§ Motion made, and Question proposed, That this House do now adjourn—[Mr. Archie Hamilton.]
§ 3 am
§ Mr. David Harris (St. Ives)Even at 3 o'clock in the morning I warmly welcome the opportunity of raising the problems facing one of the most beautiful parts of the country, the Isles of Scilly. In doing so, I thank my hon. Friend the Minister for agreeing to reply to this debate, because it has had a change of title. My original intention had been to raise the problem of electricity charges on the Isles of Scilly, but because of a pending court case it was thought that this might be sub judice. With the Minister's agreement I have now brought forward the debate on the general problems of the Isles of Scilly.
Those problems are deep-seated and long-standing. To many holidaymakers enjoying themselves in the Isles of Scilly these islands must seem like paradise, but they are a paradise with real problems. I hope to touch on some of those problems straight away, but before doing so perhaps I could call in aid no less a person than HRH Prince Charles the Duke of Cornwall, who last year wrote a foreword to a very comprehensive study carried out by Graham Moss Associates into the economy and the development of those isles. In his foreword Prince Charles pointed out that the islands have a unique environment which is enjoyed by many thousands of people each year. He went on to say:
However, in recent years, economic pressures have become more intense and the Islands' economy has become more fragile.These islands, five of which are inhabited with a population of just under 2,000, are some 30 miles west of Land's End and they rejoice, perhaps quite rightly to an extent, in the title "the fortunate islands". But, as I have said, there are real and long-standing problems. The cost of living on the islands is appreciably higher than on the mainland in many regards. It was calculated last year, in the Graham Moss report to which I have referred, that probably the cost of living on Scilly is 10 per cent. to 35 per cent. Higher than on the mainland. Even if one excludes housing costs, which are exceptionally high, the cost of living is probably 8 per cent. to 12 per cent. higher than on the mainland. This extra cost springs in part from the difficulties of transportation. Practically everything consumed on the island has to be brought, normally on the ferry, from Penzance, some 40 miles away, or by helicopter; and there is now a Skyvan service to the islands.Similarly, all the produce grown, the flowers and the early potatoes, has to be transported to the mainland. The difficulties are compounded if one happens to live on one of the four off-islands, because normally there is that extra leg of a journey from the main island, St. Mary's, to the off islands. It is not a question only of freight. It is also a question of passengers. This is a considerable burden on holiday trade because fares are a very big component of any holiday on the Isles of Scilly and also for islanders themselves when they go to the mainland.
Perhaps I should point out that the Government's recent changes in student travel grant arrangements particularly hit the islanders and, whereas a £100 grant might be quite reasonable for somebody living on the mainland fairly near 1060 to his university, for someone who has to travel from the Isles of Scilly that initial leg of the journey before he gets to the mainland is very expensive.
I must not stray too deeply into the vexed question of electricity. However, the islanders have had a 14 per cent. increase in electricity charges this year, whereas the other consumers of the South-West electricity board, on the mainland, have had an increase of under 7 per cent. The charges for electricity on the islands are 37 per cent. higher than on the mainland.
Housing is another very big item of expenditure, and it is difficult to build houses on the islands. The sites and the water and other services are not available, and any properties that become vacant are immediately snapped up for holiday homes or, in some cases, for people coming from the mainland to live. We all know that a distinguished former Member and former Prime Minister lives for part of his time on the island, and is welcome there. He has on many occasions spoken up for the islanders.
Water is a big problem on the island, as is refuse disposal, which has been a major headache over several years. The difficulties continually impinge on the two main industries that sustain the economy of Scilly — tourism and horticulture. I would hate to give the impression that all is gloom. When some two years ago I had the honour to become the Member for St. Ives—my constituency includes these islands — I was worried about their economy. There has been a general upturn in the tourist trade. This year, as well, growers have done reasonably well with their daffodils and potatoes. The islands have considerable strengths. They have a versitile and talented population. I am always struck by the amount of talent — particularly among the young people who have come back to Scilly after a spell on the mainland — by their enterprise, and the way in which they are tackling the problems of the economy.
