But the established policy of successive British governments has been to give every help and encouragement to those territories which wished to proceed to independence, where it is an option. The issue was most recently reviewed in Bermuda in August 1995, when a referendum produced a 73 percent vote in favour of retaining the link with Britain.

2.2 Britain is helping to develop the Overseas Territories, both economically and politically. This is a high priority for the Government, and is in line with Britain's commitments under the terms of the UN Charter.

2.3 To improve the links between the UK and the territories, we have for the first time appointed a dedicated Minister for the Overseas Territories in the FCO to oversee and develop the new partnership.

2.4 The partnership will be based on consultation and mutual understanding. A new political forum, the Overseas Territories Consultative Council, will be set up bringing together British Ministers and Chief Ministers and, where there is no ministerial system, elected members of Legislative Councils from the Overseas Territories to discuss matters of common concern. It will meet annually. Every other year, the Council will meet immediately before the Commonwealth Heads of Government Meeting, to allow our representatives to attend in full knowledge of the views of the governments of the Overseas Territories. We plan to hold the first meeting of the Council in September/October 1999.

Constitutional relations 2.5 We are committed to ensuring good government, sustainable political, economic and social development in the Overseas Territories and to guaranteeing their security and defence. The commitment to the defence of the Overseas Territories was reiterated in the Strategic Defence Review published in July 1998. It has substance: a garrison in the Falklands, for example, and guard-ships in the Caribbean and South Atlantic. In return, we expect high standards of probity, governance and adherence to the international agreements to which the UK and the Overseas Territories are party; and we expect to minimise the extent to which the UK is exposed to contingent liabilities.

2.6 Consultation with the territories showed a clear expression of their wish to retain the connection with Britain. We concluded that neither integration into the UK, nor Crown Dependency status, offer more appropriate alternatives to the present arrangements. But these arrangements need to be revisited, reviewed and where necessary revised.

2.7 The link between the UK and the Overseas Territories is enshrined in the constitution of each territory. The Overseas Territories believe that their constitutions need to be kept up to date and where necessary modernised. Each Overseas Territory is unique and needs a constitutional framework to suit its own circumstances. Suggestions from Overseas Territory governments for specific proposals for constitutional change will be considered carefully.

2.8 The governance of the territories must have a firm base. Democracy, human rights and the rule of law are all as relevant in the Overseas Territories as elsewhere. The principles which should underlie modern constitutions are clear. There must be a balance of obligations and expectations, and both should be clearly and explicitly set out. Future action will focus on: measures promoting more open, transparent and accountable government; improvements to the composition of legislatures and their operation; improving the effectiveness, efficiency, accountability and impartiality of the public service; the role of Overseas Territory Ministers and Executive Councils and their exercise of collective responsibility for government policy and decisions; respect for the rule of law and the constitution; the promotion of representative and participative government; freedom of speech and information; the provision of high standards of justice; adoption of modern standards of respect for human rights.

2.9 Discussion of constitutional change is already under way. We are planning, for example, to consult the people of St. Helena and its Dependencies about how to develop the democratic and civil rights of people living on Ascension Island. Some territories are already actively modernising the machinery of government: in the Cayman Islands, for example, an extensive programme of public sector reform and rejuvenation is in place.

2.10 Important changes have already been introduced to make the new partnership work. The Foreign and Commonwealth Office (FCO) and the Department for International Development (DFID) have put in place new administrative arrangements to ensure better management of the UK's links with, and responsibilities for, the Overseas Territories.

2.11 After close consultation between the two Secretaries of State, it was decided that there should be parallel departments for the Overseas Territories in both the FCO and DFID. These have been set up. A ministerial joint liaison committee has also been established to coordinate the departments' activities and policies towards the aid-receiving Overseas Territories.

2.12 In the FCO, the new Overseas Territories Department is responsible for all issues relating to the Overseas Territories and reports to the Minister for the Overseas Territories. Special arrangements apply for issues relating to Gibraltar and the Falkland Islands. Because Gibraltar is within the European Union (EU) as part of the UK membership under the Treaty of Rome -- the only Overseas Territory with this status -- it will continue to be handled principally by the FCO's European Departments, reporting to the Minister responsible for Europe.

2.13 Following a review of the management of the aid programme in the Caribbean region, DFID decided early in 1998 to concentrate all support work for the Overseas Territories in London and the Parliamentary Under Secretary of State in DFID was given specific responsibility for overseeing the aid relationship with the Overseas Territories. At the same time, the FCO decided to transfer back to London responsibility for its Good Government funding and most of the other work hitherto done by the joint FCO/DFID Dependent Territories Regional Secretariat in Bridgetown. The Secretariat consequently has been closed. To reflect changing organisational and structural needs the Overseas Territories Department is, however, keeping some advisory expertise in Barbados.

