House of Commons Hansard Debates for 26 Jan 1993

Mr. Cryer : You were not in the Chair, Madam Deputy Speaker, when that very point was raised with Madam Speaker. Because the Minister had referred to the suspension of the scheme, Madam Speaker agreed that it was no longer simply a debate on the narrow issue of this grant to SCA Aylesford but could go wider. I am speaking about the suspension of the scheme.

Madam Deputy Speaker : It is a matter of degree. What I have described as a passing reference is one thing, but we cannot widen the debate so that the original issue becomes lost in the other issues of whether the scheme continues. I must draw the line there and I hope that the hon. Gentleman will understand that. He has made his point cogently but should not continue with it.

Mr. Fatchett : On a point of order, Madam Deputy Speaker. When I responded to the Minister I was conscious of the fact that the motion referred only to SCA Aylesford. I asked Madam Speaker for guidance and she made it clear that we could comment on the Minister's announcement and its implications. [Interruption.] Despite the laboured French from the Conservative Benches, it was not en passant. Madam Speaker was clear that we could draw substantial attention to the Minister's announcement, and in his speech the right hon. Member for Tonbridge and Malling (Sir J. Stanley) said that the scheme relates to projects that are of national importance. I think that Madam Speaker intended to allow a much more general debate.

Madam Deputy Speaker : That is not my understanding.

Mr. Cryer : Perhaps I could extend the debate to consider the question of jobs. The Minister made it clear that 300 jobs would be safeguarded and that there would be 100 additional jobs, plus construction jobs on the project to which the grant relates. By virtue of the avoidance of payment of unemployment benefit and the tax revenue that the jobs will yield, surely the cost of the grant will be recouped over time. Has the Minister calculated over how many years the tax revenue and the unemployment benefit would be equivalent to the £20 million grant?

The right hon. Member for Tonbridge and Malling said that if the grant were not available the paper-making capacity at Aylesford would be extinguished. Therefore, there is a possibility that jobs will be lost if the grant is not forthcoming. My question is therefore valid. The Minister's announcement of the suspension of the scheme means that the Government will pay more money than grant aid through the payment of unemployment benefit and the loss of tax revenue. That potential loss can be set against the amount of grant which would preserve jobs.

The Minister also mentioned suspension of the scheme, due to a desire to conform to the EC's much-vaunted but highly inaccurate claim of providing what is generally termed a level playing field, because state aids, he said, distort competition.

I find the statement from the Minister extraordinary, because the reality is that competition inside the EEC is distorted and until the EEC Commission makes it clear

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beyond peradventure that other state aids in other countries are also to be completely removed, we are tying an economic hand behind our back without any economic advantage being provided.

It does not make sense. What, for example, has the Minister done in the textile industry? This is said by way of example and explanation, Madam Deputy Speaker.

Madam Deputy Speaker : Order. The explanation is getting very full and lengthy so I remind the hon. Member again of the point I made earlier.

Mr. Cryer : The explanation is one that the Minister made in his statement, when he said that the scheme was suspended because, in his view, it helped to distort competition. I am commenting on the Minister's statement.

I am saying that, in the EEC, nothing was done about the Lana Rossi scandal in which £4 million was given to a private company, in the Prato region of Italy. There was a 10 per cent. competitive advantage because there were no insurance payments.

That is what I am saying in comparison and explanation. The Minister is giving away, by suspending it, a scheme which could have been of benefit to British manufacturing industry. It is being scattered to the winds for no advantage.

Why did the right hon. Gentleman not go to the Common Market and say that if they made certain concessions about schemes which are giving advantage to other EEC countries he would suspend this scheme? Nothing like that happened. He came simply to the House and made this announcement without so much as a by-your-leave statement or anything of that nature. He tried to creep it past Parliament without any concentration on it.

This scheme is administered under section 8 of the Act and there is provision for advice and guidance from the Industrial Development Advisory Board. Has that board approved suspension of the scheme? Did the board consider all the 44 or so applications before the Minister, which, he said, were not successful? Did the Industrial Development Advisory Board reject them, or did they never reach the position of the board providing advice and guidance?

Lastly, because the board involves manufacturers, industrialists, merchant bankers, and so on, did any of the board members dealing with this scheme have any financial interest involved, and did any withdraw when the matter was under consideration?

