HC Deb 18 December 1961 vol 651 cc1077-90

10.8 p.m.

The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames)

I beg to move, That the White Fish Subsidy (United Kingdom) (Amendment) Scheme, 1961, a copy of which was laid before this House on 30th November, be approved. It would be convenient to the House, Mr. Speaker, if we discussed with this Scheme the White Fish and Herring Subsidies (Aggregate Amount of Grants) (No. 2) Order, which also stands in my name.

Mr. Speaker

If that is the wish of the House, so be it.

Mr. Soames

When we discussed, on 14th July, the subsidy rates for the fishing fleet for this year, there was a body of opinion on both sides of the House, which reflected what the industry had represented to me in discussions before the debate, that owing to the decrease in the catches off the Faroes the subsidies which the Government proposed to allot to vessels which traditionally fish for a considerable part of the time off the Farces were insufficient. Figures were quoted to show how the catches had decreased considerably since November of last year.

As you will remember, Mr. Deputy-Speaker, the figures which we had before us then were for the year 1960. During 1960 the middle water fleet, as a whole, including those ships which had been fishing wholly or mainly off the Faroes, had not been doing too badly. It was only in the first five months of this year, for which we had figures only for catches and not for profit and loss accounts, that the picture had begun to look bleak.

We felt that before acceding to a larger subsidy it was right to see what the longer term effect would be. Was this a temporary phase, or was it something with which we would evidently have to live as a permanency, or, at any rate, as a semi-permanency? For this reason, in our debate on 14th July I asked the House to accept the fact that we should agree to the subsidy figures as I put them before the House at the time, with the assurance that we would look again as the year went on at the figures of the Faroese vessels of the middle water fleet to see how they had fared.

We have been watching this month by month. We thought that it was necessary to get figures over nine months of the year before reaching a conclusion. We have had the figures from the fleet for the nine months from January to the end of September of this year. They show a considerable decline over the equivalent figures for the same months of 1960. They show also a significantly worse position for vessels which fish off the Faroes than for other equivalent middle water vessels fishing in other waters.

Mr. Charles Loughlin (Gloucestershire, West)

I appreciate some of the difficulties about giving the fullest possible information to the House on matters of this kind, but as the right hon. Gentleman is asking the House to approve additional subsidies, coming so quickly after a full discussion on the pay pause, would it not be convenient to the Minister and to the House if he gave us the precise figures to which he has just referred?

Mr. Soames

Yes. In round figures they are as follows. For the first nine months of 1960 the vessels showed an average profit of £800 per vessel. For the first nine months of this year they showed an average loss of £6,400 per vessel. So we have decided that it is right to increase the level of subsidies to vessels fishing largely off the Faroes. The figure we have decided upon is an increase to £13 a day for these vessels. According to the length of the vessels, it will mean an increase varying from £3 10s. a day to £8 a day to bring them all up to £13 a day.

There are a number of points of detail which I want to make. First, I think that it was understood by the House—it was inherent in the assurance I gave to the House in July—that this figure will count as from the beginning of the subsidy year, that is, as from 1st August of this year. Secondly, these increases will be for all motor vessels and all oil burners built before 1952. Thirdly, we will pay this to vessels which have fished for 30 per cent. of their fishing days on Faroese grounds.

We had originally intended to make the payment to vessels that had fished for 50 per cent. of the time, because we thought that would be about the right proportion. We found, however, that a comparatively small number of mainly Scottish boats that had fished for between 30 per cent. and 50 per cent. of their time off the Faroes had suffered very badly. It was decided to include them. Therefore, as an exceptional con- dition for this particular Scheme, we have reduced the time to 30 per cent.

The next point is that we intend to pay this subsidy for all the voyages of those vessels that have fished more than 30 per cent. of the time off the Faroes. It will be paid for all the voyages, whether the vessels have been fishing off the Faroes or otherwise. We believe this to be fair, as it will avoid penalising those people who, realising the difficulties existing off the Faroes, chose to go to other grounds to try to improve their difficult circumstances.

The next point relates to gross proceeds for the purpose of determining crews' earnings. Normally speaking, when increased subsidies of this kind have been given they have come about as a result of increased costs, and where this has been so, they have not been included from the point of view of the determination of the crews' wages because the owners have had to bear the increased costs. Here, however, we have a different circumstance. The cause has not been increased costs, but a fall in catches and in receipts, which has been felt by the crews as well as by the owners. That being so, we have decided, and the owners have agreed with this, that the whole of this extra determination should count towards the crews' settlement—

Mr. Loughlin

I am very sorry again to intervene, but the Minister will realise that I am trying to get information. As this is based on gross receipts, what arrangements have been made in those ports where the earnings or poundages are paid on net receipts?

