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Ascension Island

Volume 534: debated on Thursday 27 October 2011

My hon. Friend the Minister for the Armed Forces, the Member for North Devon (Nick Harvey) and I are pleased to inform the House that the financial dispute between the Ministry of Defence and the Ascension Island Government has been resolved and that we have agreed with the Ascension Island Council a number of changes to the island’s finance model which will help to ensure a sustainable future for Ascension.

Earlier this year, we commissioned a review of service delivery and finance arrangements on the island. That review was carried out by FCO officials working closely with all stakeholders. The three key recommendations of the review which we have agreed, and to which all stakeholders have committed, are:

The establishment of a Budget Consultation Forum to make recommendations on the Ascension Island Government’s budget. The forum will comprise representatives of the Ascension Island Government and the major, externally based taxpaying Employing Organisations on the island;

The replacement of Property Tax with a Business Levy based on employee headcount; and

A year-on-year reduction of 7% over the next four years in the levy on the major Employing Organisations.

We recognise the role played by the Island Council in this process, who have already begun a programme of significant efficiency savings. They will now consider the remainder of the recommendations in the report which concern the increase or implementation of taxes and duties and other means of raising revenue, and continue to reduce duplication of services on the island.

We welcome this approach which we believe will ensure the effectiveness and efficiency of service delivery and the viability of Ascension Island’s finances.