Video: Fergusson Speaks To British Committee

“Bermudians think of themselves as Bermudians” and “becoming more legislatively connected with Britain would cause unease” and “Bermuda meets OECD standards pretty comfortably” and “has a record it can be quite proud of in that respect.”

These were some of the comments made by former Governor of Bermuda George Fergusson took part in the British Parliament’s Foreign Affairs Committee inquiry in to the ‘Future of the UK Overseas Territories’.

Mr Fergusson, who served as Governor from 2012 – 2016, said, “I don’t think Bermuda has much to be ashamed of in terms of international transparency. It has had a beneficial ownership registration regime since the late 1940s, which includes trusts, which is unlike quite a lot of other jurisdictions.

“It has moved quite a lot in the past few years to have rapid access—instantaneous access in some cases—for tax and law enforcement authorities in G7 countries, and I think EU countries.

“I think Bermuda meets OECD standards pretty comfortably. I think it has a record it can be quite proud of in that respect,” he added.

Susie Alegre, a Director at this Island Rights Initiative, told the Committee, “I think they are an easy target. Often the scale of the criticism is not necessarily fair. Certainly, following discussions in the UK Parliament, you will find parliamentarians referring to places such as the Bahamas as British Overseas Territories.

“I think there is often a conflation and they are quite easy targets because it is not so easy for them to stick up for themselves. The reality on the ground is, I suspect, not proportionate to the amount of criticism that they get.”

The transcript of the hearing, with Ms Alegre and Mr Fergusson, is below:

Chair: Welcome to this afternoon’s session of the Foreign Affairs Committee. Susie Alegre and George Fergusson, thank you very much for coming. As always, if you could keep your answers brief and to the point, that would be very gratefully received. If another witness has already answered the question as you see fit, do not feel the need to repeat it.

Q1 Andrew Rosindell: Good afternoon. Could I start by asking a fundamental question to both of you? Why do you feel that so many former British colonies—now known as Overseas Territories—want to remain part of the British family? Why do they choose to want to stay British? So many others have chosen a different route of independence, but the remaining territories are so determined to keep that link. Why do you think that is

Susie Alegre: I think it varies and there are as many different reasons as there are Overseas Territories. For some of them, it is a question of size, where independence would not necessarily be practical. For many of them, it is because they feel British and they have never not been British. It is not a question of going off and becoming an independent nation; it is part of their sense of self, in the same way that just because you are Scottish, you may still feel very British. For some, there may be practical reasons why independence was never thought of, but for many it is an emotional and identity reason.

George Fergusson: I would agree with that. I would add security or sovereignty reasons in a couple of obvious cases. Although I have direct experience only of Bermuda and Pitcairn, there is an element of, “If it’s not broken, why fix it?” In some cases, it is the need for financial and material assistance, which links to the point about size.

Q2 Andrew Rosindell: Do you feel that the British identity of the Overseas Territories is now solid and absolutely permanent, and that, whatever happens, the 16 remaining Overseas Territories feel deeply part of the British family? Or do you think that in 20, 30, 50 or 100 years it will gradually evaporate?

George Fergusson: Like everything else, I think it varies across the different territories. Some feel a greater organic attachment than others. I think that for some it is a matter of convenience and not getting around to doing anything about it.

Susie Alegre: I would agree. For some, there may be areas where suddenly it is not expedient to be British any more. I think you would probably have to ask people in the Overseas Territories directly about the feeling of Britishness, but obviously there are a couple where there are more discussions on a political level about potential independence, and many where there are not.

Q3 Andrew Rosindell: So should British Government policy be on the basis that the territories remain British, rather than that they are in a transition to becoming independent? In the past, FCO policy has effectively been that it is a matter of time. Should we review that and say that following the last territory to go—Hong Kong—the remaining ones will stay British, and therefore our policies should reflect that this is a permanent arrangement, rather than something that may change in a few years’ time?

George Fergusson: Since I have been involved with the Overseas Territories there have been three different attitudes in Government, which is a legitimate matter of Government policy. The consistent thing is to say, “Self-determination, as far as possible.” The variant has been, “Self-determination, but it does not make a lot of sense for some of these connections to continue. We will try and encourage you and help you make your own way in the world, subject to consent.” Tipping the seesaw the other way is a matter of consent. We could say, “We like you and we will try to do our best to keep you, because we like the association.” All of those are legitimate and they all reflect self-determination so far as that is feasible with the Overseas Territories. Which end of the seesaw is up is a legitimate matter of policy.

Susie Alegre: I would say that there is a real need for a review of the situation. You cannot really bunch all the Overseas Territories together, because they are all unique. There are various groupings that will have a different answer to the question you are asking. In some there may be internal discussions about independence and things might be quite in flux, particularly over the next few years, during which you might see fluctuations. There may be others where there is a fairly obvious answer of a fixed status where it is unlikely that that will change, and if it does change then it will be towards a greater closeness to the UK rather than in the opposite direction. There needs to be a review of groupings of overseas territories, and maybe it no longer makes sense to bunch them all together in one group.

