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Westminster Hall

Thursday 23 April 2009

[John Bercow in the Chair]

Overseas Territories

[Relevant documents:Seventh Report from the Foreign Affairs Committee, Session 2007-08 HC 147, on Overseas Territories, and the Government’s response, Cm 7473.]

Motion made, and Question proposed, That the sitting be now adjourned.—(Gillian Merron.)

2.30 pm

Mike Gapes (Ilford, South) (Lab/Co-op): I am pleased to introduce the report. It had been more than 10 years since the last report on overseas territories by the Select Committee on Foreign Affairs. That is probably far too long. When the Committee decided in 2008 to set up an inquiry into the overseas territories, we initially thought that it would last only a few months, but in fact it was far more detailed and intensive than we originally envisaged.

The overseas territories are diverse and are found in all parts of the world. There are 14 remaining British overseas territories, which vary greatly in size. For example, Bermuda has 66,000 people, whereas Pitcairn has only 47, or perhaps 48—I have seen different figures—but our report said 47 at the time. The administration of such diverse overseas territories has presented the British Government and the Foreign and Commonwealth Office with some difficulties.

The journalists of the Evening Standard and the Daily Mail, who I assume are not here reporting our debate, sometimes choose to put pictures in their publications denouncing hon. Members for travelling to the Turks and Caicos Islands. They should understand that the work of three members of the Foreign Affairs Committee, two of whom are here with me—there is another behind me as well; that makes three—led to a change in the Government’s attitude and approach. As a result, the Government have intervened to deal with serious corruption and other difficulties that had been occurring for some time in the Turks and Caicos Islands but had not been dealt with until then. The journalists who write about Committees’ work and travel do not understand the role of Members of Parliament, which is to hold the Executive to account and scrutinise the work of different Departments. No doubt, my remarks will not be reported, but if they are, they will be reported adversely. However, I am prepared for that.

Mr. Greg Pope (Hyndburn) (Lab): I just wanted to say a few words, knowing that my hon. Friend will be too modest to say it himself, in support of the right hon. Member for Tonbridge and Malling (Sir John Stanley), whose tenacity in leading the delegation to the Turks and Caicos Islands led to some of those changes. That needs to be placed on the record.

Mike Gapes: I hope that my fellow Committee members will have a chance to make their speeches after my own and to go into more detail than I have time to do.

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When we set up our inquiry, we were shocked by the large number of submissions from the Turks and Caicos Islands. In its submission to us, the Foreign and Commonwealth Office did not refer to issues in the TCI as being of particular concern and expressed no concern about corruption or standards of governance. We received more than 200 submissions for our report, of which the largest group—more than 50—related to that territory. That was a great surprise to us.

Many people wrote to us in confidence, afraid that their names might be revealed, to allege corruption, especially in regard to the sale of Crown land, the distribution of contracts and development agreements, the granting of belongerships and the misuse of public funds by Mr. Michael Misick and his cronies and relatives. There was also a deep concern, borne out by my colleagues when they visited the TCI, about free speech and people’s ability even to be seen to talk to hon. Members. People wished to speak to us only in confidence, away from the eyes of friends or officials of the Administration. That was extremely worrying, and we reported back on it.

As a result of our visit and the publication of our report on 6 July, the Government announced on 10 July through the outgoing Governor that they would establish a commission of inquiry into the Turks and Caicos Islands. On 16 March 2009, after the publication of the interim report by Sir Robin Auld, the Government announced that they would make provision to suspend parts of the TCI constitution through a draft Order in Council unless the final report significantly changed their view of the situation. Premier Misick had resigned and been replaced by Galmo Williams as leader of his party. However, when the Government made their announcement, they did not pay tribute to the work of our Committee. We are disappointed by that. We issued a press notice on 31 March welcoming the Government’s action and pointing out the fact that we had been instrumental in making the Foreign and Commonwealth Office at last take seriously the problems in the Turks and Caicos Islands.

Jeremy Corbyn (Islington, North) (Lab): I understand what my hon. Friend is saying and the good work done by his Committee. Is he not concerned, however, that Orders in Council have been used to achieve that outcome? It is an extremely undemocratic process that bypasses any democratic accountability either in the Turks and Caicos Islands or here.

Mike Gapes: I do not believe that the Government had much alternative in the short term but to act quickly with regard to the interim report. However, I have some questions for the Minister about the fact that the Governor of the TCI, Mr. Wetherell, has just announced that although the original deadline for the report was November 2008, which was extended until April 2009, the final report will now not be published until 31 May. Therefore, the interim period before the Order in Council comes into effect has been extended for several more weeks, raising some questions about what will happen in the meantime. There are provisions and powers for the British Government to stop further land sales or other measures. Nevertheless, it is not entirely satisfactory that the period before the Order in Council comes into force has been extended.

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I agree with my hon. Friend the Member for Islington, North (Jeremy Corbyn). Political and parliamentary accountability are important. That is one reason why I am pleased that we have secured this debate, so that the Minister can respond to the concerns that I have expressed and that my colleagues will no doubt express later. I have a large area to cover in discussing the report, so I will leave the TCI for now.

