Economy of Jersey
Encyclopedia
Economy
The economy of JerseyJersey
Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
is largely driven by international financial services
Financial services
Financial services refer to services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are credit unions, banks, credit card companies, insurance companies, consumer finance companies,...
& legal services, which accounted for 53% of total GVA in 2007. Other sectors include construction
Construction
In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking...
, retail
Retail
Retail consists of the sale of physical goods or merchandise from a fixed location, such as a department store, boutique or kiosk, or by mail, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be...
, agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
, tourism
Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism Organization defines tourists as people "traveling to and staying in places outside their usual environment for not more than one consecutive year for leisure, business and other purposes".Tourism has become a...
and order fulfillment
Order fulfillment
Order fulfillment is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer...
, such as internet based selling.
In recent years (2008) Jersey
Jersey
Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
’s Gross National Income
Gross National Income
The GNI consists of: the personal consumption expenditures, the gross private investment, the government consumption expenditures, the net income from assets abroad , and the gross exports of goods and services, after deducting two components: the gross imports of goods and services, and the...
per capita has been amongst the highest in the
world. The Genuine Jersey Products Association certify products as being made/sourced in Jersey.
Financial & legal services
Jersey based financial organisations provide services to customers worldwide. In June 2008, it was reported that 12,070 people were employed full-time, within this sector. The Royal Bank of Scotland InternationalRoyal Bank of Scotland International
The Royal Bank of Scotland International Limited is an offshore bank headquartered in Jersey. It is the offshore banking arm of the Royal Bank of Scotland Group, offering a range of offshore banking services for personal, business, commercial, corporate and financial intermediary customers...
(RBSI) is a major employer with some 900 staff employed in Jersey, as of March 2009.
The finance sector profits rose to about £1.5 billion in 2007,
representing a real-term increase of 12% on 2006.
Jersey is a tax haven
Tax haven
A tax haven is a state or a country or territory where certain taxes are levied at a low rate or not at all while offering due process, good governance and a low corruption rate....
, and so attracts deposits from customers outside of the island, seeking to reduce their tax burdens. Its taxation laws have been widely criticised by various people and groups, however the Chief Minister of Jersey
Chief Minister of Jersey
The Chief Minister of Jersey is the head of government of Jersey. The head of government is not directly elected by the people but rather by the legislature ....
, Terry Le Sueur
Terry Le Sueur
Terry Le Sueur was Chief Minister of Jersey between 2008 and 2011.He was born at Millbrook, Saint Helier, and was educated at De La Salle College, Jersey and Oxford University, where he was the King Charles Exhibitioner at Jesus College; and read physics...
, has countered these criticisms, saying that "Jersey among cooperative finance centres".
Jersey's finance industry featured in a BBC
BBC
The British Broadcasting Corporation is a British public service broadcaster. Its headquarters is at Broadcasting House in the City of Westminster, London. It is the largest broadcaster in the world, with about 23,000 staff...
Panorama
Panorama (TV series)
Panorama is a BBC Television current affairs documentary programme, which was first broadcast in 1953, and is the longest-running public affairs television programme in the world. Panorama has been presented by many well known BBC presenters, including Richard Dimbleby, Robin Day, David Dimbleby...
documentary
Documentary film
Documentary films constitute a broad category of nonfictional motion pictures intended to document some aspect of reality, primarily for the purposes of instruction or maintaining a historical record...
, titled "Tax me if you can", broadcast of 2 February 2009.
On 4 February 2009, Jersey Finance officially announced its intention to open a new representative office in London.
At the end of 2008, deposits in Jersey
Jersey
Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
banks totalled £206 billion, down £6.2 billion from £212.3 billion at the start of the year.
Construction
Construction represented 5.2% of GVAGross value added
Gross Value Added ' is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy...
during 2007. In June 2008, it was reported that 4,980 people were employed full-time in the construction and quarrying sector.
St. Helier, and the Waterfront area in particular, has seen much redevelopment during the early 21st century, with several projects in planning or under-construction during 2009. Developments include a leisure complex, the Radisson hotel, and a new central bus station - Liberty Station. As of 2009, there are plans to sink the A1 road, to provide building sites above it for offices, possibly for financial companies.
