HC Deb 04 November 1987 vol 121 cc926-8
8. Mrs. Fyfe

asked the Secretary of State for the Environment what is his Department's latest estimate of the cost to local authorities of the recent storms and floods.

Mr. Ridley

I do not yet have sufficiently reliable information to provide the estimate requested.

Mrs. Fyfe

Perhaps the right hon. Gentleman recalls another great storm in 1968 which hit Glasgow and the west of Scotland, when 250,000 houses were serverely damaged and 21 people were killed. Does he recall that at that time the Labour Government gave the local authorities concerned 75 per cent. of the cost of storm damage? Will he emulate the example of the 1968 Labour Government?

Mr. Ridley

Over a 1p rate for counties. That is precisely what we have done.

Mr. Moate

Does my right hon. Friend agree that the reaction from my own county of Kent to the Government's assistance has been somewhat less than ecstatic? If we rightly expect local authorities to respond immediately with urgency and efficiency to emergencies, should they not be more certain of the arrangements that are in place? Should we not ensure that the maximum that any county can contribute is the 1p rate and no more?

Mr. Ridley

For many years local authorities have been well aware of the proposed Bellwin scheme to be used in cases of emergency. It is perfectly right that we should have expected them to prepare their budgets with that possibility in mind. There has been some misunderstanding about where storm expenditure will fall. It is likely that much of what does not fall within the Bellwin scheme will qualify for additional capital allocations if the work can be properly capitalised. It will either be covered by the capital allocations, which I mentioned in my statement the other week, or it will fall within the Bellwin scheme. That is not generally recognised.

Mr. Molyneaux

In view of the wide variation in powers and status of local authorities in the constituent parts of the United Kingdom, will the Government ensure that there is a degree of flexibility in the administration of compensation schemes?

Mr. Ridley

At this time it is difficult to tell precisely what costs are incurred under each of the various headings. There was damage which immediately arose from the emergency, there was damage which was insurable and which falls to capital account, and there may be a small element of cost which was insurable, but which was revenue and therefore cannot fall to the capital account. The vast bulk of the expenditure falls either in the first or second category and is therefore covered. I give the right hon. Gentleman the undertaking that he wants: we shall try to interpret the matter as flexibly as we can. I realise that it has been a major occurrence for local authorities. We are trying to he as helpful as we can.

Mr. Rowe

I am sure my right hon. Friend is aware that my county of Kent, for example, is covered with many massive fallen trees and that it will take thousands of man hours to remove them. He may also be aware that the Trust for Conservation Volunteers, as far as I can make out, is working out a leisurely five-year scheme towards helping in the replanting of trees. Will he try to make sure that some major effort is now made to organise volunteers to help farmers and others to remove the fallen trees that are littering their land? Will he consider a nuclear arrangement for calling in volunteers in future emergencies?

Mr. Ridley

I have every sympathy for those in the south-east counties who suffered mammoth damage, particularly due to fallen trees, during the great storm. Arrangements for dealing with trees in commercial forests or on farmland are for my right hon. Friend the Minister of Agriculture, Fisheries and Food, although I have tried to help in cases of damaged trees of amenity value in parks and gardens of all sorts by getting the Countryside Commission to give discretionary assistance to clear up the damage and replace the trees. On the main private sector and commercial interests, my hon. Friend should address his question to my right hon. Friend the Minister of Agriculture, Fisheries and Food.

Dr. Cunningham

Like his original statement on storm damage, is not the Secretary of State's answer to my hon. Friend the Member for Glasgow, Maryhill (Mrs. Fyfe) far from candid? It is absolutely untrue for the Secretary of State to continue to claim, as he has done again today, that he will refund 75 per cent. of the costs to local authorities. Penalties did not exist in 1968. How will he explain to the Conservative-controlled East Sussex county council, which faces a bill of £12 million at least, that it will get only about £1.5 million from him? It will have a bill in excess of £10 million and, as a consequence, will lose between £6 million and £7 million in grant, which will be clawed back by the Treasury. Is not the reality of the con trick that the Treasury is likely to end up making a profit out of the scheme?

Mr. Ridley

No, somebody is conning the hon. Gentleman. The large bulk of the expenditure to which he referred falls to capital account. A number of authorities insure their capital stock, so they can claim insurance money and put right the damage on capital account at the expense of the insurance company. Those that are not insured will have to borrow. It must be right that the money that they have saved through not paying insurance premiums should, to some extent, be matched by the cost of borrowing. I have already made it clear that the capital allocations will be made available when we have a better idea of the scale of the damage.

Mr. Yeo

Is my right hon. Friend aware that not only east Sussex but Suffolk is concerned about the consequences of spending the proceeds of a 1p rate? Although I entirely endorse the requirement for authorities to spend a 1p rate, may I ask my right hon. Friend to consider those cases where, through spending that money, an authority and therefore the ratepayers are penalised, and his Department or the Treasury gain? Will he undertake sympathetically to consider all such cases?

Mr. Ridley

We considered that point both before and after my statement. If an authority has put aside a sum of money in its budget as a contingency, it obviously has also allowed for the grant consequences of that decision. Authorities knew that that was the position, because they were aware of the Bellwin rules that made that entirely clear from the beginning. What authorities have not realised, and I hope that they do now, is that the vast majority of the expenditure that they have incurred will fall either to the Bellwin scheme or to the capital account, and will therefore be covered either way.

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