Simon Calder: As sterling sinks, time to test out some funny money

Hitch-hiking is inherently rewarding. You travel through interesting places, chauffeur-driven by a member of a self-selecting group of friendly, helpful people. Occasionally, you can step out of a vehicle having made a cash profit too.

In the days when 50p represented a pint of beer and a half-ounce of Old Holborn, I earned that princely sum from a driver asked me to shift some furniture after giving me a lift to Brighton. Twice as profitable, though, was the first lift I hitched on the Isle of Man. The lady in a Skoda who picked me up outside Ronaldsway airport handed me a Manx £1 note to show that the island is a separate country, and refused to take it back. Ten minutes later I climbed out with tangible evidence of the island's financial advantages.

Another tax-haven island with what some would regard as "funny money" is seeking to profit from the slump in sterling. Last weekend, Jersey Tourism took out advertisements with the slogan, "Europe without the euro". The ads promise an exotic experience in the largest of the Channel Islands without the need to undergo ritual humiliation at the hands of foreign-exchange dealers. But according to a survey conducted on behalf of Jersey this week, many travellers are unaware that sterling is sovereign on the isle.

The "JEP", as the Jersey pound is abbreviated, has been the official currency for 175 years – even through the German occupation during the Second World War. But of 1,000 people polled, one in six said they believed the euro to be legal tender in Jersey. The same proportion said they had no idea which currency circulated.

How, I wondered, does the UK's travel industry compare? I conducted my own phone survey of 10 enterprises to gauge how well-informed our travel professionals are about the Channel Islands. From Sheffield to Shanklin on the Isle of Wight (where the pound also prevails), eight travel agencies and bureaux de change instantly answered "sterling" when I said "I'm off to Jersey – what currency do I need?".

The two odd pennies? A branch of Thomson in Bristol, which told me, "They have got their own currency; it's not something we can deal with, but they do accept sterling." And the travel agency at Warwick University, where I once studied mathematics. "Let me see if I can find out," the helpful but baffled member of staff replied. A moment later: "Everyone's on the phone. I was going to Google search it, but our internet's just gone down." Warwick was always a bit of a muddle.

Another rate of exchange: one empty water bottle equals free hydration. I always carry such a vessel through the airport security check to refill on the other side and avoid the extortionate price of water on "low-cost" airlines. Fail to plan ahead, though, and a bottle of water could cost a fortune.

That was the experience of Martin Lewis, a reader who flew to Kittila in Finland on a Thomson charter flight two weeks ago: "We tried to buy two 500ml bottles of water (branded, ironically, 'Thirsty Planet') priced at £1.60 each." This is already about 10 times the cost of aviation fuel, but the price was about to more than double.

"We only had euros on us and therefore I handed over a €20 note. The steward said change would be given in sterling and offered us £12."

You do not need a questionable maths degree to work out that, with the pound effectively at parity for anyone trying to buy euros, Mr Lewis was being charged £4 per bottle. When he complained, "The response was that their exchange rate was €1.28 to the £1 because Thomson 'buys euros forward' and we were charged the rate they paid." That, if I may, is a ridiculous assertion on the part of the cabin-crew member.

If Thomson has strategically locked into euros, for example to pay Finnish hoteliers, at a rate of €1.28, then it has done well for its shareholders and passengers. But new earnings in euros, such as from Mr Lewis's desire for a drink, have nothing to do with hedging arrangements; they will be converted at the prevailing rate.

The frank explanation that Mr Lewis reports from a stewardess sounds more plausible than the smoke and mirrors of financial instruments: "You should pay in pounds – our exchange rates are extortionate."