The Dependent Territories

HL Deb 09 February 1994 vol 551 cc1574-604

3.3 p.m.

Baroness Hooper rose to call attention to the current status of the United Kingdom's dependent territories and plans for their long-term future; and to move for Papers.

The noble Baroness said: My Lords, in spite of the fact that a number of our dependent territories have become independent or opted for some other political status over the last few decades, a surprising number remain. The purpose of the debate is to remind ourselves and, we hope, a wider audience, of their continuing existence; to draw attention to some particular issues and to hear from the Government what plans they may have for these tiny territories in the changing world order.

In preparing what I should say in the limited time today, it occurred to me that a study of the dependent territories could well form an entire subject of the national curriculum in our schools, since one has to focus on geography, history, social needs, cultural and religious diversity, trade and economic development and constitutional law in order to comprehend all the issues.

We currently remain responsible for the peoples of some 13 or 15—depending on how we count them—dependencies, ranging from big bustling up-front Hong Kong through to Gibraltar and the Falkland Islands, to Bermuda and the five Caribbean dependencies, to St. Helena and the Pitcairn Islands with its population of 58 people. In addition, we have the uninhabited British Antarctic territory and British Indian Ocean territory.

Common factors are that they are virtually all island communities, English-speaking and essentially they have the same legal systems and democratic processes. However, from then on their needs and aspirations are diverse. There can be no blanket answer, I realise, to all their needs, but there are points of similarity and common interest between them.

I know that other speakers in this debate intend to talk in depth about individual territories, with the possible exception of Hong Kong. That is in part because we already know the Government's plans for that territory, but also because it has been well debated in the past and I understand that there is due to be another major debate about Hong Kong shortly. But even St. Helena and its associated territories were by coincidence the subject of an Unstarred Question only last week. I know, too, that my noble friend Lady Young very much regrets that she cannot be here to speak about the Caribbean dependencies today, some of which she visited very recently. I feel sure that my noble friend Lord Waddington will be listening carefully over there in Bermuda to what we have to say today about that dependency.

There are general questions which arise and which will, 1 feel sure, be developed and illustrated by others in the course of the debate. But given the rapidly changing world scene—and yesterday's statement by the President of Argentina is evidence of that—I hope that my noble friend the Minister will be able to give us some answers and reassurance, for example, as regards the economic development and investment needs of the territories. Are the Government satisfied, for example, that funding of projects in less viable economies, such as that of Montserrat, is adequate and properly applied? The Cayman Islands, Bermuda and the British Virgin Islands have buoyant economies built on financial services, but that is certainly not the case in all dependencies where financial aid and support are required.

What about the enforcement of law and order? Again, the Caribbean has particular difficulties in dealing with drugs cartels since they lie on the major drug routes from Latin America. Given the review of the Caribbean independent territories initiated by Foreign Office Ministers in late 1991, what developments have taken place to promote a closer working relationship between the elected governments of the territories and between them and HMG? What is the relationship between the dependent territories and the European Community? We all know that France solves the problem by making its overseas territories part of metropolitan France. But apart from Gibraltar, which is part of the European Community, do our independent territories have any preferential status vis-à-vis the European Community?

Conversely, what would be the Government's attitude to a dependent territory linking into a regional association in another part of the world—a West Indian federation, for example, or the groupings of the Pacific rim countries? Furthermore, are any changes envisaged relating to employment rights, to nationality issues, to residents' rights? Those are all questions that arise in the dependent territories themselves.

Finally, how do the United Kingdom Government take into account the needs of the dependent territories in relation to global environment issues and establishing educational links? I was interested, in that respect, to learn that there is a special dependent territories input to the World Conservation Monitoring Centre in Cambridge.

From those general questions, I wish to turn specifically to Gibraltar. Indeed, it was my interest in Gibraltar which prompted me to table this Motion and inaugurate today's wider debate. Each of the dependent territories is special in its own way. Gibraltar is special because it is the only one of our dependencies which is situated in Europe. It is special also because mere mention of the Rock of Gibraltar evokes memories of safe harbour and refuge for so many sailors, soldiers and individuals who had wartime and service experience there. It is also a place in the sun for holiday-makers, whether they descend on main street shops from their cruise liners or see it as a holiday centre in itself. Increasingly, it is fighting for recognition as a centre for financial services. Furthermore, like the people of the Falkland Islands, the people of Gibraltar have entitlement to British citizenship.

It is a well-known historical fact that we became responsible for Gibraltar following the Treaty of Utrecht in 1713. That makes 281 years of allegiance. In the old days Gibraltar's strategic significance was all important. Nowadays, however, there are many issues which affect Gibraltar and its relationship with the United Kingdom and the rest of the world.

The case for Gibraltar was very eloquently made by the chief Minister, Joe Bassano, at the recent dependent territories conference which was held in London and co-hosted by Gibraltar and the Falkland Islands. I recommend to anyone who wishes to delve further and wider the synopsis of Mr. Bassano's spontaneous speech on that occasion.

I shall now focus particularly on European Community issues, since my involvement and interest in Gibraltar stem in part from the fact that after I was elected to the European Parliament in the first direct elections held in 1979 I was one of the six British MEPs (three Conservative and three Labour) to be asked by the Gibraltar Government to look to Gibraltar's interests.

Gibraltarians, although themselves members of the European Community, could not vote in those direct elections—and they still cannot vote in European parliamentary elections in spite of further rights which have now been conferred on British non-residents enabling them to vote from abroad. I know that were my noble friend Lord Bethell here, he would reiterate this point.

To give some of the background, Gibraltar entered the European Community on 1st January 1973, at the time of the United Kingdom's accession. There is specific reference in the Treaty of Accession. It is the only European territory for whose external relations a member state is responsible under Article 227(4) of the European Communities Treaty. Article 28 of the Act of Accession provides that there shall be certain exceptions from Community measures with respect to Gibraltar. For example, because of Gibraltar's size and territory, the common agricultural policy does not apply; neither does the common Community tariff system. But subject to those explicit exceptions, all legislation adopted by the Community since 1973 has been applicable to Gibraltar. All the treaty provisions on the free movement of capital, services and persons therefore apply fully. The fourth freedom on movement of goods is restricted by Gibraltar's position outside the customs territory, although in effect that is mitigated by the application of the generalised system of preferences.

Under the 1969 Gibraltar constitution, the United Kingdom Government have responsibility for Gibraltar's defence, internal security and external affairs, while the Gibraltar Government have, both by definition and convention, responsibility for all domestic matters. Because of that constitutional relationship with the United Kingdom the application of Community law in Gibraltar is legislated by Gibraltar's parliament, the House of Assembly. Between 1973 and 1985 Gibraltar's position within the European Community was not questioned. That changed with the advent of the single market and the accession of Spain. As the United Kingdom has become more integrated within the European Community, the constitutional relationship between the United Kingdom and Gibraltar has been distorted. Community measures increasingly impinge on domestic matters which have normally been the exclusive competence of the Gibraltar Government but are now entering the domain of the United Kingdom Government as the member state ultimately responsible for Gibraltar's compliance with EC obligations. The distortion is unfortunately compounded by the line taken by Spain against Gibraltar whenever new Community measures are produced or proposed. In addition, there are problems over banking and financial services in the single market and similar difficulties over insurance. In 1989 a major insurance company established itself and was licensed in Gibraltar to sell its products into Spain. Spain blocked that on the basis that the licence had been issued by an authority in Gibraltar and it was therefore not a competent authority of the member state, the United Kingdom. More recently, a major Spanish insurance company was not allowed to undertake business from Spain into Gibraltar because the Spanish authorities considered that there is no competent authority in Gibraltar and that the relevant supervisory authority is the DTI in the United Kingdom.

In all these matters the relationship with Spain is all important. Clearly, during the period of Franco's undemocratic leadership of Spain there could be no question of the British Government making concessions. It must be said that Franco used the Gibraltar issue literally as a red rag to a bull, as a distraction whenever home affairs were going through a difficult phase. Many of my Spanish friends admit that Franco made a mistake when he closed the frontier; it led to a hardening of attitudes on both sides as well as a separation of interests which could otherwise have naturally grown together. But we cannot ignore history and its consequences—although I would point out that many Spanish people do not agree with the Spanish Government's approach either; particularly the Catalans who, incidentally, also see aspects of their different identity as being safeguarded by the Treaty of Utrecht. The question is therefore: do the British Government intend to leave things to drift, or will they commit themselves to unblocking this futile impasse? No one wants to rock the boat so far as relationships with one of our European partners is concerned, but when the boat is being rocked in so one-sided a fashion what is needed is not a soothing lullaby but a firm hand.

