What’s the constitutional status of the Isle of Man, then?

...what? Image: Google Maps/CityMetric.

Amidst the tumult of Brexit negotiations, away from questions about the integrity of the Union itself being asked by wearied bureaucrats in Edinburgh, Belfast, Brussels and London, the constitutional uncertainty of our times has washed up on the shores of the Isle of Man. Now it threatens the slumber of policymakers in Douglas, too.

The ten-by-forty mile island in the Irish Sea is best known internationally for its annual TT motorcycle races and tax haven status. If you haven’t been you should go: the variety of scenery is breath taking, as are the economics. Lamborghinis emerge from the back of slate cottages, a seaside dwelling can set you back more than an Edinburgh duplex, and the gilet prevalence index is off the charts in certain localities.

The reason for the disconnect is the constitutional relationship between the Isle of Man and the UK. For centuries the island supplemented threadbare revenue streams from subsistence farming and fishing with a robust smuggling sector. The IoM government homepage clearly, maybe even proudly, states that it has never been part of the UK: in the 1700s plans to buy it out and make it part of England were shelved after local unrest, while the current arrangement of Home Rule dates to the early 1800s.

Today the IoM government is based in Douglas, the island’s largest town. Its funding comes through a revenue sharing agreement, the “common purse”, with tax gathered locally on behalf of London and returned to the island according to an unpublicised formula. The agreement has been a source of contention for about as long as it’s existed, but ire has grown proportionally with the island’s pre-eminence as a tax haven. Its detractors point out that the UK consistently gives back to the IoM government more than it gathers, effectively subsidising the island’s status as a tax haven; while its supporters are wealthy.

A map of the Isle of Man. Image: Eric Gaba/Wikimedia Commons.

In a world gripped by economic injustice, the IoM drives social change with a programme of support to welcome the huddled masses of oligarchs yearning for freedom from autocratic tax regimes. Income tax tops out at 20 per cent but, fear not, it’s capped at £150,000. Corporation tax is nil, until your firm earns £500,000 a year; then it has to pay 10 per cent on everything over that. For mega-wealthy émigrés forced to flee odious obligations like capital gains, inheritance or wealth tax, there are opportunities to invest in local property, to get back on your feet: proceeds are taxed at 20 per cent.

The Isle of Man enjoys the same constitutional status as the Channel Islands: the UK handles its accountancy and defence, but aside from the constant vigilance required to keep Dublin at bay the only international hassle comes from Brexit. In the same way as the IoM has never been part of the UK, it’s never been part of the EU – it enjoys all the benefits (or unconscionable infringements) of membership by virtue of a legal protocol which doesn’t bestow membership. Crucially, the IoM doesn’t have any representation with the EU – it can’t, being the kind of Schrödinger jurisdiction which is neither part of the UK nor its own recognised area.


That distinction brings other problems. Regardless of how Brexit pans out, the EU has shown signs of going to war on tax avoidance – a rare political argument which unites populists and progressives. The EU now maintains lists of high risk money-laundering and tax compliance jurisdictions, and the IoM’s prominence in the international sector was part of the reason some MEPs have pushed for including the UK as a whole.

The IoM experiences the paradox of autonomy without representation. Its relationship with the UK has often been hamstrung, too, such as in 2009 when the Treasury slashed common purse funding in an attempt to nudge Douglas away from its tax avoidance platform.

Domestically, the distance between the plutocracy and everyday islanders is stark. Most people on the island are not wealthy: they rely on public services and work jobs like anywhere else. After the IoM’s funding was cut by London at the height of the financial crisis, lower and middle income earners were worst hit. Now the island has to maintain a favourable tax code for plutocrats while supporting public services used by the people who need them. It’s a difficult balance to strike, and likely to become more so if the EU pursues its anti-tax avoidance agenda post-Brexit.

Simon Jones is a writer based in Glasgow.

 
 
 
 

Segregated playgrounds are just the start: inequality is built into the fabric of our cities

Yet more luxury flats. Image: Getty.

Developers in London have come under scrutiny for segregating people who live in social or affordable housing from residents who pay market rates. Prominent cases have included children from social housing being blocked from using a playground in a new development, and “poor doors” providing separate entrances for social housing residents.

