Examination of Witnesses (Questions 20-39)
FOREIGN AND
COMMONWEALTH OFFICE
& DEPARTMENT FOR
INTERNATIONAL DEVELOPMENT
10 DECEMBER 2007
Q20 Mr Mitchell: Is it not a daft
legal position that Orders in Council cannot be subject to judicial
review? Surely they must be subject to judicial review.
Sir Peter Ricketts: The Government's
position is that, if these types of Orders in Council are subject
to judicial review under UK public law principles, then there
is potential for enormous confusion because they are laws for
the overseas territories and they will bind the overseas territories
in their own territories, their own parliaments, but not in the
UK, but they will bind UK Ministers in the UK. This risks undermining
the way in which we have governed the overseas territories using
Orders in Council to adopt their constitutions and then for them
to make laws. There is a second point as well, which is our defence
obligations, since the United States have made clear that resettlement
of the islands by the Chagos Islanders would pose security risks
to the operation of the base at Diego Garcia.
Q21 Mr Mitchell: That is the real
reason, is it not? We do not want to inconvenience the Americans.
Sir Peter Ricketts: No. There
are two reasons. One is that there is a very important point of
law here about the governance of the overseas territories. The
other is our obligations as an ally of the US for the defence
interests of the base.[2]
Q22 Mr Mitchell: These are more important
than the human situation of people who have been taken away from
their homes and want to go back there?
Sir Peter Ricketts: Remember also,
Mr Mitchell, that we have already compensated the Chagos Islanders
and we have already given—
Q23 Mr Mitchell: I do not think you
can compensate people adequately for the loss of their homes in
this fashion.
Sir Peter Ricketts: They have
accepted financial compensation and British citizenship, so all
the Chagos Islanders have the right to come to the UK as British
citizens.
Q24 Mr Mitchell: So we are going
to go on fighting it?
Sir Peter Ricketts: We intend
to go on. We have asked for leave to appeal to the House of Lords.
We have been given that right of appeal to the House of Lords.
Q25 Mr Mitchell: In November 2000
Robin Cook accepted the judgment of the High Court that they had
the right to return. Why did we not adhere to that position?
Sir Peter Ricketts: I cannot speak
for the position as it was in the year 2000. All I can do is set
out the position that we are in—
Q26 Mr Mitchell: It says here that
in June 2004 the FCO overturned Mr Cook's decision. That would
presumably be a ministerial decision to overturn a ministerial
decision.
Sir Peter Ricketts: I am afraid
I do not have the background to that, Mr Mitchell.[3]
Q27 Mr Mitchell: Perhaps you could tell
us. If this is going to be pursued at considerable expense, which
must mean economies elsewhere and cuts in posts elsewhere, we
would need to know on whose authority it is being pursued and
who reversed Robin Cook's decision.
Sir Peter Ricketts: I can of course
write to you on that point. It is being pursued on the Foreign
Secretary's authority at the present time.
Q28 Mr Mitchell: Whatever the estimates
of the costs, if they are over £3 million, as suggested here,
have we asked the Americans, whose convenience we are protecting,
to fund any part of this?
Sir Peter Ricketts: Mr Mitchell,
I have not accepted that we are protecting the Americans' convenience.
No, I think this is a cost, this is an issue—
Q29 Mr Mitchell: They do not want
people intruding on their base, do they, and that is basically
what we are defending?
Sir Peter Ricketts: I have said
there are two points here. There is a point of law about governability
of the overseas territories and there are our obligations to the
United States. The answer is no, we have not sought payment from
the US.
Q30 Mr Mitchell: Perhaps we should
submit a bill to the Americans and they can happily consider paying
part of it since they are being so well defended by the Foreign
and Commonwealth Office quibbling on obscure points of law about
Orders in Council. However, let us pass on. I was surprised: we
have obligations to these territories; they are mini-states, most
of whom are not going to be able to provide the framework, the
apparatus of a big state for themselves, and therefore presumably
they need more help. Why are we cutting down our obligations in
general to these mini-states which do need the help and support
we can provide, and should provide?
Sir Peter Ricketts: The Foreign
Office is not reducing the fairly small programme funds that we
make available.
Q31 Mr Mitchell: We are reducing
funding for law and order, are we not?
Sir Peter Ricketts: I will ask
Mrs Shafik to say a word in a moment on the DfID side. We are
maintaining our own funding through the FCO's programme funds,
which are thinly spread, I accept, across the territories but
we try to target them on the places that need them most. I wonder
if we could have a word about the DfID programme.
