CONFIDENTIAL
Future Prospects and Action
2.
Bermuda is constitutionally ready for independence. The present leadership has the confidence and ability to carry this through, though as yet it has been unable to bring the majority of the population to accept this view. The cause of independence was hampered most recently in April (it has been on the political agenda for a number of years) when a Private Member's Bill on the
issue failed to receive the support of the United Bermuda Party, the majority party, in Parliament. Although the bill enjoyed
·
little public support, public interest was aroused and the
government, and in particular Premier Swan, is committed to educating the electorate on the pros and cons of going independent. It could be a major issue at the next general election in 1990. Before then there may be renewed attempts to gain agreement to a referendum.
3. Bermuda is a rich country which has a higher per capita
income than the UK. The drafting of a UK/US convention on the
position of financial and other enterprises in Bermuda offers new
commercial opportunities to the island. A successful outcome would enable Bermuda to obtain from the US exemption from federal excise tax on insurance premiums and freedom from tax liability
on business conventions.
4. In pushing Bermuda towards independence the UK should seek to cooperate fully with the local leadership. Bermuda has its own small defence capability trained for internal security work which
might need to be supplemented, after independence, by an increase in US or UK security assistance. Overall security protection would it is hoped be provided by the US. Prior to independence
the UK could help overcome the resistance of the peoples by
assisting for example in the process of public education (see
para 29(iii) of paper). Political and administrative training
(para 29(ii)) might also be offered. Subject to the outcome of
any referendum and the forthcoming elections, it might be
possible to bring Bermuda to independence within five years.
CONFIDENTIAL