As reported earlier, Anguilla’s Chief Minister, Mr. Victor Banks, was among leaders of the Overseas Territories who appeared in the House of Lords in London before a Select Committee on the European Union on Monday, July 10 2017.
The giving of evidence was in relation to the UK’s forthcoming departure from the European Union (Brexit) and the impact this is likely to have on the Overseas Territories.
The Chairperson of the public session was Baroness Verma. The Anguillian newspaper obtained an uncorrected transcript of the statements made by the various representatives of the Overseas Territories. It is stressed that the transcript is still to be edited by the Clerk of the Select Committee in London.
The following are extracts from the 26 – page transcript which are of particular interest to Anguilla as it relates to the evidence given by Chief Minister Banks (not including all the statements given in between by the other representatives of the Overseas Territories):
Q1 The Chairman: Thank you very much, ladies and gentlemen. Can I remind everybody that this session will be in public? It is being broadcast. There will be a transcript, which will be given to you after the session has taken place. If there are any corrections, please feel free to send the corrected transcript back.
We have quite a full session, so the easiest thing to do is to introduce all our visiting witnesses and open up with the first question, which will allow the following questions to become part of the wider debate without taking a break in between. I will start by welcoming: Mr Victor Banks, Chief Minister, Government of Anguilla; Dr Derrick Binns, Secretary of the Cabinet, Government of Bermuda; Dr D Orlando Smith, British Virgin Islands Government; MLA Roger Edwards, the Falkland Islands Government; Donaldson Romeo, the Honourable Premier of Montserrat; Councillor Leslie Jaques OBE, Government of the Pitcairn Islands; Chris Carnegy, UK Representative of the Government of Tristan Da Cunha; and the Premier Honourable Sharlene Cartwright Robinson of the Turks and Caicos Government. Welcome to you all.
We will start with our representative from Anguilla. What are your principal concerns, both individually and collectively, about the impact of Brexit on the overseas territories? If each of the other witnesses then answers in turn around the table, that would be very helpful.
Victor Banks: Thank you very much, and thanks for having us. Obviously we have issues that affect all of us as overseas territories. We are concerned as a collective about those issues. A number of them have to do with our future relationship with the EU specifically, and how that will impact the support that we receive from the EU, whether financial and otherwise. It has been considerable over the years, and has been a blessing to many of our territories, including Anguilla, where the support from the EU from EDF funding accounted for some 36% of our capital budget in 2016. This is critical for that aspect of it. Most of the territories will be concerned about the impact that it will have on aid and other support that we receive.
Of course, we would like to know that our administering power, the UK Government, is able to negotiate an arrangement coming out of the negotiations that would enable us to enjoy some of the privileges we have enjoyed from an immigration standpoint: our ability to move around, freedom of movement throughout the EU and so on.
Anguilla in particular has another issue, which we want to focus on very strongly in all our presentations and everything that has to do with these negotiations going forward. We are in fact a border state of the European Union, being located geographically within five miles of the French and Dutch St Martin. Obviously that relationship goes beyond economics. It is a familial relationship. As a matter of fact, the President of the Collectivity of St Martin and I are first cousins once removed. That is the level of that relationship. In addition to that, 60% of the elected representatives of French and Dutch St Martin have Anguillan roots. The Prime Minister of the Dutch side of St Martin is a grandson of Anguilla. It is strong at that level.
Additionally, we are involved in the tourist industry, other elements of trade, social services and medical services. We have a small population of 15,000, and French and Dutch St Martin has a population of over 100,000. Certain social services, medicines and so forth will be much more readily available because of the population of St Martin, so we have taken advantage of that. There are ferries that go to St Martin every 20 minutes, to the Dutch side and to the French side. There is a movement that takes place every day. Children in Anguilla go to school in St Martin. There is trade with St Martin. Most importantly, it is the access point for our key industry, which is tourism; 90% of the people who come to Anguilla use St Martin as a hub.
Obviously, we are very dependent on that relationship. If Brexit impacts the degree to which we are able to continue to do business with French and Dutch St Martin, it will be very critical to our development. We want to ensure that we bring that impact on our region to the attention of the British Government in these negotiations.
