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17 Jun 2009 : Column 117WH—continued
We are at an important point in the process in that, this week, the facilitated consultation referred to in the debate gets under way on the island. We shall await the outcome of the consultation process before reaching a decision, and with that in mind I suspect that hon. Members will not be surprised to hear that I can add little to what I said in this Chamber during a similar debate about St. Helena on 17 March. However, I
reinforce the point that no decision has yet been taken and that we will take it only after the consultation has been completed.
Bob Russell: Is the Minister asking us to accept that one of the options—to build the airport now—is still very much in the frame or is it there just for the sake of it?
Mr. Foster: All options are listed in the consultation paper. The Government have indicated what they consider the preferred position, but if option A was not going to be considered, we would not have put it in the consultation document. I can assure the hon. Gentleman of that.
Let me begin by reassuring hon. Members that the pause in the process in no way represents a dilution of the Government’s commitment to meet the reasonable needs of St. Helena. Let me make two things clear. First, the Government are not proposing to reduce their financial assistance to the island, which stands at approximately £20 million a year—in other words, around £5,000 for every man, woman and child resident on the island. Secondly, the Government are not proposing to reduce access to the island from the level that it has enjoyed over the past 20 years.
The question is therefore not whether we are discharging our responsibilities towards the people of St. Helena; it is, in fact, whether—in addition to our ongoing assistance to the island—the Government are in a position to finance the construction of an airport, which would require some £230 million to £260 million extra in aid over the next five years. In other words, it would involve an extra £57,000 to £65,000 for every man, woman and child resident on the island, on top of the £5,000 a year that I have already mentioned.
Mr. Lancaster: What the Minister said is perfectly reasonable. I simply ask him to rule out the do-nothing option.
Mr. Foster: I will come to the hon. Gentleman’s comments and answer the questions he and others asked at the same time, because this issue affects hon. Members from all parties.
I shall put the choice in context. We have paused the project not only because the costs I have highlighted are three times higher than the estimates we had at the time, which we committed to the project in 2005, but because the world has taken on a very different complexion from that of the economic environment in which our previous planning took place.
Bob Russell: Does the Minister anticipate that capital building costs will fall during a five-year pause? Assuming that that is not the case, does he agree that 10 years of subsidy at £25 million a year roughly equates to the capital cost of building the airport? Thus, in year 11, the island of St. Helena would move from being dependent on the British taxpayer to self-sufficiency and then surplus.
Mr. Foster: The hon. Gentleman raises an interesting point about what might happen to future costs. All I would say is that not just the basic raw material costs, but the important impact that the exchange rate has must be considered. I shall deal with that shortly.
Ann Winterton: I have two brief points to make. First, will the Minister answer the question put by my hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster)? He asked what caused the pause between October and December when the Government decided that they would not go ahead with the airport and that there would be a further consultation.
The second and important point is that we all live in the real world. We know what the economic difficulties are in this country and elsewhere and that a new airport would cost a great deal of money. If by any chance further private capital—further investment—could be acquired elsewhere, would the British Government still contribute significantly to the project? If so, will the Minister speculate on how great their support might be?
Mr. Foster: I have said that I intend to reply to the question about what happened between autumn and Christmas, but I shall answer it now for the hon. Lady. The worsening of economic conditions intensified in the autumn, which brought to the attention of the Government and my Department the need to look again at what would be, in anyone’s language, a serious investment—a serious chunk of cash—that would have to be paid out in the next five years.
On the second question, my Department is perfectly happy and willing to look at any proposals that are made as a result of the consultation exercise. If the hon. Lady knows of private sector investors who are willing to make a contribution, I ask her to encourage them to present their ideas to the Department. I can assure her that they would not be ignored.
Andrew Rosindell (Romford) (Con): Will the Minister give way?
Mr. Foster: May I make more progress?
My hon. Friend the Member for Sheffield, Heeley (Meg Munn) and the hon. Members for Colchester (Bob Russell) and for North-East Milton Keynes asked in different ways why overseas territories are part of DFID’s responsibility. I have to be perfectly honest and admit that that is an interesting question.
My hon. Friend the Member for Sheffield, Heeley will know from her time as a Foreign Office Minister with responsibility for overseas territories that there are differing views in Whitehall about exactly how overseas territories should be treated and who is responsible for their management and the funding that goes with it. The debate has gone on for some time. I have looked at the issue across the 12 years of this Government and before that. There has been a debate about who has responsibility because of the perceived conflict that can exist between meeting the first-call, reasonable needs of the overseas territories and, to use the more colourful language of the hon. Member for North-East Milton Keynes, who quoted a resident of St. Helena, dumping St. Helena with the third world. [Interruption.] The hon. Gentleman was quoting.
