Independence: costs still outweigh the benefits

  • Island home: in the end, Bermudians must be hard-headed about their choices (Photograph by Blaire Simmons)

    Island home: in the end, Bermudians must be hard-headed about their choices (Photograph by Blaire Simmons)

From the first session of what would become the House of Assembly 399 years ago, Bermudians have always been fiercely independent, much to the chagrin of past governors and others sent to assist the island in its governance.

Indeed, the closest Bermuda has come to independence was not in the 20th or 21st centuries, but in the late 1700s, when the American Revolution was under way and many Bermudians were inclined to join their colonial brethren in rebellion.

That did not happen. Bermuda’s isolation and the British putting in place a stronger military presence after the gunpowder theft prevented it. However, it is worth noting that independence in 1776 would not have seen little Bermuda go its own way, but it would have joined a much larger whole as the 14th colony.

Today, as it does every decade or so, independence is starting to be discussed again and the passing of advocate Walton Brown may have given it added impetus. Bermuda has opted against independence in the past because most Bermudians have decided that it is not in their best interests and that the benefits of going it alone are outweighed by the disadvantages.

This is not to say that Bermuda could not survive as an independent country; it could, just as similar-sized countries such as Antigua&Barbuda do. But in the critical areas of governance, the economy, defence and internal security, would Bermudians be in a better position as an independent nation than they are now as a British Overseas Territory? That is the question that Bermudians must ask themselves.

There are arguments that Bermuda would be more unified as an independent nation and it is also true that many Bermudians feel no particular ardour for Britain, the Union Jack or the Royal Family. This is perhaps more true for black Bermudians than whites, many of whom feel some natural ambivalence towards a country that permitted their ancestors to be shipped in chains across the Atlantic to be forced to work in bondage, and then permitted a formalised system of segregation to exist for 130 years after the Westminster Parliament abolished slavery in the British Empire.

As valid as those feelings may be, in the end Bermudians must be hard-headed about their choices — this is a decision that affects generations of Bermudians yet unborn.

Over the years, the pros and cons of independence have changed with internal and external circumstances. In the 1990s, at the time of Sir John Swan’s ill-fated referendum, there were perhaps stronger arguments in favour of independence than there are today. The economy was strong and growing rapidly as international business took off, while Bermudians carried the limited British Dependent Territories passport for overseas work and travel.

The grant of British passports to all Bermudians in the early 2000s meant that the advantages of remaining a British Overseas Territory increased dramatically. Bermudians could now live, study and work not only in Britain but throughout Europe. Many have taken advantage of this, and although some will bemoan the departure of young Bermudians abroad, it is worth noting that this has been an important release of pressure on the moribund Bermuda economy in the past decade.

The period of the 1990s and the 2000s was also a period of globalisation, including the freeing-up of financial markets around the world, of which Bermuda was a beneficiary. The use of international financial centres such as Bermuda, while not universally acclaimed, was accepted.

Since the global economic crisis of 2008, this has changed. The pressure that Britain has put on its Overseas Territories to make public the beneficial owners of businesses on their company registers is one example of this — and this is being used as an argument in favour of independence.

But this pressure is hardly singular to Britain: the same pressures have been coming from the European Union, the United States, the Organisation of Economic Co-operation and Development, and the various organisations that have been spawned by these international bodies such as the Financial Action Task Force. The pressure has grown since 2008 as large Western nations have seen their finances deteriorate and populist political protests towards corporations and the “1 per cent” have taken hold.

So the question before Bermuda as these supposedly grassroots discussions evolve is, what is in Bermudians’ best interests? Does Bermuda go it alone or does it continue with the status quo?

Many of the arguments against independence are well established. Bermuda is a self-governing territory with long and well-established rights and privileges. It does not pay for its external defence or external relations, which are provided for by Britain. Its legislative system and court system are based on British law and, crucially, especially for international business, its highest court is the Privy Council in London, which gives business a high degree of comfort. While that may not change, independence would add an element of uncertainty.

So would the insurance policy that if things in Bermuda went really wrong — as they did in the Turks&Caicos in recent years — Britain would step in. This is, to be sure, the nuclear option, but it gives Bermuda’s business partners a sense of security they do not have in small, independent countries.

Bermuda’s lucrative aircraft and shipping registries also benefit from falling within the British umbrella. Bermuda can and does seek and get assistance and advice from Britain on a wide range of issues.

And as noted earlier, regardless of what happens with Brexit, Bermudians benefit from holding a British passport, which, even if Britain leaves the EU, would still allow them the right to live, work and study in Britain. If Bermuda became independent, there is no reason whatsoever to think that this would continue.

One of the reasons for independence would appear to be the divergence of views between Britain and Bermuda on the question of sexual orientation and same-sex marriage. There was a move in the British Parliament to impose recognition of same-sex marriage on Bermuda. This was rejected. The British Government recognised — rightly, even if it disappointed same-sex marriage supporters in Bermuda — that this was an internal decision on which the Bermuda Parliament had already voted, in this case firmly against it. This decision by the British Government should be an argument against independence, as it clearly recognises where its rights end and where Bermuda’s rights start.

In other cases, Bermuda’s complaints about British interference are more the result of Bermuda’s own inaction and refusal to engage with our British partner. Bermuda’s recent refusal to appear before the House of Commons Foreign Relations Committee is an example of this. Instead of engaging with British MPs, Bermuda’s leaders took offence and refused to attend. If this is an example of how an independent Bermuda would conduct its foreign affairs, Bermudians should be very worried.

One of the most longstanding arguments against independence has been over cost, and this is more relevant today than ever before. Independence would result in the establishment of some kind of foreign affairs apparatus and the need for Bermuda to beef up its external defence, now provided for by Britain. There would be other costs as well.

For a government that frequently has to declare that it has no money, the prospects of taking on millions of dollars in additional costs should fill both finance minister Curtis Dickinson and taxpayers with fear; taking on additional obligations — with no assurance of a concurrent increase in revenues — makes no sense.

It is possible that there would be some financial benefits: presumably, Bermuda would have more freedom to set its own airline policy and it could also negotiate its own treaties on tax with other countries and the EU.

But would Bermuda, isolated and alone, be able to negotiate from a position of strength in these circumstances? Or from weakness?

On balance, independence — or sovereignty as some spin doctors have taken to calling it — still contains more costs and risks than benefits.

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Published Oct 18, 2019 at 8:00 am (Updated Oct 18, 2019 at 10:37 am)

Independence: costs still outweigh the benefits

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