Crisis in British Virgin Islands is latest post-colonial headache

The crisis in the British Virgin Islands (BVI) is a small reminder that the sun has not quite yet set upon the British empire. Its disparate remaining territories, even the uninhabited ones, still have the capacity to cause trouble and distraction for the “mother country”. When that happens, there are usually no easy answers.

Like most of the British overseas territories (no longer styled “crown colonies” or “protectorates”), BVI is entirely self-governing in internal affairs, elects its own government and relies on Britain only for defence and security and to represent its interests in foreign affairs.

The arrest of premier Andrew Fahie on charges that he had conspired to launder money and traffic drugs into the United States has resulted in the imposition of direct rule on the advice of a judicial commission. The governor, John Rankin, is now presiding over a group of appointed officials to undertake the day-to-day administration of the islands.

Fahie’s arrest follows a long inquiry into corruption in the BVI, during which the premier was represented by British MP and QC Sir Geoffrey Cox – a source of amusement during last year’s controversy surrounding the barrister’s freelance earnings (Sir Geoffrey had previously defended the former premier of the Cayman Islands on corruption charges between 2012 and 2014).

Direct rule is supposed to last for two years. There have been demonstrations in protest at the return of this much older model of British rule. Understandably, islanders prefer to have their affairs determined by elected representatives rather than a Foreign Office diplomat, but there is little they can do. Like most overseas territories, BVI is too small to be viable as a fully independent state, though there are many tiny ex-British colonies in the region that are fully independent, with or without the Queen as head of state.

The BVI is a major tax haven and is home to many of the world’s offshore companies and trusts, and therefore much individual wealth, clean and otherwise. Its stable “British” status probably adds to its attractions, and to the income of its government. Occasionally, the reputation of the BVI can reflect badly on the UK.

It is not the only tax haven with a “British” identity. Leaving aside the crown dependencies of Jersey, Guernsey and the Isle of Man, which enjoy a different status, there are also the Cayman Islands, Gibraltar (another favourite for gambling outfits), Bermuda, and the Turks and Caicos Islands, the latter of which was also put under direct rule between 2009 and 2012 because of corruption.

Other territories far too small to realistically contemplate independence include Anguilla and Montserrat in the Caribbean, Ascension Island, St Helena and Tristan da Cunha in the south Atlantic, and Pitcairn Island in the Pacific – which is populated by the descendants of the mutineers on HMS Bounty – among others. Two geographically vast territories, the British Indian Ocean Territory (BIOT) and the British Antarctic Territory, are virtually uninhabited but strategically valuable, the former being leased out as an important American military base.

The Falkland Islands are by far the richest territory nowadays, per head, because of the lucrative trade in fishing licences for the seas around them and their subdependency, South Georgia. The British sovereign base on Cyprus, Akrotiri and Dhekelia, is the only one besides Gibraltar that isn’t an island or islands; both of these, like the UK itself, border the EU.

Much like the old empire that included India, Australia, Canada and vast swathes of Africa, the British overseas territories are a highly diverse set of “possessions” that come with often insoluble problems. Four have territorial claims laid on them by neighbours – Gibraltar (Spain); BIOT (Mauritius); the Falklands (Argentina) and Akrotiri and Dhekelia (Cyprus). Others make a living from tax evasion – something Britain finds troublesome.

Others still have little chance of economic viability, through no fault of their own, but cannot be fairly amalgamated with a foreign state or have independence imposed on them. Not for the want of trying; in the years immediately before the Falklands war of 1982, British ministers held secretive talks with Argentina over sovereignty and attempted to nudge the locals towards an accommodation with the junta in Buenos Aires (something that is likely to be neglected in the commemorations on the 40th anniversary of the war).

Beautiful as they invariably are, and with sometimes great potential, the scattered remnants of the British empire, with a combined population of around 250,000 (the same as Derby), are a set of headaches. Self-government can lead to corruption; but direct rule is rightly resented. None of these places begged to be occupied or colonised by the British, but successive British governments haven’t known how best to promote their disparate interests. The BVI represents another governance problem for a “mother country” that can barely govern itself these days.