Q4 Andrew Rosindell: Do you feel that it is time that the UK changed its approach to how we deal with Overseas Territories? One example is that they are currently under the management of the Foreign Office. They are not Commonwealth, as they are not allowed to be members of the Commonwealth in their own right. If they are British territories, is the Foreign and Commonwealth Office the appropriate Department for the territories going forward, or should they be brought more into domestic Government Departments?

George Fergusson: The Committee may have seen my submission on this. My personal view—this is not the policy of the UK Government—is that it does make more sense to bring the management of the UK Government and its relations with other British jurisdictions to a greater extent into the same stable. There would be benefits in concentrating those resources, talent and careers. You would get away from the confusing status that we presently have, partly on the grounds mentioned. For the Foreign and Commonwealth Office to be administering British citizens—and administering territories at all—needs some explanation. The current arrangement adds to the confusion over what the relationship is both at this end and to some extent in the territories.

Q5 Andrew Rosindell: Just to add to that, other countries with former colonies seem to treat them in a very different way. We talk about the British family, but clearly the territories are not part of the United Kingdom. We do not even have a name that represents the entire British realm. Do you not think that it is time we had a phrase, or something that absolutely encapsulates all the territories with the UK as part of a British realm?

George Fergusson: On the first part of that question, I think you could envisage a much more orderly, logical and accountable relationship, looking at France, the Dutch and the United States as possible models. Mostly this would involve direct representation to the House of Commons, and that would have some benefits. For example, it would mean that the territories could call to account the relevant Secretaries of State, and it would address a bit of a democratic deficit.

The catch used to be that there was no representation without taxation. If you were going to go down this track—and there are big disadvantages to this as well—you could see the limitation on Scottish representatives voting on income tax and, maybe one day, Northern Ireland representatives voting on corporation tax. You could say that OT representatives shouldn’t have a right to vote on many matters. The really big obstacle to this neat, logical structure is that it would bind territories more closely to the United Kingdom—probably more than they want.

The arrangement we have at the moment is slightly messy, certainly when compared with the French, but it reflects the wishes of territories that—I think; you need to ask them directly—would be reluctant to be tied in to Parliament, particularly Bermuda. Bermudians think of themselves as Bermudians. Becoming more legislatively connected with Britain would cause unease.

Susie Alegre: I would agree about the question of the complexity of British constitutional relationships. I am from the Isle of Man, so I recognise how strongly people can feel about their own Parliament. So, while feeling British, this idea of being brought more closely into an idea of what the United Kingdom is would meet quite a lot of resistance in some areas, although possibly not so much in some Overseas Territories. As I said, it very much depends on the territories you are talking about.

Having said that, I think that the situation generally around the British constitution is so unwieldy and complex, when you look at the different layers with the Overseas Territories, the Crown Dependencies and the devolved Governments, that there is a need generally for a British constitutional review to look at how exactly you reflect the needs and wishes and practical arrangements that need to be made between the UK and the Overseas Territories and Crown Dependencies.

That is also reflected in decisions taken by the UK that have direct effect. I raised in my paper the question of Brexit and people not being able to vote in the Overseas Territories and Crown Dependencies. While those votes might not have made much of a difference—Gibraltar did vote overwhelmingly to remain—Brexit will have an impact on many of the Overseas Territories and Crown Dependencies, but they do not have a voice in that. The question about the UK taking decisions that have a direct impact on them without them having a say is part of that constitutional review, of exactly how that balance is met.

Q6 Andrew Rosindell: So you think that there should be some form of constitutional review of how the Overseas Territories, and maybe the Crown Dependencies, fit within the overall British family. The Danish allow the Faroe Islands and Greenland to vote in the Danish Parliament. We are the only former colonial power that does not allow our territories any say at all. Would you at least agree with my view that there should be a Committee in Parliament that specialises, on a day-to-day basis, in the issues relating to the territories? This is the only Committee that does it and, of course, we have bigger issues to deal with: China, Russia, America, Europe—whatever it may be. Should there not be some central Committee that deals with the issues on a day-to-day basis? At least have that for them.

George Fergusson: I am not sure it would be very busy. The day-to-day business is not enormous. It is difficult to make the relationships too tidy, or much tidier than they are. There is a sort of equilibrium between the arguments for better accountability, perhaps including the sort of thing you are talking about, and the territories’ reservations about getting more closely involved. Another element in that balance is the UK Government’s principal limiting concern, which is not to allow the safety catch to be released that makes the UK Government liable for contingent liabilities over which it has no control. Those things swirling around together make it difficult to move very far.

Neither of us have answered the second part of your first question about terminology. I have been attracted by the New Zealand use where they have—like us but there are fewer of them—associated territories of various kinds with various different relationships. They call the areas that come under the Queen of New Zealand the Realm of New Zealand. We could not call it the realm of the United Kingdom, because the Crown Dependencies are not, in fact, the United Kingdom. Whether the British realm sounds a bit vague, I do not know. It is quite a striking gap that there is no term for all the bits in the world that come under the Queen of the United Kingdom.

