12 January 2012

Anguilla Chief Minister outlines British interference in territory’s budget

United Anguilla for Transparency

Special to Overseas Territories Review

Hubert B Hughes
Chief Minister of Anguilla
January 3, 2012

Fellow Anguillians,

Let me take the opportunity first of all to wish to Anguillians both at home and abroad as well as other visitors to our shores a Happy New Year as we enter 2012. I wish also to publicly convey the sentiments of the Season and best wishes of the New Year to the Father of the Nation, Mr James Ronald Webster and his dear wife Mrs Cleopatra Webster. No one knows the future either on a personal level or indeed on a national level and therefore as a Nation, we enter this New Year in Faith and Trust that God will see us through.

In this New Year, my administration intends to continue to maintain dialogue with the You the People about the various initiatives that we would like to engage in, keep you abreast of matters and issues that face our Nation, and hope that You will be actively participating in offering your views or indeed yourselves, if called upon for service to our beloved country.

It is against that backdrop that regrettably I am forced to tell you that today, the 1st day of Government business in 2012, the People of Anguilla are once again faced with the situation of not having a Budget.

I say once again - because as you already know from our first term in office, notwithstanding that all the Budgets presented in the House of Assembly have been passed unanimously by both Government and Opposition, the UK Government refused to assent to our Budgets. Again for this 2012 Budget, the UK Government has failed to assent to our Budget.

While seasoned business professionals may understand the impact of not having a Budget, I want the average man in the street and young People to understand the impact of what happens when the country does not have a Budget. Because of Anguilla’s Colonial status as a territory of the UK we require that after our Budget has been presented in the House of Assembly and debated by your Government and the Opposition that even after your Political Representatives considered that the Budget has been agreed, it requires that the Governor who represents the UK sign off on the Budget, that is Assent to it. This process traditionally happens prior to the 31st of December because by law, from the 1st working day in a New Year the Budget that you have passed is supposed to be the operating document that guides how you are permitted to spend money or to collect revenues.

Therefore if the Budget which you have passed in the House is not assented to, then the liabilities of Government –such as loans, invoices to be settled, payments to be made to statutory bodies including the hospital, and payments to individuals should not occur and
any revenue generating measures that would have been budgeted for cannot legally occur because they cannot take effect until after the Budget has passed. Essentially the wheels of Government grind to a halt. Essentially, this is exactly where the British Government has now placed us.

I want the People of Anguilla however to understand that the fact that the Governor and the British Government have not assented to the Budget is not by accident. The Foreign and Commonwealth Office (FCO) set a deadline of 31st October 2011 for the proposed Budget to be submitted to them by the Finance Department and my Permanent Secretaries in Finance, Mrs Kathleen Rogers and her team and Dr Aidan Harrigan and his team ensured that that deadline was met.

Mrs Rogers travelled with me as a part of my delegation to London in mid-November 2011, and even though we were both initially approached in what I would say was an abrasive and hostile manner on our Budget, we were both able to defend the Budget and in particular stand resolute that we could not and would not intend placing any further taxes on our People.

We also maintained that neither were we in a position to release civil servants because that situation or indeed further taxes would create greater social hardships on the People of Anguilla and which I as the Political Leader would not do.

In those meetings we were verbally assured that we had adequately responded to their concerns and that there would be no problems and indeed that there would be no delay in having the Budget assented. Since that time my Finance Department responded to further queries and requests which either the Foreign and Commonwealth Office or the Department for DFID requested of our Department - all within the timelines that were set by them, so that prior to the time that we went to the House of Assembly, there were no outstanding questions that had not been answered, no concerns that had been raised that had not been settled and all done within the timelines set by the FCO who were fully aware that the Assent needed to have been received by 31st December 2011.

While I as the Leader of Government Business have not received the courtesy of written communication as to why the Assent has not been received, I observed that the Governor in responding to Permanent Secretaries made mention of the fact that Minister Bellingham and other Ministers with whom he has to consult were going to be [And I quote] “pre-occupied with constituency events” and therefore he the Governor did not anticipate that he would get the instructions to Assent.

Also in the last Executive Council the Governor informed that the Ministers went on holiday and that it would be “a few weeks”before an Assent could be received.

This is of course with the full knowledge that the British Government have held the handle of the knife in setting a deadline of three (3) years for Anguilla to reduce a EC 70 million dollars deficit of which they had oversight and allowed to grow for several years under their watch. This is of course also with full knowledge that this can never be said to be “good governance” - a standard which is always strictly observed as against this Administration but does not have to be observed by the Administering Power. This is also with the full knowledge of the Ministers’ Departments that deadlines were set and that an entire country is now being held hostage to a“pre-occupation with constituency events”; that is to say that Anguilla does not even rank as high as events in their districts. I consider this to be the ultimate disrespect - not to me – but to you the People of this Nation.

I also want you to keep in mind that not only do we not have a Budget on the 1st day of Government business because of the lack of Assent by the Governor, but we also have a Department of Finance that has been officially handicapped on today’s first day of Government business.

