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Falklands : Governor's Address to the Budget Session of Leg-Co
Submitted by Falkland Islands News Network (Juanita Brock) 28.05.2008 (Article Archived on 11.06.2008)

Last year, the 25th Anniversary of the Argentine invasion of the Falkland Islands and of their liberation by British forces, was a very moving year for us all.



Mr Speaker, Sir


Last year, the 25th Anniversary of the Argentine invasion of the Falkland Islands and of their liberation by British forces, was a very moving year for us all. The commemorative events allowed us to remember the courage and commitment of the British servicemen and their civilian counterparts who helped to restore freedom and re-instate the rule of law and democracy to these Islands – and it allowed us to honour the dead on both sides.


We were able to show how the Islands have progressed and prospered since 1982 – and how, ironically, the conflict provided a catalyst for change. Many UK veterans, who came back in the SAMA 82 pilgrimage in November, found comfort and a sense of closure from returning to the battlefield sites. They saw too the new growth and change for the better in Stanley – and, in experiencing the warmth of the welcome and the hospitality of Islanders who opened their homes and made their time and vehicles available to them without hesitation, they understood more clearly that, notwithstanding the loss of life, their efforts had been worthwhile and wholly justified. Nothing better, in the circumstances, could have been achieved for the community here than that.


Mr Speaker


The British Government’s commitment to the Falkland Islands remains absolute. Gordon Brown, as new Prime Minister, reasserted this in his New Year message to the Islanders. And the number of senior visitors to the Islands, from the Earl of Wessex in June, to Derek Twigg the MOD Minister for Veterans in November, and Meg Munn the FCO Minister for the Overseas Territories in January, as well as parliamentarians and senior Whitehall officials and military officers, underscores this. The British Government consistently makes it clear in international fora and to the Argentine Government that British sovereignty over the Falkland Islands is not for negotiation or discussion unless the Islanders so wish it – which you don’t.


The Government of Argentina continues, however, to press its claim to the Falklands, whenever and wherever it can. In doing so, it ignores the principle of self-determination enshrined in the UN Charter and the International Covenant on Civil and Political Rights. It seeks to get round this by arguing, wrongly, that the principle of self-determination should apply only in cases where there is no dispute about sovereignty and it speaks about taking the interests (but not the wishes) of Falkland Islanders into account.  In contrast, the British Government stands firm in upholding the right of the Islanders to determine their own future. And Islanders have consistently made clear, through their freely and fairly elected representatives, their wish to remain under British sovereignty. Self-determination does not necessarily mean independence.


The British and Falkland Islands Governments do of course want to have good, stable relations with Argentina.  We regularly make constructive suggestions on ways to advance practical co-operation with Argentina, for example in the conservation of fisheries.  But instead of wanting to discuss practical co-operation, the Argentine Government repeatedly accuses us of “unilateral acts” and wants to talk about something else.  Too often the something else is more political or somehow implying an Argentine right to be involved in decision-making over the Falklands.  Yet that was not the purpose of the various co-operation agreements under the so-called ‘sovereignty umbrella’ where sovereignty issues were specifically set aside. And the Argentine Government consistently refuses to acknowledge the role of the Falkland Islands Government in the government of the Territory, preferring instead to portray the Falklands’ relationship with Britain, again wrongly, as a colonial relationship, with the Islanders under British Government administration. Well, we have progressed a long way from that as the new Constitution, if agreed, will show.


There are things that we all want - or at least should want – for example, better air and maritime links between South America and the Falklands to allow more economic opportunity; closer co-operation on fisheries conservation, both bilaterally and internationally in the south-west Atlantic; and greater mutual understanding between our communities. And all three governments want the special service(s) for Argentine next-of-kin at the Argentine cemetery near Darwin to go ahead. We need to find acceptable ways of making progress on these, so long as sovereignty issues do not intrude.


Mr Speaker


We are now a long way forward on constitutional reform. The talks have been conducted in a friendly, positive spirit and, subject to agreement on a few remaining issues, I hope that a revised draft constitution will be put out for public consultation soon. Subject to any further points arising out of this process, and any UK parliamentary input, it should be possible to submit the Order in Council containing a new constitution to Her Majesty the Queen in the Privy Council to be made before the end of this year.


