Review of crown dependencies announced

Fears the UK authorities are determined to 'rein-in' the Isle of Man and other offshore centres have been re inforced this afternoon (Monday).

In a surprise announcement to the Commons, Chancellor of the Exchequer Alistair Darling has called for a review of financial regulation in the Crown Dependencies.

His comments came in the opening of today's pre-Budget report - and just a day after Gordon Brown used a BBC TV interview to hint at problems with the UK's relationship with the Island.

The Chancellor's broadside is a significant escalation of what appears to be a growing hardening of views by the UK authorities towards the Isle of Man and the Channel Islands.

It won't go unnoticed that Mr Darling (pictured) used a high-profile occasion - prior to announcing the widely expected cut in VAT - to criticise the Dependencies.

He said potential problems with overseas territories were cited at talks at the G20 summit earlier this month.

He went on 'it is crucial international transparency is implemented - as Crown Dependencies continue to attract investors who avoid contributing to the exchequer.'

And referring to those customers of Kaupthing Singer and Friedlander in the Isle of Man who stand to lose millions, after their assests were frozen in the UK, Mr Darling said: 'at times of stress depositors need to know who is going to compensate them - the British taxpayer cannot be the guarantor of last resort'.

He's asked the European Commission to report back, with recommendations, by Spring next year.