When William the Conqueror invaded England in 1066, he continued to be Duke of Normandy, as well as king of England. The Channel Islands are the last parts of that Duchy which the British monarchy still rules, distinctly from Britain. They consist of the separate jurisdictions of Guernsey, Jersey, Alderney and Sark. These had been subordinate fiefs of the Duchy, and were never consolidated after the loss of the main part in 1204 by King John. Guernsey provides some services for Alderney and Sark. These are constitutional oddities to be compared with Andorra as feudal survivals. They all have elected governments but with varying powers. They all function as tax havens as they have very low income tax compared with Britain. They all use British currency and some but not all British laws apply to them. It would be hard to say whether they are colonies or not. Perhaps they are best classified as Associated States similar to some small Caribbean islands. The head of state is the Queen of Britain, but with the title: Duke of Normandy.

There is no National Health Service.

The Isle Of Man in the Irish Sea, a former Viking kingdom, has a similar status.

In practice they come under the British Home Office for most purposes and perhaps are local governments without representation in Parliament. There seems to be no local protests about their status. They were the only British territories to be occupied by the Nazis during the second world war. They are members of the European Economic Area but not of the European Union.

English

Norman French

There are elections to local parliaments on each island. On Jersey the parliament is called the States (compare with the pre-revolutionary French Étates Generales). However, the British Home Secretary, acting in the name of the Crown and Privy Council (as Duke of Normandy) appoints some important posts. In May 1992 the deputy chief of the Legal system, and Speaker of the States was dismissed by the British, reviving a demand for modernization of the political system.

On Sark it is the Chief Pleas. Until March 2006 most of the seats were hereditary, the owners of certain estates (fiefs). In March 2006 the Pleas voted to reduce the hereditary element to 14, with 14 elected members, following a ruling by the European Court of Human Rights that the former, feudal system was unacceptable in modern times. All the titles and parliaments reflect the feudal French origin of the system. Some services are provided to Sark by the Guernsey government on contract.

On 10 December 2008 elections were held and the feudal system came to an end. However, the results showed an interesting contrast between the old feudalism and the new. The Barclay Brothers, who owned many businesses on the island and a new castle on the island of Brecqhou, "advised" the islanders to vote for their candidates. When the voters chose candidates who supported the Seigneur and the Seneschal, the Barclays suddenly closed all their businesses, putting many people out of work. It would seem they had agitated for democracy (they were the ones who took the case to the Court of Human Rights) in the hope that they would be the new de facto lords by the power of their money.

Agriculture, tourism and offshore banking (tax dodging). Low taxes are an important part of the economy.

In June 2003 a Jersey government spokesman has suggested that if Britain were to adopt the euro Jersey might link its currency to the US$ because otherwise they might have to set tax rates at the same rate as in the rest of the euro-zone. However, the policy of being a tax haven, especially for Jersey, is coming under pressure from the European Commission as its existence distorts the economies of all the members of the EU. Abandonment of the policy, by charging taxes similar to those in other members, would drastically affect the economies of all the islands. Many rich people maintain a residence there - making it difficult for Islanders to buy houses for themselves. There are rules about outsiders who can only buy houses valued over a certain threshold -£1,000,000. This is in effect an immigration exclusion.

On Sark by far the largest source of income is for people to act as nominal directors of companies that have chosen to domicile themselves in the island - presumably to avoid regulators and tax.

The 2008 worldwide financial crisis may lead to changes. President Barack Obama is said to want to prevent businesses and rich people hiding their money in such places to avoid tax. A G20 meeting expressed the same desire. The European Commission agrees. One solution might be for the "Duchy of Normandy" to be incorporated into the United Kingdom, with a county council for local affairs and one or more Members of the British parliament.

The Isle of Man is facing pressure to raise its tax levels by having its British subsidy reduced (October 2009). The Channel Islands can expect the same kind of pressure. Already they are coming to tax agreements with various other states.

Control of immigration to the islands from Britain is through housing. Lower priced houses may not be bought by people from outside the islands. Higher priced houses (£1,000,000+) are available to anyone.