Overseas Territories (Governance)

Mark Simmonds Excerpts

Tuesday 11th December 2012 Westminster Hall

[The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mark Simmonds)]

It is a pleasure to serve under your guidance this morning, Dr McCrea. I congratulate my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) on securing the debate and generously allowing the time to be changed, and on the informed and articulate way in which he introduced it. I was keen to hear of his prescient and visionary visit to St Helena all those years ago. He will be delighted, as I think the whole House is, that the airport is predicted to open in 2016. I know from his remarks that he is ambitious to visit many of the other territories, but I hope that he will find time to return to St Helena to benefit from the airport, once it is open. I also congratulate the Commonwealth Parliamentary Association, which does an enormous amount of significant work. In particular, I congratulate Andrew Tuggey on his professional and detailed work to ensure that the CPA is such a success in building relationships and sharing knowledge between Parliaments. Long may that continue.

I thank the hon. Member for Dunfermline and West Fife (Thomas Docherty) and my hon. Friend the Member for Rochford and Southend East (James Duddridge), who, sadly, is no longer in his place, for the work that they have done recently, particularly in the Turks and Caicos Islands. I look forward to discussing with them the report, which I have seen, and how to pursue the lessons that they think can be learned. I also thank the hon. Member for Wrexham (Ian Lucas) for his positive and thoughtful contribution.

I want to respond to specific points made in the debate, but also to take the opportunity, if Members will bear with me, to respond to comments by the hon. Members for Dunfermline and West Fife and for Wrexham about the projection made at the joint ministerial council last week. The JMC builds on the White Paper published in June, which sets out a strong and positive vision for the territories to build on their excellent facilities and ensure that, where appropriate, they can proudly retain their links with the UK for present and future generations. The White Paper sets out clearly the benefits and responsibilities of the relationship for the territories and the United Kingdom. As the hon. Member for Wrexham pointed out, it builds on work done by the previous Government as well, but we thought it important to set out in a White Paper the UK Government’s fundamental responsibilities and objectives to ensure the security and good governance of the territories and their peoples.

I want to say a little about the priorities for the Foreign and Commonwealth Office in driving UK Government apparatus to support the development of the overseas territories. We should focus on three areas: building stronger links with the UK; getting the territories the support they need; and working together on good governance, financial management and economic planning, where necessary. My priority in the first strand of the work is to encourage more trade and investment to benefit both the territories and the UK. I have already had the opportunity in my time as the relevant Minister to visit the British Virgin Islands, Anguilla and the Turks and Caicos Islands. That allowed me to see for myself what opportunities exist. Those are not just in the sectors where some of the territories are already strong; there may be opportunities to assist them in diversifying their economic base, whether by expanding financial services, assisting with UK investment in tourism, or using UK companies to help build and develop infrastructure. To that end, Lord Green, the Minister for Trade and Investment, and I discussed those issues with territory leaders and a selection of business representatives last Monday in the Foreign Office, and that meeting has the potential to be significantly productive.

The point that I want to emphasise is that building stronger links with the territories is not just down to the Foreign and Commonwealth Office, but is a cross-Whitehall effort. Every Department has written a paper setting out how it can help. Eight of my ministerial colleagues met the territory leaders last week. The Department for International Development is doing particularly valuable and significant work, particularly in St Helena, Montserrat and Pitcairn, and through its temporary assistance in the Turks and Caicos Islands.

Another important area of work is the strengthening of political links with territory leaders. That was the thrust of the JMC last week. We have upgraded the meeting to make it our annual summit, which enabled us to discuss a substantive and significant agenda and to agree for the first time a detailed communiqué setting out an ambitious programme of joint working for the year ahead. If colleagues have not seen that joint communiqué I would urge them to look at it, because it responds to the sensible and correct point made by the hon. Member for Dunfermline and West Fife about the action points and work streams that will flow from the JMC towards the next one, across a range of areas. I see the focus of the UK Government in the year ahead as assisting the territories with their priorities, rather than what we think their priorities should be. I took territory leaders to No. 10 Downing street to meet the Prime Minister—I understand that it was the first time that a British Prime Minister has met all the overseas territory leaders collectively—and the event was very well received and a positive time in all our diaries.

The second goal in my list of priorities is to make sure that the territories have the support they need. That was a common theme in the speeches this morning. We already provide significant development support, of which perhaps the most obvious example is the £350 million that we have provided for Montserrat since the volcanic crisis of 1995 to 1997, which destroyed the capital and economy; also, £247 million has gone to St Helena to build the airport, and for other aspects of its development.

