Ladies and Gentlemen
I am delighted to have been invited to say a few words at the start of this important public consultation on the proposed Framework for Fiscal Responsibility which is to be agreed later this week in government to government negotiations between the Govt of Anguilla and theUnited Kingdom. The negotiations were originally to start today, but theUKteam have postponed their visit until later in the week to enable this public consultation to go ahead in advance of them.
Looking around the world today, two things are clear, as we enter the fifth year of the great financial and economic crisis that began in September 2008. Firstly, the world needs economic recovery. Secondly, economic recovery has to be based on sound public finances and an affordable level of public debt. Countries that have lost control of their public debt – there are several obvious examples inEurope– have found themselves in great difficulties. Their borrowing costs soar out of control, and their people end up paying an ever greater share of their wealth in debt servicing. This is no basis for economic recovery in a very difficult international economic environment. By contrast, countries who get their public debt under control are finding the task of building recovery much easier.Irelandis a good example of the latter. It is not easy for any country, because the economic climate is tough for everyone, but much easier for those countries whose borrowing is under control.
The new governments which took office in theUKandAnguillain 2010 recognised the need to get the public finances under control as their highest priority. The British Government has introduced a painful austerity programme, affecting all in theUKpublic service. This is bearing fruit in lower borrowing costs, which create a virtuous circle and are giving theUKthe basis for recovery. Similarly, in Anguilla, soon after taking office the Chief Minister wrote to the Minister for theOverseasTerritoriesvolunteering a commitment to bring the budget into balance. I quote from his letter to Henry Bellingham of 21 June 2010 “”….my government has an unwavering commitment to restoring the recurrent budget to a balanced position by the end of 2011 and the overall budget by 2013”. On the basis of that commitment Mr Bellingham agreed a request from the Chief Minister to borrow EC $50 million to getAnguilla’s public finances through their short-term difficulty.
There has been some misunderstanding since then of just who decided that the public finances should be brought into balance by the beginning of 2013, but the record makes clear that the credit for that commitment should go to the Chief Minister alone.
The Chief Minister has also made clear that he shares the British Government’s desire to modernise the agreement on borrowing – the “borrowing guidelines” agreed in 2003. This is where the Framework for Fiscal Responsibility comes in. The FFR will cover more than just borrowing. It is an over-arching strategic framework, which will be the beginning of a process, within which the Government of Anguilla will develop and enact its own legislation for public financial management.
As I said, UK Government officials are coming toAnguillalater this week to finalise the text of the FFR in government to government negotiations . The Government of Anguilla will then be able to use the FFR as the basis for developing strong legislation forAnguilla. Improving public financial management and having this clarified through the enactment of Anguillan legislation are the key toAnguilla’s future as an economy able to attract business. Having public financial management legislation will be beneficial to everyone inAnguilla. It will show the high standards against whichAnguillamanages its public finances, it will increase transparency in government business, and in the awarding of contracts, and will ensure taxpayers know what is happening with their taxes.
Increased transparency in public finances will allow the electorate to see whether the government is providing best value for money in its provision of goods, services and investments. The FFR is a first step towards improving public financial management forAnguilla. Similar agreements have already been agreed with BVI and the Caymans.
A word about the evolution of the FFR. The British Government put its proposals for the FFR to theGoAback in April 2011. Some sixteen months later, on 15 August this year, the Chief Minister put forward a paper to EXCO with a suggestedGoAnegotiating position for the talks with the British Government. Ministers agreed those proposals from the Chief Minister in EXCO the following day (16 August). This enabled the British Government to agree to send a negotiating team to conclude the FFR, subject to ministerial approval on both sides. So clearly the purpose of today’s and tomorrow’s consultations is not to influence the GoA’s negotiating position which has already been agreed by EXCO as proposed by the Chief Minister. But I am sure it will be helpful for theGoAto explain its approach to those negotiations to civil society and business, and to hear views on the wider issues involved. As I said earlier, the FFR once agreed is the beginning not the end of the process.
So I wish your consultation well, and also of course hope that the government to government negotiations later this week go well.Anguillastands to benefit hugely from agreement on the FFR.
Contact for this press release:
Peter Roberts / Staff Officer to the Governor Anguilla / 497 2621 / peter.roberts@fco.gov.uk
– Press Release
