Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
MANX HERITAGE FOUNDATION ORAL HISTORY PROJECT ORAL HISTORY TRANSCRIPT
‘TIME TO REMEMBER’
Interviewee: Mr Bill Dawson
Date of birth:
Place of birth:
Interviewer: Roger Rawcliffe and Sue Lewis
Recorded by:
Date recorded: 9th November 2006
Topic(s): Ronaldsway Aircraft Company The Isle of Man Finance Board Abolition of Surtax Company formations Development of the Finance Sector Manx Company Law Banking and self-regulation Savings & Investment Bank collapse The Financial Supervision The Usury Act The Treasury Finance Board British and off-shore Insurance Companies Development of the Freeport Abolition of Exchange Controls Government Corporate Services
Bill Dawson - Mr D Roger Rawcliffe - RR Sue Lewis - SL 1
Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
RR … we talked about getting a bit of – Research Assistant, and then Sue had been doing a – well she had already done a Phd on, sort of ‘Manxness,’ if you like – Manx language. And she’s about to be introducing people, older people, to all the rest of us, and she’s just about to complete another piece of work on …
SL Manx satirical poetry.
Mr D Very intellectual! (laughter)
RR So we find her quite useful for – ‘cos this – this is intended not to be Mark Solly’s type of book, where everything is there, and it’s good old heavy reading and guaranteed to send you to sleep. It may well send you to sleep, but it’s not the aim of it (laughter) so it’s trying to get the whole picture – the good and the bad. I mean, my own belief is your belief, and I think most people’s belief is that – couldn’t have done without it and a lot of good has come out of it. But, but there are things that wrong from time to time, I mean … but you’re very important, because a lot of the – specifically financial stuff was in your – the development of it was during your time. So really what I’m – I came here at the end of 1979. So anything after that, I was around for. You know – have some reasonable ideas about it. But I shall need other people’s opinions because my ideas are not necessarily going to be the right ones. And before then, I was married to Elizabeth, so came over all the time – kept hearing people saying this or that or the other, and kept observing things, but I wasn’t here to see what was going on between 1960 and 1980 …
Mr D Hmmm.
RR Ummm … the first bit as I see it was that the new visitors came. But the bit that is really interesting is how the financial sector started – developed.
Mr D Yea, yea. No, you were just saying, when you mentioned Wendy Kirkpatrick …
RR Hmmm.
Mr D Because the – because when Ronaldsway came, I think that was a – Ronaldsway Aircraft – I think that was about ’56 …
RR Yes. 2
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Mr D ... and, err, according to Richard, when they placed the order for the timber at Quiggins, it saved them going bankrupt – they were about to go out of business, and the Ronaldsway order kept them going ‘til things picked up. Whether that’s true or not, I don’t know. (laughter)
RR I’ve heard, separately from that, that about one third of the revenues of the Isle of Man came from the taxation payment by – as a consequence of the internment camp.
Mr D Well, yea, the first, the first – when I – I came in ’69, and I think, in that year, the income tax estimate was about 2.6 million, and a quarter of it was coming from Ronaldsway. And it – well, it came out – they paid – well, I suppose I’d better not quote that (laughter) but they paid ummm …
RR I’m not going to quote six hundred …
Mr D ... I think about – we got, we go in about, I think 2.8 millions, of that .6 million came from one company.
RR Yea.
Mr D So they were rather important. (laughter)
RR Very important.
Mr D Which is why everybody suggested doing away with common purse, and Ronaldsway didn’t like that, it sort of faded into the distance. (laughter)
RR Well, we – we – after, I think it was – when did you retire – I forget when you came?
Mr D ’91. May ’91.
RR When Terry Groves set up that sort of ‘Think Tank’, which was after you’d given up. And we had lots of people – pundits and private secretaries and all – we – one of the things, obviously, we looked at was, was the common purse, and there was nobody that wanted it aborting. Now – except, I’ve heard, Robert Shaw, Robert Shaw … 3
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Mr D Yea – the tourist …
RR Yea.
Mr D Well, the theory – the theoretical argument was that the UK’s economy was different – the structure was different to the Isle of Man …
RR Hmmm.
Mr D ... I mean they are moving closer together now, but – manufacturing industry’s important in the UK, so if you had a system of indirect taxes designed for the UK, it was only by accident it were right for the Isle of Man.
RR Hmmm.
Mr D But the fallacy in that argument was that the UK tax system was not designed in particular for the economy, but the raise revenue. (laughter)
RR Yes!
Mr D So, um …
RR Somewhat [unclear] the way it developed.
Mr D No, no.
RR So when you – when you arrived, in terms of financial services, what was going on?
Mr D They were purely local. Umm, you know the – but I suppose – well, of course they used – well, the first thing that happened – I mean, the first day I was here, my first meeting was with the Governor – ‘cos he was the boss-man.
RR Who was that – Stallard, was it?
Mr D Yea … so my first meeting was with him, and …
RR He, effectively, still ran – he was the Chief Executive. 4
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Mr D Yea – he was sort of head of the Civil Service, Chancellor or the Exchequer, and by really ‘wish’ of the politicians, he was really Head of the political side, as well.
RR Yes, I …
Mr D Except Charlie Kerruish, (laughter) – he had different views. But err … so that my first meeting was with him, and the two things he said, ‘Two things you must do – stop us going bankrupt and prepare the Finance Board to take over the responsibility for the government finances.’ Now, those … well, first of all, I thought he was joking, and the second one I couldn’t understand. Anyway, my next meeting was with …
RR It was called the Finance Board by that time, was it?
Mr D Called the Finance Board, yea.
RR When they did – it was called something else – the income tax commission … I think – anyway, it doesn’t matter – it was the Finance Board then?
Mr D Yea. Ummm – then my next meeting was with Jeremy Bolton, who was Chairman of the Finance Board. And amongst other things he said, ‘You must make sure we don’t go bankrupt.’ (laughter) Well, so my – I thought – I said ‘Oh, have you had a problem?’ He said, ‘Well, well, no, not really, but err …’ I was the third Treasurer in about two years. The first government Treasurer had sort of gone before he went mad; (laughter) the next guy came in and only stayed fifteen months, and in between they’d had a sort of void and during that period they had managed to spend the ‘sinking fund’…
RR Hmm.
Mr D ... which they were building up for repayment of debentures. So they actually ran out of money for the normal revenue expenditure, and were using the ‘sinking fund’ before anybody apparently realised what was happening. So that was the reference from the Governor and JAB about going bankrupt. I mean, they could always borrow money, but they’d virtually run out of the normal revenue money, if you like.
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RR Talking about Jeremy Bolton, looking – I mean it’ll only be hearsay in your time, to try and find people who were there at the time – whose idea was the abolition of surtax and the …
Mr D Well, I think it was – that was before my time, but as I understood it, it was between Jeremy Bolton and Clifford Irving.
RR Yea.
Mr D But, Clifford Irving was the one that proposed it in Tynwald …
RR Yes, he put all the stuff …
Mr D ... because Jeremy Bolton felt, if he proposed it, everybody would vote against it (laughter) – well, not everybody, but he felt it would be better coming from Clifford Irving because he was more persuasive and probably more acceptable.
RR But JB put it – put the [unclear] through to Tynwald, didn’t he? I’m trying to remember when I read the Tynwald debate, which I’ve got a …
Mr D Well, I can’t – I can’t remember that – I must admit, I’ve never looked.
RR Clifford Irving always claimed it was his idea.
Mr D Well, it may have been, but ummm …
RR I’ll look it up. I mean, at the time, I understood it was Jeremy Bolton.
Mr D Well, they were both – I – I don’t really know, they were both involved.
RR What about Garvey, what about Garvey – was he the one?
Mr D I never heard him.
RR [unclear].
Mr D Yea, he was one who came up with different ideas …
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RR Yea.