Our inquiry received allegations about corruption in other overseas territories, including in Bermuda and Anguilla. The Committee recommended that the Government should encourage the Anguillan Government to introduce anti-corruption measures and to hold an independent inquiry into the allegations that Ministers accepted bribes from developers. The Government have declined to do so and have told us that

In a letter to the Committee, the Anguillan Government commented that they were

They requested that the Committee provide more evidence for the allegations. Given that we were told originally by the Foreign and Commonwealth Office that there were lots of allegations in the Turks and Caicos Islands, but that there was no evidence, I am not reassured by the position that has been taken so far. Will the Minister reassure us in her remarks that the Government are looking closely at these matters?

Similarly, we received allegations about corruption and electoral fraud in Bermuda. No detail was provided on the investigations into the issuing of contracts, as the Committee recommended. The Government pledged to encourage overseas territories to promote transparency and, where necessary, to improve their public accounting and auditing capabilities. I understand that the National School of Government project on strengthening public services is under way. It was due to visit the majority of overseas territories by this month. I would be grateful for an update on that.

We recommended that the Government introduce legislation to extend the Witnesses (Public Inquiries) Protection Act 1892, which does not apply to overseas territories. Failing that, our alternative was for the Government to urgently require overseas territories to introduce equivalent legislation to encourage good governance. The Government responded by stating that the Governments of overseas territories should propose any necessary legislation themselves. We note that the Cayman Islands has passed legislation to implement the witness protection programme and that the Government supported that. I would be grateful to know whether there has been progress elsewhere.

We recommended that the Foreign and Commonwealth Office consider transferring the responsibility for the terms and conditions of employment of chief justices to the UK Ministry of Justice. That was not accepted by the Government. In addition, we recommended that the FCO consider whether judges in overseas territories would be less vulnerable to interference if they were
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on longer, non-renewable contracts, with appropriate safeguards in case of incapacity. If they are on shorter, renewable contracts, they might be more sensitive to local political pressures. The FCO agreed to look further at that issue and to update us. Can the Minister say anything on that today?

Concerns have been expressed over matters of governance in the British Virgin Islands. There is a difficult relationship between Premier Ralph O’Neal and the Governor and deputy governor. I understand that the Minister has been in close contact with the British Virgin Islands through correspondence and through a visit just a few days ago. Did she have a fruitful, productive and friendly discussion with Mr. O’Neal? Have the outstanding issues been resolved to her satisfaction? Is she confident that relations between the Premier, the political establishment, the Governor and the deputy governor will get back to an even keel?

This is a time of major global financial turbulence. Many overseas territories have roles in the international financial system. Financial service industries are important to a number of the territories. Some of them are tax havens. Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Montserrat and the Turks and Caicos Islands have been named by the OECD as failing to deliver on promises to be more transparent. At the beginning of April, it was agreed at the G20 summit to take action against tax havens. That has caused concern and alarm in some overseas territories.

Following the Guardian report that the Prime Minister has written to all British Crown dependencies and overseas territories setting a September deadline to sign up to agreements to share tax information with the authorities, will the Minister say what response, if any, there has been from the relevant overseas territories? How will that matter be taken forward?

We recommended that the Government should encourage Bermuda, the British Virgin Islands, the Cayman Islands and Gibraltar to continue to improve their financial regulation and the investigation of money laundering. The Government accepted that recommendation. However, they did not accept the National Audit Office conclusion, which was supported by the Committee, that they had been complacent in managing the risk of money laundering in Anguilla, Montserrat and the Turks and Caicos Islands, where the UK is directly responsible for regulation. It is therefore most exposed to the financial liabilities that might follow in those places.

In the opinion of the Committee, the Governors of those territories should use their reserve powers to bring in more external investigators or prosecutors to strengthen their investigative capacity. The Government accepted that recommendation, but stressed that using reserve powers to bring in those people would be a last resort. That may be true, but there is a question over when they should use their last resort.

The Committee recommended that the FCO continue to work with the Department for International Development to introduce a financial services regulatory regime in St. Helena that is appropriate for the local economy and for development. We are pleased that that recommendation was accepted.

Committee members split into three groups for the travel involved in this inquiry. Two members went to the Falkland Islands via Ascension Island. That communication
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link is vital for the Falkland Islanders. There was discussion of the air bridge at the time of our report. A commercial aircraft contracted by the Ministry of Defence now operates on that route. The new contract came into effect in October 2008. It now operates four times a fortnight, whereas it used to be three times. The Governments of the Falkland Islands and Ascension Island are given the number of seats that they request for each flight, plus 10 premium economy seats.

I understand that the FCO and the MOD are negotiating on a joint policy statement on civilian use of the air bridge. There has been controversy over the pricing structure. There is currently a single tariff with no concessions for children. Concerns were expressed to us by Falkland Islanders who have sons or daughters who wish to come to the UK for education. The lack of concessions would mean additional costs when such children want to get in touch with their families or to return home. The MOD has stated that the islands’ Government are able to take their own decisions on fares and discounts on the route and, presumably, therefore expects them to make the necessary payments for that.

