UK NOT OBLIGED TO PAY GIBRALTAR’S DEBTS

The UK Government has implied, in the UK Parliament, that, were Gibraltar to default on its public debt to banks, the UK would have no liability to pay it. The answer, to a written question in Parliament, is circumspect. It certainly does not deal with constitutional arguments, which could give rise to such liability.

Andrew Rosindell MP asked the question of the Secretary of State for Foreign, Commonwealth and Development Affairs.It was answered, on the 30th March 2022.

He asked, what statutory or constitutional obligations the UK would have to pay, were an Overseas Territory to default on international debt obligations.

The answer was given by Amanda Millings MP, a Foreign, Commonwealth and Development Affairs Minister in the UK Conservative Government, who circuitously implies that the UK has no obligation to pay.

NOT THE CONSTITUTIONAL POSITION

It is difficult to accept that what Ms. Milling explained is the real position at a constitutional level.

The arguments in that context are deep and legal in nature, but in essence they revolve around the concept that the debt of an Overseas Territory is a Crown debt; accordingly, any debt of an Overseas Territory is part of the debt owed by the British Crown.

The British Crown governs through its constitutional bodies, namely, Parliament, the Cabinet, and the Privy Council. In the case of the Overseas Territories, it is the Privy Council. The Gibraltar Constitution (2006) is an Order of the Privy Council.

Under that Constitution the UK Crown (government) delegates powers and authority, (subject to, seemingly little understood restrictions, reference “peace, order and good government”) to the Gibraltar Parliament and Executive, the ‘government’.

Continued at link.

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