I should like to make one further point. Since 1988 Gibraltar has invested heavily, without any development aid from the United Kingdom, in diversifying its economy to create a new base largely aimed at the development of an international finance centre. That strategy was geared to offsetting the impact of continuing defence cuts. The Ministry of Defence now accounts for around 10 per cent. of GDP in Gibraltar, compared to around 75 per cent. in the late 1970s. Only a week or so ago news was leaked of further cuts which, if confirmed, will have a disastrous impact, with the loss over three years of over 1,000 civilian jobs in an economy where employment levels total 13,000 jobs and are falling. In addition to Spanish pressure, Her Majesty's Government are perceived to be preventing Gibraltar from developing its new markets. On banking and financial services Gibraltar is excluded, unlike the Channel Islands, the Isle of Man and even Liechtenstein, from having its credit institutions passporting into the United Kingdom.

There are therefore concrete examples of where United Kingdom policy impinges to the very great disadvantage of the people of Gibraltar. Although my enthusiasm for the theme outstrips the time available, I hope that we shall hear from my noble friend the Minister some concrete responses to those issues. I beg to move for Papers.

3.20 p.m.

Lord Pitt of Hampstead

My Lords, I should like to thank the noble Baroness for giving us this opportunity to discuss the dependent territories. I shall concentrate on the Caribbean because that is the part of the world that I know best. I feel that I know something about what is going on there and have ideas for dealing with it.

We ought to be encouraging the Caribbean territories to be part of the Caribbean community. There is in existence already a Caribbean community. Admittedly, it is not very effective but it shows a movement in the right direction. The Caribbean is a difficult area. There are many colonies but also many small, independent states. For example, I believe that Bermuda is better equipped to be an independent state than is my native Grenada. But my native Grenada has been an independent state for 20 years. That area can only be safe—I use the word "safe" advisedly—if it is united economically and politically.

This country has governed most of those territories as colonies. It should be using some of the influence that it must still have to encourage a union of those territories. One of the levers that this country could use is the fact that those dependent territories need a home. We should be helping to provide such a home.

A dependent territory has more or less internal self-government but Britain is responsible for its foreign policy, defence and judicial system and has some control of its finances. All those things can be provided effectively in a union. If those states are part of a united Caribbean, then that united Caribbean can provide an effective foreign policy for the area. I cannot say that it would provide an effective defence. Even now the defence of many so-called independent countries depends on support from this country and the United States. So the defence requirement will still be the same.

There has been a long-standing proposal—one hopes that one day it will come to fruition—for a Caribbean court of justice which should become the Caribbean Court of Appeal dealing with issues concerning the territories and their relationships with each other. That would provide the judicial requirement for the dependent territories. An overall influence should enable the financial services to be properly controlled. Therefore the services that are now provided by Britain sending a governor to those territories can be provided more effectively through those territories being a part of the bigger union.

I can hear noble Lords who know something about the Caribbean asking me, "What union?" I accept that that is a nice question. I left Grenada in 1933 to study medicine in Edinburgh. When I left Grenada, I was quite certain that there would soon be a federated West Indies because at that time there was a conference taking place in Roseau, Dominica to consider closer union of the islands. That was 60 years ago and we still do not have that closer union.

There is much worse. In 1992 I attended a conference in Grenada which tried to form a new Windward Islands Union. What is strange is that when I left Grenada in 1933 there was a Windward Islands Government. There was a governor in Grenada and all the other islands had administrators. So 60 years ago the Windward Islands was one government and today they are finding it difficult to become a government. So I accept any kind of criticism levelled along those lines.

However, I should like to point out that real efforts are being made to create a union. As noble Lords will know, the area was federated between 1958 and 1962. Then the federation broke up. It has never been able to get a proper union going since. But there is the Caribbean community. Recently, a commission chaired by Sir Shridath Ramphal, who is a former Secretary General of the Commonwealth, went into the question of increasing the integration of those territories. The commission made recommendations, some of which would be quite useful for our purpose because what I have just said about those small dependent territories forming part of a bigger union fits into them.

For example, the commission recommended that there should be a Caribbean Assembly and that in that assembly there should be members from the dependent territories. It even suggests that there may be members from the French and Dutch territories. That is not so peculiar. When I was a young man and we spoke about federation, the federal state that we envisaged always included Martinique and Guadeloupe. At that time they were all colonies, so it did not matter. Now Martinique and Guadeloupe are departments of France, which must make it much more difficult. So if there is to be any kind of deepening relationship between Martinique and Guadeloupe and the other states, there has to be a lot of negotiation at international level.

I merely brought that example in to illustrate the extent of current thinking. What is now recognised by all the thinkers in the Caribbean is that the Caribbean needs economic and political union in order to survive. As a result of the free trade area negotiated between Canada, the United States and Mexico, there is right above the Caribbean a big area which, as usual, will be supportive of the central American and southern American states. The little states in the Caribbean can easily be ignored and find themselves in difficulties. For example, the noble Baroness did not mention the problem of the area in its relationship with drug trafficking and crime.

Unless there is real union, a government which can deal with the problems of the area as a whole, that area may prove to be a problem to the world. Therefore in my contribution to the debate I ask the United Kingdom Government to concentrate their activities on helping the integration process; in other words, to support the territories in the area to enable them to form one political and economic union. I ask the Government to use their lever of having dependent territories in the area for that purpose.

My view is that can be done. Perhaps I can illustrate what I mean. Nearly every year the Canadian Prime Minister attends conferences to meet the Caribbean Prime Ministers. A conference is usually held with representatives from all the states plus representatives from the United States. We do not hold similar get-togethers in Britain. That is where we are falling down. The UK Government ought to be regularly co-operating with the territories in that area and in so doing provide a home for their dependent territories.

3.31 p.m.

Lord Braine of Wheatley

My Lords, perhaps I may say at the outset that we must be grateful to my noble friend Lady Hooper for making this debate possible and for introducing it with such a wide ranging but sensitive, well-informed speech. I am grateful also to the noble Lord, Lord Pitt, who speaks with special knowledge of a part of the world that I love very much.

Our dependencies can be found in every quarter of the globe. They vary greatly in size, population and resources. It is interesting to note that they are all democratically governed and generally value their membership of the Commonwealth, and in particular the Commonwealth Parliamentary Association. By now independence has been obtained by the larger dependencies, and those that remain continue to need aid of one kind or another. As president of the Falkland Islands Association, I wish to address myself to the problems and prospects of a relatively small and vulnerable but distinctly British territory in the South Atlantic and one which we all now know has considerable potential.

Certain facts in regard to the Falklands must be recognised from the start. The islanders are British almost to a man and have never had any desire to be anything else. They have been British for a long time. We live in an uncertain world; but we need never doubt that the Falkland Islanders want to be anything but British. However, there is now a new element in the situation. They have the prospect of significant development of resources in their territorial waters—immensely rich fisheries and significant oil resources.

I rely on what I read in the newspapers, of course, but I understand that the oil resources in the Falkland waters are believed to be 50 per cent. larger than those discovered in the North Sea. At the end of last year the British Geological Survey felt able to state that the 200-mile exploration zone around the islands has "enormous oil potentialities". The area surveyed is 50 per cent. larger than the British sector in the North Sea. We can therefore look forward to highly promising development some years ahead.

This then is the time to reflect on what that will mean for the islands and their people. It is not too early to start reflecting on that aspect of the matter because development requires people—managers, skilled workers—and special skills. It is plainly time to start considering—now, not at some vague date in the future —how we can encourage the building up of the islands' small population. It is encouraging that Argentina, the islands' nearest neighbour, possesses similar substantial resources in its own waters. Therefore the scene is set, if common sense prevails—another word for statesmanship—for co-operation; not rivalry and the continuance of the threats of the past.

Last week we debated the dependent territory of St. Helena and its associated island, Ascension. I hope the Government took the message that some of us who, for a long time, have taken an interest in the Atlantic dependencies, are highly critical of the restraints on immigration to this country of the loyal, hardworking St. Helenians. The first St. Helenians were refugees from the Great Fire of London. The population only developed from the latter part of the 17th century. Wherever those people go to work in the Atlantic and the Indian Ocean, importance is attached to the high quality of their work; for example, by our American friends. Here also in this country they have a good reputation.

It is not too early to see what role the St. Helenians might play in building up the workforce in the Falklands. As economic activity quickens in the Falklands, as undoubtedly it will, they will need reliable workers. Because of their British connections they should look for some of them in St. Helena—to a people who are proud to call themselves British.

My message to this House is that we in this country should cease to think of the dependent territories as a problem, or even an irritation. We should see them wherever possible—it is certainly possible in the cases I mentioned—as an asset in developing new resources not merely for themselves and this country but for the whole world. I respectfully suggest that the Government should set up an expert inquiry into the possibility of developing the undoubted resources of the Falklands, and to see what can be done to develop the manpower resources of St. Helena and possibly some of the smaller islands in the West Indies.

The presence of the noble Lord, Lord Pitt, reminds me of the great worth of the Caribbean peoples and the opportunity may well exist for some of them to take part in the massive developments that I foresee in the Falklands. We must not neglect the opportunity which the development in the Falklands will make possible in the relatively near future.

3.40 p.m.

