The last of the Empire that sometimes sees red when they talk to London

It is ten years since the last foreign affairs select committee inquiry into the Overseas Territories. Its present inquiry is well timed. Much has happened over the last decade that has transformed relationships between the UK and its overseas territories, not least the working out of the new relationship that the government of Tony Blair set out in its 1999 white paper Partnership for Progress and Prosperity.

With Hong Kong handed back to China in July 1997, the FCO began an internal review of the remaining overseas territories, formalised by Robin Cook’s off-the-cuff promise of a white paper. The review period was dominated not just by the underlying issues that had built up over many years and the departure of Hong Kong but also by the explosion of the volcano on Montserrat and the aid crisis that followed.

Initially caught on the backfoot and, after some unfortunate remarks from the then secretary of state for international development, Blair opened Downing Street to the Montserrat government and worked with them to manage the crisis. This event brought overseas territories onto the agenda of Downing Street and the government committed itself to a significant overhaul of relations — to make them fit for the 21st century.

The 1999 white paper still underpins relations day. It has four basic principles: self-determination, mutual obligations and responsibilities, maximum self-government and UK guarantees of defence, security and support for economic prosperity.

The challenge now as then is to recognise the diversity of territories and relationships. British Antarctica has no resident population, British Indian Ocean Territory has been leased to the US and its people turned into refugees; Pitcairn has only 54 inhabitants. Some territories are economically weak or dependent on the UK: St Helena and Tristan d’Acuna largely due to their isolation. Montserrat is still dependent on UK aid as the volcano remains active — preventing the return of almost two-thirds of its population. Ascension Island is part of the UK airbridge to the Falklands.

Many are wealthy: Gibraltar is in the EU, a thriving financial centre and a substantial port. The Falklands is thriving too: its population, ex-service personnel, having doubled since 1982 and its economy booming on fishing and hydrocarbon exploration. The four other Caribbean territories — Anguilla, British Virgin Islands, Turks and Caicos and the Cayman Islands are successful financial centres and tourist destinations. Bermuda, the most populous at 60,000, is prosperous and stable. Fourteen territories in all, some uninhabited, one dispossessed, but most thriving, active and stable democracies.

The 1999 white paper formalised the ending of a policy of independence for UK territories, promising that all would remain British as long as they wanted to. British citizenship was granted to those territories that did not have it. This sent a strong and unconditional signal of support and commitment both to the territories and to their neighbours. It remains the foundation stone on which all other aspects of the relationship lie.

The UK government’s major concern, beyond defence and sovereignty issues, is the stability and propriety of the territories governance. This concern grew in the 1980s with concerns about money laundering, including narcotics money; there was strong US pressure on the UK to clean up its overseas territories: Gibraltar causing problems for Anglo-Spanish relations is one thing: the Caribbean dependencies causing problems with the States is quite another.

In fact, by the time of the white paper the overseas territories had mostly modernised their financial regulations and had become advocates of strong and independent financial regulation — after all, well run finance centres are prosperous and sustainable.

The British Virgin Islands past its Companies Act in 1984, for instance and its current head of the Financial Services Commission, Robert Mathavious, is an internationally respected financial regulator.

Britain is required to ensure that her territories fulfil her international obligations and is rightly determined that they do so. This perhaps explains why the white paper reads as if it is a driver of change for finance centres: in reality what it insists upon was already in place or coming into place, driven by market pressure and the territories own interests.

Britain’s overseas territories’ financial centres are internationally recognised as having high levels of supervision, good legislation and transparency. The IMF regularly reviews their standards, as does the Financial Action Taskforce and the UK government.

Interestingly, Angela Merkel’s recent attacks on finance centres have been aimed at non-British finance centres — Andorra and Lichtenstein in particular — both with a reputation for secrecy.

The white paper was significant in the development of new constitutional arrangements — after all, they have to be approved in London. They exemplify the new relationship — more self-determination but higher standards for democracy, rule of law, and human rights. New constitutions for Gibraltar and the British Virgin Islands came into force last summer. The constitutions for the Falkland Islands and Cayman Islands are presently under discussion.

The terms of the new relationship were tested almost immediately by the Anglo-Spanish negotiations over the future of Gibraltar. Ministers operated without reference to the white paper’s principles, seeking to negotiate away issues of sovereignty with no regard for the views of Gibraltarians.

The policy — incoherent as well as unjust — collapsed in 2002. It was replaced with a policy of engagement with Gibraltar. In 2004 a new deal was reached that established the Trilateral Forum — the UK, Gibraltar and Spain — in which issues of mutual interest can be discussed and progress made.

The experience raised the profile of the overseas territories in parliament and across the UK and reaffirmed UK government support of self-determination for Gibraltar. It also signifies the realisation of the white paper principles: Gibraltar is now formally an equal partner in discussions with the UK and Spain and enjoys very much a ‘non-colonial’ relationship with London.

Of course, the new relationship between territories and the UK throws up its own tensions. The territories cannot just be ‘told what to do’. They have constitutions, elected politicians and their own legal systems. The relationship is alive and changing.

One of the challenges for the UK is to recognise this. The territories are growing in self-confidence. Skilful political leadership, self-sufficiency and the realities of the globalised, multi-relationship world, mean that new pressures and new demands are coming to the fore. Others will come in the future — perhaps, for some, independence.

One of the irritants that is expressed by overseas territories is how they are treated in London. Most now have permanent representatives — even tiny St Helena — but they have no automatic access to parliament. The UK parliament is still their sovereign parliament and relationships between them and MPs in particular are vital and highly valued. Gibraltar’s victory in securing a shift in FCO policy was won as much in the corridors of Westminster as in the streets of Gibraltar.

This is seen not just as an irritant but as belonging to the old, colonial-type status that the 1999 white paper was meant to end.

There is justification in giving overseas territories’ permanent representatives a new status. One new term, suggested by Gibraltar’s Albert Poggio, is ‘Commissioner’. It has associations of the close link with the UK akin to the Commonwealth ‘High Commissioner’ title but distinguishes them as non-diplomatic.

There is also a call for attendance by overseas territories on the fringes of Commonwealth Heads of Government Meetings. The overseas territories have much in common with the Commonwealth in history, in their geographical spread, diversity and the many issues they face.

And finally, a point all territories feel strongly on, is the right to lay a wreath at the cenotaph on Remembrance Sunday. Almost every territory has veterans; some have many. The governors lay wreaths in the territories, rightly, but the overseas territories have to be represented by the foreign secretary in London. Is that mutual respect?

The mutual relationship is summed up well by Britain’s commitment to provide security and defence and work for the territories economic prosperity. The willingness of the overseas territories to send their sons and now daughters to die for Britain is the chief expression of their commitment to Britain and its values. And after all, when the UK goes to war, so do they.

The committee is right to maintain its focus on the overseas territories. For Margaret Thatcher, the Falklands was a defining moment; for John Major and Tony Blair, the handover of Hong Kong was one of our chief foreign policy successes of the 1990s. Tony Blair found Montserrat and Gibraltar sharp learning curves for his government. These overseas territories have a knack of becoming significant political issues, far beyond their apparent political and economic weight. That means not side-lining, as many in the Foreign Office have argued in the past, but rather understanding and giving attention to the overseas territories. It is not hard to see that had such a policy been advocated by the foreign office over the last thirty years, much grief and loss of life would have been avoided.

Roderick Crawford is editor of Parliamentary Brief