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12.17 pm
The Minister of State, Foreign and Commonwealth Office (Sir Nicholas Bonsor): I add my thanks to those already expressed to my hon. Friend the Member for Sevenoaks (Mr. Wolfson) for raising this issue. I welcome the opportunity to set out the Government's position, to explain some of the issues raised by hon. Members today and to state clearly the way in which we propose to deal with the problems in St. Helena.
I agree with my hon. Friend that the state of St. Helena's economy is precarious and that it requires our closest attention. I assure the House that it is getting that attention. The diplomatic and aid wings of the Foreign and Commonwealth Office are keenly focused on the need for positive and real change. I assure the hon. Member for Stretford (Mr. Lloyd) that there is no question of complacency on the part of the Government--we are addressing these important issues vigorously.
Everyone who has the welfare of St. Helena at heart agrees that the status quo is not an option. The problem, as we have known for some time, is that economic and social pressures, when allied to aid dependency, can only lead to a downward spiral of economic stagnation. As with all the remaining dependent territories, we care very much about the welfare of St. Helenians and share wholeheartedly their desire for a better and more prosperous future. Our task, along with that of the St. Helena Government, is to shape that desire and turn it into reality.
Our continuing commitment to the island is evidenced by our aid support, which, as my hon. Friend the Member for Sevenoaks and others mentioned, is more than £8 million a year. That equates to some £1,500 per head of population and is the highest per capita package of UK aid in the world. It is testimony to the seriousness with which the Government take their responsibilities towards the island and shows the importance that we attach to it.
However, we and the "Saints" themselves want to see a reduced dependency on aid, not only because of the burden on the UK taxpayer under the present circumstances, but because we want a self-sufficient, confident and economically viable St. Helena. Neither we nor the Saints want the island held back by financial dependence on the United Kingdom. We want the island to develop. We are committed to a process of change. To paraphrase the St. Helena Government's stated vision for the future, we want economic development to lead to a prosperous future for the island.
Private sector development and public sector reform are the keys to the island's future. To begin that process, we are negotiating an important three-year country policy plan with the St. Helena Government. The basis for the agreement was the St. Helena Government's strategic review, which was completed last year. The document results from a great deal of hard work by the St. Helena Government and the governor, and we congratulate the team on its efforts. The strategic review provides a comprehensive approach to St. Helena's economic and social development.
The country policy plan will set out action plans for each sector. A specific plan will encourage inward investment and private sector development. We shall help
with this in every way we can. The plan will also highlight how the Government can either transfer activity to the private sector or deliver services more efficiently through the public sector.
There has been a degree of concern on the island about the Government's public sector reform programme and its social consequences and that has led to some of the matters that have been mentioned, particularly by the hon. Member for Wrexham (Dr. Marek). I appreciate that there have been difficulties between the governor and some of the inhabitants of St. Helena, and I have no doubt that the governor is trying hard to deal with the exceptionally difficult circumstances which the state of the economy in St. Helena has imposed on him. It is not easy for reform programmes to be put in place without a certain amount of short-term hardship and discontent, but I hope that those circumstances can be resolved and that, as the policy plan is put into effect, we shall improve St. Helena's economy and get over the problems that have been mentioned in the House today.
For our part, the plan would commit the ODA to a substantial aid package spread over the next three years, which would give the St. Helena Government more responsibility for their own affairs. They could divert savings from within the budgetary aid element of that framework to other priority areas of Government expenditure. Thus, they would maintain firm control on their own expenditure programme and be able to prioritise accordingly in a way which hitherto they have been unable to do. I hope that that will reassure my hon. Friend the Member for Sevenoaks, who raised the question of the inability of the St. Helena Government, particularly LegCo and ExCo, to play a full part in handling the economy. As we move forward with our plan, those difficulties will be resolved.
St. Helena's isolation proved useful in Napoleonic times and at other times in the past, but in today's world it is a major drawback. It is approximately 1,200 miles from the nearest continental land mass and it takes five days by ship to Cape Town. Physical isolation means that the cost of St. Helena's products when they are exported are high, which is obviously a substantial brake on the island's potential for economic development of the export market. Isolation also deters potential investors from spending their valuable time getting to and from the island to explore ideas for development. We need to find ways around this. I accept the points made today about the need to develop a wharf and to examine air services and I assure the House that the Government are looking closely at those issues.
The RMS St. Helena provides a vital link between the island and the outside world. It is a modern, well equipped ship funded by the ODA and it serves St. Helena and her people well, and long may she continue to do so. As the hon. Member for Stretford said, neither he nor I have had an opportunity of getting to St. Helena, unfortunately. I believe that those who have travelled on RMS St. Helena have found her comfortable and have been extremely well looked after. She should be an asset not only as a means of communication for Saints but to encourage tourism, and I hope that many more people will use the opportunity. As the House knows, we have altered the ship's schedule so that long-haul journeys have been reduced and short-haul local journeys increased. I hope that that will enhance both those opportunities. We shall
continue to seek the best balance in the schedule between the island's transport needs and the need to make the ship commercially viable.
Several hon. Members touched on the possibility of providing an airport on the island. We continue to keep that under review, but I shall not hide from the House the fact that such a project would be extremely expensive and currently difficult to justify. One problem would be to find a commercial air service able to run a viable route to the island. Another problem is the enormous expense of building a modern airport that conforms with Civil Aviation Authority rules. The distance from Cape Town means that we would need fairly large long-haul aircraft to make the journey. Moreover, the difficulties of providing an airport on St. Helena are great but we are looking at that problem and I hope that we can find ways around it in due course.
Inward investment is absolutely vital if the island is to prosper. It will breathe new life into the economy. The current cash flow is tiny and the existing private sector is saturated with small service industries. We need new productive investment, encouraged by the St. Helena Development Agency. We also plan a new business forum in London whereby we hope to encourage investment and focus the attention of people in this country on the opportunities that St. Helena offers.
As has already been said, the fishing company, Argos, is leading the way and I welcome the investment that it has put into the island. It is extremely good news as it will create some 40 jobs, which represents about 10 per cent. of the island's unemployment rate. It is worth noting that we do not need extensive investment to deal with the unemployment problem. About 450 people, representing 18 per cent. of the island's work force, are involved. That should not present insuperable problems so long as we and the St. Helena Government work together, as we shall.
Unfortunately, I have very little time with which to deal with the many points that have been raised, so I intend to take some of the more important ones. I mentioned the difficulties that the governor has had on the island. I assure the hon. Member for Wrexham that the ODA consults strongly with the island. Of course, the islanders are sometimes disappointed that the ODA does not accept
their plans but the reason is that the ODA does not think that those plans are viable, and the islanders' well-being is the primary reason for any decision that has been made.
I take the opportunity, while touching on inward investment, to commend the work of Mrs. Essex, who is listening to this debate today. She will return to the island in May and has done a phenomenally good job as its representative in this country. I wish her well and hope that her labours will bear fruit.
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