Letter to the Financial Times from Mr. Anthony B. Travers,
Sir, I cannot be alone in noting the irony in the UK financial services secretary's comments quoted in the article "Tension eases as London backs Cayman loan" (October 1).
Indeed, the basis for the inadequate nature of the UK government's response to the European Union's attack on the City of London under the alternative investment funds directive is well described by the thinking that underlies Lord Myners' grimly ill-conceived metaphor that offshore financial centres, like addicts, should be "weaned off tax if that is the only source of competitive advantage that they offer".
Lord Myners needs to look in the mirror first. It is better argued that it is the UK government's addiction to high taxes and irrelevant regulation that is causing the diminishing benefits to the UK Treasury, and indeed if the EU initiative is not derailed, UK taxable income will decline further and Chancellor Alastair Darling's woeful projections will look increasingly optimistic.
Rather than the drug-crazed one-trick ponies Lord Myners suggests, it is the comparative clarity of a superior legislative regime, an indirect tax system and a relevant regulatory approach that is the cornerstone of the Cayman financial model. No Cayman financial institution has failed, and Cayman continues to experience net inflows of business.
Throughout the financial crisis the Cayman debt to gross domestic product ratio has been less than 30 per cent of the real UK figure. The Cayman budget today will again be balanced. Perhaps there is a message here to those with clarity of thought. Lord Myners: do get the metaphor straight.
Anthony B. Travers,
Chairman, Cayman Islands Financial Services Association