Mr D ... but it – whose idea it actually was, I’m – I’m not sure. Jeremy was involved, and Clifford Irving was involved with it, and Clifford Irving was the one who put it to Tynwald …
RR Hmmm.
Mr D ... as a policy …
RR Hmmm.
Mr D ... and I always understood it was felt that Clifford Irving would have a better chance of getting it through.
RR The ‘Silver Fox’ …
Mr D Yea.
RR ... they called him.
Mr D Yea – they called him the ‘Silver Fox.’ And of course, I don’t know quite when it happened, but Jeremy Bolton lost the General Election, and he was appointed to the Legislative Council by the Governor.
RR Oh.
Mr D Now, I should – I imagine that was after surtax was abolished, but …
RR I think it was after surtax.
Mr D Yea.
RR Surtax was abolished in November 1960 to start from April 1961, I think. Ummm, don’t remember it all that perfectly.
Mr D So …
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RR Jeremy Bolton was the one that got knighted.
Mr D When I came, the banks, generally, just deal with domestic business.
RR When I came, the banks just dealt with …
Mr D And err … the – as far as I can recall, the only financial business that was started, was – probably, Dursley Stott and Duggie Bolton, who were involved in a Unit Trust.
RR Was one of the – was that one of their own, or was that one of the Unicorn ones?
Mr D I’m not, I’m not sure … Barclays had the Unicorn, didn’t they? Ummm, they – it was particularly those two who asked the government to bring in sort of regulations. Can I refer to my little book?
RR Yes, yes.
Mr D Have you ever read this?
RR I’ve got that, yes.
Mr D You’ve got that – well, I think it tells …
RR That’s quite – that’s quite a good book, isn’t it?
Mr D Yea. Took an extraordinary long time. I re-wrote my bit about three times, it took me so long to publish. (laughter) Yea ... the err – there’s the – well I wrote, ‘The leaders of this trust development ...’ – I was thinking it was Duggie Bolton and Dursley Stott.
RR Do you ever see Duggie?
Mr D Now, whether they are – whether it was a local one, or whether it was part of Barclays, I don’t know.
RR No, well, at that time … 8
Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
Mr D Because they had some Australian – there was an Australian thing – I – not sure. Umm ... as a result of them pushing – pressurising the government, they brought in the Prevention of Fraud Investment Act 1968.
RR That was just before you came, wasn’t it?
Mr D Yea.
RR I remember that.
Mr D But it didn’t – it wasn’t done err ... to develop the financial sector, it was just – as far as I know, it was an idea – they were just making money.
RR Well I think that’s how it started. I suspect a lot of things started because someone had an idea. Was there much, you know, sort of company formation – trust work going on when you came?
Mr D I don’t think there was very much, it was, as far as I can recall, most of the work that was being done was for the new residents, you know, who had come over who wanted financial advice or setting up financial companies to ...
RR Do their own …
Mr D ... protect their own …
RR ... investments …
Mr D ... investments. P A Management had produced a report which came out in the early 1970s …
RR Hmmm, they did two reports.
Mr D The Structure of the Economy – the sort of the …
RR Yea, I’ve heard of that.
Mr D You’ve heard of it? As far as I recall there was no suggestion in the first report of developing the finance industry. 9
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RR No. And there was nothing at the time of the debates in Tynwald – virtually no mention of this sort of work. There was some significance to it ‘cos it …
Mr D Yea. I produced a paper – I think it was in early ’71 – which set out the things that the Island could do as a financial centre. It was really like a shopping list – cutting income tax, helping non-resident companies, developing the banking sector, insurance, shipping even ... ummm ... the Freeport – well, it was really not saying ... these are all the things you could do ...
RR Yep.
Mr D ... and ummm, that paper went – ‘cos they expected – or I expected the tourist industry to decline, and in fact, I think I headed the paper to start off, ‘How to develop the finance industry to counteract the decline in tourism.’ Well, that went to the Finance Board and also went to the Governor. And both of them said, ‘Oh yea, this is a good idea if you can do – you’d have to cut out any reference to the decline of tourism, else everybody will vote against anything you do, but you’ll have to do it!’ (laughter) ... said – this is the Governor as well, said, ‘we’ll support you, but you’ll have to do it, and you can’t expect any help from the Members of Tynwald because they won’t understand it, (laughter) particularly if you say tourism is going to decline.’
RR Well, they wouldn’t accept [unclear] (laughter). Well, almost until you retired, they wouldn’t – a lot of people wouldn’t accept that tourism was actually a different thing.
Mr D So, ‘And,’ they said, ‘this paper’s not got to be circulated to anybody else.’ So, (laughter) nobody had to know except the Finance Board and the Governor, what I – all these things that I’d listed. And it was from there it was started with non-resident companies, trying to develop banking – each time there was opposition. Ummm ... I never quite understood the opposition to non-resident companies, because they err – some of the professions were saying that the existing system that they had then, which was just you could have err – say the company was controlled and managed outside the Isle of Man, and the tax office accepted it …
RR Hmmm.
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Mr D ... and you didn’t pay anything …
RR And it was uncontrolled, really, wasn’t it?
Mr D Pardon?
RR It was uncontrolled.
Mr D Yea – the tax office was quite happy with that. (laughter) Well, they said, we have non-resident companies, and they can pay – I’m not sure whether it was a hundred or two hundred to start with – somebody in the tax office who shall be nameless, didn’t like it at all – which I never understood his attitude – ummm ... but that was that! And for ever more he [unclear] everything on non-resident companies for lots of problems.
RR Is that someone who’s still around?
Mr D (laughter) Yea – I’m not mentioning any names.
RR No, no.
Mr D But ummm, it was rather strange …
RR If it was the same person I think it is, he wouldn’t accept any – I mean I know – we produced a paper about the controlling of people who operated companies as trusts, and I said, ‘There’s only one way to do it …’ and that is to do more or less what’s happening, of course it’s always going to be heavy handed, unfortunately, and everybody is forcing us to be heavy handed anyway now.
Mr D Hmmm.
RR But, ‘Oh, no, no, no – it’s all under control, it’s all under control …’ he said. And Jim Noakes said, ‘All under control,’ and William Cain said, ‘all under control …’ – it wasn’t – he said, ‘we’ll just change it to Manx Company Law…’ and I said, ‘but that won’t do any good, because they’ll just [unclear] to [unclear] companies.’ And [unclear] said, ‘All here, oh, but they won’t be Manx companies.’ ‘I know, but some of them were standing outside with their television cameras outside an office, place, where it’s actually done, so it won’t 11
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do us any good.’
Mr D Hmmm ... anyway … well, I think it was Martin Moore who said to – or Jeremy Bolton and I, he said, ‘With non-resident companies we are, by not having them, we are losing business,’ …
RR Yea.
Mr D ... because people come over and we explain the situation to them here, and they can’t understand why we don’t have non-resident companies and we don’t charge a fee for them ...
RR Hmmm.
Mr D ... and they think, ‘well, we’ll go to the Channel Islands because it’s certain there – they have the non-resident companies.’
RR Hmmm, hmmm.
Mr D And, because of the uncertainty here as to what would happen in future, sometimes they just lose business, because people want more certainty when they’re setting up these operations. When non-resident companies came in, I don’t – I don’t think we had too much opposition, but there was some opposition. Well, anyway …
RR Anyway – non-resident companies ... you had banking …
Mr D Banking, we, well, I proposed that we had a banking inspectorate – in this paper it said, ‘Banking Inspectorate.’ And there was something put in to drafting legislation … I can’t – I can’t remember exactly what it was … about banking inspection [rustling of paper] err … and when the draft was discussed with the bankers, they objected to banking inspection. They said, you know, their own systems of control, they had their own auditors, and they didn’t need banking inspection here. Of course, there wasn’t banking inspection in the UK at that time.
RR No – unless you were talking about big-wig people like Barclays, they will have their own internal system … 12
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Mr D Hmmm.
RR ... but that doesn’t work for the one-offs, does it?
