Premier talks Brexit, budget, beer in London

Premier Alden McLaughlin [front, second from right] joins other British Overseas Territories leaders and U.K. Baroness Joyce Anelay at the Joint Ministerial Council meeting in London this week.

The Cayman Islands government may wish to pay off some of its $500 million in debts early, according to statements made during the week-long Joint Ministerial Council meeting in London.

“Part of our remit is to promote a better economic, social, cultural and political understanding of the Cayman Islands.”

Premier Alden McLaughlin, Finance Minister Marco Archer and Financial Services Minister Wayne Panton led the delegation to the annual meeting between British government and overseas territories representatives this week, with talks starting on Tuesday. Other topics of discussion included the pending British exit, or “Brexit” from the European Union, healthcare and pensions in the territories, and the Cayman Islands’ own brand of beer, Caybrew.

Before the official meeting, Mr. Archer and Mr. McLaughlin, along with Financial Secretary Ken Jefferson broached with U.K. leaders the issue of voluntary early repayment of debt.

The Progressives-led administration has cut the central government debt by about $71 million over the past three years, but still owes about $503 million,including a $261 million bullet loan that matures in 2019.

Mr. Archer has previously said that government once hoped to store up enough cash to repay the full amount of the loan when it comes due. However, the premier’s office noted that any large, one-off payments of public debt might affect legally mandated limits regarding how much Cayman can pay to service its debts each year.

The loan derives from a 2009 public bond offering by the former United Democratic Party administration. Then-Premier McKeeva Bush has often said he was forced to engage in borrowing at that time to pay recurring expenditures of the former People’s Progressive Movement government that had accumulated an operating deficit of $81 million the year before (2008/09). The so-called bullet loan or balloon payment loan requires the full amount to be paid as of Nov. 19, 2019.

“It is projected that the 2019 bullet bond can be repaid fully with government’s bank account balances in November 2019, without the need for external borrowing to do so,” a statement from Finance Minister Marco Archer’s office issued in June read. “If the government decides to repay the bond fully from its bank account balances, such a payment will not adversely impact other government planned operations.”

The $261 million due is more than half of all the debt held by Cayman’s central government.

Brexit

Representatives from all of the British Overseas Territories agreed ahead of this year’s meeting to form a small committee to keep up with developments as Britain works out its separation from the European Union.

British citizens approved the separation from the EU on June 23 by a narrow vote. Formal talks on the exit are not expected to start until early next year.

Territorial leaders are expected to hold another special meeting of the Joint Ministerial Council in early 2017, prior to the actual separation set for March 2017.

Little is known at this stage about how the separation will affect the remaining overseas territories and whether they will continue to have any direct access to European political leaders. Cayman Islands London Office Director Eric Bush, who is also attending portions of the Joint Ministerial Council meeting this week, said there is also the question of Cayman and other territories continuing to have access to the European Court of Human Rights after the split.

Issues regarding free movement of Cayman Islands citizens in Europe and whether Cayman might adopt EU-style data protection legislation, as well as whether the local government can still access EU grant funds for such things as environmental protection and infrastructure will all be discussed, Mr. Bush said.

The British pound has steadily devalued against major world currencies since the Brexit vote and remains on a roughly one-to-one level with the Cayman Islands dollar as of this week.

All Party Parliament Group Chairman Nigel Evans, British MP Graham Brady and Director of the Cayman Islands London Office Eric Bush sample some Cayman Islands Brewery beers at the Strangers' Bar in the House of Commons this week.
All Party Parliament Group Chairman Nigel Evans, British MP Graham Brady and Director of the Cayman Islands London Office Eric Bush sample some Cayman Islands Brewery beers at the Strangers’ Bar in the House of Commons this week.

Caybrew

Premier McLaughlin doled out free beers to British MPs at Strangers’ Bar in the House of Commons on Tuesday evening as part of product placement effort.

“Strangers’ Bar is open to members and staff of parliament, their guests, and invited media, so it’s a good place to showcase a Cayman Islands product and keep our name out front in a friendly atmosphere,” Mr. McLaughlin said.

At the gathering on Tuesday night were Mr. Panton, Mr. Archer, British MP Graham Brady and All Party Parliament Group Chairman Nigel Evans. Arrangements for the free beer were made between Caybrew Chairman Stephen Webster and Mr. Bush.

“Part of our remit is to promote a better economic, social, cultural and political understanding of the Cayman Islands. One of the ways we can do that is engaging MPs, their staff and the media through an authentic Caymanian-made product that can be enjoyed by all,” Mr. Bush said.

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