Last week, in relation to the Anguilla Government requiring the consent of the U.K Government in order to borrow, I mentioned that I was not aware of any Law which mandates such a consent as a condition precedent to such borrowing.

Today, with your leave, I wish to expand on that so as to present the fullness of the situation to the General Public.

Section 55 (2) of the Anguilla Constitution states as follows:

" (2) Except on the recommendation of the Governor, the Assembly shall not--

(a) proceed upon any Bill ( including any amendment to a Bill ) which in the opinion of the person presiding in the Assembly, makes provision for imposing or increasing any tax, for imposing or increasing any charge on the revenues or other funds of Anguilla or for altering any such charge otherwise than by reducing it or for compounding or for altering any such charge otherwise than by reducing it or for compounding or remitting any debt due to Anguilla;

(b) proceed upon any motion ( including any amendment to a motion ) the effect of which, in the opinion of the person presiding in the Assembly, is that provision would be made for any of the purposes aforesaid; or,

(c) receive any petition which, in the opinion of the person presiding in the Assembly, requests that provision be made for any of the purposes aforesaid."

Section 28 (1) of the Constitution requires the Governor to consult with the Executive Council "...in the exercise of all powers confered upon him by this Constitution or by any other law for the time being in force in Anguilla and act in accordance with the advice of Council" (emphasis added). Section 28 (2)(a) removes that obligation to consult with and to act upon the advice of Council with respect to "...any matter that in his opinion relates to defence, external affairs, international finance or any directly related aspect of finance, (emphasis added) or internal security, including the police."

It is clear that the removal of that obligation with respect to finance is confined to what we call the Offshore Industry and any directly related aspect thereof, given the wording and deliberate punctuation of the part of subsection (2)(a) of Section 28 highlighted above, and does not relate to internal Government finance.
Based on what was said in the Assembly, the Council did approve the borrowing resolutions which were presented to the House and passed a short time ago. It must be presumed that the Governor must have made the Section 55 recommendation given that the resolutions were permitted to be brought before the Assembly by the person presiding, the Speaker, and passed. Whether that recommendation was voluntary, or by virtue of Section 28 (1) is of no moment.

When one examines the Financial Administration and Audit Act R.S.A. c. F27 of the Laws of Anguilla, the Statute which governs Government borrowing and spending etc., there are these Sections which contain the words "..the Governor in Council.." with respect to " remission of money payable" to Government, (Section 18) " Interest on overdue accounts", ( Section 22), and "Expenditures before appropriation Act comes into force", ( Section28). This language supports the interpretation given above to Section 28 of the Constitution that when it involves internal Government Finance, the Governor must act in accordance with the Advice of Council.

Part 7 of the said Act entitled " PUBLIC DEBT, GUARANTEES AND ADVANCES" creates a two step process for Government to borrow. Step one Mandates that " No money shall be raised on the credit of the Government except under the authority of this or another Act of the Legislature or of a resolution of the House of Assembly." ( Section 38 ). Step two kicks in upon the attainment of either of the two Section 38 predicates: " Section 40 (1) When this or another Act of the Legislature or a resolution of the House of Assembly confers on the Government of Anguilla the power to raise money on credit of the Government, other than as provided in section 39, the Minister of Finance may raise the money as provided in this section." Section 39 deals with short term borrowing and is not relevant to this discussion.

Sub-section (2) of Section 40 sets out what purposes money may be raised for under that section. Subsections (2) (a) and (d) state: " (a) [ for] the capital or recurrent expenditures of Government;...(d) [for] advances or payments to public officers provided by law or General Orders." The Resolutions passed in the Assembly are for those purposes. I am of the opinion therefore that the Anguillian Government are in full compliance of all the Legal requirements to borrow, and to charge that loan on the Consolidated Fund for Security.

Interestingly, and in further support of the interpretation that the Executive Council has full sovereignty with respect to internal finances, subsection (3) of Section 40 states: The Minister of Finance shall determine how money is to be raised." The subsections which follow deal with the raising of money by the issue of Government securities. The remainder of Part 7 of the Act deals with, Section 41, "Regulations respecting government securities"; Section 42, "Loans, guarantees and debts to be charged on the Consolidated Fund [ that is, they are to be secured by a charge on the Fund]; Section 43, " Change in form of public debt"; Section 44, "Government guarantees"; and Section 45, "Advances". None of these sections create the requirement that the Government must first obtain the approval or consent of the U.K Government as a condition precedent to the Government borrowing. In fact such a requirement does not exist in any Law or Regulation in Anguilla, and it is not in the Constitution.

So then, to what do we owe this concept that the U.K Government's approval/consent is a condition precedent to our Government borrowing? We owe it to a document signed by the Governments of Anguilla and the UK entitled " Statement of Agreed Borrowing Procedures". This document is not an Agreement and lacks the requied elements to be such in Law. It is not a Law, a Statute or a Regulation. It therefore has no binding effect on either signatory to it. It is nothing more than agreed Guidelines for borrowing which have no legal effect on either party. It therefore does not have, and cannot in Law have a Legal consequence for not following the procedures contained therein, including that of having the U.K. Government "approve' or "consent to" any borrowing by the Government of Anguilla, once the requirements of the Constitution and the FAA Act are met.

