The “Jersey question”: what if the profits of free data move offshore?
I gave a talk last month about the Free Our Data campaign to be2camp (which had the aim of getting the idea of better sharing of data through wikis and other social systems for architecture).
Amidst it there were questions, and among the questions was this one: “if you make all the data available for free download, what’s to stop companies from relocating to Jersey – which pays no UK tax – and operating from there?”
That would mean that the UK taxpayer now wouldn’t be getting the benefit of revenues to the Ordnance Survey through its licensing fees, and wouldn’t get the tax revenue on the company that would now be headquartered in Jersey. So you’d have higher taxation costs (since the OS would now be funded centrally) and no obvious economic benefit.
So what’s the answer?
We don’t know.
The government has struggled with this problem over issues such as gambling, where companies have preferred to locate in places like Gibraltar or far-flung Caribbean countries with less strict tax regimes and offer services online. There’s a money flow out of the UK with those too.
One possible argument is that even if the data were sold and the profits taken abroad, the UK economy would benefit because the information is being made more widely available – and that has to have a benefit. There could even be a multiplier effect, as there tends to be with any commodity: making steel bars is a profitable business (or can be), but making buildings is a much more profitable one. Perhaps in time, with a free data model, the OS data would be the steel bars of the building: necessary, but not the biggest part of the value chain.
- The following posts may be related...(the database guesses):
- How does Australia charge for government data? (30 November 2006; score: 45.22%)
- Daily Telegraph: making stuff free can create revenues (9 December 2009; score: 24.06%)
- Susskind steps down (19 February 2008; score: 23.05%)
- Your questions please for Baroness Ashton - and a question for you, the reader (20 March 2007; score: 18.61%)
- Postcomm makes recommendations on future of Postcode Address File: it should make a profit (19 April 2007; score: 18.49%)
November 4th, 2008 at 10:30 am
The question strikes me as little more than a Red Herring. The question remains just as valid even if it isn’t prefixed with “If you make all the data available for free download”.
As you note, relocation of companies and individuals is a flaw (or feature) of the current methods of taxation, it has little to do with freedom of access to data.
It’s also worth consideration that the £50 million shortfall required to free OS data need not, and probably should not, be raised from corporation tax receipts.
November 4th, 2008 at 12:39 pm
What happened to the idea about funding it by a land registry surcharge?
If it is that important that you shouldnt be able to make money out of it without paying tax, then licence the data as free to personal use and businesses resident in the UK or an appropriate fee otherwise.
November 4th, 2008 at 4:02 pm
The answer to the question raised should perhaps be considered in the context of the UK Office of Public Sector information (OPSI) Click-Use-Licence scheme. The statistics show that organisations and people from all across the world have taken out a Click-Use-Licence and most of the information that they are accessing and using is available to them for no financial charge.
The precedence has been set.
http://www.opsi.gov.uk/click-use/index.htm
http://www.opsi.gov.uk/about/website-statistics/licensing-statistics.htm
November 4th, 2008 at 9:27 pm
Simple. The terms of the license should be free to use by all UK registered companies based in the UK excluding subsiduaries registered or based outside of the UK. I’m no lawyer but the owners of the data can stipulate whatever terms they like when offering a license, even if no payment is required.
November 5th, 2008 at 12:00 am
@Rob – on where the monies would come from, the idea is that there would be a bigger private sector, which would generate more tax revenues naturally.
@Brian – I haven’t seen the latest Land Registry transaction numbers but I suspect they’ll be a long way down: look how the house market has collapsed in volume.
@Gary – you could try, but you would then have the situation where you’d be policing the licences – just as happens now. That’s not satisfactory.
November 5th, 2008 at 9:06 am
The UK is a member of the European Union and has a responsibiliy to comply with the European Union Directive 2003/98/EC.
The UK is also a member of the Organisation for Economic Co-operation and Development and has a reponsibility to comply with the OECD PSI Policy Principles.
If you are not aware of the above responsibilities of the UK then please take the opportunity to browse the following and then reconsider the question posed the Jersey question:
http://ec.europa.eu/information_society/policy/psi/index_en.htm
http://www.epsiplus.net/reports/oecd_psi_policy_principles
http://www.intgovforum.org/cms/workshops_08/showmelist.php?mem=54
http://www.epsiplus.net/
November 5th, 2008 at 11:30 pm
@Charles – I think the economic benefit approach (Cambridge Economists Report) could get shot out of the water if the businesses move offshore.
@Chris – I think that the EU’s own interpretation of the regulations may not be as clear cut as you suggest. The EU has commenced infringement proceedings against Sweden and Poland, why not against the UK?
November 8th, 2008 at 10:48 am
Steven
What is behind the question you ask – why not against the UK?
The Jersey question regarding profits moving off shore whilst interesting is not relevant as the UK Policy of the Click-Use-Licence has since 2001 or there abouts permitted anyone across the world to use UK public sector (initially under the Crown Copyright regime but now spreading across UK public sector information domains).
The European Union Directive 2003/98/EC is a framework for developing the European economy and one of the objectives is the utiisation of public sector information across borders. By implication a company elsewhere in Europea may re-use the UK public sector information but the economic gain may well go to another country within Europe or indeed any other in the world!
So are you saying in the question that you have posed (why not against the UK?) that public sector bodies in the UK have not permitted others across Europe (including the Channel Islands) to re-use their information but have permitted UK based people and organisations to re-use their data? If so and you are aware of this I would suggest you submit the evidence to the European Commission via the contacts at the current URL:
http://ec.europa.eu/information_society/policy/psi/contacts/index_en.htm
and take the matter up with the UK Office of Public Sector Information.
The OECD public sector information principles have the same objective.
April 3rd, 2009 at 2:50 pm
free jersey should be given.why i am saying that .due to some reason or the price of jersey is high we the supporters cheers football .