the need for urgent political reform.

The Commission's report, and its 13 further recommendations, will be debated at the July sitting of Tynwald.

More than just a brand surely?

The head honchos at Johnstone Press operating as Isle of Man Newspapers have certainly thrown themselves into their efforts towards re-branding the Island.  Just like the newspaper group, the idea is risible.  It smacks of the same, myopic and simplistic mentality often heard referring to "Isle of Man plc".

We are a proud nation, living in a beautiful and special island: What do these jokers want?  Should we be looking for sponsorship, perhaps seek corporate support? Isle of Man - sponsored by Tax Dodgers R US?   How about a couple of snappy slogans "Come to the Isle of Man, no questions asked".  Or "Visit the Isle of Man first for sleaze"?

The results of a survey on re-branding recently published by the said outfit revealed some interesting, and telling, opinions:-

When asked what our (the Isle of Man's) most important advantages were top, out of ten, with 69% support from 1,089 respondents, was Low Corporate Tax.  Sitting at ninth place with a measly 26% support was a Beautiful Place. 

The answer is depressing and says much for the attitudes of many now living here.  No doubt government and its chums in the property development sector feel the same way.  Hardly fills one with confidence at the prospect of preserving, unspoiled, our island's magnificent scenery does it?
 
In a final amusing and rather ironic comment the rag proclaimed that 86% of Manx Residents felt, "we haven't educated the non-Manx media."  Well then, could I suggest we start at the Peel Road premises of the Scottish newspaper (?) group Johnstone Press, publishers of the only locally produced news papers.  Some education about matters Manx would be a good start.

Trickle Down Economics (or how to keep people under a financial thumb)

Disgraced treasury minister Alan Bell has been anxious to promote a low taxation strategy which, ultimately (if events go according to plan and that's a very big "IF"), will result in a zero rate tax regime for corporate business. The thinking behind this policy has its origins in the 80s and is nothing more than a rehash of the long since discredited Trickle Down Economics theory (TDE).  The flawed philosophy behind TDE implies that, if corporate entities are freed from regulation and, most importantly, the responsibility of taxation, somehow this will benefit the rest of us.  It's never been possible for the financial theorists to provide a rational explanation of exactly how this apparent magic trick will come about. Other than to vaguely imply that a part of the considerable savings being made when businesses avoid tax and other social responsibilities will somehow find its way down to everybody else.  Hence the term Trickle Down Economics.

Like all magic tricks, TDE was never anything more than an illusion designed to deflect scrutiny away from huge tax cuts for the already rich. Subtle loopholes were also written into the taxation codes for the sole advantage of special corporate interests: Greed came well and truly to the forefront. The taxation responsibility was simply moved from the rich to those least able to afford it by a series of consumer taxes.  VAT, increased fuel duty etc., all presented as providing choice.  The truth, however, was rather different in that it actually succeeded in increasing economic inequality and shifted a greater portion of wealth to the already rich at the expense of those least able to afford it.  A "Robin Hood" act in reverse.

Mec Vannin has submitted the following resolutions to the Treasury:

This AGM unreservedly rejects the taxation policies that so obviously pander to business and disproportionately burdens the individual's earning and spending.

7. This AGM:

a) rejects the government policy of zero rate income tax as ultimately suicidal, both economically and in relation to achieving genuine independence.

b) calls for the fundamental VAT / income tax strategy to be overturned.

Company Law Reform - Is Alan Bell getting ready to do another Mount Murray?

Treasury Minister Alan Bell has called for an urgent reform of Company Law against a backdrop of falling revenue from company formations and the prospect of no future income tax due to ill-conceived commitments to a zero rate of income tax for companies.

Though Mec Vannin acknowledges potential benefits from objective Company Law reform, the Party views the actuality with some trepidation, especially in light of the Mount Murray Inquiry Reports.

This inquiry has revealed serious shortcomings and Mr. Bell has been identified as the central figure in these shortcomings. He remains, despite the huge amount of impartially scrutinised evidence, in denial of his culpability in the Mount Murray development scandal. He has acknowledged his willingness to do anything to accommodate any scheme purporting to be tourist related and the Mount Murray Part One Report, Part A, 2.6 quotes:

"...the reasons (for Mr. Bell's improper conduct) likely to be a misjudged sense of political and public interest necessity against a background of serious decline in the tourist industry in the Isle of Man."

