British Overseas Territories

Lord Luce Excerpts

Thursday 10th March 2011 Lords Chamber

[Lord Luce]

My Lords, I am very pleased that the noble Baroness, Lady Hooper, who knows an enormous amount about the overseas territories, has introduced this debate. After all, there are 14 overseas territories under direct British government responsibility, with a total population of about 239,000. These are important responsibilities and there ought to be regular opportunities to hold Her Majesty’s Government to account for the performance in those territories. Of course, these 14 territories are an inheritance from the former British Empire, which has long since gone, but they have, for one reason or another, decided that they do not wish to proceed to complete independence or—to put it another way; due to particular constraints that they may face—they feel that it is impossible to proceed towards independence at this stage. It is right, too, that we now describe them as British Overseas Territories. I think that it was Robin Cook, as former Foreign Secretary, who decided to drop the word “colonial”. In my view the matter has nothing to do with colonies now; there is simply a British responsibility for these territories.

I wish to make one or two general observations and then comment on three territories. On the general side, the Minister and I and many other noble Lords share a very strong belief in the value of the Commonwealth. I was glad that the noble Baroness mentioned the value of the Commonwealth Parliamentary Association. As I think the noble Lord will know, a number of Chief Ministers consider that it would be of value to them if they had a closer link with Heads of Government in the Commonwealth by means of a forum at the Heads of Government Meeting or perhaps by holding regular meetings once a year, or every other year, with the current chairman of the Heads of Government of the Commonwealth. This ought to be looked at because there are common interests, for example between the independent Commonwealth members of the Caribbean and the overseas territories of the Caribbean. I hope that the Minister will look at that.

Over the past decade there have been one or two rather unfortunate examples of poor performance by people appointed to serve in those territories—notably by judges. One such case arose in Gibraltar, involving a chief justice, and another in the Caribbean. We need to be extremely careful how we appoint people to serve in these overseas territories. I suggest that the noble Lord consider a wider draw, including from Commonwealth countries, when appointing judges and others to fill important positions.

The principal approach, as I hope the Minister will confirm, should be to allow these territories to achieve the maximum possible level of self-governance. However, that has to be in keeping with Her Majesty's Government’s ultimate responsibility for ensuring the good governance and, if possible, the financial viability of those countries. It is interesting to note that DfID has regularly to support only Pitcairn, Montserrat and St Helena. The others—with one or two exceptions, such as the Turks and Caicos—are expected more or less to finance themselves. That should be the right approach.

One thing that has already emerged in this debate is the number of territories that rely on financial services for their viability. The noble Lord, Lord Jones, rightly referred in detail to the Turks and Caicos, but other territories such as the Cayman Islands, the BVI, Bermuda and Gibraltar, as well as the Turks and Caicos, also rely on success in their financial services in one way or another. There is therefore an onus on the British Government to ensure that we satisfy ourselves that all these territories comply with international financial sector standards on, for example, transparency, financial regulation, money-laundering and counterterrorism financing.

I should like to comment on just three territories. The first, of course, is Gibraltar. I declare an interest as a former governor of that wonderful territory, with its remarkable people, in the late 1990s. I have noticed how much things have improved there in the past decade, since I returned from that job, and I should like to highlight three strands. First, Gibraltar has negotiated a new constitution which is in keeping with today’s age. The Government of Gibraltar have more powers now, and there is a better balance between the powers of the governor and those of the Chief Minister. I very much hope that this new partnership will work effectively.

Secondly, Gibraltar now has a trilateral forum involving the British and Spanish Governments and the Chief Minister of the Government of Gibraltar. All three participate in regular discussions and I think that that is a notable improvement. For example, an agreement was reached in Cordoba on arrangements for practical co-operation between Gibraltar and the region—Algeciras and so on—in modernising the airport, sharing its services and contributing to the general development of the region as a whole. All that must be welcome.

The third issue is Gibraltar’s financial services. Tourism is important to Gibraltar as well, but financial services have contributed to steady growth in the territory, at a rate which we and many other countries in the European Union would envy. This growth is possible because Gibraltar now has a well regulated authority, an independent financial services commission, and practices that are totally in keeping with OECD standards. There is proper transparency and tax information agreements; and on 1 April—in three weeks’ time—a 10 per cent corporation tax will be introduced to deal with the problem of unfair tax competition. All that is welcome. Gibraltar should also serve as a model for the other territories in how to manage financial services. I am not sure of the extent to which there is a consist approach in this field.

