The following is the text of a letter from the UK Minister for the Overseas Territories, Mr. Henry Bellingham, written to Anguilla’s Chief Minister and Minister of Finance, Mr. Hubert Hughes. The letter, which had to be re-typed by The Anguillian, was released to the media by a representative of the Anguilla Government.
8th August 2012
Foreign & Commonwealth Office
Hon. Hubert Hughes King Charles Street
Chief Minister LondonSW1A 2AH
Anguilla
Dear Hubert,
The Minister for State for International Development and I are concerned about the current state of public finances in Anguilla. We recognise that there are challenging global economic circumstances at present and we recognise the efforts you have already made to keep expenditure under control. Revenues, however, are falling short of forecasts, and we strongly believe that, unless further action is taken now, you will record a deficit this financial year. We look to you to meet your commitment to balance the budget by the end of this year.
We are aware that Government of Anguilla officials are forecasting that, by relying on stamp duties, there is a possibility of a small surplus. Stamp duties are, as you know, volatile and uncertain and cannot provide the basis for a confident prediction that your budget will balance. The Department for International Development has funded a technical expert to work with your Government to provide expertise on options which are available to you to help improve the sustainability of the public finances. The Government of Anguilla needs to take action now to return public finances to a sustainable footing by the end of this year.
We understand that EXCO has agreed to establish a revenue collections unit, which is expected to improve the revenues received. This is welcome. However, the technical expert has made clear that the most recent forecasts produced by your officials are overly optimistic and do not present a cautious and realistic balance of risks, and unless additional measures are implemented, a potentially significant deficit will remain unaddressed.
Any material year-end deficit would breach the personal commitment you volunteered to me, and more recently confirmed to Minister Duncan in November 2011, to balance the overall budget by the beginning of 2013. Without further action on your part, there is a serious risk that the public finances will continue to deteriorate. That would of course increase the risk that you would have to decide to turn to theUKfor assistance. I cannot prejudge any decision about budgetary or project assistance if you requested it, but you are aware that such support would inevitably involve attaching strict conditions, including control over public financial management. We therefore urge you to take action now to implement the necessary measures to balance the public finances by year-end, in order to avoid this outcome.
(Signed)
Henry Bellingham MP
Minister for the Overseas Territories
PS (hand written) I have just met Shara Proctor –Anguillacan be very proud of her.
