HC Deb 31 July 1981 vol 9 cc1418-25 2.30 pm
Mr. A. J. Beith (Berwick-upon-Tweed)

The vexed question of Amble harbour has occupied me since I was first elected a Member of Parliament. The large file that I have with me starts with a letter that I received in December 1973 from the hon. and learned Member for Colchester (Mr. Buck), who was then a Service Minister, intimating a strong naval interest in developing a dock at Amble for reducing the magnetism of minesweepers. That is the starting point of the story. However, it was not the starting point for the local authorities. They had been engaged since before 1973 in trying to deal with the repair of the sea defences of the town of Amble.

Amble was once a busy port for the coal trade. Its harbour and sea defence works are, therefore, extensive, but they have become old and badly decayed without the income from the coal trade that had been used in earlier years to sustain, develop and maintain them.

Amble remains a vital fishing harbour for keel boats .1s well as for cobles. The fishermen who earn their living out of Amble have put their own money into it quite extensively in an attempt to turn the decayed coal harbour into a viable harbour for the fishing industry. In recent years the harbour commissioners have worked hard with the fishermen to try to do that. Many pleasure boats come into and go out of Amble, and many are moored there.

The harbour is run by the Warkworth Harbour Commissioners, but the main sea defence of the town is the north pier breakwater, which is the province of the local authority. It is leased by the local authority, which is responsible for its maintenance.

The North Pier breakwater is the defence not only of the harbour but of the town. If a serious breach occurred in it a large part of the town would be flooded, including many houses as well as commercial and industrial properties.

The breakwater is an extremely long structure. It takes a heavy pounding from the North Sea and it is now dangerously decayed. If it is not repaired, the harbour and all the works associated with it, as well as the town, will suffer serious damage. It is the repair of the breakwater that is the principal subject of the debate along with the role of the Ministry of Defence in the delay and difficulties that have arisen. Those are the aspects on which I most want to concentrate. I am glad that the Under-Secretary of State for the Armed Forces is to reply to the debate.

Alnwick district council and its predecessors had plans to repair the breakwater when the Ministry of Defence first appeared on the scene. It was in 1974 that the Ministry decided to build a degaussing dock. The project was very much welcomed locally. The idea of a permanent naval installation in the town was warmly welcomed and the council went to great lengths to try to assist the Ministry of Defence and the Navy. The dock was expected to provide over 30 jobs and considerable economic benefit. Apart from those factors, there was a genuine feeling among the people of a town long associated with the sea that they wanted to have the Navy working in the town. The citizens of Amble were proud to be involved with and to contribute to the sea defence of the United Kingdom.

It became clear immediately that the plans to repair the north breakwater would have to be modified to meet the Ministry of Defence. It was realized that the Ministry would have navigational requirements that had not existed hitherto. It was intended to bring quite deep draught vessels, at least by Amble standards, into the harbour. In addition, the materials used in the repair would have to take account of the special purposes of the dock that would be built, which was to reduce the magnetism in minesweepers. Therefore, the magnetic properties of the material used became an important factor in the design of the breakwater. For the same reason, work on it would have to be completed in one operation, because later work could limit the effective operation of the installation.

The correspondence with the Ministry at that time bears that out. The Ministry wrote the following letter to the council on 13 March 1975: It seems to us that the most efficient arrangement would probably be for any repairs which your council wishes to make to the remainder of the breakwater to be undertaken at the same time"— that is, at the same time as the Ministry's own works— and there would appear to be advantages, if it proves possible, for the whole job to be undertaken as a single contract. It continued to be the assumption of all concerned that it would be much more straightforward to complete the works as one job.

The minutes of a meeting in June 1977 between the council, the Property Services Agency and the Ministry of Defence state: If the Property Services Agency proposals are implemented, the work should be entirely contracted by them and some method would have to be found of apportioning the cost. Again, the assumption was made that the works would all be carried out as one operation and one contract. That was clearly accepted on both sides. In any event, the council could not have gone ahead on its own without causing great difficulties to the Ministry of Defence. Its attitude at that stage and in every respect reflects its desire to be as helpful as possible to the Ministry and to smooth the way for the project.

