TIME to REMEMBER: Edgar Mann
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Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann MANX HERITAGE FOUNDATION ORAL HISTORY PROJECT ORAL HISTORY TRANSCRIPT ‘TIME TO REMEMBER’ Interviewee: Dr Edgar Mann Date of birth: Place of birth: Interviewer: Roger Rawcliffe and Charles Guard Recorded by: Charles Guard Date recorded: No recording date Topic(s): Isle of Man Government Reserves The Savings & Investment Bank [SIB] The Manx Shipping Register Companies Exempt Insurance Act Negative publicity from collapse of SIB Financial Supervision Commission [FSC] Stress and illness Anglo Manx Bank Gwendolyn Lamb Bernie Moffett and tanker drivers strike Gun incident involving Mr Oatway Declining Tourism Setting up a Ministerial Government in the Isle of Man Standing down from Legislative Council Promoting Isle of Man as an offshore business centre Edgar Mann - Dr M Roger Rawcliffe - RR Charles Guard - CG 1 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann RR … was in the Finance Board? Dr M Well, not immediately, no, err … RR No. Dr M ... I was five years on various Boards, and then I became Chairman of the Board of Agriculture. And it was after the election of 1981 that I became Chairman of the Finance Board. RR And you hadn’t experienced – that was your first – being a Member of the Finance Board, was it? Dr M Yes. RR So a lot of the … a lot of the problems which turned into the SIB [Savings & Investment Bank] where already in the system? Dr M Oh yes, yea. RR That’s interesting. Now when you – what was your impression when you became Chairman of the Finance Board as to the status of the financial services industry? Dr M Well, the state of the finances of the Isle of Man Government were frightening. RR Were they? Dr M Ummm, because err ... the umm … taxation revenue had fallen quite significantly over the latter part of the seventies, and after the election we were faced with a fairly tight budgetary situation with a – if I recall – a reserve just about approaching one million. RR (laughter) At least you weren’t borrowing ... Dr M And the reserves are now in the hundreds of millions, yea. RR I know. 2 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann Dr M So it was quite obvious that things had to change, and somehow we’d got to stimulate the finance sector still further. So the impression I got, and this is only an impression ‘cos I wasn’t involved, was that, you know, in the earlier stages, nobody really was talking about a financial centre as such, they were talking about just giving the economy a bit of a boost by in-coming wealthy people and the setting up of these private banks. But I mean that was the impression I got. Certainly from 1981 onwards, we were quite deliberately going out and trying to raise the – raise the profile. RR Well, I remember – I remember that, but the new – and I do remember that when I – I came to live here – I came to Pannells in 1979 – end of ’79 – and it was all a bit – you couldn’t sell houses and things ... Dr M Hmmm. RR … clients of ours died and you found you got some awful house that was on your hands. So I do remember it being quite flat at that time. Dr M Yes, it certainly err … it certainly was. And of course, as far as the banks were concerned, they were just domestic ... RR Hmmm – well, we audited quite a few. Dr M ... domestic retail bankers, and that was that. There wasn’t any major ummm ... but of course, we were still in a situation where, of course, there was no capital movement in and out of the UK without – well, there was capital movement, but it was all monitored. RR Well, the, the, the exchange control went before just before 19 ... just before Mrs Thatcher got in in 1979. Dr M Errr ... RR So that had just happened. Dr M No it didn’t, no it didn’t, actually. RR Didn’t it? 3 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann Dr M Err … because when we were still in the early stages, and this was quite lucky really, we had people from the Bank of England coming over every quarter … errr … and they saw Bill Dawson and err … they were checking on the capital flows in and out … errr … on this quarterly basis so of course there was a personal relationship between the Bank of England and us at that time, which was very helpful indeed, when it came to the SIB problem. RR Now ... tell us the sort of background ... you mentioned banks – were there other financial things you were trying to get moving? I mean, insurance – you, you had ... Dr M Well, I don’t ... RR Coming in. Lloyds Life came in, didn’t it? Dr M Ummm – yes, I’m just trying to remember when we actually altered the err ... law, so that ummm, errr … you know, the insurance companies could benefit from ... RR I think it was 1981 ... Dr M ... low taxation ... RR ... I think you did it in 1981 from what I remember ... I have it in here somewhere, but it doesn’t matter for this purpose. Dr M I know in developing the economy there were two key issues, one was not directly financial but err … was the setting up of the Shipping Register ... RR Hmmm. Dr M ... and certainly I err … put through a lot of the … a lot of the Bills that set up the err … the Manx Shipping Register, but that was before ’81, but … yea. RR Well, I was the auditor of the Harbour Board, and all this legislation I had to look at. Dr M Yes, that’s right, yes. 4 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann RR And that was to get it prepared for ... Dr M That’s right, yea … err … but I believe, by ’81, they were already beginning to start ummm … signs of shipping companies coming over here. But ummm … I can’t recall an awful lot about the insurance, I ummm … I have a vague recollection of it going through the Keys but, I couldn’t relate it in terms of err … of time, you know, in what, what year. RR I, I think it was 1981 … Dr M Was it? RR ... errr …’cos it was the, was the Companies Exempt Insurance Act, or something of that kind. Dr M Well that ... that certainly took off very quickly, yes. RR Well they had had some before, but there was … they taxed the investment income, I think … Dr M Hmmm. RR ... but not the trading income by accession and this sort of put the whole thing – ‘cos Guernsey had stolen the march on us I think. Dr M Oh yes. RR But the captives started to come in after, after you became Chairman. Dr M Yea – which, which was, ummm … you know … a specific item when it came to financial … err … you know, setting up the … ummm … you know, the regulations. Because then we started getting arguments between the insurance industry and the banking industry as to how (laughter) ... RR Come back to that in a moment … Dr M Yea. 5 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann RR Ummm … before the SIB happened, did you have any warnings of, of, of … Dr M Well, there were ... RR ... impending disaster? Dr M ... there were a lot of mutterings, a lot of mutterings that ummm … err … we should be doing a lot more in terms of err … of regulations, or certainly knowing what was going on, because at that time, really we, we had no great knowledge of actually what was going on in the individual banks. We – they were supposed to be submitting their balances every so often, and there was a Commercial Relations Officer, I think he was called … RR He was – that’s what he was called … Dr M ... err … who was supposed to be err … keeping an eye on these things. RR Well, that’s all, that’s all … I mean there was quite a lot of interesting stuff when they had those inquiries … Dr M Yea. RR ... and that’s precisely what he undertook to do, to keep an eye on it, which was … (laughter) sounded a bit casual in the way it was … it was a sort of Minute of a meeting. Dr M And I can remember ... RR Before your time, I think? Dr M ... yea … err … I can remember, early on, err, when I was Chairman of the Finance Board, err … of course I was Member of the Executive Council, as well, of trying to persuade Executive Council that we needed a Banking Supervisor … ummm … and of course ... ummm … all the government departments were err … you know – on a very tight budget … RR Hmmm. 6 Manx Heritage Foundation: TIME TO REMEMBER: Edgar Mann Dr M ... and personnel wise as well as err … as financial. And there was quite a lot of objection to this, and I quite well remember … err … when Executive Council refused to authorise an additional person in Treasury to do banking supervision ... err … saying to them, ‘You may well rue this day.’ (laughter) But ... err … I don’t want – I don’t know how, personal your … err … your comments have got to be or not to be. CG As personal as possible, really. RR Well I have to also to then to then to pull the punches a bit because I don’t want to – I mean I want to give a flavour without necessarily ..