There is no Law, Statute or Constitutional provision in existence which places ANY liability, contingent or otherwise, for any debt of the Government of Anguilla on the U.K Government. The British Government is not, and cannot be held liable for any debt of the Government of Anguilla unless they sign the loan Documents as Gurantor of that particular loan. So there can be no legal requirement to first obtain their consent/approval for our Government to take a loan.

In fact, when the U.K Government does consent to/approve of the Anguilla Government obtaining a loan, they, the U.K Government, state expressly on the signature page that their Consent/Approval IS NOT, and IS NOT to be taken as a Guarantee for the loan, and does not give rise to any liability on their part, contingent or otherwise. So their consent/approval is otiose.

There is no reason in Law for the Anguilla Government not to go ahead with the taking of the much needed loan without the consent/approval/permission of the U.K. Government. A lender can be assured, once the requirtements of Section 55 of the Constitution and Sections 38 and 40 of the FAA Act are met, that the lack of the U.K Government consent/approval/permission for the loan has no legal consequence on the validity of the loan, or on the security for that loan as a charge on the Consolidated Fund.

It is without a doubt absolutely necessary for the Government to move, ex post haste, to procure the necessary funds to save our Country! The Eastern Caribbean Central Bank has warned that unless the Anguillian Government quickly pumps big spending into the Economy, Anguilla will suffer a DEPRESSION which will last for at least three years. That would destroy Anguilla.

If I were able to I would ask of the Government this question: "Honourable Mr. Fleming; Honourable Mr. Banks; Honourable Mr. Harrigan; Honourable Mr. Rogers, WHAT are you waiting for? Do what you need to do to save this country please. The People of Anguilla will support you. This is NOT a Political issue; it is NOT about Politics. It is about the very life of this country. History will judge you by this crisis. History will absolve you if you act quickly and get the funds and immediately flood the Economy with Public Works Projects to save us from Depression and despair. There is no more time to waste. Should you fail to act now, Sirs, you will be condemned by History to an eternity of blame for the consequential suffering wrought on this country by that failure to act decisively.

On the idea of a point of sale tax which I wrote about recently as a suggested method of increasing Government Revenues, I do trust that Dr. Aidan Harrigan and Mr. Carl Harrigan are now quite busy working on it so as to have it implemented shortly. A blogger on Anguilla Talk suggested an additional source of revenue which I would like to commend. It is that Government mandates that all persons who hold work Permits on Anguilla, whether employed or self employed, pay a Tax on their Income, deducted at source like the Social Security Contribution is. That for the privilege of being granted a Work Permit. Also, they use our Social Services. They should be made to contribute to them by this Income Tax.

Next Mr. Editor, what is the role and function of the Eastern Caribbean Central Bank in times of crisis? The four Anguillian Banks own approximately 90% of the US Dollars on deposit with the Central Bank. They are mandated by Law to deposit a certain percentage of their monies at the Central Bank. They have faithfully done so. Now, at this time when our Economy is reeling on wobbly knees from the upper-cut of the Global Economic and Financial crisis, the Banks should be allowed to draw down from those deposits to be able to fund local lending to help stimulate the Economy. But no, by the Central Bank Rules and Regulations, to which the ECCB adhere like a hog to mud, they are not permitted to do so by the Central Bank. I am currently advised that the Central Bank invests monies in, amongst other things, the U.S Stock Market. Are our Banks Deposits so invested? Would it not be better if these funds were available to the Banks in Anguilla which own them? Should these funds not be invested by our very own banks on Anguilla, ( and NOT in the Stock Markets!) with whatever restrictions being placed on these deposits to secure the required ratios? What is the status of those funds given the losses to the U.S Stock Markets? Are the monies which the Anguillian Banks have on deposit at the ECCB guaranteed in sum? Since the monies are the property of the People of Anguilla, we need to know.

I am of the view that Anguilla's participation in the ECCB is NOT in the best interests of Anguilla, and never has been. The Government should withdraw from it. For many reasons, not the least of which is the Cost to Anguilla of being a Member, both in terms of the ceding of Sovereignty over its Onshore Banking , and the actual costs associated with Membership. We get nothing of relative significance in return. The Government need to invoke the procedure for withdrawal without further delay.

Finally, Mr. Editor, it is also now time, in this the 21st. Century, for the People of Anguilla to face reality. Time to discuss changing your Constitutional Status. If your Home is your Castle, so too is your Country YOUR Castle. Govern them both without having to defer to any outsider. I know that there are some persons who will take issue with this, but that cannot detract from the dark reality which faces Anguilla in its current Constitutional netherworld.

Let your Destiny be determined by you. Let your affairs be determined by you. Let your decisions be taken by you. And I would prefer not to hear the age old, tired and baseless argument that " we not ready.."; "we cant do it with our present politicians"; " we dont have enough experience.." and the like. Just remember two things: 1. Nearly all the Members of the Anguilla House of Assembly have MORE Legislative and Executive experience than the Entire British Cabinet and the entire British Parliament Membership, to which our House Members and Executive Council must defer by virtue of our Constitutional Status; and, 2. If you do not like how the people you elect to the House of Assembly govern, vote them out!! That is the Power of Democracy; that is the purpose of your vote. They are accountable to YOU! Hold them to account.

To whom are the British Government and Parliament accountable? Certainly not to you.

Thank you for your kind attention.

Tommy Astaphan
Little Harbour

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