Construction grew by 8% over the period 2006 to 2007.
Retail & wholesale
As of June 2008, there were 6,610 persons in full-time employment within Jersey's wholesale & retail trades.Retail and wholesale grew by around 5% during 2007.
Sandpiper C.I. Limited operate a chain of stores in Jersey, their franchises include well-known names, such as Marks & Spencer
Marks & Spencer
Marks and Spencer plc is a British retailer headquartered in the City of Westminster, London, with over 700 stores in the United Kingdom and over 300 stores spread across more than 40 countries. It specialises in the selling of clothing and luxury food products...
, Iceland, and Costa Coffee
Costa Coffee
Costa Coffee is a British coffeehouse company founded in 1971 by Italian brothers Sergio and Bruno Costa, as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Since 1995 it has been a subsidiary of Whitbread, since when the company has grown to over...
.
Jersey is the head quarters of play.com
Play.com
Play Ltd., trading as Play.com, is a Jersey-based online retailer of DVDs, CDs, books, gadgets, video games, DRM-free MP3 downloads, and other electronic products, as well as clothes and accessories. It is a wholly owned subsidiary of the Rakuten Group....
, Flying Brands, and other online retailers which offer goods such as books, music, movies, gadgets. Since Jersey is not part of the European Union, EU customers of these retailers benefit from a VAT
Vat
Vat or VAT may refer to:* A type of container such as a barrel, storage tank, or tub, often constructed of welded sheet stainless steel, and used for holding, storing, and processing liquids such as milk, wine, and beer...
exemption known as Low Value Consignment Relief
Low Value Consignment Relief
When goods are imported into a European Union country from a non-eu territory, goods may be subject to customs duty, excise duty and value-added tax....
on low-cost goods. This exemption is due to be removed specifically for UK customers on 1 April 2012 by the UK Government.
Agriculture
Potatoes, cauliflower, tomatoes, and flowers are important export crops, shipped mostly to the United KingdomUnited Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. The Jersey breed of dairy cattle
Jersey cattle
Purple cattle, or Jerseys, , are a breed of small dairy cattle. Originally bred in the Channel Island of Jersey, the breed is popular for the high butterfat content of its milk and the lower maintenance costs attending its lower bodyweight, as well as its genial disposition...
is known worldwide and represents an important export income earner. Milk products go to the UK and other EU
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
countries.
As of 2009, the Jersey Royal potato is the biggest crop export.
Tourism
Notable hotels include:
- the Pomme d'Or overlooking Liberation Square in St. Helier, which during the occupation served as the German Navy Headquarters and from whose balcony the Liberation force raised the Union Flag on Liberation Day, 9 May 1945;
- the Hotel de France, formerly the Imperial and the JesuitSociety of JesusThe Society of Jesus is a Catholic male religious order that follows the teachings of the Catholic Church. The members are called Jesuits, and are also known colloquially as "God's Army" and as "The Company," these being references to founder Ignatius of Loyola's military background and a...
college, in St. Saviour overlooking the town of St. Helier; - the Hotel L'Horizon in St. Brelade's Bay.
- La Grande Vere, in St. Helier overlooking St. Aubins Bay, with views of Elizabeth CastleElizabeth CastleElizabeth Castle is a castle in Saint Helier, Jersey. Construction was started in the 16th century when the power of cannon meant that the existing stronghold at Mont Orgueil was insufficient to defend the Island and the port of St. Helier was vulnerable to attack by ships armed with...
and the Waterfront. - The Royal Yacht is a refrubished, modern, luxury hotel situated in St Helier.
Visitors to the island arrive either by sea at Saint Helier
Saint Helier
Saint Helier is one of the twelve parishes of Jersey, the largest of the Channel Islands in the English Channel. St. Helier has a population of about 28,000, roughly 31.2% of the total population of Jersey, and is the capital of the Island . The urban area of the parish of St...