There are also benefits for the UK Government that are available because of where we are positioned geographically. One of the neighbouring islands that we as a Parliament go to, Sombrero, is a gateway to the Panama Canal, so a lot of the shipping that goes through the Panama Canal has passed through that channel historically over the years. There are certain benefits to be derived from having a relationship with the UK, which is concerned about how that develops and how it impacts Anguilla. Oil comes in to Anguilla through St Martin via St Eustatius, the main terminal in that region, so there are a host of things that impact this.
We need to be concerned about how that plays out. It is very important that this is an aspect of the discussions going forward, and we want you to continue to recognise that. In spite of whatever findings or whatever opinions have come as regards that relationship, the border relationship of Anguilla with two EU member states is critical to our development. Thank you.
Q2 Lord Cromwell: Can I just echo that? It is great to see you all here today, and I feel in the last few minutes that I have been on a fascinating journey through some of the most interesting and, dare I say, exotic and beautiful parts of the world. Thank you for that, among the other things.
From what you have been saying, there are various commonalities that seem to run across, which are trade, aid and the ability to travel freely, as well as a more personal requirement and request to remain involved and not to be forgotten. That leads me to my first of two questions, if I may, with the Chairman’s permission, sneak two questions in. My first question is: to what extent, given how diverse you are yet with these common issues, have you been able to join forces, make a common position and push your arguments together? Has it very much been an individual enterprise? I do not know who will be bold and help me with answering that question, but I am looking hopefully across to you.
The Chairman: Perhaps we can start with Anguilla.
Victor Banks: Thank you very much. Over the years, Anguilla has recognised that it is important for us to deal with issues where we have a common interest generally as a group. We have done that through OCTA. We have done that through the joint ministerial council meeting. We have UKOTA, which we have been struggling with for a number of years, to ensure it has the impact it should have.
Certainly, Anguilla has found that, when it comes to critical issues affecting Anguilla directly, it is important for us to make a direct approach on issues that affect our development. We recognise the importance of the collective approach. It is something that is critical. We are overseas territories and we have common issues. But, at the end of the day, when it comes down to the bread and butter issues that affect individual territories, we have to make representations on our own.
During this period with the Brexit discussions, because of our peculiar circumstances as a border state of the EU—and I want to emphasise that—it is important that we make that case very strongly. To do that, we have put together our own document, our own White Paper, explaining exactly what Anguilla is all about, and I am sure that you have received copies of it. We are trying to circulate those copies as widely as possible because we recognise that it could get lost in the negotiations. Of course, you talk about Gibraltar and you talk about Northern and Southern Ireland, but Anguilla is very important in that discussion as well, as you go forward.
It is important to have the collective and OCTA, because that enables us to access the benefits that we can derive from that decision. Of course, out of that come the aid that we receive and the various social and educational programmes that obtain. But, at the end of the day, it is important to have a two-pronged approach. We are in the wider framework for discussion on a collective basis, but individually we have to put forward our concerns as well.
Lord Cromwell: Before we go on, perhaps I could add a third prong to give you a trident, which is really my second question. It may be a heretical question. Particularly in the case of your location, to what extent are there opportunities to look at affiliating to the EU through your neighbours—through the French or the Dutch—or just a direct link into the EU? In many cases, it seems to me that the EU funding is more valuable than the DfID funding. Is there a third prong to that trident or is that a heretical suggestion?
Victor Banks: There have been certain partnership programmes that have been a part of past relationships. Going forward with the ACP countries and so forth, there are certain programmes that benefit countries in the region. We have been having some discussions about some of those programmes regionally. I cannot relate the specifics of those programmes now but they exist and they are part of the process. Certainly, even though we speak about the relationship between Anguilla and the French and Dutch St Martin, at the local level we really do not have any issues. We have the issues at the administering power level because external affairs, which is what this comes down to, are dealt with by France, the Netherlands and the UK. On immigration, marine coastguard and other issues, such as the importance of ensuring that we have the coverage, security and safety of passengers travelling between the various territories, we can get by at the local level but, at the foreign and external affairs level, it can create a problem.