Lord Boyd-Carpenter

My Lords, it is conventional in your Lordships' House to say how grateful one is to the noble Lord—the noble Baroness in this case—who initiates a debate. But I think that there are very special reasons for saying that this afternoon. It is extremely important from two separate points of view that your Lordships' House should concern itself with the future and with the well-being of these territories. First, it is very easy in the controversy of English politics to forget the interests and concerns of these, in many cases quite small, territories for which we are ultimately responsible and which look to us for guidance and for help. At the same time, if we do not show an interest in them and in their future, it increases the risk, to which one or two of them are exposed, of aggression from those who would seek to take them over, if necessary by force. I shall mention two such places in a moment. Therefore, I think that your Lordships' House is doing a very good public service by debating the future of these territories this afternoon.

It is impossible in the course of a short speech in a short debate to cover the very wide variety of territories involved, but I hope that the fact that your Lordships think it right to devote time and energy to discussing the future of dependent territories generally will be observed outside, will be observed in the territories concerned and will also be observed in the case of those countries—and there are some—who have designs upon them.

For my part, I want to take two cases only. The Falklands have been so well dealt with by my noble friend Lord Braine. Perhaps I may say how nice it was, having heard him speak for years in the House of Commons, to hear him make that delightful speech here this afternoon. I am sure that we all greatly enjoyed it. I should like to add just a little in respect of the Falklands. They are, as my noble friend said, geographically very vulnerable, at the far end of the world. The fact that they are today a British territory is of course due, among other things, to the courage and determination of our former Prime Minister, my noble friend Lady Thatcher, who took very considerable risks and faced very considerable dangers and difficulties in using very proper military force to repel Argentine aggression.

One must remember, when we are discussing the 12 years of the Thatcher regime, that very conspicuous act of courage. Not everyone would have had the courage to face a military conflict at the far end of the world with another country closely located at the scene of the activities. It was a remarkable achievement, not only for the Prime Minister and the Government, but for the Armed Forces of the Crown, that we were able, at the cost of some lives, to subdue the Argentine aggression. I should like to hear from my noble friend the Minister what now are the relations with the Argentine over this matter.

Recently there have certainly been one or two speeches in that country which have not looked altogether friendly and which have not altogether created the impression that the Argentine has abandoned its ambitions. Yet if the Falklands are really to develop —my noble friend Lord Braine suggested that they have enormous possibilities of development—it must be made plain to all concerned, including those who are being asked to invest in them, that if necessary we shall protect again these islands from aggression and that their British character is one which the British people and British Government are pledged to preserve and will preserve whatever events may happen.

I know that in these diplomatic matters Ministers have to exercise delicate diplomacy and I know that in this case my noble friend the Minister will always do that. But it is a fact that if the islands are to be developed, if their very great resources of oil and fish are to be developed and if we are to attract the massive investment that is needed, it must be made absolutely clear that the whole strength, power and force of this country are behind them and that we are determined to preserve their British character.

The only other territory that I should like to say a word about is Gibraltar. I have, as it were, an old family connection there. Your Lordships may not be too bored to know that I had a forebear who was Lieutenant-Governor during the great four-year siege and who later succeeded as Governor of Gibraltar. In those happy days when no ages of retirement were imposed he continued as governor until a very mature age. He died there and is buried there. I have seen his grave. Therefore, I have an old family connection with the Rock and indeed with the defence of the Rock.

We discovered as recently as the last war how important that defence could be. Gibraltar and its naval establishment and defences were of crucial importance to our access to the Mediterranean during that time. I myself recall how, when we were going through the Straits in a troop ship, we were trailed out from the Spanish coast by a German reconnaissance boat which had been accommodated, thanks to Spanish friendship with Germany, and which tried to trace us. There was a certain feeling of security when we came within the reach of the cover of the guns of the Fortress of Gibraltar. The convoy, though it was later attacked, passed through the Straits effectively. Gibraltar therefore has great military significance. Even though, perhaps regrettably, the dockyard has been closed, Gibraltar is still part of our defence system and is in a crucially important position.

The Gibraltarians are firmly pro-British. They are an admirable set of people. I should again like to hear from my noble friend the Minister what are the relations in this connection with Spain. It is, I believe, the fact that the Spanish Government, for no very obvious or respectable reason, have refused to allow what used to be the very useful ferry service between Gibraltar and Algeciras to operate. I do not know whether that was due to antagonism to Gibraltar or simply economic obscurantism. But I should be glad to hear from my noble friend whether this ban has now been raised and whether it will now be possible to take the boat between Algeciras and Gibraltar. It seems a great pity that Gibraltar should be deprived of this facility and indeed that Algeciras should be so deprived, since one of the pleasanter holidays in the delightful climate of those parts is perhaps to stay at Algeciras and go over on the boat regularly to Gibraltar.

Gibraltar has a tremendous historic tradition. Government House—the Convent—is a splendid historic house. Gibraltar has had the good fortune to have a series of excellent governors, many of them soldiers of great distinction, who have governed extremely well and who have helped the Gibraltar Government with the many tasks that face them.

I understand that there are still complications as regards relations with Europe. Some of them seem to me to be unnecessarily created, perhaps as a by-product of Spanish ambitions. But here again, I should be grateful if my noble friend the Minister would bring us up to date on Spanish relations with Gibraltar and in particular in connection with the very important Gibraltar airport. As my noble friend the Minister knows only too well, great difficulty arose over the opening of the airport as regards relations with the Spanish authorities. I shall be glad to know whether these have now been cleared up.

I have dealt with only two of our dependent territories because that is all that is possible within the time limit. I am sure that it is extremely useful that this House should discuss in detail the problems, dangers, difficulties and tremendous opportunities of the British dependent territories.

3.51 p.m.

Viscount Torrington

My Lords, when my noble friend Lady Hooper told me that she was going to introduce this debate today, which I know we all consider to be a great service, I found myself being informed by my noble friend Lord Ironside at almost precisely the same moment that I had been selected as part of a team of your Lordships to go down to the Falklands next month to talk to the military personnel and the islanders.

I suppose that as a lover of wild places I have always wanted to go to the Falkland Islands. It is a desire which goes back long before the South Atlantic conflict. It has been slightly heightened by the fact that in the past couple of years I have come to know Argentina a little.

I appreciate that the Falklanders suffered a very unpleasant experience some 12 years ago. Their peaceful little island was the subject of unprovoked aggression and an unpleasant little war in which a large number of British servicemen lost their lives in order to restore the position. As my noble friend Lord Braine said, the Falklanders are British through and through.

But I feel that the time has come when realism says that there has to be more contact with Argentina. Argentina today is a very different country under Dr. Carlos Menem, with very different preoccupations and interests, compared with the Argentina that existed under Galtieri and the Junta. Argentine democracy shows every prospect of being reasonably firmly rooted and, as between Britain and Argentina, the vexed question of sovereignty of the Falklands has been put on one side, it would seem, by mutual consent notwithstanding the remarks which one speaker made earlier.

Ties between Britain and Argentina have warmed to such a degree that in Autumn 1992 the Union flag appeared "undefaced" all over Buenos Aires, advertising British Week. I myself had the privilege of standing on a platform with the British ambassador and Dr. Menem to open British Week. I do not suppose anybody will be opening Argentina Week in Port Stanley in the near future, but I believe it is important that relations should be normalised as much as possible.

My noble friend Lord Braine touched on the oil prospects of the Falklands. If we are to have a major oil province one-and-a-half times the size of the North Sea, it is completely impractical to consider that that can be developed using the islands as the only base, shipping in labour from this country, St. Helena or wherever. The environmental damage would be absolutely appalling. After the development of an oil province, the Falklands would resemble some kind of ghastly construction yard if we were not careful.

At the same time it appears as though Argentina will also have a major oil province near the median line. So it will be ridiculous to duplicate all the facilities. I have no doubt that there will be some facilities which will be better handled in the Falklands and some better handled on the mainland. There must be an effective opening of the frontier for legal reasons as well, if the oil province is to happen.

When I go down there I have no desire to say to the Falklanders that they should be friends with Argentina against their will, but I believe that simple logic says that they will have to talk more to the Argentinians and at least normalise relations to the extent of normal commercial relationships which exist between any two adjacent, or almost adjacent, states.

I hope that the Government will also be encouraging the islanders to think along these lines. I very much look forward to the Government's response. I look forward next month to talking to the islanders, their leaders and the military personnel who guarantee their security.

3.55 p.m.

Lord Beaumont of Whitley

My Lords, we are indeed grateful to the noble Baroness, Lady Hooper, for her initiative in tabling this Motion and also for very kindly arranging for some of us to receive briefing papers in this matter.

The populated countries which are still formally dependent on the United Kingdom can be counted on our fingers and toes. As I said when I asked an Unstarred Question on St. Helena last week, and which has already been referred to, we can no longer treat them just as a class. It is convenient to have a subject for debate framed in this way, but when it comes to discussion and, above all, to the answers that the Government will give, every case has to be treated separately. It has been one of the encouraging factors about this debate so far that we have had treatment in depth of some of the particular problems.

