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5 Jan 2010 : Column 37WH—continued

Regrettably, I have been unable to meet the hon. Member for St. Ives, despite his asking me on a number of occasions. That is not, to quote again from the letter, a snub: it is because ongoing legal matters are involved, and that is the only reason why. I am sure that hon. Members are aware that I cannot discuss in detail the
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harbour revision order, the listed buildings consent order or the proposed planning application from Cornwall council. It would not be advisable for me, a decision-making Minister, to do that because I could be involved in processes later on. However, it might be useful if I answered the questions posed by the hon. Gentleman and gave an indication of the implications of any revised time scales. I hope that this scene-setting will help to take that forward.

It is crucial to maintain the existing links between the mainland and the isles. I put that on the record because it is clearly our position. They are an essential lifeline to more than 2,000 islanders and they allow trade and tourism to flourish. Some 140,000 visitors a year are attracted to make the journey down to the beautiful south-west. To give an indication of how vital retaining the Isles of Scilly link is, the tourist board for the south-west estimated that 77 per cent. of employment on the islands relies on tourism. It cannot be much clearer that there is an overriding need, just in economic terms, to ensure that there is a safe, affordable link to the islands.

For many people the stopover in the scenic and historic town of Penzance and surrounding areas before moving on to the islands is an essential part of the experience. That is why I picked up on the comment made by the hon. Member for Cheadle about the economic prosperity not just of the isle, but of Penzance and the surrounding area. That is all part and parcel of the work that goes on. An assessment in 2009 said that 190 jobs in Penzance alone are directly or indirectly related to tourism and trade with the Isles of Scilly. Those issues should feature prominently and those two employment facts should be at the forefront of our thinking about the future and the timing of the delivery of a solution to the issues that we face.

As hon. Members have already highlighted, current links include a plane from Land's End and a helicopter from Penzance, which continue to offer excellent, speedy transport links to the islands. Equally, the existing passenger vessel, Scillonian III, and the freight vessel, Gry Maritha, provide the unique travel experience enjoyed by many-although I understand it is not so good when the swell is up. I had that experience when I was in the North sea. I have been advised by members of my own office that the journey across on Scillonian III is beautiful. However, we have to recognise that although various works, including maintenance works, have been undertaken and that it probably has a certificate until 2012 on the passenger side, which might be able to be extended, there is clearly an issue vis-à-vis health and safety and long-term sustainability that must be taken into account.

Andrew George: The Minister is aware that the Maritime and Coastguard Agency regularly inspects the Scillonian III. I understand that, as a passenger ferry, it is subject to a five-year round of annual inspections. Obviously, the thing that is under inspection most in relation to the Scillonian III is its life-saving apparatus, which may have an impact on the passenger numbers that it can take. However, I hope that we can work together and ensure that we are communicating and will fully understand if the vessel requires some extension of life with regard to the certificate, which will be necessary should this project be delayed, and that there is some co-operation
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from the Minister's Department in ensuring that the concerns about the longevity of the vessel are communicated and actioned properly.

Paul Clark: I take that point on board. The Scillonian III was built in 1977 and I want to ensure-as does the hon. Gentleman, I am sure-that we continue to have a regime that is fit for purpose and ensures the safety of passengers, staff and operatives who use such vessels. That must be the overriding concern. If I am right, two overriding considerations were taken into account in 2002-03, one of which was the upgrading of the quays, which was needed to allow safer and more efficient passenger and freight movement. Most importantly, there was the need to acquire a new vessel or vessels, since the current vessels are likely to be past their service fitness by 2012.

As already indicated, the Scillonian III has a licence to operate until February 2012. It is part of the MCA process to continue reviewing that, but we are talking about long-term viability and it is clearly not going to go much further than that date. The freight vessel has been subject to major repairs and is licensed until 2014. Further extensions to the licence may be possible, but that must be underpinned by a firm commitment to replace those vessels at the earliest opportunity.

