Overseas Territories

Lord Boateng Excerpts

Thursday 31st October 2013 Lords Chamber

[Lord Boateng (Lab)]

My Lords, this House and the overseas territories themselves owe the noble Baroness, Lady Hooper, a debt of gratitude for the fortitude and determination that she has displayed over the years in pursuit of their interests in this House and more widely.

I well recall as Chief Secretary being asked to reflect on the airport in St Helena. The noble Baroness’s name came up then, all that time ago. It is to this Government’s credit that they have gone ahead with that long overdue project. That addresses the central issue which we are asked to look at tonight about the diversification of the economies of our overseas territories. The need to diversify those economies to achieve the Government’s stated objective of successful and resilient economies in the overseas territories is clear. Without diversification, there is no way that those small economies will withstand the shocks that they are bound to experience from time to time because of events in the global economy. At the moment, they are experiencing those shocks in tourism and the financial services industry.

Of course, success is a relative term. The financial services industries in the overseas territories have been, on one measure, a real success. They have, in some instances, developed interesting and significant markets—for instance in reinsurance and hedge funds. However, that success has come at a cost. I fear that the cost has all too often been paid by economies that are themselves struggling to develop.

It is not without significance, I submit, that the Africa Progress Panel—which is supported by the Department for International Development, our Government, as well as by the Governments of many emerging market economies in Africa—stated:

“The governance vacuum surrounding companies operating from offshore centres is undermining reform in Africa itself”,

and that,

“African governments and citizens … have no recourse to information about the operations of these companies”.

That is true, and why it is so important that the Government answer the Question asked by the noble Baroness, Lady Hooper, about their position on urging the overseas territories to sign up fully at the Joint Ministerial Council to the multilateral convention on mutual assistance for the administration of tax matters. No one wants the financial services sector to go down in the overseas territories. Without it, in a number of instances, they would be in serious difficulty, but that should not be at the expense of other developing economies and markets elsewhere in the world, particularly in developing markets and economies where the poorest of the poor can least afford the consequences of the failure to promote transparency, accountability and good governance in the financial services sectors. We await the Answer to that Question with interest.

Tourism, too, has suffered as a result of the recent global downturn. It is to one particular economy in one of our overseas territories, that of Anguilla, that I ask the Minister to address his mind and the activity of the Government. Anguilla is a small island whose dependence on tourism has come at a very high cost. According to the ECCB figures of September this year, there was negative growth in Anguilla for 2012—minus 2.61%—and, for 2013, growth is projected at 0.93%. Frankly, the margin of error there is such that the economy has effectively stalled.

The consequences of that in terms of unemployment and poverty on the island are real. It is now seeing growing levels of poverty, an increasing reliance on food banks, and one in 10 homes are without electricity. There is real human suffering in Anguilla and we have a responsibility to address it. The Government have said that where there is need, the overseas territories will have first call on DfID’s budget. We have not yet seen that materialise in fact, and we need to hear from the Minister what plans DfID has to step in to support Anguilla at this difficult time.

This is not one of those occasions when it will be open to DfID to say, “They do not meet our eligibility criteria”, because the fact of the matter is that they do. If we look at the criteria for overseas development assistance or at the OECD’s development assistance co-operation list, which defines the poorest countries in the world, Anguilla is among them. We need to hear what the Government propose to do to give some reality to the aspirations contained in the highly laudable White Paper of 2012.

There is a concern that Montserrat and Anguilla have somehow fallen into the twilight zone of policy that affects the Caribbean, so far as the operations of Her Majesty’s Government are concerned. Despite its middle-income status in some instances, the Caribbean generally has within it real instances of poverty. They are driving a situation in which there are fragile states exposed to the dangers and vagaries of international and domestic gangsterism, and in which women are forced to become mules for drug runners because of their own dire poverty. Yet because these pockets exist within “middle-income countries”, DfID is unable or unwilling to do anything. We need to revisit policy in relation to the Caribbean generally, but our focus this evening is on our overseas territories—those territories for which we are responsible. Surely, Montserrat and Anguilla are entitled to the benefit of DfID’s active engagement.

I know that DfID is supposed to be working in Montserrat in ways that promote private-public partnership responses to the needs of that island, which is all very interesting. There is a real opportunity to develop the volcano that was responsible for so much of the damage and harm done to Montserrat as a highly effective energy source. Yet despite DfID’s best endeavours, and despite what I am told is the express willingness of a number of private sector operators to become involved, there does not seem to have been any particular progress in attracting private sector engagement for Montserrat. We really need to see some action in this area.

Perhaps what we need to see is a greater degree of engagement on the part of Her Majesty’s Government with the ACP in Brussels, which has a brief in this area and which also has resources paid for by the British taxpayer. We should see what it can do to promote diversification across the piece, throughout our overseas territories. These territories are a responsibility that we have inherited. We should not see them as some sort of embarrassment or vestige of a colonial past that we no longer want to talk about. They are part and parcel of our history. We owe them a debt of gratitude for the role that they played strategically over many years in our island story. We owe them, too, a moral responsibility to deliver to them at this time of real need in so many of these territories.