Mr. Soames

I cannot answer that off-hand. My hon. Friend the Under-Secretary of State for Scotland will answer it later. I can only say that all this money that is to be paid has been agreed by the industry, and I have no doubts that, whatever may be the situation in the different ports, a way will be found. As I say, it has been agreed with the industry that this extra money will count towards crews' settlement.

The cost of this will be £170,000 for a full year. That will take us over our present authorisation; hence the Order to increase the money available for this purpose by £250,000. The purpose of the Order is to get the money to enable us to make this increased settlement. We realised last July that this might come about. We hoped that it would not, that the better fishing of the earlier days after the Faroes agreements would return, and that the bad catches that our vessels had made since November, 1960, would prove to be only temporary. But that has not proved to be the case.

We feel that this is the right figure on which to settle. It is agreed by the industry to be, shall we say, an acceptable figure, and I hope that the House will agree that, in the circumstances, we are taking the right course.

10.20 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

When this subject was debated in the middle of the year my hon. Friends argued that the case was sufficiently bad for something to be done at that time. The Minister will remember that because we did not get a promise as firm as we thought it should be we divided the House on this issue.

The middle water fleet was going through an exceptionally difficult time and figures were produced showing that the section of the fleet fishing at or adjacent to the Faroes was making considerable losses. It was estimated that for boats fishing from Granton and Aberdeen the average loss was anything from £4,500 to £5,500 a year. I am not surprised, therefore, at the figures produced by the Minister tonight. The middle water fleet felt that something more should be done for it in view of the fairly substantial sums that were to be paid to the distant water fleet, which was to receive a subsidy without any returns having been made.

Thus, it is only fair now that the Minister should be as good as his promise, because he said during that debate that he would have a look at this again before the end of the year and that, if the figures proved to be of the order of those produced at that time, he would deal with the matter. It is for that reason that these provisions are now before us. To those who think that there is a fortune being made out of this, I would say that it is nothing of the kind. It will not even look at the losses at present being made.

Unlike agriculture, this is not a support price. We will not be faced with a bill for some millions of pounds in the near future, but it is hoped that this will tide this section of the industry over the period the fleet now faces. Therefore, I believe that this is a right step to take. The Minister was right to extend this provision to the sailings of the fleet and not to confine it to the Faroes waters. These vessels tried their utmost to find grounds where fish could be found and it would have been penalising them if the subsidy had not been extended to them as well, because the considerable amount of fishing at the Faroes was bound to have an effect on the remainder of the fleet.

It is important, when these sums are being paid out, that particular attention should be paid to the men who man these vessels. Obviously, when there is a fall in the earnings of the boats, this is reflected in the earnings of the men. It is only right that if moneys are being made available to help meet the losses that the fleet is making, a certain proportion of those moneys should go to the men whose earnings have dropped as well. It is right that they should be covered to this extent.

I do not suggest that this will be a solution to the difficulties that confront the middle water fleet. Far from it. But, at least, it is a step in the right direction and it is helpful. Further, the Minister has fulfilled the promise he made in the debate earlier in the year. For that, we are grateful. In the future we might have to take a broader look at the middle water fleet, because the difficulties of this section of the industry will be greater than the others. My hon. Friends and I certainly agree that these provisions should be approved.

10.25 p.m.

Mr. J. M. L. Prior (Lowestoft)

I join with the hon. Gentleman the Member for Edinburgh, Leith (Mr. Hoy) in congratulating the Minister on fulfilling the promise he gave in the debate last July, and I also thank my right hon. Friend for the attention he paid to the hon. Member for Leith and myself when we came to see him just before the debate took place. Although at that time we were unable to extract a promise from him, he subsequently made the promise during the debate. We are most grateful to him now for fulfilling that promise. When one thinks of the economic situation since July, one is the more grateful to the Minister for having extracted this extra sum of money from the Treasury.

I think it ought to be pointed out that these losses from which the vessels fishing off the Faroes have been suffering are due to circumstances completely outside the control of the industry. Perhaps when other people who know nothing about the fishing industry read that an additional subsidy is to be given, they do not always appreciate exactly what has happened. We can welcome this additional subsidy, but, of course, it is only a palliative and will not go to the heart of the problem, which is to make the fishing industry more economic. One can only hope that the new Sea Fish Industry Bill will help to do that.

I must say, however, that the outlook for the middle water fleet is extremely grim. I hope that the result of the new Sea Fish Industry Bill will be to put that section of the fleet on to a firmer footing. It may well mean that it will become either distant water or near water—that is a problem which it will have to work out for itself—but at least it can be satisfied that the Government have fulfilled their end of the bargain and have gone as far as any of the owners would have thought was reasonable in the circumstances.

