Overseas Territories — Question for Short Debate

Part of the debate – in the House of Lords at 6:02 pm on 31st October 2013.

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Photo of Baroness Hooper Baroness Hooper Deputy Chairman of Committees, Deputy Speaker (Lords) 6:02 pm, 31st October 2013

My Lords, since our last debate on the theme of the overseas territories in 2011, there have been a number of significant developments, not least the Government’s White Paper, The Overseas Territories: Security, Success and Sustainability, on which wide consultations have taken place. This was followed by the communiqué of the Overseas Territories Joint Ministerial Council meeting, issued in December last year, which committed the political leaders and representatives of the UK and overseas territories to,

“a modern relationship based on partnership and shared values”,

and to,

“the principle and right of self-determination”.

I welcome this approach and look forward to the outcome of this year’s joint ministerial council meeting, which is due, I believe, next month and which I understand will continue the dialogue on constitutional issues, the commitment to growth and jobs, the environment and the relationship of the overseas territories with other international organisations, especially the Commonwealth, among other things.

Today’s debate is intended to concentrate on economic developments but it cannot pass without a reference to the increasingly politically charged atmosphere affecting Gibraltar and the Falkland Islands. I was fortunate in being able to join colleagues from both Houses of Parliament and many Chief Ministers and representatives of the overseas territories—including one from the Pitcairn Islands, which, as your Lordships know, has a population of 52 people—for the celebration of Gibraltar’s National Day in September. It was the tercentenary of the signing of the Treaty of Utrecht and there had been increased tension and disruption from the Spanish authorities at the border all through the long, hot summer. But the National Day celebrations went with a swing and there was no doubting the will and determination of the people as well as the politicians of Gibraltar to remain British.

Gibraltar also hosted the pre-joint ministerial council meeting, hence the presence of the representatives of other overseas territories. Those meetings were well attended and fruitful.

The economy of Gibraltar as a financial centre is clearly booming, and tourism flourishes in spite of the border difficulties; sadly, the situation continues to deteriorate in that regard. I was particularly saddened to learn that only yesterday there was a serious incident when a Guardia Civil patrol boat had a slight collision with a royal naval supply ship in British territorial waters and guns were pointed at each other. Can my noble friend the Minister inform us of any steps that the Government may have taken about this incident? Could he also give us, in relation to Gibraltar, any information on the eagerly awaited report from the European Union inspectors who have looked at the border situation?

I turn to the Falkland Islands, where there is sadly no abatement in difficulties being raised by Argentina, exacerbated last year on the 30th anniversary of the Falklands War. Again, this does not appear to have affected the economic development of the islands, which flourishes. It is the Falkland Islands Government, almost exclusively, who, like the Gibraltar Government, devise their economic diversification strategy and implements it. Her Majesty’s Government are involved in certain areas, notably in negotiations with the European Union development aid budget on behalf of the overseas territories. The Falkland Islands will receive some £3.5 million over the next three years from that source. Can my noble friend give us any further information about this and on the building of a new port facility in Stanley?

I believe that we can approach the general issue of economic development under three broad headings: diversification, tourism and financial services. On diversification, which is a common goal throughout the territories, a robust, long-term economic strategy needs to be worked out on a territory by territory basis. Some will need more help than others; each is a unique and different place. To give an example, Tristan da Cunha—which is heavily reliant on its one leading export, gourmet-quality lobster—needs to take advantage of new technology and upgrade its techniques, for example for buying and selling products online. Tristan is also looking to develop its tourism in line with its globally significant biodiversity and produce more high-quality, tourist-related products. Will the UK Government support this?

Another example that I can quote is that of Anguilla, where the economy is heavily reliant on tourism, which is currently suffering in the present economic climate. They have a small financial services sector, which is under challenge, and are seeking support for diversification in developing a fishing strategy, for example, to clear the waters to the north of the island of third-country, mainly Asian, trawlers, to enable local fishermen to fish and put a conservation policy in place. It must be said that Anguilla has particular constitutional issues that affect the relationship between the governor and the elected Government, which they claim is too complex and commercially based and not sufficiently clear to encourage sorely needed investment.

Both those examples, and the many others that I do not have time to quote, underline the need for a proactive rather than a reactive partnership plan between the United Kingdom and the relevant overseas territories. They also emphasise the importance of links in the field of education, training and skills, particularly at tertiary level, between UK institutions and the overseas territories. It is clearly important, not to say vital, for overseas territories to have well diversified economies, not only to enable them to become sustainable but to allow them to flourish with continually growing resilient economies and increasingly affluent societies. I look forward to my noble friend’s comments on this. In this respect, too, I welcome the fact that the Foreign Office will host a business forum for overseas territories during the week of the next joint ministerial conference specifically to introduce UK businesses to opportunities in the overseas territories.

To varying degrees, tourism affects all overseas territories. I have already made reference to some of them. The unique and isolated locations of many territories, treasure trove of biodiversity and improving communications all go to make tourism a high value source of income for those territories. Even Bermuda, now the largest of the overseas territories, acknowledges that tourism is its second-largest industry, providing 6% of its GDP. Perhaps the most exciting development, after years of campaigning, is the building of the airport on St Helena. This will have a huge impact, with journey times to the island reduced from five days at sea to five hours by plane. The UK Government’s involvement in the airport, as well as some ongoing DfID funding to infrastructure and capacity-building initiatives to support the airport investment, is to be welcomed. I hope the Minister will be able to tell us that the UK Government intend to follow on from and build upon the large upfront investment they have made in the airport.

My third theme is financial services. I shall try to speak briefly on this as I know that others will major on the overseas territories active in this area. First, it is important to recognise that, for example in a territory such as Bermuda—which provides a global service centre in the insurance remittance, private equity and asset management fields, with the knock-on effect of 100,000 jobs in the UK—we are talking about activities with an important added value of expertise. However, the eyes of the world, especially through the prism of the OECD, are focusing very much on money-laundering and tax-washing—I think that is the expression now. It seems that blacklists can be issued on a unilateral basis, which can have an unfair impact. Nevertheless, the OECD estimated that developing countries lose three times as much money to tax havens as they receive annually in aid. It is therefore essential that our Government do all they can to ensure openness, transparency and high standards of probity. Can my noble friend comment on the signing up by overseas territories to the multilateral Convention on Mutual Administrative Assistance in Tax Matters? Could he also tell us whether the Prime Minister’s announcement this morning of the Government’s decision to create a new public register of the ownership of some 2.5 million companies applies equally to companies registered in the overseas territories?

In conclusion, in the nearly 30 years that I have been a Member of your Lordships’ House, I have had the privilege and pleasure of introducing a number of debates on issues affecting the 14 overseas territories and their dependencies. Today’s debate is the least well attended. I feel sure that it is a case of quality rather than quantity and I am most grateful to those who are participating in the debate. I have received apologies from some who know and take a great interest in various overseas territories but are not able to be here. It is a sad reflection on the present composition of your Lordships’ House that, although people complain that we now have too many Members and nowhere to sit, so few take an interest in the fascinating, diverse and tiny overseas territories.