2.14 These new arrangements are already providing greater coherence in policy making, raising the profile of the UK Government's work on behalf of the Overseas Territories in Britain, and helping to create a better dialogue with the Overseas Territories themselves.

2.15 There is great diversity within the Overseas Territories in terms of their size, their populations, their economic development and other factors.

But there is a degree of coherence and similarity in the constitutional and institutional arrangements in place for their government and administration.

We would like to see individual territories review their own structures and arrangements in line with the idea of a new partnership. Local changes may be needed to make the partnership work fully, and to improve the dialogue between the territories and the UK.

2.16 In response to representations from several Overseas Territory governments, we have reviewed the arrangements in Brussels for ensuring that Overseas Territory interests are properly looked after within the EU, given the direct impact of many Brussels-based decisions and regulations on their economies. The EU Command in the FCO will continue to liaise closely with the Overseas Territories Department and Southern European Department as well as other government departments over issues which affect the territories. A First Secretary in the office of the UK Permanent Representative to the EU in Brussels has been designated as a point of contact for the Overseas Territories covered by the Overseas Countries and Territories (OCT) Decision.

The UK Permanent Representation to the EU remains in close touch with the Government of Gibraltar through the latter's office in Brussels.

2.17 We were also asked by leaders of the Overseas Territories whether closer links might be possible between the territories and the Commonwealth. Full membership of the Commonwealth is open only to independent countries, which limits the scope for Overseas Territory participation in Commonwealth affairs.

However, members of the legislatures of the Overseas Territories have long enjoyed membership of the Commonwealth Parliamentary Association on an equal footing with full Commonwealth members. We will work to extend this collaboration to Overseas Territory participation in other Commonwealth organisations. Bermuda and other Overseas Territory governments are regular participants, as members of the UK delegation, in Commonwealth Finance Ministers' meetings. The Cayman Islands will host the 1999 meeting. Overseas Territory representatives have also attended meetings of Commonwealth Law Ministers. In 1998, for the first time, Overseas Territory representatives were included as members of the British delegation to the Commonwealth Senior Officials' meeting and the Commonwealth Health Ministers' meeting in Barbados.

In collaboration with the Commonwealth Secretariat, we are exploring the scope for extending the practice of representatives from the Overseas Territories attending Commonwealth meetings as members of the British delegation.

CITIZENSHIP 3.1 Access to Britain for people from the Overseas Territories is governed by a range of legal controls. The Government's review has examined closely whether this legal framework should now be modernised, as a key element of the new partnership.

3.2 The Commonwealth Immigrants Acts of 1962 and 1968 introduced controls which greatly restricted the ability of Commonwealth citizens and citizens of the United Kingdom and Colonies from the Dependent Territories to settle in the UK.

3.3 These Acts were succeeded by the Immigration Act 1971, introducing the concept of the right of abode in the UK and ending the right of free movement to the UK of Commonwealth citizens, including people from the Dependent Territories.

3.4 A 1977 consultative paper on British nationality proposed that the status of citizenship of the United Kingdom and Colonies be divided into two new categories: British citizenship for citizens of the UK and Colonies with the right of abode in the UK, and British Overseas citizenship for those who were subject to control under the Immigration Act 1971. Following representations received on behalf of the Overseas Territories, it was agreed that an additional category should be introduced in recognition of their special status.

3.5 The British Nationality Act 1981 accordingly replaced citizenship of the UK and Colonies with three new forms of status: British citizenship, for those with the right of abode in the UK; British Dependent Territories citizenship, for those belonging to the Dependent Territories; British Overseas citizenship, for people not connected with either the UK itself or any of the remaining Dependent Territories.

The 1981 Act also made provision for people from Gibraltar to acquire British citizenship, and a separate Act gave British citizenship to Falkland Islanders in 1983.

New rights of citizenship 3.6 Many people in the Overseas Territories who have British Dependent Territories citizenship but who do not have the status of British citizens, and thus the right of abode in the UK, clearly feel a sense of grievance. For some people this is an irritant affecting the ease with which they can travel.

For others the issue goes deeper. Some territories have only ever known British sovereignty. They feel British, and their populations have never been anything other than British. But legislation enacted in the 1960s and 1970s imposed controls on their entry to the UK either for settlement or for visits.

There is a strong desire for these controls to be relaxed and rights restored.

We sympathise with those in the Overseas Territories who feel this sense of grievance, and intend to address it.

3.7 We have examined the options carefully. We have decided that British citizenship -- and so the right of abode -- should be offered to those British Dependent Territories citizens who do not already enjoy it and who want to take it up (but see paragraphs 3.12 and 3.13). Any who do not want to take it up will be able to say so and remain British Dependent Territories citizens.

This is a significant step forward for people in the Overseas Territories. It will offer them the opportunity many have sought for many years. The Government considers this is the right thing to do as a point of principle. We will introduce, when parliamentary time allows, the legislation required to put this principle into practice.