I can recall, as a former Minister at the Department of Industry, that that policy was scrupulously followed : when members of the Industrial Development Advisory Board had financial investment, it was important that they should withdraw so that independent advice was seen to be continuous and clear for all.

I hope that, although the Minister was not listening, he will make some acknowledgement of the questions that I raised.

I conclude by saying that it has been very confusing for you, Madam Deputy Speaker. You came into the House and went into the Chair with a straightforward motion, not realising that the Minister had slipped through a much wider announcement. The confusion for you, Madam Deputy Speaker, is confusion for hon. Members on both sides of the House. We are faced with a typical example of

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the underhand way in which the Government treat Parliament. They tried to slip through a change of policy late at night when hardly anyone would be in the Chamber.

11.11 pm

Mr. Michael Ancram (Devizes) : My right hon. Friend the Minister for Industry knows of my interest in the Gartcosh plant, but I do not intend to talk about that plant this evening. Instead, I want to ask some questions about the recycling of paper. Earlier, I asked my hon. Friend the Minister for the Environment and Countryside, who is sitting next to my right hon. Friend on the Government Front Bench, about the Government's target of ensuring that 40 per cent. of waste paper is recycled by the year 2000. I asked also what the Government were doing to encourage outlets to ensure that the target is met. I was told that SCA Aylesford Ltd's plant was an example of the encouragement that was being given to the recycling of paper. I am sure that the Government will accept that if the target of 40 per cent. is to be met, SCA will not be able to produce a sufficient market to ensure that the necessary uptake will be achieved. I was glad to hear what my hon. Friend the Minister said about Gartcosh this evening, but what further encouragement will the Government give to ensure that in the south of England, the north and in Scotland there is a sufficient uptake of waste paper and a proper manufacturing outlet so that we can be sure that the Government's sound environmental target is achieved?

11.12 pm

Mr. Rhodri Morgan (Cardiff, West) : We are here because we want to extend our congratulations to SCA Aylesford and to the right hon. Member for Tonbridge and Malling (Sir J. Stanley), who has fought hard to get the project grant-aided. Our congratulations and our acceptance of the part that the right hon. Gentleman has played are tinged with regret and annoyance because the Minister has chosen to abuse and confuse the House and do untold damage to relationships with industry. The motion refers to SCA Aylesford and nothing but SCA Aylesford, but it has been announced that section 8 of the Industrial Development Act 1982 is being scrapped. That section has been on the statute book for 20 years. It is not some fly-by- night, temporary provision. It is-- [Interruption.] If the Minister is telling me that it is only part of section 8 that is being scrapped, perhaps he will elucidate now. Is that why he is shaking his head?

Mr. Sainsbury : It may be of assistance to the hon. Gentleman and to the House generally if I explain that what I announced was the temporary suspension of a scheme that is operated under the provisions of section 8. That has no effect on section 8 itself.

Mr. Morgan : I hope that the Minister will be able to say more about that.

What proportion of total section 8 money is being removed by the suspension of this particular AEP-- assistance for exceptional projects to the national economy ? Hon. Members on both sides of the House are confused--no doubt industry is similarly confused--in the absence of a proper democratic procedure. There is nothing before us save the motion, and we have not been given proper notice. The Government wish sneakily to slip

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the motion through the House. If the Minister's family grocery store, of which he is a proud scion, tried to sell an SCA Aylesford order while suspending part of section 8, the local trading standards department would be down on it like a ton of bricks. Such behaviour is not acceptable in an advanced and civilised western democracy. I am pleased that some of us have been in the Chamber this evening to see what the Government are up to. If their behaviour is any indication of the chiselling that they intend to do to regional aid when section 7 is finally reviewed--several months late--by the President of the Board of Trade, there is a pretty poor outlook for those of us who represent constituencies in the assisted areas. The Minister's excuse is extremely thin. The scheme was being suspended, he said, because it did not get sufficient use and there was always money left over at the end of the year. He is forgetting that those of us who have worked in the field and have tried to obtain section 7 and section 8 assistance for projects in our areas--in my case, before and since coming to this place--know that section 7 and section 8 budgeting is almost impossible. It is the most difficult area of prediction for any Government to say how much industrial demand there will be in the next budget year for section 7 assistance, if it is under the regional aid budget, or for section 8 assistance, if it is under the non-regional aspects of industrial assistance.