The Island Council has recently been restructured and an environmental trust has been set up, partly due to Prince Charles's interest in the matter, and there is the project for the extension of electricity to the off-islands, which is being carried out now. That is perhaps one of the biggest developments in the history of Scilly. It has given some uplift to the morale of the islanders.
However, the problems have been there for many years. It would be wrong to say that everything is all right with Scilly, and we need do nothing more. That is rather the traditional approach of successive Governments. They have rather waited for a crisis to hit the islands—be it replacement of the Scillonian, the ferry that linked the mainland to the islands or, quite recently, the threat of the possible closure, for financial reasons, of the islands' airport.
When these crises have arisen, the Government have normally responded, although they may have taken some time to do it. The time has come to try to get away from this rather piecemeal approach to dealing with these deep-seated problems.
What really rankles among my constituents on the islands is the difference between the policy that is handed out to them and that for their counterparts in the Scottish islands. For example, the ferry services to the Scottish islands are heavily subsidised from Government funds.
On electricity charges, the Scottish islanders are in the happy position of paying the same tariff as the consumers on the mainland. Here is the big difference between the 1061 treatment given to the Scottish islanders and the treatment which the islanders of Scilly receive. That is grossly unfair to the islanders I represent. I have just been refreshing my memory by looking back through Hansard while we were discussing this year's Finance Bill. In the 1953 Finance Bill the Conservative Government in which Mr. Rab Butler was Chancellor decided that in future income tax should be paid by the islanders. They had escaped it up to that point. The islanders were subsequently made to pay excise licence duty and road fund licence duty.
In recent years the Government have argued that the islanders must be treated in the same way as everyone else in the United Kingdom. My complaint is that in the matters of transport and electricity they are not being treated in exactly the same way as the rest of us who live in the United Kingdom. That is unfair and I hope the Government will direct their attention to those problems.
I can understand the reluctance of the Government to give operating subsidies, be they for a ferry service or for electricity. At the moment there is a subsidy towards electricity, although it is paid for by consumers in the area of the south western electricity board on the mainland. I can understand the Government's reluctance to go down the path of operating subsidies, but if they are not going to go down that path, then they should give some other compensating payments to the islanders. To a certain extent they do, and I have no doubt that my hon. Friend the Minister will say something about rate support grant. I would be the first to acknowledge that the islanders have been treated quite well in that respect. But there is a case for doing more.
One imaginative idea which has been put forward is that the islands should be made a duty-free zone. That would certainly help the tourist trade, but there are other ways of helping the islands. For example, the very energetic branch of the National Farmers' Union on the island put forward and pressed for a long time a shopping list of measures which would give the island's growers some real benefit from their recently won status as a less favoured area under European Community policies. I hope the Agriculture Ministers will look at that in detail.
A programme has been drawn up with the European Community in connection with capital and other development projects using largely European funds. The trouble here is that the Government have shown a marked reluctance—I must say this—to provide their share of the finance needed to carry out integrated development operations. I hope that the Government will have a serious look at this matter because from my past experience as a Euro MP for Cornwall and Plymouth, when I was deeply involved in this matter in the early stages, I know that the Commission is eager to do something along those lines for the islands.
Some years ago, I arranged to take the director for regional policy from the Commission in Brussels to the islands. He saw the problems for himself, and the Commission is very receptive to the idea of a development programme for the islands for which the Commission of the European Community would probably provide over 50 per cent. of the necessary finance.
A considerable amount of work needs to be done, particularly on water supplies and the quays for the off-islands to allow inter-island launches to get to the off-islands much more easily than at present. A range of imaginative proposals were included in the report to which I referred earlier.
1062 My plea is that the Government should take a hard look at Scilly and not wait for the next crisis, which could come any day. We must try to get the economy of the islands on a much sounder basis. Prince Charles said in the foreward that I mentioned earlier that he hoped that it would be possible for the islands to move towards a more secure and prosperous future. That is certainly my wish.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane)I endorse the final comments of my hon. Friend the Member for St. Ives (Mr. Harris). I am sure that we both share those aspirations.
