Why Britain is in the wrong over the Falklands

The UK has no legal right to the islands and only defends them to exploit oil and gas reserves.

A few years ago, the Chief of Naval Staff, Admiral Mark Stanhope, informed Chatham House that Britain's role in the world is "wielding a big stick" to "compel others to act in a desired manner." In February, Argentina's Foreign Minister Hector Timerman approached the United Nations to complain about the UK's deployment of a nuclear-armed submarine (of the Vanguard class) in the South Atlantic.

The move was confirmed by the Daily Mail and by the BBC. The latter acknowledged that "The Latin America and the Caribbean region is designated a nuclear-free zone under a treaty signed in the 1960s." The deployment of nuclear weapons in response to Argentina's peaceful efforts to resolve the Falklands/Malvinas issue is not only a grave violation of Chapter 1 Article 2(4) of the UN Charter (which prohibits the threat of force), but a particularly egregious example of "wielding the big stick."

Imagine the boot on the other foot. Imagine if Argentina had occupied the Shetland Islands in the 1800s, expelling the inhabitants. Despite Britain's efforts to resolve the issue peacefully in accordance with various UN Resolutions calling for decolonisation, Argentina continues the occupation and expands fishing and oil drilling into UK territorial waters. Under a military junta, Britain invades the Shetlands, and in doing so is threatened with a nuclear attack.

This is what happened in 1982, with the balance of power reversed. Retired Admiral Richard Heaslip was quoted as saying that "The Argentines had a good navy in 1982. But after we got a nuclear submarine down there they went back to port and never dared venture out." As the vessels were retreating, British missiles sank the Belgrano, thereby escalating the war. Foreign Office records also reveal that the Thatcher government vetoed a Security Council Resolution calling for a ceasefire.

The Law

The Falklands/Malvinas were terra nullius when the French colonised the islands in the 18th century. They were then sold to Spain, a transfer of sovereignty which Britain recognised. However, upon decolonisation and under the principle of uti possidetis, sovereignty should have been transferred to Argentina, which declared independence in 1816. In 1833, Britain expelled the islands' inhabitants. Argentina's Foreign Minister Don Manuel Moreno was told by Prime Minister Palmerston that Argentina "could not reasonably have anticipated that the British Government would permit any other state to exercise a right as derived from Spain which Great Britain had denied to Spain itself."

Writing in the Yale Law Journal, W Michael Reisman affirmed that "Upon acquiring independence, a former colony", i.e. Argentina, "ordinarily inherits all the territory of that colony. This principle, enshrined in Latin America and, a century later, in Africa, would certainly appear to apply to the Falklands [Malvinas]." For Britons, the legal status of the islands is an open-and-shut case: Britain has no legal right to the islands. This has been reiterated at the General Assembly.

General Assembly Resolution 2065 (XX), adopted on 16 December 1965, "Consider[ed] ... the cherished aim of bringing to an end everywhere colonialism in all its forms, one of which covers the Falkland Islands (Malvinas)." The Resolution left it to Argentina and Britain to negotiate the issue using bilateral diplomacy. Britain violated this aspect of the Resolution. As a result, in December 1973, General Assembly Resolution 3160 (XXVIII) "Express[ed] its gratitude for the continuous efforts made by the Government of Argentina ... to facilitate the process of decolonization and to promote the well-being of the population of the island." The Resolution also "Urge[d] the Governments of Argentina [and the UK] put an end to the colonial situation."

Oil, Gas, and Fish

Successive British governments have not only consistently violated the Resolution, but the Chatham House journal International Affairs - like the General Assembly - acknowledged Argentina's peaceful efforts to resolve the issue (except, of course, the 1982 War, for which the previous government has apologised). Guillermo A Makin's paper in the journal recognised that "the use of force has not been a permanent feature of the approach of the various very different Argentine political regimes to the [Malvinas] dispute."

Likewise, recent House of Commons papers note that "The catalyst for the renewed Argentinean sovereignty campaign is believed to have arisen as a result of the Falklands decision in 2005 to grant fishing concessions around the Islands over a 25-year period, rather than by annual renewal," recalling the events of 1986, when the Falkland Islanders unilaterally declared 150 nautical miles of fishing rights. [PDF]

The main issue, of course, is energy. North Sea-size fields were discovered in the 1970s following a UNESCO-sponsored expedition. In 2010, the Wall Street Journal explained that "The Falklands government only takes a 26 per cent share of oil earnings in addition to a 9 per cent royalty on each barrel of oil sold, making it one of the most favourable areas in the world for exploration." A few years ago, the "British firm Rockhopper Exploration discovered a massive natural gas deposit - one that could be as big as 7.9 trillion cubic feet," Money Week reported.

"By 2029 there is expected to be a considerable increase in demand for energy. In particular gas will be of increasing importance as states struggle to maintain energy supplies," the Ministry of Defence explained [PDF]. "Many boundary disputes, such as those in the Arctic, Gulf of Guinea and the South Atlantic will become inextricably linked to the securing of energy supplies." Does anyone seriously think that were it not for the oil and gas, 1,400 soldiers (around one per islander) would be deployed at a cost of £40 million a year to defend a bunch of rocks that few Britons could find on a map?

TJ Coles is a PhD candidate at Plymouth University

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.