HL Deb 12 July 1999 vol 604 cc80-96

7.35 p.m.

Viscount Montgomery of Alamein

rose to ask Her Majesty's Government what progress has been made in implementing the White Paper proposals for the overseas territories (Cm 4264).

The noble Viscount said: My Lords, we now move into what I hope will be less contentious waters. The change of name from "dependent territories" to "overseas territories" took place at the February 1998 conference in London, when the appointment of the noble Baroness, Lady Symons, was announced as the Minister responsible for the newly-named territories. The White Paper we are now considering was published in March this year after what must have been very extensive consultations. Whatever legitimate criticisms noble Lords may have about the concept and solutions contained in the report, I am sure that all noble Lords will agree that it is an extremely well presented document.

I am an admirer of the Foreign and Commonwealth Office. Its high-calibre officials are criticised frequently by senior politicians who should know better, but on this occasion the report has been beautifully prepared and the noble Baroness and her team at the Foreign Office are to be much commended.

Over the years we have had a number of debates about the different aspects of the dependent territories, most notably those introduced by my noble friend Lady Hooper. Rather surprisingly in view of the importance of the subject, this is the first time that the noble Baroness, Lady Symons, seems to have had an opportunity to speak on this report. I very much look forward to the remarks of speakers in the debate, whom I thank most genuinely. I shall briefly concentrate on general aspects.

The overseas territories are a diverse group, varying in size, population and geographical spread. They exist in the South Pacific, the North and South Atlantic, the Caribbean, the Indian Ocean, Antarctica and a rather important one at the southern tip of Europe; namely, Gibraltar. Having read the report, the only common factor running through the whole report that I could find was that the overseas territories are responsible for issuing extremely beautiful stamps, which frequently become collectors' items.

I have the impression that although the collective name has changed from "Dependent Territories" to "Overseas Territories", by and large the situation has not, inasmuch as they generally require an outflow of resources from the United Kingdom—however that may be disguised by the Treasury—with very little tangible benefit to this country.

Perhaps I may use the Falklands Islands as an example, as it is territory that I know best—despite the fact that I seem to be rather unpopular there. I find that there is a tendency to minimise the obligations and maximise the rights derived from this privileged status. I find that some of the Dependent Territories seem to suffer from the classic "have your cake and eat it" situation.

I accept that the Falkland Islands are the subject of a claim by Argentina. But it seems somewhat unreasonable that, while Argentine citizens can visit any British territory without let or hindrance, they are excluded from the Falkland Islands; whereas the islanders can freely go to Argentina, and indeed should do so in order to promote dialogue in an attempt to solve the problem that exists between the islands and their nearest continental neighbour.

Returning to the general, overseas territories are an historical legacy from our imperial past. They present a problem to which successive governments have tried to find a solution. The White Paper is another step forward in that direction. It is much to be commended. I wish it well, and look forward to what the noble Baroness, Lady Symons, will tell the House about developments that have taken place in moving this cause forward.

7.41 p.m.

Lord Bach

My Lords, I should like to congratulate the noble Viscount, Lord Montgomery of Alamein, for tabling this Question, and for opening the debate in so effective a manner.

I am something of a newcomer to your Lordships' discussions on these matters. However, I felt moved to make a small contribution after attending the annual conference of the Commonwealth Parliamentary Association on the British islands and Mediterranean region as part of the British delegation—indeed the only part of that delegation that came from this House. Our hosts were the Gibraltar branch of the CPA. The House will not be surprised to learn that the six days were full of hard work, late nights, a little controversy and a great deal more agreement. Three of the countries whose parliamentarians attended the conference are British Overseas Territories; namely, Gibraltar, the Falkland Islands and St Helena. I can safely say that all three were impressed by the White Paper and supported its conclusions. Obviously, the statement in the document that, fundamental to the new partnership fill remain the right of each territory to remain British if that is the wish freely and democratically expressed of their people", was treated as a significant re-statement of the understood position.

Other noble Lords will talk about St Helena and the Falkland Islands. I wish to address my few remaining remarks to Gibraltar. It would be easy for a first-time visitor to "go native" when faced with that mixture of charm and commitment that Gibraltarians, and particularly parliamentary Gibraltarians, use in persuading one of their case. Here, both government and opposition members of the assembly were as one, never missing an opportunity to put their case—and who can blame them?

I left Gibraltar with two clear impressions—perhaps conflicting, perhaps not. The first was the conviction, held by everyone I met, that the Gibraltarians are British and wish to remain so; and secondly, that geography, economics and history dictate that there should be close collaboration between Gibraltar and its citizens on the one hand and the Campo and its citizens on the other, for their common good. Indeed, it is an unnatural state of affairs where there is not that close collaboration. It seems particularly counter-productive for Spain—and by Spain, I think I mean Madrid—constantly to raise the issue of sovereignty and to cause general difficulties both for Gibraltarians and Spanish citizens who work in the colony.

The report of the House of Commons Foreign Affairs Committee offers many excellent conclusions and recommendations. The committee goes out of its way to praise the one Spanish national, Senor Estrella. the foreign affairs parliamentary spokesperson for the PSOE party and, importantly, a deputy in Andalucia. He is quoted as saying that the sovereignty factor overshadowed politics in Gibraltar, so preventing the communities either side of the border from developing a normal relationship. The report also quotes him as saying, in an article that he wrote for the Gibraltar Chronical, One can easily imagine some of the steps that, under a new environment, might be taken without permanent changes in the status quo: a return to normality in fishing activities, a stable and smooth passage at the La Linea gate, a joint. cohesive approach to the implications—positive and negative—of financial and other aspects of … Gibraltar economy, tourism, co-operation, including—why not?—assessing perspectives for a joint use of the airport". Surely the issue of sovereignty should be put on the back burner and co-operation between neighbours should be officially encouraged.

The British Government are almost literally caught between a rock and hard place in their dealings on the whole Gibraltar issue. Ministers are to be congratulated on keeping a steady nerve. I am confident that they will continue to do so.

7.46 p.m.

Lord St. John of Bletso

My Lords, I, too, thank the noble Viscount, Lord Montgomery, for having introduced this debate. I entirely concur with his introductory remarks that the White Paper is an extremely balanced and well prepared document. While I welcome the Government's intention to grant full citizenship to all residents of the Overseas Territories who wish to take it up—and it is by no means certain how many or how few wish to take up that option—I particularly support the Government's stated intention in the White Paper to ensure that these territories meet full international standards on financial controls, and more particularly on money laundering, transparency and co-operation with the law enforcement authorities. That will clearly require a modification of the secrecy laws in many of the territories to allow co-operation with the international investigations and the creation of licensing regimes to promote fair competition, as well as the establishment of an independent financial and regulatory authority in each of the territories.

The United Kingdom Overseas Territories Association claims that most of the financial measures, aimed predominantly at the Caribbean tax havens, are already in place. But it concedes that few overseas territories have independent regulatory regimes. Several of the territories have also not yet signed up to the Vienna convention on money laundering, but have certainly declared their intention to do so shortly. Financial regulation in Gibraltar, already mentioned by noble Lord, Lord Bach, has been shown to comply with international financial standards. Therefore, Gibraltar deserves its position as one of the leading financial services centres in Europe.

While several of the overseas territories clearly need to improve their financial controls, it is not right that they should all be accused of promoting tax evasion. I hope that the Government will ensure that the proposed improvements in financial regulations will be implemented in a sensitive manner. Too great an interference in the affairs of the overseas territories could lead to many funds and institutional investors in those territories relocating elsewhere, bearing in mind the perceived knock-on effect of European Union legislation. The White Paper notes that Britain has signed the 1997 EU Code of Conduct against "harmful tax measures" and that member states are committed to ensuring that the principles of the code are adopted in all the dependent territories.

Your Lordships will be aware that the European Union is endeavouring to implement measures to tax non-residents' savings and provide information on such income to other states. Although I support the move to tackle tax evasion, I do not share the view that all tax competition is harmful. If all the overseas territories are forced to comply with the proposed new EU measures, potentially it could cause irreparable damage to their economies and, more particularly, the financial services sectors of several of those territories.

In conclusion, I wholeheartedly support the call in the White Paper for a new partnership for progress and prosperity between Britain and the overseas territories. However, I regard the reference to modernisation as rather an anathema, as my perception of the last vestige of the British empire is that it is a thoroughly "unmodern" affair. Apart from the calls for tighter financial regulations to meet internationally accepted standards, I also welcome the call for improving human rights and encouraging sustainable development in these territories. Although the Government retain the option of imposing legislation, my hope is that the territories will implement these measures voluntarily in their respective assemblies.

7.53 p.m.

Baroness Young

My Lords, I too thank my noble friend Lord Montgomery for tabling this Unstarred Question. I very much share his support for the work of the Foreign Office and this report.

I speak this evening as president of the West India Committee. I wish to speak about the Caribbean region and the five overseas territories: the Turks and Caicos Islands, Montserrat, Anguilla, the British Virgin Islands and the Cayman Islands. I have three principal concerns. The first is the extent to which Britain's policy towards its overseas territories in the Caribbean takes into account the potential economic instability in the independent Caribbean which may impact adversely on our overseas territories. The second is the likely effect of post-2000 proposals by the European Commission on overseas territories. The third is the danger posed by proposed EU and OECD changes to taxation which threaten to undermine the viability of overseas territories that have built up sound reputations as offshore financial centres.

The White Paper contains three basic propositions; first, that all overseas territory citizens should be given the right of abode in the United Kingdom; secondly, that the UK's overseas territories will have to adopt, or have enforced on them from London, legislation enabling Britain to meet its international obligations on human rights; and, thirdly, that Britain expects its overseas territories to tighten the regulation and supervision of all offshore financial activities to ensure that they are not used for money-laundering or narcotics trafficking. The report also confirmed that Britain accepted the right of its overseas territories to remain British for as long as they wished and that independence would be, granted where this was an option". The import of the White Paper for the Caribbean overseas territories is that it confirms implicitly that Britain is a Caribbean nation through its decision to grant full British citizenship to the 92,120 citizens living in the five Caribbean overseas territories. This has substantial implications for our relations with the rest of the Caribbean. The reality is that Britain cannot now withdraw from or ignore developments in a region where it has to defend, in every sense, the interests of its own Caribbean people. It is a change which requires the Government to recognise that the UK's overseas territories and the independent Caribbean cannot be treated in isolation from each other. There is an urgent need for a policy that links the economic and political fortunes of the independent Caribbean to those of its own territories. The reality is that any political or economic instability in the Caribbean must, for all time, be of direct concern to the UK; in other words, the economic and political issues that affect the region, particularly the future of the banana, rum and sugar industries, must now be a matter of prime interest to the Government.

In addition, problems arise from the report of the European Commission that sets out its views on proposals for Europe's overseas countries post-2000. The Commission has made a number of proposals aimed at dealing with the anomalous situation in which Europe finds itself with the overseas territories of its member states.

Time does not allow me to go into all the details, but the report suggests two possible solutions. One is that overseas territories should be involved in the political dialogue that Europe proposes post-Lome with the ACP states. The other is that under the present arrangements between the EU and the overseas territories some kind of regional economic partnership should be agreed with ACP regions like the Caribbean to make them WTO-compatible free trade areas. That raises tremendous difficulties.

Finally, one comes to the apparent confusion within government over EU and OECD proposals for tax harmonisation which also include European offshore territories. The point is that any end to the well administered offshore financial activities in our overseas territories will not only damage terminally their economies, but also ensure that companies and individuals who use such facilities go elsewhere.

These are very big and important issues, and I am delighted that the noble Baroness, Lady Symons, is to reply this evening. We much look forward to her clarifying the Government's thinking on these points.

7.56 p.m.

The Earl of Carlisle

My Lords, I thank the noble Viscount, Lord Montgomery, for tabling this Unstarred Question and enabling us to probe the Government on what progress they have made in implementing the White Paper produced in March. It is always a pleasure for me to congratulate the Foreign and Commonwealth Office. I do so today in relation to the content of the White Paper. It is a user-friendly document. First, will the Minister ensure that, although each copy costs £12, it will be distributed to as wide a group as possible? I also hope that schools and universities will have an opportunity to study the document. Will the Minister ensure that tourist agencies and the British Council also purchase copies? Many of us, including myself, are woefully ignorant about our overseas territories. I declare my own ignorance, in that I have visited only one of these territories: Gibraltar, for a mere 24 hours.

One of the main benefits of the document is to point out that the overseas territories depend very largely on financial services and tourism. Last year 9,000 visited the Antarctic, whereas 6.5 million visited Gibraltar. It is likely that the number will decrease because of Gibraltar's relations with its northern neighbour, Spain. I shall deal with a number of matters relating to Gibraltar, some of which have already been touched on by the noble Lord, Lord Bach. First, we must ensure that Gibraltar transposes all of the EU directives. Of the total of 66, only four have not been transposed, including the 4th and the 7th. I ask the Minister how far Gibraltar has achieved implementing the 4th and 7th directives. What are we doing to help Gibraltar to do so? That is our duty.

Secondly, we have a duty to ensure that the constitutions, where possible, are revised. When will Gibraltar submit to Her Majesty's Government its proposals for the decolonisation of Gibraltar? What assistance, if any, will the British Government give to Gibraltar to remove the remaining vestiges of the colonial period?

Thirdly, defence is important. Britain has a responsibility to defend Gibraltar; and the British Government have the duty to maintain the integrity of Gibraltarian waters. Over the past 12 months the Government of Gibraltar have come under pressure from two sources: first, because of the fishing dispute; and, secondly, from verbal abuse by high-placed Spanish sources which have stated without foundation that the Rock is a centre for drug trafficking and organised crime. I am extremely grateful to the British Ambassador to Spain, Mr Torry, who, in the Spanish newspaper, El Mundo, in March of this year, robustly refuted those calumnies.

Will the Minister tell us what support we are giving to the Royal Gibraltar Police in their duties of fishery protection and the interdiction of smuggling? Will the Minister take on board the advice of the Select Committee on Foreign Affairs that funding be made available for at least one fast patrol boat for the Royal Gibraltar Police?

Finally, the Ministry of Defence owns the airport. It imposes high duties and high tariffs. They are disproportionate. Could they be reduced so that more carriers can afford to land at Gibraltar, thereby increasing tourism? Gibraltar is on the Continent of Europe. It is our only European overseas territory. The other overseas territories and the rest of the world look closely at how we deal with Gibraltar. They will take note, not of my questions, but of the noble Baroness's replies.

8.1 p.m.

Baroness Hooper

My Lords, I, too, welcome this all too short debate and thank my noble friend for initiating it.

I welcome, too, the White Paper. It took lengthy and careful consultation and preparation, but it gives an excellent analysis and a well documented record of the Dependent Territories, as they now are. I am pleased to think that the two debates held in your Lordships' House in February 1994, and June 1997, convinced the Government that it was necessary to think about the future and to set down the parameters of our ongoing relationship with the 13 remaining territories. During the debate in 1994, the late Lord Boyd-Carpenter said that it is not only discussion itself, but the fact that it took place at all which will be observed in the territories concerned and by those with designs upon them. It will be reassuring to the peoples of the overseas territories to see this White Paper even though they may not be happy with every line contained within it. I hope that the progress, about which we look forward to hearing from the Minister, will reassure them.

It should also be acknowledged that the overseas territories themselves have helped to bring about this state of affairs. The formation of the Dependent Territories Association, and the organisation of two conferences in February 1994 and February 1998, which first coined the phrase "progress through partnership" was an important and significant step forward. Gibraltar and the Falkland Islands, which were the co-sponsors of those two conferences, should be congratulated. They looked at the current status, examined relationships between them and their sovereign countries, and identified opportunities for growth and development. I believe that all that has led to the White Paper which I welcome.

I also welcome the progress in recent years on a number of issues which have been discussed during previous debates. I refer to the issue of citizenship and St Helena, about which no doubt we shall hear more shortly. The issue of funding, which arose from the problems over the volcano in Montserrat, was raised in a previous debate. People are now more aware of the situation regarding funding and the criteria relating to its availability.

The Falkland Islands have been referred to. I welcome the progress on this three-cornered relationship between Argentina, the Falkland Islands and this country. The meeting in May between the three parties appears to have been successful and a precursor of others. There has also been progress in relation to discussions on human rights, drug trafficking and money laundering.

There are still outstanding issues as regards Gibraltar. I welcome the remarks of the noble Earl, Lord Carlisle, and others. However, the issue of the European elections is of special interest to Gibraltar. I hope that the Minister will reassure us that when the next European elections take place in five years' time, the Gibraltarians will be able to exercise their proper rights. I hope, too, that the use of Gibraltar as an offshore financial centre will be clearer.

The White Paper is entitled, Partnership for Progress and Prosperity. I define partnership as a relationship which requires a fair balance of interests, two-way communication, and loyalty and support in times of need and emergency. The White Paper outlines that. I hope that it will not sit on a shelf and gather dust but will provide a useful basis for further progress in particular in the special relationship which we, the Commonwealth and the European Union have with these tiny democracies. I look forward to hearing from the Minister.

8.8 p.m.

The Earl of Iveagh

My Lords, first, I thank the noble Viscount, Lord Montgomery of Alamein, for introducing this timely and important debate. I hope that the Minister will be able to give us some clarification on the implementation of the White Paper.

With the limited time available, I wish to focus on St. Helena and her dependencies. The Saints welcomed the White Paper with open arms. The St. Helena Legislative Council unanimously passed the Motion on 24th March 1999, That this House conveys its sincere thanks and appreciation to the Secretary of State … for the commitment to restore full British citizenship to the people of St. Helena, and looks forward to full consultation on the other issues contained in the White Paper". The Government should be fully congratulated on putting right a fundamental wrong. However, if, due to a backlog of parliamentary business, the Saints will have to wait two years for the restoration of their passports, that wait will be unacceptable. Let us contrast that to the recently reported passport crisis which has been tackled by main Post Offices extending passports in the UK mainland, hotline numbers set up, and fast-track queuing. I realise that the context is different, but I urge the Minister to tackle the problem with the same imagination and sense of urgency. It must be remembered that the Falklanders regained their passports via a Private Member's Bill. I sincerely hope that the Government will remember the British Nationality Act (St. Helena) 1997 which sought to restore the Saints' nationality and found support across this Chamber. Indeed, it was passed unopposed in this House.

I turn now to education and training. During my visit to the island, I had the good fortune to visit Prince Andrew School. It was an uplifting experience: I saw committed teachers teaching to willing pupils. However, the teachers, through no fault of their own, sometimes lack formal teaching qualifications. That reflects an island-wide problem in that the training budget does not stretch far enough. For instance, just two of the 90 graduates from Prince Andrew School will this year go on to state-supported higher education or training. We should contrast that with the situation in Britain. A change in status to allow the Saints to be considered as British resident students would allow the St Helenian Government's budget to go much further. I would welcome the Minister's thoughts on this important matter.

Finally, I turn to the economic climate of the island. It is imperative to expand the economy, especially in the context of granting full British nationality. If there continue to be scant opportunities for the Saints, they will look elsewhere for employment. The 1998 census showed a decrease in the resident population of just under 10 per cent compared with 1987 and an increase in the number of Saints having to work off-shore. Without a solid economic base, increasing numbers of Saints will leave their island. It would be encouraging to hear the Minister not rule out the possibility that extra funds will be made available at some stage in the future for the establishment of an air strip, should the islanders want one.

I thank the noble Viscount for the opportunity to debate this important subject and I look forward to the Minister's reply.

8.11 p.m.

Lord Redesdale

My Lords, I shall begin as every other noble Lord has begun by thanking the noble Viscount, Lord Montgomery, for initiating this debate. However, I do not share the views that he expressed about the position of the Falkland Islands. Although it would be good if relations between the Falkland Islands and Argentina improved, I believe that access to the Falkland Islands must remain in the hands of the Falkland Islanders.

Some of the first debates that I heard in the House were about granting passports to those living in Hong Kong. The late Lord Bonham-Carter introduced a private Member's Bill on the subject, and I remain disappointed that it did not pass into law because I believe that an injustice was done.

I have visited only one of the Dependent Territories: Gibraltar. Many questions have been asked of the Minister in this short debate and I am conscious that, if I ask many more, she will not have time to respond. Therefore, I echo the sentiments expressed by the noble Lord, Lord Bach, the noble Baronesses, Lady Young and Lady Hooper, and my noble friend Lord Carlisle.

I have a few questions to ask the Minister this evening, and I shall concentrate first on the issue of citizenship. That matter was also raised by the noble Earl, Lord Iveagh, when discussing his Private Member's Bill concerning St. Helena. Will the Minister confirm when legislation introducing British citizenship for overseas territories will be brought forward? I realise that the Minister will say that that will take quite some time—I would be utterly amazed if she said that the legislation will be introduced in this parliamentary Session. However, I hope that that will be a priority at the beginning of the next Session. There will be a problem if it is left to the middle of the next Session because, as we discovered in this Session, business is often shunted off the agenda at a remarkable rate of knots. It is worth remembering that the White Paper appeared in March. As the noble Earl, Lord Iveagh, said, if it takes two years to introduce passport legislation, it will be viewed as a betrayal of the sentiments in the White Paper.

My second question concerns finance. The White Paper suggested that there be a financial review of the territories. What form would such a review take or what form has it taken—the White Paper states that the review will be conducted in 1999? Will the Minister explain what progress has been made with that review? The document, which provides information country by country, creates the impression that the overseas territories are doing extremely well economically and becoming independent financially. There are obviously some exceptions. A rather nice example was given of Pitcairn Island, whose sole source of external revenue comes from the sale of stamps.

I have one final question that I hope the Minister will answer when she replies to the debate. Will she give a short update on the situation in Montserrat and what further threats the volcano poses for the islanders?

8.15 p.m.

Lord Moynihan

My Lords, in thanking my noble friend Lord Montgomery, I fear that the well-deserved compliments addressed by my noble friend and other noble Lords to the Minister and the Foreign Office this evening may lead to the Minister's imminent promotion. While that is thoroughly deserved, it would be a great loss to foreign affairs debates in your Lordships' House. I hesitate to reflect that that compliment may well seal the Minister's fate, but I sincerely hope not.

When the White Paper was published, these Benches found much to welcome and support—particularly the provisions on aid, defence and financial regulations. We agree that the heart of the partnership between the United Kingdom and our overseas territories must be the right of the citizens of each country to self-determination. The decision of our overseas territories to remain British or to he granted independence must be theirs and theirs alone—so long as it is the freely and democratically expressed wish of the people of each territory.

Although united by their common desire to maintain a constitutional link, our overseas territories are spread across the world, from Gibraltar to St. Helena. 'Their populations range from more than 60,000 to the tiny population of Pitcairn, which has only 54 inhabitants. It would be helpful if the Minister could confirm that a "one size fits all" policy will not be imposed on the overseas territories, given the widely differing needs and challenges that they face. Perhaps the Minister will confirm to what extent it will be helpful to conduct a review of each territory's constitution to ensure that it meets the needs of that territory.

My noble friend Lady Hooper spoke about funding. Can the Minister confirm this evening that the concerns expressed in the report of the Public Accounts Committee of another place about the contingent liabilities of the Foreign and Commonwealth Office in the Dependent Territories—namely, that the British taxpayer continues to be exposed to very significant liabilities in the overseas territories—and the Foreign Office's admission that, everything is not wholly under control and that all risks are not weighed and properly covered", have been fully addressed by the Government's White Paper? As usual, my noble friend Lady Young concentrated on the Caribbean—and did so from a position of admirable knowledge and experience. The stability of our Caribbean overseas territories and of the entire Caribbean is critical. Perhaps the Minister will take this opportunity to develop one specific point that my noble friend raised: what progress are the Government making in developing a flexible post-Lomé European Union framework for regionalising arrangements that has the support of our Caribbean overseas territories?

Like the noble Lord, Lord Bach, and the noble Earl, Lord Carlisle, I take this opportunity to say a few words about Gibraltar in light of the publication last month of the Foreign Affairs Select Committee's report on Gibraltar. One of the noble Baroness's key tasks as Minister for the Overseas Territories is to create, a stronger, more structured dialogue between Britain and the Dependent Territories". It is not clear how that has been achieved within the context of the dialogue between Britain and Gibraltar. Indeed, we hope that Gibraltar is not an example of the Government's new strengthened relations and structured dialogue with our overseas territories, given the Foreign Affairs Select Committee's conclusion that: there have been occasions in the past when the British defence of Gibraltarian interests has not been as robust as it should have been". Does the Minister accept that the Government's failure to reject the present Spanish proposals for joint sovereignty, their refusal to introduce emergency legislation to extend the European parliamentary franchise to Gibraltarians in accordance with the judgment of the European Court of Human Rights and the Prime Minister's inconclusive summit with the Spanish Prime Minister in April have all combined to send a very mixed message indeed to the people of Gibraltar about the Government's commitment to their interests and future?

Given the Foreign Affairs Committee's general conclusion that Gibraltar has the right to be treated in the same way as any part of the United Kingdom so far as the benefits of EU membership are concerned, and that the Government should press with determination for the fullest protection of Gibraltarians' rights as citizens of the European Union, what explanations have the Government sought from the Spanish Government to explain the anomaly that allows the Spanish overseas territories of Ceuta and Melilla on the North African mainland to vote in European elections, but citizens of Gibraltar, which is part of the territory of the European Union, currently cannot?

While the Government's record on relations with some of her overseas territories is a chequered one, if the White Paper signals the implementation of clearly thought out and sensible policies—which I believe it does in many areas—which will enable our overseas territories to take advantage of new opportunities in the next century, to play a full role in the global community and to maintain the special relationship that exists between us while they chose to do so, then the Government can be assured of the support of these Benches.

8.21 p.m.

Baroness Symons of Vernham Dean

My Lords, I thank the noble Viscount, Lord Montgomery of Alamein, for introducing the debate this evening about Her Majesty's overseas territories. I must confess to noble Lords that when your Lordships' House decided not to take the Statement on the Government's White Paper in March, I was a little chagrined. It is usually my fate to make Statements in your Lordships' House on matters within the responsibility of my ministerial colleagues, and not my own, as is this matter. I am therefore particularly pleased to have the opportunity to discuss this subject this evening.

The importance of the White Paper is that it marks a turning point in our relations with our former colonies, marking the start of a new forward-looking relationship. This is symbolised by the change of the name from "dependent" to "overseas" territories. At its core are policies and plans which form the basis of a renewed contract between the United Kingdom and our overseas territories.

Before turning to the implementation of the proposals in the White Paper, as the noble Viscount's Question requests that I do, I should remind the House of Her Majesty's Government's attitude towards addressing the relationship with the overseas territories. This is not an easy matter, founded as it is on a colonial past and concepts of Empire which no longer obtain today. Indeed, such concepts often cause anger, and even offence on the one hand, and embarrassment on the other.

In the review we set in motion in July 1997, we wanted to look at three key issues. First, how we can modernise the relationship for the 21st century; secondly, how we can consult the overseas territories about the future and encourage good government in them; and, thirdly, how we can forge a real partnership between the United Kingdom and the overseas territories.

I turn, first, to modernisation. The noble Lord, Lord St. John of Bletso, was quite right: modernising relationships which are rooted in a colonial past is no easy matter at all. We need clarification of that relationship and we need to consider the role of the overseas territories in the wider world and their obligations to participate in the standards and the practices of the international community. I say to the noble Lord, Lord Moynihan, that we are under no illusions here. We do not believe that "one size fits all". Of course, some issues are generic, but all the overseas territories are different from each other.

In fulfilment of our part, we propose to change the status of the residents of the overseas territories to grant them British citizenship. I am delighted by what the noble Earl, Lord Iveagh, had to say on that in relation to St. Helena. I stress that this is a free-standing offer to the citizens of our overseas territories. We have not attached any conditions to this offer. It is not dependent on any other policies which an overseas territory's government may or may not implement. It will give proper recognition to their British connection, and their history, but give that recognition in the context of modern rights and obligations.

In answer to the question of the noble Lord, Lord Redesdale, it is our intention to pass the necessary legislation at the earliest date possible, and to that end discussions are in progress with the Home Office and other government departments to establish the principles and applications of the nationality aspects of the overseas territories Bill before drafting instructions are issued. The White Paper explained that this offer is not available to those who owe their British dependent territories citizenship to their connection with the British Indian Ocean Territory and the Sovereign Base Areas. The position of the former is indeed a particularly complex one, as most of them are citizens of Mauritius or the Seychelles, and are not in the same position as residents in our other overseas territories.

In the mean time, recognising that there will be some delay, we are considering measures to make current immigration procedures easier, a point raised by the noble Earl, Lord Iveagh. These measures are related to the permission to stay which are attached to a variety of training and employment schemes and to arrangements for representatives of the territories on official delegations to the United Kingdom and the European Union. We had an opportunity to discuss some of those aspects on the Question that I was asked in your Lordships' House on 7th June.

I turn now to the issue of consultation and the rights of the overseas territories to consider and discuss measures which affect their futures. My speech states that I will be chairing the first meeting of the Overseas Territories Consultative Council for chief Ministers. In the light of what the noble Lord, Lord Moynihan, said, I wish to say to the House that I very much hope that I will be chairing that meeting, which will take place in October this year. That and the annual meeting with the governors are part of the ongoing process of consultation. I should particularly like to pay tribute at this point to the work of our governors. They have a very difficult and delicate balance to maintain between the demands of Her Majesty's Government on the one hand and the local aspirations of the territories on the other, while of course ensuring that all the territories are well governed. It is a particularly difficult job to do in Foreign Office terms and particularly when we are talking about modernising the relationship. I believe that the overwhelming majority of them have discharged their duties in an exemplary manner.

Moreover, on the consultation front, in April the chief Ministers or senior representatives of the overseas territories and I participated in the European Union renegotiation of the provisions of the Overseas Countries and Territories Decision; that is, the OCT decision. We discussed how to gain favourable market access to the Community, aid allocation and the dialogue with the EU on areas of mutual interest, many of which pertain to the points made by the noble Baroness, Lady Young.

Ministers from the overseas territories have been invited to participate in the Commonwealth Ministerial Meetings as part of the British delegation. For example, Commonwealth finance Ministers are due to meet shortly in the Cayman Islands. A number of territories are also undertaking reviews of the provisions of their constitutions. We will consult and discuss the outcomes of those in due course. An example of this is the work that is already begun on redrafting the constitution of the British Virgin Islands.

I turn now to partnership. Partnership is fundamental to our relationship with the overseas territories. We have obligations to them which are central to our foreign policy. They enjoy security, protection and prosperity from the United Kingdom. However, partnership is a two-way street. I believe that that lay behind some of the remarks made by the noble Viscount, Lord Montgomery, but in a rather different way. Partnership brings with it expectations and obligations on both sides. Those obligations were spelt out by the Secretary of State in March, and include adherence to international standards of financial regulation, the application of basic human rights, adherence to the rule of law and democratic government, the control of international crime and ensuring that the same standards of public service and law enforcement apply as in the United Kingdom. We shall work with the overseas territories to ensure that their structures and practices are updated where needed to take account of civil and political liberties and modern methods of governance. We have a mutual interest in the control of international crime and the conservation of the environment.

The noble Lord, Lord Redesdale, asked particularly about financial issues. Much has already been done by the territories in meeting international standards. I highlight here the legislation on money laundering, international financial co-operation and work towards the independent regulatory authorities in Bermuda, the British Virgin Islands and the Cayman Islands, to which the noble Lord, Lord St. John of Bletso, referred. All those measures are to be very much commended.

However, as the noble Lord reminded us, there is much more to do. A meeting of financial secretaries from the Caribbean overseas territories was held in London on 16th June. This discussed the agenda on financial services regulations set out in the White Paper. Agreement was reached with the overseas territories and the Treasury on the logistics of carrying out the review of financial regulation. Draft terms of reference for the review of financial services regulation by independent experts have also been prepared. These will be discussed with the overseas territories before going out to tender.

Like the noble Baroness, Lady Young, the Government recognise the concerns and the burden that the OECD and EU proposals on harmful tax and other initiatives impose on the territories and their very real fears for the future of their financial services sectors. I assure the noble Lord, Lord St. John. and the noble Baroness, Lady Young, that we are working very closely with them to assist them in meeting those demands. Seminars have been held on the taxation measures and DfID has funded economic impact studies in Anguilla, the British Virgin Islands, Montserrat and the Turks and Caicos Islands.

The Foreign Office, the Treasury and the Financial Services Authority have collaborated to produce guidance to the overseas territories on how to meet such international standards. The guidance is being discussed in detail with the overseas territories at a seminar on 12th and 13th July. We believe that that collaborative approach will enable Britain to meet its international obligations and to ensure that we put up a common front against fraudsters, tax evaders, money launderers and, of course, those who traffic in drugs.

As regards human rights, we expect our territories to meet their international obligations in the area of human rights. We expect Bermuda to abolish capital punishment for murder; Bermuda, the British Virgin Islands to abolish judicial corporal punishment, and. the relevant Caribbean territories to decriminalise private homosexual acts. A delegation from the FCO will visit the overseas territories later in the summer to discuss taking forward the human rights provisions of the White Paper and we shall review progress in the territories at the end of the year.

I can assure the noble Lord, Lord Moynihan, that the Government are looking at the whole question of contingent liabilities. We have done it and continue to do so. Those liabilities change, as the world around us changes, particularly in the arena of financial services. However, I assure the noble Lord that that is very much to the forefront of our minds.

I have mentioned the importance of the environment and of combating international crime. We have had some notable successes on drug seizures in our overseas territories and there is also the issue of sustainable development. I was asked specifically about the position in Montserrat. The volcano is relatively quiet, but the volcanologists have indicated that pyroclastic flows continue from time to time on an ad hoc basis. I am happy to say that we have been able to ensure that £114 million in aid has gone to Montserrat over a five-year period, dating back the past two years and protracting forward three years.

I assure the noble Baroness, Lady Young, that we are looking at all the Caribbean countries in the context of what is happening in the Caribbean in general. The noble Baroness and I discuss the issue very often. She knows how much work is being undertaken in the FCO in that respect and I assure her that we are extremely vigilant.

I say to the noble Viscount that as regards the Falkland Islands, in May there was discussion on a wide range of issues. The Foreign Secretary invited the Argentine Foreign Minister and the Falkland Island communities to London for a further round of talks tomorrow, 13th July. I cannot anticipate the outcome of those talks, but I am sure that we all hope they have a positive outcome.

I turn to Gibraltar. Your Lordships, particularly the noble Baroness, Lady Hooper, and the noble Lords, Lord Moynihan and Lord Bach, are rightly assiduous on the issue. I do not accept that there is any doubt about the Government's commitment over Gibraltar. Her Majesty's Government stand by their commitment to the people of Gibraltar as set out in the preamble to the 1969 constitution. The Government will never enter into arrangements under which the people of Gibraltar will pass under the sovereignty of another state against their freely and democratically expressed wishes. That commitment is absolute and I say that as clearly as I can to my noble friend Lord Bach in relation to the points that he made. But of course that is a different issue; we are all familiar with the points in the Treaty of Utrecht.

As regards the parliamentary voting rights—an issue raised by the noble Baroness, Lady Hooper, and the noble Lord, Lord Moynihan—our representative in Brussels, Sir Stephen Wall, has put forward our proposals in the appropriate forums about the changes we believe are necessary to the 1976 Act.

The White Paper is available. I can tell the noble Earl, Lord Carlisle, that it is available on the Internet at www.fco.gov.uk and I hope that he and others will be able to look at it there.

The White Paper is not just about immediate action; it is about developing a continuing relationship based on dialogue and mutual commitments and obligations. We have reformed the way we handle the needs of the overseas territories, making sure that they have proper points of contact and a clear voice not only here in London but, very importantly, in Brussels, too. With the implementation of these policies, I believe that we have strengthened our relationship with the territories, that we have a constructive dialogue with them for the future, and that we can look forward to developing these relationships with renewed confidence.