MercoPress. South Atlantic News Agency

Falkland Islands: Weekly Penguin News Update

Eight-year-old Sian Watt attempts a move on her big sister

Headlines: Doing it for themselves; No threat’ to airbridge as AIG economy nosedives, MoD tax dispute at the heart of Ascension row.

Doing it for themselves

KARATE kids Kieran and Sian Watt are sisters doing it for themselves, and they make an impressive team when they’re practising their moves.

Thirteen-year-old Kieran first took up the sport at age seven, and trains four times a week at Stanley Leisure Centre as she chases her brown belt.

“Karate is my favourite sport,” she said. “I’d rather do this than anything else. “Self discipline is quite a big part of what you’re doing.”

She’ll need to watch her back when Sian is around, though. The ight-year-old is already an orange belt – and reckons

‘No threat’ to airbridge as AIG economy nosedives

MoD tax dispute at the heart of Ascension row

A dispute between the Ministry of Defence and Ascension Island Government is threatening the future of the island’s economy. If the row is not resolved in the coming months, the British overseas territory – which links the Falklands to the UK via the airbridge – would effectively become bankrupt.

However, the MoD says the airbridge is not at risk

The row centres on less than £1 million in unpaid taxes on the MoD’s RAF airbase, and the AIG budget is going into a tailspin as a result.

Government administrator Ross Denny yesterday admitted the Island’s economy was at a “critical point.” He told the Penguin News: “We have some reserves left, but we anticipate they will be exhausted by the middle of next year. “We certainly face some major challenges. In the meantime we are realising as much savings as we can to mitigate the problem.”

The council and government, responsible for all services to the 900 inhabitants, have reportedly “cut spending to the bone.” A review of taxes was also imminent, said Mr Denny.

The outstanding tax bill relates to the value of MoD assets on the Island, calculated when property tax was introduced in 2002. “It is a long and complicated story,” said Mr Denny. “But that is essentially what is at the heart of the dispute.”

The MoD, in a statement to the Penguin News, said it was disputing the level of property tax levied on its facilities, and that the government had “almost doubled the MoD’s bill without prior consultation in 2007.”

Mr Denny disagreed. “That is obviously their interpretation of it,” he said. “It is not right to say there was a tax increase. The taxes have never been increased since 2002. “They had a variation to pay a smaller amount and that was time limited and subsequently the full tax is due.” He said budget shortfall of about £900,000 was mainly due to the MoD’s unpaid tax.

“We are doing everything we can. We are not just waiting for something to fall into our laps.” Asked if the Island would effectively be bankrupt by June if the issue was not resolved, Mr Denny said: “It is a reasonable estimate of where we would be if nothing changes in the meantime.”

A spokesperson for the Foreign and Commonwealth Office said it was doing all it could to resolve the dispute, but it was having a “serious impact” on the Island’s budget.

“AIG is currently making efficiency savings which are necessary whether the dispute is resolved or not. But further savings will have to be found if the dispute is not resolved.”

Mr Denny said he did not want to speculate on whether the airbridge would be affected as a result of the row: “The MoD operates the airbridge. We rely on it too. The MoD, like everyone else, realises how people in this part of the world and the South Atlantic rely on the airbridge.”

The MoD said it was in contact with the FCO “to try to resolve this dispute urgently and seek assurance that the services it receives in return from AIG represent best value for money for the defence vote. “This dispute is between AIG and MoD and there are no foreseen threats or impacts to the South Atlantic airbridge.”