It is always pitched high because of the problems that can arise if one needs to return to the House three quarters of the way through the financial year. So an over-estimate is nearly always done because it is demand-led from industry. If there is a great deal of industrial investment, there tends to be a high level of demand, and one tries to allow for that when setting the budget for the following year. In my experience, section 7 is always wildly over-estimated in the Department of Trade and Industry budget and is rarely used. The same probably applies to section 8.

But that is no reason for suspending--I call it scrubbing--the scheme because the chances of it being revived are slim in the light of the £44 billion public sector borrowing requirement and the Government's attempts to save money here, there and everywhere. We regret that it is happening without proper discussion. Almost by accident--simply because some of us take an interest in the paper industry, since we have paper mills in our constituencies--the matter is being raised. We regret that the Government should be making such an important announcement in a behind-the- hand manner. In his reply, the Minister should apologise to the House and explain the matter in more detail. In relation to section 7, particularly during a recession when there is less industrial investment, it is inevitable that the target of the previous year will be undershot. After all, the budget of the year before, particularly in an election year, will have been set in the hope that industrial investment will pick up. In the event, it has not, so there is less call for grant. The same is true of many other industrial aid schemes, but that is no reason for closing them down.

The Minister's behaviour tonight has been appalling and discourteous to the Chair, to hon. Members and to industry as a whole. If this is part of a new spirit of partnership, I fear that, until the Government are

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removed, we shall continue to have the problem of Ministers announcing unpopular news late at night without making proper provision for the matter to be discussed. It represents an abuse of the House. It may be on a small matter, but in terms of the grossness of the abuse, it is the worst that I have witnessed in my five and a half years' membership of the House. I appeal to the Chair to protect our rights in the future.

11.18 pm

Mr. Michael Connarty (Falkirk, East) : I echo the remarks of the hon. Member for Devizes (Mr. Ancram) and the concerns that have been expressed about Gartcosh. I took part in the vigil when the rolling mill at Gartcosh was closed. I know well the people--I come from there--I lived within a mile of that plant. They have been looking forward to some activity in the paper recycling business. I regret that I was not in my place for the Minister's opening remarks. I gather that he announced the suspension of the scheme but that the scheme will still be in existence and could be applied to Gartcosh. That is a non sequitur, in terms of grant availability, if ever I heard one. Is it not a fact that if a scheme is suspended, nothing can be available under it? How can a scheme that is being suspended temporarily still be available for one project? The people of Scotland will be confused when they read about it in tomorrow's newspapers.

It would have been better if the Minister had made a special announcement about the decision to suspend the scheme, explaining precisely which applications would be processed, how the procedure would apply and when the suspension would come into being. The people of Scotland will not be satisfied about what is proposed until a full explanation is given.

11.19 pm

Mr. Sainsbury : First, may I thank my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) for his kind remarks. He was modest about his own contribution to the success of SCA Aylesford. Some of his remarks about major manufacturing investment in non-assisted areas were perhaps a little wide of the mark. Two projects currently coming on stream and greatly to the benefit of the areas involved and the country are the Toyota factory in Derbyshire and the Honda factory in Swindon-- [Interruption.] Perhaps the hon. Member for Cardiff, West (Mr. Morgan) will contain his sedentary remarks for a moment and allow me to develop my point.

My right hon. Friend was suggesting that it was not possible to get major manufacturing investment outside a non-assisted area and I was pointing out that there are a number of major investments. The hon. Member for Bradford, South (Mr. Cryer) was decrying our ability to get inward investment and suggesting that somehow a modest change to one scheme which has assisted only two projects in five years would mean that any prospect of attracting inward investment was for ever destroyed. As we might expect from the hon. Gentleman, that is a gross exaggeration, because, after all, Britain gets a larger share of investment from the United States of America and from Japan than any other country in the European Community--something like 40 per cent. of that investment.

Mr. Cryer : Will the Minister give way?

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Mr. Sainsbury : I shall just finish one point arising from the remarks of my right hon. Friend.