Mr D No, and it didn’t work at times for some of the big banks around the world (laughter) mmm … to banking inspect, the Banking Act was a very general Act. It allowed a lot of things to be done, but it needed some other action, it was really self-regulation. And then when we produced some guidelines under the Banking Act – well, it wasn’t under the Act, there were – we put in – they had to makes returns of advances and deposits and that sort – balances out. Well, that was objected to and so we had to withdraw our proposals on that.
RR But you – I mean, they were introduced again, weren’t they?
Mr D Well, we did introduce some guidelines, but the things that really would have controlled banks, had to be taken out.
RR Hmmm.
Mr D They never appeared in it, because the bankers objected.
RR But coming back – going forward a bit now to the SIB [Savings & Investment Bank] business, that was still the position.
Mr D Yea.
RR Anything that you got from them was something which was not – you had no power to get – it was something that you’d …
Mr D Well, I think the power was there, but it was [rustling of paper] …
RR You were getting returns at that time, were you?
Mr D We were getting returns … err … they were really for statistical purposes. But if they’d been examined carefully, ummm ... somebody in the Treasury would probably have raised questions about SIB [Savings & Investment Bank].
RR But you had raised questions, hadn’t you, about SIB [Savings & Investment 13
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Bank]?
Mr D Yea – but we could have probably had more information.
RR Hmmm – we’ll come onto that in a bit … obviously …
Mr D Yea.
RR ... I mean, I know a fair amount about that, because we were obviously involved at the stage when it went …
Mr D Yea, well, I’ve forgotten, but …
RR You had no one – you had no one who was assigned to do this work, either, did you?
Mr D Well, I mean, at one stage I – I had no one. So I was running around sort of (laughter) many hours a day (laughter) and, of course, once we’d started trying to push the finance sector, we obviously got a lot of people visiting the Island, and I was on their list to come and see – took up an awful lot of time. And then we got Peter Duncan …
RR The Isle of Man Commercial …
Mr D ... the Commercial Relations Officer … ummm ... whose principal job was to try and promote the Island.
RR Yep.
Mr D That was his principal job. Ummm … and we got – he used to get the statistical returns, which were used mainly to judge how the sector was growing. And prior to that, we had been getting information from the British Bankers’ Association. But it only covered their members …
RR Hmmm.
Mr D ... which when we started getting those – probably about ’72 – it only showed 14
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the deposits – total deposits. And at that time the small banks were not very important in terms of deposits. So the information we got from the British Bankers’ Association for many years, was quite adequate for what we were doing – just trying to ...
RR Build up the sector …
Mr D ... build up the sector and err … see how it was growing.
RR So when did the – the first – I mean, Singers came in at one point, but when did the first of the sort of independent banks start? That was in your time, was it?
Mr D Oh yea, oh yea. Well, Singers came in, what – about the mid-70s.
RR Yea – oh, I’ve got the date in Mark Solly’s book – Mark Solly’s banking book is actually quite good.
Mr D Is it?
RR Hmmm. There’s a lot of – it’s almost readable.
Mr D Yea, they’re all …
RR It’s got all those sort of dates – but Singer’s came in as a – I know how that came to be, but things like – I mean, when I got here, there were all sorts of banks like …
Mr D Yea.
RR ... there was the Savings & Investment Bank, there was the other one that went bust – the ICFC or something …
Mr D Yea … that was – David Snelling was involved in that. RR Yea. Well, he got it – got that wrong. Ummm ... there was a thing like Fitzwilliam Bank, which was Lyon Car Hire – it was – it sat in a rather pretty office in Athol Street – I did the audit of it when I first …
Mr D Fitzwilliam – hmmm, I don’t know any of that name. 15
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RR It sat in – on the, on the – going from, from the government down Athol Street, it was on the left hand side, and it had a pretty window, and there was an old chap called MacMillan or something that, who’d been a banker, and he had two girls who sat one on either side, and they kept all the records written out by hand, and I did the audit of it – it was sold to Kingstons [sp ???] during that …
Mr D Kingstons [sp ???], oh yea.
RR ... and we it three times for the process of selling it and Lyon Car Hire used to finance its cars by the deposits in the summer and when he sold his fleet off in the autumn, all the money went back on the money market. And in fact, if you audited it in the middle of July it looked quite alarming, but if you audited it at 31 December it looked absolutely fine. But it was a method of cheap finance, as far as he was concerned because he was buying at deposit rates and not at banker’s loan rates. Ummm, and I remember somebody coming in when I was sitting there, ticking my books and quite – somebody from Preston coming in with a huge suitcase of used ‘one-ers,’ which he solemnly paid into the bank. And so that’s how – no one turned a hair about ...
Mr D No, they weren’t supposed to know customers going into their banks. (laughter)
RR Well, at least they weren’t going to bounce on them! And it’s the same guy who wasn’t paying his English income tax.
Mr D Now I can take – we had a problem – there were fifteen banks – fifteen companies with the title ‘Bank’ registered in the 60s …
RR Hmmm.
Mr D ... and quite a few of them by professional people, presumably hoping to sell them on – sometime or other. Ummm, SIB was one of them – Savings & Investment Bank – I think, wasn’t it?
RR They didn’t start off, actually, ‘til …
Mr D Oh no, it started off in the 70s.
RR And that was the Harper family, was it? 16
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Mr D The Harpers – well, at that time, I had the agreement of the Finance Board that we didn’t have small banks, because of the problems they may cause. And actually turned one or two away … saying that they were no advantage to the Isle of Man economy.
RR The small banks – that was something …
Mr D Then SIB came along, and they turned that down. So, Harpers, they got in a whole lot of local shareholders, and the next news was that members of the Finance Board were raising this question of SIB [Savings & Investment Bank] – why it hadn’t been approved. And JB had been ‘knobbled,’ and Alf Devereau who were both members …
RR Well, Harpers were partners, presumably, of Duggie at that time, weren’t they?
Mr D Yea, so all same … err … camps … and err … the Finance Board could, in fact, under the Banking Act, give directions to the Treasurer. But I mean I was in the position there, if I’d have continued to refuse it, the Finance Board would have given me directions to approve it, which wasn’t very good for the relations between the politicians and the government Treasurer …
RR Oh yea.
Mr D ... so err … they were approved, and they had a – a – they certainly had all these local shareholders and err … there was a proposal to bring in a qualified international banker who they had lined up, but who never appeared once they got their licence. Now whether they had this man actually lined up or not, and he changed his mind, I don’t know. Anyway, he never appeared and they had their licence, and they got into difficulties.
RR I understood – I mean, this is from – from a chat I had – that the original idea was supposed to be that they would pool the client money and get better rates by bulking it up. But they got into lending from the start, I think.
Mr D Yea, they were lending money from the start, now …
RR To Harpers’ other – other enterprises?
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Mr D Ummm – I can’t remember exactly what the problem was, ‘cos the Harpers family had a – I don’t know whether it was a – they got into difficulties with some of their pension fund of their company that they had in England – I can’t quite – I can’t remember … anyway, they got into difficulties, and this must have been towards the late 70s and the Whipps got involved …
RR The Whipps bought it more or less, didn’t they?
Mr D Yea. I don’t know how much of the share-holding they had, now, from memory.
RR I don’t know – I thought they more or less got the bulk of it anyway.
Mr D Hmmm. Ummm …
RR But why would the Whipps want to come in on it?
Mr D Well I don’t know, unless they had quite a lot of money deposited in it, I don’t know.
RR And the Whipps, as we know, sold it to Mayflower Trust, a lot of it [unclear]. (laughter) Did you have any control on who owned it?
Mr D Well, they always had to come to us to see about whether we transfer the licence, and err – certainly when the Whipps were buying it, we knew all about it, and, from our point – tend to look at it from our point of view – well, what if we don’t agree to it – we’d have an even bigger problem (laughter) …
RR That’s the trouble with debts, isn’t it? (laughter)
Mr D ... and err … we had no – don’t remember having any particular worries about the Whipps taking it over.
