Falling between two stools: the British Overseas Territories

Unlike the Conservatives and Labour, which both made mention of the British Overseas Territories (BOTs) in their recent election manifestos, the Liberal Democrats made none at all in theirs.

The last time they were mentioned in any detail in a policy document was in 2019, and only then as two pages in ‘Modernising the relationship between Britain and its citizens living abroad’, a symptom of how they fall between two stools, under British sovereignty, unlike the wider British diaspora, but outside the United Kingdom, despite often being called a part of a ‘UK family’.

Unfortunately, this invites misleading comparisons with the French overseas departments and collectivities, which, as integral parts of la République, have seats in the French Parliament. These have been confused with those for French citizens abroad, which inspired the Liberal Democrats’ proposed ‘Overseas Constituencies’ for their British counterparts. Italy, on the other hand, has a similar system for its diaspora, but hasn’t had overseas possessions since Mussolini; Argentina today has far more Italian citizens, and voters, than Eritrea ever did under Italian rule!

However, the British have long resisted the French model of integration; only in Malta in 1956 was it seriously considered, but disagreement over financial aid, the prospect of three extra MPs at a loose end, as Malta had almost complete self-government, and the precedent it might set for other small colonies led to it being shelved, with great relief, a case of ‘once bitten, twice shy’.

Poignantly, had they been prepared to consider it for Mauritius, where opponents of independence sought a relationship similar to that of neighbouring Réunion with France, perhaps the Chagos Islanders might have been treated far more humanely than they were, though we’ll never know.

But what British government would want to make the Cayman Islands or Gibraltar adopt the UK’s tax regime, when it would have to spend far more on them per head than it does existing parts of the UK? Had that happened with Malta, it would have cost the Treasury £280 million annually, four times as much as defending the Falkland Islands. Or one St Helena airport a year!

The 2019 policy document didn’t suggest that for any of the BOTs, but it did state that ‘we do not accept that there is any justification to deny legally-resident Brits or [British Overseas Territories Citizens (BOTCs)] who have made the OT their home the right to vote and to hold elected office, as this elevates one group of British people over another’, echoing the sentiments of a recent Foreign Affairs Committee report, which provoked anger in Bermuda.

As for the idea of them sending their own MPs to Westminster, this is a source of contention; most prefer the flexibility of being able to appeal to the House of Commons as a whole, through the All-Party Parliamentary Group (APPG) system, rather than working through a single MP. In addition, they are wary of anything that might encroach on or erode their self-government.

However, there should be a means for their elected representatives to make their voices heard directly in Westminster, through a Joint Parliamentary Assembly to complement the annual Joint Ministerial Council (JMC). After all, in 2018, the Commons chamber hosted the Women MPs of the World Conference, in which legislators from other countries sat alongside MPs, but not the BOTs, neither part of the UK nor independent of it.

A talking shop? Maybe, but better that than a wasted trip, like in 2022, when their leaders travelled all the way to London for the JMC only to learn on their arrival it had been cancelled! As for their debut at the UK Youth Parliament that year, also held in the Commons chamber, this was like children being allowed to sit in the driver’s seat of a car and play with the steering wheel when their parents weren’t allowed to drive the car themselves, infantilising as well as demeaning.

The last Parliament had two separate inquiries into the BOTs, one by the Public Administration and Constitutional Affairs Committee (PACAC) and the other by the Procedure Committee, but frustratingly, their work was cut short by the election before they could produce reports. Nor is there any word on the Foreign Affairs Committee (FAC) reviving its Sub-Committee on the Overseas Territories, only established earlier this year.

However, I hope the new Liberal Democrat members in their ranks will stop these issues being kicked into the long grass again.

* Ken Westmoreland is a member of the Taunton and Wellington Local Party.

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4 Comments

  • Nigel Jones 1st Nov '24 - 10:27am

    3 British Overseas Territories rank by far the highest in the world for corporate tax abuse. These are British Virgin Islands, Cayman Islands and Bermuda. See WorldPopulation Review.com and cthi.taxjustice.net What should be done about this ? It affects our own government income and most people here are not aware that the goods and services they buy contribute to the economic wealth of these countries not our own country ? Maybe that is fair, maybe not, particularly since it is not transparent.

  • Ken Westmoreland 1st Nov '24 - 6:25pm

    Yes, what should be done about all that? If you have any ideas as to what the places you mention can do instead to survive economically, they’d be eternally grateful to you.

  • Peter Davies 1st Nov '24 - 8:10pm

    Although the amounts involved are enormous, the proportion going to the treasuries of tax havens is tiny. That’s why they go there. so “the goods and services they buy contribute to the economic wealth of these countries not our own country” is not true. They mainly contribute to the wealth of the wealthy of all countries including our own.

  • Ken Westmoreland 1st Nov '24 - 8:50pm

    That proportion is indeed tiny, but it goes a long way in those places because their populations are so tiny – Bermuda has barely 70,000 people.

    However, their governments raise revenue in other areas through high import duties, making the cost of living much higher than the UK.

    Additionally, local people often feel sidelined, priced out of the property market and the jobs market, prompting them to move away, even in wealthy BOTs like the Cayman Islands – https://www.caymancompass.com/2024/09/03/is-cayman-facing-a-brain-drain-locals-living-overseas-say-yes/

    If people living in a wealth territory like that can feel that way, it shouldn’t come as a surprise that those in a poor one like St Helena do so – the problem isn’t that it’s a tax haven, but that it hasn’t been allowed to become one, meaning that it’s been dependent on pocket money from the UK, even after the building of the much derided airport.

    Montserrat is another overlooked territory with similar challenges, or worse, two thirds of it still uninhabitable since the volcano erupted nearly 30 years ago, its people accused by Labour’s International Development Secretary of wanting gold elephants!

    Sadly, discussion of these places tends to focus either on Gibraltar and the Falklands, which prompt tiresome jingoism, also recently displayed in the case of the Chagos Islands, or on the tax arrangements of Bermuda, the Cayman Islands and the British Virgin Islands, with those like St Helena and Montserrat ignored.

    Incidentally, the French overseas departments and collectivities also levy their own import duties in addition to having to pay French VAT, as while they are regions of the EU, they are not part of the EU’s customs territory, and even after generous subsidies from Paris, the cost of living is still very high.

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