I therefore have much pleasure in thanking the Minister for what he has done.

10.27 p.m.

Mr. Anthony Crosland (Grimsby)

It must be nice for the Minister to have this brief half-hour of general thanks and flattery, in view of some of the less favourable Press comment to which he has been subjected in the last few days.

I also join in thanking the Minister for carrying out the promise that he made in the debate on 14th July. He has made a settlement to which nobody in the fleet could possibly object. It seems to me an absolutely fair settlement and one has no right to say that he should be more generous.

I feel more sympathetic to the idea of giving this additional pay to the middle water fleet than to the idea of giving subsidies to the distant water fleet. These two sections have one rather marked thing in common, namely that the distant water fleet is dominated by very large firms indeed, which make considerable profits from their ancillary activities, whereas the middle water fleet, although including elements of the large groups in the industry, also includes in Grimsby and other ports relatively small family firms. I have said constantly in this House that it may be that some trend towards mergers and bigger units is necessary and inevitable, but it would be a disaster to the health of the industry if these smaller family firms with from ten to fifteen trawlers were driven out. The effect of assistance to the Faroes part of the fleet was essential to one or two firms that I can think of.

I am also glad that the Minister has made his explicit statement today that the new subsidy goes onto the gross amount and will be calculated in the determination of the gross wages. The position before was complicated. There were several different methods of making the calculations. But although complicated, the general opinion among the deckhands was that the distant water fleet subsidy was coming into this determination and that the middle water fleet subsidy was not. The position was not as simple as that, but it was widely believed to be the case amongst the deckhands. Therefore, I am glad that the Minister has made it clear that, like the distant water fleet subsidy, it is treated as a payment for loss of receipts and not for an increase in costs and, therefore, is taken into account where remuneration is calculated.

Like the hon. Member for Lowestoft (Mr. Prior), I do not know what the future of the Faroes will be. I think that the fleet will be substantially helped by the new concession on the number of trips they are allowed to make to the distant-water grounds, but I am inclined to share the hon. Gentleman's view and I shall be surprised if in five years' time we have a middle water fleet as we know it today. I agree that this tripartite distinction which we now have will probably disappear and that we shall have a near water fleet on the one hand, and a distant water fleet on the other. However, these wretched people have to get over the transition period, and, because this will be a very disagreeable time, I also am grateful to the Minister for the help he has given.

10.30 p.m.

Mr. Charles Loughlin (Gloucestershire, West)

I am glad to see the last-minute conversion of my hon. Friend the Member for Grimsby (Mr. Crosland) in regard to the deep water fleet, but, like him, I feel that it would be impossible to oppose the subsidies proposed by the Minister tonight for those who fish particularly in the Faroe waters.

As I understood him, the Minister said that the loss per vessel in the 1961 period was £6,400. I calculate that the subsidy will give to each vessel roughly for a year. I say "roughly" because the question of sea days comes in, how long it is fitting out, whether it has another skipper during the skipper's holidays, and so on. I am not sure that that is right, but I think it is. It is £13 a day, which, on the sea days of the vessel, would make it about £3,800. If that is so, and if each vessel loses at the rate of £6,400, what effect will the subsidy have on the economic position of the fleets?

We have to bear in mind, as the Minister said, that the trouble is no fault of theirs. I wonder whether, in practice, the help we are giving on this occasion will be sufficient to enable them to continue in the way they have gone on in the past year.

I should like to know more about the way the subsidy will be calculated for poundage purposes. While it is relatively easy to calculate it for poundage purposes when the crew are on gross receipts, it seems extremely difficult to arrive at another settlement where the crew are being paid poundage on the basis of net receipts because, if the ships are making a net loss inclusive of the subsidy which we now pay, the crews will not have any poundage at all. I hope that the Under-Secretary will give us an assurance that the fact that the remuneration is paid by a different method will not mean that some crews will have the benefit of the subsidy in some ports while some will not in others.

Although it may surprise some hon. Members to hear me give approval to what the Minister has proposed, it should not do so. My argument has always been based solely on the deep sea side of the fishing industry. My only regret about the subsidies is that we cannot sort them out. We cannot sort out the amount which is going to Associated Fisheries, for instance, which may well have some middle water vessels in its fleet. But that is a qualification which I am not prepared to make at this point. I make it merely as an observation.

If the Minister can assure us that the subsidies will make a substantial contribution to the recovery of the middle water fleet from its present position, and if the question of the poundage can be cleared up, I shall give my blessing, for what it is worth, to the Minister's proposals.

10.35 p.m.