We support the European Community in its efforts to create a level playing field ; those efforts include monitoring the schemes that are available in assisted areas. My right hon. Friend made some valid points about what occurs, but we are hopeful that the situation is being improved. His rather splendid suggestion that any amount of grants were available in some countries is not precisely the position and I think that matters are improving.

Mr. Cryer : The Minister, in turn, is exaggerating my remarks about inward investment procedures. Will he confirm that no other SCA Aylesford- type investment projects will be induced to come to Britain because of the suspension of the current scheme?

Mr. Sainsbury : That scheme has helped only two projects--this being the second one--in five years. A great deal of money has been made available over the years. Since 1972, more than £1.7 billion has been paid out under section 8 and, including the £20 million that we hope the House will approve this evening, only £30 million has been paid out under the AEP scheme. I hope that puts matters in perspective.

Mr. Peter Thurnham (Bolton, North-East) : Is my right hon. Friend aware of how important the project is to two companies in an assisted area in my constituency? The first is Davidson Ratcliffe Ltd., a leading waste paper collector and merchant, and the second is Beloit Walmsley Ltd., a very large manufacturer of paper-making machinery, which I understand is in contention to win orders under this project. I welcome the motion.

Mr. Sainsbury : I am not familiar with the firms to which my hon. Friend refers, but I know how energetically he pursues the interests of his constituent companies and we hope that one, if not both, of them will be successful in gaining work from this project. I began to regret what I had hoped was a courtesy to the House. Let us be realistic and recognise that the normal arrangement for announcing the suspension for one year of a scheme which has produced two grants in five years would have been for a written answer to appear on the Order Paper. If Opposition Front-Bench Members were honest with themselves, they would recognise that. I thought that it was a courtesy to the House, given that we had the opportunity to debate the grant, to announce its temporary suspension in a debate rather than a written question so that right hon. and hon. Members would have the opportunity to comment on it. The Opposition's reaction is more than a little unrealistic.

Mr. Fatchett : Does not the Minister realise that that is a specious argument? If the response had been through an answer to a written question, it would have been on the Order Paper. My right hon. and hon. Friends would have had the opportunity to study it and to make whatever comments they wished about local schemes. The simple fact is that the announcement was not on the Order Paper--and in that sense it is a gross discourtesy to the House and to the Chair. The Minister has taken the opportunity of this debate to sneak through an announcement without having a word with the Chair and getting its support and permission. Out of courtesy to every Member of the House, the right hon.

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Gentleman should have made his announcemenmt at some other time. He should apologise rather than make a specious argument.

Mr. Sainsbury : I refute the hon. Gentleman's suggestion. All that he has succeeded in doing is to encourage the Government to proceed on such matters by means of a written answer. If the next time that happens we get protests from the Opposition, I shall know to what to draw attention.

Mr. Mark Robinson (Somerton and Frome) : Does my right hon. Friend agree that if he had made his announcement by written answer, the Opposition would have complained equally vociferously?

Mr. Sainsbury : I am not too sure about that. The comments of Labour Members this evening suggest that they would rather have such matters dealt with by means of a written answer-- [Interruption.] Their suggestion that this matter merits a statement is, as I said earlier, quite absurd. Labour Members-- [Interruption.]

Madam Deputy Speaker : Order. Many allegations of discourtesy are flying about. I remind hon. Members that it is an elementary courtesy that when someone is speaking he should not have to do so with a chorus of seated interventions.

Mr. Sainsbury : Thank you, Madam Deputy Speaker. I shall move on to one or two of the more important observations that were made. The point about the AEP scheme is that it is for projects that carry exceptional national benefits. As I emphasised in my opening remarks, there are exceptional national benefits relating to this scheme relating to environmental policy objectives. I stress that it is not like the regional selective assistance scheme, which is job related. That point was made by several Opposition Members. The number of jobs actually created or safeguarded, or those created during the construction process, is not in itself one of the objectives of the scheme. The exceptional national benefits have to be something beyond merely job creation. In this case, it is the use of a new technology in de-inking that meets those important environmental policy objectives.

A point was made about energy consumption. The energy generation on the site is small compared with national energy consumption. The existing mill takes its electricity from the national grid and is derived from coal and oil. One could say that moving to a combined heat and power gas-fired plant would result in lower CO emissions, which would meet another environmental objective.

