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Mr. Nicholas Winterton (Macclesfield): Is it not possible that there could be an increased perception that British citizens, including those who will now become British citizens, should be equally subject to the same tax obligations? Is not that a danger? Will my hon. Friend confirm unequivocally from the Opposition Front Bench that we have no intention of letting that happen and that those countries will be able to have their own fiscal policy and regime?

Mr. Spring: I am grateful to my hon. Friend for making that point so forcefully. Of course, taxation is a matter of residence and in no way should it be our responsibility, or, indeed, that of the European Union to impose a specific tax structure on the overseas territories. I should therefore like to ask the Minister to assure the House and the people of the territories, who would resist such a move, that the Bill will not result in the Government or our European partners further interfering in the internal workings of the British territories.

Peter Bradley: Will the hon. Gentleman confirm whether, as well as reading the Lords Hansard report of debates that took place in the other place, he has read the White Paper, the Bill and the explanatory notes, which clearly confirm that the citizens of overseas territories will not be subject to British tax unless they have taken up abode and qualify for tax and benefits in this country? Will he make that clear to the hon. Member for Macclesfield (Mr. Winterton), who clearly has not read that information?

Mr. Spring: I am sorry that the hon. Gentleman seems to adopt a somewhat churlish tone about a perfectly valid point, which my hon. Friend asked me to reinforce. As I made clear in response to my hon. Friend's intervention, we are talking about residents. I am happy to confirm that,

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but what I want to hear from the Minister is something crystal clear, from the Government's point of view, to echo the point that the hon. Gentleman makes.

Mr. Wilkinson: These are extremely important points, which get to the heart of the Bill. Will my hon. Friend consider reciprocity again? Is it not the case that the Minister said in his speech that British citizens resident in the United Kingdom would not be able to settle in the overseas territories because he lumped them together with European citizens? He referred to British or European citizens. In other words, he gave the impression that, notwithstanding the fact that the overseas territories remain British and not part of the EU, European citizens from elsewhere in the EU could go to those overseas British territories. For that reason, he denied full reciprocity. Will my hon. Friend consider that point?

Mr. Spring: I hope very much that, for the benefit of the House, the Minister will clarify that point in replying to the debate, because some confusion has obviously arisen from his remarks. The fact is that there is no reciprocal arrangement between citizens of the United Kingdom and those who live in the overseas territories for exactly the reasons that have been set out in the White Paper and the Bill. Obviously, it would be extremely difficult for that to happen in practice, as I am sure that my hon. Friend would agree, but I am grateful to him for making that point.

Andrew Mackinlay: British and European citizens will be free to go to the overseas territories, but there will be no free mobility of labour. That is also the existing position in the Isle of Man and the Channel Islands. To invest or obtain employment, one has to meet the local work permits regimes. There is confusion because, although the right to live in the territories will be a matter of fact, there is also the question of employment.

Mr. Spring: I am grateful to the hon. Gentleman for raising that point. It underlines the importance of the Minister addressing it when he winds up.

The Minister talked about the relationship between the United Kingdom, the European Union and the territories. The White Paper states:

The Minister defined the difference between what was and was not available, but he might wish to refer to the issue when he winds up as there is some confusion.

Andrew Mackinlay: The White Paper was probably written by the same person who wrote the brief.

Mr. Spring: I am grateful for the hon. Gentleman's erudition.

The Government raised human rights issues in their 1999 White Paper. It states:

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It also flagged up three human rights issues on which it wanted reforms in some of the overseas territories: judicial corporal punishment, homosexuality laws and capital punishment.

We note that the laws making homosexuality a crime in Anguilla, the Cayman Islands, the British Virgin Islands, Montserrat and the Turks and Caicos Islands were repealed in January 2001; that judicial corporal punishment has been abolished in all overseas territories; and that a variety of human rights projects in the territories are funded by Britain.

However, many Members may not be aware that some lawyers and students of law believe that the Government may still risk being in breach of important and fundamental international agreements, including the European convention on human rights and the international covenant on civil and political rights. It will be useful for clarity's sake if the legal position regarding the international agreements is outlined by the Minister for the consideration of the House when he winds up.