Very crudely speaking, the attitude of the party on these Benches is that the UK should act like good parents with grown up children. The children should be encouraged to set up in jobs and flats of their own, and the right to make up their own minds as to what they do does not, for their own sake and that of their parents, include the right to stay at home indefinitely except in special circumstances.

Hong Kong is in a case of its own which we are rightly constantly considering. The only thing I say here is that the tragedy of Hong Kong is not that we are abandoning it but that we are abandoning it to a totalitarian state. Here I underline what previous speakers have said about the democratic nature of the dependent territories.

The implication of the model of parents and grown children is that we encourage independence where it is viable; and I believe that it is going to be viable for smaller and smaller countries in future, just as today we are seeing independence working in countries which, 30 years ago, were regarded as too small to be viable. Where independence is rejected we encourage marriage or possibly even settlement in a commune, with partners a great deal nearer to them than is the UK. That last pattern would be the one to which the noble Lord, Lord Pitt, referred in his very interesting speech.

The dependent territories are, I repeat, all special cases —every single one of them. But the Falkland Islands is extra special. Suffice it for me to say that many of us who supported our Government in the recent war did so because we thought it important to resist international piracy by dictators and not because we thought that the Falklands should continue to belong to Britain indefinitely. I believe it is quite clear that the future of the Falklands eventually (I underline "eventually") and particularly today, is either in some kind of liaison with a democratic and law-abiding Argentina—here I was very interested in what the noble Viscount, Lord Torrington, had to say about the future oil province—or independence with appropriate defence provisions.

Gibraltar is now incorporated in the European Union. Many of us who believe in the growing importance of that institution look forward to the day when any dispute between us and Spain is settled in that arena, although I admit that I was a little depressed by what the noble Baroness, Lady Hooper, said on that particular subject. Similarly, as some of us have been saying for some time, it is possible that we may be able to find in that framework of Europe an eventual solution to the problem of Northern Ireland.

We dealt with St. Helena fully last week and I should like to thank those of your Lordships who took part in that debate and the Government for their reply. St. Helena and its dependencies are possibly the special cases which we must continue to look after for a considerable while, for reasons that I outlined last week, bearing in mind that as we manage to make arrangements for the other territories the case for giving the inhabitants of St. Helena full British citizenship (which should never have been taken away from them) increases.

That leaves us, more or less, with the Caribbean territories. In a neat and tidy world, we should still be striving, in spite of all setbacks, for a confederation. I was heartened by what the noble Lord, Lord Pitt of Hampstead, said on that matter and I hope that headway can be made. But we do not live in a neat and tidy world —the noble Lord has already pointed out the problems caused by the fact that two of the Caribbean islands are now departements of France—and the solutions may be messy. Nevertheless, that is the area in which we should press further.

In dealing with those separate problems (and I repeat that they are all separate and distinct), we must work within a framework of support and encouragement of democracy—how deeply we must regret not having embarked on a democratic programme in Hong Kong 30 years ago—and of self-determination within limits; the limits being that any possible partner, such as the United Kingdom, also has its own rights of self-determination.

Penultimately, I cannot close without paying tribute to the governors and expatriate administrators of the territories. I am not one who denigrates our empire. Although we often acquired and administered it in the belief that it enriched us (which in the short term it did, although the economic chickens are now coming home to roost) we brought some vital gifts in the shape of good, uncorrupt and selfless administration to a large part of the world. The present governors and administrators of the dependent territories are worthy heirs to that tradition. Like many parents, as we nudge our fledglings out of the nest we can do so in the knowledge that at least we gave them a good upbringing.

Finally, it would be good—and I think necessary if we are to do our duty by these many thousands of people for whom we are responsible—if we were to have a similar debate every year. I think that we, the authorities of the House and the Government should consider such a commitment. It cannot be right that we have to depend entirely on fortune and on the individual admirable initiatives of those such as the noble Baroness, Lady Hooper, to make it certain that we consider the fate of these people for whom we are ultimately responsible. I hope that the Government will take that on board.

4.3 p.m.

Lord Newall

My Lords, I, too, am grateful to my noble friend Lady Hooper for introducing this important but often neglected subject. There are many different dependent territories and they are in many different stages of economic development. We can cover only a few of them today. I hope to visit the Falklands next month and shall reserve judgment on that area until I have been there.

I intervene briefly to refer specifically to Bermuda which, as we all know, is an island not in the Caribbean but stuck out in the middle of the Atlantic. It is now governed by my noble friend Lord Waddington who I believe is not only having an enjoyable time there but is extremely popular and successful. I have been very lucky to have visited Bermuda many times. It is a lovely island. It is peaceful; almost sleepy at times. It is slightly old fashioned. There is no unemployment. It is very British in many ways: they drive on the left.

However, Bermuda has very superior financial institutions and traditions, which is evidenced by a large reinsurance market. I believe that 3 billion American dollars have gone into Bermuda's reinsurance market since June 1993. Bermuda has the second oldest Parliament in the Commonwealth. I did not know that until I started to look into this subject. Most of Bermuda's income comes from tourism and offshore company businesses, both of which are thriving. Its main trading partner is the United States, which also provides about 63 per cent. of the tourists. However, British influence is very strong and there is good co-operation between Bermuda and this country. Bermuda has flourished over many years to become a very successful island. In fact, its per capita income is in the world's top 10 at about £15,500 per year. Relations with the United Kingdom are excellent, with high level visits both ways over recent years.

However, two problems face Bermuda today, and they are the principal reasons why I wish to concentrate on the island. The first problem relates to potential independence. Bermuda is quite capable of becoming independent. On 4th February this year the issue was discussed in the Parliament in Bermuda. Since that date the Premier, Sir John Swan, has announced his intention to produce a Bill for a referendum on the subject of independence, which I understand will be debated in nine days' time on 18th February. The Bill will have to go through both Houses of Parliament there. It is also proposed to set up a commission of inquiry to look into all the issues surrounding the possibility of independence. I know that Her Majesty's Government will be neutral in this, but I hope that they will ensure that all the advantages of remaining alongside the United Kingdom will be spelled out in detail. This is a very important problem to solve.

The second problem is that the naval bases on the island are going to close. Bermuda's civil airport is a United States military facility, operated by the United States Navy. The Americans have maintained bases in Bermuda since 1941 on a 99-year lease. In 1989, the US naval air station contributed 88 million dollars to the economy and provides air traffic control, emergency services, airfield maintenance, meteorological services and all the things that go with running an airfield. It also has responsibility for search and rescue at sea. Last year the Americans said that they would withdraw their naval station and all their forces from Bermuda by the end of 1995. Canada closed its base in May 1993 and it was decided that the United Kingdom's naval base is also of no further strategic significance.

As noble Lords will appreciate, that will put some strain on the economy of Bermuda. In the short term, it will cause some unemployment and costs for operating the civil airport and doing all the jobs that the naval bases have been doing over the years. No doubt the United Kingdom and the United States will assist greatly in the transition, but initially it will be difficult for Bermuda. On the other hand, Bermuda is a small island and land is in short supply. The release of the bases will undoubtedly release some land, which could be beneficial to the island.

I therefore hope that my noble friend Lord Cranborne can assure the House that as far as Bermuda is concerned Her Majesty's Government will pay very close attention to helping the government there to overcome these two problems, particularly by providing the very best help and advice, and that they will assist Bermuda to continue on its successful road to increased profitability and continued tranquillity, whether or not it decides to go independent.

4.10 p.m.

Lord Merrivale

My Lords, while being grateful to my noble friend Lady Hooper, I should like to refer to Gibraltar, a metropolitan power and the only British dependent territory within the European Union. It is "a particular case", to quote the Foreign Secretary's recent words in respect of self-determination.

On this same issue, my noble friend Lady Chalker said on 18th October and 1st December that Her Majesty's Government took into account the Treaty of Utrecht and particularly the rights and responsibilities in Chapter XI of the UN Charter. Article 73 recognises that the interests of the inhabitants of such territories are paramount and that "due account" shall be taken of the political aspirations of the peoples. So would my noble friend agree that the United Nations Charter, with its rights and responsibilities, should take precedence over the Treaty of Utrecht?

I turn to the problem of Spain, which presently does not recognise the laws and competence of Gibraltar, and I refer to the Financial Services Act 1986, in particular to Section 208. Gibraltar is specified as though it were a separate member state. On Monday 31st January my noble friend Lady Chalker mentioned "primary legislation" in relation to banking. Am I therefore correct in saying, as I have been advised, that if subsection (2) of the section is incorporated into the Banking Act 1987 Gibraltar's licensed banks will be able to passport into the United Kingdom and the 11 other member states? If that is correct, can this process be expedited?

On that same Monday my noble friend Lady Chalker said: We are seeking to ensure that there is proper regulation of financial services in Gibraltar".—[Official Report, 31/1/94; col. 1110.1 Will the Minister therefore agree that the supervision from London and in Gibraltar has been considerably tightened since the Barlow-Clowes affair? Bearing that in mind, does the Minister also agree that it is some time since the first commissioner, Bill Penman Brown, was appointed by the governor? Three weeks after Penman Brown's departure, an acting commissioner, Michael Constantine, took over and he still seems to be doing an excellent job.