RR Well they were people of substance, weren’t they?
Mr D Yea, money, the money came, the money was there and that. When the Whipps sold it, unfortunately I never met – well, I don’t know it made any difference – I never met the people involved. Peter Duncan used – one who met them. And when the err … what were they called – Gray … 18
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RR It was Victor Gray – well you met Victor Gray with me – when we went to London.
Mr D Oh … this was later – before they took over.
RR Oh no, not before they took over. There was Gray, and there was a fellow mixed up with Pennine Motors, or something, wasn’t there?
Mr D Yea. I’d have to read the report – can’t remember.
RR Yes, it’s all the …
Mr D Anyway, I should have met Gray – Gray came over to the Island and I, as it happened, I went into hospital before he came over, so I never met him. But err … and I don’t know who met him besides Peter Duncan.
RR Not sure you would have necessarily have twigged, knowing those meetings.
Mr D No, no – I say I don’t know, but I didn’t meet him ...
RR No.
Mr D ... but ummm, as far as I was aware, Peter felt they were okay to take over the bank. It’s what they did after they took it over that was the problem. (laughter) Ummm …
RR Well, that …
Mr D ... I mean, it ummm, later it – much later we discovered that Gray was well known sort of in the East End of London, that sort of area, as being a very dubious character. Ummm – but I got all that from Barclays man. When the SIB [Savings & Investment Bank] was getting into trouble, Barclays, who were their bankers – clearing bankers for SIB – said they would – if I wanted, they’d send somebody over to help have a look at things. And a man called Carslake [sp ???] came over, who was also from the East End, (laughter) but he was – he wasn’t a manager, but he was in a – he was sort of a trouble-shooter. He was a Barclays man, but he was in this little department where they tend – they were a bit like trouble-shooters. And he came over and we had a meeting between – oh, 19
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a whole lot of bankers in the Island, and Carslake [sp ???], and SIB, to see whether anything could be put together or not, and then I asked Carslake to go and have a look at their Loan Book. And off he went one afternoon, and I came home, and we’d just got home and the phone rang and it was Carslake – ‘You’d better – you ought to come to London with me tonight.’ ‘I what?!!!’ (laughter) He suddenly realised where half the Loan Book was …
RR Hmmm.
Mr D … and err ... recognised them as all being sort of all quite dubious loans. And err …
RR And so it proved, didn’t it?
Mr D Yea, so, I was off that evening in a private plane that Barclays had, and who was one of the passengers but Mr Gray! (laughter)
RR Really?!
Mr D It was one of these small planes with a – you know – took about six or eight – and Mr Gray was sat opposite me (laughter) and he was saying, ‘This is the worse day of my life,’ (laughter) you know, because things had gone wrong – not that he’d done anything wrong.
RR When we looked – I mean, I forget who the manager was who handed me – it was …
Mr D Oh, err …
RR It wasn’t Cunningham, was it, it was the one above him …?
Mr D He was a Scot, wasn’t he?
RR Keeling, or something, was it – a chap who lived at Clay Head.
Mr D Yea, I know who you mean … I think it does begin with ‘K’.
RR Anyway … I don’t – when we went and looked at it, I’d just become a partner, 20
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and I’d been – you know – had been back in the practice for two years, and I said I’d do all the easy jobs, like count the cash, you see, so … ‘cos in the old days, at the 31st December we went into Barclays and counted the cash – piles of cash and we counted all night – counted cash as soon as business had finished. So I said I’d count the cash. So they opened the safe – oh – that’s handy – there’s no cash! So, I said, ‘Well, never mind, we’ll just look at the next thing – travellers cheques.’ Oh, no travellers cheques … and so it went on – Bills of Exchange – oh, that’s handy – no Bills of Exchange! Ummm, but when we came to look at the Minute Book – that was another job I was going to do, look at the Minute Book – nice simple jobs for partners who hadn’t been involved in much auditing for a very long time – nothing in the Minute Book. Meetings took place – there was no meeting here of the Debtors, the Deposits, you know, none of all this – there was sort of half a page each time they met. There wasn’t a – what had they been looking at? And who had been doing it? And you know there was no controls ever. Now whether Victor Gray knew how badly – but he should have known if he was sitting at the meetings.
Mr D Killen …
RR Killen – that’s the one. And there was all the story about shredding and so on. All the records, when we went in, (laughter) whether they were the right records or not I don’t know, it really doesn’t matter, I don’t really think they were – the records were all there, so they’d been shredding, but they hadn’t actually shredded all the lists of depositors. Because there was a complete list of depositors, complete list of loans – all that sort of thing – there was a complete set of accounts. Ummm ... there were stories about the Bishop having been tipped off and taking his money out of it at the last minute which may not be true … I don’t know that … but all these stories went whizzing round …
Mr D Hmmm.
RR ... and we went on ... do you remember, it was one of your – it was the first of the Isle of Man promotional ... tours, wasn’t it? (laughter)
Mr D And I served the rent-a-mob – rent a crowd. (laughter)
RR And the clown was out there, whatever she was called – Gwendolyn …?
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Mr D Gwendolyn Lamb.
RR ... Gwendolyn Lamb was in the street with her banners, and we all had to go in the back door – ‘cos I was one of the speakers [unclear]. And we went to Bristol, went to Edinburgh but it was London where they had all the [unclear].
Mr D Yea.
RR Gwendolyn Lamb is still around.
Mr D Is she? She caught me once, she caught me once, but err …
RR But going back, going backwards err …
Mr D I mean to say, I could have – with SIB [Savings & Investment Bank], I could have sent in people – I mean, we’d have had to – we didn’t have anybody we could have sent into the bank, in the Treasury, to look at SIB.
RR But you sent us in, so …
Mr D Yea – but that was later. But before …
RR Oh yes, I see, yes …
Mr D ... I could have sent somebody in and if things hadn’t have been as bad as they were, we could have ruined the business for the bank, because, if we sent people in, everyone in Athol Street would know sort of five minutes later.
RR That’s the problem of banks – is it’s confidences.
Mr D Yea. And if you don’t have – I mean, financial supervision people know, presumably have – they could send people in. Err … but …
RR The great thing about financial supervision arrangements we’ve got, and that were set up after this, was that they had – they have control going all the way along …
Mr D Yes. 22
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RR ... so if something started to go wrong, you could – you’ve a reasonable chance of correcting it.
Mr D Hmmm.
RR What you had here – what happens when a bank makes a loan to them that goes bad – what you have is a situation which is virtually – for which there’s no real solution. There is only one solution, I mean, you – somebody re-capitalises it with huge amounts of capital, sorts it all out, takes a loss and start again. But no one was going to do that.
Mr D No. And err – I got the impression initially, from, from the directors, that the problem was a sort of cash-flow one, but it wasn’t cash-flow, it was a Loan Book [unclear].
RR And it was also that Jim Baker going around, rubbishing them.
Mr D Yea.
RR The question you asked us to find out was whether it really was in real difficulty or not. But Jim Baker said it’s bust, ‘cos they were trying to get their money back off him.
Mr D Yea. And Peter Crellin – he got involved with somebody – a client came along one day with a whole lot of stories from – oh, from one of the Browns – you remember there were some Brown brothers? And they were a dubious pair (laughter) and the one that Peter Crellin had as a client, was the worst of the two. You couldn’t really believe anything he said. So Peter Crellin made a big thing about it as well, ‘cos he came to see us. But ummm … he couldn’t produce any evidence, just said, ‘Well, his client had said …’ Anyway, that’s getting a long way from …
RR Yea, yea – that’s not – we’ve gone off into that particular sort of thing, which is a different heading. What I really don’t know – it’s not what I came to ask about, about what things … I mean, that’s one of the things that happened was banks, and that was one of the consequences of banks …
Mr D Yea, yea. 23
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RR ... and then, I – you know, and people came in and Farrants came and gave a report, we got in the FSC etcetera. So that – that’s its own subject, that’s not – that’s in our lifetime.