In the context of supporting the territories to develop, a key element is making links with the Commonwealth. My right hon. Friend the Member for Saffron Walden will be pleased to hear that that is a significant thrust of our efforts, set out in the White Paper. As part of that approach, the secretary-general of the Commonwealth came to the JMC and made a presentation. He received questions and responded to points that were made, and said that he greatly valued the part played in the life of the Commonwealth by the overseas territories. I can reassure him that we are working with the secretariat to explore what more can be done. The territories already participate in some areas—not just the CPA, important though that is. Some of them have participated in events aimed at supporting small island states, which have been particularly valuable as the territories have many challenges in common with other small island states elsewhere in the world, including some governance challenges. We continue to encourage the secretariat to invite the overseas territories to participate in Commonwealth meetings.

It might help if I explained why we are in the situation we are in. We very much agree with my right hon. Friend the Member for Saffron Walden and the Foreign Affairs Committee that there should be a more formal tie between the overseas territories and the Commonwealth family, in the form of observer or some other status but, as Members will know, membership of the Commonwealth has to be agreed by a consensus of all Commonwealth Heads of Government, and the membership category is that of “sovereign state as full member”. In 2007, the Heads of Government endorsed the recommendation of the Commonwealth committee on membership not to establish any other status.

Officials have discussed different categories of membership with Commonwealth members, and it will come as no surprise that at the joint ministerial council last week territory leaders raised the matter with me, with other colleagues who were there and with the secretary-general. I have spoken to the Minister of State at the Foreign Office who has responsibility for the Commonwealth to see if we can work together to find a solution. Indeed, the Foreign Secretary told the Foreign Affairs Committee back in 2011:

“We are exploring the possibility of creating observer or associate member status of the Commonwealth, from which many overseas territories would benefit. We are still continuing to explore that possibility.”

[Thomas Docherty]

I am sure that the territories will be heartened by that. It would, however, be remiss of me not ask whether that was seen to be for Crown dependences as well as for territories.

[Mark Simmonds]

The constitutional relationships with overseas territories and with Crown dependences are very different, but the ongoing discussions should certainly involve both.

I want to move on to important issues that some Members have raised: good governance, financial management and economic planning. We take very seriously the responsibilities for the security and good governance of the territories, and we believe that what is good enough for the UK should be good enough for the overseas territories as well. One key aspect of the White Paper was the commitment to strengthen training and exchanges between the public services in the territories and the UK. Our jubilee programme, which is worth £500,000, will fund some of the exchanges, with UK civil servants going to overseas territories to assist in building capacity and in training public servants through the civil service learning service, and overseas territories public servants being facilitated to come to the UK.

On 16 October, I opened the first meeting, in the Foreign and Commonwealth Office, of the heads of public services, one purpose of which was to exchange best practice across a range of important areas for further work including procurement, codes of conduct for Ministers, parliamentarians and public services, and e-government—an area in which we think we can do significantly more together. However, as the hon. Member for Dunfermline and West Fife rightly said, it is not just about overseas territories learning from us; there are things we can learn from them.

Democracy is flourishing in most overseas territories, and I am delighted that the new Turks and Caicos premier, Dr Rufus Ewing, was able to attend the joint ministerial council last week. He was extremely warmly welcomed, and he made a significant contribution to all our debates. It is an excellent and positive development that democracy has returned to the islands after a difficult period. It is important also to recognise that all overseas territory constitutions are different. They have developed over time, most of them have been updated and they are not necessarily set in stone; they need to be debated and discussed over the coming years.

All Members who contributed to the debate mentioned election observers. We rightly encourage observers to monitor elections all over the world, to promote internationally accepted standards, and we encourage other confident and open democracies, including the territories, to welcome observers.

I have to say that we are slightly disappointed that Bermuda has not recognised the need for election observers. The Governor of Bermuda has suggested to the Premier that as a sign of a mature, advanced and open democracy the country might invite an external independent team—perhaps a Commonwealth Parliamentary Association group—to observe its elections, but unfortunately the Government have decided not to do so. I raised the issue with the Bermudan Attorney-General and Minister of Justice last week, and she assured me that she would reflect our views to the Premier. Interestingly, the example I gave her was the comparison with North Korea, which the hon. Member for Dunfermline and West Fife mentioned earlier. It is a positive sign, rather than a negative one, to accept external election observers.

The hon. Member for Wrexham is absolutely right about the need for more elected politicians to be involved as election observers. Although civil servants play a significant and important role, politicians can often bring a slightly different perspective—perhaps over a longer period, including during the campaigning before the election and what may or may not happen immediately afterwards, depending on whether it has been successful. I support the hon. Gentleman’s train of thought in that area.

The hon. Member for Dunfermline and West Fife talked about the electoral registration officers—EROs—in the overseas territories, and particularly in the Turks and Caicos Islands. We have included a partnership in TCI, and elsewhere, with an experienced UK election official. In TCI, the official supported the practical planning for the preparation of the new electoral roll, the training of election officials, and an arrangement for the counting and announcement of results.