My hon. Friend the Member for Devizes (Mr. Ancram) referred to the further encouragement of the collection of waste paper. We certainly intend to meet the targets and we will consider all measures that ensure that market mechanisms achieve that work.

Points were raised about the Gartcosh scheme. The hon. Member for Falkirk, East (Mr. Connarty) was not in the Chamber when I made my opening remarks. For his benefit and that of others who may not have been listening as closely as they might have done, I shall repeat what I said. I said :

"I can confirm that we shall consider against those criteria the application currently being pursued by North British Newsprint in respect of the Gartcosh project."

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Now that I have announced that AEP is to be suspended, the company will need to develop its application by the end of February so that the appraisal may go forward.

Mr. Fatchett : The Minister has omitted an important point. Several hon. Members asked whether the European Commission had indicated its objection to this scheme and whether that was why the Government were suspending it. Can the Minister clarify the position in respect of that matter?

Mr. Sainsbury : We did not discuss the scheme as a whole with the European Commission. We share the Commission's desire to keep firm control of all schemes that can distort competition in the Community. Such schemes can, of course, be outside or inside assisted areas. In referring to this matter, my right hon. Friend the Member for Tonbridge and Malling talked about any amount of money being available. Schemes within assisted areas are also subject to the scrutiny of the European Commission. That is something which we welcome, as we believe that distortion of competition does not benefit either this country or any other part of the Community.

Mr. Fatchett : Am I right in construing the Minister as saying that he thinks that this scheme distorts competition and that its suspension has, therefore, been volunteered to the European Commission?

Mr. Sainsbury : I believe that in my remarks there was a reference to relaxation of the criteria for this scheme. Such relaxation might result in success for more applicants. As I pointed out, in five years only two applicants have been successful. This would be a move towards more overtly flexible schemes--schemes of just the sort that can be used by others to distort competition and might, therefore, understandably, find disfavour in the Commission. There have been several alleged instances of aid in other countries giving rise to complaints from British industry.

Mr. Alex Salmond (Banff and Buchan) : The Minister has said that the scheme at Gartcosh will now have to be developed before the end of February if it is to go forward. Why the end of February? Does the Minister know that that will give the company sufficient time to develop its application? Or is it a purely arbitrary date that the Minister has conjured up out of thin air?

Mr. Sainsbury : The hon. Gentleman may not have been in the House when I made my introductory remarks and, therefore, may not have heard my reference to the suspension of the scheme from the end of February until April 1994. I said that North British Newsprint ought to get its scheme registered before the end of February so that it might be subjected to the appraisal process.

Mr. Connarty : This matter continues to worry me. What notice of the Minister's announcement was the company given? Is it to get its information from tomorrow's papers?

Mr. Sainsbury : The company has been in contact with the Department for a considerable time. Since July we

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have been waiting to hear from it. We do not know whether it will come back to us. [Interruption.] The hon. Gentleman was not in the House when I dealt with this point. We have discussed it at length. This scheme will bring considerable benefits.

Mr. James Wallace (Orkney and Shetland) : Will the Minister give way?

Mr. Sainsbury : As the hon. Gentleman, unlike some hon. Members, has been in the House for the debate, I shall give way to him.

Mr. Wallace : Can the Minister be more explicit? When is it intended that those putting in the application for Gartcosh will be told about the suspension and informed that the application will have to be received by the end of February? Have they been informed already, or will this come as news to them? Has the Minister any indication that what he is asking of them is feasible?

Mr. Sainsbury : To the best of my knowledge, it is entirely feasible. Whether they will actually do so, I do not know. We will, of course, communicate with the company.

It is occasionally suggested--not infrequently, I suggest, by hon. Members on the Opposition Benches--that it is a courtesy to come and tell Parliament things first, and that I have done. I have provided an opportunity for debate, and all I have received in exchange is brickbats. Perhaps we can draw a conclusion from that.

Mr. Salmond : On a point of order, Madam Speaker. There is considerable noise in the House. As you will recollect, a few seconds ago the Minister started a sentence about the company being unable to bring the scheme forward by the end of February ; in the noise I lost the second half of that sentence. Perhaps the Minister could complete it for us now.

