Lessons from Alderney


Last week I was in Alderney, the most northerly of the Channel Islands and a wonderfully free place. It is controlled by an elected legislature with ten members and a President, acting as head of the government. Without the interference of party politics and career politicians they seem to have maintained a sense of sanity that has been lost in Westminster.

As part of the Channel Islands Alderney maintains a low tax status:

  • No Value Added Tax.
  • No tax on capital.
  • No tax on inheritance.
  • No tax on exempt companies carrying on business outside the islands-see section Trusts/ Company Law.
  • No tax on trusts whose beneficiaries live outside the island.
  • Low tax (only 20%) on profits of companies which carry on business in the island.
  • Low tax (20%) and generous personal allowances on income of persons who live in the island.
  • Preferential arrangements made for captive insurance companies based on the island.

This all means that smaller local businesses don’t have to struggle in order to pay their tax bills, which obviously is beneficial to all on the island. The absence of tax on capital attracts wealth from abroad, creating flows of income into the island that act as an investment for the community.

The island is not only competititve in its tax policy. The legislature also does not infer in people's social freedoms as in mainland UK. There are relaxed driving laws with no traffic lights or MOT tests. If you go into the pubs on the island people are free to smoke indoors at the bar – a far cry from the infringement on our freedoms that we have suffered here.

There was a really good quality of life on the island, this is shown by a high number of people retiring there after living and working in Britain and France. The government has not sought to meddle in every aspect of life and the community is better off for it – now why did I come back to Westminster again?