Economies of the UK Islands

Debate between Bob Seely and Alistair Carmichael

Wednesday 9th May 2018 Westminster Hall

[Mr Bob Seely (Isle of Wight) (Con)]

Thank you for calling me, Mr Rosindell; it is a pleasure to serve under your chairmanship.

I also thank my hon. Friend the Member for Havant (Alan Mak) for securing this debate and for being part of the all-party parliamentary group for UK islands. His presence here is very welcome and he spoke very eloquently about the needs of Hayling Island; once upon a time, when I was very young, I visited it and I remember how lovely it was. I also thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for his contribution: it is always good to hear of the experiences of other islands.

As we know, this is not a debate about places such as the Channel Islands and the Isle of Man, which are Crown dependencies. This debate is about islands that are fully within the governance of the United Kingdom, but clearly they have physical characteristics that make them islands and give them distinct traits. Indeed, our islands are unique and special places, and to represent my island is a passion and a privilege, which I am incredibly grateful for. I love being here, but I would not want to represent anywhere other than the Isle of Wight.

Islands are, by definition, at the fringes of our nation, but they also help to define us, and they have a special place in our geography and culture. However, my argument to the Minister who is here today—I am very grateful for his presence—is that islands do not always get their fair share, because they are overlooked. In the case of my island and my constituency—the Isle of Wight—that is especially true.

By way of example, the Scottish islands get the Scottish islands needs allowance, or SINA, which comes from the Scottish Government. So they get the Barnett formula money, which is generous, and on top of that they get the SINA. If I remember correctly and have my facts right—I am sure the right hon. Member for Orkney and Shetland will correct me if I am wrong—the Western Isles, Orkney and Shetland get an extra £6 million a year through SINA, in acknowledgment of the fact that supplying Government services on islands tends to cost more than it does on the mainland. The Isle of Wight gets none of that money, despite the fact that we have a population four times bigger than that of the Western Isles, for example, and two, three or four times bigger than that of Orkney, Shetland and other islands.

So we do not get our fair share, and when it comes to “fair” funding we are unfairly funded. The central reason for that is simple: it is the Solent. Government funding systems are not designed to deal with isolation by water. The rural isolation grant and the rural farming grants are all predicated on a sense of isolation, but isolation on land and not isolation by water. One of the arguments that I am trying to make, and I have already made it to the Minister’s colleagues in other Departments, is that a fair funding formula needs to take into account isolation by water.

I have gone straight into the meat of my speech; I will now go backwards a little bit. We are very much open for business on the Isle of Wight; we are trying to attract new businesses to the island; and our regeneration team and our council have a very ambitious programme, which I absolutely support, and I will work hand in glove with them.

In fact, we have a unique scientific heritage. Marconi set up the first experimental wireless station off the south coast of the island, on St Catherine’s Down, which, by the way, is one of the sunniest places in Britain; seaplanes were built by Saunders-Roe in East Cowes; and we have major employers and a cluster of defence, composite and high-tech industries, including companies such as Gurit, BAE Systems, GKN, which is now part of Melrose, and Vestas. Indeed, a high percentage of the world’s large offshore turbine blades are made on the Isle of Wight at the Vestas factory. Vestas is doing great work on the island, and I thank it, as I do all employers, for its presence. So we are very much home to high-tech businesses that are at the cutting edge of their industries.

As I have said, however, there is a problem with providing Government services on the island. A University of Portsmouth 2015 study said that the extra costs of providing Government services on the Isle of Wight were £6.4 million a year, because of the costs of being an island. The university broke that figure down into three: first, the cost of self-sufficiency, because of the lack of spill-over of public goods provision; second, what it called an “island premium”, which is the additional cost of conducting business on and with islands, which the right hon. Member for Orkney and Shetland will know about; and thirdly, the sense of dislocation, which is the physical and perceived separation from the mainland and which could come from providing services to a smaller population and a smaller market.

I will give an example. At care homes, there was a clear mistake that we are rectifying. Elderly folks were put into care homes earlier than on the mainland, yet our care homes were costing more than the mainland because of the lack of competition between them. To some extent, another issue was their high quality. The cost was pushing additional burden on to our adult social care costs, which skewed our funding so that we could not spend the money on infrastructure to provide jobs and on a jobs agenda. That is absolutely vital in keeping our youngsters on the Island, which helps make us the vibrant and successful community that we are, and which we are building on as well.

In those three different ways—full self-sufficiency, the island premium and dislocation—there is an extra cost for Government services on the Isle of Wight. That has been estimated, in an academically rigid, peer-reviewed article, to be £6.4 million a year, and that does not include other factors that I would like to bring to the attention of the Minister. One of those is the Green Book estimate. Green Book estimates are the terms and references for Government investment, and they do not work for the Island because we are physically isolated. We cannot do the things that work for Southampton, Portsmouth or, indeed, for Havant, because we are physically separated. The Green Book estimates process counts against the Isle of Wight in providing infrastructure.