Bob Russell (Colchester) (LD): Did the members of the Committee who visited Ascension and the Falkland Islands report back that, if it were not for the residents of St. Helena working in the Falklands and Ascension, neither of those two locations, which are so important to the UK, could be sustained?

Mike Gapes: Members of our Committee are aware of that, and we referred to the importance of St. Helena in our report. I shall talk a little more about St. Helena when I have finished with the Falklands.

Another issue for Falkland Islanders is the strategic environment in which they find themselves. On 28 March, during his tour of Latin America before the G20 summit, the Prime Minister stated, prior to a meeting with the Argentine President, Cristina Kirchner, that there was “nothing to discuss” regarding the sovereignty of the Falkland Islands. It is reported that he also said there were

the islands. At the moment, anyone who leaves the Falkland Islands by air has to fly around Argentina to Chile, or has to go via the air bridge. Clearly, that is not ideal for people on the islands.

The Committee had previously recommended that the Prime Minister should press the Argentine President to agree to the establishment of a regional fisheries management organisation for the south-west Atlantic and to reiterate the islands’ right to develop a hydrocarbon industry. I am interested to know whether those issues came up in the discussions with President Kirchner and whether there has been any improvement in the attitude of the Argentine Government to those important matters, which are of concern not only to Falkland Islanders, but to the UK, because the islands are UK territory.

The hon. Member for Colchester (Bob Russell) mentioned St. Helena. The Committee concluded that the building of an airport and related infrastructure on St. Helena could be a significant step towards self-sufficiency for the territory. However, there was concern about the cost, and we asked the Government to provide figures
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to demonstrate that they had selected the most cost-effective option for bringing St. Helena off dependency on aid. The Government responded:

That was the Government’s position, as expressed by the Foreign and Commonwealth Office, in September 2008, but on 8 December 2008, the Secretary of State for International Development decided, in light of the global economic situation, to pause negotiations on the airport. Subsequently, on 9 April 2009, a letter was sent by the Under-Secretary of State for International Development, the hon. Member for Worcester (Mr. Foster), that seemed to kick the whole thing into the long grass. I understand that a firm of contractors was there and that the process was about to begin, but that everything is now in disarray. Much concern has been expressed by people in St. Helena about the implications for the viability of St. Helena and about having the most cost-effective solution, as that was accepted by our Government only three months before they decided to put it on hold. Clearly, this matter raises some big issues, and I would be grateful to hear more from the Foreign Office about it. The Minister has experience of DFID, so perhaps she can understand where it is coming from. Can she speak on behalf of both Departments to give some hope to the people of St. Helena that this issue will not drag on for years, that the uncertainty will be brought to an end and that the most cost-effective way forward will be found?

I also want to discuss Diego Garcia, but I am conscious that other hon. Members might want to talk about it, so I shall not spend too long on it. We had meetings with and heard evidence from the Illois—the Chagossian people who were disgracefully excluded from their homeland and sent away in the 1960s—and we were very concerned about that issue. In May 2007, the Court of Appeal decided that those people had the right to return to the outer islands of the British Indian Ocean Territory. Subsequent to our report, however, the Government won their appeal in the House of Lords, on 22 October 2008, and the Orders in Council that were made in 2004 to prevent the Chagossians, or Illois, from returning now stand.

The Committee has taken the view that, although the legal case has been determined, the moral case for allowing the return of those people has not been determined, and we have recommended that third-generation descendents of exiled Chagossians should be extended British overseas territories citizenship. We made that recommendation on the ground that their birth in Mauritius was a consequence of exile, not of choice, but the Government declined to accept that recommendation on the basis that it would set a precedent for citizenship to be extended to a third generation of people who were born outside the UK or its overseas territories. Clearly, however, those people had no choice about being forcibly removed from their homes by a British Government, so this case is an exception and should be treated in an exceptional manner.

Jeremy Corbyn: I am most grateful to my hon. Friend’s Committee for taking up this issue and for its two recommendations on the matter, which I fully endorse. Will he also try to persuade the Foreign Office that it is
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time actively to consider ways and means of returning the islanders to the islands? Does he agree that it is time to update the feasibility study on doing that, rather than continue pursuing an incredibly expensive and ultimately futile legal battle to deny islanders the rights that they, like everyone else in this world, deserve?

Mike Gapes: I hope that the moral argument will be considered. I am not sure whether the legal process can be taken much further following the House of Lords’ decision, sadly, but I am not a lawyer. Perhaps other people will consider other options.

Diego Garcia is the largest island in the British Indian Ocean Territory, and has been leased to the United States to become a major military base. Our Committee has been expressing concern for years about extraordinary renditions. We concluded that

That was the result of information that came to light early last year, and led to the Foreign Secretary making a statement to the House at that time. We also said in our report that we intend to examine further

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