There is an issue that needs to be looked at. If the hon. Gentleman is suggesting that, in government, he would look at it and rejig the structure of Whitehall, I would be happy to hear his views.
Andrew Rosindell:
I apologise for missing the first part of the debate, but it is timely to come in on this
point. Surely, the Minister understands that we are talking about not just finance and economics, but loyal British subjects and an overseas territory that is not foreign or international, but British. We have a duty and a responsibility to the people of that island, which we now appear to be neglecting by introducing a shameful pause in delivering the promise that the Government made to them.
Without the airport, there will be economic decline, which none of us wants. A British territory deserves to be treated as British, not as foreign or international. When will the Government make true the promise that they made to the islanders of St. Helena?
Mr. Foster: The obligation that the UK Government have towards the overseas territories is being met. They have first call for reasonable assistance needs. Perhaps some difference of opinion about the definition of “reasonable assistance needs” will show up as a result of the consultation document. I suspect that that is the bone of contention.
In DFID’s current position, with the overseas territories as part of its responsibilities, we have a duty to consider what else is going on in the world. At this time, our best estimate of the impact of the global economic downturn, which is acknowledged as one of the most serious downturns of recent generations, is that 90 million more people are living on less than $1.25 a day, there has been an 80 per cent. reduction in capital flows to emerging economies and developing countries, there have been reductions in remittances to developing-country households and an estimated 1.4 million more infant deaths are likely to occur up to 2015.
Meg Munn: I said in my speech that I hoped the Minister would not repeat those facts, as he did last time. That was not because some of us do not believe that the Government should respond to problems in the developing world, but because the reality is that if the situation on St. Helena deteriorates, or if, as I suggested, some problematic social situation arises, the British Government will have to deal with the results.
We have a legal responsibility that goes beyond the moral responsibility that we all feel for international development. It is that legal responsibility, which was set out by the United Nations, that hon. Members are asking the Government to fulfil. The overseas territories are different, which is why we do not think it appropriate for the Minister to counter-pose real and important development issues.
Mr. Foster: I know that my hon. Friend asked me not to put this debate into the context of developing countries and other needs, but, unfortunately for her, that is the situation that the Government find themselves in. I would be genuinely interested in—and may look back, if I can—the record of her time as Foreign Office Minister with responsibility for overseas territories. Did she make such recommendations and is this something she advocated? This important issue should be debated.
The loss in the value of sterling against the United States dollar over the past year means that in many countries of the world our aid is not going as far as it did. It has reduced the value of our multilateral payments and has also had an impact on many of the larger international non-governmental organisations to which
we provide funding. DFID’s budget has come under pressure from new calls for aid to protect low-income countries that are most vulnerable to the global downturn. For example, we recently agreed to provide £200 million in response to a request from the World Bank for $5 billion to $6 billion for its vulnerability financing facility, and at the beginning of the year we approved £100 million of contingency funding for Africa.
There are also growing financial pressures in other overseas territories, which the Government must take into account. The value of our aid to Montserrat, for example, whose local currency is pegged to the dollar, has fallen by 30 per cent. due to exchange rate decline.
Bob Russell: Important though those points are, does the Minister accept—I do not know how many times I have asked him this question, but he has not answered it—that 10 years of subsidy to the island of St. Helena roughly equates to the cost of building the airport? At the point the airport is built, the island will move from being dependent on the taxpayer to being self-sufficient and creating a surplus. Investment will save the British taxpayer money—and then there will be more money to give to Montserrat and the other countries.
Mr. Foster: I intend to reply in detail to the hon. Gentleman’s point, but the problem is that Montserrat is facing its difficulties now and cannot wait 15 years before money becomes available to deal with them. If he does not appreciate the difficulties faced by overseas territories such as Montserrat, let me tell him that last night its Government fell and there has to be a general election. It is facing serious difficulties.
Other Caribbean territories have seen tourism fall markedly, which is seriously affecting the viability of their economies. As I told the House in March, these impacts of the global crisis seriously affect the Government’s ability to achieve all their international development objectives. An airport for St. Helena represents significant outlay, which is why we have to revisit the choices before us. That is not to say that we are ignoring the special place that the overseas territories have in the aid programme, but as I said earlier reasonable need cannot amount to an unqualified commitment, irrespective of circumstances.