Discussions proceeded on costs. The council took the lease on the breakwater from the harbour commissioners, which was an essential part of the handling of the project. However, deterioration continued while the discussions took place and nothing was being done to the breakwater, which suffered further damage from the sea. The passage of time only made things worse.

Then doubts began to arise about the dock project. The Labour Government reviewed the project and decided to retain it. The review caused further delay. The incoming Conservative Government cancelled the project in July 1979. It is not difficult to imagine the consternation with which that news was received in the town. I met the Under-Secretary of State for Defence for the Royal Navy the day after the project was cancelled. He seemed to recognise what a blow it would be and that he would have to consider the case that the council would advance for compensation for the extra costs that had arisen during the delay. The same message was clear in correspondence with the council.

On 30 July 1979 the Ministery of Defence wrote to the chairman of the council. The letter was signed by an assistant secretary. It stated: I can appreciate the difficulties that you and your council face. I am mindful of the problems that remain with the repair of the breakwater and the dredging of the channel. These two matters will, of course, be the subject of further negotiations between us. I am sure that all necessary action is already in hand towards this end. I wish to stress the phrase "further negotiations between us". It was clearly understood in the Ministry that the council was left with a serious problem on its hands and that the Ministry would have to negotiate and discuss with it how it could be dealt with. The negotiations have continued ever since 1979, but they have failed to yield any result, despite numerous representations from the council and from myself.

The council's claim, which it detailed at considerable length, was prepared by the consultants who had been employed on the breakwater project from the very beginning and before the involvement of the Ministry of Defence. They produced figures of over £500,000, which were based not merely on inflation and cost increases but on a number of specific features, such as emergency work that had to be carried out to prevent an early breach by the sea and the possible damage that could result. That short-term work would have been unnecessary if the major project had been carried out. Many forms of additional work are now thought to be necessary as a result of the delay. It will be necessary to use additional stone because of the fall in the beach level. It will be necessary to introduce more piling, more concrete and more dredging. The work has become more complicated because of the action of the sea in the meantime. The sea does not wait for Government Departments and civil servants to discuss and argue. It carries on its relentless tearing away at the structures that man builds and makes his efforts seem puny.

Through its consultants, the council submitted its view on the additional costs. In the meantime, the delay over the breakwater was causing serious problems elsewhere and other Departments were making the situation far worse. The Department of the Environment took the view that the repair of the breakwater was urgently required and that no other work in the area should be grant-aided until it had been repaired. That had serious implications. The Ministry of Agriculture, Fisheries and Food took immediate cognisance of that and vetoed various grants that might otherwise have been given to the bodies concerned.

The harbour commissioners had applied for a grant under the Fisheries Act 1955 for the repair and development of the fishing harbour. That grant was refused and in a parliamentary answer the Minister of State, Ministry of Agriculture, Fisheries and Food said that consideration … must be deferred pending consideration by Alnwick district council of a scheme of work to the north-east breakwater which is in a poor state of repair and which protects the fish quay and the harbour generally."—[Official Report, 28 January 1980; Vol. 977 c. 492.] That is a clear indication that the Minister felt that the harbour was in such a serious state that if nothing was done about the breakwater, the work would be pointless.

The harbour commissioners had more confidence than that and went ahead with the work without the grant-aid. The fishing community, which contributed substantially to the cost, is grateful to them for having done that. The continued operation of the fishing harbour would have become impossible if some of the work had not been done. That was not the limit of the meanness. The fishermen purchased and installed an ice plant in the harbour. The ice was to be used to freeze and protect fish. The Minister of State, Ministry of Agriculture, Fisheries and Food, the right hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) came to examine the ice plant. I was photographed with him as he scooped out the ice and said that it was a splendid development.

What did the right hon. Gentleman then do? He vetoed the grant-aid for which the ice plant would have been eligible, on the ground that it might be washed away because the north breakwater had still not been repaired. Yet again, innocent parties were heavily financially penalised because of continued delay over the breakwater project. Ministers were wrong to take the view that they did, particularly as the ice plant could have been moved in the event of flooding. However, I have cited it as an illustration of the part that other Departments have played in making everyone in the area extremely sore about the way in which Whitehall has handled the matter.