Dr Derrick Binns: In response to the first two points that you have raised, our view is similar to that of Anguilla, and you might find that it is shared by many of us: it is important for us to work together, and we do. We meet together on a regular basis. We meet with the UK Government in the joint ministerial council forum, but we also meet in advance of that to discuss those issues of concern to us. Where necessary, there might even be meetings by teleconference, so we work together.
At the same time, we also have issues that are distinct for each of us and it is important for us to represent our own positions on those most distinct issues. You will find that, Bermuda included, we make our own direct representations to the UK Government on those issues that pertain directly to us. It is therefore both a shared approach and an individual approach.
With regard to your third prong and the second question, our constitutions in many ways determine our ability to, and the extent to which we can, make a direct approach. For example, under our constitution, the UK Government have retained responsibility for external affairs, so we often work together with them. We are granted letters of entrustment that enable us to undertake a number of initiatives with other countries.
That has been the case with the EU and we have used that to our advantage. There are a number of things that we have been able to negotiate directly with the EU. Aid is not an issue for us—we do not qualify for the aid to the same degree—but there are other issues in support of our financial services sector that we work on. We would like to see the ability to extend that as necessary. We expect that we would get support from the UK to enable us to do that through letters of entrustment.
Q3 Baroness Wilcox: Thank you much indeed for being here today, representatives of the overseas territories. It is very exciting to hear these stories, but we have to write a report and that is what we are after. The question that I will ask is: to what extent are the overseas territories recipients of EU funding—not the rest, EU funding—and what will be the impact if that funding is lost? Those are the things that we will need to be able to put together.
Lord Woolmer of Leeds: In the same spirit of getting to some key issues, I would like to touch on the question of restrictions on movement within the EU. Mr Banks spoke eloquently about the effect of that in his case but there are two types. There is travel for the purpose of health, education, tourism and so on, and then there is travel for the purpose of work. I wonder if you could bring out the importance or otherwise of restrictions on the free movement of people, as far as you are concerned, into the European Union or its associated territories, distinguishing between the different kinds of movement.
Victor Banks: Thank you. I will first respond to Baroness Wilcox. You asked about the extent of the impact of EU funding loss. The EU is the only source of significant development aid for Anguilla. It accounts for 36% of its capital projects budget in 2016. Obviously, without EU funding, Anguilla would be unable to balance this capital budget. Under the EU’s 10th EDF fund, Anguilla was allocated €11.7 million for the three-year period. In the present 11th EDF fund, it is €14 million over that period.
It is critical for a number of projects. The funding this time around is for education. There has been a lack of capital investment in educational infrastructure in Anguilla over the last 10 to 15 years. It is important, with the growing population and with changes in educational policies and programmes, that we spend money in improving the quality of these human resources.
That funding is critical right now. Without that funding, going forward, we would be in a dilemma. It does not come from anywhere else except borrowing, and we have a very small fiscal space to undertake any borrowing for those kinds of things right now. With the challenges coming out of the recession in 2008, with the drop-off in tourism arrivals and the economy generally, we would be unable to even balance our budget, let alone put aside funds for that critical area of education. EU funding is very important for us. If we lose that funding, it must be replaced in some way.
You mentioned travel. A lot of the travellers for the purposes of work from our territory go to French and Dutch St Martin. Over the years, we have been able to benefit from a close neighbour that has a vibrant economy and that has the job opportunities that people are qualified for. They go to St Martin to work in education as teachers, in the hotel sector, in construction and in other areas of work. They can do this by getting on a boat in the morning and going to St Martin or by going to St Martin at the beginning of the week and coming back at the weekend. Other people travel to the UK. Very few of them travel to mainland Europe for work but the opportunities are there and, as time goes on, I am sure they would avail themselves of those as well.
Anguilla has one of the largest diasporas of the overseas territories, in my estimation, in the UK. We have over 6,000 people of Anguillan descent living in the UK, and a majority of them live in an area called Slough, which is where I live when I come to the UK, because it is important to understand the issues of our people in that area as well. They will be impacted by Brexit, because a number of them have been looking to the wider European Union for job opportunities as well.
To respond to your question, there is a critical opportunity that can be lost if the negotiations do not go in the right direction. As far as the EU funding or the grant aid that we receive is concerned, it is very important that that be replaced in any negotiations that take place or is maintained in some other way.