We now have the same man in the potentially far more damaging position of Treasury Minister, obstinately refusing to acknowledge his shortcomings, facing  similar background circumstances (a decline in business due to a host of factors) but in a far more sensitive area.

His comments in the Budget Speech indicate that his own objectives for the proposed reforms may, yet again, be for reasons likely to be a misjudged sense of political and public interest necessity against a background of serious decline.

Reading between the lines of the Minister's statements, an air of panic can be detected. He has already admitted that he perceives the finance sector to be "hanging by a thread" but, looking at the global situation in the past five years, no great degree of financial expertise is required to understand that company formation would slow up, in the short term at least, no matter what company law and regulation existed.

Knee-jerk reactions with long-term consequences to transient conditions is no way to run a country but Mr. Bell appears to be doing exactly that.

The Minister's perceived need for reform itself is also the result of a situation forecast and warned against by Mec Vannin: The reliance upon incidental revenue from a high level of company formation rather than from the existence of companies in a stable environment means that the Treasury will find itself forever chasing its tail to encourage company formation and finding itself incapable of regulating the situation because of lack of resources.

The zero tax strategy has painted the Treasury into a corner before it has even been implemented!

The Party has called to be involved in the consultative process and has recommended the potentially less dangerous option of consolidating existing company law with minor adjustments.

The full interim submission can be viewed at www.manxman.co.im/mecvan/archive/company_law.html

Need to scrutinise Legal Fees in the Isle of Man

Sorry to mention Mount Murray again, but Speaker of the House of Keys Tony Brown (who was severely criticised in the Part One Report) wants the cost of the inquiry referred to the Public Accounts Committee.

Perhaps he should think a little before doing so, for he will find that, firstly, the spending was approved by Tynwald, the highest court in the land, and, secondly, the hourly rate charged by the highly qualified Chairman, an English QC with a wealth of experience in many fields of law, works out at substantially less than a Manx advocate would charge per hour for routine work.

What's he hoping for, the bill to be raised?

Cabinet re-shuffle - a step towards Mec Vannin policy or a clumsy diversion?

Mec Vannin wishes to see an elected Legislative Council. As an interim step, we advocated that no minister be appointed from the Legislative Council.

Richard Corkill's reshuffle has rid us of any MLC ministers but, in the absence of any statement to the contrary, this can only be regarded as happy coincidence.

Pamela Crowe MLC is known to be "difficult" but, whereas not without controversy, Claire Christian MLC has not attracted the same adverse publicity as Alan Bell MHK who remains firmly entrenched as Treasury Minister despite the damning findings of the two Mount Murray reports.

Mec Vannin's eye remains firmly on the ball.

Don't be duped by the Europhobes

Over the past few years, Mec Vannin has advocated direct negotiation with the EU as the best method of protecting our national interests.

This call has been largely ignored by politicians with the result that important decisions affecting our future have been taken without our knowledge or input.

Certain people advocate ignoring Europe in the hope that it will go away but these people usually reveal themselves as petty English nationalists who, in reality, can offer the Manx people little other than Little England.

The reality of Europe is that it exists and it exerts a tremendous influence on us no matter what. It should also be remembered that many rules that are passed off as "European law" are voluntarily adopted directives or, even worse, just plain excuses. Blind Europhobia only provides a smokescreen for such behaviour. Don't fall for it.

Phil Gawne's attack on Mark Kermode - Putting the record straight

The Island's only remaining newspaper (and the name must be applied loosely) claims to adhere to the UK's Press Policy. As most of us are aware, it doesn't, so it was pretty laughable when deputy editor Jo Overty spent about a page telling those who bother to read the "Isle of Man Examiner" how very responsible, fair and balanced they are.

Perhaps she would like to explain the half-page diatribe by erstwhile nationalist Phil Gawne MHK which made allegations against me, but made no effort at all to even find out what my side of the story was. A flagrant breach of the Press Policy but that's of no concern to Lionel "the pencil" Cowin, Johnstone's head lackey at the outfit.