That was not the end of the troubles caused by the Department of the Environment. It is particularly galling that, after it had blocked every other Department's attempts to grant-aid projects in the area, it has written to the council within the last few weeks saying that it must carry out another survey into the economic justification for the breakwater repairs. It said that the council must seek to identify potential beneficiaries. In other words, it must identify whose houses will not be washed away if the breakwater is repaired and whose commercial property will not be damaged. The council must identify those who could then be asked to contribute to the cost of repairs. However, they are the very people who have already been deprived of Government grants that they would otherwise have been entitled to, namely, the harbour commissioners and fishermen

As if that were not enough, by removing the area's development area status—despite its high level of unemployment—the Department of the Environment has effectively prevented the council from receiving European aid towards the expenses involved. At every turn, the council has been blocked while it has sought some reasonable compensation from the Ministry of Defence for the extra costs that have resulted from pulling out of the dock project.

On 13 October 1980 the council took a deputation to see the hon. Member for Ashford (Mr. Speed), who was then Under-Secretary of State for Defence for the Royal Navy. As always, the deputation was sympathetically received. Nevertheless, the visit was followed by a refusal.

On 18 December 1980 I saw the hon. Member for Ashford. Again, I was sympathetically received. I also saw him informally at a later date. When I met the hon. Gentleman he made it clear that the Department was at least prepared to look at the figures, to consider the council's assessment of additional costs and to compare them with the Department's assessment. There were fairly wide discrepancies between the two. He was prepared to consider whether there was a figure that could provide the basis for an ex gratia payment. He made no commitment to such a payment but implied clearly that he was prepared to discuss it. He did make it clear, however, that no Government Department would entertain responsibility for the effects of inflation. No Government ever do. Therefore, the claim has concentrated on the additional costs that have arisen.

The Under-Secretary of State for the Armed Forces wrote to me on 14 July, declining to make a separate contribution to Alnwick's costs. I saw him on Tuesday of this week, and again I was given a sympathetic hearing. However, no progress was made towards achieving some help for the council.

What are the obstacles to assisting the council? The Government do not want to be seen compensating for inflation. We know that that is their position and we have no choice but to accept it. However, that does not affect the obligation to help the council with the increased costs that have arisen from delay. The Government then say that any aid that the Ministry of Defence could give could be clawed back by the Department of the Environment, which would not give additional grant-aid to the extent that the project had been supported by the Ministry of Defence.

That is not necessarily the position. These are only procedural rules and there is no statutory provision. They need not be, and should not be, applied in such a case as this. Even if that limitation were placed on any grant received, the council would still benefit from a separate contribution from the Ministry of Defence. It would be the equivalent, to the council, of receiving a 100 per cent. grant for that part of the project, instead of the 79 per cent. that it would receive from the Department of the Environment.

It has been said that the Ministry of Defence gave no written undertaking to contribute to the costs, let alone in the instance of withdrawal from the project. However, the understanding was obvious, and the correspondence makes it clear that the obligation existed. The Department's main worry is probably that it might set a precedent and that other authorities might constantly con le to it when it changed its mind and ask for compensation. However, the Department should consider that it is far worse to set a precedent that gives the impression that when the Ministry of Defence embarks on consultations with a local authority it will pull out if circumstances change and leave that authority financially worse off, without doing anything about it. If that view became widespread, informal co-operation between local authorities and the Secretary of State for Defence would become impossible.

I hope that the Minister realises how strongly people feel about this matter. The chairman of Alnwick district council, who is a loyal supporter of the Conservative Party and the Government, has written in desperation to Ministers and to the Prime Minister. Any Minister who comes near my constituency runs the risk of being met by a deputation from the council. I notice that the Leader of the House is coming tomorrow to fulfil a political engagement. He may be greeted by a deputation. Certainly the Home Secretary has had that experience. It shows the deep feelings of those of all political views. They feel that the area has been treated badly. In terms of numbers Alnwick is one of the smallest district councils in the country and has a population of only 26,000. It is faced with an enormous bill and feels that the Department that led it up the garden path for many years has not taken on its responsibilities. I appeal to all the Ministers involved, including the Secretary of State for the Environment and the Minister of Agriculture, Fisheries and Food, to recognise that this prevarication has done great damage.