Dr Shafik: In total, DfID and
the FCO spend about £43 million a year. Over half of that
is DfID funding for the three poorest of the overseas territories,
St Helena, Montserrat and Pitcairn. I think by any benchmark we
provide what we consider reasonable needs. Just to give you a
set of benchmarks, Montserrat we aid at the level of £2,607
per capita, St Helena about £3,331 per capita.
If you look at other countries, for example, the French overseas
territories, they support them on the same order of French Polynesia
£2,514, the Netherlands Antilles £643, Aruba £242,
New Zealand Tokelau £3,352, so we are on the high end of
aid levels to our overseas territories.
Q32 Mr Mitchell: Are we helping them
with disaster plans? I see from the Report that several of them
in fact do not have disaster plans. We have seen the effect of
disaster in Montserrat. How many do not have disaster plans and
why are we not helping them develop them?
Dr Shafik: They all have elements
of an overall disaster management strategy and we have been helping
them on that. DfID provides a dedicated person who serves all
the overseas territories to improve their disaster planning and
in every case they are at different stages in the process, some
of them quite advanced, like Cayman, and others at earlier stages.
We have supported Anguilla building a new disaster office, Cayman
has a new agency as of 2006, Turks and Caicos has strengthened
its disaster office in the last year.
Q33 Mr Mitchell: At the same time
they are presumably becoming more exposed, given climate change
and global warming. This surely imposes a need to accelerate the
development of disaster planning for all of them.
Dr Shafik: Absolutely.
Q34 Mr Mitchell: Is that being done?
Dr Shafik: I think it is. We are
advancing in almost all the cases now. Exercises are more frequent,
testing is more frequent and they are incorporating disaster risk
management into their own planning functions more actively to
take into account the greater risk they may face in future as
a result of climate change.
Q35 Mr Mitchell: Let me ask about
financial services. About half the tax havens in the world are
Crown dependencies. Some of them are making a fairly rich living—Jersey,
for instance—out of financial services. What are we doing
to ensure the proper regulation of financial services in these
dependencies so they do not become tax havens on the scale of
Jersey? Indeed, the Cayman Islands are already a tax haven.
Sir Peter Ricketts: We take that
very seriously. A number of them do now have significant financial
services industries and we have been pressing them very hard through
the Governors and in direct contacts with the Prime Ministers
and Chief Ministers to make sure that they have the regulatory
arrangements so that they can be safe and effective financial
centres. I think all the territories understand that.
Q36 Mr Mitchell: It is also in their
interests to develop them and to have a lax regulatory regime
to attract funny money, is it not?
Sir Peter Ricketts: No, I think
it is in their interests to have a proper regulatory regime, to
get a proper bill of health from the IMF and the Caribbean Financial
Action Task Force.
Q37 Mr Mitchell: Jersey does not
have that.
Sir Peter Ricketts: As I understand
it, these territories are seeking to be world-class financial
centres and a number of them are now very large financial centres
and they understand that they need to have the regulatory underpinning
for that. Many of them need our help—I absolutely accept
that—which is why we have a financial adviser deployed in
the region who is there to help them and to get the best advice
we can from the UK.
Q38 Mr Mitchell: They are going to
find that difficult when they have not even bred their own auditors,
and when we read in the Report that the auditors are subject to
very severe social pressures, are inadequately backed, how are
they going to develop an effective regulatory regime in a world
that is awash with funny money looking for a home?
Sir Peter Ricketts: I do not underestimate
the challenge of that. I think in the richer and bigger financial
centres, like Bermuda and the Cayman Islands, there is now a well
developed financial services regulation function and indeed I
think the NAO Report says that.
Q39 Mr Mitchell: I doubt that. Can
you tell us that they are not being surreptitiously encouraged
to develop this is as a form of self-sufficiency?
Sir Peter Ricketts: I can certainly
tell you that the Government are not surreptitiously encouraging
them to do that. We are encouraging them to be proper, world-class,
international financial centres. That is the way to mitigate the
risk to the UK, which we do take very seriously.
2 Note by witness: There were three, not two,
grounds on which the decision to appeal this case to the House
of Lords was based. The first two are set out in the response
to Q25-27 below and were the ones we sought to address in the
2004 Orders in Council. The third reason for appealing was the
constitutional point, set out in response to Question 132 (Ev
32). Back
3
Note by witness: The two grounds for the 2004 Orders in
Council were as follows. First, that HMG had concluded on the
basis of the feasibility study commissioned in 2002 that lasting
resettlement would be precarious and, if sponsored by the Government,
would entail expensive underwriting by the British taxpayer for
an open-ended period. Second, the restoration of full immigration
control over the entire territory was necessary to ensure and
maintain the availability and effective use of the Territory for
defence purposes, for which it was constituted and set aside in
accordance with the UK's treaty obligations. Back
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