From House of Commons Foreign Affairs Committee

Fifteenth Report of Session 2017–19

NOTE: THIS NOT THE FULL REPORT

Summary

The British Overseas Territories (OTs) are a set of largely self-governing territories spanning nine time zones, from the Atlantic to the Pacific, the Antarctic to the Caribbean. These territories are not part of the UK and each has its own constitution, but all share a bond with the UK and a pride in their deeply-rooted British identities. For the Overseas Territories, Global Britain is a living reality and they have a valuable part to play in it.

On the whole, OT-UK relations are stable but there is some appetite for reform in a number of areas. The FCO’s role as the lead department for the OTs is one such area. Some OTs feel that it is inappropriate for a department responsible for foreign relations to also have responsibility for governing British territories and many OT governments feel that they are being managed by FCO officials rather than treated as partners, and that their voices are not being heard elsewhere in Whitehall. That is why we are recommending that the Government commission an independent review into cross government engagement with the OTs and the FCO’s management of its responsibilities towards the OTs and to consider the costs, benefits and risks of moving primary responsibility for the OTs away from the FCO.

The UK’s relationships with the OTs were placed under strain in May 2018 by the passage of the Sanctions and Anti-Money Laundering Act (SAMLA), which requires the OTs to publish registers of beneficial ownership. Some OTs say that this will impact their financial services sectors and make them less competitive. We believe it is a matterof national security, because there is evidence to suggest that money tied to autocratic regimes has been connected to OT-registered companies, and that considerations of competitiveness cannot prevent action. The public in the UK and elsewhere have a right to see beneficial ownership information and we are calling on the Foreign Secretary to lay out plans for achieving this.

Beyond the specifics of SAMLA, some OTs say that its consideration and passage raised wider questions about Parliament’s relationship with the OTs. There is little appetite in the OTs for major change, such as the OTs sending MPs to Westminster, but most agree that there needs to be greater scope for Parliament to examine OT issues, particularly given the cross-departmental nature of the Government’s engagement with the OTs. We therefore think the time is right to consider establishing a new formal mechanism by
which the members of relevant select committees can scrutinise the UK Government’s administration of, expenditure on and policy towards the OTs.

In the long term, rethinking how the Government and Parliament interact with the OTs will help to ensure that the UK’s bonds with the OTs remain strong. There are also steps both sides can take in the short-term. On the one hand, the UK Government needs to ensure that those who should be able to claim British Overseas Territories citizenship can do so and that OT citizens can access NHS treatment in the UK when they need to. On the other hand, belongership and its equivalents are wrong: we do not accept
that there is any justification to deny legally-resident British Overseas Territory and UK citizens the right to vote and to hold elected office. The UK Government should initiate a consultation with the elected governments of the OTs and agree a plan to ensure that there is a pathway for all resident UK and British Overseas Territory citizens to be able to vote and hold elected office. Moreover, those OTs that have not yet legalised samesex marriage should move towards doing so. These steps can ensure that the concept of Global Britain can be underpinned by shared values and commitments.

Streamlining funding for the OTs is another way in which their relationships with the UK can be strengthened. For some, this means having certainty about the long-term outlook for funding large-scale infrastructure developments, for others it means helping to tackle climate change and continuing and expanding the Government’s Blue Belt programme, which helps to conserve the OTs’ globally significant environments. That is why we are recommending that the UK Government set up a dedicated development and stimulus fund for the Ots.

Conclusion

1. Since the start of our Global Britain inquiry, we have repeatedly argued that the FCO needs to move forward by looking back. We have said that the FCO should resume
   responsibility for the UK’s international trade and its relations with the EU and set the strategic direction of the UK’s foreign policy as it did before so many other departments became involved in international relations. When it comes to the Overseas Territories, however, the FCO needs to do the opposite; it needs to give up rather than reclaim responsibility. In other policy areas the FCO must return to form but with the OTs it is stuck in the past. This is reinforcing the sense that many in the OTs have that they are not just far away from Britain but foreign. That is why we are calling on the UK Government to commission an independent review into cross-government engagement with the OTs and the FCO’s management of its responsibilities towards them.

1. Parliament has a role to play too. It must ensure that, while the people of the OTs are not directly represented in Parliament, there is a forum for the effective scrutiny of the decisions taken in London that impact them directly. That is why we think the time is right to consider establishing a new formal mechanism by which the members of relevant select committees can scrutinise Government administration, expenditure and policy in relation to the OTs. Taken together, these and the other recommendations in this report
   can help to ensure that the bonds between the UK and the British Overseas Territories are strengthened and that together we can truly be a Global Britain.
   