3.8 In making this decision the Government has taken into account representations made by people in many territories -- not least those made on behalf of the people of St. Helena.

What new citizenship rights will mean 3.9 We have considered carefully the argument that a grant of British citizenship to people with British Dependent Territories citizenship would lead to a new wave of primary immigration. We expect few people from the Overseas Territories would wish to emigrate permanently to Britain. Roughly 70 percent of the total population of the Overseas Territories live in territories with a higher income per head than Britain, and residents of the larger and richer territories such as Bermuda, the British Virgin Islands and the Cayman Islands might well be more likely to want to stay where they are.

But some, for example, may like to come to Britain for training and work experience, and will be welcome. We would not expect large numbers of those currently resident in the less prosperous, smaller territories to take up the option of coming to live and work permanently in the UK. Effective and sustainable development within the Overseas Territories will continue to provide opportunity and choice and reduce the need for people to seek these elsewhere.

3.10 Another point made by some governments of the Overseas Territories is that they would not welcome a grant of British citizenship if this came with conditions attached to it, such as an obligation to introduce British tax rates and regimes. There are no such conditions attached to the Government's proposal on citizenship. Nor will this offer of British citizenship imply in any way a threat to the right of the people of these territories to determine their own constitutional relationship with the UK. The new grant of British citizenship will not be a barrier, therefore, to those Overseas Territories choosing to become independent of Britain. Nor will British Dependent Territories citizenship status be abolished.

3.11 Many people from the Overseas Territories have made it clear that they want British citizenship so that they can travel more freely. It is right that they should be able to do so. They should be able to enter Britain through our ports through the same channels as British citizens and other European Union (EU) nationals -- who at present include inhabitants of French and Dutch territories, but not those of our own except Gibraltar and the Falkland Islands.

3.12 We do not intend to offer British citizenship to British Overseas Citizens. Many have access to or have acquired dual nationality. Many have access to the UK through our voucher scheme. Moreover we have a particular responsibility to people in areas for which we have sovereign responsibility.

3.13 Nor does the Government propose to extend the offer of citizenship to British Dependent Territories citizens who owe their status to their association with the Sovereign Base Areas in Cyprus or with the British Indian Ocean Territory. Both are special cases. British usage of these territories is defence-related.

Reciprocity 3.14 It is our intention that the offer of British citizenship should be on a non-reciprocal basis as far as the right of abode is concerned. Our consultations with the territories showed that there is a fear among these mostly small communities that reciprocity would give unrestricted access to not only British but also other EU citizens. This would, potentially, make possible an inflow of people on a scale that could dramatically alter the social cohesion and character of the communities. The Government regards this concern as legitimate. Precedents have already been set for British citizenship being offered without reciprocity in the case of the Falklands and Gibraltar. Within the EU, neither France nor the Netherlands nor Portugal require reciprocity in exchange for full metropolitan citizenship.

3.15 A non-reciprocal offer of British citizenship would be wholly consistent with the importance the Government attaches to the emergence of a vibrant multiracial and multicultural Britain.

3.16 Under European Community law, giving British Dependent Territories citizens British citizenship will mean giving them certain European Community rights of free movement and residence in EU and European Economic Area member states.

3.17 Once the appropriate legislation has been passed, all those who were British Dependent Territories citizens by connection with any qualifying Overseas Territory (see paragraph 3.13 above) at the time the legislation entered into force would automatically become British citizens.

We shall make provisions for children born to qualifying parents to become British citizens at birth or adoption. But we shall also make it possible for those who do not want to become British citizens to give up that status and remain British Dependent Territories citizens.

3.18 As now, newcomers to the Overseas Territories will be subject in the first instance to regulations on rights of residence in the Overseas Territory in which they wish to live. These regulations differ from territory to territory and often prescribe lengthy periods of legal residence and other qualifications for the grant of 'belonger status'. We shall put in place arrangements which will make it possible for any such people who acquire British Dependent Territories citizenship through legal residence in an Overseas Territory to be granted British citizenship.

ENCOURAGING GOOD GOVERNMENT HUMAN RIGHTS 4.1 We regard the establishment and maintenance of high standards of observance of human rights as an important aspect of our partnership with the Overseas Territories. Our objective is that those territories which choose to remain British should abide by the same basic standards of human rights, openness and good government that British people expect of their Government.

This means that Overseas Territory legislation should comply with the same international obligations to which Britain is subject, such as the European Convention on Human Rights and the UN International Covenant on Civil and Political Rights. The Overseas Territories have a well-deserved reputation for their respect for and observance of human rights, but changes are still necessary in some territories to ensure consistency.

4.2 There are three human rights issues on which we have indicated we would like to see reforms in some of the Overseas Territories: Judicial corporal punishment, which remains on the statute books of two Overseas Territories; legislation in some of the Overseas Territories which outlaws homosexual acts between consenting adults in private; capital punishment, which is still available to the courts in Bermuda.

IMMIGRATION IMM