Travers hits out at damaging UK “dithering”

| 25/09/2009

(CNS): The continuing delay by the British government in signing off on the approval for the Cayman Islands government to borrow funds for this year’s budget is becoming the major cause of concern among leading business practitioners, says the chair of CIFSA. Speaking from London, Anthony Travers said that, while the UK was not necessarily turning the issue into a war, it was holding out for direct taxation, which Travers said was a seismic shift that was not justified. He accused the FCO of not understanding the far reaching consequences of their obstruction.

“The latest signs from the Foreign and Commonwealth Office are that they do not want to turn this short term budget issue into a war but they would like to see some measured cuts in public spending. That seems entirely reasonable,” the Cayman Islands Financial Services Association and Stock Market Chair stated. “Our information also indicates that the Minister for Overseas Territories, Chris Bryant, MP is not going to die in a ditch demanding we bring in income tax. However, all the signs are that they are still looking for a payroll tax and that is a cause for grave concern.”

Travers said he had canvassed senior business players in Cayman and they  indicated that at the first sign of a payroll tax they will have to consider their options. “I believe this will inevitably lead to job losses and it will affect both the highly paid and more junior members of staff and lead not to a revenue increase but a decrease. The move from indirect to a direct system of taxation is a seismic shift which has not been thought through and which is not justified on the facts,” he added.

Travers also noted, with regard to the hedge fund sector, that Bryant and his colleagues at the FCO did not appreciate that in obstructing the CI government they are going to reap a bitter harvest with very far reaching consequences. 

“The FCO’s sniping at hedge funds plays right into the hands of EU legislators who are desperately trying to curb the success of The City of London and in particular the hedge fund industry,” Travers claimed. “In short if the FCO attack the Caymans, they damage London. I would have thought in the current financial crisis that would be a horrendous example of unintended consequences.  I urge the FCO to acknowledge that the CI Government has put forward sensible ideas to cut costs and raise revenue without the introduction of totally unnecessary taxes and allow the CI Government to borrow the relatively small amount of money it needs to carry out its business.” 

It was revealed yesterday that Although CI government had been expecting a ‘yes’ from the UK on the borrowing requirement there was still no agreement by late evening which caused a public meeting to be cancelled. Leader of Government Business McKeeva Bush has also confirmed that the budget statement will now be postponed and will not take place on Monday but on Thursday evening instead.

Go to Budget delayed as no UK OK

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Comments (29)

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  1. Anonymous says:

    Mr Travers you must surely appreciate that the UK Govt has no trust / confidence in the CIG –

    Please remember that they are dealing with Mac – It is extremely unfortunate that Mac has not given you the powers to negotiate as I believe we would not be left hanging. 

    Do you sir have any confidence in the negotiating skills of CIG or indeed their competence –

    Please put yourself in the shoes of the FCO 

     

  2. Anonymous says:

    First of all, I have some experience with Cityof London and a little with the FCO and I can tell you, like many of the so-called foreign ‘professionals’ in Cayman, they are no better equipped/skilled/ qualified than the average Caymanian professional.  We unfortunately, are just told constantly that we are not good enough.  Unfortunately there is an element of this going on here, wherein persons are seemingly giving in to this misconception.  I am not trying to start an expat vs. Caymanian argument, or sound vain, but I feel that it has to be kept in context.

    Anyone reading these posts, in whole, would no doubt get the impression that Caymanians are not up to par and corrupt, while the expats (and the posts, will cause the person to assume white expats) are the ones with true knowledge and are in danger of not being listened to.  That being said, I agree with O’Really; whether you are prejudiced or not, whether you believe the misconceptions or not, the fact is I was raised here knowing that the average white person I meet would look down on me no matter what my accomplishments.  And sadly, I have experienced few pleasant surprises.  I came to terms with that a long time ago, but will never stop saying that it is wrong.  However, if I have to swallow my pride and put a white man out in front to speak to another white man that feel the same way towards me, then as unfair as it is, if it saves all of us, I am willing to do it.  Peace.

  3. Joe Average says:

    People are right in saying Mr.Travers knows what is going on.  The FCO (thinly disguised as the mouthpiece for The City of London and it’s financial interests) is playing hardball with offshore centres such as Cayman.  Which is in direct competition to services provided by The City of London.  The FCO is already aware direct taxation will drive this particular offshore centre and it’s competitiveness straight into the ground.  Unfortunately, through apparent mis-management of the local economy we have unwittingly fallen into their hands and they have pulled out the ace in the hole.  I hope the individuals sent to negotiate on our behalf are aware of this fact.  If they weren’t aware of it going in then at least I hope they are aware of it NOW.  If not then we are in….how does the expression go?