I appeal, in particular, to the Under-Secretary of State for the Armed Forces to take a personal initiative and to safeguard his Department's reputation and that of the Navy for fair and reasonable dealings. If he took the initiative, he could cut through this bureaucratic mess. He may be tired from many months of ministerial responsibility and anxious to go on holiday. However, he will enjoy his few weeks' holiday much more and have greater peace of mind if he takes some action to ensure that the people of the district, who were so ready to welcome the Navy, get a fair deal. They will suffer severe financial consequences because the Royal Navy decided to pull out of the project. I appeal to the Minister to see that they get a fair deal.

2.42 pm
The Under-Secretary of State for the Armed Forces (Mr. Philip Goodhart)

As the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, this is a long and detailed story. It begins with the fact that Alnwick district council is responsible for the north pier breakwater. Any scheme for its maintenance needs to be agreed with the Department of the Environment, which can meet up to 79 per cent. of the cost by grant in aid, under the coastal protection arrangements. In practice, the balance of the cost would not be borne entirely by the district council since Northumberland county council would make a contribution; currently it would be one-third of the balance, or 7 per cent., leaving 14 per cent. to be met by the district council. The payment of a grant is discretionary and is dependent on the Deprtment of the Environment's assessment of the benefits of the scheme towards coast protection.

The district council had—as the hon. Gentleman reminded us—engaged consultants to study the repair options for the north pier breakwater when, in 1975, the Ministry of Defence announced its intention to construct a fixed degaussing range at Amble. The dry dock to be built would have been protected by the north pier breakwater but, because of the need to prevent magnetic interference, the shore end of the pier would have had to be replaced by a structure without any metal. Discussions took place between, on the one hand, the Ministry of Defence, with the Property Services Agency as its agent for the works project as a whole, and, on the other hand, the district council and the Department of the Environment.

It was recognised that the maintenance of the breakwater, which was the statutory duty of the district council, was a proper charge to it, while Ministry of Defence funds would have to bear the cost of such additional works as were necessary for the naval project.

The PSA suggested that it would be sensible that any breakwater repairs that the council wished to be carried out should be done in conjunction with the main dock construction contract. Discussions then took place on a formula for cost sharing of the reconstruction and repair of the breakwater, which would have been to the mutual benefit of all, but no formal agreement had been reached as to cost sharing by the time the Ministry of Defence decided to abandon the dock project early in July 1979.

This decision was taken because various costs for the dock had risen from £7.4 million in 1974 to £39.3 million, with a worst case estimate of £48 million in 1979.

All of us in the House are used to defence costs sometimes escalating, but this was escalation on a massive scale, and it was not surprising that the Ministry decided to withdraw. This was partly due to the need for special foundations, exceptional measures for keeping the dock site dry during excavation, strengthened superstructure foundation, and uncertainty regarding the exact nature of the dredged material. There were also difficulties and teething problems in the design, which covered relatively new areas of building technology, such as glass-reinforced plastic building cladding. In any event, it was decided that alternative solutions would have to be found.

On hearing of the cancellation of the dock project, it was not surprising that the district council should write to my predecessor, my hon. Friend the Member for Ashford (Mr. Speed), expressing its extreme distress. It stated that repairs to the breakwater, which were to be carried out in conjunction with the dock construction and partly financed by the Property Services Agency, acting on behalf of the Ministry of Defence, would now have to be taken over by the district council, and that it would need a grant of almost 100 per cent. if the work were to go ahead.

That led to the official Ministry of Defence reply of 30 July 1979, to which the hon. Member has naturally referred. The Ministry of Defence said at the time that the repair would be the subject of further negotiation between us". The negotiations that the Ministry of Defence had in mind would have involved the Ministry, the PSA and the Department of the Environment, but the district council has since argued that the words implied acceptance of a Ministry of Defence obligation over and above the grant in aid by the Department of the Environment. That, sadly, is not the case.