Cornwall council's proposal to replace both vessels with a single vessel for handling passengers and freight in a safer and more comfortable fashion has been clearly outlined, recognising the two overriding criteria that were identified in 2002. Improvements to the harbours at St. Mary's and Penzance would be needed to accommodate the larger single vessel. Obviously, there are always bones of contention with any such proposal. As the hon. Member for Canterbury (Mr. Brazier) said, that will always be the case due to the nature of planning and major changes, but we need to find the right way to proceed on that basis. It is partly the role of Cornwall council, along with the Council of the Isles of Scilly, to find ways through. I understand that concerns continue regarding the sight lines along Jubilee Pool, the future of Battery Rock beach and the proposed new terminal.

I will not go through the rights and wrongs of what we now know as option A and option C, but I will state again that securing a long-term solution must allow the sea link to operate economically. It must be done on an economic basis or it will not work. I recognise some of the arguments about that being more expensive and issues about freight operations, but this must be done on an economic basis or it will have no sustainability. Any solution must secure vital jobs in Penzance and the island, and it must allow the Scillonians to contribute to the wider UK economy and community and allow passengers and freight to move safely. Those are our key concerns, which I am sure are shared across the Chamber.

Andrew George: In terms of assessing the merits of the scheme before the full approval submission is made, the Minister will be aware that as a fall-back, both councils suggest that this might go to Falmouth as an alternative-a lot of people raise their eyebrows when they hear that. Given the test that he has just set for such an approval, I am sure he would acknowledge that such an alternative would require an entirely new business case, and the whole project would have to be started
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again. A business case of that nature would take at least 10 months to complete, and would probably require about half a million pounds of investment to undertake all the scoping and investigation work. I would be interested to hear the Minister's comments on that.

Paul Clark: I was coming on to the implications of that. The hon. Gentleman is right: if there is to be any major revision to the proposals, we will need a new appraisal process that would, quite rightly, have to be followed to ensure that a business case could be made and to protect the public funds and so on.

There have been some issues about whether an options analysis was undertaken. My understanding is that in 2004, the route partnership started looking at the details and the range of options for delivery of the scheme, on the basis that I outlined a moment or two ago. It was agreed that the basis behind the options and analysis would be that the vessel and harbour-side operations would be self-financing, and would not continue to have revenue implications for the public sector through subsidised fares or freight costs. The scheme would need to provide for a payback to Cornwall council of any moneys that were provided, and create a sinking fund for the replacement of a new vessel in 20 to 25 years' time. Clearly, a prudent, sensible process was put in place. There were a number of scenarios to look at-doing nothing; doing a minimum option such as replacing the vessel; or doing something on a range of different harbour options, including alternative mainland port options, and alternative layouts for Penzance and St. Mary's harbours.

The conclusion at local level was that option A was the best route forward as it had the smallest impact in terms of the development of the harbours, and was the most sustainable solution for the environment and as a business model. I understand that the route partnership undertook a comprehensive range of consultations on the necessary consents for the harbour revision order, the listed building consents at Penzance, and the planning and listed building consents at St. Mary's. As part and parcel of that process, an additional £400,000 was found to review the potential of option C. That detailed financial analysis showed that such a solution would not solve the health and safety issues that I raised about port security. It also showed that the out-of-town depot would have increased operating costs of around £300,000 a year, with no greater revenue. That was confirmed by a body that operates another out-of-town freight facility on the Isle of Wight. A number of assessments were made in getting to where the local stakeholders and bodies currently are. It would be a sad day if a workable solution could not come forward and a lifeline for economic prosperity was placed at risk.

On the funding arrangements, I commend the south-west region for identifying the Isles of Scilly link as a priority scheme for the region. The region has had a number of pressures on it in respect of a range of transport demands, as many regions do. Not long before taking this portfolio, I made a three-day visit to the south-west and saw some of the work being undertaken at Truro and St. Austell. I opened the new Dobwalls bypass. There is a range of pressures, but I recognise that the south-west region has put the scheme very high on its agenda, and rightly so.