Of course, segregation has long been a reality in cities around the world. For example, gated communities have been documented in the US cities since the 1970s, while racially segregated urban areas existed in South Africa under apartheid. Research by myself and other academics has shown that urban spaces which divide and exclude society’s poorer or more vulnerable citizens are still expanding rapidly, even replacing public provision of facilities and services – such as parks and playgrounds – in cities around the world.

Gated developments in Gurgaon, India, have created a patchwork of privatised services; elite developments in Hanoi, Vietnam, offer rich residents cleaner air; and luxury condos in Toronto, Canada, displace local residents in favour of foreign investors. An extreme example is the Eko Atlantic project in Nigeria – a private city being built in Lagos, where the majority of other residents face extreme levels of deprivation and poverty.

A commodity, or a right?

Although these developments come with their own unique context and characteristics, they all have one thing in common: they effectively segregate city dwellers. By providing the sorts of facilities and services which would normally be run by public authorities, but reserving them exclusively for certain residents, such developments threaten the wider public’s access to green spaces, decent housing, playgrounds and even safe sewage systems.

Access to basic services, which was once considered to be the right of all citizens, is at risk of becoming a commodity. Privatisation may start with minor services such as the landscaping or upkeep of neighbourhoods: for example, the maintenance of some new-build estates in the UK are being left to developers in return for a service charge. This might seem insignificant, but it introduces an unregulated cost for the residents.

Privatising the provision of municipal services may be seen by some as a way for wealthier residents to enjoy a better standard of living – as in Hanoi. But in the worst cases, it puts in a paywall in front of fundamental services such as sewage disposal – as happened in Gurgaon. In other words, privatisation may start with insignificant services and expand to more fundamental ones, creating greater segregation and inequality in cities.


A divided city

My own research on branded housing projects in Turkey has highlighted the drastic consequences of the gradual expansion of exclusive services and facilities through segregated developments. These private housing developments – known for their extensive use of branding – have sprung up in Istanbul and other Turkish cities over the past two decades, since the government began to favour a more neoliberal approach.

By 2014, there were more than 800 branded housing projects in Istanbul alone. They vary in scale from a single high-rise building to developments aiming to accommodate more than 20,000 residents. Today, this development type can be seen in every city in Turkey, from small towns to the largest metropolitan areas.

The branded housing projects are segregated by design, often featuring a single tower or an enclosing cluster of buildings, as well as walls and fences. They provide an extensive array of services and facilities exclusively for their residents, including parks, playgrounds, sports pitches, health clinics and landscaping.

Making the same services and facilities available within each project effectively prevents interaction between residents and people living outside of their development. What’s more, these projects often exist in neighbourhoods which lack publicly accessible open spaces such as parks and playgrounds.

This is a city-wide problem in Istanbul since the amount of publicly accessible green spaces in Istanbul is as low as 2.2 per cent of the total urban area. In London, 33 per cent of the city’s area is made up of parks and gardens open to the public – which shows the severity of the problem in Istanbul.

These branded housing projects do not feature any affordable units or social housing, so there are no opportunities for less privileged city-dwellers to enjoy vital facilities such as green spaces. This has knock-on effects on excluded residents’ mental and physical health, contributing to greater inequality in these respects, too.

Emerging alternatives

To prevent increasing inequality, exclusion and segregation in cities, fundamental urban services must be maintained or improved and kept in public ownership and made accessible for every city-dweller. There are emerging alternatives that show ways to do this and challenge privatisation policies.

For example, in some cities, local governments have “remunicipalised” key services, bringing them back into public ownership. A report by Dutch think-tank the Transnational Institute identified 235 cases where water supplies were remunicipalised across 37 countries between 2000 and 2015. The water remunicipalisation tracker keeps track of successful examples of remunicipalisation cases around the world, as well as ongoing campaigns.

It is vitally important to keep urban services public and reverse subtle forms or privatisation by focusing on delivering a decent standard of living for all residents. Local authorities need to be committed to this goal – but they must also receive adequate funds from local taxes and central governments. Only then, will quality services be available to all people living in cities.

The Conversation

Bilge Serin, Research Associate, University of Glasgow.

This article is republished from The Conversation under a Creative Commons license. Read the original article.