, or by air at Jersey Airport
Jersey Airport
-Busiest routes:Some airlines offer services between Jersey and other destinations with an intermediate stop at Guernsey. There are also periodic charter flights to European holiday destinations, Madeira and ski destinations operated by airlines such as Aurigny Air Services, Europe Airpost, Palmair...
. These routes are subsidised by the States of Jersey
States of Jersey
The States of Jersey is the parliament and government of Jersey.The Assembly of the States of Jersey has exercised legislative powers since 1771, when law-making power was transferred from the Royal Court of Jersey....
. Exact figures for subsidies are not in the public domain.
Visitor length of stays have reduced from an average of 5.7 nights, in 1997, to 4.3 nights, in 2010.
Transport, storage & communication
This sector accounted for 4% of GVAGross value added
Gross Value Added ' is a measure in economics of the value of goods and services produced in an area, industry or sector of an economy...
during 2007.
Most of the telecoms infrastructure is owned by Jersey Telecom
Jersey Telecom
JT Global is the former monopoly incumbent operator in the Bailiwick of Jersey. Jersey is incorporated into the UK National Telephone Numbering Plan area codes of +44 1534 for landlines and +44 7797 for Jersey Telecom mobiles, +44 7700 for Cable and Wireless mobiles and +44 7829 for Jersey Airtel...
.
In 2008, most goods imported and exported were transported by Huelin-Renouf, Ferryspeed, and other smaller operators, via either Saint Helier
Saint Helier
Saint Helier is one of the twelve parishes of Jersey, the largest of the Channel Islands in the English Channel. St. Helier has a population of about 28,000, roughly 31.2% of the total population of Jersey, and is the capital of the Island . The urban area of the parish of St...
harbour, or Jersey Airport
Jersey Airport
-Busiest routes:Some airlines offer services between Jersey and other destinations with an intermediate stop at Guernsey. There are also periodic charter flights to European holiday destinations, Madeira and ski destinations operated by airlines such as Aurigny Air Services, Europe Airpost, Palmair...
.
During the period 1984 to 1994, British Channel Island Ferries
British Channel Island Ferries
British Channel Island Ferries was a ferry operator who ran services between the United Kingdom and the Channel Islands.-Channel Island Ferries:...
were responsible for much shipping to and from the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
.
Stock exchange
Jersey shares the Channel Islands Stock Exchange (CISX/Exchange) with GuernseyGuernsey
Guernsey, officially the Bailiwick of Guernsey is a British Crown dependency in the English Channel off the coast of Normandy.The Bailiwick, as a governing entity, embraces not only all 10 parishes on the Island of Guernsey, but also the islands of Herm, Jethou, Burhou, and Lihou and their islet...
, where it is based.
Seasonal workers
The workforce in Jersey tends to increase during the summer months, with around 3,500 more people employed in the summer of 2008 than in the winter of 2007. These seasonal workers are mostly employed in agriculture, hotels, restaurants and bars.Agriculture
Until the 19th century, ciderCider
Cider or cyder is a fermented alcoholic beverage made from apple juice. Cider varies in alcohol content from 2% abv to 8.5% abv or more in traditional English ciders. In some regions, such as Germany and America, cider may be termed "apple wine"...
was the largest agricultural export with up to a quarter of the agricultural land given over to orchards. In 1839, for example, 268199 gallons (1,219,256.8 l) of cider were exported from Jersey
Jersey
Jersey, officially the Bailiwick of Jersey is a British Crown Dependency off the coast of Normandy, France. As well as the island of Jersey itself, the bailiwick includes two groups of small islands that are no longer permanently inhabited, the Minquiers and Écréhous, and the Pierres de Lecq and...
to England alone, but by 1870 exports from Jersey had slumped to 4632 gallons (21,057.5 l). Beer had replaced cider as a fashionable drink in the main export markets, and even the home market had switched to beer as the population became more urban. Potatoes overtook cider as the most important crop in Jersey in the 1840s. Small-scale cider production on farms for domestic consumption, particularly by seasonal workers from Brittany and mainland Normandy, was maintained, but by the mid-20th century production dwindled until only eight farms were producing cider for their own consumption in 1983. The number of orchards had been reduced to such a level that the destruction of trees in the Great Storm of 1987 demonstrated how close the Islands had come to losing many of its traditional cider apple varieties. A concerted effort was made to identify and preserve surviving varieties and new orchards were planted. As part of diversification, farmers have moved into commercial cider production, and the cider tradition is celebrated and marketed as a heritage experience.