    Deep ca-ca.

    But I am very impressed that Mr. Travers seems to be willing to step up to the plate, play hardball and point out some of the failings in their logic.  What he is saying is….if it can be done to us….it follows it can be done to anyone.  At the very least he is making the FCO aware Cayman cannot and will not be treated like a banana republic.

    Now if we could only prevent our politicians from saying ANYTHING.  Or making ANY comments.  Then… this poker game we are involved in may have a better outcome.  DO NOT tell your opponent your hand.  And don’t blink.  Especially when you don’t have that many chips. 

  4. Frank says:

    Cayman is in better shape financially than all its critics…

    The Cayman Islands are being pilloried by the US, UK and France who clearly want to destroy its financial business, when in fact, our finances are in far better shape than that of our detractors…

    The soundness of the finances of a country is judged by the Debt to GDP ratio and the smaller the number, the better: for instance the Cayman Islands debt represents only 27% of its GDP:

    Cayman: GDP $2,254 Billion — Debt $600 million — Ratio = 27%…

    However, our critics have a much higher ratio Debt to GDP ratio:

    France===>67%

    US===> 61%

    UK===> 47%

    http://www.visualeconomics.com/gdp-vs-national-debt-by-country/

    I’d say these countries have a serious case of ENVY and want to steal  Cayman’s financial business…

     

     

     

  5. O'Really says:

    I have been called a racist and guilty of prejudice towards Caymanians on this site quite a few times for expressing opinions which are not always complimentary to certain aspects of Cayman life. I raise this only as an illustration that Caymanians are obviously aware of racial issues and quick to call someone a racist.

    It’s odd to me then, that when a poster raises a problem that local politicians face in the UK, which almost certainly hasan element of racism to it ( ie that Travers won’t have to deal with the prejudice that BigMac will have to deal with) , the messenger is racist. He could have been more diplomatic in his wording, but acknowledging how the real world works doesn’t make him racist. And to dismiss the substance of the message because it deals with a harsh reality won’t get anyone anywhere.

    When Cayman deals with the outside world, the world is not fair. The old boy network still exists. Going to the right schools/universities is still important. Having the right accent still matters. The list is long. Is this equitable? Absolutely not. Is it important? It shouldn’t be, but recognising that it is may have a role to play in determining whether Cayman makes progress it can live with or not.

    Whether Travis is really achieving anything remains to be seen, but his efforts would probably be helped if he were speaking in some quasi-government approved position. How difficult would it be for CIG to give him a title of some description? Could it be that his original nationality and appearance weigh against this? If there is any element of truth in this, what would you call it?

    And finally, just because BigMac is called " leader of government business " does not make him a business leader when it comes to representing the financial service industry. 

     

  6. Anonymous says:

    Mac is described as a self employed business man , the members of CIFSA are qualified Accountants , Lawyers etc all of the highest calibre. The FCO has Economists , Accountants , Lawyers  – Who would you take seriously going into negotiate – a self employed business man , or a highly qualified professional ??

    See the entry from Wilkipedia re Mac – Doesnt make very good reading does it 

    Bush is notoriously associated with overseeing of 3000 Caymanian Status grants via cabinet that has caused much social friction and anger amongst the Caymanian population. Furthermore, Mr. Bush and the United Democratic Party were alleged to have been at the center of several corruption allegations relating to the Royal Watler Cruise Terminal, the Government affordable housing initiative, Boatswain’s Beach, and the Ritz Carlton Hotel.

    Bush was forced to resign from Executive Council in 1997 being implicated as culpable in the failure of First Cayman Bank, a fraudulent institution he was a Director of at the time. It is said that he was also involved in the failure of Eurobank that resulted in the abdication of the Island’s attorney general at the time who fled the Island due to espionage allegations.

    In November 2001 he was a founding member of the United Democratic Party whom it is rumored has a strong monetary connection to the Dart Container Corporation.

    A self-employed businessman, he is married to Mrs. Kerry Bush; the couple have two children. 

    • Anonymous says:

      And two real estate companies – Windsor and Cambridge.  At least that will likely save us from property tax. 

  7. N. Fidel says:

    Future recruitment – that will be the problem with direct taxation.  Cayman attracts better quality offshore professionals because the take home pay is more than its competitors.  That gap has been decreasing recently. A few percentage points today is likely to make a subtle but appreciable change in the quality of recruits over the next few years. 