Mr D Yea.
RR But going back to the 1970s, to developing the various things, you produced this paper – much of which came to pass in due course.
Mr D Hmmm. Well the next thing they had a go at was the – well, was the Usury Actuary Insurance …
RR Yea, now there’s the Usury Act is a very interesting subject.
Mr D So say you – well, from your special subject, you’ll probably know they had Usury – well, the equivalent of Usury Acts in Babylon, years ago.
RR Well, absolutely.
Mr D (laughter) Even the Romans, I think, passed an Act, but they didn’t implement it.
RR The Muslims still don’t like it, do they?
Mr D No. So ummm, I mean, the Usury Act in the Isle of Man really arrived through Henry XIII.
RR Hmmm.
Mr D Henry XIII introduced – you know – a cap on interest rates in England, because, at that time, Christians weren’t allowed to lend money for interest.
RR Which is where the Jews came in, because they …
Mr D Yea, they came in to loan money ...
RR Somehow though, the Jews had managed to square it.
24
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Mr D ... around the whole of Europe. The Jews became the money lenders because Christians was – it was a sort of sin to do it.
RR Hmmm.
Mr D And charge interest. Henry XIII introduced, in the UK – it came to the Isle of Man – I don’t think it was in his reign, it was probably in whoever followed.
RR I have a feeling it was sixteen hundred and something, the first Usury Act. Anyway, that’s – that appears in one of Mark’s books – you know – the date … it’s a long way ago, anyway. But when you came here, it was well installed.
Mr D Yea, I mean, when I came, I had some cash from having sold a house in England.
RR Hmmm.
Mr D I went down to the Midland Bank and put it on deposit in their Jersey branch ...
RR Hmmm.
Mr D ... which a lot of people did because it was – they were paying the market rate of interest in Jersey – here, they weren’t! So, I mean … that was a very easy way to get round the Usury Act as far as getting deposit interest – it went into a Jersey branch. Ummm, and here, the – one of the problems was that the – well, the Members, most of them were convinced that it was of great benefit. Now a number of them were also at that time members of local authorities, and all those people thought the Usury Act kept the rate of interest down that local authorities had to pay for money. And err ... the fact that it hadn’t operated effectively for about a hundred years, was totally relevant, because the interest rates had been below – the market rates had been below the Usury Act for about a hundred years. It was only in the 60s when interest rates started to rise, that it created problems here. And I think at least twice the Usury Rate had to be increased.
RR I mean, it increased in your time, didn’t it?
Mr D Yea. And err ... we thought, in the Treasury Finance Board, we thought we’d 25
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got a majority – just a majority of the House of Keys, to get rid of the Usury Act. Now this must have been about 1964 – somewhere about there.
RR 1964?
Mr D ’74.
RR ’74?
Mr D ’74 it would be, yes. And err … when it came to a vote, we lost by one vote, the abolition of the Usury Act in the Keys. Oh … and one person had changed his mind, and it was one of the honourable members for Ramsey, who knew that the local authority had been having trouble raising money, on loan. Had called into the office on his way to the Keys, and said, ‘How are you getting on for money?’ Said, ‘Oh, we’re fine now.’ Got to the Keys and decided he could – we could keep the Usury Act. Now Ramsey Commissioners were having problems and the Isle of Man Treasury had lent them the money – we hadn’t broadcast it because we didn’t want everybody panicking thinking the local authority …
End of side one
Mr D ... well, they didn’t – they didn’t have a real problem. What– what had – I don’t why, but the local government board had built a housing estate in Ramsey, and I’m not quite sure of the history of why the local government board had got involved – the Ramsey Commissioners wanted to take it over, and err … so they had to raise the money to pay the government. And I had said to them that err – the Clerk there, who was Mr Swales? Mr Swales at the time …
RR Swales? Mr D Know him?
RR Hmmm.
Mr D We – I remember going to see him and saying, ‘Well, I don’t know how you are going to get all this money together. What we will do, if you like, you can just pay us off gradually – you know, you’ll get the houses and it’ll be like a mortgage.’ Well, he couldn’t grasp that it wasn’t some sort of trick. He thought it was some sort of plot that the government Treasury were pulling one over on 26
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Ramsey (laughter) for some reason – I don’t know why … and I certainly don’t see – ‘Well, there – I don’t really want anything to do it …’ so they couldn’t raise the money to pay the government. And eventually they accepted this, they had virtually a mortgage from government and they just paid it off when they wanted. But until they agreed to that, they had problems.
RR Hmmm.
Mr D But when Swales retired and became a Member, called in at the office and said they were all right, he just thought, ‘Oh well, we’ll keep the Usury Act.’ And on that silly little incident, we had the Usury Act for another five years ...
RR Hmmm.
Mr D ... from ’69 – as soon as we got rid of the Usury Act, the deposits – well, first year went up by 30% in banks, and then it dropped down to about 25 or something like that. Are you warm enough?
RR No, we’re fine.
Mr D Would you like a coffee?
RR That would be lovely.
Mr D Yea – I’ll just have this – I’ve been given instructions. (laughter) Your visit was a signal to go shopping. (laughter)
RR They shot up, the next year, didn’t they, I remember?
Mr D SIB [Savings & Investment Bank]?
RR After SIB.
Mr D Oh, well, they didn’t decline – err – there wasn’t actually a dip in deposits.
RR No, they went up by, I think, quite …
Mr D They kept going up, but the rate of increase was a little lower, I think. 27
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RR It’s like all the publicity … no publicity is bad publicity – it sort of puts us on the map, I think. Hmmm. Yea – I remember when I came here, my brother who’s Price Waterhouse, London, was extremely scornful about going to this place where nothing ever happened, and ...
SL (laughter) That’s a typical attitude.
RR ... it really wasn’t a serious player in financial services … but in a way, 1980, 1 January 1980 I started – an awful lot of things had not happened by then. You know, there were some banks, there were some insurance companies, weren’t?
Mr D Yea – the err … I suppose somewhere in the err … mid 70s I went to err … I had insurance on our list. I concentrated on banking …
RR Hmmm.
Mr D ... and I went over as a guest of Bowerings to Liverpool – they had a, an annual dinner of – I think it was the British Insurance Associates ...?
RR Hmmm.
Mr D ... something else – and err … the speaker there, mentioned that the insurance industry had earned more in invisible earnings than, sort of, the previous year, than banking, which – I thought, – ‘Well, I should have known that, but I didn’t.’ (laughter)
RR Well, I couldn’t have known that!
Mr D When I came back, I got the Finance Board to agree to appoint – we had two – we had Bowerings and err … Harridans –do you remember Harridans?
RR Harridans – I do – Alexander Harridan.
Mr D We appointed both of them to give us a report on the potential to develop insurance business in the Island. Of course the two places where off-shore business was being done was Bermuda, which was the big one, and Guernsey in the Channel Islands … and err … they both came back with a sort of positive report on developing captive insurance. And we produced the legislation – draft 28
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legislation – for this business, and err … the Finance Board were persuaded by the ‘unspeakable’ man, (laughter) because we had made them tax free, these companies, to refer the matter to the Income Tax Commission who advised the Governor, if matters were referred to them, they had to be referred by the Governor, or the Finance Board through the Governor, to this Income Tax Commission, we get their views on it. Well, they came back, and we were absolutely – well, we were taken totally by surprise, ‘cos Alex Crowe was the Chairman, and err … he didn’t like Mark, anyway, (laughter) we thought, well, we assume Mark was going to have some negative view on it, we thought, well, it wouldn’t really matter, and when the report came back, which went to the Governor and then to Executive Council, they’d suggested that, although the profits on the business could be exempt from tax, the investment income shouldn’t be exempt. And of course, the investment income was the most important factor, really. And err … the Executive Council said, ‘Well, we’ve got this advice from this Commission who are supposed to be the experts on tax,’ ummm ... you can – as far as the Finance Board concerned, they could either err … withdraw the Bill, the whole proposal, or they – you could change it so that only ummm …
RR Trading …
Mr D ... trading profits were exempt from tax. I said to Jeremy Bolton, ‘Well it’ll be fine – I don’t think it will be successful if we accept their proposal, but it will be easier to come back in a few years and say, ‘it hasn’t worked, we ought to amend it …’ rather than starting again.’
