Economy
Unlike many countries, Guernsey has not delegated money creation to the central bank and has instead issued interest-free money from 1822 to 1836, allegedly stimulating the growth of economy after Napoleon's wars without creating public debt and without increasing taxes. Also gold and silver coin remained money in Guernsey in the period 1822 to 1836 – and indeed long after.
Financial services, such as banking, fund management, and insurance, account for about 37% of total income. Tourism, manufacturing, and horticulture, mainly tomatoes and cut flowers, especially freesias, have been declining. Light tax and death duties make Guernsey a popular offshore finance centre for private equity funds. However, while Guernsey is not a member of the European Union, the EU is forcing Guernsey to comply more and more with its rules. As with other offshore centres, Guernsey is also coming under pressure from bigger nations to change its way of doing business. Guernsey is changing the way its tax system works in order to remain OECD ( and EU ) compliant. Tax contributes 18.2% of GDP. From 1 January 2008 it has operated a Zero-Ten corporate tax system where most companies pay 0% corporate tax and a limited number of activities are subject to taxation, including banking activity (taxed at 10%), regulated utilities and income from the sale of land or building (taxed at 20%). As a result annual accounts showed an overall a fiscal deficit of £24m in 2011, which it aims to eliminate by economic growth and government expenditure restraint. The deficit is currently supported by drawing funds from reserves built up during periods of surplus. At present the Island has no national debt. Guernsey also has a thriving non-finance industry. It is home to Specsavers Optical Group, which manages the largest optical chain in the UK and Ireland and also operates in Scandinavia, the Netherlands, Australia, New Zealand and Spain. Healthspan also has its headquarters in Guernsey.
Guernsey issues its own sterling coinage and banknotes. UK coinage and (English, Scottish and Northern Irish faced) banknotes also circulate freely and interchangeably.
Public services, such as water, wastewater, the two main harbours and the airport are still owned and controlled by the States of Guernsey. The electricity, and postal services have been commercialised by the States and are now operated by companies wholly owned by the States of Guernsey. Guernsey Telecoms, which provided telecommunications, was sold by the States to Cable & Wireless. Newtel was the first alternative telecommunications company on the island providing a range of residential and business telecommunication services as well as high specification data centres. Wave Telecom, owned by Jersey Telecom, also provides some telecommunications excluding local loop services. Newtel was acquired by Wave Telecom in 2010. Gas is supplied by an independent private company. Both the Guernsey Post postal boxes (since 1969) and the telephone boxes (since 2002) are painted blue, but otherwise are identical to their British counterparts, the red pillar box and red telephone box. In 2009 the telephone boxes at the bus station were painted yellow just like they used to be when Guernsey Telecoms was state-owned.
During late 2011 the UK decided to end VAT relief on Channel Islands Goods. This is no longer being contested by the Guernsey Government and several private firms.
Data centres are a growing part of the Guernsey economy and are helping it diversify away from mainly finance related industries. Building on the island’s excellent infrastructure, its independent legal system, its inherent security and the wide range of professional skills associated with the finance industry, the island is already an important location for hosting the international e-gambling industry. Long Port Group is now in the process of developing the Guernsey Data Park offering large scale, secure and high specification hosting facilities for all types of industries. Guernsey is an ideal location for data centres being able to take advantage of its temperate climate for almost 100% free air cooling and its plans to generate low carbon, renewable electricity from its local tidal resources. (Guernsey Renewable Energy)
Guernsey now has the official ISO 3166-1 alpha-2 code GG and the official ISO 3166-1 alpha-3 code GGY; market data vendors, such as Reuters, will report products related to Guernsey using the alpha-3 code.
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Famous quotes containing the word economy:
“Wise men read very sharply all your private history in your look and gait and behavior. The whole economy of nature is bent on expression. The tell-tale body is all tongues. Men are like Geneva watches with crystal faces which expose the whole movement.”
—Ralph Waldo Emerson (1803–1882)
“I favor the policy of economy, not because I wish to save money, but because I wish to save people. The men and women of this country who toil are the ones who bear the cost of the Government. Every dollar that we carelessly waste means that their life will be so much the more meager. Every dollar that we prudently save means that their life will be so much the more abundant. Economy is idealism in its most practical terms.”
—Calvin Coolidge (1872–1933)
“The aim of the laborer should be, not to get his living, to get “a good job,” but to perform well a certain work; and, even in a pecuniary sense, it would be economy for a town to pay its laborers so well that they would not feel that they were working for low ends, as for a livelihood merely, but for scientific, or even moral ends. Do not hire a man who does your work for money, but him who does it for love of it.”
—Henry David Thoreau (1817–1862)