Recently, on 20th January, under the chairmanship of Sir Joshua Hassan, QC, the General Council of the Bar came out strongly against the delay in appointing a commissioner. Taking into account the Foreign Secretary's words on 24th November, which were: We no longer believe in the idea of a colonial office which simply issues instructions", should not the commissioner be under Gibraltar's control?

I turn from banking to insurance. I understand that since 1989 there have been two cases of Spain's refusal to allow business to be carried out in a neighbouring Community territory. A major insurance company, which was established and licensed in Gibraltar to sell its products in Spain, was blocked by the Spanish Government and a major Spanish insurance company was not allowed to do business with Gibraltar.

I mention Section 31, which deals with authorisation in other member states, and Part II of the Financial Services Act 1986, which deals with insurance business, with a view to seeking information as to whether amendment of the Insurance Companies Act 1982, in line with an amendment to the Banking Act 1987, will rectify the present situation brought about by Spain's attitude towards the laws of Gibraltar while recognising the UK's laws and competence.

4.15 p.m.

Baroness Strange

My Lords, we are all not only conventionally grateful to my noble friend Lady Hooper for raising this interesting question of the British dependent territories, but also grateful to her for her excellent and comprehensive speech. Miss Sukey Cameron, the Falkland Islands' representative, has asked me to speak about the Falklands. I do so rather reluctantly, in view of the splendid, amusing and comprehensive speeches of my noble friends Lord Braine and Lord Boyd-Carpenter and other noble Lords. As your Lordships will be well aware, I shall speak only briefly.

To some extent I have connections with the Falklands in that my son served in the campaign there, which was so gallantly fought by all our forces. Furthermore, I was lucky enough to visit the islands four years ago with the All-Party Parliamentary Defence Group.

Before the Falklands War the main income of the islanders came from wool from the islands' sheep. It is very good wool, too—my husband has a pair of socks knitted from it. However, with the 200-mile exclusion zone a new source of income arose from granting fishing licences. When I was in Port Stanley four years ago I saw the splendid new hospital which had been built from some of this income. It not only treated patients from the 2,000 Falkland Islanders, but also foreign seamen from the fishing fleets. I noticed an injured Chinese when I was there. I also saw the hydroponic farm where in a vast greenhouse lettuces, tomatoes and cucumbers were grown. For us, buying fresh vegetables like that is only a walk to the corner shop. If almost every item of food has to be flown in by a Tristar, fresh lettuces are not such a priority and are therefore much appreciated.

Since then, the new secondary school has been built and the new swimming pool. Roads are being improved. These are all projects done by the Falkland Islanders themselves from their own income. We have constructed the massive new airport at Mount Pleasant, with all its hangars and other facilities, where upland geese stalk importantly past the windows.

Now there is the exciting possibility that oil may be harvested. This would of course be of great financial benefit to the islanders, but they are concerned that they should have as much control over the operations as possible with special reference to the environmental concerns. Their islands are no bigger than the Principality of Wales, their population is far less, but they are just as British. I remember sitting in the council chamber at Port Stanley and looking out of the window at the Union Jack flying outside while an albatross glided past in the wind. The Falklands, while seeking hands-on control of their own affairs, are very much and very proudly British dependent territories.

4.18 p.m.

Lord Morris

My Lords, I too am grateful to my noble friend Lady Hooper for initiating the debate on this very important subject. She rightly alluded to the dependent territories conference which was held in London some weeks ago and which I am glad I attended. The points of similarity rather than the disparities appealed to me and were mentioned by my noble friend. Some were mentioned and some were not. One of the most striking is that except for the few territories such as Hong Kong and Antarctica, they are all islands. That similarity is very important because it predicates a need for the protecting territory—I prefer the term "protectorate" rather than "dependency", although it too has its disadvantages—to keep up to strength a proper strategic Royal Naval reserve. I shall return to that.

The other point is that the cultural, jurisprudential and linguistic ties are the similarities which are of vital importance. That brings me straight to my noble friend Lord Torrington. I was delighted to learn that he is to visit the Falkland Islands with my noble friend Lord Newall. I assure my noble friend Lord Torrington that if he states what he believes to be the very strong case for the Argentinian view with regard to the future of the Falkland Islands, he will be assured of a very warm welcome there.

The point is that the wishes of the Falkland Islanders are the only wishes that are important with regard to their future. That is found in a very important principle, the one important principle that has flowed since the formation of the United Nations after the last war—that is, the principle of self-determination. That is absolutely key. It is not for Her Majesty's Government, still less for the people of the United Kingdom and still less for my noble friend, to suggest to the Falkland Islanders what should be their future. That is why that point, raised by so many noble Lords, is so important. Her Majesty's Government must continue to consult those people—and, God knows!, it is easy enough with small territories —with regard to their future.

For the second time in a fortnight, my fox has been most elegantly shot by my noble friend Lord Braine and other noble Lords. I do not hold that against him at all because it is always a delight to go hunting with him at any time. But he has been a great help to me because I can restrict my remarks to only one or two aspects with regard to the Falkland Islands.

One issue worries me considerably—that is, the recent news that the Government of Argentina have acquired from the United States of America some 36 Skyhawk fighter bombers. I can quite understand that Her Majesty's Government have been unable to deduce the purpose seen by the Argentine Government for acquiring those military weapons. Even if they have not been able to find that out, do the Government have a view as to why Argentina should need those weapons? I should be extremely interested to know also what is the view of Argentina's neighbours with regard to the acquisition of those weapons.

My noble friend Lord Torrington suggested that democracy is reasonably firmly rooted in Argentina. Democracy is a very, very tender plant. It must be rooted for century upon century until it grows into a massive and immovable oak. That must be understood. It is vitally important that we should treat our duties as the protecting power for all our dependent territories with great responsibility and care. I know that we do. For that reason, I am extremely grateful to my noble friend Lady Hooper for initiating the debate.

4.25 p.m.

Baroness Blackstone

My Lords, I too am grateful to the noble Baroness for introducing a debate on the dependent territories. I suspect that most people are unaware of them as a group, although everyone will know something about Hong Kong, Gibraltar and the Falklands. But how many people know anything about Anguilla or Pitcairn or Ascension?

When Churchill was Colonial Secretary, he was asked in a debate in another place, if the honourable Member could tell the House where the Virgin Islands are Not having a clue, he replied: I can assure the House that they are a long way from the Isle of Man". To generalise about those far flung territories in the Caribbean, the Atlantic, the Pacific and the Indian Ocean is difficult. Leaving out Hong Kong, as most noble Lords have done in the debate—in any event it will cease to be dependent territory in three years' time —the one thing which the remaining territories have in common is their very small populations. Indeed, the combined populations of the rest is less than 150,000. With the possible exception of Bermuda, few of them would really be viable as independent countries. Therefore, they are likely to retain their existing status for the foreseeable future. I have no doubt that when the noble Viscount replies he will tell the House whether he sees any likely change in the status of the dependent territories. I hope that he will reply in particular to the point raised by my noble friend Lord Pitt.

Because of the remoteness of some of them and their small size, the per capita costs of maintaining them can be high, although the absolute cost is of course small. Noble Lords will recall that at the time of the Falklands war it was claimed by some commentators that if each inhabitant were to be given £0.5 million and transferred to a Commonwealth country of his or her choice, it would be much cheaper than continuing to maintain the islands as a dependent territory. That is true, but it is not a very practical or desirable proposition in the circumstances.

As well as being directly responsible for their defence and external affairs, in some cases we are also responsible for their policing and their systems of justice. The UK also provides capital aid and technical assistance.

The Labour Party recognises the close historical links between the UK and its dependencies, but believes that relations with them need to develop according to changing circumstances. Meanwhile, we accept that we have a continuing responsibility to them, and believe that the aid programme should promote their sustainable development. Perhaps the Minister could outline the objectives and priorities of our aid programme in the territories and tell the House what the total level of our aid to them is in 1993–94 and what it is expected to be in 1994–95? I understand that the constitutions of several of the dependent territories have been reviewed over the past 10 years. I believe that the constitution of the British Virgin Islands is currently being reviewed. It is important that the political development of each dependency should be based on democracy and respect for human rights. One aspect of human rights that is of concern to us on these Benches is the continuing use of the death penalty in Bermuda. Can the Minister confirm that in spite of a decision to abolish capital punishment in the dependent territories, it has been retained in Bermuda? If so, can he explain why, what offences are still punishable by death in Bermuda and what plans there are, if any, to abolish the death sentence? I understand that a debate in the Bermuda Parliament on this matter has been pending for some time.