Conclusions and recommendations

The OTs and the FCO

1. Some of the Overseas Territories feel that the Foreign and Commonwealth Office should not be the lead UK department for the OTs. Some believe that this arrangement reinforces the perception that the OTs are foreign and that it is not fit for purpose given the cross-government nature of the UK Government’s modern relationship with the OTs. However, not all OTs agree and some feel that the FCO has long experience of working with the OTs, it has expertise in managing relationships with the countries that surround the OTs, and it deals on a daily basis with international treaty obligations relevant to the OTs. It is time for the UK Government to seriously engage with this issue and to do so in a fair and transparent manner. Before the next full meeting of the OTs Joint Ministerial Council the Government should therefore
   commission an independent review into cross-government engagement with the OTs and the FCO’s management of its responsibilities towards them. Drawing on international comparisons, this review should consider alternatives to the FCO and assess the costs, benefits and risks associated with moving primary responsibility for the OTs away from the FCO. The findings of the review should be presented to the House
   and shared with the elected OT governments as soon as is feasible (Paragraph 21)

There is a widespread feeling in the OTs that the quality and quantity of their communications with UK Government departments needs to improve. The OTs’ needs extend far beyond the FCO and their voices must be heard elsewhere in Whitehall. Towards this end, the FCO should draw up plans for a secondment programme between government departments in the UK and the OTs, including assessing the likely costs and level of interest in UK Government departments. The FCO should include specific proposals, costs and a timeline for this in its response to this report. (Paragraph 22)

1. The FCO must ensure that the officials it appoints in the Overseas Territories have the skills necessary both to build constructive relationships with the OT governments and to ensure that the territory’s governance meets the highest standards. In its response to this report, the FCO should explain the processes it has in place for advertising and
   recruiting for positions in the OTs, such as governorships, and what it does to consult the OT governments on these appointments. The FCO should also outline the training it provides to the officials it appoints in the OTs, both in advance of and during their postings, and how it assesses their performance. (Paragraph 23)

There is no single name that properly describes the UK, the Overseas Territories and the Crown Dependencies as a collective family of nations and territories. In its response to this report the FCO should lay out plans for a consultation on whether there should be a name and what such a name should be. (Paragraph 24)

The people of the Overseas Territories are deeply proud of their British heritage and continue to feel a strong sense of loyalty to the Crown and a close bond with the United Kingdom. The flying of the flags of all Overseas Territories and Crown Dependences in Parliament Square for the weekend of the Queen’s Birthday Parade,
“Trooping the Colour” and for all State Visits since 2012, has been a source of enormous pride in the OTs. To many in the OTs, this symbolised that they were fully 30 Global Britain and the British Overseas Territories: Resetting the relationship part of the British family and gave them long overdue recognition. However, their
request to lay a Poppy Wreath on Remembrance Sunday at the National Service of Remembrance at the Cenotaph in Whitehall has not been accepted, thus far. There is a unanimous wish amongst the governments of the OTs that as their citizens have fought and died in the service of the Crown in various conflicts over the centuries,
that they too should be able to pay tribute in the same way as Commonwealth nations, whose representatives lay a wreath each year at the Cenotaph. Since 2014, the Ambassador of Ireland has also been invited to lay a wreath in memory of Irish citizens who have served in the British Armed Forces, yet the OTs and the Crown
Dependencies are still denied that same right. The Committee believes that it is time for this anomaly to be rectified. Before Remembrance Sunday 2019, the Foreign Secretary should explore the possibility of extending an invitation to each OT to send a representative to lay their own wreath, or at the very least one wreath laid by a different OT representative each year. (Paragraph 25)

The OTs and Parliament

1. Parliament has judged public registers of beneficial ownership to be a matter of national security. Those who seek to undermine our security and that of our allies must not be able to use the OTs to launder their funds. We cannot wait until public registers are a global norm and we cannot let considerations of competitiveness prevent us from taking action now. The lowest common denominator is not enough.
   While law enforcement agencies in the UK appear to have made relatively little use of their powers to request company information from the OTs, it is vital that this information can be accessed by the public, both in the UK and in countries where public money has been stolen by kleptocrats whose actions harm the UK and its allies. We welcome the FCO’s assurances that it is working with the OTs to help them implement the Sanctions and Anti-Money Laundering Act. We commend the constructive approach the FCO has taken on this, despite the language used by some OT politicians. We profoundly regret, however, that public registers may
   not be published before 2023. It is simply not acceptable that this will be long after the deadline set out in the Act. The Foreign Secretary, in co-operation with the elected governments of the OTs, should lay out before the Summer recess a clear and detailed timetable for the publication of registers of beneficial ownership in each OT. (Paragraph 33)

1. We are aware that many people in the Overseas Territories feel that they do not receive the attention in Parliament that they might expect and that the Foreign Affairs Committee has not carried out a major OTs inquiry since 2008. Given the competing pressure of other policy areas, and the requirement to scrutinise the whole gamut of the Foreign Office’s work, it is difficult to envisage another major OTs inquiry in this Parliament. This fails to do justice to the range an complexities of the issues facing the OTs, individually and collectively. Mindful of this, we believe the time is right to give serious consideration to establishing a formal mechanism by which members of the Foreign Affairs, Justice, International Development, EFRA and other relevant Committees are able collectively to scrutinise the UK Government’s administration
   of, spending on and policies towards the OTs. (Paragraph 38).