This is the second in a series of articles about self governing Islands and what we in Orkney can learn from their governance. The Islands Bill is currently making its way through the Scottish Parliament and it will see more powers transferred to Orkney.
The Isle of Man located in the Irish sea between Northern Ireland and England is a self governing island. It is, however, also a crown dependency. Its settlement goes back to the earliest of times with artefacts from hunter gatherers dating back to 6500 BC. Once ruled by Vikings, Scots and the English, the Isle of Man has always retained its ability to govern itself. Its native language,Manx, is one of the Gaelic languages but very few people now claim to speak it.
What is a Crown Dependency?
The Isle of Man is:
- not part of the UK
- not an Overseas Territory
- not a member of the Commonwealth of Nations
- not a member of the EU
It is what is known as a Crown Dependency. This means it shares the same Head of State as the UK. Although it is neither in the Commonwealth of Nations or the EU it does have favourable agreements with them. It is also in the Customs Union of the EU. All legislation passed in the Isle of Man Tynwald, (assembly) must have the assent of the Crown which is done through the Privy Council. The UK Government is responsible for Defence but the island does have a civil defence corps.
It has its own currency, the Manx pound. It also uses the pound sterling. It’s economy was once based on fishing, agriculture and tourism but it is now known for its financial services principally as a tax haven. It has its own tax raising powers.
The growing population is currently at 89,500 (2016 census). Less than half are born in the Isle of Man with most now migrants from the UK. Being 30 miles long and 10 miles wide over half the population live in urban areas mostly the three main towns including the capital, Douglas.
“The government consists of an elected president; a Legislative Council, or upper house; and a popularly elected House of Keys, or lower house. The two houses function as separate legislative bodies but come together to form what is known as the Tynwald Court to transact legislative business. The House of Keys constitutes one of the most ancient legislative assemblies in the world.” (Encyclopaedia Britannica)
UNESCO World Biosphere
In 2016 the Isle of Man became a world first as a UNESCO World Biosphere Region. This recognises the amazing biodiversity of the island existing alongside an ever growing population. This has three main aims:
- Conservation: Taking care not only of nature and wildlife, but also culture, heritage and communities. Specific initiatives range from marine conservation to safeguarding flora and fauna to enhancing urban spaces.
- Development: Maintaining and improving infrastructure and economy in ways that respect and support the amazing environment. Introducing energy-saving measures, supporting local produce and minimising waste are just three examples.
- Learning: Helping more people to understand what makes the Island so special and encouraging active involvement in keeping it that way. This will see a whole range of projects being highlighted and shared through education and community networks.
The Isle of Man is known now mainly as a tax haven having benefitted from not being in the EU but still being part of the Customs Union. It has:
- no capital gains tax
- no wealth tax
- no inheritance tax
- no stamp duty
Its top rate of income tax is 20% however it does also have a tax cap at £120,000 (£240,000 for couples). All income earned throughout the world is assessible in the Isle of Man which has made it an ideal place for Offshore Banking. This means many of the depositors are not resident but can take advantage of its financial set up.
Space exploration companies have been keen to set up in the island an industry the Scottish Government has also been encouraging to locate in Scotland. As a UNESCO World Biosphere Region it also has much to offer in how to balance the environment with an increasing population. With the UK is about to exit the EU the status of the Isle of Man as a Crown Dependency and enjoying the advantages of being in the Customs Union has not been explored. Negotiations for Brexit are now on hold due to the UK General Election throwing even more uncertainty into the mix. Some commentators suggest that the UK would like the same set up as the Isle of Man enjoys and its tax haven status.
By looking at how other islands use their self governing powers we in Orkney can consider in a more informed way how we will use ours. Devolving more powers to Orkney brings with it the responsiblity of our local authority to make agreements that are not only beneficial to Orkney but also reflect the moral standards of the People of Orkney.
Reporter: Fiona Grahame
Related Story: The Faroes: Self Governing Islands
Tax havens like this are a disgrace, allowing the rich to avoid paying their fair share of taxes. Any suggestion that Orkney should go down this route is deplorable