Q7 Chair: What would you call it, Andrew?

Andrew Rosindell: I think that there should definitely be a name, but I do not think it should be for me to decide that; I think there should be consultation. Mr Fergusson is absolutely right that there is a huge gap here. When you talk about British territories and dependencies, there is not one name that encapsulates everything to say: “That is part of the British realm, or whatever we call it.”

I certainly agree with Mr Fergusson that maybe there should be something that encapsulates that to explain to everybody that we are responsible for all these Overseas Territories and Crown Dependencies.

Q8 Chair: Ms Alegre, do you have a view?

Susie Alegre: One of the things that is quite interesting in the way the EU deals more broadly with small islands not directly attached to the continent is the difference between outermost territories and overseas countries and territories. Outermost territories are places such as the Azores and Madeira or the Canary Islands, whereas the overseas countries and territories are dealt with as being overseas. I think there is an argument, which doesn’t go to the global title for all British territories, but maybe for a distinction that could be made when you look at reviewing how they are treated. There are probably those differences as well within the Overseas Territories.

Andrew Rosindell: I think Denmark refers to it as the Danish Kingdom. That does not mean that Greenland and the Faroe Islands are part of Denmark, but they are part of the Danish Kingdom. I think something along those lines would probably be the way to go.

Chair: Thank you. Those are some interesting ideas.

Q9 Royston Smith: We have mentioned Brexit briefly, and I will come back to that. There have been some other things recently, not least hurricanes and changes to legislation in the UK. How healthy is the relationship between the UK Government and the Overseas Territories?

George Fergusson: I think it is almost fated to be difficult. Part of the reason, as I mentioned earlier, is that we are in an equilibrium where there are interests at the UK end and variously around different OTs in different forms, which are quite difficult to reconcile in a neat, tied-up parcel. There will always be a degree of confusion and pushing and pulling.

I am now two years away from Bermuda. I do not think it is worse than usual. I do not think it is necessarily bad. I think that things like the Sanctions and Anti-Money Laundering Act obviously would represent a bit of a spike in spikiness. There will always be something around, but I don’t think the relationship is too bad.

Susie Alegre: I would say—not necessarily speaking about the UK Government’s relationship to Overseas Territories, but in terms of the way the Overseas Territories are portrayed and perceived in Parliament and the media—you would not really think that real people lived on them. There is always this idea that they are just offshore tax havens—a sort of rock with some banks on them. That is what leads to a real degree of disenfranchisement and the feeling that it is very difficult to engage. I would not necessarily say that that is about UK Government relations, but more about British relations with the Overseas Territories.

Q10 Royston Smith: We will speak more about Brexit—we talk about almost nothing else these days. What sort of strain has the Brexit vote had on the Overseas Territories? I was in the Falklands some months ago and we discussed some of their unique circumstances and how Brexit might affect them. Do they feel that their concerns are being listened to by the Government and the Foreign Office in this country?

Susie Alegre: I cannot speak for all the Overseas Territories. I know what some of the issues are that they are facing because of it. As you have mentioned, with the Falkland Islands it is obviously market access. For others, such as Saint Helena, Montserrat and the Turks and Caicos, there are issues about development funding, which will be the kind of funding they are getting from the EU that will not be capable of being replaced by official development assistance from the UK, because it is infrastructure-type funding. There is a cut-off of international funding that won’t obviously be replaced from elsewhere, which is a very big deal in a small economy. For others it is a question of not having the same degree of representation at the European table, when you are talking about things like blacklisting. There are very variable impacts.

Gibraltar is clearly another unique circumstance: they are in the EU and they will no longer be in the EU. That will have a big effect on their border. There are very big impacts. Gibraltar is obviously being treated as a special case, in terms of the Brexit negotiations and how it has been dealt with, but for the others, how much of a problem it is varies from territory to territory. I do not know how much they feel they are being listened to, but, as you say, people are generally not talking about much other than Brexit. Whether or not the needs of Pitcairn, Tristan da Cunha or Turks and Caicos are going to be taken into serious account in those discussions is open to debate. Obviously, they are talking to them, but I do not know how much whatever they are saying is being reflected in negotiations. Maybe you have more insight.

George Fergusson: I agree with the categories that Ms Alegre has put forward: sovereignty, top cover in Brussels, market access and aid are the generic issues. Gibraltar obviously has a portfolio of extra unique issues. You ask about how territories feel they have been represented. I know you have another witness who can give a more direct response to that. I declare some interest in that until a year ago, I was working in the Cabinet Office on the management of Brexit for Crown Dependencies and Overseas Territories in particular, and Gibraltar was quite a big bit of that. As of a year ago, the feeling was that they were being listened to. At that stage, it was largely an exercise of mapping to see where the impacts would be and making sure that as the negotiations progressed the UK Government were not taken by surprise by the impacts on our territory or dependency.