Mr. Sainsbury : I may have to read Hansard, which is not immediately available, to find out what I said. Perhaps I could recommend that the hon. Gentleman read Hansard himself. It may be that the sentence to which he referred was when I said that the company would need to develop its application by the end of February so that the appraisal could go forward. Perhaps it was those words that he did not hear clearly ; I hope that it was and that we will have it doubly on the record.

The motion is to approve a grant to a project which I think has exceptional national benefits. It enables environmental policy objectives to be met. It maintains and improves the operation of a company which, as my right hon. Friend the Member for Tonbridge and Malling has said, has operated with distinction in his constituency for a long time. I hope that the House will approve the motion. Question put and agreed to.

Resolved,

That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, in respect of the installation of new and the refurbishment of existing machinery to manufacture newsprint from recycled fibre at Aylesford, Kent by SCA Aylesford Ltd., sums exceeding £10,000,000 but not exceeding £20,000,000.

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Public Health

11.36 pm

The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro) : I beg to move

That the Food Protection (Emergency Prohibitions) (Oil and Chemical Pollution of Fish) Order 1993 (S.I., 1993, No. 17) dated 8th January 1993, a copy of which was laid before this House on 11th January, be approved.

In the statement that my right hon. Friend the Secretary of State for Scotland made on 11 January about the Shetland tanker incident, he told the House that an exclusion zone had been declared under the Food and Environment Protection Act 1985, within which fishing and harvesting of farmed fish is prohibited. The emergency order which set up the exclusion zone requires the approval of Parliament if it is to continue in force, and that is the purpose of tonight's motion. Copies of the map of the area are available in the Vote Office. The purpose of the order was to ensure that, in the light of the Braer incident, there was no danger of fish or fish products reaching the market if they could be hazardous to human health. No sensible fishermen would have fished in the area after the incident--in the light of the weather conditions, I do not think that they would have tried- -and fish farmers affected by the spread of oil could similarly have been relied upon voluntarily to keep their product from the market. The fishermen imposed a voluntary ban before the order was made. I pay tribute to the Shetland Fishermen's Association and the Shetland Salmon Farmers Association, and particularly to their respective chief executives, John Goodlad and Jimmy Moncrieff, for their excellent and impressive response to all these difficulties. I pay tribute also to the hon. Member for Orkney and Shetland (Mr. Wallace) who, in his capacity as constituency Member, has been very helpful and constructive throughout.

Nevertheless, my right hon. Friend and I thought it right to use the power that was available to give legal force to a ban on taking fish from the area. We did this after full consultation with, and with the agreement of, both the Shetland fishermen and the fish farmers. The imposition of the order was part of a three-pronged strategy which also included the establishment of arrangements to sample and test fish being landed on Shetland markets, and the setting up of longer-term monitoring arrangements covering both fish and water quality.

That background to the order is important. In setting up the arrangements, we had in mind the vital importance to the Shetland economy of both the fishing and the fish farming industries. They faced an obvious and immediate threat to their businesses. There was also the danger of much longer term damage if those industries should lose market and consumer confidence.

Therefore, the order, and the other arrangements that I have mentioned, seemed to me of the greatest importance in assuring commercial buyers and consumers that special care was being taken over the quality of Shetland fish products and, correspondingly, that the public should have every confidence in the products when they reach the shops. I know that that approach has the full confidence and support of the industries in Shetland, and with regard to salmon it is reassuring that a number of supermarket chains which have now visited the islands are remarketing Shetland products. I have emphasised the consultation because some newspapers implied that the Government

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had slapped on an order without considering the interests of the Shetland fishermen when, in fact, the reverse was the position. Against that background, we must proceed cautiously in considering the future of the ban. It may be helpful to say a little more about the arrangements which underpin the ban. Those are based on a continuous programme of water and fish sampling. The first test is the state of hydrocarbons in the water. If the water is polluted, the pollution will get into the fish. The critical test, from the point of view of food safety, is the fish itself and the accumulation of hydrocarbons in their edible tissue.

The sampling programme has been hampered by extreme weather conditions, but a clear enough picture has emerged which requires a continuing exclusion of fishing and fish harvesting activity in the zone as presently defined. I confess that I had hoped to be able to inform the House this evening that it would be possible to remove the ban on the east side of the mainland. My feeling is that this may be possible soon, but the latest results indicate not yet.