Q4 Lord Jay of Ewelme: I had a question about financial services, which probably applies more to Bermuda than, say, the Pitcairn Islands or Tristan da Cunha. I just wondered how far Brexit was likely to affect, in your view, your financial services sector. I note that your Premier said recently, referring to the EU Solvency II directive, that you thought it might not have an effect because you already have equivalency status. Does it worry you that you might not be able to continue that after Brexit, or what would you have to do to ensure that you did? It is a slightly more technical question and slightly more geared towards Bermuda than some of the others.
Baroness Browning: Good afternoon. It is very good to see you all. To what extent are you reliant on trade with the EU, particularly in the areas of fisheries and agriculture? How can any negative effect of Brexit on such trade be mitigated? Have you started the process of looking at other markets elsewhere as substitute markets, given the British Government’s commitment following Brexit to be a global player as far as trade is concerned?
Baroness Neville-Rolfe: Several of you have talked about the opportunity of coming to see this Committee, and we feel that the opportunity to learn about what is happening in the overseas territories has been an amazing advantage. On that theme of opportunity, I just wanted to ask whether you perceive any benefits for the overseas territories arising from Brexit and, if so, what they are. Listening to you, you obviously talked about development aid. Is there an opportunity of matching that development aid by the UK, which has been very strong on development? There was talk about a higher value elsewhere, in relation to lobsters. I used to trade in China. Are there opportunities? Tristan da Cunha talked helpfully about that. Tourism is an incredibly important industry in a lot of the overseas territories. Does a post-Brexit scenario give you any opportunities?
The Chairman: May I suggest that our representative from Bermuda responds to Lord Jay’s question?
Dr Derrick Binns: We expect that our efforts to achieve equivalency with Solvency II will stand us in good stead, notwithstanding what will happen through Brexit. We achieved it on our own. We achieved it for Bermuda and we do not believe that it is linked in any way to the UK’s membership of the European Union.
However, having the UK as a member of the EU provides significant support for us and we would be somewhat concerned with how the interactions will now take place, with the UK no longer being there to provide that support. We are working under the assumption that, having earned it on our own because of what we have done, that will remain. But it is the relationships that become important and of concern to us.
Can I just touch on the other two questions while I am at it? We do not have any major reliance on trade with agriculture or fisheries. Our main trade will be through financial services, primarily through insurance and reinsurance. With regards to opportunities that might come from Brexit, we have always desired to have greater tourism from Europe. We are challenged, again, by our constitution and the responsibilities that the United Kingdom Government retain, particularly for international affairs. They include international travel, so we have to negotiate with the UK if we want to have any direct flights other than British Airways flying into Bermuda. That has been a longstanding issue for us, it remains an issue and it will not be in any way impacted by Brexit. It may become worse. Who knows?
Victor Banks: I want to respond to the questions that came up. The financial services sector in Anguilla is relatively small when compared to those in the other territories in the region, but it is now marketed and promoted to a great extent, so the impact of Brexit hinges on the Union’s blacklisting regime, and this should concern all of us. This will come into effect notwithstanding Brexit, however, and hence the impact of Brexit will be the extent to which inappropriate classification by the EU may be successfully challenged by former member states and their related territories. Anguilla is currently responding to the EU’s information request and awaits the outcome of its deliberation.
As regards the question on trade, French and Dutch St Martin still remain the main market buying Anguillan fish. That is the agricultural produce that we mainly trade and it is transported to French St Martin, which is the outermost region, as well as the constituent part of metropolitan France. Anguilla seeks to expand its fishing industry and, as such, will require continued access to the French and Dutch markets. However, Anguilla has yet to fulfil EU requirements for the export of its fish and may face additional criteria after Brexit.
Finally, there was the question about the benefits for the overseas territories after Brexit. Anguilla, in particular, has been raising the issue about borders. The issue of borders points strongly to the need for Anguilla to have access that is flexible. As a consequence, it may assist us to build the case for more effective and efficient access, facilities such as airport expansion and port development, and so on. These are the things that we are looking for coming out of the Brexit discussions and what could happen as a result of the UK trying to respond to some of those areas that would be affected. One of them is access, one of them is fishing and the other is port development and so forth.