I am grateful to my hon. Friend for bringing these issues to the attention of the House. It is easy to forget—or for many to realise — the many problems faced by the inhabitants of our offshore islands; everyday matters which, on the mainland, we take for granted, such as easy transport links, electricity and other services. We would all do well to reflect that the Scilly Isles are rather further from the coast of England than the continent of Europe. My hon. Friend ably represents these distant parts of his constituency. His constituents will be grateful to him for raising these issues and they are doubly fortunate to have as their Member a man who knows his way round the corridors of Strasbourg and Luxembourg and knows how to harness the needs of his constituents to possible funding from Europe.
My ministerial colleagues at the Department have very much valued the contact that they have had both with my hon. Friend and with the officers of the Council for the Isles of Scilly. My noble Friend Lord Skelmersdale had a most informative and enjoyable visit to the Isles last year and experienced both their problems and their generous hospitality at first hand. I know that he would want me to record that he found his visit stimulating and rewarding; it gave him a clearer insight into the serious difficulties that remote island communities have to face. That was of great help to all of us in the Department.
I do not wish to dwell solely on the islands' problems. They have an outstanding reputation as a paradise for tourists. Distinguished royal visitors, former Prime Ministers and Cabinet Ministers have found them a haven from the pressures of the mainland. The islands are also a source of high quality horticulture.
As regards tourism, I was delighted to read the article in the April edition of "In Britain" which, in narrative form, sets out some of the islands' many virtues. On horticulture, the House needs no lessons in geography to recognise the Isles as a source of early spring flowers, and it is no surprise that the word "Scilly" is derived from another word meaning sunny.
I shall not deal tonight with some of the points raised by my hon. Friend, but I will give him a fulsome reply in due course.
The Government have been impressed by the comprehensiveness of the final report on the integrated operations study of the Isles of Scilly commissioned by its council.
European Commission regional policy aims to
promote the convergence of national economies and a more balanced distribution of economic activities within Community territory".The integrated development operation approach is an attempt to further this co-ordination. The concept is based 1063 on the assumption that in some areas it may be possible to increase the impact of expenditure by further co-ordination of Community aid and domestic expenditure.Throughout the preparation of the study, I was pleased to note the good working relationship between the parties involved and I am sure that that was a decisive factor in ensuring the successful completion of their work.
We are well aware of the economic problems of the islands, and the report clearly outlines a varied list of schemes aimed at improving the wellbeing of the islands, for both the residents and the many visitors attracted by their outstanding natural beauty. I note that the consultants have not only identified schemes for implementation over the next 10 to 15 years, but have given them priority ratings. That is a sensible step towards the sound future planning of the islands' economy, and is in line with the Commission's philosophy of how integrated operations studies should operate.
The European Commission and the Government have, however, made it clear that integrated operations should not be seen as a means of obtaining additional funds, whether European or domestic. The Isles of Scilly representatives have always been advised that the concept was intended to help improve the co-ordination of existing financial mechanisms for promoting development — a point which is now well reflected in the European regional development fund regulation, which came into being on 1 January 1985.
At present there is no Community machinery for considering as a totality applications which are currently handled by separate Directorates General in Brussels under different timetables.
Until the Commission has further clarified its position on the designation of "integrated operation areas", the Government will continue to submit eligible schemes from the islands at the highest rates available under the existing fund structures. To that end, my Department's officials have recently submitted a number of top priority schemes for ERDF grant aid at the highest grant rate of 55 per cent. My Department's officials will do all that they can to ensure that the Commission reaches a positive decision on those schemes. I fully accept that my hon. Friend wants a constructive policy, which is not wholly reactive, but steady, consistent and forward looking.
My hon. Friend expressed great concern about what he feels to be the injustice that the Isles of Scilly must suffer compared with the Scottish islands regarding transport services to the mainland. He has argued ably that if the transport services to Scotland can be subsidised, why should not those to the Isles of Scilly, which are of a comparable nature and equally remote. I must admit that I could, on the face of it, feel some sympathy for that view, but the case is not as straightforward as it seems. The longstanding subsidies for shipping given by my right hon. Friend the Secretary of State for Scotland are made under Scottish legislation, and new legislation would be required to do that in England.