Q11 Chair: Can we move on to other areas? We have touched in this already in response to Andrew Rosindell. There are many other Government Departments that are connected to the OTs in various different ways. Most recently we have been talking about Treasury and DFID elements, and in many ways the Home Office has very strong connections. How does the FCO co-ordinate these relationships?

George Fergusson: I am sorry that this is repetitive, but it varies. Bermuda, for instance, is very devo-max. The Foreign Office has really not very much to do with the Government of Bermuda, certainly on a day-to-day basis. The Governor is obviously the main channel for that. Probably the Government Department that spoke most often to counterparts in the Government of Bermuda would have been the Treasury speaking to the Ministry of Finance. There were connections between the Ministry of Defence and the Bermuda Regiment, and sometimes events made those contacts more frequent.

In other territories, there is probably a stronger connection between DFID and the island authorities than directly with the FCO, if you set aside the Governor. It is quite a varied picture. If you have got day-to-day contacts between DFID and the development Ministry in an aid-dependent territory, I don’t think the Foreign Office would expect to get itself between DFID and a working relationship there. If it started going wrong, the FCO probably would want to get more involved.

Q12 Chair: Focusing on the Foreign Office’s duties, how integrated are the OTs into the United Kingdom’s foreign policy?

George Fergusson: You have got three territories where there are sovereignty or neighbourhood issues—the Falklands, Gibraltar and the British Indian Ocean Territory—and where foreign policy is deeply integrated. To some extent, there are foreign policies that those territories bring with them, so you would expect it to be connected. Sometimes, like with the British Indian Ocean Territory, it has a part to play in our strategic relationship with another country—in that case, the United States. Otherwise, I don’t think it would be easy to show a close connection between the territories and UK foreign policy.

Q13 Andrew Rosindell: Following up on the Chairman’s question, does this not highlight the huge gap that there is here? We are talking about territories that are British, yet we in this Parliament and Government Ministers influence them, whether it be through defence, foreign affairs or DFID. DEFRA does so especially when it comes to the protection and conservation of wildlife, particularly in the territories in the Southern ocean, and even the Home Office does so when it comes to immigration. Many of the territories use the pound sterling, so currency is an issue—I know the Caribbean ones do not, but the Falklands, Gibraltar and several others do. There is a whole range of areas for which the UK Government represent the territories in international organisations. The list goes on.

You can analyse the huge influence that HMG have over things that could affect the territories, even though they are all self-governing. Isn’t there a big gap here about how the territories are included, consulted and represented? Shouldn’t we try to look at this and resolve it so we have a permanent way of dealing with things that properly gives the territories a voice and a say over the things that affect them?

George Fergusson: It is difficult to make the relationship between Whitehall Departments and territory Governments very much more direct with devo-max plus, to go back to the Bermuda example. DEFRA would find it very difficult—and understandably so—to influence policy within Bermuda, in the same way as applies in respect of Scotland or the devolved territories.

On the second half of the question—getting territories’ input into broader UK policy, where input might mean getting UK help—I think there probably is more scope for that, but the Secretary of State for whatever feels that his or her responsibility is to deliver the policies within either the UK or England. It is quite difficult to get a UK Department to feel the same sort of responsibility and concern, particularly when they are cut out of policy development in a devolved area.

Susie Alegre: I agree that it is quite difficult to get people to listen in the UK. If you are in an Overseas Territory and you want a Whitehall Department to listen to you, I think that would be quite a challenge, particularly if you are not voting in UK elections but are in this separate situation.

Going back to the relations between the British Government and Overseas Territories more generally, which touches on your question about DFID, there is a problem there, in that development for Overseas Territories is not the same as it is for overseas countries. It is a very different deal to be funding a big programme with a large consultancy firm in Nigeria for development, compared with supporting a small community in the South Atlantic to be sustainable and manage its day-to-day affairs.

On the international development question, there is a real need for clarification about what it means to be supporting the Overseas Territories that need development support, because it is not at all the same as development for developing countries and never will be. They are British territories: many of them are not going to be in the position to be standing on their own two feet with a wonderful, sustainable economy because of their size and remoteness. That is quite a difficult thing for DFID to deal with.

Q14 Andrew Rosindell: Is it not therefore time to have one Government Department? We have the Scotland Office, Wales Office and Northern Ireland Office. Should there not be a Department for all the territories of the Crown with which the UK Government have to work and liaise and for each Government Department to co-ordinate through, or should the Cabinet Office, perhaps, take responsibility for all the British territories? At the moment, it is very disjointed. There is no one Minister who looks after all the different issues. Equally, I think there is a lot of frustration in territories that they are not fully included and consulted on all the issues. Is it not time that we included them properly, without taking power from them, because they are self-governing? Is it not high time that we gave them their own Department or unit within the Government that is separate from the Foreign Office, which clearly has bigger priorities to deal with in today’s world?

George Fergusson: I do see the advantage in that. Going back to an earlier point in this exchange, the Cabinet Office would find it slightly easier to get other Whitehall Departments to pay attention to territories. It is quite a difficult thing for a small part of the Foreign Office, which otherwise does not do domestic policy, to tap into other Whitehall Departments, which is the Cabinet Office’s day-to-day activity.