The new constitution, if agreed, will make it much clearer where responsibility for the government of the Territory really lies. The Governor will be bound to accept the advice of Executive Council on most internal matters unless there are good governance grounds not to do so (in which case he would have to report to the Secretary of State conveying the views of Executive Council). Except in certain specified areas, including defence and external affairs, this places responsibility for domestic affairs exactly where it should belong – with elected representatives. It will, therefore, be a major step forward in democratic self-government and self-determination.


The draft constitution also reinforces the public checks and balances against the power of the Executive by establishing an independent Public Accounts Committee, as well as a Commissioner to investigate complaints of maladministration in the government of the Falkland Islands. Again, this can only be to the good.


Mr Speaker


Last year, I changed the nature of this address by focussing on the Islands’ Plan in an attempt to indicate what had been achieved against its commitments and what more needed to be done. This year, I have asked Councillors to make their own assessments, more in the style of a Queen’s Speech in Westminster. What follows therefore represents their views.





Mr Speaker


Government finances are in a reasonably healthy state, with no borrowing and levels of disposable reserves in excess of the target of 2½ times annual operating expenditure.  But balancing the revenue and expenditure budgets is getting ever more difficult.  With government revenues flat and increasing cost pressures through inflation and increased expectations, the forecast shows no sign of improvement.  We need to act now to increase revenue and decrease expenditure, since eating into reserves is not an option.  To this end, the Government has begun the implementation of a Medium Term Financial Plan which seeks to increase revenue by £500,000 per annum over the 07/08 budget, and to decrease expenditure by the same amount from the same base, over the next five years. Achieving this will not be easy, but it has to be done.


Government spending must be targetted towards the most important areas, and growth and cost savings must be preferred over consumption.  The Treasury has already set some demanding targets, which will involve difficult, and sometimes unpalatable decisions.  We shall apply the “user pays” principle wherever it is reasonable to do so, and we shall review various schemes for means testing, including family allowance, holiday credits, and further and higher education living allowances.  We shall engage in public debate to determine where savings can best be made.


But the economy is not all about Government finances.  We need to provide incentives for growth in our key industries. We must, therefore, maximise economic opportunity in the fishing, tourism and agriculture industries, and in services to these, as well as in hydrocarbons exploration.  We shall engage with the private sector to identify where growth opportunities are and how they can best be achieved.


Falkland Islands companies make up a thriving business community that continues to express confidence in the economy.  It is the Government’s role to ensure that business can thrive with as little Government regulation and interference as possible. We are committed to that and will this year seek to move services currently provided by the Government into the private sector where that can be done without disadvantage to the private citizen. We shall publish a “green paper” on this, after consultation with the private sector. 


We have published the Islands Plan for 2008-2012.  There is, however, a dearth of solid economic data in the Falklands on which to base macro-economic policies. We have therefore made it a priority to complete the collection of statistical and economic data that will enable us to link the annual budget cycle to the Islands Plan. Clear and agreed GNP and GDP figures will allow us to investigate where opportunities exist for increased economic activity.


The nature of the Falklands economy is unusual, with low tax rates and a small tax base making relatively small contributions to Government revenue which is heavily supported by resource rents taken directly from the allocation of fish quotas, and heavy reliance on international financial markets to produce income from reserves.  It is nearly five years since the publication of the last Tax Policy Framework in July 2003.  We intend this year to conduct a review of our tax regimes, again in consultation with the business sector. 


Mr Speaker


We can all take pride in the fact that the Falkland Islands fishery is one of the best managed in the world.  The loligo fishery remains the powerhouse of local industry development; with catches of 42-58 thousand tonnes over the last three years. Sustainable exploitation of this reserve depends on effective management.  The transfer of responsibility for most of our fisheries stock assessment from Imperial College to the Fisheries Department has yielded important operational and financial benefits. The introduction this year of an enhanced programme of safety inspections on all fishing vessels, together with the introduction of the Overseas Masters fishing licence should help to improve conditions on fishing vessels where these fall short of our expectations. Tragic incidents this year have reminded us that this is a tough business, and we must seek to improve safety standards on board vessels fishing in our waters. 


