Britain ‘may be forced to bail out tax havens’

| 13/09/2009

(The Guardian): Britain could be forced to bail out one or more of its offshore tax havens at huge cost, according to early drafts of a Treasury report, because the economic crisis has wrecked their finances. Offshore expert Michael Foot will next month set out a number of options to government ministers in the report as anxiety grows within Whitehall over the health of Britain’s overseas territories and crown dependencies. Senior insiders say early drafts of Foot’s report suggest that the government may need to make provisions for the financial failure of British tax havens. Experts suggest the failure of a major tax haven could potentially cost the UK tens, if not hundreds, of millions of pounds.

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  1. Anonymous says:

    Once again the UK is trying to put blinkers on the real problem which is all their own fault.

    They are trying to engineer our economic ruin in the hope we will eat out of their hands.

    They just dont know the Caymanian people.

    Always remember that a "shot in the glass"  is better than a "shot in the a$$."

  2. Anon says:

    It is ironic that the UK have done NOTHING to support our industry here, and in fact have done more damage to it than good, and here they are now lamenting the fact they "might" have to bail us out.


    I wonder when they will see the link between how they behave towards us, and our financial fortunes. They might do well to make that link themselves.

  3. Dennis Smith says:

    Its not too hard to see where this is going, the UK is not only pulling the plug on Cayman, it is building a PR campaign that is setting us up for a shutdown. Massive debt and inefficiency have made us venerable. We have a little breathing room, but not much. We may not want independence but we need to be non-dependant if we are going to control our destiny. We still have the opportunity to emerge stronger and secure but change will hurt.

    Once upon a time I used bank financing to expand a rapidly growing business. After 15 years of working days, nights and weekends everything I touched multiplied, prospered and needed more growth capital. Impressed by my timely, audited financials and expansion plan my bank approved a very large loan secured by a floating debenture on all of my assets.  These funds were immediately applied to waiting projects and spent. My operational costs and management structure tight, efficient and well run. Cash flow was positive and profitable. Reserves and liquid assets, nil.

    Then a recession hit, even before it affected my business, my bank called the loan and demanded immediate repayment. With no refinancing options I had to pay down the loan from cash flow. That gradually diminished, as consumer spending slowed and sold inventory was not replaced. Already lean, I cut still further to the bone, open a payroll account in another bank for essential employees.  Projects were stopped, orders cancelled, inventory sold back to suppliers, at a losses, and the screws were tightened to the point of breaking. I didn’t consolidate, I slashed and burned. My balance sheet looked like someone had taken a blowtorch to it.

    Adding insult to injury, government abruptly changed the duty free law, which invalidated my profitable offshore hard-asset brokerage business and the duty free foundation of my diamond and gemstone retail business. Manufacturing was shut down and leases given up. Everything changed in a few months.

    Eventually I got the loan down to a point where another bank took it over and I reinvented my business model to fit its new reality. New and innovative product ideas were successful and my collections grew to become world famous. Years later I was sitting next to my ex-banker on a flight and he said to me; “Out of adversity comes opportunity.” Thinking of all the damage that had been done and the long days and nights of endless struggle, I agreed with him.

    • Anonymous says:

      Thank you for that encouraging word from your own experience, Dennis. That’s what we need more positivity. Any more where you came from?

  4. OH PLEASE! says:





    Do you think they would actually bail us out???


    I think their efforts with Operation Tempura to ruin us as a trustworthy banking industry, is succeeding!  THEY WANT US TO LOSE MILLIONS SO THE SAME MILLIONS CAN REPLENISH THE UK’s ECONOMY


  5. Anonymouse says:

    Total HOGWASH!…

    The soundness of the finances of a country is judged by the GDP to debt ratio: the UK’ s debt represents 42% of its GDP, while it’s only 27% in the case of the Cayman Islands…

    Cayman: GDP $2,254 Billion — Debt $600 million…

    Brits are total financial Morons…

    Brown sold 400 tons of Gold (1/2 the UK’s total reserve) at $255.00 in 2001 at a multi-decenny low, losing some $9 BILLION in the process compared to current price of over $1000.00 per ounce…

    Watch on Youtube a video from Max Keiser calleda "Brown’s Bottom"…





  6. Anon says:

    This is just another speculative article drummed up by journalists. Note the word "Could" at the start of the article. There "Could" belittle green men on Mars too, but that does not mean it is likely.

    Just another "shock" article designed to provoke, and judging from the posts here it is doing a good job.

    Let us hope Mac comes up with a plan acceptable to Capt. Underpants, so we can borrow what we need and get over this bump in the road.

    The Guardian will never be our friend, so keep that in mind when these clowns spout off.

