The Liberal Democrats’ Defending Democracy policy paper calls for a codified UK constitution. If democratic consent and self-government matter at home, they must also shape our relationship with Britain’s 14 Overseas Territories, ten of which have permanent populations. In 2025, UK and Territory leaders agreed to develop voluntary Partnership Compacts, and in September 2026 the UK published a Charter affirming “devolution and democratic autonomy” and “nothing about you without you”. These are welcome commitments, but they must translate into a more equal constitutional partnership.

Recognising national identities

“Dependent Territories” became “Overseas Territories” in 2002, reflecting a move towards partnership. Yet there is still room to consider how the constitutional relationship can better recognise the distinct identities and democratic aspirations of each Territory. For some islanders, their primary sense of identity may be rooted in their own island and community, rather than in English, Scottish, Welsh or Irish identity. For others, local and British identities may coexist. These identities should be recognised on their own terms, rather than assumed to fit a mainland British model.

A survey conducted in Gibraltar in 2000 and reported in 2001 found that 45% of respondents identified as both Gibraltarian and British. Though dated and specific to Gibraltar, this illustrates how identities can overlap. We should invite discussion with Territory governments and communities about whether the term “British Overseas Territory” remains appropriate, or whether alternatives such as “British Overseas Nation” would better reflect the identities of some communities. 

A partnership in Official Development Aid

Financially self-sufficient Territories should be invited to invest in overseas development alongside British International Investment (BII), combining development benefits with financial returns.

A voluntary co-investment scheme could direct Territory government or institutional capital into independently managed projects, such as small-business finance and climate-resilient infrastructure. In 2025, BII, Zambia’s pension authority and Sweden’s Swedfund launched a platform with an initial close of about £52 million to finance Zambian small businesses.

Some Territories have institutions that could explore similar opportunities. Cayman’s Public Service Pensions Board held around £1.3 billion in assets at the end of 2024, while the Falkland Islands Government reported a £156.7 million Growth Fund in its 2025 accounts. Any investment must have local approval, credible returns and safeguards for pensions, public services and reserves. Participation must remain voluntary, with no expectation that Territories dependent on UK budget support contribute. Britain could invite interested Territories to design a pilot with BII.

Putting elected representatives in charge

Constitutional arrangements differ across the Territories, but some give Governors appointed by the Crown powers to veto local legislation or make laws in the name of “peace, order and good government”. Governors may consult elected representatives, but ultimately answer to London rather than local voters.

Ascension Island illustrates the problem. Its seven-member Island Council was elected in July 2025, yet remains advisory. The Governor exercises executive authority and may make local laws after consulting the Council, while an Administrator manages day-to-day government.

The dispute over residents rights highlights the consequences. The 2015 Wass Inquiry recorded that many St Helenians had lived on Ascension since the 1920s and that some of their children were born there. Residents had been encouraged to establish businesses and prepare to buy homes while rights of abode and property ownership were discussed. The UK subsequently declined to grant those rights, citing the costs and risks of supporting a permanently settled population, while acknowledging that prolonged consultation may have raised expectations. In March 2007, six of seven councillors resigned in protest. The Council was suspended after too few candidates came forward. Although it has since returned, the underlying issues remain unresolved in publicly available information.

Bermuda provides another example. In 2022, its elected House of Assembly passed a Cannabis Licensing Bill by 18 votes to six. After the Senate rejected it twice, the UK Government instructed the Governor not to grant assent, arguing that the Bill conflicted with international drug conventions. Bermuda’s Attorney General disputed that interpretation. Although the conventions are binding, their application to cannabis policy allows room for interpretation. Ultimately, an unelected Governor acting on London’s instructions prevented legislation passed by elected representatives from becoming law.

In the British Virgin Islands, disagreement over border security during the Covid pandemic exposed similar tensions. Premier Andrew Fahie initially rejected UK assistance in May 2020, preferring local resources. By September, he was seeking temporary military support for sea-border surveillance while a permanent system was procured. The proposed package included HMS Medway’s return, training and possible UK co-funding. Fahie maintained that his request was limited to surveillance and technical advice, while Governor Augustus Jaspert announced the ship’s return, citing his constitutional responsibility for internal security. The dispute demonstrated how unclear authority and competing interpretations of requests can undermine trust.

A timetable for devolution

Several Territories have explicitly sought greater control. Anguilla’s Government has called for limits on Governors overriding elected governments and for local involvement in their appointment. The Virgin Islands Government has sought genuine devolution, clearer limits on veto powers and greater authority for local ministers in regional affairs.

Britain should negotiate a timetable for reform with every Territory that wants one. Domestic executive authority should rest with elected heads of government, and lawmaking with local legislatures. Governors should lose their domestic veto and lawmaking powers, with courts resolving legal disputes. Local ministers should manage regional and Territory-specific foreign affairs, while elected leaders should participate in defence and security decisions that remain UK responsibilities.

A choice of sovereign association

A more ambitious Liberal vision would offer Territories the option of moving from self-government under British sovereignty to sovereign statehood, with a treaty defining their continuing association with Britain.

The Marshall Islands and Federated States of Micronesia offer precedents. Their compacts preserve self-government while providing for US defence and financial assistance. The idea has also been raised for Britain’s Territories; Peter Clegg advocated exploring it in 2018, and Benito Wheatley urged making it a status option in 2023.

Such an arrangement would end Britain’s constitutional authority over domestic affairs and define any continuing British role through agreement. For Territories on the UN list of Non-Self-Governing Territories, it could also provide grounds to seek removal, subject to a separate UN decision.

The principle should be straightforward: no Territory should have its constitutional future imposed on it. Britain should offer genuine choices, respect local democratic mandates and build relationships founded on consent rather than inherited authority. That is what a modern Liberal partnership should mean.

* Cody Butler joined the Liberal Democrats from the Conservative Party in 2026.