The Government will, from 1 July, require the installation of the Automatic Identification System (AIS) and Vessel Monitoring System (VMS) on all licensed vessels to improve both monitoring and search and rescue capability. The Dorada’s departure also gives FIG the opportunity to reassess our fisheries protection and scientific research requirements: we look forward to the recommendations of the Fisheries Protection Review Group for a cost-effective way forward.  We shall continue to improve the procedures relating to the ITQ system and look forward to reviewing proposals for the assessment of efficiency in the taking of ITQ to ensure continued economic growth in the industry.


Mr Speaker


Last year was the Falklands most successful tourist season to date. We welcomed over 62,000 cruise ship passengers – an increase of over 21% - whilst land-based operators reported an increase of 18% in the number of tourists spending at least a week in the Islands. Even on the busiest of days - 4 December saw Stanley’s population nearly trebled – the feedback from those coming ashore was positive. Our only real disappointment was not to be able to pay a final farewell to the QE II due to bad weather.


Tourism has established itself as a major contributor to the economy, with steady growth predicted for the next few years. The development of the new National Tourism Strategy is well advanced, and will set down some key challenges to continued economic success – ensuring that the right infrastructure is in place to handle predicted growth, accommodating increased customer expectations, improving air access, and marketing ourselves better.  This year will see the closure of the iconic Upland Goose Hotel substantially reducing available bed spaces in the high season, but providing opportunities for others. The debate on FIGAS will be pivotal for the industry, and the introduction of the new East-West ferry service should result in increased land-based tourism. It will be as important as ever that the Government and private sector work closely together to maximise opportunity and out turn.


Mr Speaker


This season has shown seen some improved wool prices for farmers and significantly better prices for exports of meat from FIMCO, providing continued encouragement for the development of camp businesses. The pasture improvement programme now involves 50 farms, increasing the available feed for stock at critical times of the year, and we have seen steady genetic improvement in both sheep and cattle. The development of dual purpose sheep breeds for both high quality wool and mutton has shown good progress, and the delivery of a series of workshops on managed grazing by a specialist consultant has proved popular. FIMCO staff have continued to work hard to improve efficiency and to deliver improved financial results (albeit still with a substantial subsidy from Government) which provides encouragement that the Falklands can achieve a successful long-term alternative source of agricultural income. In these days of world food shortages and high food prices, our involvement in the supply of both fish and meat is encouraging for the long term.


The Department of Agriculture will continue next year to provide the necessary technical support and data collection to enable farmers to make informed choices and business decisions. The establishment of an appropriate internationally recognised scheme of organic certification for agricultural products should be completed, with a view to increasing returns to participating farms. The creation of the Rural Development Strategy Group led by Cllr Hansen will focus on a number of key areas to continue the push towards economic self-sufficiency in camp; with new developments in communications, opportunities are improving though the challenges are still significant.


On minerals, although Falklands Gold and Minerals left without success, the data they bequeathed us will be of huge importance in years to come. In hydrocarbons, the prospects for another drilling round look good.  The year has seen the completion of a major 3D Seismic survey in the southern basin, and various other surveys in both southern and northern basins in preparation for drilling. There has been a significant farm-in to the FOGL acreage in the south-east, and there is interest in the Desire Holdings in the North.  Drilling commitments therefore remain on track and new activity can be expected to materialise in the coming months. Open door production licencing has been re-opened for a limited area in the north to encourage potential bidders.


The tasks of the Minerals Department next year will be to facilitate drilling programmes by advising licencees on the required environmental, health and safety and technical approvals in order to bring rigs to the Islands. From the industry perspective, some easement in the market for drilling rigs combined with unprecedented oil prices makes the prospect of drilling in 2009/10 much more likely. As in the first drilling round, it will be the role of FIG and FIDC to ensure that every possible opportunity is provided to local companies to provide the support services required, and to maximise local involvement in the drilling process.


