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Mr. Jon Owen Jones (Cardiff, Central): Will the Secretary of State give way?
Mr. Hague: Yes, although I have other things to announce and I should get on.
Mr. Jones: I am grateful to the Secretary of State for giving way. On the related issue of the number of people and the different industries in Wales that have been affected by the disaster--the Secretary of State just mentioned tourism--is it not clear that there is a real danger--perhaps it is inevitable--that the amount of compensation currently available to people will be exceeded? What measures does the Secretary of State, with his colleague in the Ministry of Transport, believe he can take to ensure that extra compensation is made available so that people who have genuinely lost out as a result of the disaster are properly compensated?
Mr. Hague: I am coming to some of the measures that I want to take--I shall reach them in about a minute's time.
Scientific advice is that there is no indication at present of any risk to agricultural produce from oil particles being blown inland, but as a precaution we are analysing samples of agricultural produce and crops that are eaten by farm animals. These are very much precautionary measures to provide reassurance to farmers and growers and to the general public. We expect to get the results of the tests on the samples within the next few days. There are no indications of any risk to animal health or to the safety of meat when animals are sold for slaughter, but to give absolute reassurance on the matter, members of the state veterinary service are monitoring the situation on my behalf.
I have provided up to £250,000 for the Countryside Council for Wales for a comprehensive environmental assessment and monitoring programme. The Countryside Council for Wales will work with other statutory agencies and voluntary environment groups. The work is being complemented by the Ministry of Agriculture, Fisheries and Food, which has made available the research vessel Coryster for work on fish and shellfish. An independent assessor will examine the response, clean-up procedures and the techniques employed following this incident.
The Wales tourist board is taking an active lead with other interested public bodies in Pembrokeshire and throughout south Wales to ensure that tourists to the area are kept informed of the true state of the coastline. It is
staying in the closest possible touch with the clean-up operation and will mount a vigorous and high-profile campaign of reassurance for potential visitors.
The main priority now is to provide assistance to people in west Wales whose livelihood has been affected by the spillage. Let us be clear that the responsibility for compensating those who have suffered loss must rest with the industry, on the clear principle that the polluter must pay. Some £8 million is available from the vessel's insurers, the Skuld Protection and Indemnity Club of Norway, and some £50 million is available from the International Oil Pollution Compensation Fund. Urgent discussions took place yesterday between the relevant Government Departments, representatives of the fund, the insurers and the oil industry. The insurers have agreed to meet the claims of hardship cases straight away. They will set up a claims handling office in Milford Haven in co-operation with the IOPCF, which will immediately start to process claims received between now and the end of April and make hardship payments to individuals and small businesses. I welcome that action by the insurers.
The executive committee of the IOPCF is expected to meet again in April to consider further compensation arrangements. Although the responsibility for dealing with compensation rests with the insurers and the IOPCF, there are ways in which the Government can help, in addition to the measures that I have announced. First, I have taken steps to enable me, should there be any problems with the prompt payment of compensation in difficult cases, to set up a bridging fund of up to£2 million, financed by the Welsh Office, to be disbursed by the local authorities concerned. Any payments would be repayable in due course by the insurers or the IOPCF. I hope and expect that the bridging fund will not be necessary, but felt it prudent to ensure that we could bring it into play if the arrangements did not work as we expect them to.
Secondly, the Government will not ask for payment from insurers for costs that we have incurred until it is clear that all other claims can be paid in full. Thirdly, I shall consider sympathetically any representations that local authorities may wish to make concerning the costs incurred by them, including temporary supplementary credit approvals. Fourthly, I shall explore with the European Commission what assistance it might be able to provide to help alleviate the economic and environmental consequences. The affected area covers many protected sites, including sites protected under European directives. Fifthly, I have set up an oil incident response unit in the Welsh Office, which will report directly to me. It will act as a central point of liaison for local authorities, the Countryside Council for Wales, the Wales tourist board and the insurers, and it will provide help for people who need advice on these various and sometimes complex arrangements.
I hope that the House will welcome these arrangements and join me in saluting the hard work and dedication of all who are currently involved in the clean-up operation.
Mr. Gareth Wardell (Gower):
The Select Committee on Welsh Affairs, which I chair, decided this morning to conduct a short inquiry into the problems that the fishing industry in Wales may experience following the Sea Empress disaster. In relation to the Secretary of State's point about tourism, which was well made, we do not want areas to be blighted. He and the Secretary of State
Mr. Hague:
I shall certainly give attention to that point. These are complex matters and it is quite difficult to predict how things will work out in the future and what the long-term consequences will be. It is important that everybody has the maximum information about the problems at every stage. That is one of the reasons why I announced extra funding for the Countryside Council for Wales to map and survey the consequences of the pollution. We shall continue to give attention to the problem that the hon. Gentleman quite rightly raised.
