Travel: Islands - Cornwall drifts to the mid-Atlantic

West country meets Switzerland in the middle of an ocean? Hamish McRae explores Bermuda

Imagine an island surrounded by coral reefs, with about the highest standard of living in the world, with no income tax or corporation tax, and an hour-and-a-half's flying time to three of the world's most sophisticated cities. Any idea? A hint: it is a British colony. Still not there? All right, it is Bermuda.

Bermuda is not a common destination for Britons and virtually all the half-million tourists it receives each year are Americans. We tend to think of it, if we think of it at all, as a Caribbean island, whereas it is in fact 1,000 miles north of the Caribbean, stuck out on its own in the middle of the Atlantic. That means that its climate is much wetter and cooler than that of the West Indies, and that it is therefore principally a summer holiday destination rather than a winter one. Yes, you can lie on a beach in winter, but you will have to wait for a dry and not too windy day. Yes, you can snorkel the reefs, but in winter you would probably want to wear a wetsuit.

So why go? It is easy to see why Americans go. It is quick and relatively cheap to fly there from any of the big east coast cities: New York, Boston and Washington. It is also, to Americans, exotic. It feels different. It is tiny - 25 miles long - and for most of its length it is just a few hundred yards wide. There are narrow little roads with cars driving on the left, neatly cropped hedges, pastel-painted cottages - half-close your eyes, and it could be Cornwall. Visitors are not allowed to rent cars, so they have the novel experience of riding around on scooters or taking buses. It's not at all like life in the US.

The island's colonial status is also an attraction. Unlike virtually all the other former colonies it seems happy with this status, having voted nearly three to one to remain so in 1995. In fact it is the only colony of any size we have left, now that Hong Kong has gone, with 60,000 of Britain's remaining 100,000 or so colonial subjects living there. It also has the second oldest British settlement in the western hemisphere, a town called St George, founded in 1612, a few years after Jamestown in Virginia. Unlike Jamestown, which has been reconstructed as a museum, St George has been in continuous occupation, and the oldest buildings date back to the 17th and early 18th centuries.

So Americans get a glimpse both of a foreign culture and of their own history. But they can use their own dollars, which are legal tender and pegged one-to-one with Bermudan dollars, speak their own language and enjoy all the amenities of a country with the standard of living of Switzerland. Bliss.

For Britons the attraction is less obvious. We were there for a financial conference rather than a holiday - Bermuda is a big insurance centre. To the first-time British visitor the place seems extraordinarily built up. Pack 60,000 people on to an island of 21 square miles, give them all houses with gardens and you have no room for country. Instead you have continuous suburbia, interspersed by the occasional golf-course. Bermuda is also expensive for a holiday destination. As residents pay no income tax and there is no company taxation the revenue has to be raised somehow, and the government does that with import duties. There are also taxes on visitors, with even cruise visitors who sleep in their ships having to pay a nightly tax. Add in the fact that wages are high and you end up paying London prices, plus a bit. The quality of the service is excellent, but cheap Bermuda is not.

However, Britons and Americans alike get two incomparable attractions: the sea and the people. The sea substitutes for countryside. The Bermuda sailing races are legendary, the dinghy races in particular: a little 14ft traditionally built boat, with an enormous mast, a massive sail area and a crew of six or seven to try to keep the thing upright. If you need to lighten the boat during a race, apparently you dump a couple of the crew overboard.

Our own exploits were more modest: a rented motorboat to spin out to a wreck, HMS Vixen, the navy's first twin screw warship, where my intrepid spouse and daughter snorkelled sans wetsuits. Bermuda has a brilliant line in wrecks. That was how the British arrived, when the Sea Venture, under Sir George Somers, was wrecked in 1609 en route for Virginia. Bermuda has accumulated about 300 wrecks, ranging from Spanish galleons to The Constellation, made famous by Peter Benchley's book The Deep. For anyone interested in snorkelling or diving Bermuda is a starred alpha location, because aside from its wrecks it also has particularly interesting coral - the most northerly reefs in the western hemisphere.

The other extraordinary feature is the charm of the people. Just as Parisians have developed rudeness to an art form, so Bermudans have developed politeness. It is considered extremely rude to pass someone in the street without greeting them; the politeness is catching and you end up saying good afternoon every few seconds to locals and visitors alike. To the visitor, at least, there is no evident racial tension between the 65 per cent mostly black population and the 35 per cent mostly white. There are big wealth differences, but there is no poverty and little unemployment. The impression is one of easy egalitarianism. To anyone familiar with the Caribbean this is refreshing and delightful. I found myself wondering how other societies could achieve this self-reinforcing "critical mass" of politeness; if Bermudans could put it into a bottle and export it, Bermuda would dominate the world market.

As it is, you have to go there to experience it. A long way from London? Yes. An expensive location? Sure. Uneven weather? True. A touch of make- believe about it all? I suppose so. But the charm helped make for four of the nicest days of my life.

The only airline with direct flights to Bermuda from Britain is British Airways (0345 222111). The lowest fare for travel between June and September is pounds 738 return. Bermuda Tourism: 1 Battersea Church Road, London SW11 3LY (0171-771 7001).

The knees have it

Bermuda Shorts are the main (well - the only) contribution of the island to the fashion industry. They were developed from British tropical military wear and are used for formal occasions as well as informal. The classic business attire consists of a blue, blazer-style jacket, a white shirt with a tie, tailored shorts ending between three and four inches above the knee, knee-length socks and black formal shoes. The shorts can be in any colour except that of the jacket; and the socks must tone with either the jacket or the shorts. Bermuda shorts are completely acceptable at a business meeting. Go to a convention, and never in your life will you see so many male knees.