From Tourism to Tax Haven: Jersey

Jersey is the largest and southernmost of the Channel Islands, situated 43 kilometres from its sister island Guernsey, 22 kilometres from the French coast, and 137 kilometres from England. It has a population of about 103,000, with around 35,000 living in the town of St. Helier. The island is home to three languages — English, French and Jèrriais (an ancient Norman language) — but most people speak English. It has its own financial, legal and judicial systems. Jersey is not part of the UK but it is part of the British Islands.

Modern Appearance

Jersey’s modern appearance took shape in the 19th century, with improvements in the road network, the construction of two railway lines, improvements in transport links to England, and the building of new piers and harbours in St. Helier. Tourism started, together with the immigration of thousands of people from England, which created a more anglicised society. 

Knitting Culture

Before these changes, however, the island had been famous for basically one thing: knitting! For hundreds of years, Jersey was famous for knitting and its wool, which eventually gave the world the knitted jersey, the cable-knit woollen Jersey jumper typically worn by fishermen. The islanders — men, women and children — produced ten thousand stockings a week, mostly for continental Europe. People even knitted in church, angering vicars, who had to shout their sermons! 

Tourism Growth

The relevance of knitting eventually declined, but tourism, together with agriculture, more than took its place. The two sectors grew throughout the 19th century and the early 20th century. Tourists, mainly English, came for the miles of beaches and the warm climate. The island’s major agricultural products were, and still are, potatoes and sandy dairy produce — Jersey Royal Potatoes have a Protected Designation of Origin. The island is famous for its rich milk and cream. 

Germans on Jersey

Tourism stopped with the Second World War. The island was occupied by the Germans from 1940 to 1945. Hundreds of islanders were sent to concentration camps on the continent. The Germans banned radios, changed the time zone and made residents drive on the right. Jersey was liberated in 1945, ruining Hitler’s plan to convert the island into a Nazi holiday resort.

Timely Tides

Tourism grew dramatically after the war, principally due to improvements in transport. Water activities, especially surfing, became very popular. The beautiful beaches, and the tides, have played an important role in surfing’s popularity. Jersey has the third largest tidal movement in the world, creating wonderful waves for surfers. The small island — nine miles by five miles — shrinks to half that size at high tide compared to low tide. The tide rises at a speed of 10kph.     

Tax Haven

Jersey, however, is not just famous for its tourism. It is also well-known — if not infamous — for its status as an off-shore tax haven, which is now attracting the interest — and anger — of the European Union. In the 1950s, Britons began to move to the island, attracted by Jersey’s low taxes. Then, in the 1970s, the banks also arrived, transforming the economy, and incomes rose — but so did house prices! Delighted with the hundreds of billions of dollars arriving on the island, governments built new schools, hospitals and roads, plus a new harbour. But it forgot about the tourism and agriculture sectors, which have both suffered significantly.  

Dirty Money

The European Union, on the other hand, did not forget about Jersey’s financial sector. For decades Brussels has accused the island of accepting dirty money, facilitating “illicit financial flows and capital flight.” Jersey’s reputation has suffered and the financial sector has contracted considerably. The EU is considering legal action against the Jersey government. There are also problems for the island at sea. France and Jersey have had numerous disputes over fishing rights since Brexit. Both Britain and France have even sent gunships to patrol the area. Fishing and financial clouds can clearly be seen on the horizon, and they seem to be coming in with the tide.