In a personal communication to me, Mr. Gawne asked me not to pay attention to the "rubbish" printed in the "Manx Independent" (as if I ever do) but had to concede, when pressed, that what was printed was actually what he had said, just that they had left out the "nice" things that he had said about me. Really? What the hell else would he expect from such an extremely biased publication? Certainly, the feed-back I got was that Mr. Gawne had actually done himself no favours at all with his outburst and I'm certainly not interested in a public squabble with Mr. Gawne (with whom I am still on speaking terms) but, given the nature of some of the allegations, I feel it only right to respond without the distorting influence of the Johnstone Press.

Despite acknowledging what he concedes to be "procedural error", he appears to hold me personally responsible for the failure of his lone attempt to overturn established and researched Mec Vannin policy in relation to the Finance Sector.

Here's what really happened:

He turned up at a fully notified AGM and, without any support, tried to submit a motion to do a full U-turn on finance sector policy as an "Emergency Resolution". Knowing that he had no support whatsoever for the motion, had I wished to manipulate the situation in favour of my own views, I would have accepted the motion and it would have been dead and buried there and then. To do so, however, would not have been responsible Chairmanship.

Instead, it was put down for discussion at the next meeting (four weeks later) giving him some opportunity to prepare his case and garner some support. When that meeting arrived, he wasn't there. That is not a problem. Had he any support for the motion, it would have been moved and discussed. He didn't and nor had he tried to get any support so the motion wasn't even put.

My biggest crime was to give him a chance to advance his argument properly and the blame for his failure to take the opportunity I gave him lies entirely with him. I don't write Mec Vannin Policy and I have been voted down on plenty of occasions. I don't go scurrying to the Johnstone Press to cry my eyes out when it happens.

I think it is justifiable to demonstrate how Mr. Gawne's tune changed and his departure from Mec Vannin was sounded once he started getting fed a few peanuts from the government:

In 1992, Mec Vannin fully reviewed it policy in relation to the finance sector. The resulting report can be read on the internet at http://www.manxman.co.im/mecvan/archive/finance.html

Mr. Gawne made input to this which was supportive of the stance. The only disharmony came in the form of a Memorandum of Dissent from then PRO and now President Bernard Moffatt. Mr. Gawne was a leading voice in calls for disciplinary action against Mr. Moffatt.

He was supportive of Mec Vannin's stance on the finance sector and equally critical of government funding and support for the Manx language- see Policy for the Development of the Manx Language, 1995,
http://www.manxman.co.im/mecvan/
archive/gaelg.html

His sudden change of tune can be traced directly to the time that the Department of Education started to accommodate calls in regard to Manx medium education. At that point, he was still Mec Vannin's Cultural Officer and the work he was doing was in line with Mec Vannin policy. Set against the D of E's budget, however, the two branches of Manx Language Education is a very small expenditure and one still relies for a substantial amount of funding from the Manx Heritage Foundation of whom he was quite critical prior to becoming "Yn Greinneyder" (then co-funded by the MHF).

Small steps towards a policy, while welcome, do not warrant U-turns in policy and, as a final comment, I reproduce (with the Editor's permission), the final paragraph of an article previously published in Yn Pabyr Seyr (July 1999) under the title "Eshyn ta g'eeck da'n phiobeyr, vel eh reih yn carr?" (Does he who pays the piper call the tune?)

"Those within the language movement should never lose sight of the fact that the language was saved by the efforts of those who believed in it, not by the government or sponsorship. The language is the property of the people who speak it. both collectively and individually, and the day that the politically active speakers are asked, in whatever fashion, to temper or moderate their views for fear of rocking some boat or other, is the day the language really has died."

Mark Kermode
Chairman
Mec Vannin

Mec Vannin AGM

This year's AGM of the Party took place on May 12th. Officers were elected as follows:

President (Life)
Chairman / PRO
Secretary
Treasurer
Editor
Cultural Officer
Bernard Moffatt
Mark Kermode
Verity Gorry
Cristl Jerry
Alan Comaish
Freddy Cowle




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