Douglas, we have a problem

The Isle of Man's once-thriving industry in space exploration is heading for a crash landing. Jonathan Brown reports

When the annals of human space flight come to be written, there, along with Houston, Cape Canaveral and Star City, the name of Douglas, the capital of the Isle of Man, could well be etched.

News this week that a Manx-based space company, Excalibur Almaz, is offering the first human trips to the Moon since the Apollo 17 mission 40 years ago has been met with surprise bordering on disbelief.

Yet for space industry followers the revelation was unremarkable. The offshore jurisdiction, famed for its zero corporation tax, treacherous motorcyle race and belated acceptance of gay rights, has long been rated the fifth most likely territory from which to launch Moon missions. Two lunar programmes are active on the island.

Space has been one of more than a dozen sectors designed to help the island replace its traditional reliance on fishing, agriculture and tourism. It is estimated that over the past seven years the industry has contributed £35m to the Tynwald's coffers. But this year changes to the amount received through the tax system from the space industry have turned that net gain into a liability. And despite the years of investment, the number of people employed in the space sector on the island is estimated at just 30.

In March the Manx government announced plans to cut spending by £35m to help balance its budget. Cuts are planned in all departments except health, education and social care.

Tim Craine, the Isle of Man's director for economic development and former head of space commerce, admitted that even on the island times were difficult, although ministers still saw the space industry as an important contributor to economic growth.

"The Isle of Man is not immune. We are facing similar challenges [to the mainland] but currently our economy has not gone into recession. Our chief minister believes the reason we have avoided recession is because of the diverse economy," he said.

Alan Bell, the Chief Minister, rejected calls that taxes should rise to help the island through its present difficulties, choosing to leave allowances and rates unchanged in this year's Budget.

Mr Bell believes rates of zero per cent for corporation tax and 10 per cent for income tax have been central to the past 28 years of unbroken growth, and ministers opted instead to offset cuts with money from the island's reserves.

Richard Murphy of Tax Research UK has been a longstanding critic of offshore tax havens, particularly the Isle of Man – although he concedes that it has become more open.

"[Tax havens] are still pretty secretive and you can't get information, while the low-tax system is designed to undermine the tax situation in the UK. A lot of companies on AIM [the Alternative Investment Market, a sub-market of the London Stock Exchange] are incorporated in the Isle of Man but listed in London," he said.

Mr Murphy is sceptical about the success of the space industry there. "The attraction of the Isle of Man is not that it is a hotbed of technical expertise. It is not. The interest is that there is no tax. That is bluntly it," he said.

It is a claim rejected by Mr Craine, who said the island's short-term space liabilities would be reversed by the end of the current financial year and the industry would move back to a surplus.

"It is a fallacy to think that the space industry is on the Isle of Man for tax reasons. The main reason is because it is a neutral jurisdiction which is not aligned to Russia, China or the United States," he said.

A recent report by the Institute of Directors singled out the Isle of Man as a stellar example of Britain's emerging role as a leader in the space industry – a sector that has doubled in size over the past decade. It now employs 25,000 people and is said to be worth £8bn to the UK economy.

The IoD said 30 companies of the 54 working in the satellite sector are based on the island and acknowledged that the industry is well served by the island's growing concentration of professional and manufacturing expertise.

Mr Craine admitted that even many of those living could barely take in its growing prominence in the space industry. When the Excalibur Almaz spaceship went on display last year 30,000 of the island's 85,000 inhabitants went to have a look for themselves. "It was a case of seeing is believing," he said.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

'Queer saint' who bankrolled artworld giants

British culture owes a huge debt to Peter Watson, says Michael Prodger
Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

Pushkin Prizes brings countries together

Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
14 best kids' hoodies

14 best kids' hoodies

Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

The acceptable face of the Emirates

Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk