HL Deb 18 May 2004 vol 661 cc720-36

7.40 p.m.

Baroness Hooper rose to ask Her Majesty's Government what plans they have to make changes in the overseas territories following the meeting of the Overseas Territories Council 2003.

The noble Baroness said: My Lords, the British Overseas Territories comprise Anguilla, Bermuda, the British Virgin Islands, the Cayman Islands, the Falkland Islands, Gibraltar, Montserrat, the Pitcairn Islands, St Helena and its dependencies of Ascension and Tristan da Cunha and the Turks and Caicos Islands. There are other territories—the British Antarctic Territory, the British Indian Ocean Territory, South Georgia, and the Sandwich Islands, which are also under that designation, but which have no indigenous population.

That may be well known, but I suspect that as these are for the most part tiny territories scattered around the world they are not always considered as a group. Populations range from Bermuda with more than 60,000 people to the Pitcairn Islands with a mere 54 or 45, depending at which statistic one looks.

Although each territory is very individual and different, there are links which bind them together—a shared history, allegiance to the Queen and a unique relationship with the United Kingdom, both within the European Union and as part of the Commonwealth.

Co-ordination and a common approach is provided by the Foreign Office and, indeed, by the Overseas Territories Association. It now meets on a regular basis and provides a forum for discussion of those issues which are common to all—mainly constitutional, but also concerning good governance, observance of international commitments and the building of a sustainable economic future in this global environment.

The consultative council meeting, to which my Question refers, was held last December. I tabled my Question in advance of it, hoping to have a much earlier date for the debate. Nevertheless, as is often the case, events have moved on, and there has been a recent meeting of the governors. So I look forward to an update on the results of both meetings from the Minister when she winds up.

I believe that the overseas territories are very dear to all our hearts. I have had the privilege of introducing previous debates on the subject, in 1994, 1997 and 1999, always with considerable support. From time to time, it has been suggested that representatives of the overseas territories should be found a place in your Lordships' House. It still seems a good idea to me and perhaps it should remain on the table as an idea when we next consider further reform of the House of Lords.

In parliamentary terms and within the aegis of the Commonwealth Parliamentary Association, we have an active All-Party Parliamentary Group on Overseas Territories as well as the Falklands and Gibraltar bilateral groups. I should like to put on record our thanks to the official representatives of the overseas territories for the work they do in maintaining and developing links and keeping us parliamentarians well informed.

The last occasion we had for a general debate on overseas territories was during the passage of the British Overseas Territories Bill in 2001 when the name of the territories was changed from dependent territories to overseas territories and when outstanding issues relating to rights to British citizenship were resolved. That was a welcome piece of legislation, and I should like to ask the noble Baroness whether its implementation has been completed and whether it has gone smoothly.

I should also like to ask the noble Baroness whether events are going smoothly for the participation for the first time of Gibraltarians in the European parliamentary elections next month. Noble Lords will remember the long and eventually successful campaign led by Lord Bet hell in that respect.

I am delighted to see how many noble Lords are to speak in the debate. Each will speak with considerable personal knowledge of and interest in one or more of the territories. I know that they will be raising particular and focused points in the short time available. Because of time restrictions I shall try to confine myself to general issues.

I have already asked the Minister to update us on the implementation of recent legislation affecting overseas territories and on the December meeting of the consultative council and the recent governors' meeting. In that context, I hope that she will be able to inform us in particular on the progress and implementation of the constitutional reviews that have taken place in most of the territories.

I should also like to explore a little further, as part of the relationship of overseas territories with international organisations, the relationship with the European Union. I know, for example, that the United Kingdom has committed Gibraltar and the Caribbean overseas territories to the implementation of the EU savings tax directive and that most overseas territories observe European Union environmental standards and other directives. What, therefore, will be the voice, for example, of the Caribbean overseas territories at the Latin American and Caribbean EU summit to be held in Guadalajara on 29 and 30 May?

In terms of funding from the European Union, I am aware I hat in the past overseas territories have received European Investment Bank loans and Stabex (Stabilisation of Exports) funding. Given that the European Union is now setting criteria for the new EDF (European Development Fund) funding for all European overseas territories, does the Minister agree that our overseas territories should receive a fair share in that, in spite of the fact that their constitutional status differs considerably from those of the overseas territories of France, Spain and Portugal, for example? I particularly look forward to hearing her views since I know—as her past like mine is as a member of the European Parliament—she takes a particular interest.

Another general issue relates to education, which we all agree is so important for the future. There is no recognition of the special relationship between the overseas territories and the United Kingdom in terms of university education. Their students are expected, like other overseas students, to pay the full overseas fee. In many cases they come from small territories where there is no alternative choice. The Caribbean territories may have the opportunity to look north and go to the United States, but where then is the special relationship between ourselves and these so important territories?

I believe that all these issues deserve a more thorough examination than we are able to give them today, so I would draw your Lordships' attention to a two-day seminar, which is being organised by the Institute of Commonwealth Studies on 28 and 29 June, when a number of issues, such as governance and politics, political parties in small communities, resource development and management, security and international questions, environmental issues and comparative perspectives will be considered. I think that that debate will be a very useful.

Since I have the time, perhaps I may ask some very short specific questions. I understand that the Pitcairn Islands are hoping to develop an air strip and also that they wish to set up a scheme for returning islanders, many of whom are currently residing in New Zealand. Can the noble Baroness give us any information on that, given that the tiny population seems to be diminishing further?

Furthermore, what plans are there for Tristan da Cunha, a dependency of St Helena, when the R MS "St Helena" ceases to go there? I understand that it is to be based in South Africa rather than in Cardiff as before. Will the inhabitants of Tristan da Cunha be totally dependent on fishing vessels for their communications with the rest of the world in the future?

What are the Government aiming to do to encourage the Argentine Government to desist from ruining the Falkland Islands' developing tourist industry by preventing charter flights from Chile overflying Argentine territory? What will the Government do to encourage the new Spanish Government to see the value of improving their relationship with Gibraltarians, rather than constantly antagonising them, especially during this special celebratory year for Gibraltar?

Finally, what will the Government do to save the blue iguana, unique to the Cayman Islands? I understand that there are only 30 of those creatures left.

It is difficult to give sufficient weight to all the issues that arise concerning the overseas territories. I know that the Minister will deal with the questions sympathetically and perfectly understand that if the answers for all of them are not available, she will write to me. Once again, I thank all noble Lords who will participate in this short debate.

7.50 p.m.

Baroness Howells of St Davids

My Lords, I begin by congratulating the noble Baroness, Lady Hooper, on raising this debate and on giving such an insight into the present position of the overseas territories. Her commitment is well known and, as she said, she raises the these matters publicly in the House. Her focus, following the meeting of the council in 2003, gives the debate a yardstick against which we can all measure our concerns.

I will concentrate on the British Caribbean territories that are still dependent. Their vulnerability is obvious for all to see—chiefly because of their size and location. They are: the British Virgin Islands, Anguilla, the Cayman Islands, Montserrat, Bermuda and the Turks and Caicos. The constitutional position of the dependent territories varies, but the chief British responsibility is for the regulation and supervision of the financial services sector.

In four of the territories, the Governor as Her Majesty's representative, among his other duties, has direct responsibility for offshore financial services. In Bermuda and the British Virgin Islands, that responsibility lies with the local Minister of Finance. Both territories have always co-operated fully with the Foreign Office in the conduct of their offshore sectors, because the UK has reserve powers to override local government and regulate the sector, even if the local government silently disagrees with the UK's mandate.

On 10 December 2003, at the Overseas Territories Consultative Forum, which has already been referred to, Bill Rammell, speaking for the Government, said that he welcomed the need to clarify mutual responsibilities in the constitutional review process. He noted that the 1999 White Paper set out the balance. The UK, he said, has the right to expect high standards of probity, governance and adherence to international obligations and to minimise the extent to which the UK is expected to be responsible for liabilities. He stated further that that is what the Government expect governors to do in the territories.

However, the territories feel left in limbo because there has not been any follow-up, as I understand it. I therefore ask my noble friend the following questions. We understand that the British Virgin Islands has established a constitutional commission that in part seeks to reduce the Governor's powers. Can the overseas territories enact different powers to the Governor and, if so, how? If not, what plans do the Government have to change the powers of governors in overseas territories even when there is not yet a constitutional commission in place?

Can the Minister clarify the level of consultation taking place with the overseas territories on international agreements, especially where the territory may be susceptible to money laundering by the drug trade or international terrorists? Where do overseas territories sit in meetings between the UK and regional organisations? Last week, at the Caribbean Forum, the members of overseas territories that are members of CARICOM were concerned that they could not fully participate.

The position with EU matters seems to be as perplexing: will the Minister clarify to what extent the Government have consulted the overseas territories on the impact on their financial centres by the wide range of EU regulatory proposals arising from the Financial Services Action Plan? Have the Government explored the impact of those proposals, for example the EU Investment Services Directive? The Caribbean overseas territories were pressed to accept the provision of the EU directive on savings taxation, which they believe could adversely affect their economies. Can the Government give us some insight?

7.55 p.m.

Lord Waddington

My Lords, it is always a great pleasure to follow the noble Baroness, Lady Howells of St Davids, who always makes such a sensible and balanced contribution to our debates. I am also very grateful to my noble friend for giving us the opportunity to discuss these matters tonight. Noble Lords opposite may be somewhat surprised at what I am going to say next, but this Government have taken more of an interest in the overseas territories than some of their predecessors who, in my experience, tended to go along with the prevailing view among Foreign Office officials that the dependent territories, as they were then called, were a bit of a nuisance and an embarrassing relic of the past.

This Government, with one sad exception—Gibraltar, to which I shall turn in a moment—have recognised the dependent territories, the overseas territories, as an important responsibility and have seen their wish to maintain the British connection as something of which we should be proud. Indeed we should. The Government were certainly right to grant belongers in the territories British citizenship.

Against that background, it is a pity that the Government had blotted their copybook over Gibraltar. It amazes me that they should have tried to strike a deal with Spain which they must have known that there was no chance of Gibraltar accepting. When I look opposite and see my noble friend Lord Hoyle—he may sit on the wrong Benches, but he is still my noble friend; I have known him for years and count him as a friend—I think of his son, Lindsay, who has fought a doughty battle in the House of Commons. He must be very proud of him.

However, I want to use the few moments at my disposal to voice my concerns about government policy towards St Helena. Of course, there was rejoicing when the islanders got British citizenship, but it has not worked out quite as expected. Unfortunately, because of the lack of opportunities on the island, that step has had the effect of accelerating the decline in population as people come to Britain to get the work that they cannot get at home. The population has sunk quite dramatically and frighteningly during the past two or three years.

It has been clear for some time that there is only one way to arrest that decline, which is to improve communications with the island and thus open it to tourism or other development. But on 19 April this year, all our hopes were dashed when those who, at the Government's invitation, had submitted proposals for air access were told that none of their plans were acceptable and that the Department for International Development was no longer interested in the development of air access as part of its package of private sector investment in which air access would be part-funded by proceeds from other private development.

I attended a very unsatisfactory meeting on 27 April, at which the Minister seemed to be saying that the runway needed to be longer than any of those who had submitted proposals thought necessary. I left that meeting without a clue as to whether DfID's advisers thought that the runway could be extended to the new recommended length if the present alignment was maintained; what additional cost was involved if they needed to be a new alignment; or what additional cost was involved if it was the same alignment. If the runway is too short, too short for what? I am by no means clear. Is it too short for flights from Europe and South Africa? If so, is it long enough for flights from Ascension? Surely, a shuttle service to and from Ascension would be better than nothing.

I would appreciate the Minister's guidance. I should particularly like to know whether the Americans have yet agreed to the use of the airbase on Ascension for commercial flights. Above all, I would like to feel that there is some sense of urgency in DfID about the matter. I was not at all impressed by the passage in the Minister's statement, in which he said, after torpedoing the plans to which I have referred: Nevertheless, we understand that air access still remains the preferred option of the people of St Helena for maintaining physical links with the island after the present ship is withdrawn from service during or soon after 2010". —[Official Report, Commons, 19/4/04; col. WS 1.] That reply did not betray much urgency. Many sought the opening of an airport well before then and can see what enormous damage will be done if the Government pursue that policy of drift much longer.

8 p.m.

Lord Greenway

My Lords, I, too, am grateful to the noble Baroness, Lady Hooper, for raising this question, because it allows me to raise a rather narrow point on recent action by the Spanish Government concerning cruise ship calls at Gibraltar.

This is not the first time this has happened. It has happened twice before: once in 2002 and again last year. The present incident arose at the end of last month, when the cruise ship "Norwegian Dream" was barred from calling at the Spanish port of Barcelona following a call at Gibraltar. The Spanish Government cited EU Regulation 4055/86 of 1986, which related to maritime transport between member states—cabotage, in effect. It was designed for use by cargo ships and had nothing to do with cruise ships. As a result of that, the Foreign Secretary instructed our ambassador in Madrid to write a letter to the Spanish Government expressing "disappointment and surprise". I am no expert in diplomatic language, but that hardly seems a tough line. Where is the EU in all this? Surely, it should have something to say. I am astounded at the silence in Brussels on these matters.

As a result of the Spanish Government's action, six ships so far have cancelled their calls at Gibraltar. There is no rhyme or reason for the Spanish action, because they cited the cruise ship as being "non-EU flag"; it flew the Bahamas flag. The second ship, the first to cancel a call at Gibraltar, flies the Dutch flag; therefore there is no reason why she should have been excluded.

I am surprised that the action seems to relate only to the ports of Barcelona and Cadiz. There has been no trouble with ships going to other Spanish ports. Indeed, after Gibraltar they have called at Malaga, Almeria, Valencia and shortly at Tarragona. That is the result of an edict direct from Madrid to those ports. I have had a personal complaint from the director of the port of Barcelona, whom I know quite well, and who still thinks that I am president of Cruise Europe—I gave up that position a year ago—asking what I could do about the situation. So the Spanish ports are just as worried as Gibraltar.

The only reason that Spain is doing this is a deliberate act to cause confusion and uncertainty. Uncertainty is very dangerous in the cruise business, because cruise companies work on itineraries two to three years ahead. If there is the slightest uncertainty, they will drop a potential port call. That has an enormous impact on the economy of Gibraltar. I need hardly add that it also suffered another setback this year when it lost 27 calls due to the financial difficulties of a Greek company, Royal Olympic Cruises. In addition, the Queen Mary 2, a very prestigious call, had to be put off because the dredging was not done in time.

I believe the Government's view is that there is no legal basis for the Spanish action. What exactly is the position? Has there been a reply or indeed any clarification from Madrid? I gather that there is a meeting tomorrow between the Foreign Secretary and his Spanish counterpart, Señor Moratinos. Perhaps we may learn more from that. This intermittent nit-picking action by Spain must not be allowed to continue. Surely it is not beyond the wit of Her Majesty's Government and the EU between them finally to put an end to it once and for all.

8.5 p.m.

Lord Davies of Coity

My Lords, I thank the noble Baroness, Lady Hooper, for introducing the debate. I declare an interest as chairman of the All-Party Parliamentary Group for the Cayman Islands, which provides a link between the Cayman Islands Legislative Assembly and the United Kingdom Government.

I am sure that the image that most people have of the Cayman Islands has been conjured up as a result of its exaggerated portrayal by Hollywood. I intend to present a much more realistic picture. The relationship between the Cayman Islands and the United Kingdom stretches back 500 years. When Jamaica became independent in 1962, Cayman decided to remain with the Crown. It is politically and economically stable. It has a world-class financial structure, with lawyers, bankers, accountants and so on, and an excellent legal system. The belief that the Cayman Islands is a haven for money-laundering is now outdated and it has done more than most to remove those practices. The Cayman Islands is the fifth largest financial centre in the world after New York, London, Tokyo and Hong Kong. You do not get that level of business by being "shady"; it is because you develop an effective and efficient financial environment, and that has been done.

The Cayman Islands has implemented a host of international measures, including OECD and financial action task force initiatives. Cayman is now a place where the "know your client" due diligence requirements exceed the standard required in the United Kingdom and where the anti-money-laundering legislation matches that of the United Kingdom and exceeds the standards operating in the United States of America and continental Europe. That is why bank deposits and inter-bank bookings have increased over the past four years from £340 billion to over £540 billion. Caymanians are proud that they have lifted the islands from a basic economy in the 1960s to a sophisticated financial centre today which has provided its citizens with a high standard of living.

In December 2003, the overseas territories at the consultative council produced a joint statement in which they all recognised the responsibilities they have as a consequence of their relationship with the United Kingdom. They also shared with Her Majesty's Government the aim of providing high standards of governance for all their citizens. Although this is a shared objective, there is no doubt that discussion and consultation must continue about the means of achieving it. In the Government's 1999 White Paper, the stated aim was to enable overseas territories to achieve greater autonomy. The overseas territories have emphatically stated that they are not seeking independence. There is, however, a need to improve democratic accountability while at the same time strengthening, and not weakening, the relationship with the United Kingdom.

There is no doubt that, if there is not measured progress towards democratic accountability and elements of internal self-government, there is a risk that the demands for full-blown independence will become much greater. As different levels of internal self-government already exist among different territories, there is bound to be a feeling of some unfairness and a desire on the part of some territories to catch up.

The time is now right for a meaningful dialogue, and for a rebalanced relationship, particularly in respect of the Cayman Islands. Handled with care and goodwill, this can lead to improved constitutional advancement without damage to the relationship with the United Kingdom. The issues are complex but, with the necessary understanding and tolerance, an outcome acceptable to all can be produced.

A recent issue of some concern has been the European Union Savings Tax Directive. The Cayman Islands has been largely concerned that a level playing-field approach was not being applied in the implementation of this directive and, as a result, felt that banking business now being held in the Cayman Islands would go elsewhere, with a consequential adverse impact on employment. Last summer, I led a cross-party delegation, along with Members from the other place, to see the Paymaster General. Arising from this, there has been subsequent discussion, which has proved fruitful, between the Treasury and the Leader of the Cayman Islands Legislative Assembly, with the Cayman Islands having given a commitment to sign up to the directive and the UK Government having given appropriate assurances.

Although the United Kingdom benefits from having overseas territories, and the people in the overseas territories benefit from having an association with the Crown, the relationship is much, much deeper than that. The development over centuries must mean a great deal more. It is about mutual loyalty; it is about responsibility; and, above all, it is about civilised behaviour on the part of all. I hope that the relationship between the United Kingdom and the overseas territories in the years to come will mutually strengthen, and not weaken, this partnership.

8.10 p.m.

Lord Beaumont of Whitley

My Lords, I too join in thanking the noble Baroness for introducing this debate tonight. It is a good thing that we should, from time to time, consult about the overseas territories. As we have heard, it is necessary to pick and choose when dealing with them because there is a wide variety involved. As I have raised the issue of St Helena over a long period of time, your Lordships will not be surprised to hear that I am choosing it as my subject. That is not least because, as all noble Lords will be aware, next week will feature St Helena day, which we ought to be able to celebrate with some good news.

The problem about St Helena at the moment, as we all know, and as the noble Lord, Lord Waddington, has fleshed out, is depopulation. The population is shrinking, and we do not know what the Government propose to do in a situation where depopulation went on more than it does at the moment. Do the Government have forecasts of what the depopulation is likely to be over the next two to three years? What are their different plans, depending on what levels they think depopulation will reach? I too, with the noble Lord, Lord Waddington, went to the meeting about air access, and I too was very far from impressed about what we were told. The problems of St Helena are large; they are to a large extent our problems; and their own dependencies are also important, not least Tristan da Cunha.

Your Lordships will be aware that the Minister has recently given a Written Answer to a question of mine on access to Tristan da Cunha, which was reasonable as far as it went. The time has come when the Government must face up to all the problems of that group of dependent territories. It is time that we had a White Paper, or an equivalent document, devoted entirely to those three—St Helena and its dependencies. I hope that the Minister will be able to tell us that something like that is on the Government's agenda—because if it is not, they are letting things slide to a future disaster.

8.14 p.m.

Lord Hoyle

My Lords, I congratulate the noble Baroness, Lady Hooper. Her interest in the overseas territories is well known, and it has been shown again tonight. As many noble Lords have said, it is important that we discuss such matters from time to time. We have covered a range of territories already: the Cayman Islands, the old territories in the West Indies, and St Helena. I could not agree more about the problems there and the need for an airport to be developed very quickly, if we are to stop the population drain.

I shall turn my attention to the EU constitution and, in the main, Gibraltar. That will not be a surprise to anyone in the House, certainly not to the noble Lord, Lord Waddington. I have several questions to ask my noble friend about the EU constitution. There is a voluntary clause that allows member states to withdraw. Why does it not apply to dependent territories and to overseas territories? Surely, they should have that right as well. I look forward to hearing the answer to that question.

The other clause that worries the people of Gibraltar is the clause allowing member states to specify the location of the border. We know that Spain has put its case about the location of the border with Gibraltar. It is important that that matter is clarified for the people of Gibraltar. That is the border that they have always stuck by and about which they have argued.

I also want to ask about territorial integrity. Under the constitution, member states have a right to ensure it. Again, that is extremely important to the people of Gibraltar, as it is the basis of the claim that Spain has always made with regard to Gibraltar. Will it have a negative effect on Gibraltar's status in the European Community? I would like to hear my noble friend say something about that.

In trying to ensure that Gibraltar has certain facilities relating to things such as VAT and the common customs tariff, the Government must remember that it is important to Gibraltar that such things are preserved. Can my noble friend tell me about that?

The noble Lord, Lord Greenway, explained in great detail the silly situation that has arisen with cruise ships. Why is it that Spain, which strives to say that Gibraltar belongs to it, never tries to persuade the people of Gibraltar by friendship? Such pinpricks have an effect on the economy of Gibraltar. Cruise ships are exceptionally important. Gibraltar's economy is in a good way and is expanding. One can only think that it is a case of envy. As the noble Lord explained, the situation has not been welcomed by certain ports in Spain, particularly Barcelona. The meeting tomorrow is very important. My noble friend may not be able to give any further details except about what we have said to the Government about the matter, but I ask her to come back to us on it.

The final issue I want to raise is the continuing problem with telephone numbers. They are still being restricted. The EU Commission has decided to take no action. We believe that it is unlawful, so will we take the matter to the European Court of Justice?

8.18 p.m.

Baroness Thomas of Walliswood

My Lords, I was so interested in what the noble Lord, Lord Hoyle, said that I forgot to get to my feet. The noble Baroness, Lady Hooper, introduced the debate with her usual expertise and thoroughness. I shall not be able to follow her down that line, as I have only a small portion of her time.

The overseas territories and their inhabitants are in a curious situation. They are British, and the territories are dependent on the UK partly at their own wish. Yet, their affairs are dealt with by the Foreign and Commonwealth Office. It is clear that it has proved difficult for other departments to take any account of the effect of their decisions on the territories. Even the citizenship situation is odd. As the noble Baroness pointed out, a student coming to this country from, say, St Helena—it could be any of the overseas territories—will pay more for his or her course than a student coming from France. Have the Government any plans to iron out that anomaly? Is it one of the aspects that the former Foreign Secretary wanted the Whitehall mandarins to concentrate on?

While reading for this debate, I was struck by the differences between the overseas territories of Pitcairn, Montserrat and St Helena at one end of the spectrum of size and wealth and Bermuda and the Cayman Islands at the other. Apart from a long association with the UK, they seem to share a determination to stay British. I am reminded of a comment made to a UK diplomat some years ago by a chief minister of a Caribbean dependent territory, who said: If you want independence you will have to fight for it". In other words, they were not going to give the British the pleasure of making them independent.

While the White Paper, Partnership for Progress and Prosperity, welcomes all overseas territories to remain British for as long as they wish, it also talks pretty plainly about the consequences of doing so in the modern world. The December conference, to which this evening's debate refers, seems to have shown that the territories themselves are pushing at the boundaries of their own devolved powers in the course of following through their constitutional commission.

I have a good deal of sympathy with the title of this debate, which was so ably introduced by the noble Baroness, Lady Hooper: she is trying to find something out. An Answer to a Written Question in this House about last December's conference and a Written Ministerial Statement in another place have been couched in unusually reserved terms, even by FCO standards.

A question put by my noble friend Lord Wallace of Saltaire about offshore financial centres did not elicit much more information. The final conference speeches of the Foreign Secretary and especially that of his junior Minister, Mr Rammell, occasionally had the tone of a headmaster addressing a slightly recalcitrant group of prefects: that is, he wants them to take responsibility for helping him run the school, but only where he indicates that that would be suitable to their status.

When reading carefully, one can see that during the conference the FCO and at least some of the representatives of overseas territories differ in their attitude to the role of the Governor. The White Paper, Partnership for Progress and Prosperity, is a sensible document. Shorn of its verbiage it indicates that overseas territories can stay as such for as long as they wish. But that has implications for the standards of domestic governance and for the establishment of better regulation of financial transactions among other important matters. The UK Government have a right to see that progress is made because, if things go wrong, we might have to take the blame or have to pay to put things right. The Governor has an important role to play in helping a territory to go in the right direction and therefore has a specific range of positions which he ought to fill and duties within his territories. That is the Government's attitude to the role of the Governor.

How do the attitudes of the dependent territories vary from that? Is that difference of opinion important? I have come to the end of my time. I shall close by saying that I support, with sadness, the criticisms that have been levelled by several Members at the Spanish Government for the ham-handed way in which they are handling the dispute with Gibraltar, which, heaven knows, has been going on for long enough. However, I look forward to hearing the Minister's reply to a wide variety of questions.

8.23 p.m.

Baroness Rawlings

My Lords, I, too, pay tribute to my noble friend Lady Hooper for initiating tonight's debate. While the overseas territories are constitutionally not part of the United Kingdom, as we have heard, they continue to maintain their strong links with us. We have also heard during tonight's excellent debate that the 14 British Overseas Territories cover not merely a wide geographic region from Anguilla to the Turks and Caicos Islands, but also a range of other issues. These include access to British citizenship, the UK health system and the European Union. Those interrelationships form a continued and lasting partnership based on mutual trust, responsibility and the pursuance of good governance. It is of course a complex relationship.

As several noble Lords have outlined, the overseas territories have separate constitutions and most of them have elected governments with varying degrees of responsibilities for domestic matters. The Governor, who is appointed by and represents Her Majesty the Queen, retains responsibility for external affairs, internal security, defence and, in most cases, the public service. Yet, the relationship goes further.

Noble Lords have referred to the British Overseas Territories Act 2002, which extended British citizenship, together with the right of abode in the United Kingdom, to people in the overseas territories who qualify for it. This is a non-reciprocal arrangement that also extends citizenship to the European Union. It is therefore fair to say that we have a mutual interest in each other's affairs.

As with any partnership, it is vital that channels of communication are always open and regularly maintained. We believe it is important for the Government to demonstrate our continued commitment to the overseas territories. I would ask the Minister how often she has communicated with the governments of the British Overseas Territories over the past three years.

We must not forget that this is an evolving partnership and for several years now, some overseas territory representatives have argued for a greater devolution of responsibility and reduction in the powers of governors. In some cases this has amounted to full internal self-government and the total abolition of the UK Government's reserved powers. It is important to bear in mind that the territories do have the right to seek independence, and it is equally important that the UK Government are seen to be actively listening to the concerns and views of the citizens in these territories. This should apply whether the call is for further devolution or, as is the case with Gibraltar, a call for continued affiliation to the United Kingdom, as demonstrated in the referendum held last year.

This debate provides a timely opportunity to ask the Minister to outline what consultations have been held with the people in the Overseas Territories Consultative Council.

We continue to welcome the ongoing commitment of Her Majesty's Government to the key principles of good governance in the overseas territories. I cite in particular the independence of the judiciary, the political impartiality and integrity of the public service, and sound financial management. We acknowledge too that the governors have a key role to play.

I support my noble friend Lord Waddington and the noble Lords, Lord Beaumont of Whitley and Lord Hoyle, in asking the Minister about the latest situation with the St Helena airport. As we have heard, transport links for the island are vital not only for tourism, but for trade, especially in fish. Why has the decision for this desperately needed airport still not been agreed? As the noble Baroness knows, there is either the RMS "St Helena", which needs to be replaced at a cost of around £38 million, or the airport. Which will DfID support?

We have heard during the course of the debate that the UK has a key role to play in this partnership. On our part, we have the responsibility to safeguard the defence and security of the overseas territories. Meanwhile, the territories should continue on their path to creating democratic and fair small-island economies with sound financial management and strong public services. The key point of this evening's debate must be to send a clear message to the citizens of the British Overseas Territories. They continue to be our valued partners and, so long as they want, the UK should maintain its commitment to this partnership and the obligations that go with it.

8.28 p.m.

Baroness Crawley

My Lords, the whole House is grateful to the noble Baroness, Lady Hooper, for initiating this debate on an important policy issue for the UK. Her considerable experience in foreign policy matters, along with that of many noble Lords who have participated tonight, has made this a most engrossing debate, if somewhat short.

Britain's links with the overseas territories are longstanding. I shall ensure that the noble Baroness, Lady Rawlings, receives an answer in writing detailing the very many meetings held between Ministers and representatives of the overseas territories. There is a deep bond of affection and respect between the people of Britain and the peoples of the overseas territories. Some of the territories share the same opportunities and challenges, but each territory has its own individual character and attributes.

I thank the noble Lord, Lord Waddington, for his kind words regarding our relations with the overseas territories, although I take note of his other words about those relations, which I hope to come to before the end of my time to speak.

Over the past 50 years or so, many of the UK's former possessions have moved from self-government to sovereign independence. Those territories which have chosen to retain the link with the UK are, like us, having to face the challenges presented by the rapidly changing modern agenda. Globalisation is a phenomenon that affects everyone. In recent years, Britain's relationship with the rest of the world has also changed. It was to reflect these changes that the Government undertook a major review of the relationship with the then dependent territories in the late 1990s. This led to the 1999 White Paper.

The paper noted that the UK's links with the territories should he based on partnership, with mutual obligations and responsibilities. The territories should largely administer themselves in accordance with their constitutions and in full respect for the UK's international obligations relevant to them. Within that framework, the UK should uphold the right of the individual territories to determine their own future and to enjoy a high degree of autonomy while ensuring their defence and external relations and, through governors, governance of a high quality.

The White Paper referred to by the noble Baroness, Lady Thomas of Walliswood, and other noble Lords was widely welcomed and still provides the basis for the UK's relationship with the territories. It led to a number of important changes. The first was the renaming of the dependent territories as overseas territories, the better to reflect the evolving relationship. A Minister for the overseas territories was appointed within the FCO and a new structured dialogue between the overseas territories and the government was established. This included a new political forum, the Overseas Territories Consultative Council, to which the noble Baroness refers in her Question. This brings together British Ministers and the territories' political leaders to discuss matters of common concern. It meets annually. This body provides an opportunity for the UK and the territories to set out their objectives and concerns in respect of the relationship in a frank and open manner.

The December 2003 meeting of the consultative council, the fifth in the series, tackled a number of issues, ranging from economic development to the environment; the EU; and overseas territories' membership of the regional organisations referred to by my noble friend Lady Howells of St Davids. It also provided an opportunity to take stock of the relationship between the UK and the overseas territories and to reaffirm the UK's approach to a range of issues on the basis set out in the 1999 White Paper.

At the meeting, the Parliamentary Under-Secretary of State at the FCO, Bill Rammell, noted that the relationship needed to take account of changes at international level, which meant that the dividing line between domestic and international issues had become blurred. The challenge was to strike the right balance between the territories' desire for increased self-governance and the UK's need to meet its overall obligations and responsibilities for the good governance of the territories and their compliance with international obligations, as well as protecting the UK Exchequer from contingent liabilities.

