GOVERNOR’S PRESS CONFERENCE Clarification by Governor Harrison of Foreign Secretary’s Written Minister

Catherine Firth, Governor Alistair Harrison and Deputy Governor Stanley Reid

“I wouldn’t presume to make my own prepared statement in … contrast to my bosses so really that statement speaks for itself,” the Governor said. “It sets out where we have got to in London on work on the White Paper that the new British Government has promised to assume on therelationship with the Overseas Territories. Particularly, it defines the three practical policy goals on which the British Government is concentrating: to strengthenthe engagement and interaction between the United Kingdom and the territories…; work with the territories to strengthen good governance arrangements, public finance arrangements and economic planning where this is necessary; and to improve the quality and range of support available to the territories.

“The statement sets out how some of that is done and, in particular, how we are engaging a much broader range of other Government departments in London with the Overseas Territories at the moment, which is a process that was carried forward very much at the last Overseas Territories Consultative Council in London and will be continued at the next such Consultative Council in November this year.”

The Governor commented on a section of the Ministerial Statement in which the Foreign Secretary spoke about constitutional change. Mr. Hague said in part: “The time is not right to embark on further constitutional change”. This and other relate mattersdrew much comment on the island in view of arrangements being made by the Anguilla Government for a third Constitutional and Electoral Reform exercise.

“There is a reference to constitutional change in the Ministerial Statement, which I would like to clarify,” Governor Harrison said. “What the statement says is that the previous British Government launched in 1999 a process of modernising the constitutions of the inhabited territories. We are continuing this work with a view to providing each territory with a modern constitution, and that is a clear reference to Anguilla which is certainly the only one of the Caribbean Overseas Territories that has not had a new constitution promulgated yet as part of that process.

“So when it [the Ministerial Statement] says that we expect these constitutions to continue to evolve and to require adjustment in the light of certain circumstances, it is referring, I think, more to the constitutions that have already been promulgated;and certainly the British Government is clear that the process isn’t yet complete as regards Anguilla. And we very much hope that the latest Constitutional Committee that has been appointed will work with the British Government to bring that process forward. They are not trying to close off the negotiations on the new Anguilla Constitution. On the contrary, the Foreign Office has always said that it is ready to get back into the negotiations as soon as Anguilla is ready to do so.

“That said, the Ministerial Statement also makes clear that we are not envisioning at this stage any fundamental change in the constitutional relationship between the Overseas Territories and Britain. We are not, for example, envisioning moving more to the French model where the Overseas Territories become much more closely a part of the metropolitan country.

“Equally, we are not thinking about moving to an alternative model such as Associated Statehood; and then the final point is worth reminding ourselves that the British Government is absolutely committed to the principles of self-determination. It means that any territory that wishes to become independent, and … that was the clearly expressedconstitutional view of the people of that territory, the British Government would work with that territory to bring independence status as soon as possible. And that applies obviously to all of the inhabited British Overseas Territories. (The uninhabited ones don’t have any people to exercise self-determination.)”

The Governor was asked whether the British Government understood that Anguilla was working towards full internal self-government. The Governor replied that he had heard a lot of talk about that desire. “I think the question that anybody who wants that needs to answeris how that differs in practical terms from the constitutional set up at the moment,” Mr. Harrison replied. “As I have said, Britain wants to modernise the constitutions that all the Overseas Territories have. Anguilla’s constitution is now thirty year old, a generation, and it certainly does need modernising and everybody, I think, agrees with that. So I think the answer to the question on full internal self-government is how do you wish to change the current arrangements… but I think all proposals to change the current arrangements will be looked at very carefully. I think the key thing is to have the right balance of powers and responsibilities between Britain and the authorities here in Anguilla to ensure that everybody can fulfill their own obligations for the good governance of Anguilla.”

Governor Harrison further expressed the view that the British Governmentwould consider the present setup to be the one described in the present administrative constitution; and that any future setup would be what is described in the future constitution. “I think a particular label, as I said, is not necessarily very helpful,” he explained. “What people need to say is what you want to change in the present constitution, and what you want to keep, and how do you get the balance right.”

On another matter, the Governor was asked to comment on the latest OCED report which puts Anguilla’s offshore financial services in a good light. He replied that he had not read the report in detail but knew what it said. “It is very good news because Anguilla, in contrast to some of the other territories in the region, has moved through the first phase of the OECD process which is to look essentially at our legislative framework and [which] has found that it is in very good order,” he said. “This means, to use a sporting analogy, that we have qualified for the next round and at this stage there will be an equally rigorous look at the implementation of our legislative framework.

“Of course, that is going to be quite a testing examination as well and, in many ways, it is always more testing to be examined on how you are implementing a particular set of commitments than the original commitments themselves. One cannot get away from the fact that we have passed that first phase and other territories have not. I think it is atremendous tribute to all of us concerned in the Ministry of Finance, the financial community and, more widely, in the Financial Action Task Force, which is chaired by Jerome Roberts, and my colleague, Catherine Firth, sits on that. I think it is extremely good news and it says a lot of good things about our jurisdiction which will be extremely helpful to us.”

Mrs. Firth said the OECD report recognised the hard work of all stakeholders in Anguilla and in particular the Ministry of Finance. “I don’t think anybody is complacent. There is always more work to do, but the report was generally positive,” she commented. “As is inevitable, there were some areas where Anguilla does have room for development and needs to take action but, overall, I think it is a very good report and well justified.”

Governor Harrison said the report should do three things for Anguilla: provide a sense of moral standing for the island which is viewed as one of the jurisdictions which have an international financial services industry; help the financial services industry because, increasingly in the wake of the financial disasters of 2008, it is the jurisdictions controlling the well-regulated services that attract business. Thirdly, it would contribute to the growth and prosperity of Anguilla. The Governor noted that financial services in a normal year accounted for about 18 percent of the island’s Gross Domestic Product which he described as a significant contribution to the local economy.

“It is of course not the biggest contribution which is tourism, but it is an extremely useful component of our economy,” the Governor observed. “It is one that operates in a very competitive international market. All jurisdictions are finding that in order to keep up with the global situation they need to be better and better regulated and have a higher and higher reputation. I think what this shows is that Anguilla is well on track to keeping up with those requirements…I think at the moment we are doing extremely well.”

On the question of the 2012 budget, the Governor said that the British Government had no worry about the formulation of Anguilla’s budget except insofar as it came up against the borrowing requirements. “Inevitably any budget, at the moment, given the present fiscal and economic position, is going to come against the borrowing requirements, and therefore it makes good sense that the budget should be agreed before we get to the end of the process in Anguilla, rather than [like] last year, and the year before, when we had to reserve the budget and then re-negotiate it. It would be much better if it could be agreed and the process could be smooth in that respect.”

He acknowledged that the borrowing guidelines would only come into force when there was a need to borrow. The Governor disclosed that the British Government had proposed that in Anguilla, Cayman Islands and the British Virgin Islands the borrowing guidelines, a very crude instrument, could be replaced“with a much more wide-ranging framework for fiscal responsibility.” He said the matter was being considered by all three Governments at the moment although in the case of Anguilla it was“fair to say that the urgency of getting the budget right is the first task.”