The following is a reply to Dr Rufus Ewing Premier Turks and Caicos Islands from William Hague, Secretary of State, to his open letter dated 10 February to Hague.

Please see iNews Cayman story published Feb 17 Feb 2013 at http://www.ieyenews.com/2013/02/tci-premiers-letter-to-hague-says-he-wants-governor-replaced/

where a direct transcript of Dr Ewing’s letter can be read.

Hon Dr Rufus Ewing

Premier

Turks and Caicos Islands NJS Francis Building

Grand Turk

From

Foreign  & Commonwealth Office

London SW I A 2AH

From the Secretary of State

Further to your open letter to me dated 10 February I have seen the speech you gave to CARlCOM heads of government on 18 February about the relationship between the Turks and Caicos Islands and the United Kingdom. I regret to say you substantially misrepresent both the past and the present situation to both the people of the TCI and to the leaders of the Caribbean.

The UK Government set out a clear vision in our Overseas Territories White Paper last year. We want the Overseas Territories, including the Turks and Caicos Islands, to flourish in partnership with the United Kingdom. We want you to build a strong and sustainable local economy and to develop as a community. Our relationship with you entails responsibilities for both parties. We have a broad responsibility to support the Territories and to ensure security and good governance. We expect the Territories to meet the same high standards of good governance and public financial management as in the UK.

We are playing our part to support economic and social development in TCI. We have provided, over many years, significant economic support and technical assistance, for example funding the initial investment in the main airport on Providenciales.

We accept a broad responsibility for our joint security. In recent years we have provided support to TCI when you have suffered natural disasters such as Hurricane Ike in 2008.  Two British naval vessels will be on station in the Caribbean this summer to provide further assistance if required. I know that you visited Royal Fleet Auxiliary Wave Knight yourself when she was in TCI last month. The UK funded the repairs to the radar equipment that has been instrumental in helping intercept potential illegal immigrants and drug traffickers. We continue to provide a range of support and training for public servants, such as in police, prison and immigration services.

We accept a broad responsibility for good governance. In 2009 Sir Robin Auld, a greatly respected former Lord Justice of Appeal and Senior Presiding Judge for England and Wales, conducted a Commission of Inquiry in TCI which concluded that

there was a high probability of systemic corruption among Ministers, members of the legislature and public officials in the then TCI government. He documented in detail information on corruption, dishonesty and abuse of public office by former Premier Michael Misick and other Ministers in the previous People’s National Party (PNP) Government and recommended criminal investigation. As a result, the previous UK government suspended parts of the TCI Constitution providing for Ministerial Government and the House of Assembly. Subsequent investigations have led to 12 people being charged. The judicial process is underway. There are still questions to be answered: the Attorney General is properly and legally seeking Michael Misick’s extradition from Brazil to TCI. Mr Misick is resisting ret urn to TCI and seeking political asylum. But progress has been made: a prominent international law firm was appointed to recover misappropriated assets and has so far recovered $16.6m, with a fu1ther $2.6m ordered to be paid, as well as nearly 2,500 acres of Crown land recovered; all to benefit the people of TCI.

As we are all aware, the previous PNP government left behind a chaotic situation including- through incompetence, abuse of power and corruption – rapidly deteriorating public finances. As a result, TCI was, in effect, bankrupt. In 2009 the UK government provided emergency funding to enable public workers to be paid. In 2010 we provided a guarantee that enabled the TCI government to borrow up to $260 million at an affordable interest rate in order to enable the government to maintain essential services while bringing public finances back under control.

The Interim Administration implemented a broad programme of reform to deal with this situation and to help prevent it being repeated.  It established a robust framework for good government and sound public financial management and integrity and accountability in public life. These steps should help minimise the chances of a few corrupt people exploiting the assets of TCI for their own benefit, instead of these assets being available for the good of all the community. We will allow neither this framework to be rolled back nor the delivery of good and honest government to be undermined.

Your letter raised prominently the issue of VAT. The UK Coalition Government in 2010 was presented with a situation in which TCI had an annual deficit of £3om which was set to grow significantly.  This unsustainable situation led to the UK Department for International Development appointing a Chief Financial Officer whose responsibilities were to ensure that this deficit was reduced and t hat TCI’s finances returned to surplus.  In a parliamentary statement dated 9 December 2010, 8 milestones were set, before which elections would not be permitted. Despite the financial milestone not yet having been met, the UK Government agreed in good faith to permit elections in the expectation that an in-coming government would administer the island’s finances so as to build an increasing surplus and release the UK Government from its government guarantee. Introducing VAT was central to this and seen to be in the interests of TCI and the UK. That said, UK Ministers have consistently made clear that a decision to introduce VAT is one for the TCI Government, and that credible alternative measures would be considered.

The TCI Government is responsible for delivering sustainable public finances. As you know this means that you and your Government have to meet the public finance framework, which includes debt reduction targets and should enable you to refinance your debts without a UK guarantee after 2016. UK Ministers have recently accepted your proposal not to introduce VAT on 1April but instead to set public spending at a lower level commensurate with the absence of VAT, the uncertainty about alternative revenue streams, and the weakening outlook for some existing revenue streams. We are now waiting your specific proposals on what additional expenditure cuts and alternative revenue measures you will put in place to ensure your adherence to the public finance framework.

I want to take this opportunity to make clear my full confidence in Ric Todd, the Governor of TCI, and his team. I also want to make clear my support for all those from TCI, including public servants, who engaged with the reform efforts and who are now working hard to ensure laws and regulations a re applied fairly and rigorously. An example of our commitment to the public servants was that during HM The Queen’s Jubilee year we launched a Jubilee fund to support t raining and development of public servants. This will continue.

We expect the elected government of TCI and other territories that wish to remain British to abide by the same high standards as the UK Government in maintaining the rule of law, respect for human rights and integrity in public life, delivering efficient public services, upholding the judiciary and building strong and successful communities. You have raised independence and of course this is an option for TCI; if the people of TCI express a wish for independence through a clear and proper process, the UK Government  will meet its obligations to help the Territory to achieve it.

I want to conclude by reiterating my belief both in democracy and that Government must be honest and transparent and behave responsibly. The TCI government has the chance to shape the future of your islands. The UK Government has invested much in helping put TCI back on the right path. TCI has a growing economy, modernised legislation and a committed  public service. I hope you will use this inheritance wisely.

WILLIAM HAGUE