Government policy generally is to oppose subsidies for shipping. But above that, the ferry service to the Isles of Scilly appear to operate profitably, and the Government would find it difficult to justify subsidising an apparently profitable commercial company. We had gone about as far as we could when, a few years ago, we gave them a returnable grant for a new ship which was of real 1064 assistance, and should not be overlooked. In addition, the Isles of Scilly Steamship Company has been exploring ways of making its service more economical and reliable.
Similarly, we could not directly subsidise the air services. There are a number of them, although the backbone is the helicopter link provided by British Airways. But there are other, again apparently profitable, commercial services. The Government have, however, given the isles substantial indirect help over the past three years in the form of grants to make good deficits incurred in running St. Mary's airport, which the council took over in 1982. In total, nearly £190,000 has been provided or approved, which has enabled the council to consolidate its position so that it now expects the airport accounts to show a surplus. I am sure that my hon. Friend will share my view that that is a most welcome development.
My hon. Friend also raised the question of the disparity between the isles' and mainland electricity charges. I cannot comment on that as the matter is before the courts and is, therefore, sub judice. However, I should like to point out on a related matter that mains cabling is now being installed to the islands of Bryher, St. Agnes, St. Martin's and Tresco, for which I know the islanders have pressed long and hard. That will bring real benefits to the communities. There may be some grant aid available from the council to help householders bring electricity installations up to the standard required for mains supply where such installations do not already meet it.
The Government are providing substantial assistance towards the cabling to the off-islands, with a contribution from the Countryside Commission of £132,000. The Duchy of Cornwall has also agreed in principle to a contribution of £100,000.
An application for ERDF grant aid has also been made, and was submitted to the European Commission in June this year. A grant rate of 55 per cent. is being sought. The application was prepared following discussion with my Department and South-West electricity board officials. SWEB officials visited Brussels to seek the European Commission's support for both the concept of the scheme and the option chosen. That involved a certain amount of more expensive undergrounding because of the need to preserve the island's environment. The Commission is expected to announce its decision in the autumn.
My hon. Friend raised the question of students' travel costs and the position of the few students from the Isles of Scilly who are attending distant institutions. I appreciate the point, but I understand from my colleagues in the Department of Education and Science that a number of institutions in particular areas elsewhere have also made similar representations.
The Government made it clear from the start that any policy which would achieve a worthwhile degree of administrative simplification, as well as ending the open-ended commitment to public expenditure which the present arrangements entail, would necessarily involve an element of rough justice.
Students from the Isles of Scilly will be at some disadvantage, particularly if they choose to study at institutions at the opposite end of the country. Any student who chooses to study at an institution remote from his home will need to give careful attention to the resources available. Any help for particular groups of students could only be provided at the expense of others and we do not 1065 believe this to be justified. It would also reintroduce complications into the system which would effectively defeat our primary objective of simplification.
For all of those reasons, the Government would be reluctant to contemplate any immediate change in the present system. But, as my hon. Friend the Parliamentary Under-Secretary of State for Education and Science said in the House last October, if, once the new system has had a chance to settle, we are presented with compelling evidence that some students are facing hardship and if a means is available to overcome any problems in an administratively efficient way. I can assure the House that we shall look at them again. This is the only way to proceed.
My hon. Friend has raised the question of local authority expenditure and the rate support grant. He said that they had not done badly this year. The Isles of Scilly's target for 1985–86 of £1.3 million, is an increase of nearly 3 per cent. on the 1984–85 budget, and an increase of 2.5 per cent. on last year's target.
The council's grant-related expenditure this year at about £1.4 million is up 11 per cent. on last year's figure. 1066 This large increase is due to a recalculation of the Isles of Scilly special costs component, to include for the first time expenditure on transport. That will be welcomed. I know that the council has requested that sewerage and sewage disposal should be included in the special costs component, but the Government believe that the component overall adequately reflects the additional costs faced by the Isles council attributable to the Isles' remoteness. My hon. Friend will be glad to note that we have, however, agreed to reconsider the matter at a later date.
I hope that I have dealt with all the points. I am confident that everything can be studied closely by officials and Ministers. We have the interests of the islanders at heart. I am sure that my hon. Friend will be patient while I look into the other matters which he raised this evening.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-seven minutes past Three o'clock am.