International outlook key for new Isle of Man government

The Isle of Man’s governing body, the Tynwald, is of Norse origin and more than 1,000 years old, and can claim to be the oldest continually active assembly in the world. In September 2016 the island held elections for a new government, which saw both the chief minister and treasury minister step down with a host of new faces elected to parliament.  

Although the quality of the new intake was “extremely high”, according to John Spellman, director of Financial Services at the Isle of Man’s Department of Economic Development, there will be a “bedding in” period, while a great deal of experience has been lost.

“We have politicians who have never operated in these roles before, so they have to get up to speed, to see where their responsibilities lie and where they don’t. There is also a learning curve. New politicians might be very aware of the situation within the Isle of Man, but they also need to be aware of our position on the international stage.”

It is this international scene which will take up a huge amount of the new government’s time. Mr Spellman points to rising protectionism, regulation and Brexit as issues that could threaten the future prosperity of the island.

The Manx population was not given a vote in the referendum on the UK’s membership of the EU, which did lead to “some dissatisfaction locally”, according to Mr Spellman, as the decision to leave the union will hugely impact some sectors of the island’s economy. He lists areas such as fishing, agriculture and some software-based services as those likely to be hardest hit with financial and professional services less likely to be impacted.

However, Mr Spellman “couldn’t speak highly enough” of the way the UK government is listening to the concerns of the Isle of Man, along with fellow Crown Dependencies Jersey and Guernsey. “We have a direct route into the relevant departments and they have visited the island on a number of occasions. They understand our arguments and have been very receptive.”

Although the impact of Brexit on the Isle of Man is unclear, Katherine Ellis, group director at multi-family office Boston, is optimistic. “Although we have some manufacturing here that may suffer, finance and gaming, the two largest industries, should be largely unaffected. This stands in stark contrast to somewhere like Gibraltar, where the loss of passporting could really hurt them.” 

Indeed, for companies like Boston with a multi-jurisdictional strategy, she believes Brexit will be quite positive. Boston, for example, will have an onshore EU base in Malta and an offshore non-EU base in the Isle of Man, which brings flexibility.

Boston believes there is plenty of organic growth to be had managing local money on the island, something David Batey, director of Coutts Crown Dependencies, agrees with, explaining how business has evolved, with the current Coutts offering on the Isle of Man focused on servicing the wealth management needs of local HNWs.

“The client base is varied and increasingly includes a higher entrepreneurial base where wealth has been generated through business interests,” he explains. “We often find ourselves talking through the practical and emotional implications of selling a business as well as providing investment solutions for any sale proceeds.”

For wealth manager WH Ireland, though, who opened an office in Douglas in 2013, the focus is on building international business. Director David Bushe is full of praise for the jurisdiction as a base, though admits attracting skilled staff can be a problem.

“It can be a job getting our graduates to come back,” he says. “Many will head elsewhere after university, though might come back later in life.” 

The island needs to identify where its skills gap lies and work to fill those areas, he says, pointing to a push underway to build IT knowledge. “Even in our industry, if we went out to recruit portfolio managers, we would struggle. And we need to develop those people here, not just fly them in. Those people might not stay.”