The first thing you learn about Guernsey is that the speed limit is 35mph. “Not 40 like Jersey,” sniffs a local, as though this placed its neighbour into dangerous, grand prix territory. But then everything is compared with Jersey here: it is an obsession.

But, as we tootle along, without stop signs, I cannot help but notice that the cars are fabulous. This is a place that loves its wheels: 65,700 people with 43,000 cars and a great many of them are Mercedes, BMWs, Audis and Porsches.

I even saw one with a spoiler (clearly for when you hit 34mph.) Life in the slow lane in fast cars. How very Guernsey. Here people lead the simple life while putting together some of the most complex financial instruments in the world.

They seem British but are not part of the UK. They are peaceful and yet live in the shadow of Hitler’s bunkers. They are a meritocracy but also feudal. As I overheard one woman say: “Well I am from one of the original five families and so I have no troubles.”

I find David Jenkins, 59, catching his first ever fish (a 2ft 6in long-nose) in the gorgeous clear water off the marina pier.

Behind us the town of St Peter Port glistens, the promenade frothy with hanging baskets: there are no tacky arcades here, only sleek banks.

Mr Jenkins, who came a few years ago from Lincolnshire, still seems in awe: “It is fabulous. Very little crime. Very little litter. No gangs on the street. The beaches are paradise. And they collect the rubbish twice a week!”

Any downsides? He says housing is very expensive. (And it is: even the restricted local market is near London levels.) If money makes the world go round, then Guernsey spins like a top.

Jim Gilligan, the chairman of Guernsey Finance, came 40 years ago from Scotland to work for Guernsey Inland Revenue, which, I cannot help but think, can’t have been that strenuous.

After all, there is no capital gains tax, no inheritance tax and no VAT. Income tax is 20 per cent, a level said to have been set by the Germans during the Occupation. “It just stuck,” he says.

I say something about Guernsey being a tax haven. Is that insulting? “We prefer international finance centre,” he says smoothly. “What do small island communities do if their natural occupation of farming no longer pays? Guernsey could have been like the Isle of Wight, where there is very little other than tourism.”

Still, I can tell it rankles. “We are always being knocked,” Mr Gilligan says.

“You can either develop a chip in both shoulders, an evenly balanced personality, or you can just roll with the punches and say: ‘What do we need to do?’” Guernsey has worked hard to get on the OECD (Organisation for Economic Co-Operation and Development) “white” list.

Mr Gilligan points to another list, the Global Financial Centres Index, where Guernsey is 12th. “Look,” he crows, “We are above Jersey!”

The credit crunch has nibbled away here, with growth down and some redundancies. This, and a fierce debate about whether to adopt a £93.5 million mass-burn incinerator, are the hot political topics.

But the crunch has an upside. Guy Hands, the private equity zillionaire, has moved here (reputedly to a £8.6 million house) to escape Gordon Brown’s top tax rate. There is a rumour that more like him will follow to live a life of low-key luxury.

Fred Gallienne grew up in the rural southwest of the island speaking Dgèrnésiais, the Norman French patois.

Now, aged 78, he is the island’s history incarnate. Indeed, I first meet him outside the bus station where Mr Gallienne, and about 20 other locals in Tudor costumes, are re-enacting the burning of three heretics in 1556. “Burn them!” shout local teenagers. This is what passes for light entertainment here.

I visit Mr Gallienne the next day at the local castle, where he gives talks. As a child he lived here during the Occupation, a topic very much in the zeitgeist.

John Nettles, of Bergerac fame, is about to start filming a series on the Occupation. Certainly, on the island, it is treated as a tourist attraction. You can even visit a refurnished bunker, complete with a gun (now aimed at surfers) and German mannequins playing draughts over signs that begin “Achtung!”

Mr Gallienne blames the Germans for, among other things, the demise of Dgèrnésiais. Unlike him, most children were evacuated and returned, five years later, monolingual.

Now only 2 per cent of islanders speak it. “We are desperate that it doesn’t disappear. If you lose your language, you lose your identity, your roots have all gone. Also, we are unique in the world — we have to retain that! We are not English!”

As if to prove this, he now breaks into Dgèrnésiais: “Ch’est d’tché triste quànd la créature tourne en jniche, mais pière quànd ch’est en biche!” This was one of his mother’s sayings. It’s about going from bad to worse and translates as: “It’s sad when the person turns into a heifer but worse when it’s into a goat.”

For a small island, it is a complicated place. Newcomers. Financiers. Natives.

Then there are those who come to do the menial jobs. It is one of these, a Latvian, who sums it up best. When asked why he has stayed, he says: “Many things happen in Guernsey that do not happen in real life.”

Standing apart

Area 24 sq miles

Population 65,700

Location 60 miles from England, 25 miles from France

Money British pound but Guernsey still uses much loved £1 notes

Status The Bailiwick of Guernsey also includes the islands of Alderney, Sark, Herm, Jethou and Brecqhou. It is a British Crown Dependency, not part of the UK

Government The States of Guernsey, as it is called, has 45 Deputies elected every four years

Legal system Derived from Norman French customary law

Housing The local market is for natives and incomers doing vital jobs. The open market, for foreigners, is fixed at 1,600 homes

National animal The donkey, which may or may not have something to do with the islanders’ stubborness

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