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17 Jun 2009 : Column 111WH—continued

We have heard the figures. The annual subsidy will be £25 million and rising. The simple maths—the Minister can do it on the back of a fag packet—is that we have the subsidy and the cost of the airport minus the cost of
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the RMS St. Helena, including the cost of repairing or replacing it. We also have the certain knowledge that the capital costs will go up every year that the project is delayed. The simple maths is that an airport will make the island of St. Helena self-sufficient at the end of 10 years. That has to be a bargain. It makes economic sense.

I recognise that it is not easy to get the Government to accept economic sense, but the sums are quite simple—the Minister and his officials can do them. That is the economic case, but there are people living on the island and they deserve an airport, although I do not see that happening.

I cannot commit my party, but I shall work as hard as I can on this issue because I have spent my entire political life arguing that we should invest to save and to provide services, facilities and amenities to improve people’s quality of life. That is what the airport would do.

Obviously, the Minister cannot do it today, but I urge him to work behind the scenes to convince the bean counters in the Government that this is a clear case of the capital cost paying for itself at the end of 10 years. Thereafter, there will be no need for the British taxpayer to make any revenue contributions to the people and the island of St. Helena. The island will be self-sufficient, the population will grow, the children will be able to grow up with a full family network and everybody will be a winner.

I urge the Government to go with the option of building the airport now because the do-nothing option is far more expensive.

3.14 pm

Mr. Mark Lancaster (North-East Milton Keynes) (Con): It is a pleasure to contribute to this timely debate, and I congratulate my hon. Friend the Member for Congleton (Ann Winterton) on securing it. Having listened to what she had to say, I am amazed that she has not been to the island, such was the informed level of her comments. She gave us a passionate speech, which outlined very well many of the concerns that I heard about when I was on the island. I would also like to take this opportunity—I am sure that I speak on behalf of all hon. Members here today—to thank Calvin Thomas, who is a St. Helenian, for his many years of service to Parliament.

The right hon. Member for Oxford, East (Mr. Smith) also gave us an informed and passionate contribution on behalf of his constituents. The hon. Member for Sheffield, Heeley (Meg Munn), who is a former Minister, made a powerful argument as to why we should make a decision. Likewise, the hon. Member for Colchester (Bob Russell), who has put in many hours as the chairman of the all-party group on the island of St. Helena, made an equally powerful contribution. There seems to be a consensus on both sides of the House, and I hope that the Minister is listening to what is being said.

I want to take this opportunity to reaffirm the Conservative party’s commitment to our overseas territories. There is a feeling that they have been neglected to a degree over previous years, although, that said, I pay tribute once again to the hon. Member for Sheffield, Heeley for her previous work. That neglect is precisely why my hon. Friend the Member for Sutton Coldfield (Mr. Mitchell) was absolutely determined that I should
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go to St. Helena—as we have heard, that is very difficult given the access issues, and it is particularly difficult when Parliament is sitting—to experience at first hand the concerns of islanders and to listen to their comments.

I was absolutely delighted to go the island last month. I want to put on record my thanks to the governor—Andrew Gurr—the executive council and all the islanders for their hospitality during my three days there. I had an incredibly busy programme. I spoke to nearly all the key stakeholders and had a series of public meetings, including formal ones and less formal ones in the pub, which was fun, if I am honest. The pub is a good place to meet St. Helenians, who are wonderful people. St. Helena is a wonderful island with a unique character, and I think that we all agree that whatever happens in the future, we have an obligation to ensure that that character is maintained. That must be at the forefront of our minds.

Although the debate is about the future of the island, it is worth talking about the situation today. Of the current £20 million-plus given by DFID each year, approximately £12 million is required to balance the island’s budget. In the past 10 years, the population has declined from just over 5,000 to 4,000, and UK aid to the island has risen from £10 million a year to more than £20 million.

3.15 pm

Sitting suspended for a Division in the House.

3.30 pm

On resuming—

Mr. Lancaster: Before we were interrupted, I was about to move on to the current access arrangements for the island—the Government-subsidised RMS St. Helena. Simply maintaining the current arrangements will limit the prospects for economic growth on the island. After my visit there, it is hard for me to disagree with the common view on the island that DFID is simply managing the island’s decline. I am sure that the Minister agrees that we cannot allow that view to continue. St. Helenians are fiercely proud of their British citizenship and have a long history of service to the Crown, as the hon. Member for Colchester has said. It is important to remember that the island has no indigenous population and was created entirely by the British, but I am afraid that islanders feel incredibly let down by the current Government in particular.