RR Hmmm … that’s right.
Mr D So that’s what we did and it was an absolute dead loss.
RR But in – in Guernsey they also taxed investment income.
Mr D Well, I didn’t know that. I – I was under the impression …
RR Well when I came here …
Mr D You’ve mentioned that before.
29
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RR ... one of the reasons, one of the reasons why I managed to get some captives here rather than in Guernsey was that Guernsey was taxing investment income – this is after we’d abolished the investment – there was a tax on investment income which happened in the early 1980s, I think.
Mr D I – I don’t know – I mean, I didn’t know that.
RR I know that we – we had …
Mr D I was under the impression that they – they had their ummm ... I’ve forgotten what they call their non-resident companies – and quite a lot of them were doing insurance business …
RR Hmmm.
Mr D ... but no licensing system.
RR Hmmm.
Mr D They didn’t know how many companies, who were doing insurance business, when I spoke to them, and they were just paying £200 per year or whatever it was. Because they got very concerned ummm … at our legislation, that it was going to take business away from them.
RR Well, it did, I think.
Mr D Well they fell around laughing when they saw it. (laughter) Every time, every time you see some of the Guernsey officials they say, ‘Keep going – don’t you upset your Members in there.’ (laughter)
RR And then they started to get life companies after that, didn’t they?
Mr D Well, we ummm ... ummm ... not sure when it was – somewhere in the late err… must have been the late eighties – no …
RR Lloyds Life came – I think it was a bit earlier than that.
Mr D Lloyds Life were here … 30
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RR Yea.
Mr D ... a long time before that ...
RR Hmmm.
Mr D ... ummm – ‘cos I couldn’t understand why they were here! (laughter) ... what was actually happening – ummm – I mean, I’ve forgotten, I’ve forgotten the dates now. When we went back with insurance legislation, we had a little committee to look at it, which comprised me, ummm … one of the attorneys, Theo Drassman [sp ???], and Mark Solly. And err … of course, we started off saying, ‘Well, the present legislation hasn’t worked at all’ …
RR No.
Mr D ... with somebody saying absolutely nothing, (laughter) so it wasn’t long before we came to the conclusion that ummm … we ought to change the legislation and extend it, because of Lloyds Life were here, to general insurance providing they weren’t ummm … trading on the Island.
RR Yes.
Mr D And that’s what happened – I can’t remember the dates when it happened, though.
RR Mark’s book’s full of dates and things. Mark’s books are very good if you can find the stuff. Mr D Hmmm.
RR Having all the facts in it – they’re usually in several times over – that’s the only trouble. Anyway, don’t worry about that – I can, I can find that. ‘Cos I remember all – I remember a lot of these things taking place, but it’s just a question of placing them. Now …
Mr D ’81 – 1981 – Exempt Insurance Companies Act …
RR ... I think …
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Mr D ... we’d been going with loss about five years …
RR I think – yes, I think that’s so, ‘cos the other was 1976 – the first one.
Mr D Hmmm.
RR The – I think Guernsey was still taxing – part taxing their captives after 1981 – it was after 1981 - I first had anything to do with captives.
Mr D Hmmm.
RR We had some Japanese gentlemen who turned up. Jim Cain got in a great flap (laughter) – good old Jim, sort of thing – had to have everything organised in advance for them. Ummm – and so I began to learn something about it. And we formed – we started actually doing something. So we ran one for – we ran one for – which was a Guernsey company – it was an Isle of Man company but it was actually run in Guernsey, and we – we made them bring it here, and we set up a PKF PI captive here in 1985 or something, and I set that up and I [unclear] ... I’ve only just come off that board. So that’s when – when we looked at it at that sort of stage, the Isle of Man had some advantages over Guernsey.
Mr D Oh.
RR But then Guernsey also twigged that they were losing, so they altered that. Going to ummm … so we’ve got in with banking, so when insurance came in exempt companies, non-exempt companies, non-resident companies … ummm … Mr D Then we had the ummm ... marine – the shipping register.
RR I remember that.
Mr D I spoke to Roy McDonald, who was then Chairman of the Harbour Board …
RR Yea, I was the auditor! (laughter)
Mr D ... about that. That must have been sort of mid 70s – I can’t remember. So he started running with that sort of idea, but said he wasn’t going to have anything to do with it unless he had a proper staff. He wasn’t going to get into the same 32
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problem that I had, where we had the banks and nobody to supervise …
RR Yea.
Mr D … so he said he would have to have an adequate staff to do it. And so he started it, but unfortunately, in Tynwald – ‘cos he was quite a nationalist was Roy – ummm ... he said something – I can’t remember what it was – he said something off the cuff about, you know, how he was – how, with the Isle of Man we’d got to develop, you know, sort of brush the UK aside – not those words, but it was that sort of thing, and, of course, the Home Office get all the Minutes – the copies of the Tynwald proceedings and that sort of thing. So making these rather off the cuff – in a way, silly statements just to impress Members of Tynwald how clever he was, it created a problem with the UK authorities. That they weren’t err … receptive to this idea and that took another few years to get over that.
RR It was quite a long time, because when I was doing the – the Harbour Board audit, all these – one of the things we always did was look at any of the legislation to do with the department and all involved, and the safety of life at sea and all this stuff was being brought in bit by bit, and that took – it was 1980 – 1981, 1982 – all that was going on. But then there was still a pause, after that, before it really got going …
Mr D Yea, yea … well, I think it …
RR ... and that’s one of the reasons, then …
Mr D … yea – it was unfortunate – I mean – he just said – I can’t remember what it was, but he just said it. I mean, it wasn’t serious stuff.
RR Hmmm.
Mr D Anyway, I’m a man from Peel, I was … (laughter) and that sort of few seconds, saying things, delayed things for a few years. But that was fairly typical of Roy. And then the other thing was the ummm ... oh … duty free… duty free?
RR Freeport?
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Mr D Freeport, hmmm ... which I had put down, as I say, on this paper that I did years before. I wasn’t very enthusiastic about the idea, ‘cos I thought a Freeport had to be at the end of an international trade route, really, to be of any use. Anyway, John Webster, who was the economist, he wanted to run with that one, so he – he started pursuing that idea. And I think it was only on the third attempt that it actually took off.
RR Yea … it’s … it … was a bit slow, and it’s …
Mr D It was almost accidental – I don’t know whether you went – there was a group went to America. There were quite a number of …
RR I went to New York on that – that one.
Mr D Yea, hmmm ... well the guy who …
RR Peter Henwood proudly announced that he was …
Mr D Hmmm, yea – well, he was the man who actually got it here – Henwood. Because he – his – what was the connection there with a firm of accountants? Were they trustees, or something?
RR I don’t know what it – I don’t know how he managed it, but Peter Henwood – I had ... I went into his offices to do an audit once, and I talked to him at length about – and also in Dublin and also – ‘cos he turned up at all these things, and also in America. And he was in the ... he was quite ‘flashy,’ ... had all the gear ... Mr D Hmmm.
RR ... and everything ...
Mr D Hmmm, he had a helicopter, I think ... did he have a helicopter?
RR Oh, I think so, yes.
Mr D Yes.
RR He had all the gear and all the show. But he also took enormous pains. He took 34
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an enormous amount of pain, so that when we went to Dublin, for example, he had all these appointments made. And as ... but he’d run into trouble because he had announced that he was a Chartered Accountant. He’d put on his paper, ‘Peter Henwood, Chartered Accountant,’ which he wasn’t.