This meant that, as Ministers had consistently stressed at earlier consultative councils, the UK would have to retain sufficient powers to protect its overall responsibilities for the territories as long as the constitutional link with the UK remained. The Minister made clear that the UK's position on independence remained as set out in the White Paper. The UK would respond positively when independence was the clearly and constitutionally expressed wish of the people. But, equally, any territory wishing to remain British could do so.

So, in answer to the noble Baroness's Question, Her Majesty's Government do not propose any change in our policy towards the overseas territories. Our policy remains based on the White Paper. It does not imply any diminution in the role of elected governments in the overseas territories, many of which already enjoy a high degree of self-government. We want to work with them in fulfilment of the aims of the White Paper, many of which have been touched on today. These will continue to be the guiding lines in the ongoing series of constitutional reviews that the UK is conducting with the overseas territories and which, for the first time, are being driven by local review commissions in the territories themselves, a matter to which the noble Baroness, Lady Hooper, referred.

I have been asked more than 30 questions—I have lost count—and I hope that noble Lords will be patient with me if I do not answer all of them in my response. Of course, I will follow up with detailed written answers any questions to which I do not respond.

The noble Baroness, Lady Hooper, asked for an update on the EU taxation of savings directive in relation to Gibraltar. This, we believe, is a good deal for Gibraltar, and for the interests of the UK and Gibraltar. Her Majesty's Government are confident that the deal safeguards Gibraltar's position as an attractive centre for banking and financial services.

The noble Baroness asked for an update on the European Parliament elections in Gibraltar. Gibraltar will take part in the European Parliament elections on 10 June, for the first time. Gibraltar is part of the south-west constituency for those elections.

The noble Baroness also asked for details of the governors' conference. The annual conference of governors is not a decision-making body, but essentially a housekeeping meeting. It brings together governors, FCO officials and officials from other relevant government departments to exchange views on issues of common interest affecting the territories, especially those for which Her Majesty's Government retain responsibility. The subjects covered at the meeting this year included the relationship between HMG and the territories, law and order, aviation and maritime safety and security, nationality and consular issues, disaster management and preparedness, and human rights.

The noble Baroness also asked about the European Union's relations with overseas territories and the EU funding that they can access. As territories have graduated away from budgetary and technical aid from DfID, they have naturally looked for alternative sources of financing. One of these is the European Union. The 2001 Council decision on the EU overseas countries and territories—the OCT Association—was a good result for the UK overseas territories. Their share of national European development fund allocations increased by 14 per cent to a significant 41 million, or 32 per cent of the total.

I was asked about the European taxation of savings directive by the noble Baroness, Lady Hooper, and my noble friends Lord Davies of Coity and Lady Howells. The financial sector has also been affected by international legislation and regulation designed to eradicate and mitigate the effect of unequal competition between states. One key piece of legislation is the EU's taxation of savings directive. I am happy to report, as some noble Lords have observed, that all the relevant overseas territory governments have now agreed to introduce the same measures as are contained in the directive and implement the directive from the same date as the EU and other countries with whom the EU is negotiating an agreement in relation to the directive.

The noble Baronesses, Lady Hooper and Lady Thomas of Walliswood, asked about overseas students who are British citizens and whether the policy would change when it came to qualifying for home student fee rates. No—British Overseas Territory citizens do not automatically qualify for such rates. Eligibility for home student fee rates depends on UK or EU residence, not citizenship. So those who have already been in the UK for three years are eligible for home tuition fee rates and other student support.

I was asked several questions about the situation concerning Gibraltar. My noble friend Lord Hoyle raised concerns, as did the noble Lord, Lord Greenway.

As far as the European Union Constitutional Treaty is concerned, under present arrangements the United Kingdom could initiate Gibraltar's withdrawal from the EU, but that would require a treaty amendment and perhaps an IGC. We would look hard at the case for any alteration, but do not believe that withdrawal is in either Gibraltar's or the UK's interest. We reviewed the draft treaty from a Gibraltar perspective. In respect of demarcation of borders—which was raised by my noble friend—we do not believe that the latest draft will change the existing situation in Gibraltar in any way.

Cruise ships are currently cancelling scheduled visits to Gibraltar because Spain is banning them from docking in Spanish ports if they come from Gibraltar. We agree that there is no good reason for Spain to deny entry to such ships. I was asked what the Government are doing about the problem. The permanent representative to the European Union sent a letter to the Commission on 14 May setting out Her Majesty's Government's legal position and inviting it to investigate. The Minister for Europe raised the issue with Spanish Ministers this week and the Foreign Secretary may raise it with his counterpart on Thursday 20 May.

My time is up. Of course, I will ensure that all noble Lords get detailed answers to their questions. In conclusion, I stress that Her Majesty's Government are committed to a relationship with the overseas territories for as long as they wish to retain that link with Britain.