Overseas Territories — Question for Short Debate

Part of the debate – in the House of Lords at 6:51 pm on 31st October 2013.

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Photo of Lord Ahmad of Wimbledon Lord Ahmad of Wimbledon Lords Spokesperson (Department of Business, Innovation and Skills), Lord in Waiting (HM Household) (Whip) 6:51 pm, 31st October 2013

My Lords, I join other noble Lords in congratulating and paying tribute to my noble friend Lady Hooper, who has—as I recently found out, I confess—done incredible work in this area. She continues to represent the case for the overseas territories with great passion and vigour. I pay tribute to her efforts in this regard. The noble Lord, Lord Bach, was kind in his opening remarks and perhaps I may reiterate the sentiment he expressed about quality over quantity in terms of participation.

Economic diversification in the overseas territories is an important area. I will take the opportunity also to comment on what the Government are doing to improve trade and investment opportunities, about which all noble Lords asked. Mention was made of when my noble friend Lord Howell of Guildford responded to a previous debate on this subject. I share his sentiments and comments. Certainly from the Dispatch Box he, too, demonstrated Her Majesty’s Government’s commitment to the overseas territories.

The Government set out our vision for the overseas territories in last year’s White Paper. My noble friend Lady Hooper referred to it in her introduction. The Prime Minister described them as,

“an integral part of Britain’s life and history”,

and said:

“We want to see our communities flourish in partnership, with strong and sustainable local economies”.

As the noble Lord, Lord Bach, said, as we progress on this issue, there is no difference in the sentiment, emotion and determination to protect and defend the territories’ sovereign integrity that we share across the Chamber and the political divide.

The territories are constitutionally separate from the United Kingdom and have their own Governments and laws. The elected Governments of the territories are responsible for developing their economies but, as we said in the White Paper last year, the UK Government will continue to work with the territories to help them in this area. We have made significant strides but recognise that there is more to do. As several noble Lords outlined, the territories have particular challenges, such as their geographical isolation, small communities—only 52 in one case, as we heard—and the fact that at times they face hostility from their nearest neighbours. They have a narrow economic base and limited natural resources, and few have a manufacturing industry.

Many territory economies are based on the twin pillars of financial services and tourism, both of which are vulnerable to shifts in the global economy. Territory leaders recognise the need for diversification, but their scope to do so is limited. The Falkland Islands, for example, are actively developing their natural resources for their economic benefit. Anguilla, which was mentioned by the noble Baroness, Lady Howells, and others, is looking to develop a sustainable fishing industry, which is to be welcomed.

Renewable energy—another source of diversification —is another area that some Caribbean territories, such as Montserrat, are taking forward. They have an abundance of natural energy sources that can reduce reliance on imported fuels, help create jobs and of course improve balance sheets.

I will set out for noble Lords the work that we have been doing across government to support the territories in order to help them to diversify their economies. At last year’s Overseas Territories Joint Ministerial Council, the Government and territory leaders agreed to work together to promote trade and investment between the territories and the United Kingdom; to support territories in overcoming obstacles to trading with third countries; to support the development of entrepreneurship and the growth of small business in the territories; and to organise a business forum in 2013 involving the territories.

In July this year, we gave instructions to our overseas missions to assist bona fide territory companies and territory government/business delegations in accessing overseas markets. FCO and UKTI staff will also give a range of assistance across three fronts: first, assisting territory delegations visiting their markets; secondly, assisting territory companies experiencing market access difficulties; and, thirdly, assisting territory Governments and trade promotion agencies wanting to establish a presence in a market. We have also introduced a light-touch buddy system so that territories can call on expert UKTI advice in their respective regions.

We work in different ways across the territories, but I will highlight some specific examples where they have received assistance from the Government. Last year, the FCO launched the jubilee fund to help develop the capacity of the public services across all the territories. The fund, which this financial year is worth approximately £500,000, has been used to support secondments of territory officials to UK counterpart departments and agencies, as well as visits to territories by UK experts. This work assists the territories to reach high standards in governance, financial management and economic planning. Such standards allow the territories to present themselves as trustworthy and transparent partners in business, and excellent places in which to invest.

As several noble Lords have acknowledged, in 2011 the UK Government agreed to provide funding of more than £246 million to design, build and operate an airport on St Helena. I note the comments made by the noble Lord, Lord Boateng, and my noble friend Lady Hooper in this regard. I assure my noble friend Lord Brooke that I shall ask for a written response to him, enclosing both a name and an e-mail address to which he will be able to respond accordingly.