Q15 Mr Seely: May I ask a question in relation to that? Looking at it from the other way round, do you think the amount of time the Foreign and Commonwealth Office spends—though it might be that it does not spend that much time—in looking after Overseas Territories is an efficient use of Foreign and Commonwealth Office time, considering that, effectively, it is there to speak to the rest of the world on our behalf? If it is dealing with somewhere that is not really the rest of the world because it is sort of British—they don’t really pay tax or send representatives here but they are not “foreign”—is that a good use of the FCO’s time and money?

George Fergusson: My personal view is that it is not.

Q16 Mr Seely: Should we hive off the Overseas Territories in some kind of structure that is separate from the Foreign Office?

George Fergusson: In my personal view, yes. When I started I was Governor of Pitcairn from 2006, which is when I got involved in this business. In the period since then the Foreign Office has invested more in terms of money, people and effort in the Overseas Territories area, but it still seems to be an odd adjunct to what the Foreign Office is increasingly and rightly focused on.

Q17 Mr Seely: So what would you do? Would you set up a little Department for the Overseas Territories that is separate and maybe has people from DFID, people from the Home Office, people from the FCO—and you almost have a mini Government Department sitting somewhere?

George Fergusson: I think there are different ways of doing it. What I have suggested in my note is that the UK Government split the Cabinet Office, which already includes the Scotland Office and the Wales Office—and in a slightly different shape the Northern Ireland Office, at one stage, briefly came under the same umbrella. They deal with constitutional issues. They deal with some constitutional relationships. I think they could quite neatly take on the UK’s relationship with the Crown Dependencies and absorb the Overseas Territories directly to the FCO. I am not so sure that it makes sense to take in Overseas Territories to DFID, because there are specialisms that DFID has with some useful cross-fertilisation—but I’m not sure.

Susie Alegre: I think it would be useful to have a focus. Having said that, yes, the Foreign Office does not appear to be the natural fit, my understanding is that, certainly within the Overseas Territories directorate, there are people who really understand and get what the Overseas Territories are. Whether they are in the right place in Government to transmit that is a different question. One thing you do have to be careful about in creating a new Department is that it does not just get put in a cupboard because it is just about the Overseas Territories. You have to bear that in mind while moving it.

Q18 Ian Murray: Mr Fergusson, could the idea of the Overseas Territories being in some sort of regional or national construct in Whitehall have the opposite effect of undermining the Wales and Scotland Offices, in the sense that the Overseas Territories are something different from the Whitehall departmental structure that is looking after Wales, Scotland and, increasingly, Northern Ireland?

George Fergusson: I do not think it need do that. I do not think it need affect the Scotland or Wales Offices at all, but I think bringing them together under the same umbrella offers an opportunity for a career structure in which understanding the difference between reserved powers and devolved powers, and matters of self-determination and constitutional relationships more generally, could become a career specialism. At the moment, you have got people—although I don’t think you have to give this up—moving in and out from the Welsh Assembly Government or the Scottish Government into those offices. You also have some more Whitehall-based people who specialise in constitutional stuff. You would simply make that framework bigger and keep more people whose chosen career path lay—although not exclusively—within the world of reserved and devolved powers, self-determination considerations and so on. Again, in the Foreign Office, it is not quite big enough to be a career structure, so it tends to be people who do it for a few years.

Q19 Ian Murray: I can see the argument for a civil service career structure and not having a brain drain of those particular specialisms, but I think there would be a real problem from a constitutional perspective, treating Wales and Scotland the same as Pitcairn or Anguilla, in terms of a Whitehall structure. The constitutional arguments against that would, in my view, be pretty powerful.

George Fergusson: If you did it on the model I have suggested, the UK Governance Group already deals with how UK structures are dealt with. I cannot second-guess what would concern people, but there is a practical point. In my own career, the best part of it was in the Northern Ireland Office. When I was Governor of Pitcairn, I was also High Commissioner to New Zealand and to Samoa. I did not find much that I had done in my Foreign Office career all that useful for governing Pitcairn; I found quite a lot that I did in the Northern Ireland Office really quite useful—in terms of understanding constitutions, police accountability, local government elections, and all of those sort of things. Somebody who had come in, say, from the Scottish Government and done a couple of jobs in the Scotland Office might be well equipped to take on a job in Overseas Territories.

Susie Alegre: May I say something not on the constitutional role but on the advisory role of the United Kingdom and parts of the United Kingdom? I think on the nitty-gritty and the daily operation in a small Overseas Territory, it may well be that the Scottish Government, for example, has more to say than Whitehall in terms of advisory support and connections. Building connections is a useful thing to do but, without wanting to muddy constitutional waters, from a practical perspective of exchange.

Q20 Ian Murray: Whitehall is not very good at determining practicalities against politics, unfortunately. You would never suggest that the Wales, Scotland and Northern Ireland Offices would go into the FCO as a reverse.

