In a complete reversal, Cayman Islands Premier McKeeva Bush reluctantly assented Tuesday to various demands made by the United Kingdom regarding the territory’s fiscal management policies and abandoned a proposal to expand the George Town cruise port.
UK Overseas Territories Minister Mark Simmonds had earlier warned that the British government required the Framework for Fiscal Responsibility to be passed into local legislation in the same form it was signed a year ago. The fiscal framework document, which sets certain guidelines for public bidding, project management and public sector borrowing among other matters, was signed by Mr. Bush and then-Overseas Territories Minister Henry Bellingham in November 2011. Mr. Simmonds also said the UK would block the mooted cruise port expansion plan with China Harbour Engineering Company unless the project was put out properly for bid.
Meanwhile, Cayman Islands Governor Duncan Taylor travelled to the UK on Monday for meetings with “a range of people at the Foreign and Commonwealth Office, including Minister Simmonds”, according to his office. Mr. Taylor was due back in Cayman on Friday. His office did not provide specifics about the discussions.
Mr. Bush’s announcement Tuesday was a sharp departure from positions he took just a day before in the Legislative Assembly, where he presented a revised Framework for Fiscal Responsibility document for insertion into the Public Management and Finance Law and told members that good governance requirements had been observed during port expansion talks.
“I make these announcements with a heavy heart,” Mr. Bush said during a broadcast address Tuesday evening. “I have fought against these positions, but I am now forced [to accept them] through the dictate of the UK government.”
Mr. Bush said “no reasonable person” could say that the port selection process, which seeks to install a cruise ship berthing facility for larger cruise liners to direct dock in George Town harbour, has not been fair and open.
“However, we are told by the UK that it is the specific type of process that matters, not the outcome,” Mr. Bush said. “We have been stymied unless we follow their prescribed approach to the letter.”
Specific bid documents for the port expansion project had not been released by press time Wednesday.
Mr. Bush apologised to China Harbour Engineering Company, with which the Cayman government had been negotiating for a number of months on the cruise port deal.
Meanwhile, the premier said the Framework for Fiscal Responsibility proposal would be “taken to the [Legislative] Assembly as prescribed”. Presumably, this meant in the form in which it was signed by the Premier and then-UK Overseas Territories Minister Bellingham in November 2011 and not the version that was contained in legal amendments made public Monday.
The fiscal framework document requires Cayman to get its budget back into line with responsible financial management guidelines contained in the territory’s Public Management and Finance Law by the end of the 2015/16 budget year.
The earlier proposed legal amendments contained, among other things, requirements that the UK compensate Cayman for any reputational damage or financial loss due to following the dictates of the fiscal framework. Mr. Bush did not give specifics on the matter, but it was assumed those provisions and other changes to the fiscal framework document would now be taken out.
“God help us all if it proves to have the negative consequences that some experts have warned are likely,” Mr. Bush said of the fiscal framework agreement. He did not state what “experts” he referred to or what they had warned about regarding the fiscal framework agreement.
A broadcast statement made by the premier in November 2011 indicated his general support for the fiscal framework agreement: “Based on the historical evidence of what can happen when a financially irresponsible government spends without any thought process or a carefully thought out plan, I am in favour of signing such a mutually agreed Framework for Fiscal Responsibility. It is understandable that the UK government has seen the need to restrict their exposure in such circumstances as there is no guarantee as to what kind of spendthrift government will be elected in the future.”
On Tuesday, Mr. Bush said he was prepared personally to “continue resisting” the UK’s demands, but said he did not wish to expose his family to the “political turmoil being brought into play at the present time”.
“I can only pray that the worst will be averted, and that we will find a way forward that shields our population from too painful a decline in our living conditions,” the premier said.
Opposition Leader Alden McLaughlin said he agreed “something needed to happen” with regard to the UK dictates on the budget and port project, but he said he was more than a little surprised to hear what Premier Bush had to say.
“Given the belligerence of the statement he gave [in the Legislative Assembly] Monday, I didn’t expect this to happen Tuesday night,” Mr. McLaughlin said.
The opposition leader said he agrees with Mr. Bush that the UK requirements on the Framework for Fiscal Responsibility will increase government bureaucracy to a certain extent on public sector development projects.
“Whether or not all of the provisions of the FFR are in the best interests of the Cayman Islands, I can’t say,” he said. “But I’m satisfied that the UK did tell [the government] from very early days [that it would reject the port project as presented] … certainly by November 2011.
“They have been as diplomatic as they possibly can.”