Mr D No, he wasn’t – well, I assumed he was. (laughter)
RR So he had some difficulty. Neil Crowe got onto it, and Neil Crowe got into great [unclear] and we managed to prevent him from putting that on it. It was a bit – ‘cos it’s outside the jurisdiction of England and Wales, or Scotland or Ireland, it was – it was not clear that we could actually prevent him calling himself what he liked. Anyway, he was prevented in the end. So then he, then he hitched up with Kidsons, and outside his office in, in Parliament Street was a big sign said Kidsons, but when you got inside it was Peter Henwood. Well then he got even more ambitious and he – when he was in New York he managed to persuade Arthur Anderson that he would be their man in the Isle of Man. So we then had a huge brass plate about this size with the words, ‘Arthur Anderson’ [unclear]. I remember when we were – we were all went to [unclear] with Arthur Anderson – do you remember? And Arthur Anderson said how their great friend, Mr Peter Henwood, was going to be there, evidently in the Isle of Man … so everybody’s jaw dropping (laughter) – Martin Moore’s jaw dropping, and Pete’s jaw dropping ... all these jaws dropping. But Pete Henwood got the first Freeport thing, did he?
Mr D Yea. Well – I, I, I was – I didn’t go and I understood that he – his parents had been killed and the – there was a trust fund for him, and the accountants in New York were part of the Trust Administrator. Now that’s what I was told – not by him … errr … He ummm ...
RR I think that ... I don’t know.
Mr D I’ve no idea, I mean, and for some reason, Anderson – it must have been Anderson – had a company who were ummm ... in the Freeport out at Shannon, and they wanted somewhere for – nearer to Europe. They wanted – they didn’t want it all in the same place. And ummm – it was the diamond people – what were they called ...?
RR Oh, Diamax, was it? 35
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Mr D De Beers – it was De Beers, wasn’t it? De Beers – and they wanted some unit elsewhere than Shannon ... and through Peter Henwood, he mentioned the Isle of Man and the Freeport, which we – we were still struggling to get it off the ground.
RR All we’d got was the fences and some signs, wasn’t it?
Mr D Yea – nobody had taken it up at all. And err … he err … mentioned this and got them over, and the government sort of ‘De Beers – oh, right!’ and they came and I think somebody in government – I think it was Edgar Mann at that time – I said, ‘Well, you really ought to tell De Beers that Henwood is, you know – a little bit dubious and, you know, we’re rather surprised they’re sort of tied up with him.’ Anyway, De Beers came and they dropped Henwood – it was Henwood who got them – through Henwood that they came here ...
RR Hmmm, hmmm.
Mr D ... and that was – that was a sort of third attempt we’d ...
RR Well, it never really fulfilled what one might have hoped for – even now, has it?
Mr D Well, I – I don’t know.
RR Don’t know quite what’s in there.
Mr D I don’t know – I don’t know what goes on there.
RR No, well I – I’ve only been in there about twice.
Mr D Hmmm.
RR I don’t think there’s very much.
Mr D I went into De Beer’s operation after they’d set it up, but I can’t remember much ...
RR Well, there’s still, there’s still – Diamax is still there, isn’t it?
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Mr D Yea, yea.
RR Which is the same thing.
Mr D Yea.
RR I’m not sure if the ownership is the same.
Mr D I don’t know, I don’t know.
RR I don’t know. Anyway, so that’s the Freeport. Now we had, during your time, the very important thing was the abolition of exchange control …
Mr D Yes.
RR ... which must have been a terrible restriction.
Mr D ’72, yea.
RR No – it was later than that, wasn’t it? Wasn’t it Mrs T [Thatcher] who did away with it, finally?
Mr D ’75 – oh, right, okay. Oh, they re-drew the boundaries of the scheduled territories in ’72.
RR In ’72.
Mr D Ireland was one of the few remain ... they cut out some of the ...
RR Australia and New Zealand, sort of thing ...
Mr D Yea – probably Bermuda and those sort of places I think ...
RR So that was then redefined, really as, as ... Great Britain and Ireland.
Mr D Well it was good for us, because most of the business came from – through the UK, right?
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RR Yes – and it meant – it also meant that ummm ... that anybody wishing to move their wealth outside, was limited where could take it to …
Mr D Yea, yea.
RR ... so they could actually only go to ...
Mr D Channel Islands, Isle of Man ...
RR ... scheduled territories, which was the Channel Islands and us and Ireland.
Mr D Yea.
RR But I think it was – I think Mrs T [Thatcher] abolished ...
Mr D Ummm.
RR ... exchange had gone altogether – one of the first things she did in 1979 - I think. Anyway, that’s something ...
Mr D July ’79 – abolished. Oh no! No, sorry – that’s the Usury Act. (laughter) I’m not sure when – when it was err ...
RR Anyway, it was, it was around there. It was Geoffrey Howard – when lots of things happened – fairly early on. Ummm ... but Ireland kept theirs so that the punt and the pound parted company ...
Mr D Yea, yea.
RR ... as far as parity went. When I first started doing tax planning for Irish clients, one of issues that arose was exchange control ... ‘cos they had it and – being good Irishmen, they were not too concerned by (laughter) – abiding by it. We had quite a lot of [unclear] and I remember having – going to bed with Jim - Jim and Geoffrey Crowe and Neil Crowe and I and – shortly after Geoffrey Crowe was – went – I suppose it was about then. And I sort of got landed with all the off-shore type of stuff ... ummm ... and Bob Callick [sp ???] debating on our attitude. It was one of the things they were going to bring in – our attitude to work we would accept ... ummm ... because it was quite clear that a lot of 38
Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
people would accept pure evasion structures – to set up companies that were owned by somebody in a taxable place and just not tell anyone about it. We had this – and our Jersey office, who we subsequently got rid of, were quite happy with that. Charles Parkinson, who was Professor Parkinson of Parkinson’s Law fame, who came to live here, err ... he was a very rigidly – he’s now a – he’s now on – in the Senate of Guernsey ... or at least their Treasury Minister or Number Two Treasury guy ... but he had a very sort of strict view on it and we hadn’t really got no views because we’d not really any of that sort of work. It’s very likely Geoffrey Crowe had done some I think in some of his structures were a bit loose. We had this great debate as to what was acceptable - what’s not acceptable. So we, in the end said we not accept anything that we did not believe, if brought to light, couldn’t work ... that didn’t mean to say could guarantee it was going to work, because you don’t know, sometimes, ‘til it’s tested in court. And [unclear] Watson who advised us – we had him in on the debate – it was the sort of position we kept him. But I do know from – from situations I was asked to take over from time to time, from other firms, that their attitude was not the same, and they’d just something up, and it err ... it worked and no one knew about it.
Mr D Hmmm.
RR So that was one of … one of … one of our great debates. And of course it has all moved on since then because ... even tax evasion is now – I mean, there was an attitude, wasn’t there, that no jurisdiction enforced the tax laws of another jurisdiction.
Mr D Yea, yea.
RR And that was well established for a long time. (laughter) Well, that’s all gone out of the window now. It’s now a criminal offence ... not to have knowledge of and enforce the tax laws of somebody else. So the total movement, so the evasion and the avoidance matters have almost become sullied.
Mr D Yea.
RR But that really wouldn’t have affected ... might have affected Mark as Assessor of Income Tax, or his successor, who was Killip, wasn’t it? David Killip.
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Mr D Hmmm.
RR And then Ian ... but it wasn’t really your concern as Treasury man – any of that?
Mr D No, managed to keep out of that. (laughter)
RR Well, there wasn’t anything useful you could have done about it.
Mr D We had – there was one occasion we would – almost dragged into it ... can’t remember ... one of the bankers was running around – must have been about the mid-70s was it – early – late 70s? Don’t know who was that ... there was a court case that they had, and I think it was James Reeson [sp ???] said it was a ‘fishing’ expedition that shouldn’t take place or something like that?
RR Hmm.