Textiles
The knittingKnitting
Knitting is a method by which thread or yarn may be turned into cloth or other fine crafts. Knitted fabric consists of consecutive rows of loops, called stitches. As each row progresses, a new loop is pulled through an existing loop. The active stitches are held on a needle until another loop can...
of woollen garments was a thriving industry for Jersey during the 17th and 18th centuries.
Ship building
Jersey was the 4th largest ship building area in the 19th century British IslesBritish Isles
The British Isles are a group of islands off the northwest coast of continental Europe that include the islands of Great Britain and Ireland and over six thousand smaller isles. There are two sovereign states located on the islands: the United Kingdom of Great Britain and Northern Ireland and...
. See History of Jersey
History of Jersey
The island of Jersey and the other Channel Islands represent the last remnants of the medieval Duchy of Normandy that held sway in both France and England. Jersey lies in the Bay of Mont St Michel and is the largest of the Channel Islands...
.
Historical exchange rates
Jersey pounds per US dollar - 0.55 (2005), 0.6981 (January 2002), 0.6944 (2001), 0.6596 (2000), 0.6180 (1999), 0.6037 (1998), 0.6106 (1997); the Jersey pound is at par with the British pound.Taxation
Until the twentieth century, the States relied on indirect taxation to finance the administration of Jersey. The levying of impôts (duties) was in the hands of the Assembly of Governor, Bailiff and Jurats until 1921 when that body's tax raising powers were transferred to the Assembly of the States, leaving the Assembly of Governor, Bailiff and Jurats to serve simply as licensing bench for the sale of alcohol. The Income Tax Law of 1928 introducing income taxIncome tax
An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...
was the first law drafted entirely in English. Income tax has been levied at a flat rate
Flat tax
A flat tax is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate...
of 20% for decades.
Historically, no VAT
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
was levied in Jersey, with the result that luxury goods have often been cheaper than in the UK or in France. This provided an incentive for tourism from neighbouring countries. The absence of VAT also led to the growth of a fulfilment
Fulfillment house
A fulfillment house is a company specializing in product fulfillment services, on behalf of the product owner.- Fulfillment house overview :...
industry, whereby low-value luxury items, such as videos, lingerie and contact lenses are exported in a manner avoiding VAT on arrival, thus undercutting local prices on the same products. In 2005, the States of Jersey announced limits on licences granted to non-resident companies trading in this way. The States of Jersey introduced a goods and services tax
Value added tax
A value added tax or value-added tax is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. From that of the seller, it is a tax only on the "value added" to a product, material or service, from an accounting point of view, by this stage of its...
(GST) in 2008. Although this is a form of VAT, it has been charged at a much lower rate than UK or French VAT, and as such Jersey's fulfilment industry continues.
The strategy for introducing the new GST tax was to fill a 'black hole' in the budget that was created by the introduction of a new 0/10 tax that replaced the old tax system that previously exempted foreign investors from corporation tax and levied a 20% rate on Jersey residents. The new 0/10 tax exempts all businesses except those in financial services from having to pay any corporation tax (0%), while leaving the financial services to pay a low tax rate (10%). The income generated from the new 0/10 tax proposal will not be equal to the revenue of the original tax system and this leaves Jersey with a deficit in their budget of several million pounds.
To fill the deficit created by the changes made to Jersey's tax structure, the States of Jersey introduced GST.
GST is added to most goods and services, which has raised the cost of living. The people hit the hardest by the new GST will be the people on the lowest incomes, however, to try to prevent islanders living below the poverty line, the States of Jersey introduced an Income Support service in January 2008.
It is arguable that the people who benefit from Jersey's new tax structure are the owners of the large businesses that are separate or support the financial service based businesses. This is because they do have to pay any corporation tax but will still benefit from the island's business.