Cayman Islands Premier McKeeva Bush plans to press ahead with legislation relating to a revised financial management agreement between the United Kingdom and the Cayman Islands, despite strong opposition from the UK’s overseas territories minister.
In a statement to the first sitting of the latest Legislative Assembly meeting Monday in Grand Cayman, Mr. Bush told lawmakers that the terms of the agreement, known as the Framework for Fiscal Responsibility, had been incorporated into a legislative enactment, which is due to be debated and voted upon in the current assembly meeting.
“I have instructed the legislative drafters and the draft will incorporate the terms as contained in the FFR and agreed with the previous of Minister [of Overseas Territories Henry Bellingham] in the UK, but it will contain two additional provisions which, in the government’s opinion, are extremely important for the peoples of these Islands,” Mr. Bush said.
One provision increases the permissible capital expenditure over the lifetime of any specific project from $10 million to $25 million. The second specifies that if the Foreign and Commonwealth Office insists the Cayman Islands government take or agree to any action emanating from the Framework of Fiscal Responsibility, that the UK government accepts the responsibility for “any fiscal or reputational damage which the people suffer as a result of their insistence that the government act upon their advice,” Mr. Bush said.
On Friday, the British Overseas Territories Minister Mark Simmonds wrote to Mr. Bush urging him not to go ahead with his plans to bring a revised version of the agreement before the Legislative Assembly. Mr. Bush signed the agreement with the UK government last year, as part of conditions under which the UK agreed to approve the 2012/2013 government budget.
Premier Bush said it appeared Minister Simmonds had not been provided “with the full facts and circumstances in relation to a number of important matters, which are briefly and unspecifically referred to in his letter”.
Mr. Bush said he had understood that when his ruling United Democratic Party government first entered into the Framework for Fiscal Responsibility agreement that the Foreign and Commonwealth Office at the time was concerned about capital projects started by the previous People’s Progressive Movement government and increases in recurring expenditure.
He said Minister Simmonds should be able to agree that the two provisions were “reasonable and in keeping with a positive working partnership”.
“Unfortunately, the minister’s letter of 2 November does not provide any specific reasoning as to why these provisions may not be acceptable,” Mr. Bush told legislators, adding that he and his government were willing and available to discuss the issues relating to the FFR further with Mr. Simmonds.
“The minister indicated in his letter that by reason of the inclusion of these changes that I am disregarding good governance and I continue to be in breach of a series of commitments without any reference to what those commitments are. It appears that he is referring to these two changes in the FFR, which in my opinion are reasonable and accord with good governance, particularly in the light of the financial working relationship with the FCO which the document requires,” Mr. Bush said.
The legislation relating to the Framework for Fiscal Responsibility was not among the items on the order of business paper scheduled to be brought before the Legislative Assembly Monday.
Close to the brink
Leader of the Opposition Alden McLaughlin said he feared that the Cayman Islands was “very close to the brink of some form of serious intervention by the UK government”.
“That is bound to create even greater uncertainty and further undermine investor confidence in the Cayman Islands as a good place in which to invest and do business,” he said.
Mr. Bush’s comments in the Legislative Assembly on Monday were issued in response to a statement by the PPM about the overseas territories minister’s letter.
Mr. McLaughlin said he had never seen diplomatic language as strong as that expressed in Mr. Simmond’s letter to the premier.
In the letter released by the Office of the Governor, Mr. Simmonds told Premier Bush that his plan to proceed to the Legislative Assembly to “transpose a version of the Framework for Fiscal Responsibility, which does not accord with that which you have signed” was “not acceptable”.
“Should you go through with this course of action, I will have no choice but to conclude that you are disregarding good governance and continue to be in breach of a series of commitments you have made,” wrote Mr. Simmonds, adding that the such continued breach of commitment left him with “no alternative but to give detailed consideration to the alternative”.
Mr. Simmond’s letter also addressed the procurement of the new cruise ship terminal, saying that he would have “no choice but to ask the secretary of state to instruct the governor to reject the proposals” if Mr. Bush pressed ahead with plans for China Harbour Engineering Company to build the new cruise ship facility in Grand Cayman.
In his statement Monday, Mr. Bush said the cruise ship berthing project had progressed “in compliance with international procurement best practices” and that the government had instructed its attorneys at Maples to prepare for Minister Simmonds “a full and comprehensive outline of the processes which are being carried out and the process for the ascertainment of good value for money will be verified by KPMG and the project placed before the Central Tenders Committee.”
Call for referendum
The controversy surrounding the Framework for Fiscal Responsibility has led backbench Member of the Legislative Assembly Ellio Solomon to call for a public referendum on the issue.
Mr. Solomon told the Caymanian Compass on Monday that he wanted to call the financial agreement to be subject to a referendum. “I think there needs to be a lot more open dialogue on it. People need to be properly informed about this matter,” he said.
The George Town MLA said he thought the Foreign and Commonwealth Office requested for the agreement to be implemented was “dictatorial” and stood in the way of the democratic process.
Mr. Solomon said he would attempt to bring a motion to the Legislative Assembly calling for a referendum. He had planned to call for the referendum on the issue even before the correspondence between Mr. Bush and Mr. Simmonds were made public Friday, he said.
Opposition leader Mr. McLaughlin called Mr. Solomon’s referendum plan “complete and utter nonsense and, unfortunately, very dangerous nonsense as well”.
“The government seems to think that this is open to negotiations. It is not – not by a long shot,” said Mr. McLaughlin. “The premier went to London without consultation from the Opposition and I don’t know who else. He signed an agreement in November last year committing the government to the terms of the FFR. The UK has made it plain that they expect him to honour that commitment and have come as close as they possibly can in diplomatic language to saying that they will enforce it by order of council if he does not do so.”
Mr. McLaughlin described the idea of a referendum on the matter as “just an attempt to deflect attention and responsibility away from the premier and the government in relation to this. It’s a very dangerous path to take in the present circumstances”.
No live TV
Despite plans to show Monday’s sitting of the Legislative Assembly live on the new CIGTV, or Cayman Islands Government Television, the channel did not launch as expected.
None of Monday morning’s meeting could be viewed on WestStar’s channel 20, but the premier’s press secretary Charles Glidden, who is in charge of bringing the TV channel to fruition, said: “We had to make a few adjustments here and we hope to be able to join the Legislative Assembly later today”.