Jersey is surfing the wave of international change

A common theme at the Jersey Finance Private Wealth Conference, for which Moore Stephens was among a number of sponsors, was the turbulence of international politics and economics. Richard Hay, of Stikeman Elliot likened it to a giant wave, washing over (back and forth) governments and financial institutions. However, things have not been shaken up as much as there was potential for them to be shaken. For example, we are more than six months past the decision to Brexit, and yet London is still Europe’s leading financial centre. On the list of global financial centres it stands alone ahead of Luxembourg in 18th and Frankfurt in 23rd. There is no real challenger (at this point) for London’s lead, however change is undoubtedly coming to the UK. Brexit, according to Hay, has shown that UK voters prioritise immigration over any other issue, and that as a result of the vote, the UK will pivot from the EU to the rest of the world. In addition the UK will look to be more competitive on tax rates for corporates and Hay highlighted that politically, the safe statement is to equate increased tax revenues with raising taxes, however what the UK is proving at the moment is that slashing the rate of corporate tax actually raises the overall tax take by encouraging growth. But – making itself more competitive will not make the UK more popular. Hay suggested that in the post-Brexit world the UK will be looking for friends and that those friends may well come in the form of IFCs who the UK will come to see as allies in the protection of their ‘crown jewel’ – the financial services industry. Thinking more widely it is also clear that China is a big supporter of IFCs, seeing them as a necessary route to globalisation. So, whatever the state of the global situation, and the giant wave that is currently shaking up expected norms, it is clear that Jersey will need to ‘surf’ and, as Hay pointed out, there is one thing we do know about the financial services industry, and of Jersey itself, it’s that we are ‘pretty good big wave surfers’.