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Chief Minister’s address to the Alliance of Isle of Man Compliance Professionals

Friday, 1 February 2019

Ladies and Gentlemen,

This is my third state of the nation address to the Alliance of Isle of Man Compliance professionals.

Over that time the Isle of Man has changed, and so has the rest of the world.

But something that has definitely not changed is our Island’s commitment to international standards of excellence.

That commitment shines through: in our legislation, in our regulation, and most importantly in our dedicated business community.

Over the last few years we have been challenged in new ways by forces outside of our control.

Despite this we have maintained our world-class track record of over 40 years in meeting international standards.

We have created a regulatory environment that is the envy of many jurisdictions around the world.

We have continued to build a strong and diverse economy, skilfully pairing stability with innovation.

This ensures that our industries succeed both locally and on the world stage. 

Yet while we build our resilience, the world around us continues to change so we cannot be complacent.

We remain committed to our talks with the UK about Brexit.

The UK’s withdrawal from the European Union continues to cause uncertainty for people and business in our Island.

The Isle of Man Government has always taken the view we must prepare for the possibility of a no deal scenario.

So we are continuing our contingency planning and preparing for our legislation to be amended to deal with the impact of the UK’s withdrawal

The Prime Minister has been mandated to renegotiate the Withdrawal that the Northern Irish backstop provision can be amended.

However, EU leaders have firmly stated that they will not re-open the Withdrawal Agreement for amendment.

The Prime Minister has until 13th February to obtain some form of compromise and then come back to the Commons for further debate and a meaningful vote on whatever concessions she manages to get.

Whatever happens we will continue to keep focused on the 29th March deadline

We will also continue to protect our relationship with the UK, which is of profound importance.

After all, 80 per cent of our trade is with the UK.

So as we look ahead I foresee further uncertainty and potentially some turbulence in the coming months.

We will continue to make preparations for Brexit.

And we will keep working with our partners across the various sectors to ensure that we minimise the impact of the UK possibly leaving the EU with No Deal.

Last year we hosted a number of high profile visits to the Isle of Man.

Most recently we were visited by the European Parliament special committee on financial crimes, tax evasion and tax avoidance, otherwise known as the TAX3 Committee.

The Committee’s questions were focussed on the exchange of information and cooperation on tax avoidance between the Isle of Man and EU Member States.

They had questions about how the Isle of Man applies VAT rules in relation to yachts and aircraft, and wider questions about beneficial ownership and money laundering.

There were also broader discussions about zero tax rate jurisdictions and their implications.

We will continue to be the subject of scrutiny.

And we will continue to robustly defend the Island’s highly regarded reputation and prevent complacency.

At the same time we will continue to meet all of our international obligations and cooperate fully with regulators.

You all play an important part in that.

Actually, that's not quite right.

Your work in building the Island’s strong regulation and your assistance in meeting the international standards of financial supervision is not merely “important”.  It is absolutely invaluable.

As an Island we have a strong sense of identity and a vigorous spirit of collaboration.  We can become the premier jurisdiction for international finance because we work together.

Last year, the Department for Enterprise launched a new executive agency – Finance Isle of Man.

It is designed to work closely with the private sector to help create a shared vision for the Isle of Man’s financial services industry.

The agency will have a key role in ensuring that the Island is seen as an international financial centre of excellence with long term sustainable economic growth.

As part of this the agency has worked closely with the regulator on the new Conduct of Business rules for insurance business. The overriding aim of the new rules is to require insurers to embed the fair treatment of policyholders within their business culture.

This sort of positive engagement is a sure sign of things to come.

Work with the life insurance sector continued through 2018 with the launch of an international marketing campaign to put the Isle of Man unshakeably on the map as a premium place to do business.

Finance Isle of Man will have plenty more initiatives gushing through their pipeline in 2019.

Right across our industries, from insurance through to e-Gaming we have been pioneers in both protection and setting standards.

In the face of a challenging wider environment the Isle of Man FSA and industry itself have brought certainty and confidence through enhanced engagement proactive supervision and continual regulatory developments.

As innovations enter the market we will continue with our pragmatic and practical approach to regulation. 

We are close to announcing plans for a Blockchain Office in the Isle of Man.

Blockchain technology has morphed through various uses over the past few years, with the rise and fall of Bitcoin, the continued interest in Initial Coin Offerings (ICO) and the launch of the first fully compliant blockchain lottery in the world.

And that was developed by a company here in the Isle of Man.

We have considered our position in this fast-changing industry and will be moving forward with a roadmap for the future later this month.

The need to maintain our reputation at the forefront of innovation and emerging technologies was set out in this Administration’s Programme for Government.

As we approach the halfway mark, let's reflect on how much we have achieved.

Last year we reformed the Island’s work permit system.  We listened to the needs of our businesses who are struggling to find the skilled workers they need to support their growth. 

So we introduced a raft of changes to simplify and enhance the process.

And it has been a great success.

Employer satisfaction has significantly increased over the last year with 75% now either satisfied or very satisfied with the reformed process.

The Programme for Government highlighted our need to be a digital island, ready for new technologies.

So last year, we published a National Telecoms Strategy for positioning the Isle of Man at the forefront of telecoms innovation.

The latest National Income Report indicates a 7.4 per cent growth in real terms for the Island’s economy.  This was paired with a 4.4 per cent increase in personal income for our local population.

We recorded a Government budget surplus last year, due to an increase in income tax payments and a reduction in the number of people receiving unemployment benefits.

Very soon, we will be publishing the Business Confidence survey. I am pleased to say that you have told us that the financial services sector is increasingly confident in terms of growth, profitability, and the likelihood of employing more people.

This means that we have opportunities and we also have risk.

Going into 2019 we have more people in work, more people who are better off, and more confidence in our business community.

And we know that we need to continue to grow our economically active population.

There are opportunities for the Government and business to attract skilled workers to the Island.  We need to tell the world about the opportunities for success on the Island; a place where you can be a part of an international business and a place where you can start one.

A place where you can have a career that uses state of the art technology, crosses international markets and works closely with Government.

We will be pushing forward with a strategy to attract more skilled workers this year, with targeted promotion in the UK and further afield.

We will also be reaching out to the Manx diaspora all around the world to encourage them to reconnect with the Isle of Man.

I am also delighted that Minister Skelly will be laying his “Locate” programme before Tynwald next month.

The aim will be to encourage them to come back and work and live here.

We are hosting a new Isle of Man Graduate fair in April to connect our local students and Manx graduates with businesses here that need their skills and experience.

We will show our young people that the Isle of Man has a lot to offer professionally and that a valuable and challenging career can definitely be found right here, right now.

We are an administration with a focus on delivering our domestic agenda. There will be significant changes in our Health Service this year.  Sir Jonathan Michael's report will be published in May.

We have revised the planning system, taken on public sector pensions, reviewed Manx Gas, and our work to end poverty and homelessness in the Isle of Man goes on.

As an Island we have continued to move forward in the middle of a relentless sea of change.

We have maintained our professionalism, our positive attitude, and our ability to adapt and evolve.

When people engage and work with the Isle of Man I want them to see the value of our experience and the depth of our integrity.

The pace of change is unlikely to slow down.  However, as a Government we are confident in our engagement with the international community.  Confident in the resilience and experience of our industries, and, most importantly, confident in the spirit and determination of our people.

The Island's greatest asset is its stability.

The continued dedication of the people in this room to compliance and to raising the standards of financial regulation is an important part of this.

You are in the front line of the defence of our reputation as a world class business centre.

We will continue to work together to ensure that the Isle of Man remains a proudly premium place for people and for business.

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