The district council then entered into discussions with the Department of the Environment, but, on finding that the 79 per cent. limit to grants could not be exceeded, it turned back to the Ministry of Defence early in 1980 for a separate contribution. There was then the inflation argument and it was said that inflation had pushed up the cost by about 21 per cent., and that the local authority would have to bear about £½ million of extra costs caused by the damage done by the sea.

In correspondence the district council acknowledged that, because all the figures produced to date had been estimates, it was extremely difficult to calculate the actual increase in expenditure that the council would face in undertaking the coast protection scheme and the cost which would have been incurred had the scheme proceeded in 1974.

Legal advice was sought from the Treasury Solicitor, who replied that no contract existed whereby the Property Services Agency or the Ministry of Defence had undertaken to carry the costs claimed, nor was there any wrongful act on its part which placed on it a legal duty to meet the claim. If the council had incurred any extra expenses which it would not otherwise have incurred by reason of the Amble dock project, there could be a moral claim to meet that wasted expenditure, but no such claim was being made.

The district council then asked for a meeting with the Under-Secretary of State for Defence for the Royal Navy, and the deputation was seen on 13 October 1980. There was a full exposition of the district council's case and of the financal burden now facing a small and poor local authority. My hon. Friend expressed his sympathy but restated the view that planning discussions between central and local government on roads and other such matters of common interest were often subjected to setbacks which could prove to be to the financial disadvantage of either side, and that he could not agree that a Ministry of Defence contribution in this instance was justified because of inflation. The Department of the Environment then examined the history of the case and concluded that any differences between the scheme contemplated in 1976 and that now found necessary were so insignificant in terms of cost that they should be ignored.

On the strength of this, my hon. Friend wrote to the council on 10 December reaffirming his view that there was no moral obligation on the Navy Department to make good any rise in costs due to inflation. He went on to say that he had checked whether in real terms the cost of repairs now necessary was significantly different from that which was necessary in 1976. But his conclusion was that the slight variation identified fell within the estimating margin appropriate to such a major scheme. He could, therefore, find no justifiable case for a separate contribution from the Ministry of Defence.

Furthermore, the estimated cost of the original district council scheme, which was never considered in detail by the Department of the Environment at the time, was £6,212,000 at current prices. The current scheme is costed at £4,756,000 at current prices. These figures illustrate how difficult it is to make valid comparisons and to be specific in attributing the cost of new works.

This latest development and the evidence in support of the council's claim that there had been a real cost increase received the fullest sympathetic consideration, first by my hon. Friend the Member for Ashford and then by myself. My conclusion was the same as that of my hon. Friend.

The situation in which Alnwick district council finds itself is fully appreciated by the Ministry of Defence, which has given the most sympathetic consideration to all the points raised. However, there was never any formal undertaking by the Secretary of State for Defence to the council over cost sharing. The Government and local authorities engage in a wide range of associated planning schemes, and delays or changes by either party unavoidably affect the other. The Government cannot indemnify local authorities against all changes of mind. Therefore, there is, in our view, no legal case for the Ministry of Defence to make a contribution.

Even if the Ministry of Defence accepted that there was a case to be put: on the grounds of real cost increase, and even if that case were to succeed, the actual benefit to the council would be small. That is because the Ministry of Defence contribution would be deducted from the total cost of the work before the Department of the Environment grant is assessed. The Department of the Environment grant would normally be 79 per cent. of the remaining cost of the works, and the net effect of the prior deductions of any Ministry of Defence contribution would be to reduce its cash value to only 21 per cent.

As the hon. Gentleman knows, there are well-established precedents. Under successive Governments the Treasury has naturally sought to establish rules so that Departments adopt the same procedures, and any request to waive the deductions of contributions by outside authorities from the total amount qualifying for the Department of the Environment grant would almost certainly not succeed.

I am sorry that I have to give such a disappointing reply to the hon. Gentleman, but I fear that the precedents are plain.