You have heard me speak time and time again for the last few months on the fact that the Governor and Deputy Governor without consulting me proposed to transfer key Permanent Secretaries particularly in the Ministry of Finance.

You have heard me refer to the fact that the only Permanent Secretary with a double major in Finance and Accounting with 30 plus years experience in the departments of the Treasury and Audit was being removed during Anguilla’s toughest economic crunch in its history, to a Department in Public Administration which is a complete misuse of precious human resources which serve the People of this country.

You have also heard me refer to the fact that our solitary Permanent Secretary in the Ministry of Finance who is our Economist with a doctorate in Economics is being transferred from his position as an Economist to take up the position of PS Finance when he is not an Accountant. And you have heard me refer to the fact that the Permanent Secretary who has served the Ministry of Home Affairs and has significant experience in that Department and who does not have Economics as a qualification is now to serve as Anguilla’s Economist in the Ministry of Finance.

You have heard me refer to the fact that these transfers are unjustified not just from the standpoint of misuse of our human resources, but from the position of performance and the fact that it was the synergy of particularly these two Permanent Secretaries who led their teams to produce a Budget which could withstand the scrutiny of the UK appointed team of Experts and which allowed Anguilla to rebound from a 70 million dollar deficit to a surplus position in 2011 in just 2 years of this Administration.

I stand amazed that notwithstanding my own objections that these transfers are not in the best interests of Anguilla, notwithstanding the objections of every single Premiere or Leader of the Overseas Territories expressed at the Overseas Territories Consultative Association Meeting in mid-November 2011 in London and despite the indications of Minster Bellingham that the Governor should review his decision, the Governor maintained that his decision stands and through his office transmitted the Appointment Forms to the Permanent Secretaries effecting the transfers as of 1st January 2012

So now that there is no Budget and there is a handicapped Finance Department where does that put us?

Well once a Budget has not passed, the Government is entitled to utilise the option of signing off on a Provisional Budget. The Provisional Budget means that we cannot use the initiatives that we have planned for in our 2012 Budget and have to stick to what was done in 2011. In that case, it means that our proposed revenue generating measures – not taxes – are compromised and it means that every single day that we are unable to put our 2012 Budget into effect we become compromised in meeting our monthly targets and in meeting the overall deadline set by the UK. If you recall last year, as a result of not getting a timely Assent to our Budget we lost over EC 8 million dollars in revenue. Of particular significance for Anguilla however, is that every year we are supposed to receive funds of about EC$9 million from European Development Fund in the form of budgetary support.

We did not get it last year however, because of the fact that our Budget was not assented to and we had to utilise a Provisional Budget. I have been informed by my technocrats that already the European Department has been enquiring as to our state of affairs on the Budget and if again I am forced to sign a Provisional Budget there are strong chances that we would have jeopardised being able to receive those funds.

What I need you the People of Anguilla to understand is that notwithstanding it was the UK that delayed signing of our Budget last year which caused us to lose EC$9 million dollar in aid from the European Union, it was the UK Government that tried to strong-arm us to put taxes in place to make up for the short-fall even though they were the ones that created the situation that led to the short-fall. This year, after presentation of the Budget, it was made clear by Minister Duncan – the Minister for the Department of DFID that they wanted to receive from us a“Contingency Plan” - essentially a menu of measures that they wanted us to put in place in the event that we fall behind in any of our targets. That is why it was so critical for us to start the first working day of 2012 with a Budget. Doubtless, as with last year, even though they have created the situation in which we stand to fall behind – they will be the first ones asking us about further measures.

It is for all these reasons and particularly because if I go ahead and sign off on the Provisional Budget it will signal to the European agencies that once again we do not have a Budget and jeopardise Anguilla receiving funds, that I am taking the decision to delay signing of that Provisional Budget for one week to allow the UK Ministers to give priority to our situation. I am appealing to them to consider the further damage that they can do to Anguilla’s economy by delaying assent to the Budget.

Just as a footnote, I have specifically invited the President of the Civil Service Association to this briefing because I wish to make it clear to civil servants that what they see happening to their fellow civil servants, the Permanent Secretaries is not isolated. While they have chosen to remain silent on the issue, I must remind them that the woes and upheavals that we are constantly having with the British Government is in preserving their jobs. We have received recommendations to cut the civil service by 30%. I also wish to remind them that the British Government is reducing their civil service by 30,000 in two years. We have resisted this option because we recognise that to send civil servants home now is to condemn families to not being able to survive and will also affect our economy at large. While I intend to remain passionate about any action of the British Government that I do not feel is in the best interests of Anguilla, as the Elected Representatives we cannot fight this battle on our own.

Please recognise that General Orders which is subordinate to your Constitution cannot stop you from protecting your constitutional rights to work and to live.

To the People of Anguilla, I ask that you remain vigilant but the days of remaining silent are long gone. In our Past we have been successful in overcoming oppression when we felt that we were mistreated as a People.

We spoke with one Voice then because of our Pride as a People and our strong determination to protect our Home and our History. We need again to speak with one Voice.

I will be in touch with you and keep you abreast of further budgetary developments.

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