Turks and Caicos Islands

House of Lords written question – answered on 21st July 2014.

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Photo of Lord Ashcroft Lord Ashcroft Conservative

To ask Her Majesty’s Government whether there are any proposals to use the sinking fund balance under the Turks and Caicos Islands debt obligations to pay down, to pay off or to buy back existing debt to reduce interest charges.

Photo of Baroness Warsi Baroness Warsi Senior Minister of State (Foreign and Commonwealth Office) (Jointly with the Department for Communities and Local Government), Senior Minister of State (Department for Communities and Local Government) (Faith and Communities) (also in the Foreign and Commonwealth Office)

The UK and Turks and Caicos Islands governments have agreed a framework for management of public finances that includes principles of good financial management as well as the debt ceilings. Key requirements are that net debt is less than 110 per cent of revenue by the end of the financial year 2015/16 and less than 80 per cent of revenue by the end of the financial year 2018/19, and that debt service is less than 10 per cent of annual operating revenue and liquid assets at least 25 per cent of annual operating revenue.

The Turks and Caicos Islands government has run a surplus for the last two years and continues to be on track to meet the provisions of the agreed framework document. In accordance with the Turks and Caicos Islands legislation, surpluses are paid into a Sinking Fund. The Sinking Fund may only be used for the purposes of paying down debt. However, how the debt is repaid is ultimately a delegated matter for the Turks and Caicos Islands government.

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