GUERNSEY stands accused of robbing UK businesses of trade. ‘In just 10 years, the Channel Islands has taken away 20% of trade from Britain,’ said Labour MP Dr Brian Iddon.

He tabled a House of Commons motion last week to stop companies exporting food supplements and herbal remedies VAT-free from the islands.

‘If their products are considered to be less than £18 in value, they avoid VAT – they save money.

‘Ironically, some products are being exported out of the UK and imported back through Guernsey and Jersey. It’s environmentally unfriendly and undermines the competitiveness of responsible UK businesses.’

He believes the UK Government should remove the Channel Islands’ special status to comply with UK and European legislation on the sale of medicines, food supplements and herbal remedies which give access to products containing ingredients banned from sale in the UK.

‘I am in favour of Channel Islands wholesalers selling products to Britain, but I’m not in favour of this special status. Where trade is concerned, it should be a level plain.

‘I am sure the Channel Islands would react if it were the other way round – Britain’s businesses are losing out.’

Last year, he said, a legal loophole was closed to prevent firms avoiding VAT by distributing from the Channel Islands cut-price CDs and DVDs for major chain stores.

‘The Department of Trade and Industry supported a move for the Channel Islands to come into line with European law on the sale of DVDs and CDs and I think there should be a level plain for importation of food supplements and herbal remedies.’

But Healthspan, which contributes 60% of all products exported to the UK direct from Guernsey, has defended its place in the market.

In a statement, it said each product was manufactured in the UK in premises that conformed to good manufacturing practice and did not supply herbal products that were illegal there.

‘Any gains that Healthspan make from their VAT status are also offset by much higher international postage costs and the high costs of wages and infrastructure within the Channel Islands.

‘There are several companies throughout the world who make medical claims and sell offending products in the UK marketplace.

‘In market value terms, these offending companies are small; nonetheless, their activities require targeting by authorities such as Trading Standards whenever they are unearthed.

‘The nature of these poor trading practices does allow them to move easily from jurisdiction to jurisdiction. They are not confined in any sense to the Channel Islands.

‘Healthspan, together with the island government, fully endorse the rooting out of unscrupulous suppliers who damage the good reputation of well regulated nutritional suppliers within the UK and elsewhere.’