In particular, I would like assurances from the Minister that the Bill's implications for the agreements were carefully considered when it was drawn up. A statement on the legal rights of individuals in the territories that will become British overseas territories is central to that. In particular, as a result of the Bill, will individuals be able to take action against the British Government regarding legislation or actions implemented in the territories that fall in breach of the ECHR? As Baroness Amos said in her letter to my noble friend Baroness Rawlings on 15 October:

I take this opportunity to acknowledge my gratitude to my noble Friend Baroness Rawlings. She put much constructive effort into the debate and discussion of the Bill during its stages in another place and asked such questions.

Addressing the situation in the Cayman Islands would add clarity to the problems that Britain may face in due course. Despite the progress on human rights that I have outlined, reports suggest that the human rights situation in the Cayman Islands—and indeed in some other territories—is at present below that demanded under the ECHR. One issue of particular concern is that spouses of citizens of the Cayman Islands do not have an equal human rights status. Does the Minister agree that this constitutes a violation of article 8 of the ECHR, which demands that spouses have equal rights even if one spouse originates from another country?

In addition, there is the issue of statelessness. The noble Lord Redesdale mentioned that in the debate in the other place. Is the Minister aware that the problem extends to the Cayman Islands? I understand that children there who are subject to statelessness are entitled to British citizenship under provisions in the British Nationality Act 1981. Will he clarify that?

Furthermore, what discussions has the Minister had on the human rights situation in the Cayman Islands and will he assure the House that before legislation comes into force, those matters will be considered and, if necessary, resolved? Will he consider placing in the House of Commons Library his assessment of whether the

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European convention on human rights extends to the Cayman Islands, with particular reference to the right of individual petition applying as of November 1998 with the addition and changes to the treaty through protocol 11, which was ratified at that time.

It would be of great concern to all hon. Members if the United Kingdom were found to be in contravention of its obligations under the European convention on human rights and the international covenant on civil and political rights as a result of this Bill. That would expose the United Kingdom to an avoidable contingent liability of costs and possibly damages. Will the Minister assure the House that the Bill does indeed comply fully with those obligations? Will he also assure the House that no embarrassment will be caused to Britain as a result of the change of status of the territories?

At present, citizens of the British dependent territories can acquire an entitlement to British citizenship if they qualify under the immigration rules to enter and remain for settlement in the UK. They are then entitled to register as British citizens as soon as they have completed five years' residence. I am interested to know what mechanisms, if any, are in place to stop terrorists obtaining citizenship in an overseas territory and using that status to apply for British citizenship under the rights afforded in the Bill. I understand that the Home Secretary will exercise scrutiny in that matter, but the detail of the process is less clear. We should consider that given the current international situation. Are there plans to scrutinise those citizens of the territories who apply for British citizenship shortly after obtaining citizenship of one of those territories? What mechanisms are in place to prevent known proponents of terrorism from obtaining British citizenship under this legislation?

In whatever action we take we must be careful that we do not undermine either the political structures or the economies of the British territories. Will the Minister give assurances that the Bill will not result in unrealistic standards being forced on the overseas territories? It must not result in regulation in excess of that operating in the London markets, especially if financial markets are a primary source of revenue. What of the financial concerns that were raised in the White Paper? Several of the territories rely heavily on offshore banking. What are the implications for them? Will they be affected by European Union legislation on that sector?

Clarification is also needed on some of the Bill's finer points. What is the cost of bestowing British citizenship? The explanatory notes to the Bill state:

Will the price vary from territory to territory? Does the Minister agree that it is important that any cost-paying mechanism is not discriminatory?

What measures is the Minister taking to achieve the aim of the partnership that all hon. Members would welcome? The Bill implies that the people of the islands will become more closely associated with the United Kingdom, but little has been said about what positive steps will be taken to achieve that aim. What evidence will be required when applying for British citizenship, and what action has the Minister taken to ensure that arrangements for passport issue are agreed and that the staff who will deal with passport and nationality questions are properly trained?

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What has been the outcome of the discussions being undertaken with the overseas territories with a view to developing a programme of secondment and training for overseas territories civil servants from the Foreign and Commonwealth Office's good governance fund? Finally, how will the pension and social security rights of those applying for British citizenship be affected?

The Bill is a significant step towards the Government's notion, as expressed in the White Paper, of a partnership. In fairness to the Minister, I do not expect him to provide full answers to my questions this afternoon, but I hope that he will do so either in part in his response or in Committee. However, for the sake of clarity, I hope that he can be persuaded to write to me on some of those questions before we reach the Committee stage. I should again like to commend the Minister for introducing and explaining the Bill today. We fully support its aims.

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