  8. Anonymous says:

     You seem all to be so focused on irrelevant personal comment that you miss the main point  The  Chairman  is speaking for the Cayman Islands Financial Services Association. It is the only body capable of developing a consensus for the Cayman Islands Financial Industry and it does so. It has real meetings real discussions and arrives at real conclusions by consensus. The views expressed are the views of the Cayman Islands Financial Services  Association. IF CIG ignores these views as it is clearly doing it does so at its peril .CIG has no one within it , and not within the Civil Service  with any comparable understanding. Personalizing this fundamental  point with inane personal nonsense is trivializing the importance of the CIFSA recommendations  and the structure that lies behind them.No wonder CIG feels it can ignore them  with impunity. But if it continues to everyone in Cayman will suffer. Without the Financial Services Industry Cayman needs Civil Service of 50 people .

    • Anonymous says:

      CIFSA undoubtedly has a role to play, but its ability to represent the financial services sector as a whole should not be overstated. As a Caymanian professional who has a vested interested in the financial services sector of this country, I would like to point out that the decisions taken by CIFSA represents the interests of the senior partners and managers of some 40 organisations, a tiny fraction of the people employed in the sector. In some instances the positions articulated by CIFSA coincide with the interests of most of the Caymanians and non-Caymanians in the sector but not always. Those of us for whom Cayman is our home may take a more broad view moreinclusive of societal issues than those interested primarily in keeping the inbox full for a few more months or years.

      In this particular instance I suspect that CIFSA’s opposition to direct taxation and its concern for the fumbling of the issues over the recent past is shared by both those who have a say in CIFSA’s official position and those who work in the sector but have no such say. That may not always be the case. CIFSA should be careful not to overstate the basis for its representations.

      • Anonymous says:

         It is clear  that CIFSA  should be involved in the frontline negotiations as CIG does not have anyone who is nearly as well qualified. It is concerning that Mac has chosen to go it alone and we are all going to pay the price for his recklessness. 

        CIG need to start dialogue immediately with CIFSA 

         

         

        • Anonymous says:

          I beg to differ.  The Civil Service has quite a few people that are as good or better than mr. Travers and his associates.  I am not stating this to start a fight, I simply want to point out that we may be in a situation where CIFSA is listened to as much (or as little) as the internal experts.  An illusion has been created that we don’t have people of adequate skills, because these people have to follow orders no matter what.  Thankfully Mr. Travers doesn’t.  For the record, I also don’t like when (to borrow from MLA Mr. Solomon) poison is mixed in with the water.  While Mr. Travers is doing a good job, he is also using his current notariety to push for other things (including some immigration related items – I am not trying to start a Caymanian vs. expat argument) that won’t benefit the country in the long run.

      • Anonymous says:

         The CIFSA board is controlleed by Caymanian professionals who have risen to the top of their accounting and law firms  .That is a fact .The Financial Services Associations it represent are a fact.What exactly is your point and who do you represent ?

         

      • Shif Shah says:

        Can you please give us a few examples so we can consider the validity of your point? 

      • Anonymous says:

         CIFSA represents the ‘industry’ not the personal opinions of board members or every individual worker . Expressed  CIFSA positions are developed by consensus and are based on protecting the industry in Cayman and creating an environment where the industry here can continue to grow. This ultimately benefits every Caymanian through greater employment opportunities in all sectors, higher revenues for government, promoting education and a more worldly view, support for local charities and cultural events, and a myriad of other benefits.  The  Cayman Islands benefits  from  CIFSA  providing a  clear,centralized  voice for the industry on the international stage.  

  9. Anonymous says:

    Mr Travers is being extremely charitable in relation to his advisee. Clearly the "dithering" has not been on the UK side of the discussions. The UK negotiators at least have an idea of what they are doing. 

    • Anonymous says:

      agreed, after listneing to the ramblings of mac over the last week it is obvious that the uk have not been offered realistic or sustainable proposals from ci gov

  10. Anonymous says:

    How does Travers know what is in the proposed budget and they rest of us don’t?

    I can certainly agree with Travers that a payroll tax will not work, but how is is able to say "I urge the FCO to acknowledge that the CI Government has put forward sensible ideas to cut costs and raise revenue without the introduction of totally unnecessary taxes and allow the CI Government to borrow the relatively small amount of money it needs to carry out its business.” ??????

    Why doesn’t Mac show the budget to the rest of the population. We understand that he wants to borrow $370M, but has given us no indication where he intends to spend it.

    I canaccept the fact that we have overspent on schools and a new administration building, but they will be used and eventually we will own them. I would suspect that even with an inflated priced the new administration building will save millions each year on rent.