The scheme was supported in the first round of regional funding allocations, and in last year's update to the region's transport programme continued to be so.
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The region has proposed an increase to the scheme, with a revised regional allocation of £36 million. That is a resounding reflection of the importance that the regional partners attach to the scheme, for all the reasons that we have identified.

The South West of England Regional Development Agency has also given its full support to the scheme, and long may the RDAs continue to play an important role in helping with economic development for regions such as the south-west. I am sure that the hon. Member for Canterbury would like to agree. The South West of England RDA has identified £11 million-that has been made available-from the convergence fund to support the upgrade of the harbours. There is also, of course, funding from Cornwall council. The scheme has in place for the first time all the funding sources that it requires.

Mr. Brazier: As the Minister invited me to intervene, I shall do so. There are, of course, some things being done by development agencies of which we approve and which we would like to see continue.

Paul Clark: That sounds like resounding support for the continuation of regional development agencies. I am delighted that the enlightened hon. Gentleman supports the bringing together of investment in jobs, homes and the prosperity of regions such as the south-west.

Andrew George: Rather ironically, the decision taken by the regional development agency is to spend money that has been allocated to Cornwall and the Isles of Scilly through the European convergence programme, and of course many people in Cornwall and on the Isles of Scilly believe that such decisions would be better taken in Cornwall than by an unaccountable and unelected body covering the Government zone of the south-west.

Paul Clark: However, this is about bringing together minds and having representatives from local authorities-from Cornwall council in this case-and so on involved. It is about partnership, going back to the very first comment of the hon. Member for St. Ives. It is about partnership, not dictatorship, and drawing together many strands of importance to ensure that we have economically viable regions. That is exactly what has been happening.

That said, it is evident that an appropriate scheme needs to be found, and quickly. The convergence funding must be programmed by the end of 2013 and spent by mid-2015. With pressures elsewhere and such a sizeable commitment involved, any submissions for funds made towards the end of the programme may be too late to secure the £11 million required. Those are some of the issues that must exercise the minds of local and regional stakeholders in finding a way through.

The south-west region will need to consider whether retaining the island link as a top priority represents good use of its capital allocations. Clearly, it believes that at the moment, because it has reaffirmed that and the allocation has been increased to £36 million. Spend on the Isles of Scilly vessel and the harbour is due to start this year. With potential delay, regional partners may consider reprioritising this scheme and bringing forward another scheme from the region. Given the steps that the region has taken to improve scheme
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delivery and given other calls on funds, the Cornwall and the Isles of Scilly link could find itself reprioritised to later in the current 10-year transport programme, which runs to 2018-19. I think that all those involved in the debate today and the people of Cornwall and the Isles of Scilly would wish to avoid that scenario.

As I said at the beginning, the officials at the Department for Transport have been working closely with all funding partners associated with the scheme and have taken a broader view of the economic and social issues attached to the scheme to ensure that it is ready for delivery. Working up alternative schemes to the one currently presented to the Department is possible but will be time-consuming and costly for the council to pursue, and there is no guarantee that the complex and hard-won funding arrangement in place today will be available when a new proposal is tabled. I believe that it is reasonable that hon. Members and others involved are aware of the risks to funding and relative priorities and how that impacts on the timing of replacement of the ageing vessels. Let me-

Andrew George: Will the Minister give way?

Paul Clark: I will, but I may well be going to answer the question that the hon. Gentleman raises.

Andrew George: The Minister refers to "the region" as if that body is somehow accountable to those in Cornwall and on the Isles of Scilly. I have to say that the decision-making process that it is engaged in is pretty opaque to those who consume the outcome of that decision making. Is it entirely a decision that is delegated to that body that makes decisions on behalf of the Government zone of the south-west as a whole, or do the Minister and his Department have any influence at all in the decisions that it takes? It clearly is not directly democratically accountable to the people whom it serves.

Paul Clark: This is an interesting debate. Clearly, the south-west regional body has said that it believes that one of the top priorities or the top priority is to go forward with the link service-with all the associated works-which needs to be in place for a host of reasons, and to take it through all the modelling and so on that is required to ensure that it is viable and has a sustainable future.