Susie Alegre: No.

Ian Murray: Although some would want that to happen.

Q21 Chair: The Government are understood to be working on an intermediate update to their 2012 Overseas Territories White Paper. Given what we have been talking about now, what should go into it?

George Fergusson: It is quite hard to see a strategic change. The 1999 White Paper did some big things, above all the extension of full UK citizenship to virtually all OT citizens. The 2012 one found it quite difficult to come up with a big strategic thing. I am no longer involved, but I think you would be quite hard pressed to find something very strategic to change the step, given the balance between not wanting to bring people in the territories in beyond their comfort zone and not wanting to loosen up too much on taking on contingent liability. There is not a lot of scope for big strategic change. If it took on the suggestion of the machinery of Government changes that we have been discussing, I would be delighted but slightly surprised.

Susie Alegre: There is certainly a need to look at representation and international relations, and how Overseas Territories are able to have their voice heard on decisions made internationally that affect them. There certainly needs to be more work done on that. The 2012 White Paper spoke about the fact that Overseas Territories should have the same standards of human rights protections as the UK, but what that means in practice is not really fleshed out.

One of the things that I think needs to be developed more in the White Paper is the question of development assistance and what that means for Overseas Territories in practice. It is very important to look at human rights not simply as what is on the statute book, but as what is happening in practice, so access to healthcare facilities or funding for policing and internal security—those sorts of things. It is about looking at how you put into practice what you said in policy terms.

One final thing is to iron out the anomalies. As George Fergusson said, there are still very small anomalies in British citizenship in relation to people from British Overseas Territories. Ironing out all those anomalies is a very important step, because they may be very small things on paper, but obviously for the people concerned they are very important.

Q22 Mike Gapes: We have one Overseas Territory—Anguilla—that has a sea border of about 8 miles with an island that is part of two other European Union states: Sint Maarten is one of the four kingdoms that make up the Netherlands, and Saint-Martin is a French territory. I know you have answered questions already relating to the Brexit issue, but in your view what is the implication for Anguilla of these changes? Specifically, is there not an argument that in places such as Anguilla and potentially some of the other smaller overseas territories, it would be better to have some relationship closer to that of the French territories and the Netherlands territories in that area?

George Fergusson: There are two questions wrapped up in that. I am not remotely an expert on Anguilla. Anguilla is not in the EU, so the sea border with its nearest neighbour is already an external border of the EU. I do not think that will change. I see logical attractions in the close relationship that the French and Dutch territories have with metropolitan France and the Netherlands, and although I have had some hopeful conversations over the years on this, I have never picked up any real enthusiasm for getting closer and losing the autonomous identity that is currently enjoyed. Bermuda has had devolution since 1620, and was kind of American until the 1770s. The term Bermudian was first heard in about 1615. They are not suddenly going to call themselves British.

Susie Alegre: For the specifics of Anguilla I think you will need to speak to the Anguillan representation, but I think this highlights things like access to healthcare. My understanding is that those in Anguilla will often use healthcare facilities in French Saint-Martin. If there is a risk of that relationship being unavailable on an island with limited healthcare facilities, where will they go?

This is a big issue for the UK’s relationship with many Overseas Territories. The UK has limited the number of people who can get access to the NHS if they need it; I am not sure, but I think in Anguilla it is four, so we are talking about small numbers of people who can come and get NHS treatment if they need it. What happens if you are No. 5 on that list and therefore do not get access to healthcare at all, because there is not sufficient healthcare on the island you live on and you cannot get access to UK NHS care?

Beyond that issue, I am not sure whether, in the context of having borders with the European Union, they are better off being linked more closely to the UK or being at a further distance. Time will tell. However, there are certainly big questions on issues like health and education in some Overseas Territories—though, again, not in all. They all have slightly different arrangements to ensure that people have adequate access to healthcare and education when those services are not available for people on the island they live on.

Q23 Mike Gapes: Anybody flying to Anguilla has to go to the Princess Juliana airport across the water. On the health issue, is Gibraltar in a completely different category because it is part of the European Union?

Susie Alegre: I am not exactly sure of the arrangement with Gibraltar, but I assume that you could use a European health insurance card, as you would if you travelled from the UK and crossed the border into Spain.

Q24 Mike Gapes: But in terms of people from Gibraltar coming for treatment in the UK—

Susie Alegre: I am not entirely sure. I know that about nine years ago there was a debate about the Crown Dependencies removing reciprocal health agreements, but they did not have limits on the numbers as some of the Overseas Territories do. Do you happen to know the answer on Gibraltar, Mr Fergusson?

George Fergusson: I don’t. My hunch, which we would need to check, is that the Government of Gibraltar pays a sort of subscription, either to an NHS trust or to the NHS itself, and carries its own cost in that way.

I am venturing into speculation, but with respect to Anguilla, it seems quite hard to expect the Dutch or the French to pay indefinitely for the more serious health costs of a British territory. The Government of Anguilla or the UK Government may already pay a similar subscription, or the idea may be under consideration.