Sir James Duncan (South Angus)

I have no constituency interest in this business, but in the absence of both hon. Members for Aberdeen, my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir) and the hon. and learned Member for Aberdeen, North (Mr. Hector Hughes), and as there is a distinct Scottish interest involved, I think I should say one or two words.

I congratulate the hon. Member for Edinburgh, Leith (Mr. Hoy) both on speaking from the Opposition Front Bench tonight and on his promotion to the position, as I understand it, of joint shadow Secretary of State for Scotland, and I presume that in one sense he was speaking as such tonight.

I must congratulate my right hon. Friend on producing the Scheme and the Order. I was flabbergasted when earlier this year the middle water fishing people came to see me and disclosed how their position had completely changed through no fault of their own but because of the new international situation. The hon. Member for Gloucestershire, West (Mr. Loughlin) talked earlier about the pay pause, but this case has absolutely no relationship to that whatever. It is a situation created entirely by the Faroese and Icelanders themselves. The situation came about so quickly that there has been no time for the middle water fishing people to find other fishing grounds. Now my right hon. Friend has saved the situation till July, 1962.

What I want to say tonight is that I do not think there will be time before July, 1962, to find other fishing grounds, and that we may, therefore, have to come forward to repeat this sort of provision for a year or two longer till the situation is settled. It is frightfully bad luck for Aberdeen fishermen and ship owners, because for years now we have been complaining about the old steam trawlers in Aberdeen and about how uneconomic they were and so on. Perhaps partly due to the pressure put upon them from here, they modernised their fleet, bought new ships, new engines, and so on, and now they are suddenly faced with a completely new situation which makes it impossible for them to make ends meet. The figures given by my right hon. Friend show the seriousness of their situation—a profit of £880 one year turned into a loss of £6,400 another. I doubt if they can get over their difficulty in one year.

I hope, therefore, that my right hon. Friend, who has been so sympathetic, will continue to be so, because the hardship this year will continue. I hope that he will keep a very close watch on the situation and, if necessary, bring in provisions similar to this in ensuing years to give adequate time to the middle water fishing folk to make up their minds about other fishing grounds suitable for their vessels to work, or whether to reorganise themselves, to become inshore or distant water fishermen in future. Whatever they decide, it will take some time, and my plea tonight to my right hon. Friend is to give them in years to come the sympathetic consideration he has given this year.

10.40 p.m.

The Under-Secretary of State for Scotland (Mr. Gilmour Leburn)

Generally, both sides of the House have welcomed the Scheme laid by my right hon. Friend and general endorsement has been given to its contents. I should like to thank hon. Members on both sides of the House for what they have said, but there are two points which I should like to make. The hon. Member for Gloucestershire, West (Mr. Loughlin) was right in his calculation that with the £13 payment there is an income of about £3,800 to £3,900 if one takes the whole amount into account. The increase brought about by this Scheme is not as great as that, and, spread over the whole field, will amount to between £2,000 and £3,500. This is a substantial contribution that is being made towards these losses, but I will not pretend that in every case it will necessarily cover the whole loss being made by any particular group of vessels.

The hon. Member for Gloucestershire, West also asked what happens if the crew's settlement is on net proceeds. I am advised that the whole of the subsidy counts as part of the proceeds for the purpose of the crew's pay if that pay is based on a share of net proceeds. The hon. Member asked what happened to the crew's earnings if the vessel is making a loss. I am advised that their net earnings is the difference between gross earnings and running costs, not total costs, and it will practically never be a minus sum. I hope that with these explanations the hon. Member understands the position.

I was very interested in what my hon. Friend the Member for South Angus (Sir J. Duncan) said—

Mr. Loughlin

Will the hon. Gentleman give us some further clarification of what he means by the calculation which will not be a minus figure?

Mr. Leburn

As I understand, net earnings is the difference between gross earnings and runnings costs and not total costs, and that figure is practically never a minus figure. If the hon. Member is still in doubt I shall be glad to get in touch with him and explain the position further. I should like to draw to the attention of my hon. Friend the Member for South Angus that a new Statutory Instrument will be laid in regard to subsidies in the summer and under the Sea Fish Industry Bill, now in Committee upstairs, arrangements are made not only for basic subsidies but also for a special fund which will cover some of the points he has in mind.

With these comments, I hope that the House will approve the Scheme and the Order.

Question put and agreed to.

Resolved, That the White Fish Subsidy (United Kingdom) (Amendment) Scheme, 1961, a copy of which was laid before this House on 30th November, be approved.

White Fish and Herring Subsidies (Aggregate Amount of Grants) (No. 2) Order, 1961, [copy laid before the House 30th November], approved.—[Mr. Soames.]