...our dear Channel Islands ..

When Winston Churchill famously announced on May 8th 1945 (a day early) that "..our dear Channel Islands are also to be freed today." He could not have foreseen how tenuous the relationship between the islands and the UK would become.

A staunch European, Churchill would no doubt have been saddened to learn that on the 65th anniversary of the liberation, his dear islands would be battling to maintain their economic independence. Battling the UK and battling Europe.

Channel Islanders are a resourceful bunch but isolated by around seventy miles of sea from England, there are few strings to their economic bows. Post war Guernsey depended largely on a tomato growing industry that was devastated when the Dutch Government subsidized fuel for their growers.

The tourist industry has always provided some income but with competition from mass destinations like Spain and bucket air fairs, this has never been sufficient to support the population.

The only other industry with any scale to land, produce jobs and invest over the past thirty odd years has been Finance. The islands have nurtured and developed this and the various sub-sectors as well as the supporting legal and administrative businesses. With the possible exception of eGaming, this has been one of the few industries capable of locating offshore due to the geographical isolation.

So what does 'offshore' offer to entice them?

The answer is simple, yet grossly misunderstood. The islands offer an efficient, tax free environment with excellent regulation and superb telecommunications. All the islanders can do is to make their tiny land masses attractive by removing the obstacles to companies locating in them.

If they could attract a more diverse range of industries, they would. But islands are very unlikely to attract a volume of manufacturing or 'transformation' businesses because the logistics are both costly and unpredictable.

Why then is the UK and Europe 'hell bent' on destroying the only economic life line available?

Low or no tax jurisdictions are considered the pariahs of the offshore world because they do attract those businesses that can operate there, thus denying the onshore world those tax revenues. So a variety of accusations are levelled at them, most typically that they are routes for money laundering and a range of equally vicarious activities. Of course they aren't, any more than the City of London or other financial centres, but this helps to justify a range of sanctions.

The question the 'onshore' world needs to answer if it is to bombard the Channel Islands with economic artillery to match that of the German bunkers still punctuating the cliffs sixty five years after the liberation is this; "take away the finance industry and what are you going to put in its place?"

Having failed to live up to the commitment to defend the islands, cast adrift island students from UK universities, ended the reciprocal health agreement and been 'absent without leave' when needed to support the only local industry that feeds and sustains islanders, the UK must wake up to it's obligations. The words 'Crown Dependency' spell it out and if the Crown no longer wishes to be dependable, perhaps a financial compensation needs to be put forward?

Islanders have defended their position robustly but if the UK or Europe succeed in destroying the local Channel Island economies, they will be culpable for the plight of tens of thousands on the doorstep of Europe.


Peter Lihou
Author of the Guernsey Occupation Novel; Rachel's Shoe
www.rachelsshoe.com