Mr. Alan W. Williams (Carmarthen)
rose--
Mr. Hague:
I shall give way once more on this matter, but there are other matters that I wish to deal with.
Mr. Williams:
On the question of compensation, I understand that £8 million is available from the ship's insurers and that £50 million is available from the IOPCF, but both are being capped. What happens if the total claims in one or two years' time exceed the cap, as is very likely? I understand that claims might be of the order of £100 million. Where will the rest of the money come from?
Mr. Hague:
We are not able to say that the claims are likely to exceed the amount available. It is perfectly understandable that people should ask the question, but we should not raise the spectre of claims exceeding that amount. If compensation on the principle of the polluter paying is not adequate, the hon. Gentleman can rest assured that my right hon. Friend the Secretary of State for Transport and I will have strong words to say to the oil industry about the matter, and that we will seek a change in arrangements for the future or for this incident. I am alive to the hon. Gentleman's concern, but we are not currently in a position to say that the amount may exceed, is likely to exceed, or is very likely to exceed, the cap.
Local government has been playing its part in the process. In a month's time, local government in Wales will be administered by 22 all-purpose authorities. The House should be in no doubt that the reorganisation presents Wales with a great opportunity. The fact that single authorities will in future be responsible for all local authority services should ensure that they are managed more effectively. However, I see the reorganisation as another kind of opportunity as well: I want it to mark a turning point in relations between the Welsh Office and local government.
I want to reduce local authorities' dependence on my Department. Unnecessary controls should go. Most of all, I want more of the decisions that affect the well-being and prosperity of communities throughout Wales to be made where they will prove most effective--at local level. I shall shortly publish a consultation paper setting out a series of proposals. We now have the opportunity to mark
a radical shift in the nature of the Welsh Office's relationship with local government. I shall outline three specific proposals.
First, I have been considering the future shape of my Department's strategic development scheme, the SDS. It supports local authority projects and strategies promoting economic, social and environmental development. In the coming year, it has a budget of around £57 million in support of regeneration projects across Wales.
Local authorities have argued that it should no longer be necessary for Ministers to make decisions on many such projects, which often have only local significance. They would like progressively greater delegation of decision-making, with Ministers involved only in the larger schemes. I agree with that: I believe that the time is now right for a further substantial shift of responsibility to local level. I have already indicated that, in the coming year, £13 million of SDS funding will be available to local authorities so that they can decide how to use it. Over the next three years, I propose to increase that amount substantially--to £38 million--so that unitary authorities have much greater freedom to make their own choices on local priorities.
At the same time, I believe that departmental funding should continue to be available to support an authority's major strategic priorities, which would include projects that go beyond the financing capabilities of an individual authority, or which have a regional significance. For that purpose, I propose to develop the SDS into a new challenge fund, the scope of which would be a matter for discussion.
As now, the emphasis will be on encouraging innovative projects and strong public and private sector partnerships. I also favour extending the challenge principle beyond the economic, social and environmental areas already covered by the SDS. I envisage that such an enhanced challenge fund would be introduced in 1997, with the first bids being invited by early this summer. Its initial budget would be at least £20 million, which would be funded in part from uncommitted SDS resources and in part from other existing local authority capital top-slices. In later years, there would be an opportunity to refine the schemes to take account of the lessons learnt from the parallel schemes being planned for England by my right hon. Friend the Secretary of State for the Environment.
Secondly, I have re-examined our management of the European structural fund in Wales. Current programmes include the objective 2 programme for industrial south Wales, the objective 5b programme for rural Wales and nine special initiatives such as RECHAR. Together, over the life of the programmes, those measures involve more than £360 million of European funding, contributing to total programme expenditure by all the parties of more than £959 million. That funding makes a major contribution to the regeneration process across Wales and is a vital source of project finance for local authorities, agencies and the private and voluntary sectors.
My Department is currently responsible for managing the funds--It provides the secretariat for the relevant monitoring committees. It has been argued that the transparency of the system and of the decision-making process would be improved if my Department's
management of the secretariat's functions were devolved to a free-standing executive that was independently staffed and operated under the guidance of local authorities and the wider partnership including local authorities.
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