The access problem has been recognised for some time. Civil Aviation Authority studies carried out in 1973 and 1984 led to the initial air access feasibility study in 1999. A referendum of islanders in 2002 showed that 71.6 per cent. of voters favoured air access over a replacement ship. A further, detailed feasibility study carried out in early 2005 led to expressions of interest in a contract for the design, building and operation of the airport being issued in December 2005. In 2006, all four bidders pulled out because of concerns about risk allocation, and new expressions of interest were issued in September 2006; I shall return to that point in a moment. Following St. Helenian Government approval, Impregilo was selected as the preferred airport tender in October 2008. A few weeks later, in December 2008, the Secretary of State announced the pause.

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Let me be clear: the islanders are utterly exhausted by the 26-year process and feel that any further studies will add little value because just about every piece of information that can be has been gleaned from them and the island. Let me also be clear that if the Government get their way and impose a five-year pause, and if the air access route is subsequently followed, it will be at least another nine years before an airport is delivered, given the four-year construction period. The current consultation, which was announced in March 2009, is viewed as a sham by many islanders, most of whom are deeply disillusioned, and, unfortunately, many of them will not participate. After years of engagement with DFID consultants, they feel that they have made their views plain.

During my time on the island, I was constantly referred to a brief section on overseas territories in the 1997 DFID White Paper, which states at paragraph 2.28:

There was real anger that NGOs that have no involvement with the island have been invited to comment on the consultation. As fiercely loyal British citizens, and in light of the White Paper commitment, islanders do not understand why, to quote an islander, they should be

The islanders hate being dependent on aid, and they desperately want to be self-sufficient. They feel that the status quo of managed decline is unacceptable and will simply lead to further decline. Although the relationship has improved in recent years, thanks mainly to the sterling efforts of the DFID’s island representative, Mr. Eddie Palmer, DFID is, unfortunately, still widely viewed with suspicion on the island. DFID is seen as a micro-managing organisation that has sent a stream of consultants to write reports that recommend actions that are never implemented due to lack of funding. I cannot emphasise enough how badly let down the islanders feel by the Government’s dithering and indecision over the airport, especially given that the project was signed off by the Secretary of State, only to be reversed, out of the blue, eight weeks later.

Ann Winterton: What does my hon. Friend think happened between 16 October 2008, when the Secretary of State entered final negotiations, and the pause that was imposed seven or eight weeks later on 8 December? I might ask the Minister the same question in due course. What does my hon. Friend think happened in that period to change the Government’s view?

Mr. Lancaster: If only I knew. That is a key question, which I, too, was going to ask the Minister. All I can say to my hon. Friend is that the excuse about the economic downturn has been dismissed by islanders, because the looming recession was already anticipated when the document was signed in October. It is an incredibly hollow argument that within that eight-week period, given that the agreement was first signed in October, the economic recession suddenly loomed out of nowhere.

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Let me say a few words on private sector involvement. The consortium Shelco has been involved in the process since May 2002, with a view to providing a private finance initiative and operating a high-end tourist resort on the island. It has secured an option on a 400-acre site on the island from Solomons—the 60 per cent. majority, St. Helenian Government-owned land owner—but that option runs out at the end of 2009, so timing is important.

Some islanders are concerned about the price that will be paid, both financially and in relation to the island way of life, for Shelco’s involvement. There are also concerns that a monopoly situation would emerge, with flights being unaffordable for islanders and with insufficient financial benefit being retained by the island to ensure economic growth. The private sector route remains an attractive option, but there are concerns that there is insufficient private sector expertise in either DFID or the St. Helena Government to negotiate with any potential operator to ensure that the best value deal for both the UK taxpayer and islanders is negotiated.

The previous invitation-for-proposal route failed when all the contractors pulled out, because there was too great a gulf between the private sector and the Government. Insufficient communication and round-table negotiation led to it being impossible for a satisfactory outcome to be achieved. If that route were pursued, a more sequenced, negotiated approach would be required, and if the Department lacks the skill to do that, outside support would have to be sought.

In summary, I must tell the Minister that my impression from my visit was that DFID is effectively managing the decline of the island through aid but very little development.

Meg Munn: I wonder whether the hon. Gentleman has estimated what that period of decline might be. He may be aware that another overseas territory, the Pitcairn Islands, has, of Pitcairners, only about 47 people living there, and that the end of the period when that community can remain viable is not clear. Given that there are 4,000 people on St. Helena, does he have any idea how long that management of decline might go on, and therefore how long UK taxpayers’ money will be needed to support those people?

Mr. Lancaster: The hon. Lady makes a reasonable point. We seem to be doing nothing more than administering life support at the moment, which is why we have to do something, rather than kick this issue into the long grass. It is a key concern that infrastructure projects have been identified by a whole sequence of DFID representatives, but are rarely funded.

Worse still, the pause that was introduced following the change of heart over the airport has been very damaging to the island economically. That view has been emphasised to me during meetings with the chamber of commerce, the St. Helenian development agency and the building union, and the issue has caused enormous resentment among the islanders and the 10,000 Saints who live in the UK who feel utterly let down by the Government. During a dinner with representatives of the private sector, I was told that, as a direct result of the confirmation in October 2008 that the airport project would go ahead, approximately £57 million of pledged private sector investment was made, of which £18 million
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of actual investment has taken place. The anger among the private sector was palpable and there was a complete lack of trust in Her Majesty’s Government as a result, which is something it will take a long time to repair.

