Dependencies of the British crown—constitutionally odd and financially rich
The Channel Islands consist of four main islands and numerous other islets. They are governed as two separate ‘bailiwicks’ based on the two largest islands: Jersey, with 58% of the population; and Guernsey, with 42%, which also covers the two smaller islands of Alderney and Sark.
Natives of the islands generally speak either English or French, though there are vestiges of a Norman-French dialect. There are also large numbers of settlers: in Jersey only half the resident population were born on the island; most of the rest come from elsewhere in the British Isles, often as tax exiles, and there are also many immigrant workers from Portugal.
The islands have traditionally exported horticultural produce to the UK—fruit, flowers, tomatoes, and potatoes. But agriculture now accounts for less than 5% of GDP. Tourism is more significant, accounting for 24% of GDP in Jersey and 14% in Guernsey. Around 80% of visitors come from the UK, attracted by the mild climate and pleasant scenery, though most come only for short breaks.
More recently, the islands' economies have become dominated by financial services—50% of GDP in Jersey, and 40% in Guernsey. With little or no corporation tax, they became very attractive to British companies in 1979 after the abolition of exchange controls. The business is fairly clean, though a British government report concluded that the scale of tax evasion and fraud was ‘unusually hazardous’ to assess. The report also discovered that Sark's 575 inhabitants between them held 15,000 company directorships.
All the islands could, however, be affected by increasing intolerance of tax havens following the 2008–09 financial crisis, and tighter EU regulation of hedge funds.
The financial opportunities are created by the islands' unusual constitutional position, with respect to both the UK and the EU. They are neither sovereign states nor part of the UK, but remnants of the duchy of Normandy, a legacy of William the Conqueror, and come under the jurisdiction of the British monarch rather than of the state. They have autonomy in domestic policy, including fiscal policy, and Jersey issues its own coins and notes. The monarch appoints a lieutenant-governor to each of the bailiwicks. Each also has an appointed bailiff who is president of the local Assembly of the States, which has both elected and appointed members.
www.gov.je/ Jersey - States of Jersey
www.gov.gg/ccm/portal/ Guernsey - States of Guernsey
Land area:300 sq. km.
Main towns:St Helier, St Peter Port
People:British and Norman French
Government:Dependencies of the British crown
Life expectancy:80 years
GDP per capita:$PPP 52,000
Currency:Jersey pound, Guernsey pound
Major exports:Vegetables, fruit, flowers
Subjects: History — Christianity.