Having made some general points, I should now like to raise some questions concerning individual territories. Like the noble Lord, Lord Morris, and others, I begin with the Falklands. As has already been mentioned, since the change in government in Argentina in 1989, relations have improved and by 1990 all the remaining obstacles to the establishment of normal diplomatic relations have been removed. Equally important, a new security system for the South Atlantic has been established which is now firmly in place. That new framework has allowed the lifting of the Falkland Islands protection zone and has, I am glad to say, taken the tension out of the area. Like the noble Lord, Lord Torrington, we greatly welcome that. We welcome also the improvement in our relations with Argentina and the recent agreements on the conservation of fish stocks. The more intensive system of data exchange with Argentina, monitoring fish populations, and agreements on permits for foreign vessels are also helpful, as is the agreed establishment of a conservation zone where fishing is banned. Perhaps the Minister could comment on projections of fishing revenue, and say how much of the revenues, if any, are received by the UK.

Building on such agreements we hope that talks on the future of the Falklands can take place, without prejudging the outcome, in order to try to find a solution acceptable to both governments, though I recognise that the gap between us on the sovereignty question is still large. I also accept that any such settlement must protect the interests of the Falkland Islanders—as other speakers have already said—and that they should be represented in any such negotiations.

There is still a large garrison of British troops in the Falklands. Can the Minister tell the House what the future plans are for the garrison and whether, in the light of our better relations with Argentina, there are any plans to reduce it? Can he also tell the House what is the current annual cost of maintaining it? The Falkland Islands economy must continue to be developed. The major question on the economic future of the Falklands concerns oil. Surveys round the islands suggest there may be substantial reserves, capable of producing perhaps as many as 500,000 barrels a day. Can the Minister tell the House what plans there are to start drilling and what the revenue position for the UK would be were there to be substantial oil finds, given the UK's considerable defence expenditure on the Falklands?

I shall now turn to Gibraltar which, again, a number of other noble Lords have already mentioned. Indeed, the noble Baroness, Lady Hooper, focused on Gibraltar in her speech. While supporting the 1969 constitution which was drawn up after 96 per cent. of Gibraltarians voted to stay British, the Labour Party favours continuing negotiations with Spain. We therefore support the Brussels agreement which enables the three governments to meet to discuss a range of issues. It was rightly accepted that sovereignty would also be discussed. I regret that the Prime Minister of Gibraltar has not accepted this agreement and that since he came to power he and his government have not participated in any of these meetings. I hope, however, the Minister will be able to confirm that they will continue.

After many years of dispute with Spain over the airport and over ferry services to Algeciras, progress was made with an agreement in 1987 but unfortunately opposition from the Gibraltar Government to implementation of the airport agreement has blocked progress, leading the Spanish Government to retaliate by suspending the ferry service. Can the Minister tell the House what pressures are being brought on the Gibraltar Government to reconsider their position on the airport?

Although I have no particular wish to visit British Antarctica—it is a little too cold for me—a tour of many of our dependent territories would be an enticing prospect. I would particularly like to call on the Pitcairn Islands, which have a population of 58—descendants of the mutineers on the "Bounty". According to an article in the Guardian the islands, are kissed by unwavering trade winds and bathed by warm seas of translucent blue. The sunshine gives way every few days to brief periods of dramatic winds and downpours of sweet-smelling rain … Tropical fruits … grow in wild abundance, and are free for the taking". Unfortunately—or perhaps fortunately depending on your perspective—tourism is not on as the Pitcairns are 1400 miles from Tahiti and there is no airstrip. Much of the revenue of the Pitcairns has derived, I understand, from stamp collectors and from selling curios to passing ships. But ships seem to pass less frequently and in the Guardian's words, philately is a dying pastime". Apparently, as a result the islanders are feeling neglected and when the governor last visited—he is otherwise our High Commissioner in Wellington—they presented a petition raising the possibility of transferring their allegiance to France. Can the Minister confirm that story and say what has happened since?

Unlike the Pitcairns, tourism is central to the economies of all the Caribbean dependent territories, with the possible exception of Anguilla. There is, however, a further important and growing source of economic development in the shape of offshore banking. The Cayman Islands are well established as a tax haven and now boast the fifth largest banking business in the world. Offshore finance will soon overtake tourism in the Virgins and in the Turks and Caicos Islands. While this may contribute to the wealth of these islands, it raises serious questions which I hope the Minister will address in his reply.

There is a desperate need for proper regulatory procedures to cover not just banks but also insurance, trusts and company managers. I hope it will be tackled as a matter of urgency. Can the Minister tell the House what the timetable is for enforcing guidelines for the licensing of offshore banks? Further, there is a serious problem as regards money laundering, particularly in the Caymans. Although standards may now be higher, are they high enough? Further, there is an associated problem surrounding the confiscation of the proceeds of drug trafficking. If they are not resisted, in the medium term powerful drug interests will serve only to destabilise the countries concerned.

The Secretary of State for Foreign Affairs is reported to have told a conference on the dependent territories last autumn that Britain seeks an equal partnership with its dependencies through what he called "qualified nationhood". I cannot dispute that. Clearly they must have as much self-government as possible. At the same time, this requires a responsible approach by the local governments, including a willingness to react reasonably to proposals made by their neighbours—for example, for improved communications—in spite of the territorial claims that these neighbours may be making.

The dependent territories themselves must recognise that compared with many rather larger former colonies which are independent, they are in an enviable position. As the world grows smaller some of the remoter islands such as St. Helena or Tristan da Cunha, and even the Pitcairns may be able to follow the Caribbean dependencies into tourism. They will, however, understandably want to protect their special environments from being spoilt by unthinking and unplanned development. We, too, have a responsibility to try to help them achieve that. If we succeed, future generations will be grateful to us.

4.37 p.m.

The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne)

My Lords, like everyone else I have found this debate particularly interesting if only because it strays somewhat outside my usual patrolling range in your Lordships' House. I must say that it makes a most agreeable change—a busman's holiday—from the usual defence matters which I attempt to answer for your Lordships.

I am all too conscious of a difficulty which I believe faces me this afternoon. It is the following. This is a short debate—a two-and-a-half hour debate—and your Lordships have this afternoon raised a great many questions. I must endeavour, with your Lordships' permission, to steer a difficult course as regards attempting to answer all the questions that your Lordships have asked, given that I have a little under an hour, theoretically, in which to do so subject to what my noble friend Lady Hooper would wish, and given the proper strictures which many of your Lordships have already delivered to me saying how disgraceful it is if anyone speaks for more than a quarter of an hour in your Lordships' House. I will expect the usual grumbles from your Lordships if I stray too much into the realm of detail in my attempts to answer the questions that your Lordships have asked me.

First, I agreed with my noble friends Lady Hooper and Lord Braine when they commented on the broad range of subjects encapsulated in any debate on the dependent territories. To cover the subjects raised one would have to be something of a polymath. However, encouraged by my noble friend Lady Hooper, I shall leave out the subject of Hong Kong, particularly as I understand that the Third Reading of the British Nationality (Hong Kong) Bill will take place in your Lordships' House on 14th February next.

It is a truism to say that Her Majesty's Government maintain considerable interest in the dependent territories. As my noble friend Lady Hooper herself pointed out, that was confirmed by our strong support for the dependent territories conference, which was rather catchily entitled "Progress Through Partnership", held in London last November. I hope that the very title will encourage the noble Lord, Lord Beaumont, in the light of the remarks that he made in the course of his speech. The conference was highly successful. As I am sure your Lordships know, it was organised jointly by the governments of the Falkland Islands and Gibraltar. It gave publicity to the dependent territories as a group and showed their place in today's world as responsible communities which, as many of your Lordships pointed out—and I shall deal with some of the particular instances in a moment—offer many opportunities for trade, investment, tourism and, I agree with the noble Baroness, Lady Blackstone, financial services.

I also say to the noble Baroness, Lady Blackstone, in answer to her question, that demands on this country's aid programme are very high. Nevertheless, ODA support for the Caribbean dependent territories has increased from just over £16 million in the 1991–92 financial year to nearly £22 million in the current financial year. I gathered from the sentiments expressed during the course of the debate that our aims are consistent with the aims that your Lordships would like us to pursue. Those aims are to promote sustainable economic and social development through the provision of appropriate public infrastructure and technical assistance and trying to increase the supply of skilled manpower, which was a theme which ran through much of what your Lordships had to say this afternoon. It is particularly important that we should endeavour to increase the supply of skilled manpower in the fields of education, health, physical planning and financial management and to improve the efficiency of the public service.

Much has also rightly been made by your Lordships of the democratic nature of the dependent territories. I was particularly struck by the remarks of my noble friend Lord Braine and the noble Lord, Lord Beaumont, in that regard. That almost seems a contradiction in terms in view of the colonial past. I should like to emphasise that all our dependent territories enjoy that status by choice. Our relationship with them is, as far as possible, one of equal partners. We aim to provide for economic independence. Should they wish to assume political independence, economic independence is clearly a helpful prerequisite, to say the least. Whatever the United Nations may say to us, that political independence is only available if any particular territory should wish it. As the noble Baroness, Lady Blackstone, pointed out, not all of them are necessarily suited to it. Apart from the case of Bermuda, to which I should like to return in a moment, I do not know of any specific proposal for that to happen in the dependent territories.