    What does Mac intend to spend money on? A new cruise ship dock? How will that bring revenue to the government and people? A new cargo dock out of town? A new super yacht marina?

    If things are so bad now that we can’t afford necessities like new schools and administration building, why would the FCO believe that adding another $370M of debt to be serviced is good for us and them?

    Show me your budget and I will support it if it is good, but please don’t ask me to trust the UDP or any government that they know what is best for me without my approval.

    • Anonymous says:

      Here’s a guesstimate on the $370mln borrowing figure…

      The following are estimates for year-ending June 30, 2010:

      – $130mln, Budget Gap* assuming no spending cuts & no new revenues

      * read: "Deficit Spending"

      – $150mln, Capital Projects (incl.Schools $75mln**, Admin Bldg $39mln)

      ** This figure does not include furniture & fixtures

      – $90mln, Contingency & to be determined.

  11. Anonymous says:

    This is no time for shrinking violets – Travers I believe realised that this was on the cards which is why he has been so outspoken . 

     

    Why doesnt Mac give him an official position especially as he appears to be in London – far more beneficial to have Travers speaking on our behalf than having CIG jetting to and fro racking up $$$$ in expenses we cannot afford and getting no where into the bargain. 

     

  12. Anonymous says:

    Well said .  

    Why wasn’t  Anthony Travers at the meeting with the FCO – instead we send in the clowns 

    No wonder everything is deteriorating at a rapid level – lets face it you cant blame the UK Govt  – how seriously would you take Mac bearing in mind  he has no experience at the level we are talking to engage and debate with economists and policy makers at the FCO 

     

    • Anonymous says:

      Too true, we have so much business expertise and knwoledge within the private sector that obviously wants the Cayman Islands to do well, why are none of them being invited to help out at all? To the UK, Mac will look like a banana picker, not being racist, but they will hear him and his view and within moments will realise that he knows nothing about international politics, nothing about the economy and, nothing about business and would struggle running a bath let alone a country.

      Get some experts out there to join in these conversations, maybe somebody else can put our viewpoint across more clearly.

      • Anonymous says:

        So you are implying that the FCO will listen to Travers because he is a white man???

        You assume too much!  And you do sound racist!

        You ask for experts, is not McKeeva an expert in his role as leader of business? 

        You like you know his qualifications so well!

        You must have been there at one of the meetings to lowly judge his expertise!

        You sound very ignorant!

         

        • Anonymous says:

           I dont believe that is what was meant – the reason the FCO etc will take Travers seriously is down to the fact he is qualified , he is recognised globally as an expert in the field of offshore financial & legal matters. CIFSA as an organisation is made up of professionals at the very top of their game .

          You only need to listen to Mac in interviews to realise he is not of the  calibre required to take part in negotiations of this level. 

          You also perhaps need to watch recent interviews with Anthony Travers and then you may realise why he is being taken seriously and Mac is not 

          Please dont attempt to turn this debate into one of  white ex pat  v caymanian – that is the sort of stupidity that has led us to the position we are currently  in. 

           

           

          • Anonymous says:

            yeah, ust look at the way he flip-flops on nearly every issue from day to day, for me his actions regarding pirates week are enough to warrant resignation….

            ditto for his ‘well thought’ out plan on the pension ‘holiday’

    • Anonymous says:

      instead we send in the clowns 

      I find this comment unfairly demeans clowns – I suspect that if we would have sent in clowns rather than Mac and his buddies we would have had much more coherent presentations and much more progress.

       

  13. Anonymous says:

    I sincerely hope that in this context the LOGB listens to Mr. Travers. He is absolutely correct that the advice the LOGB has been getting from his other advisors to introduce a payroll tax cannot have been thought through by anyone with half a brain.

    I do not agree with all that Mr. Travers says or what in my view was his hopefully past penchant for being a bull in a china shop, but this time he is absolutely right. Please listen to him.

    • Lachlan MacTavish says:

       I agree with Tony Travers…..a payroll tax will not work….but….we need a stable non fluctuating (no tax duty ) tax that will allow the CIG to forecast, budget and rely on income.

      Lachlan MacTavish

      • Anonymous says:

        First of all we need someone to give CIG practical forecasting, budgeting and management lessons and we need to somehow constrain the empire building tendencies of Ministers – particularly as we will soon have more of them once the new Constitution is in place – Lord help us. Giving government Ministers access to more money or even predictable money is like increasing the drug supply of addicts. I would rather that they assumed that there was no money and set their spending accordingly.