It is also important to remember that the airport formed the heart of a wider programme of infrastructure improvement on the island. The island needs new diesel storage tanks—it recently came within 72 hours of running out of diesel—a new road infrastructure, new port facilities and a new electricity generating plant. I experienced two power cuts while I was on the island, and I was assured that they were not arranged especially for me. All that has now been put on hold as a result of the pause. The entire economic development plan of the island has been based on the provision of an airport.

Bob Russell: Will the hon. Gentleman confirm that, in addition to the economic benefits that he has just described, the construction of the airport would require a new dock area and a new haul road to be built? That would also benefit sea transportation to the island and provide a further boost to the island’s economy.

Mr. Lancaster: That is exactly the point that I am trying to make when I say that investment in the airport is so much more than a matter of the airport itself. The airport is now on pause and, frankly, islanders simply do not know what to do because of the uncertainty and indecision. It has been repeated to me again and again that no decision is the worst decision, because of the inability to plan

Before I conclude, I want to look briefly at the recommendations in the consultation paper. Option A is to build an airport, which is undoubtedly the preferred option of the islanders. Although they would prefer an entirely publicly funded airport, that is clearly unlikely in the current economic climate. However, as the Minister admitted in May, it is clear that eventually an airport will have to be built, if the island is going to develop economically. It is also clear that doing so will not get any cheaper as time passes. Private sector partners—Shelco and Impregilo—remain interested and business models exist that show there would be a positive internal rate of return after 15 years or so with only modest visitor numbers. I understand that Impregilo wrote to the Minister on 30 April and offered to extend its arrangement until 30 June. Perhaps the Minister will confirm that and say whether he has replied to the letter and answered some of its many questions.

The Government’s commitment to maintaining current access levels equates to investing at least £70 million in a new ship. There is a mood on the island that that money could be used to prime the private sector development, while maintaining a degree of St. Helenian Government control over the project, which is crucial. Ironically, that was the original model proposed after the 2004 feasibility study. Why is that no longer an option, and why was it not included in the consultation document?

Option B is to replace RMS St. Helena, which is the preferred option of a minority on the island, in order to maintain the character of the island. Effectively, that would maintain the status quo of managed decline on the island. However, limited improvements could be made to access by having a faster ship and changing the schedule, so that the ship simply serves the Cape Town- St. Helena-Ascension triangle by removing the twice
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annual trips to the UK and relying on trans-shipping cargo in Cape Town instead. Interestingly, when I met the ship’s crew, they confirmed—perhaps surprisingly given their self-interest—that they had an overwhelming desire for an airport.

Option C is to defer the decision for five years, which is the UK Government’s preferred view and is, ironically, a do-nothing for five years option. If taken today, a decision would delay the building of an airport for at least nine years. Having visited the island, that is clearly the worst possible option, and it has been overwhelmingly rejected by islanders, because it would cause considerable damage to the island for reasons already stated. The early signs of the hastened economic decline as a result of the Government’s change of heart are already evident on the island. Interestingly, there was resentment on the island in some quarters that no opportunity was given to islanders to suggest other options, such as a flying boat service, a smaller runway or a faster boat service. After investigation, it appears that those options were looked at by the 2004 Atkins report and rejected. Having discussed them with the island’s Executive Council, it is clear that the extra time required to explore those options again would simply add to the pause and be unacceptable to an island that desperately needs a decision.

In conclusion, I say to the Minister that having been there, it is absolutely clear what the islanders’ view is— in fact, I sense that he already knows what their view is. He is a Minister who stands tall among his colleagues and I only hope that, in the final days of this Government, he will take the opportunity to do one thing as a Minister that he knows he can achieve. I ask him to be bold, be strong, be tall and make a decision, because I assure him that if this Government are not prepared to take a decision on the island for the future benefit of St. Helena, the next Government will.

3.45 pm

The Parliamentary Under-Secretary of State for International Development (Mr. Michael Foster): It is always a pleasure to see you chairing such debates, Mrs. Dean. I extend my congratulations to the hon. Member for Congleton (Ann Winterton) on securing the debate after, it seems, much trying and echo the comments made by the hon. Member for North-East Milton Keynes (Mr. Lancaster) about her contribution. I know that she is retiring from the House at the next general election, but given what she said about St. Helena and its attractions, I am sure that there will always be a career for her in the tourism industry.

Given the frequency with which we seem to debate the issue of St. Helena, it is good to be among what some people would call the usual suspects—I like to call them my friends. I value their contributions and I will address the points that they have made. We have plenty of time to do so and there is no rush.

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