Mr Speaker


The Government will continue to provide high quality essential social services to the community in the most cost-effective way possible. 


The Health and Social Services Department exceeds expectations of a small territory.  This year an external MOD Clinical Governance Audit identified high standards of treatment and health care and service delivery of which all at KEMH should feel proud. The new dental facilities have reduced dental waiting lists.  Whilst the overall standard of oral hygiene in the Falklands remains below the European average, it continues to improve. A digital x-ray reporting scheme has been set up with Clinica Alemana in Chile, and will assist diagnosis.


However, the burgeoning cost of medical treatment overseas must be addressed. The use of UK clinical governance guidelines may be a major contributory factor in this, reducing the discretion of doctors in diagnostic options and treatments available to them.  DHSS are to see whether they can put in place more appropriate standards for the Falklands.  In parallel, a full scale review of the long term affordability of our current health service provision will be carried out; health cost inflation here, as in Europe, runs at around 10% per annum and is currently not affordable.


Smoking is one of the most common direct and indirect causes of poor health, hugely contributing to healthcare costs. The Working Group on the Prevention of Smoking in Public Places completed its deliberations earlier this year, and legislation is now being drafted to ban smoking in a variety of public places. Revised legislation to help prevent smoking by those under 16 will be completed in this session of LegCo, together with measures to increase the legal age to 18. This, with education and the re-introduction of free smoking cessation aids, should improve the overall health of future generations and reduce smoking-related health costs.





On education, there has been vigorous public debate on how to deliver the quality of education that the community wants.  An external audit conducted by the Service Children's Education (who inspect to the English National Standard) found that the Infant Junior School and Camp Education were providing a satisfactory to good quality of education, but that the Community School needed to improve.


The standards of 11 year olds at the end of Key Stage 2 this year were above the UK national average, consistent with earlier years. The IJS and Camp Education have now merged under a unified management system and the management structure enhanced. This should help to maintain the high standards that staff have been producing over the years, and for which they should be congratulated.


At FICS this year, 50% of 16 year olds gained 5 or more A*-C Grades at GCSE, a marked improvement on previous years. But this cannot hide the patchy performance assessment handed out by the inspection. There are excellent teachers at FICS delivering well planned lessons, ably and effectively led by Alistair Baldwin. But the inspection found there are also some lessons that are no better than satisfactory.  We have therefore put in place various measures to raise standards. The management structure is to be enhanced to improve school performance, with greater monitoring of teaching and learning, and extra capacity to deliver this. We also expect improvements in overall lesson quality and in school discipline.  On the positive side, our students at Peter Symonds continue to do well and a new loan agreement to secure places for the next 7 years has been put in place.


We continue to support 25 students in a wide range of Higher Education courses principally at degree level, but this year we also plan to introduce a range of vocational options as an alternative to GCSE and to develop a structured entry to the employment scheme for 16/17 year olds.


Mr Speaker


We await the report from Supt Elliott on community policing in the Falklands. This will require the full attention of Government to ensure that we have the right level of expertise and resources, and the right style of policing to retain our relatively crime-free environment, and to satisfy the community that the level of policing is correct both in deterrence and in enforcement. Like all the uniformed services the police work to serve and protect the community often in difficult circumstances.  In this context, I pay tribute also to the work of the Fire & Rescue Services, our Ambulance crews, and the FIDF, who contribute so much in response to emergencies.  The Customs and Immigration Department play a major role in the efficient running of both the fishing and the tourism industries, which provide income that helps to pay for many of Government’s other non-revenue raising services.


It is not the intention here to comment on all Government departments one by one. Those not mentioned deserve no less appreciation for getting on with their jobs in a quiet and efficient manner. But how efficiently people do their jobs is often conditioned by the organisational structures within which they work. The arrival of the new Chief Executive has given Councillors the opportunity to request a major review of what we do as Government and how we do it, and if necessary to revise the structure of Government. An important part of this will be to pass to the private sector activities which can be equally well or better managed there, but also to rationalise the management structure and administrative support services wherever possible. This review is under way. 