It is disturbing that, over the past few months, there has been a dispute with Spain over the territorial waters around Gibraltar, arising from a particular EU directive. There have been incidents between the Royal Gibraltar Police and the Civil Guard based at Algeciras. It would be helpful if the Minister could say how this issue is progressing and whether there is any prospect of finding a resolution to it.

The final matter that I want to raise about Gibraltar is defence. At one time defence was the primary purpose of Gibraltar; but over the past two or three decades that purpose has diminished, and it now represents a much smaller proportion of our total activity in the territory. However, Gibraltar commands the entrance from the Atlantic Ocean to the Mediterranean; and in the past three or four weeks we have seen precisely the type of unforeseen circumstances that can lead to instability—on this occasion, in north Africa. Surely that reinforces the value to us, and to the West and NATO, of retaining a defence interest in Gibraltar. I therefore very much welcome the joint statement from the meeting on 3 February between the Chief Minister, Mr Caruana, and Nick Harvey, the Minister for the Armed Forces. They have confirmed the continuation of a joint operational base in Gibraltar and reinforced the value of the role of the Royal Gibraltar Regiment, which I am very proud of, and which is made up of very able and competent soldiers. It is to take on additional roles from the MoD, which is very welcome.

I wish briefly to comment on the Turks and Caicos Islands, because it is important that the Minister should tell us where we stand on this difficult issue. It is a serious matter for any Government to decide to declare direct rule. On this occasion, it occurred in August 2009, and arose principally as a result of Sir Robin Auld’s report which declared that there was systemic corruption in Turks and Caicos. Parts of the constitution have been suspended as a result. The elections proposed for this year have been postponed, as the noble Lord, Lord Jones, said, and it would be good to know what the plans are now. I hope the Minister will also say something about DfID’s loan guarantee of £160 million over the next five years to enable Turks and Caicos to restore its fiscal surplus and eliminate its debt. I hope that this will not be a cost to the British taxpayer. Nevertheless, I welcome the fact that DfID has taken the lead.

The Minister will not be surprised to hear that the last issue on which I wish to touch is the British Indian Ocean Territory. This is a longstanding problem. In the late 1960s and the early 1970s, the territory’s very few inhabitants—1,500 of them—were expelled to enable the United States to set up a base in Diego Garcia. This was an abuse of human rights. No successive Government—one of whom I was a part—have succeeded in restoring justice to these people. Nevertheless, I acknowledge that this Government are trying hard to find a way forward, bearing in mind that there is currently an appeal to the European Court of Human Rights, as well as serious financial constraints on the Government. It is welcome that Mr Bellingham, the Minister dealing with this issue daily, is taking a positive attitude. In his letter to the chairman of the all-party group, which specifically mentioned the marine protection area which must never be set up at the expense of the Chagossians, he said:

“Nothing has been done to implement the marine protection area and nothing that is currently contemplated would be a bar to the British Government complying with any judgment of the European Court of Human Rights or a bar to any British Government choosing in future to change the policy on resettlement”.

I welcome that very clear statement by the Minister on behalf of the Government, and I hope that it will provide an opening for a way forward. I appeal to the Government to develop a strategy involving discussions with the United States and Mauritius that could lead to compromise proposals which could be incorporated in the exchange of letters between the United States and Britain, which is subject to renewal in 2016. This is an ideal opportunity to ensure that justice is done to the Chagossians. Mauritius has a vital role as it claims sovereignty over those territories should the United Kingdom no longer need to continue with its sovereignty. Mauritius now has the support of all 52 countries of the African Union, and of a growing number of members of the Commonwealth.

It seems that the Americans will say that they need to retain Diego Garcia for the foreseeable future. If that is necessary, so be it. However, it should be possible to work out, for the outer isles that are a long way from Diego Garcia, co-management arrangements between Britain and Mauritius for the marine protection area, and to arrange for the Mauritians to work with the Chagossians on the outer islands on conservation matters to do with the marine protection area. If that can be done, and if they can be trained up and brought out from time to time to help with conservation, it would make a contribution. At the end of the day, we are entitled to look to the British Government to work for a solution, using the exchange of letters due in five years’ time as the basis for a new arrangement.