On the west side of the zone, readings remain high, and the unhappy news is that I have had to decide to extend the western boundary of the zone by 5 nautical miles, from 1deg 30 west to 1 deg 40 west. This is in response to most recent results of tests on water quality, and on sea fish caught in the new area. The new area will not extend the present zone any further north or south. Thus it will not bring the salmon farms at Vaila Sound and Gruting Voe into the exclusion zone.

I recognise that that is not encouraging news for those concerned. However, I thought it right to tell the House at the earliest opportunity. I also emphasise that, while the news in itself is regrettable, it should nevertheless reassure both consumers and the local fishing and fish farming industries that the monitoring arrangements are working effectively, and that fish and fish products reaching the market are safe and are of good quality.

Nevertheless, I am keenly aware of the problems that the situation creates for the salmon farming businesses. I am anxious that, as soon as the evidence warrants it, we should move to more flexible arrangements which will allow fish to be harvested from within the current exclusion zone when it can be demonstrated that they are free of taint and hydrocarbon contamination. We shall be in continuous touch with those concerned to see what progress can be made as further test results come in.

Meantime, only one claim from a salmon farmer has so far been received by the claims office in Lerwick. I understand that the insurers and the international oil pollution compensation fund have today agreed a substantial advance payment in this case to mitigate economic hardship. That will be paid to the producer by the insurers direct. The speedy reaction of the insurers and the IOPC fund to a claim submitted only at the end of last week should encourage other salmon producers to bring forward their claims. I am sure that the hon. Member for Orkney and Shetland will have something to say on that.

Additionally, the Government have made available to producers a bridging fund which will be operated for the Government by the Shetland Islands council. Details of the fund's operation were announced in the House on 21 January by my right hon. Friend the Secretary of State for Scotland. The purpose of the bridging fund is also to prevent economic hardship to fish farmers and other primary producers facing temporary cash flow difficulties

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pending settlement of compensation claims. The first payment of £1 million to set up the fund will be made to Shetland Islands council this week.

It is also important for us to assess the ecological effects of the incident. My right hon. Friend has announced his intention of setting up an ecological steering group to consider strategies, in both the short and the longer terms, to deal with the impact of the incident on the local environment.

Dr. Norman A. Godman (Greenock and Port Glasgow) : Is the Minister satisfied that there is no danger that oil from the tanker will drift into areas fished by fishermen from other ports in the European Community?

Sir Hector Monro : As I have said, we are monitoring every development extremely carefully, and taking all possible steps to establish where the oil is now. We feel that the only area where it is unsafe to fish is the current exclusion zone, along with the small extension that I have announced today. I think it important for us to continue the detailed monitoring now being carried out so that we can keep a close check on what is happening.

As the hon. Member for Orkney and Shetland knows, my right hon. Friend today announced the terms of reference of the steering group, and the appointment of Professor Ritchie as chairman. The group's initial purpose will be to take an overall view of the various ecological and environmental initiatives that are now getting under way, or are likely to be established on the group's initiative. I trust that hon. Members on both sides of the House will recognise that the order forms part of a pattern of effective Government action and is in the best interests of the fishing industry and the consumer.

Mr. Brian Wilson (Cunninghame, North) : I welcome the appointment of the principal of Aberdeen university to conduct the local inquiry into the environmental ramifications. Is it not a little unfortunate, however, that the wider inquiry, under Lord Donaldson, will not take place in the area in which the incident occurred? Will the Minister give an assurance, on behalf of the Scottish Office, that any witness--or anyone who feels that he can contribute to the wider inquiry--will not be inhibited from doing so on grounds of cost or inconvenience, wherever that inquiry is held?

Sir Hector Monro : Lord Donaldson's inquiry is rather outwith the terms of the order. However, I am certain not only that it will be peripatetic and will take place in various centres but that everyone with important evidence to give will have the opportunity to give it. I hope that people will do just that : we want to ensure that the problems that we have faced in the past few weeks can, if possible, be prevented from recurring.

I hope that I have made clear how seriously the Government are taking the monitoring of the sea around the Shetlands--and, indeed, further afield if that becomes necessary. We are determined that the exceptionally good reputation of fish from the Shetlands--whether they come from the sea or from the salmon farms--is maintained, and I believe that the stringent measures that we have adopted provide the best way of doing that.

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