A crucial area for future development is communications.  Stanley now enjoys a mobile telephone system and a broadband facility that is revolutionary compared with its predecessor. We may complain from time to time that it is not world class, but by and large it is adequate for our needs. The camp has only limited mobile phone accessibility and an antiquated phone and internet system grafted on to technology for which it was not designed. The new telecommunications system now ordered and under construction will bring huge improvements to camp, and opportunities for new and existing businesses that have hitherto been only dreams. Like the ferry, it has the potential to revolutionise camp and reinforce its economic and social importance to the Falkland Islands. Technology continues to drive change, and the new BFBS digital TV service requires new ways of doing things.  Leaving aside the issue of how to cover the inevitable costs, Councillors believe that British television, British news and British culture are central to the ethos of these Islands and government will continue to ensure that British television is available, however it is delivered.


The FIGAS review will also be important.  Closer co-ordination between the air service, now in its 60th year of operation, and the ferry service, to provide affordable travel, at the least possible cost to public funds, has to be an important objective.  Government is also recruiting a project manager to move forward plans for a new port; this is likely to be our biggest ever investment in infrastructure, and will take much soul-searching, commitment and vision. But it has the potential to take economic growth in fisheries and tourism to new levels, and to support the hydrocarbons industry when it materialises. And finally on communications, negotiations continue on improved access to and service on the airbridge to support our key development needs. We anticipate a conclusion to this process soon after July, once the airbridge contract for the next three years has been awarded.


I cannot complete this review without mentioning the new wind farm. Like many of our best projects, it has been long in gestation, but it has been a technical and commercial success, and is tribute to the detailed planning and execution of the Power and Electrical department and to the management of Public Works.


We have a challenging legislative programme ahead, with an outstanding list of over 70 pieces of primary and subsidiary legislation to be drafted for submission to Legislative Council.  This cannot be completed during the remaining life of this Council, and Members have determined that priority should be given to the re-draft of the Education Ordinance and any legislation essential to economic development. To this end we plan to bring into force by the end of 2008 the Offshore Petroleum Licensing Regulations, a Merchant Shipping Amendment Order to enable the classification of the Concordia Bay, the Education Amendment Bill, legislation required in connection with EU phytosanitary approval of fishery products and the abattoir, bills required in consequence of Constitutional amendment, and the two anti-smoking Bills. Government will then review the next phase of legislative drafting work in accordance with resources available.


Finally, on a personal note, Mr Speaker, I wish to make several points – first to record that this the last Legislative Council that Brigadier Nick Davies will attend as CBF: he departs on 14 June when Air Commodore Gordon Moulds takes over.  Nick Davies and the military at MPC work tirelessly on our behalf in creating the safe, secure environment in which our economy can thrive.  Secondly, we shall see the retirement of our Financial Secretary, Derek Howatt, who has kept us wisely on a prudent budgetary path for many years.  Derek will be succeeded by Keith Padgett: we wish his wife Val, who is fighting her illness with magnificent determination, the speediest recovery.  Thirdly, we now have an excellent senior management team in the public service, a mix of local and expatriate expertise, which should help to guide us in managing the changes that must be implemented if we are to continue to prosper.


I should mention here the apology tendered by the British and Falkland Islands Governments to the Government of Argentina over the discovery that a bone, believed to have belonged to an Argentine airman shot down in 1982, had not been declared at the time to the Argentine authorities.  I have commissioned an investigation into the circumstances of the bone’s discovery in 1986 and its subsequent retention at the time.  The aim is to draw up procedures to ensure that this can never happen again, so that the remains of the fallen, British and Argentine, are given due respect and treated accordingly. 


And as a community we must confront the social issues that we face in this modern age.  There is much that the Government can, and should, do to set standards and the legal framework to enforce them.  But it is for all of us in the community to determine the type of society in which we wish to live.  It is our responsibility to maintain its values and to pass them on to future generations.  I hope, therefore, that lessons will be learned from the recent tragic death of one of our finest youngsters.   There are many issues to consider in this context but one thing, in my view, is certain: wearing seatbelts will save lives and we should all insist on their use.


Mr Speaker, Sir, I thank you.







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