Those with an interest in Jersey’s financial services sector have long argued that far from being a threat to the British economy due to perceived tax leakage, Jersey contributes significantly to its health by providing liquidity and facilitating inward investment from around the world, ultimately supporting a significant number of UK jobs.
In an attempt to quantify that contribution, late last year Jersey Finance, in partnership with Capital Economics, the respected independent research firm, produced reports looking at the economic, financial and fiscal linkages between Jersey and Britain, and Jersey and the European Union.
Taken together, these two reports provided a comprehensive summary of Jersey’s total value to the UK and European Union be it in terms of jobs, investment or extra tax income. The reports’ main findings were:
The reports reinforced how Jersey’s benefit to the UK and the rest of the EU far outweighed any potential costs in terms of foregone tax revenues to the continent and on the launch of the reports, Mark Pragnell, Head of Commissioned Projects at Capital Economics, said:
“Jersey is unambiguously European, with unique relationships with the United Kingdom and the rest of the European Union. Jersey’s freedom to legislate and govern, and determine its own taxes, has allowed it to become established as a leading centre for international financial services, one whose expertise benefits all the constituent countries of the EU.”
Jersey’s credit rating has been assessed once again by Standard & Poor’s as part of the credit ratings agency’s regular, bi-annual review. Following this assessment the agency maintained the Island’s credit rating, one of the highest possible at AA-.
In its report, S&P noted: “Our ratings on Jersey reflect our view of the Island’s strong and flexible institutions, wealthy economy and considerable fiscal buffers.
“The stable outlook reflects our view that, over the next two years, the risks to Jersey’s financial sector and its fiscal performance will be balanced by its still-significant economic resilience.”
With the impact of Brexit in mind, Jersey’s Chief Minister, Senator Ian Gorst, commented “This is a positive report from a globally recognised rating agency. It acknowledges Jersey’s strong economic foundations and sees the Island as having a healthy overall fiscal position.”
“The agency’s report does point out that economic uncertainty in the UK could impact on Jersey. This is something we have anticipated and are planning for and it is also pleasing to note the agency’s view of our economy as remaining resilient.”
“We have been able to update S&P on the work underway as a result of Brexit and they share our view that our institutional relationships with the UK and EU are not expected to materially change.”
Jersey’s credentials as a centre of excellence for private wealth management were underlined once again at the annual Citywealth Awards event on 19 January when Jersey was once named International Financial Centre of the Year for the fifth consecutive year.
The Citywealth awards were established six years ago to highlight the expertise and service excellence of private wealth sector advisers and managers in major international finance centres. Judged by an international panel of highly respected practitioners from all sectors, the winners are selected by reference to their excellence, achievement, innovation, expertise and service.
In topping the voting, Jersey came ahead of Guernsey (silver), Singapore (bronze), Bermuda, Malta, New Zealand, and USA.
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