Q25 Mike Gapes: Perhaps we will need to explore that with the Department of Health and Social Care, among others.

Susie Alegre: The issue of access to UK treatment in NHS trusts for people with very serious healthcare needs was certainly raised in the Wass inquiry report on Saint Helena.

Q26 Chris Bryant: I am terribly sorry that I am late; I was in another meeting. Mr Fergusson, you were high commissioner in New Zealand—I remember because I visited you. What do you think about Pitcairn? Why on earth is Pitcairn still British?

George Fergusson: Because we took on an informal undertaking in 1945 under article 73 to maintain its welfare and its development, and because it has always been British, although it began in slightly unorthodox circumstances. I think that is 99% of the answer.

Q27 Chris Bryant: But it has proved historically difficult for us to tackle child abuse there. We have always turned to the New Zealand justice system to tackle it, since New Zealand is far closer. Does Pitcairn have any military strategic significance for us or is it just a kind of relic of our historic past?

George Fergusson: I think there was a ship-spotting depot on it during the war.

Chris Bryant: Which war?

George Fergusson: The second world war. But I am not sure that it spotted any ships; I could not identify any strategic benefits now.

The relationship with New Zealand is very, very strong. Most Pitcairners were born in New Zealand, because that is where you go to get born. The police officer comes from the New Zealand police and when there is a need for prison officers, they come from New Zealand, as you say, although strictly speaking they are members of the Pitcairn Bench. The convenient place from which to stock the Pitcairn Bench is the New Zealand Bench, which has worked very well.

If there were to be any change in that, it would be the obvious jurisdiction to make the change with, if they wanted it, and, above all, if Pitcairners wanted it. There are precedents. The Tokelau Islands, I think, were transferred from UK supervision in the 1920s to New Zealand supervision. The key thing would be the willingness of Pitcairners to contemplate it and the willingness of New Zealand, or indeed any other jurisdiction, to share or take on the responsibility.

Q28 Chris Bryant: May I ask you about corruption in the Overseas Territories, because of allegations frequently made, both within the territories and from outside? When the French raise their objections around financial transparency in the UK, they often point to the Overseas Territories. Do you think that is a fair or unfair allegation?

George Fergusson: I should probably limit my answer to Bermuda. I could do Pitcairn, but it has no financial services. I don’t think Bermuda has much to be ashamed of in terms of international transparency. It has had a beneficial ownership registration regime since the late 1940s, which includes trusts, which is unlike quite a lot of other jurisdictions. It has moved quite a lot in the past few years to have rapid access—instantaneous access in some cases—for tax and law enforcement authorities in G7 countries, and I think EU countries.

The gap with the United Kingdom is on direct access to this information from everybody’s laptop, which is a gap with the United Kingdom, but the United Kingdom is quite a long way ahead of everyone else on that. I think Bermuda meets OECD standards pretty comfortably. I think it has a record it can be quite proud of in that respect.

Susie Alegre: I am not an expert on the details but I think they are an easy target. Often the scale of the criticism is not necessarily fair. Certainly, following discussions in the UK Parliament, you will find parliamentarians referring to places such as the Bahamas as British Overseas Territories. I think there is often a conflation and they are quite easy targets because it is not so easy for them to stick up for themselves.

The reality on the ground is, I suspect, not proportionate to the amount of criticism that they get. I understand there is certainly a need to deal with transparency and corruption, and often that can be a challenge in small jurisdictions in general to deal with, and not simply on a financial services level, but more broadly, it can be a challenge in small places.

Q29 Chris Bryant: Don’t some of them still have a system whereby you can vote only if you are a Belonger and you can become a Belonger if you are appointed as a Belonger by those who have been elected? You have no direct taxation of individuals or of land and consequently you end up with a financial system that is rather biased towards making money off financial services, rather than a more solid sustainable economic base.

George Fergusson: I can only answer for Bermuda; that wouldn’t be correct.

Q30 Chris Bryant: It is not true of Bermuda.

George Fergusson: In Bermuda, one of the main sources of income is land tax; another is payroll tax on earnings.

Q31 Chris Bryant: And shipping but they are about to lose shipping unless they change their minds on same-sex marriage.

George Fergusson: Perhaps.

Susie Alegre: That is putting together a lot of issues. I would not suggest that there are not human rights issues or issues around immigration status and people’s access to services according to their residential status. But I think that is quite separate from the wider issue of financial services.

One thing I would say about the question of other sustainable industry is: what does that look like? That is a very big question. I also cannot see any reason why it is more morally correct for the City of London to be a financial centre than it is to have a financial centre on a small island, wherever that might be. There are lots of issues, which are often conflated. There is a need to address the issues you are talking about in terms of governance where they arise, but that is not necessarily the same as saying we need to blame the British Overseas Territories for the entire global problems associated with financial services and international finance.

Q32 Chris Bryant: One final question. Is it your impression that the Overseas Territories take up a fair or a wholly disproportionate amount of time, energy and paperwork in the Foreign Office compared with their significance to the United Kingdom?

