Jersey is "heading towards bankruptcy"

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Oliver Bullough writes in the Guardian today:

Jersey looks rich – but it is heading towards bankruptcy. 

In April, officials announced that the budget would be short £125m a year by 2019. “What went wrong?” asked the Jersey Evening Post. And that was just the start of it. By June, the annual deficit – now known on the island as the “black hole” – had been revised upwards to £145m, more than £1 in every five that the government spends. 

“The black hole is so big,” according to Connect, a Jersey business magazine, that “filling it will take the equivalent of shutting down every school in the island, laying off every teacher, letting the parks turn into overgrown jungles and having our roads literally fall apart.” 

That is quite a hole, and the question is, how can Jersey fill it? The solutions are not pretty: voluntary redundancies, compulsory redundancies, new taxes, fewer public services. 

Jersey bet its future on finance, allowing its other industries to shrivel, in the belief that it could live well in perpetuity from moving other people’s money around. If that belief was false, then does its fate await another island off the coast of France – one that has also pledged its future to finance? 

In short, is Jersey’s worrying present Britain’s bleak future?

It is also worth quoting a Telegraph article by Gordon Rayner that appeared during the abortive investigation of child abuse on the island:

One more disturbing question presents itself in the light of the child abuse scandal: just why, on a such a small and supposedly idyllic island, did so many hundreds of children end up in care homes? 

The answer lies in another little-publicised fact about Jersey - its unexpectedly high level of poverty, which brings with it the sort of social problems that lead to children being taken into care. 

Although Jersey, with its £250 billion financial industry, has the second-highest gross domestic product per capita in Europe, the island's wealth is largely held by the privileged few. Some 13,000 people - more than one in seven - live in social rental properties, Jersey's equivalent of council houses, and half of all households suffer from one or more of the internationally recognised measures for relative poverty. 

The crumbling 1960s council estates of St Helier are testament to the years of neglect. Rusting cars rot on rubbish-strewn drives, windows have bedsheets for curtains and the paint is peeling off walls and doorframes. "This place is run by the finance industry for the finance industry," says one resident. "Anyone else just doesn't count."

And if the finance industry fails, what will become of the islanders then?