on the Island in a bid to boost the flagging hotel industry.

Sir John said: "Can our hotel industry survive in the present context of how it exists and what will help it survive? "No-one will question my Christian moral standing -- I'm a Christian, but I'm also a realist.'' He added that he was aware that casinos were an emotive issue on the Island and many would oppose them.

But he said: "We are operating double standards -- cruise ships shut down casinos as they enter the harbour and people from Bermuda go to America to visit casinos, taking money out of the Island.'' He added that tourists were accustomed to gambling and pointed out that the recent buyers of the London Ritz paid an over-the-odds Pounds 75 million for the hotel simply because the lease on the casino they operated in-house was due to expire.

Sir John said: "In three or four years, they will pay off the cost of the hotel and they can now take the risk and give it a good face-lift because they own the casino and the hotel.'' But he added hotels in Bermuda were on the verge of closing and some could have been picked up at cheap prices not so long ago, while the Club Med operation could probably be bought at a bargain basement figure.

Earlier, Sir John warned that the wealth gap between Bermuda's blacks and whites is growing.

In his first speech as a backbencher since resigning as Premier in August, Sir John told the House of Assembly that the tourism industry that had fed Bermuda's blacks was in a tailspin.

And rental income relied on by blacks was plummeting, while company dividends collected by whites were soaring, he said.

Sir John warned that tourism and the Island's hotels not only helped Bermudians generally, but helped international business through services and assuring the Island kept good air connections.

Standing in near-empty Government benches during the second day of the Throne Speech Debate, Sir John said he spoke "as a backbencher free to express my views without the responsibility that goes with being Premier.'' The Throne Speech tended to address things currently on the agenda, but not look at the broader picture, he said.

Sir John said that when he grew up there were "two Bermudas.'' There was Front Street -- the merchants who ran the Country -- and the rest of the Country, which in those days was left rather primitive and backward.

Blacks were told work hard to get an education and " a piece of the rock,'' Sir John said. And the 1991 census shows that 61 percent of Bermuda's homes are owned by blacks.

Whites placed their emphasis on commerce, Sir John said, and when large companies like Telco and Belco were created, their shares were distributed among whites.

Today, whites own about 70 percent of stocks in all publicly-held companies in Bermuda, he said. And partly because of the dividends those companies paid, 87 percent of the $1.25 billion in savings held by Bermuda's banks belonged to whites, he said.

"The banks will tell you it's not quite that way.'' But blacks were left with $150 million in savings and were being squeezed as the military and offshore workers left the Island and rental incomes dropped.

Meanwhile, whites were receiving larger dividends because the companies they held shares in were becoming more profitable.

"So the gap gets wider,'' Sir John said. "This society has been built on the backs of the whole society, not one particular section.'' In tourism, Bermuda's last new hotel was built in 1972, two large hotels sat vacant, and the industry employed 25 percent fewer people than ten years ago.

"That should tell us that there's something fundamentally wrong.'' Only the cruise ship business was growing.

There had been "a slow and continuous slide'' in hotel standards, facilities, and service, accompanied by increased costs to the visitors. "It didn't take you long to realise that one day it was going to be real trouble.'' And he could not blame hoteliers for not reinvesting in their properties.

"Unless you're making a good profit, all you do is borrow from other assets to put money into something which isn't making a profit,'' he said. "You end up bankrupt.'' The merchants decided they would support international business, which began to take off in the 1970s, just as the hotels were declining. The merchants did not own the hotels, they were owned by outsiders, and "they had got what they considered their worth out of them,'' Sir John said.

Last year, the GDP from international business exceeded that from tourism, he said.

The same merchants set rules about what exempt companies could come to Bermuda, and those that Bermuda refused went to the Cayman Islands, he said.

"But what I found immoral was the same people who said the business shouldn't come to Bermuda rushed down to Cayman and set up business in Cayman and did the same thing in Cayman as they were doing in Bermuda,'' Sir John said.

If one looked at the annual report of one of the two major banks, one quarter of its net income came from Cayman, he said.

"Now they are in Singapore, they are in Hong Kong, they are in Guernsey, they are all over,'' he said. "If you are a shareholder, you benefit. But if you are a worker and your job is being taken from you, you don't benefit.'' Sir John said that to stay relevant, Bermuda had to be prepared to change.

"If we don't change, we become irrelevant and somebody else takes our place.''