I have mentioned separation by water in terms of the rural isolation grant. For farming grants, things are prejudiced against us because we are in the wealthy south-east. In many ways, we get all the downside of being part of the wealthy south-east—we do not get that extra support as we are seen to be in the wealthiest area of the country—when in many ways our economy is similar to that of west Devon or Cornwall. There is some tourism, some culture, farming and little clusters of high-tech industry. Whereas lovely places such as Cornwall get money thrown at them through EU grants and Government support, we have had very little of that.

The amount of money we would ask for from central Government to make the Island even more of a success is really very small. I would love to sit down and have that conversation with the Minister in greater detail. The answer is not devolution, because the housing system sadly does not work for us, and we will be arguing why we are an exception. We want a modest, tailored package of support that recognises that we are an island. That £6 million extra in fair funding would be of benefit for the council, and would recognise that because we are an island, we need an A&E and a maternity unit, because someone cannot give birth on a helicopter going to the mainland, and the ambulance cannot wait for four hours to get the ferry overnight. Our funding in health services and many other things is skewed by the fact that we are an island, and that is not recognised.

We have many little clusters of excellence. Our tourism economy is significantly improving. We will very soon have one of the best broadband services in the world. Thanks to our wonderful local company, WightFibre, and the Department for Digital, Culture, Media and Sport—I thank them very much indeed—we are getting significant sums of money so that we will get ultra-superfast broadband for five out of six houses on the Island. If someone has a broadband business, the place they want to be is not London, Old Street, Moorgate or Brighton, but Cowes or Newport, where they will get broadband speeds comparable with Singapore. What I need to do, working with colleagues in the council, is determine how we get the other one sixth of houses in the more rural and very rural areas linked up to that as well, so that people can have Singapore broadband speeds in their little farmhouse in Newtown Creek, Brighstone, Chale or wherever.

Most importantly, education is critical to our future. It is improving and is becoming a success story. We probably need to work on restructuring our sixth forms, but most importantly, I would like to have a conversation with the Treasury and the relevant Ministers about getting significantly more higher education to the Isle of Wight, specifically a university campus. I would like that to be in Newport as part of our critical Newport harbour redevelopment. It may be that it goes elsewhere. Higher education would clearly lead to much higher levels of higher education, but it would also drive our software businesses, which the right hon. Member for Orkney and Shetland spoke about, and other key investments.

We have also won special status from the Arts Council, and we are building a much stronger cultural offer for tourism, education, aspiration and, critically, regeneration. It is important for the Minister to be aware of that. I would love to have a conversation with him about our farming and small businesses. I am having a conversation with the Minister for Agriculture, Fisheries and Food, my hon. Friend the Member for Camborne and Redruth (George Eustice), about mobile slaughtermen. Once we leave the European Union, we will be too small to have an abattoir, yet our field structure on the Island is perfectly suited to animal husbandry, and we are very keen to support local food production, which is good for multiple reasons, over and above employment.

[Mr Carmichael]

I understand exactly what the hon. Gentleman says when he talks about the Island being too small to have an abattoir—we have the same issue in the Northern Isles—but I suggest that is not actually the case. The Isle of Wight is surely too small to have an abattoir only in the way we regulate and manage abattoirs currently. A more sensitive system of regulation would surely allow a good business there.

[Mr Seely]

The right hon. Gentleman makes a very good point, and I am happy to take that correction. Post-Brexit, we need to change the rules for farming so that we have smaller abattoirs or mobile slaughtermen who can kill animals humanely on the farm to allow them to go into the human food chain in a way that does not exist at the moment.

Finally, I would like to have a conversation with the relevant Minister in due course about BAE and the need to have a complex radar technology demonstrator in Cowes. If we wish to keep radar technology in this country for the next 50 years—there is a critical national interest in doing so—the only realistic place to have it is where the aircraft carriers, the Type 45 and all the Royal Navy warships are made, which is in West Cowes at the BAE plant. I want to bring together BAE and Government to have that conversation. We are talking about small sums of money—£5 million, £10 million or £15 million—to secure a complex radar technology demonstrator, so that we can keep those high-tech jobs and that high-tech knowledge on the Island. I will wind-up now, Mr Rosindell. I apologise; I have taken a touch too long.

The Island is a success story, but I do not believe the Government have engaged with us enough over the past 10 to 20 years to maximise our success in building a new economy and an advanced education system, doing all the things we need to do regarding our infrastructure, such as our broadband and all the high-tech jobs, and making the Island the economic success story that it is. I reinforce the point about the coastal communities fund and the importance of the Treasury spending a little time and effort to understand islands, their unique circumstances and the amounts of money—very small in the great scheme of things—that could help drive enterprise and economic progress. More than anything, I want my constituency, the wonderful Isle of Wight, to contribute economically, rather than being a place that gets handouts from central Government because we say we are poor and do not have this or that. With a bit of help from the Treasury and the Government, and greater integration and support, we can drive our success story further.