  7. Anon says:

    Michael Foot is no "offshore expert" either. I believe in fact he is a long term critic of the offshore jurisdictions

  8. Twyla Vargas says:

    BRITAN FORCED to bail out its Overseas Territories………  How I honestly feel about this is…………….For donkey years England has never had to give Cayman one dime.   NOW SIT TIGHT  and read, because it is going to get more interesting.  My question is what has happened that it has come to this?, why do we have to be asking for this kind of assistance form Great Britan?   BIG MISTAKE !!!, BUT OUR FAULT.  Because of what I will call BAD MANAGEMENT..

      I would always hear my Grandmother who lived to 106 years old say that she respected the Mother Country because of the position, but that England never ever gave Cayman anything.  In fact she told me that after the Hurricane 32 storm that the residents of Cayman was starving for food.  My dad and uncles and their friends agreed that this was true.  They told me that they had to boil wild parsley and make little soup, and if any person from the Island had a little money and had killed a cow, none of the ordinary citizens could afford to buy a piece of meat unless it was once a year.  

    My Grandmother said that she would walk 12 miles to wash clothes, starch and iron them, scrubb the floors rake the yards for one slice of bread and some times was too happy to get the cowfoot bone with no meat on it to boil with the parsley for soup.  That bone was then passed around to all the neighbours and family members to boil also only to obtain a little susbstance.   Caymanians who had a few dollars did trade and business with Jamaica,  Honduras and Cuba.  That is why you will findso many caymanian families living in honduras and Cuba.

    Back to the bailing out, I see it like this If you are a young man or woman who have left home and out on your own, then your mother and family has no responsibility for you except, christmas, easter, birthday and valentine dinners.  Make your bed  hard you lie in it.   The only how you should be going back home is if you have failed in some way or become ill.  Cayman has either failed miserably or has gone ill.  Stop opressing your mother and taking away her rainy day money  and try and make it on your own.  Thats my feelings, and they stand to be corrected.  Thank you and God bless.

  9. Anonymous says:

    Of course in the Cayman context our situation has been made worse by McKeeva’s reckless and unintelligent statements about our own finances simply to satisfy his own agenda of attempting to discredit his political adversaries, the PPM.

    Each time McKeeva is put in charge of our country he makes a major screw up but yet people continue to vote him in. First it was the 3,000 + status grants that will continue to negatively affect our country for many years to come… at least for the next 15 years. Now its his reckless and down right stupid remarks at his nonesensical meeting at the Ritz recently. McKeeva’s remarks have had a very severe negative impact on our financial services industry and could potentially destroy it, and by extension our economy, in the very short term.

    Please stop voting for this XXXX… is almost as if you all want your country to be destroyed.

    • Anonymous says:

      "First it was the 3,000 + status grants that will continue to negatively affect our country for many years to come". Yes, giving wealthy individuals the right to live and invest in this country has been a terrible drain.

      • Anonymous says:

        Sorry to say, but you’re a bit dense. The MAJORITY of people who recieved status were lower to middle class.

        • dirty caymanian says:

           And the majority should have been given status long, long before BigMac did the decent thing! 

          • Anonymous says:

            In no way, shape or form was that the "decent thing". It’s motivation was wrong, its methodology was wrong and the consequences were and continue to be harmful.

            I expect you are describing yourself as "dirty".

        • Frequent Flyer says:

          Would love to know how you came up with that tidbit. I still have the Compass on the day that they listed all of the names.

          Put up or shut up. Don’t spout facts without back up.

  10. Anonymous says:

    And you wonder why the UK is insisting McKeeva and his gov come up with a financial plan to tackle the growing debt burden in the Caymans? Small wonder when it will be UK taxpayers that ultimately foot the bill if and when the Cayman Islands goes bankrupt!

    • Anonymous says:

      Cheap theatrics from the FCO and Mr. Brown. The level of public debt in the UK is far higher than what it is in Cayman. The reason that the UK pushing McKeeva to come up with a plan is the knowledge that McKeeva is probably incapable of coming up with one and the hope that they can justify crippling our financial services sector. Pigs would fly before the UK taxpayer would ever be called upon to pay off the debts of Cayman.

  11. Anonymous says:

    Undoubtedly this is a HM Treasury leak to the Guardian as the Foot Report is not a public document. HM Treasury are setting the stage for yet more intervention in order to cut out the competition and McKeeva’s stupid statements at the Ritz are giving them the ammunition that they need.

  12. Anonymous says:

    A hundred million pounds is less than half of the UK government DAILY overspend. It would be lost in the noise of the nonsense financial situation that Prime Minister Brown has inflicted on the UK in his insanity.