Flying the flag: Affluent Atlantic jewel jibs at the cost of independen ce

Continuing a series on Britain's last colonies, David Usborne reports from Bermuda
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Hamilton - A grand afternoon indeed at the National Sports Club. The Band of the Bermuda Regiment has given us God Save the Queen and Bermuda is setting about Barbados in a Rugby World Cup qualifying match. In the VIP tent, Lord Waddington, the former Home Secretary, is enjoying one of his last public appearances as governor. His is a gin and tonic; most of us are taking bucks fizz.

Lord Waddington may be going - he departed formally at the end of April - but Bermuda is not. Once Hong Kong is finally relinquished on 30 June, these coral outcrops in the Atlantic with a population of 60,000 will become the largest remaining British dependency. If the sun set long ago over most of the Empire, here, at least, it remains resolutely above the yardarm.

There is just a chance that Britain's oldest colony - the Bermuda islands were settled after a British ship bound for Virginia under Sir George Somers struck rocks off its eastern end in 1609 - could become Britain's last.

That would be ironic. Nowhere else under British rule is more able to go it alone. It has one of the world's highest per capita incomes, levies no income tax, and is a magnet for tourists and international businesses, especially the insurance industry. It is also a fully-fledged, multi-party democracy.

What Britain supplies is the Governor and his funny plumed hat. (But Bermuda pays for his salary and costs). London looks after the islands' limited foreign policy and defence concerns. And, of course, it provides a certain quaintness that the mostly American tourists relish: red post boxes, warm Watneys and a branch of Marks & Spencer.

But, for now, it seems that most Bermudians, amongst whom the black-white ratio is roughly 60-40, prefer to remain under Albion's wing. In a referendum in 1995 the 53 per cent who voted rejected independence by 73 per cent. Even politicians who favour independence predict it may now be 20 years before Bermuda confronts the issue again.

"I don't see independence in Bermuda's foreseeable future," said Jennifer Smith, leader of the opposition Progressive Labour Party (PLP), which has the pursuit of independence enshrined in its constitution. Pamela Gordon, recently installed Premier and leader of the United Bermuda Party (UBP) agreed: "It'll be a while. The referendum is still very fresh; it caused a lot of pain".

The fallout from the 1995 vote continues to stir the calm waters of Bermudian politics. An early victim was Sir John Swan, Bermuda's long-serving premier and UBP leader who called the referendum. Upon the results, he was forced to resign. Since then, he has been at the heart of a political soap opera that might be called Bigmacgate.

Picking himself up from his demise, Sir John asked for - and got - a licence to open a McDonald's on the island. It was a transaction that reeked of political favour-giving; it also appalled most Bermudians.

The burger debate split the UBP and led to the demise of Sir John's successor, David Saul, two months ago. Now, Ms Gordon is striving to clear the wreckage before the next elections, which must be held by next autumn.

Such turmoil is not Bermuda's style. Indeed, it is the conservatism of Bermuda that partly explains the dearth of nationalist fervour. In so far as there is any, it exists in the black population and is driven by racial frictions. "Change is difficult for any society and it's no different here," said Premier Gordon. "We like the status quo and there is the feeling that if it isn't broke, don't try to fix it."

The importance to international business of political and economic stability, perceived to be partly derived from the British link, is lost on few Bermudians. Perhaps Bermuda's most noted corporate catch was Jardine Matheson which stunned the Hong Kong expatriate establishment in 1984 by announcing its intention to restructure itself under a holding company to be registered here.

"We needed to find somewhere secure with a legal environment that was familiar to us; therefore we picked Bermuda," explained Harry Wilken, head of Jardines here. "Bermuda is highly respected in the Far East as a place that is open, where there is not a whiff of corruption." As for the 1995 referendum, Jardines is just glad its over.

Among the few speaking up for independence is Walton Brown, a market researcher who heads a group called the Committee for Independence for Bermuda. "The will of the people was not allowed to emanate - quite clearly they have not spoken," he said.

Mr Brown is guided by a feeling simply that "you should govern yourself". He also questions Britain's long-term commitment. "Its old colonies just cannot be of any interest to it in the long term and we have to be ready for that."

Ms Gordon sees behind Bermuda's attachment to Britain a certain sense of satisfaction that Bermuda did not join the many British colonies in the Caribbean when they rushed into independence in the early Sixties and discovered sovereignty was no Nirvana. "Our sisters to the south taught us how not to do it," she said.

Tomorrow: The Falklands

Colony facts

Population: 60,500 (1994)

Area: 20.59 sq miles

Crown colony since 1684