As I mentioned, we have set up the jubilee programme to support training and exchanges between public servants in the territories and the UK, and a priority is to foster and support networks of professionals across the territories. I think that we will commend to the overseas territories the idea of a network of EROs, so that lessons can be learned and best practice put in place for future elections.

The hon. Member for Wrexham was absolutely right to speak about transparency in all financial matters. He will notice that in the White Paper there are two or three strands to that. The first is to ensure that overseas territories have in place proper legislation for appropriate and prudent fiscal and financial management. The Turks and Caicos Islands and the British Virgin Islands have that, as now do the Cayman Islands. The second strand is to ensure that we have proper, transparent, competitive tendering for procurement, so that there is no longer any opportunity for shenanigans. The UK Government have played a significant role in building capacity and in providing advice and training to enable that to happen.

I turn to the specific point about responsible fiscal and tax arrangements. Given the discussions held last week, previous actions relating to the overseas territories and the detail set out in the communiqué, both the UK and the overseas territories’ Governments accept the requirements to comply with international standards on tax transparency and financial regulation.

Tackling financial crime is important, as was set out at the JMC. Bermuda, the BVI and Cayman have tax information exchange agreements with the UK. The OECD, a global forum, says that the overseas territories meet tax transparency standards. I have met on a couple of occasions the impressive team that regulates the financial services sector in the British Virgin Islands, and there is a real desire in that sector to ensure that it keeps up to speed with international standards, which is what it is doing.

Overseas territories’ tax rates, of course, are their responsibility; individual territories have the right to set the tax rates appropriate for them. On secrecy, which the hon. Member for Wrexham alluded to, I would argue that they are at least as compliant as major financial centres in meeting international standards. We also have to be clear that revenues from the financial services sector make a huge contribution to ensuring that those overseas territories are self-funding, self-supporting and self-reliant.

Finally, the significance and importance of the relationship between the UK and the overseas territories has never been higher up the political agenda.

[Thomas Docherty]

The Minister is doing an excellent job of setting out in some detail the Government’s position on a range of matters. I appreciate that he has to cover a large number of issues, but before he finishes may I press him to confirm that the Government have full confidence in Governor Todd? The Minister will be aware that there has been media interest in the Turks and Caicos about the work that Governor Todd continues to do.

--- Later in debate ---

[Mark Simmonds]

As the hon. Gentleman may have picked up in his visits to the TCI and, to a lesser extent, to the BVI and elsewhere, there are always tensions between elected representatives and the Governors both in terms of who has responsibility for what and the perception—sometimes incorrect—that the UK Government are not always on the side of the elected representatives in a particular territory.

In a spirit of partnership and friendship, we should be listening to each other, but that does not always necessarily mean that we will agree. I have full confidence in all the Governors currently in place, and I said so forcefully at the JMC last week. Governor Todd in particular has done a significant job in running the interim Government who were put in place after the elected territorial Government were suspended, back in August 2009. On 9 November when the elections took place, he put the TCI in a significantly stronger place, across a whole range of areas, than the one in which they were in 2009.

Finally, I confirm that this significant area of policy will become increasingly important as we develop the workstreams highlighted in the communiqué. I am delighted that colleagues have expressed their positive desire to remain engaged and to make intelligent suggestions as to how we may develop the partnership even further.

[Sir Alan Haselhurst]

Before my hon. Friend concludes, will he say whether he will take away the comments on air passenger duty, which has a particularly perverse impact on the smallest territories?

[Mark Simmonds]

I apologise to my right hon. Friend. I was not avoiding air passenger duty; I just did not see the piece of paper I had written it on.

My right hon. Friend will not be surprised to hear that I was lobbied vociferously both by the leaders of overseas territories in the Caribbean last week and by the wider Caribbean community. He will also be aware not only that there was a review of the operation of APD but that there was a meeting fairly recently, between representatives of the Caribbean high commissioners here in London and a Treasury Minister, to discuss APD further and to understand the issues.

I suggested to both the territories’ leaders and to those elsewhere in the Caribbean that there had already been significant discourse between the Foreign and Commonwealth Office and the Treasury, and that discourse continues. Those Caribbean leaders need to provide us with evidence of the negative impact of APD, particularly on the tourist industry. Mixed messages and mixed evidence are coming through so far.

[Thomas Docherty]

The Minister may not be aware that the Eastern Caribbean economic union has seen a 20% drop in passengers from the UK since APD was introduced. In comparison, there has been a 1% drop in passengers going to the east coast of the United States, although I might be wrong. There is clearly evidence that the Caribbean is being disproportionately hit by the current APD arrangements.

[Mark Simmonds]

That is interesting, because it is not uniformly the case. There was a drop back in 2009, but that has not remained consistent, nor is it consistent across the board. There are countries in which tourism has gone back up, which is why it is a complex issue to analyse. We are aware of the issue, and my right hon. Friend the Member for Saffron Walden is right to put it in the way that he did. We are still in listening mode.