Earlier this year, the British Virgin Islands established an office in Hong Kong to help promote its financial services and tourism industry. They did so with the full support of the British consulate-general, who provided logistical help and identified the key players to ensure that the launch of the office was a success.

The Government support Montserrat in implementing its plan for sustainable economic development of the island. This includes exploiting geothermal power, improving telecommunications and upgrading transport links. We are also helping the Government of Montserrat implement reforms aimed at improving the environment for business. As the noble Lord, Lord Boateng, mentioned, diversification is an important part of the economy, and the Government are seeking to play their part.

Growth and jobs will be the focus of our discussions at this year’s Overseas Territories Joint Ministerial Council. Territory leaders will have the opportunity to discuss the issues with a number of high-level speakers from across government and industry. When it comes to issues of governance, Her Majesty’s Government are encouraging full participation, not just by the Foreign Office or DfID but by departments across the board.

In addition, we are facilitating a business event in the same week as the Joint Ministerial Council, which my noble friend Lady Hooper mentioned in her opening remarks. This will go further than a round-table discussion. We are working closely with the territories to ensure that they gain maximum benefit from it. We want them to showcase what they have to offer and to scope out the possibilities for the UK—territory, trade and investment.

I shall now turn to some of the questions asked, and if I am unable to answer all of them because of pressure of time, I will write to noble Lords. Gibraltar is close to my heart. The name Gibraltar in Arabic is Gibral Tariq, and means the mountain of Tariq, so I suppose I have a personal territorial claim. Gibraltar is the only overseas territory in the EU and European law applies to Gibraltar, with some exceptions. Our team in Brussels works closely with and on behalf of the Government of Gibraltar, alerting them to forthcoming EU measures, negotiating on their behalf, and ensuring that they are able to benefit from access to EU markets. I thank all noble Lords who raised the issue of sovereignty in both the Falklands and Gibraltar. Let me make Her Majesty’s position absolutely clear.

On the Falklands, the UK has no doubt about its sovereignty over the islands. The principle of self-determination underlines this. There can be no negotiation on sovereignty unless and until the islanders so wish. Our position on sovereignty in Gibraltar is also clear. The UK will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state. I assure my noble friend Lady Hooper that this will never happen against their freely and democratically expressed wishes. The relationship with the EU is also important for the other territories, and I am pleased to inform the House that only last week we reached the successful conclusion of the negotiations on the new overseas association decision.

I shall now turn to some of the questions asked, particularly in the area of financial services, which were raised by my noble friend Lady Hooper and the noble Lord, Lord Boateng. The noble Lord, Lord Bach, also raised several questions in this regard. The territories continue to meet their international standards. They have responded speedily to our G8 tax and transparency agenda, and the Prime Minister has commended the progress made by all overseas territories, as my noble friend Lord Blencathra acknowledged in his comments. Most have now had the multilateral convention on mutual administrative assistance on tax matters extended. They have all published action plans on beneficial ownership and agreed to play an active part in the new pilot initiative on multilateral automatic tax information exchange.

Turning to the incident which my noble friend mentioned in her opening remarks on Gibraltar, I will write to her in this respect with the full facts and, of course, place a copy in the Library.

As to the register of company beneficial ownership, we are strongly encouraging all territories to ensure that their consultations or assessment also include the question of whether the register of company beneficial ownership should be made public.

Some questions on taxation and Anguilla were raised by the noble Baroness, Lady Howell, and the noble Lord, Lord Boateng. I can assure them that I note and recognise the challenges that have been outlined. I, too, received a briefing from the Anguilla Government. I shall certainly be passing those comments back to my colleagues at the Foreign and Commonwealth Office. We are looking to support Anguilla through the promotion of public and private partnerships but I appreciate and fully understand the challenges it has gone through recently.

Turning to the comments of my noble friend Lord Blencathra on air passenger duty, for now I can say that no change is intended. However, again, his comments have been noted and I am sure will be shared. He also raised the issue of the gaming industry in Gibraltar. We believe that the Government’s reforms to the gambling tax will provide a fairer basis for competition between remote gambling supplied from the UK and that from overseas.

In conclusion, our relationship with the overseas territories is very strong. I am encouraged by, and welcome the warmth and support for, the Government’s position across the Chamber. We all recognise that the overseas territories are an important part of what constitutes our relationship with them and our valued partners. As I have already said, all government departments are committed to supporting the territories in their area of expertise. Despite all the challenges that we have, we are encouraging them and we regard them as partners; we are not there to interfere in areas of responsibility devolved to them. Our aim is simple: through the work that I have described, it is ultimately for them to be able to help themselves.