My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs gave the keynote address at the November conference to which I referred. During the course of his remarks he said that the assumption current in the 1950s and 1960s that granting independence was the only way to make progress had evaporated. In the context of what I am saying that is important. Perhaps it would be fair to say that independence is a different concept now from that at the time when independence was overwhelmingly fashionable. All of our dependent territories, therefore, remain dependent by choice. Hong Kong is a special case, for reasons of which your Lordships are well aware, and the existence of the Treaty of Utrecht—in particular Article 10 (my history is a little rusty on this point, but I seem to remember that it is Article 10)—makes Gibraltar unique. Our relationship with those territories is one of equal partners. It is worth emphasising that point because it sets the environment in which we approach the various specific questions which your Lordships raised in this debate and which I should now like to try to answer.

I was impressed by and listened with considerable care to the noble Lord, Lord Pitt, who spoke from the depths of his experience in matters Caribbean. I can tell the noble Lord that we already encourage a great deal of co-operation and exchange among British Caribbean dependent territories and between them and the independent Caribbean states. Of course we welcome and encourage such forms of practical co-operation as seem appropriate and as are proposed from within those states themselves. There has been renewed interest in the concept of Caribbean integration. There is a proposal to form an association of Caribbean states which would include some of the central and south American countries. The noble Lord is already aware of that and he referred to it in the course of his remarks. A technical meeting to look further at establishing such an association is due to take place next March in Barbados. I know that the noble Lord, Lord Pitt, will take a keen interest in its proceedings.

More generally, I was struck by the particular interest shown by your Lordships in the question of the Caribbean. My noble friend Lady Hooper and the noble Lord, Lord Beaumont, referred to it. We have established a United Kingdom ministerial group to oversee the question of the relationship between the United Kingdom and the dependent territories in the Caribbean generally, and a regional office has been established in the Caribbean known as the Dependent Territories Regional Secretariat. This was set up to administer United Kingdom aid programmes in the dependent territories and to take forward the continuing dialogue with the dependent territory governments.

My noble friend Lady Hooper also rightly drew our attention to the importance of investment in Caribbean countries. Investment by British companies has, I regret to say, been rather limited. However, there have been some gratifying examples. Cable and Wireless operates sophisticated communications systems in the islands and Barclays Bank has a substantial presence in the region. However, companies from North America have taken advantage of the offshore financial structures in the territories, to which the noble Baroness, Lady Blackstone, alluded. That has been so particularly in the Cayman Islands, Bermuda and the British Virgin Islands and has served to promote their business structure, thereby contributing to the income of the islands' administrations.

It is worth drawing your Lordships' attention to another example. In the Turks and Caicos Islands the local government have recently announced the formation of an inward investment agency to act as a focal point for attracting foreign investment into the territory. If that pattern proves to be successful it can be extended to other territories. The experiment can be imitated and other territories can profit from the lessons learnt from it.

My noble friend Lady Hooper also drew attention to the relationship of the dependent territories with the European Community. As she knows—probably far better than I do with her European experience—the dependent territories are associated with the Community by Part IV of the Treaty of Rome as "Overseas Countries and Territories". As a result of that status they were allocated some money from the European Development Fund. They were eligible for European Investment Bank loans and enjoyed similar but slightly better trade preferences to those offered to the ACP countries.

Naturally enough, Her Majesty's Government welcomed the aid and trade provisions of the 1991 OCT decision. I am particularly glad that we were able to maintain the 18 per cent. share of the benefits of EDF money which goes to the British OCTs. The EDF will make grants worth about £16 million to our OCTs over the next five years. About £40 million in EIB loans is also available for all OCTs.

It is right that those grants should be focused on the poorest territories. We are encouraging our territories to liaise closely with the Caribbean regional representatives of the European Commission, and our own officials in the region, to produce good project proposals. Of course the Community wishes to promote regional co-operation but it is not always ready to agree allocations for regional projects. I hope that our territories, working alongside those of the Netherlands and France—I come back to the point made by the noble Lord, Lord Fitt—can work up good project proposals.

It is worth emphasising that the trade regime is the most liberal granted to any non-Community territories. I refer to free access for any OCT goods. Indeed, I am pleased to see that there are special arrangements for rum. in some cases there is free circulation for third country goods. We shall keep in close touch with our territories to help them exploit that important opportunity.

I have promised that I would refer to the question asked by the noble Baroness, Lady Blackstone, about financial regulation. It is important. As I have already made clear, we do not want to undermine the economic development of the Caribbean dependent territories. However, we need to ensure that the development of offshore finance is carried out responsibly and in a way which will attract high quality companies and products and will offer a sustainable contribution to economic development.

We all know how difficult it is to control the activities of tax havens. Therefore in the wake of the BCCI and other financial scandals, standards of financial regulation are naturally being raised world wide. It is important that the dependent territories raise their standards accordingly. In that I am wholly in agreement with the noble Baroness. It is important because we must prevent bad money, driven out of other jurisdictions, ending up in their offshore sectors and, as a result, the territories acquiring a tarnished reputation, resulting from weak regulation, which can take years to restore.

My honourable friend the Economic Secretary, Mr. Nelson, visited the Turks and Caicos Islands from 24th to 27th September 1993 and the British Virgin Islands from 29th to 30th September last year, too. I am sure that the noble Baroness will be pleased to hear that in both jurisdictions he stressed the need to make proper financial regulation a priority.

It is perhaps worth adding in this context that in his report into the supervision of BCCI, Lord Justice Bingham took the view that the single most important lesson arising from BCCI was that banking group structures which deny supervisors a clear view of how business was conducted should be outlawed. The Caribbean dependent territories have now revised their bank licensing guidelines to address the issue and are considering the issue of international regulatory co-operation.

I am conscious of the march of time. However, if your Lordships are still feeling patient with me I should like to address myself to a couple of other matters. Many noble Lords have quite rightly been concerned with the question of the Falkland Islands. A number of points were raised during the course of your Lordships' remarks. I was particularly interested in the remarks of my noble friend Lord Braine about what he seemed to think would be an Atlantic labour free market. He mentioned the great qualifications of the St. Helenans and the Caribbean populations to help with the development of the Falklands. That is an interesting idea. I am sure that my noble friend's suggestion will be noted in places where it can do most good.

Underlining the question of the Falklands is the subject of sovereignty. Perhaps I may stress, as one who in another place enthusiastically supported my noble friend Lady Thatcher in her commitment to recovering the islands, that the British Government have no doubt whatever about their sovereignty over the islands. Her Majesty's Government are committed to defending the islanders' rights to determine their own future. I can certainly reassure my noble friends Lord Boyd-Carpenter and Lord Morris in that respect. With regard to the inquiry of the noble Baroness, Lady Blackstone, I refer her to what I am told is the salesman's answer to a question about the power of a Rolls-Royce: "What is its horse power?"—"Enough". The commitment that we will make to defend the islands and what resources we shall commit to it are just that. We keep the matter under continuous review. We do not wish to spend more defence pounds in the South Atlantic than we have to. But we shall certainly do what we have to do to counter any threat that arises.

In that respect it is important that I make our position clear with regard to the sale by the Americans of A4 Skyhawks. The issue was raised by my noble friend Lord Morris. The United States is committed to consulting us over sales of major equipment to Argentina. The most recent discussions have centred on the sale of 36 second-hand A4 Skyhawks equipped with an advanced radar. It is the advanced radar which has been the subject of most British worries. There has been a number of high level exchanges. In the end, the United States has decided to offer the aeroplanes to the Argentinians. However, they will be equipped with a less advanced radar than in other models of the aeroplane sold around the world. We have told the Americans that we are content with their proposal to sell the Skyhawks to Argentina equipped with a radar with a specification which does not cause us concern. There remain question-marks, of course, over future upgrades to the equipment, but those are not in prospect at present and will be subject to further discussion with the Americans as and when necessary. In that context it is important that we should not be seen merely to be waving an aggressive stick at the Argentines. A number of your Lordships have made that point; and I wholly agree with it.

The noble Baroness, Lady Blackstone, referred to the question of oil and fisheries. My noble friends Lord Torrington and Lady Strange also referred to fisheries. My noble friend Lord Braine waxed eloquent on the subject of oil and fisheries too. It will be several years before we know whether there is oil around the Falklands. However, as my noble friend Lord Braine pointed out, seismic data that has so far been analysed is extremely encouraging. We have given no undertaking to co-operate with Argentina over the exploration or exploitation of such oil if indeed it is present. However, it is important for us to emphasise that we understand the advantages of that co-operation, and for me to repeat our undertaking that the door to co-operation remains open. We should like to think that that was a realistic and attractive possibility.

