The Channel Island of Jersey is responsible for inward investment of almost £500 billion into the United Kingdom and supports around 180,000 jobs, according to a report published yesterday by the independent firm, Capital Economics.
The new work comes at a time of increasing focus on the relationship between the UK, which through the City of London is the world's leading finance centre, and the so-called Crown Dependency islands of Jersey, Guernsey and the Isle of Man, all of which offer sophisticated international financial services across a range of banking, fund, private wealth and capital market activities.
The report, entitled 'Jersey's Value to Britain', provides the most comprehensive analysis to date of the relationship between Jersey's economy and that of the UK.
Key findings include:
- Jersey is a conduit for almost £500 billion of foreign investment into the UK, comprising 5% of the entire stock of foreign-owned assets.
- £1 in every £20 of money invested by foreign individuals and companies in assets located in Britain reaches the UK via Jersey.
- Each year, Jersey banks send around £120 billion of their deposits to parent operations in the UK, representing 1.5% of the funding of the whole UK banking system.
- UK net tax receipts generated by the activities of Jersey are around £2.3 billion a year.
- Two-fifths of all assets administered or managed across Jersey's financial and wealth management sectors come from markets outside the UK and EU.
- Jersey's practitioners assert that four-fifths of the wealth they manage would be lost to the sterling zone in the absence of Jersey – together with Guernsey and the Isle of Man.
Geoff Cook, CEO of Jersey Finance, said:
"This new work powerfully demonstrates the substantial contribution made by Jersey to the United Kingdom. We have always understood that our activity here in Jersey delivers a net benefit to the UK, but it is now clear from the data in this report that Jersey makes a substantial contribution to the British economy, facilitating huge amounts of foreign investment, providing billions in vital liquidity to the UK banking system and supporting many tens of thousands of jobs.
In addition, the report demonstrates the truly international nature of Jersey's finance industry, with global capital flowing to the UK from some of the largest, and fastest growing, markets in the world."
Senator Philip Ozouf, Treasury and Resources Minister, States of Jersey, said:
"This report powerfully illustrates the interdependent and mutually beneficial relationship between Jersey and the UK. In recent months we have taken significant steps to advance our shared agenda around zero tolerance of tax evasion and a commitment to transparency. This independent report goes further in quantifying also the benefit to the UK of a well-regulated offshore centre in bringing global investment to UK business, infrastructure and the City of London."
Mark Pragnell of Capital Economics and principal author of the report, added:
"This work goes further than any previous study and, importantly, provides a comprehensive review of the sources and uses of assets administered or managed in Jersey. The island is a catalyst for employment and economic activity in the United Kingdom, which itself generates revenues for the British exchequer."
The full report is available to the public via the Jersey Finance website and can be found at www.jerseyfinance.je/valuetobritain
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