There is near-universal agreement that the current circumstances are exceptional. The Government cannot evade their responsibility to re-examine the case for the airport at this time, given current circumstances and the scale of the expenditure involved.
I want to say a word or two about the consultation, which was mentioned by hon. Members. The consultation is an indication that we are not taking this decision lightly. We are well aware of the importance of the airport to the Saints who voted for it in the 2002 referendum. We are well aware of the social problems, which have been outlined in the debate, relating to the lack of easy access and a weak economy in St. Helena. We launched the consultation to ensure that the Government can hear from all those who will be affected when we come to our eventual decision.
We have made every effort to ensure that the Saints will be heard. As I speak, our consultation facilitator is on the island, listening to the Saints first hand. This evening, she is holding a public meeting at the Kingshurst community centre, which is one of a series of events organised for her around the island during her eight-day
stay. She has already spoken to Saints in London and Swindon, and she will make further visits to the Falkland Islands and Ascension Island before the consultation deadline.
Mr. Lancaster: The consultation ends on 31 July. When will the Government make a decision?
Mr. Foster: If the hon. Gentleman shows a little more patience, he will see that I will deal with that. He is right to mention that the consultation ends on 31 July, after which there is, under the Government code of conduct, a formal period within which the Government are expected to produce a report based on that consultation. I will outline the details for him in due course.
Sir Nicholas Winterton (Macclesfield) (Con): I apologise for missing part of the debate. So far, the Minister has not provided the cost of managing the decline in St. Helena. It seems that that has been ignored, although it will cost the United Kingdom Government additional sums to manage the decline of that country because of the island’s failure, which will result from the failure to proceed with the airport.
Mr. Foster: Many of the calculations that the hon. Gentleman seeks were in the report that has been presented and is publicly available now. Those numbers are already available to give people an indication of why, when that report was produced, the outcome favoured an airport.
When all the responses to the consultation are collated, together with all written submissions received, we will summarise them in a consultation report that will be published in October. I assure the hon. Member for Congleton that, when we come to make a decision, which we will do by the end of this year, we will take those responses into consideration and weigh them up alongside the shorter-term financial considerations that we are contending with.
I acknowledge the interest expressed in the debate and outside by hon. Members who are exploring other ways to improve physical access to the island, because that is the nub of the issue and of people’s concerns.
Ann Winterton: Before the Minister moves on, I understood him to say that the Government would come to a decision by the end of the year. Will he give an undertaking this afternoon that, if that decision is deferred, there will still be a timetable in place so that uncertainty about the future of the airport on St. Helena can be removed, because as many hon. Members have said this afternoon, uncertainty is a killer? People on the island and those outside it—those investing—need to know what the future holds if this matter is to be progressed.
Mr. Foster: The hon. Lady makes a fair point. The delay is important and was mentioned when I spoke to the governor and representatives from St. Helena when they visited me at DFID. The hon. Member for North-East Milton Keynes also made a good point in that regard. As the hon. Lady says, delay is the killer.
We do not want the debate to be any more protracted than it needs to be. Because of the issue of access to St. Helena, we have extended what under Government guidelines would normally be a 12-week consultation to
a 16-week consultation, just to enable due consideration to be given to people in St. Helena and to allow them to meet the facilitator and genuinely to engage in the debate.
The hon. Lady mentioned the event in Reading at the end of August, at which a number of Saints will be present. However, if we waited formally until the end of August before concluding the consultation, that would just extend the period by a month. With all due respect, I—and I think she—would rather we made a quick decision in the hope that the Saints had already taken an interest in the debate and not waited until the bank holiday event in Reading.
On improving physical access to the island, there has been discussion about whether a shorter runway or increased use of the Wideawake airstrip on Ascension would be appropriate. Some have asked for more imaginative means, such as flying boats, to be considered. Those options have all been examined and deemed unsuitable, either for reasons of technical feasibility or for their limited potential to enable economic growth. For example, it is believed that the option of a shorter runway would not deliver the benefits that connection to a recognised international hub would bring. That lack of connection reduces the attraction to the tourism market.
Additional factors are associated with restrictions on the use of the military airfield on Ascension Island. For example, it does not meet Civil Aviation Authority standards and is operated by the United States military. There are restrictions on the number of civilian flights that can go via Ascension. The cost of a short runway is not significantly lower than that of a longer one, for technical reasons that were all explored in the previous consultations.
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