In terms of fisheries, co-operation with Argentina is to the point. We co-operate with the Argentinian authorities in the South Atlantic Fisheries Commission on measures to ensure conservation of marine resources of the South West Atlantic. Conservation is essential to the sustained development of the fishery industry. The agreement which we reached in November 1993 is good for the islands. The SAFC meeting in October 1993 agreed to increase the number of foreign flagged vessels which can fish under licence in Argentine waters in the area below 45 degrees south, and at the same time it set a total catch limit for illex squid. The number of licences which Argentina may issue in 1994 has been increased from 45 to 80. The catch limit in Argentine waters has been set at 220,000 metric tonnes and in Falklands waters at 150,000 metric tonnes. There is, however, no limit to the number of licences that may be offered in Falkland waters. Perhaps I may quickly turn to two other questions.

Baroness Blackstone

My Lords, before the Minister leaves the Falklands' oil and fish, perhaps he could answer my question on what the UK share might be in existing revenues from fishing licences and potential future revenues from oil.

Viscount Cranborne

My Lords, I am afraid that I am not able to give the noble Baroness a specific answer; I shall make further investigations. It is not an easy question to answer, as she will readily understand and if I can reach something near an appropriate estimate, then, of course, I shall write to the noble Baroness and put the answer in the Library. Perhaps she will allow me to leave it like that.

There are two other questions which noble Lords raised appertaining to Bermuda and Gibraltar. The noble Baroness, Lady Blackstone, asked me about capital punishment in Bermuda. As she is well aware, Bermuda retains capital punishment for premeditated murder, although there have been no executions since 1977 and sentences are, I believe, normally commuted to life imprisonment.

The noble Baroness will also know that a national referendum was held in August 1990. The voter turn out was, perhaps surprisingly, only 33 per cent. There were 8,536 votes in favour of retention of the death penalty and 2,237 in favour of abolition. We have expressed our hope that Bermuda will come into line with the Caribbean dependent territories and introduce and enact legislation to abolish capital punishment. However, I feel bound to ask noble Lords what they think the result of a similar referendum would be in this country.

On the question of Bermuda airport which my noble friend Lord Newall raised, I can assure him that Her Majesty's Government have already offered Bermuda help and advice on assuming responsibility from the United States of America for the running of the international airport. We realise that the withdrawal of that facility by the United States authorities is something of a shock—both financial and organisational—to the Bermudan authorities. Therefore, we remain determined to keep in close touch with the Bermudan Government on the issue. Their Minister of Transport visited the United Kingdom at Her Majesty's Government's invitation in January this year to talk, among other things, about the airport's future. I hope that my noble friend will take some comfort from that.

My noble friend Lord Newall also referred to the closure of HMS "Malabar" in that context. As concerns the Bermudan economy, it is a much smaller question, as I am sure he will know. It is important in this context to emphasise only that anyone who tries to use the fact of that closure as signifying a weakening of the tie between Bermuda and the United Kingdom is mistaken.

My noble friend also raised the question of independence. I merely wish to say in answer to his remarks that it would be entirely for the Bermudan Government to demonstrate that the wishes of the population had been clearly expressed after a campaign in which the issues had been fully aired. Indeed, the preferred course may be a referendum with a stipulated minimum participation, but that is a matter entirely for the people of Bermuda.

Perhaps I may turn now to Gibraltar. My noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Blackstone, asked me about the Gibraltar-Algeciras ferry. The Government believe that an operator willing to run a service between Gibraltar and Algeciras should be allowed to do so, particularly as both points lie within the borders of the European Community. All I can say to my noble friend is that we regularly raise the matter with the Spanish Government and we hope that the question will be able to be resolved fairly shortly. There is little that I can add to that, but I share my noble friend's hope that we will be able to restore a ferry service which, as he pointed out, is greatly for the convenience of everyone who frequents that part of the world.

Lord Boyd-Carpenter

My Lords, perhaps my noble friend will allow me to intervene. Have the Spanish Government given any reason for their action?

Viscount Cranborne

My Lords, not that I am aware of. Noble Lords made a number of points about Gibraltar. The matter is complicated and I am already conscious of having trespassed for far too long on your Lordships' patience. However, I wish to refer to the speech of the Premier of Gibraltar at the dependent territories conference on 24th November last and a question raised by my noble friend Lady Hooper. As she and a number of other noble Lords pointed out, Gibraltarians' right to self determination has to take into account the provisions of the Treaty of Utrecht which give Spain the right of first refusal. I am afraid that I cannot agree with noble Lords who feel that we should override that provision. It means that independence is not feasible without Spanish consent. We should remember that Gibraltar has a high degree of self government already and the United Kingdom fulfils its obligations to dependent territories under Chapter X1 of the UN charter.

I should like to emphasise yet again that Her Majesty's Government adhere to their commitment to the people of Gibraltar, a commitment inherent in the 1969 constitution, that they will not be allowed to pass under the sovereignty of another state against their freely and democratically expressed wishes.

As my noble friend Lady Hooper mentioned, Gibraltar is part of the European Union by virtue of the United Kingdom's membership. Specific exemptions on accession were made at Gibraltar's request so, for example, Gibraltar is not in the European Union for the purposes of common Customs, VAT, agriculture and fisheries. As my noble friend pointed out, it does not enjoy separate representation in the European Parliament. All we can do is to rely on people like my noble friend, who are knowledgeable in the European Parliament, to look after the interests of Gibraltar assiduously in that assembly and for the United Kingdom to look after its interests in Brussels.

The noble Baroness, Lady Blackstone, also raised the question of the airport agreement. Her Majesty's Government support the agreement which they believe to be in the best interests of Gibraltar and her neighbours. We are, however, aware of Gibraltar's reservations and we have given an assurance that we will not force the agreement on Gibraltar. We will continue to work towards a solution which is acceptable to all parties through negotiations based on the mandate from my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs and his Spanish counterpart on 1st March last year.

My noble friend Lord Merrivale also raised the question of insurance. We are in discussion with the Government of Gibraltar about the necessary steps to implement these third insurance directives and to allow Gibraltar-authorised insurers the benefit of this passport.

The long-term political future of our dependent territories is very much in their own hands. They will remain UK dependencies for as long as, and only for as long as, they wish to. Nonetheless, they and Her Majesty's Government recognise that their long-term future lies both within the context of their geographical region—a point very much emphasised by the noble Lord, Lord Pitt—and on their historical ties with the United Kingdom. We therefore welcome and encourage the territories to seek to diversify their relations with external nations and donor organisations, particularly regional ones.

However, we have to recognise the problem for some dependent territories of unwelcome claims on their territory from larger neighbours. Such claims seem to most of us out-of-date, but they continue and they are one reason for the continuance also of dependence. It is, and I believe should be, a prime aim of British foreign policy to enhance the security and prosperity of the dependent territories. I assure your Lordships that we take both those aspects extremely seriously.

As to future dependent territories conferences, I understand that the organisers have canvassed those territories that were represented at the November conference on their views about a follow-up to the conference. I understand that the organisers are considering the possibility of a secretariat in London to enable territories' representatives to exchange ideas and practices. I believe that to be an interesting proposal, and I look forward to hearing more about it.

It has been an interesting debate. I apologise for taking so much of your Lordships' time in attempting to answer it. With your Lordships' permission, I close with a reassurance in answer to the question by the noble Baroness, Lady Blackstone. Perhaps my chauvinist heart is beginning to show, but I must say that I am rather horrified by the suggestion she made about Pitcairn Island. I can reassure noble Lords that we are not aware of any request by the residents of Pitcairn to transfer to France. No such request was put to the governor on his last visit. I am wholly confident that such a request will not be presented to him on his next one.

5.11 p.m.

Baroness Hooper

My Lords, I am most grateful to everyone who has participated in the debate. We have heard views based on personal knowledge and interest which have given us and, I hope, the Government specific insights into, and ideas about how to deal with, the needs of these territories. My special thanks go to the noble Baroness, Lady Blackstone, for underlining the allure of Pitcairn Island. I am almost convinced that I should become a regular reader of the Guardian.

I am particularly grateful to my noble friend the Minister for responding so fully and carefully to the questions raised. I am glad that he was not too much constrained by time on this occasion. His remarks will bring reassurance to people who, although they are spread throughout the world, are united by a traditional allegiance to the United Kingdom and through their participation in Commonwealth affairs. I feel sure that they will be reassured that the Government continue to respect the wishes of the peoples of the territories in respect of any change of status or moves to independence. That will be especially welcomed by the peoples of Gibraltar and the Falkland Islands. They also doubtless look forward to continuing consultation with the Government and to further progress through partnership.

I hope, as my noble friend Lord Boyd-Carpenter, put it, that not only the discussion itself but the fact that the discussion has taken place will be observed in the territories concerned and by those with designs upon them. In saying that, I do not wish in any way to exacerbate feelings or the development of our good relations with Spain and Argentina. I hope that a reasoned and reasonable discussion such as the one that we have had will be seen as helpful in resolving particular problems in relation to Gibraltar and the Falkland Islands.

Finally, I rather like the suggestion made by the noble Lord, Lord Beaumont, that this sort of debate should become something of an annual review. I hope that the usual channels here represented will take note. I beg leave to withdraw the Motion for Papers.

Motion for Papers, by leave, withdrawn.