The hon. Member for St. Ives will be well aware that record investment has gone into transport at regional and local level. We have said that it is for regional bodies to consider the schemes that are there and what is required to meet needs, whether that involves objectives to create homes and communities or jobs and prosperity. It is a question of bringing together all those areas to decide which are the best schemes that will help them to deliver their key targets for their regions. Clearly, a set of criteria is laid down to help that process, but it has been a great development that areas are brought together in that way. Rather than just whacking in schemes from Whitehall, with someone sitting in a room saying, "Yes, this is very important. We'll have this scheme but we won't have that one" or "We'll have that one; Penzance doesn't matter", it is far better that that regional prioritisation, which is best understood at local level, is delivered at local level.

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Andrew George: Will the Minister give way?

Paul Clark: I want to respond to one or two other points that have been raised and talk about a way forward. There is no deadline on the full approval submission. A business case could be submitted only when all the statutory processes-the legal and the planning-had been completed. The harbour revision order is subject to judicial review. As the hon. Gentleman will know, I have no powers over that to take it forward, but that is the backdrop to the process that is going on.

I am delighted to hear the hon. Member for Canterbury say that the leader of Cornwall council continues to have dialogue with English Heritage. Indeed, I am delighted that the hon. Member for St. Ives says that he knows that there are people at English Heritage who are working hard to find a way forward. That is exactly what has to happen at that level, and I urge people to continue it. The planning application can then be considered as well. It is in that way that we will get a solution to the problem.

Finally on funding, I have never said that we would withdraw the funding, but let me say, in terms of this being an election year, that certainly we have made it very clear that transport issues are important. I have said how important this matter is to the islanders as well as to Penzance and the wider community. I recognise its importance for prosperity, social inclusion and wider issues. Clearly, we will continue to ensure that transport is at the forefront of our spending as we have done over the past 10 years, but I certainly urge all local stakeholders to work hard to find the solution.

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Treasury Accounting (Natural Capital)

12.30 pm

Barry Gardiner (Brent, North) (Lab): I wish you the compliments of the season and a happy new year, Mr. Atkinson. The accuracy and transparency of Government accounts have long been accepted as among the fundamental pillars of good governance and democratic accountability, and it was for that reason that William Gladstone established the Public Accounts Committee almost 150 years ago. It is for that reason, too, that we have an Office for National Statistics. It is also why the Government publish a pre-Budget report and why every Budget day comes with not just a red box but, more importantly, a Red Book.

In their policy decisions, the Government must be clear that they are using the country's resources wisely and efficiently. If they are to be sure that economic growth will be sustainable into the future, it is crucial to account for the impact of economic activity on the natural environment. It is also important to be able accurately to assess the value of the natural capital on which so much economic activity is based.

Nature provides human society with an enormous range of benefits, which go well beyond the obvious commodities of food and fuel, for which we are accustomed to paying a market price. The benefits include ecosystem services, such as the soil stabilisation provided by forests and the pollination carried out by insects, coastal protection, climate regulation, nutrient cycling and water purification. They even include amenity services with aesthetic and recreational value.

Recognising that many of those services are predominantly public goods, however, presents a considerable problem for Government accounting and effective policy making. Classical economics treats such benefits and ecosystem services as externalities-free goods with no market price. Given that they have no market price, their destruction does not show up as a cost in the balance of costs and benefits. As a result, natural ecosystems become depleted and the services that they provide become degraded, and human society suffers the consequences of that loss of natural capital. We lose clean air and suffer asthma. The fish in our seas disappear and we lose a vital source of food. We destroy our forests and suffer climate change; we build a cement factory and lose a beautiful view.

Such changes are the inevitable consequence of human beings living beyond their environmental means and consuming every 12 months the resources that the planet takes 16 months to renew or replace. That is a credit bubble of far more terrifying proportions than the one that the world has just experienced. It saddles our children with debts that they might never be able to repay, because we have consumed not just money but whole ecosystems, and nature does not do bail-outs.

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