Mr D I can’t … I can only vaguely remember it. So ...
RR Anyway, ummm ... I think that more or less covers all the ... so you went in 19 ...
Mr D ’91.
RR 1991 … oh yes – there was one other thing that I do want to ask you about. ‘Cos this is – this is a peculiar thing. The FSC was set up and that had Martin Owen – Martin Owen was in charge, wasn’t he?
Mr D He was.
RR We had, under him, Duncan Kneale doing insurance and Jim Noakes …
Mr D Banking
RR ... doing banking. And it was one Financial Supervision Commission. But then, for some reason, insurance – Duncan Kneale managed to extricate insurance from ...
Mr D Oh, Martin Owen … err … went off to the Isle of Man Bank ... 40
Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
RR Yes.
Mr D ... and then Mark Solly became ...
RR So it was all still ... when Martin Owen was there, it was all still one?
Mr D Yea – became the Administrator. That’s what – can’t remember whether – called him Administrator or not.
RR Yea, whatever it is.
Mr D And then there was some terrific row, I think, broke out between Solly and Duncan Kneale. And Duncan Kneale just said he wasn’t working with Solly, and if we didn’t like it, he would leave ... more or less – that’s more or less what’s said (laughter) – I wasn’t involved, fortunately. And err ...
RR So ...
Mr D ... he decided to break it up rather than lose Duncan Kneale.
RR Yes, that was a ... never seemed to be terribly ... and there’s talk about putting it all back together again now, anyway ... I suppose it’s tidy-minded to think it’s all in one place.
Mr D Well, I ...
RR For what it matters ...
Mr D ... err ... yea, I – I’ve read the report and I went to the presentation they made – they made a presentation on that.
RR What – recently?
Mr D Monday.
RR Hmm – oh, Monday?
Mr D Yea … err ... Chartered Institute of Management organised it. 41
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RR Ummm.
Mr D I think they’d done an awful lot of work, and that sort of thing, but – well, I – I wouldn’t be doing what they’re doing, (laughter) suggesting, anyway.
RR What are they suggesting – putting it together again?
Mr D Well, generally, they came – they’ve come round to the conclusion that the Chief Minister position is not strong enough, so they ought to make it stronger. There’s a whole lot of things are going to change, and they’re going to have a department of – I think it’s called, Corporate Services.
RR Is this the Robert Quayle thing?
Mr D Yea … hmmm
RR Well, yes, I know about that.
Mr D Hmmm – Corporate Services which will be – there’ll be a Minister in charge, but he will be reporting directly to the Chief Minister – as I understood it ...
RR Oh!
Mr D ... and the Head of Corporate Services will be reporting direct to the Chief Secretary. But they start off from the premise that the Chief Minister has too much to do.
RR And thinking of giving him even more to do. (laughter)
Mr D (laughter) They’re piling a whole lot of other things under him. And ummm ...
RR I’d have thought the Chief – the way forward, I would have thought, was the Chief Minister to be a sensitive push away – the detail ...
Mr D Well, that’s what I’d have thought.
RR ... he has to – he has to be the conduct of the band.
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Mr D Well, the trouble is, umm ... when I retired, I don’t know how many people were in the Chief Minister’s office. There couldn’t have been more than about half a dozen at the most. Now there are thirty-odd people there.
RR Hmmm.
Mr D And err … there’s thirty odd people in the err … oh – I think they call it ... I don’t know whether they call it Human Resources now, or not – whatever the title is – and there used to be about six there.
RR Hmm! Well, Human Resources have got out of hand – it’s like Supervision, it’s Compliances – taken off!
Mr D Ummm ... same as with the Attorney General’s office – there’s thirty-odd people. Anyway, I discovered a lot of that is caused by the European Community legislation ...
RR Well I think that’s – I think all to do ...
Mr D ... and also ...
RR ... and also Human Rights legislation.
Mr D They’re doing a lot of prosecutions, which years ago the police would have done ...
RR Hmmm.
Mr D ... so that department has grown enormously. The Chief Minister’s office – they say he’s got too much to do, and then they piling on this extra work ... the department under him. They’re moving to this Corporate Services internal audit, they’re moving ... ummm ... computer services – IT, is it? ...
RR Yea.
Mr D ... into this Corporate Department and this department are going to be responsible for changing systems. And I thought – these people, who are ... they’ve all been in the Isle of Man a long time. They know ... 43
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RR Did Robert Quayle present this report?
Mr D Yea … and err ... they had Miles Walker and Fred Kissack who was the Chief Secretary, and ...
RR He was on it, wasn’t he?
Mr D ... Quine was on it, and Dr Dick whatever – I can’t remember … Hors ...?
RR Horsnell
Mr D Oh, Horsnell.
RR He’s the, he’s the great err ... UK Independence Party man ...
Mr D Yea.
RR ... who lives at Douglas Head.
Mr D Oh, does he?
RR Quite nice!
Mr D Oh ... he err … he wasn’t there. Robert Quayle, later when I was speaking with him said, ‘Oh, we thought we might have had a … a … another report (laughter) from Dick!’ – had his own report!
RR Well, Dick’s fairly – I think he’s got quite an acute mind.
Mr D Oh he has, yea, yea, but err ... it just seemed – I mean, you’re only going to have consensus government – never going to have a sort of Chief Executive telling everybody (laughter) what to do – it just wouldn’t work! Ummm, but err, I don’t know. It just, to me, seemed to tackle the whole thing from the wrong direction.
RR Hmmm.
Mr D They’ve burdened themselves with committee after committee after committee 44
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...
RR And ... and they’ve taken advice on almost everything …
Mr D Yea.
RR ... and have an expert in to tell what they should be able to work for themselves.
Mr D Yea.
RR I think – I think they like to have people to lean on, don’t they?
Mr D Yea – they don’t want to take responsibility …
RR No.
Mr D ... generally – which is why the Governor retained his position so long – that ummm ... they would rather he was responsible (laughter) signing ...
RR The brave hero (laughter) there was something else that was going to be … anyway, I think that ...
Mr D There was an article in The Telegraph over the weekend about the Isle of Man. I don’t know if you get The Telegraph? ...
RR There was one in … there was one ...
Mr D ... about the new tax system here.
RR There was one in another paper – I don’t see The Telegraph ... The Times, or something had a ... The Mail, I think – The Mail of all papers had a – had a sort of insert about the Isle of Man.
Mr D Oh well, somebody dealing with PR must have been working hard to get them all in at the same time. (laughter)
RR Well, they’re all sort of paying a lot of money. Anyway, we shall have another election and we’ll get some more comics, so (laughter) it’s all a little bit 45
Manx Heritage Foundation: TIME TO REMEMBER: Bill Dawson
depressing, sometimes. Anyway, that’s been very illuminating. It’s certainly very helpful.
Mr D Hope my memories are reasonable. (laughter)
RR Well I think your memory – your memory accords with what I – with what I think I know.
Mr D I had to read what I’d written before, anyway. (laughter)
RR I’d forgotten you’d written a bit in there ... well, it’s been quite a remarkable progression over the years.
Mr D Oh yea, without the finance industry I suppose the Isle of Man would be ...
RR Well, I think we ...
Mr D The population would have declined even further.
RR Well, I think it – it would. And the new residents ... not going to do it on its own. The new residents got ... got some help in.
Mr D Yea, it was really good for the construction industry and some of the banking industry.
RR Yea. And it kept the population up and, presumably the idea was that if you have people here all the year round they’ll spend money in the shops etcetera and there’s some truth in that, although half of them went over to London to buy all their serious stuff.
Mr D Still do, don’t they? (laughter)
RR Still do – well we all still do, to some extent, because they’ve got the choice. Anyway, many thanks, Jill.
SL Thank you, and thanks ...
Mr D Sorry about the coffee. (laughter) 46
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SL It was lovely!
RR It was very nice.
Mr D My excuses! All these years and I never made coffee in one of these.
END OF INTERVIEW
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