Susie Alegre: No idea.

George Fergusson: I do not have any figures for it. As I said, the commitment in terms of people and cash has gone up in the last 10 years. As I wrote in my paper, the Foreign Office is rightly focused on three logical priorities. It is quite hard to fit Overseas Territories into those priorities, so, inevitably, they become a bit of a clip-on.

Q33 Andrew Rosindell: A couple of additional points, if I may. First, Mr Bryant talked about Pitcairn possibly being a relic and all the rest of it, but surely we should see our territories as part of a global Britain network, as Britain alters its international policies in terms of trade and co-operation globally. Do you feel the Overseas Territories could actually play quite an important role in that British network around the world?

George Fergusson: I have my doubts. To some extent it will be up to them. Of the two I know best, one—Pitcairn—would find it quite hard to play such a role. In the case of Bermuda, there is a British identity, but I rather doubt it is strong enough alongside the Bermuda identity to carry that sort of weight.

Susie Alegre: Yes, I guess it depends on the territory.

Q34 Andrew Rosindell: But do you not feel that if we included overseas territories and gave them opportunities to take part in the work we will be doing in the years ahead to promote a global Britain strategy—if we made them feel part of what we are doing—they might respond very positively and feel they were an equal part of the British family? They might feel that where we go, they go, and that our successes are also their successes.

George Fergusson: There are attractions in making that offer. In areas like participation in trade missions, Lord Mayors’ visits and so on—some years ago there was agreement in principle that Overseas Territories could bid to take part in Lord Mayors’ visits, which, so far as I know, has not been taken up and may have been forgotten—the offer is certainly worth making. In those sorts of cases, Overseas Territories could take advantage of the platforms of British embassies and high commissions around the world. It would be in their interests to do more of that. I think the door has been more or less open, but, either because they do not want to confuse their image in the world as an autonomous jurisdiction or because they are not sure that it is available—for whatever reason—the offer has not been taken up. I think it should be renewed.

Susie Alegre: I think as well it will slightly depend on what global Britain looks like—that is quite an open question—and whether there is direct competition between what the UK is trying to do and what a particular Overseas Territory is trying to do in the specific area. It will depend on whether there is an alignment of interests and whether those interests support each other or whether there is a perception that they would be better off keeping a separate identity. That remains to be seen, but yes, there is no reason why the offer should not be there.

Q35 Chair: One does somewhat get the feeling occasionally that British identity is optional: when it is convenient, it is hung on to and when it is not, it is rejected. Would that be fair?

George Fergusson: I think the Overseas Territories may not be unique in that.

Q36 Chair: I merely identified that the talk of family can often be rather distant, and cousins can often reject the family name and decide to do their own thing.

George Fergusson: Bermuda takes part in the Olympics, and a lot of the territories take part in the Commonwealth games. Sport is often an area where the choice of identity can be slightly unexpected, and home internationals and rugby internationals is one of them.

Q37 Chair: May I just ask this, then: should the OTs be full members of the Commonwealth?

George Fergusson: I don’t think it is possible, because the Commonwealth is an association of sovereign countries. I am not sure how much it matters, because their membership of the Commonwealth comes through their association with the United Kingdom. In some areas they participate in the same way as a Commonwealth member, for instance in the Commonwealth Parliamentary Association, which takes sub-sovereign, or whatever the technical word is, legislatures into account. The devolved Assemblies, Canadian provinces and British Overseas Territories all take part in that. I think the OTs get quite a lot from it. Commonwealth agencies, such as the Commonwealth law foundation, I think, did some useful work in Pitcairn on the constitution. I am not sure they miss out much by not having their own flag at the table.

Q38 Andrew Rosindell: Should they not have associate status, territory status or something? At the moment, the Commonwealth secretariat produces a map of the Commonwealth and it does not include Overseas Territories. Of course, if Bermuda or any of them declared independence tomorrow, they would be given full status. How much does the objection to their having any status in the Commonwealth have to do with Norfolk Island and Australia? It seems to me that they block any attempts to give territories a status because of the situation with Norfolk Island.

George Fergusson: That is rather on the edge of the things I know about, so I had probably better not comment further, but at the moment it is relatively simple: you have to be sovereign to be in. Once you go below sovereign, do you take provinces? Do you take Overseas Territories? Do you take Crown Dependencies? It is a less clear line.

Susie Alegre: As you have said, they do get involved in activities, so they benefit from British membership of the Commonwealth. What the additional benefit of being a full member would be is debatable. One thing that is worth exploring as part of a general review of the constitutional status is their ability to engage internationally in other forums. You mentioned the Faroe Islands earlier; I think the Faroe Islands have a much more developed external relations identity on their own, separate from Denmark, than the British Overseas Territories do. Exploring how that works, or similar examples, could be useful, but whether that is for the Commonwealth or other international groupings is debatable.

Chair: Thank you very much indeed for your insight. It has been extremely useful and I am very grateful. We will pause for just a moment as we swap witnesses. Thank you very much.

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