WHITE, FISH AND HERRING INDUSTRIES (GRANTS)

HC Deb 16 July 1963 vol 681 cc422-68

7.45 p.m.

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

I beg to move, That the White Fish Subsidy (United Kingdom) Scheme 1963, a copy of which was laid before this House on 4th July, be approved. I suggest, Mr. Deputy-Speaker, that it might be for the convenience of the House if, at the same time, we discuss the following two Motions: That the Herring Subsidy (United Kingdom) Scheme 1963, a copy of which was laid before this House on 4th July, be approved. That the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order 1963, a copy of which was laid before this House on 4th July, be approved.

Mr. Deputy-Speaker (Sir Robert Grimston)

If that is agreeable to the House.

Mr. Soames

In determining the details of the subsidies and Orders before the House there are two points of departure. One is the Government's general policy set out in the 1961 White Paper, which was implemented by Parliament in the Sea Fish Industry Act, 1962, and the other is the current situation in the: fishing industry. I will address my remarks to both of these.

Basing itself on the Report of the Fleck Committee, the House will remember that the Government laid down in the 1962 Act—and this carried with it the agreement of the industry—the blueprint for the next 10 years. The idea was to provide financial assistance, through subsidies on a diminishing scale, over that period during which the industry, helped by the Government, would adapt itself to the changes which we all knew were taking place or were in prospect. The extension of limits off Iceland, Norway and the Faroes was one of the new factors in the situation while the growing competition by many fishing nations on the available grounds was another. There is also the compelling need to improve the quality of fish for the market. All these factors demand new types of vessel, new forms of fishing and new techniques of marketing and distribution.

While the adjustments to be made must be primarily decided by the industry, the Government can and must play their part, especially through an expanded effort of research and in the application of that research to the industry. The improvement in techniques, by which new vessels are able to catch more fish, will itself have an effect on the future of the fleet. Some sections of the fleet have been and will be restricted by the extension of limits off shores where we traditionally fish. The main purpose of the subsidies for the trawler industry is not to stop this necessary readjustment taking place but to make it as smooth as it can be in the circumstances.

Recognising that the fishing industry is inevitably prone to ups and downs from year to year, we provided some latitude and flexibility in the Act in two respects. First, the basic subsidy rates can be reduced from one year to another by between 7½per cent. and 12½per cent. according to the circumstances. However, before the Measure was passed, we agreed with the industry that in this particular year we would only make the minimum reduction provided for, so that the basic rates in the Scheme are simply 7½per cent., below those of the year just ended. Secondly, we provided for special rates of subsidy to be available for those sections of the fleet in particular difficulty, up to a maximum of£350,000 in any one year and of£2½million for the ten-year period as a whole.

What in fact has been the position of the trawling side of the industry? We know that results last year were disappointing; so much so that some owners have not been able to meet their payments to the White Fish Authority for the loans they had for building new vessels. Average operating losses amongst English near-and middle-water vessels were greater in 1962 than in 1961. The Scottish middle-water boats did slightly better in 1962 than in 1961, but were still, on average, suffering losses—

Mr. Charles Loughlin (Gloucestershire, West)

I appreciate that the Minister may not have the whole information, but can he give some indication, in the losses to which he is now referring, of the loss per vessel?

Mr. Soames

The vessels vary so much in size, the ports from which they operate and the grounds on which they fish that I could not give an average. There is also the difference between the operating profit-and-loss account, on the one hand, and the accounts after allowing for depreciation on the other. Many more sections made a profit on the operating account, and it is mostly when depreciation is taken into account that the losses have been incurred. But I am afraid that I could not give the hon. Gentleman an average off the cuff.

The distant-water fleet, too, did worse in 1962 than in the previous year although, overall, there was still a small profit, even after allowing for depreciation.

In the first part of this year there has been a change in the pattern. We do not yet have profit-and-loss accounts for the first four or five months of the year, as we have for the whole of 1962, but the figures of landings and proceeds show the way things have been going. English near-and middle-water boats have done much better. In the first five months of the year catches have been up by more than a quarter compared with the corresponding months of last year, and although average prices have been slightly lower, gross takings have been up by over 20 per cent.—a considerable improvement.

In Scotland, on the other hand, the takings have been marginally down on last year—by about 1 per cent.—although here, again, this has been due to lower prices rather than to poor catches. It has not been as was feared by many of us—and I must say that I shared that fear—that as limits were extended against us we might find ourselves with considerably diminished catches. That has not been taking place. The catches have been up—it is the prices that have been lower.

However, taken as a whole, there has been an improvement in the near-and middle-water fleets—an improvement which we hope will be maintained. I have just this morning had the latest figures of landings at Grimsby which show that the North Sea fishing continued to be very good during June and, so far, during this month as well. May, June and July are usually the worst months for fishing in those waters, so it looks as though we have promise of a good season in the North Sea.

Distant-water catches have been less good. Whereas the distant-water fleet had been doing better in 1962 than the middle-and near-water fleet, in the early months of this year some sections of the distant-water fleet have done distinctly worse compared with the early months of 1962. The proceeds for the older distant-water boats at Grimsby, Fleetwood and Hull have dropped by anything up to£50 a day.

It was against this background that we had to fix the special rates of subsidy for the trawler fleets—as opposed to the basic rates, which are pre-ordained in the Act. In view of the rather divergent trends in recent months, and on the recommendation of the fishing industry, we have decided to make an Order covering only the next six months. We will look at the position again in the autumn, decide what additional assistance maybe needed for the second half of the next subsidy year and see whether the balance should be shifted from one section of the fleet to another—

Mr. James H. Hoy (Edinburgh, Leith)

When the right hon. Gentleman says that he did this with the agreement of the fishing industry, is he talking of the agreement reached with the British Trawlers Federation? I am told that the Scottish Trawlers Federation object to this proposal and think that six months is far too short a period. They think that the period should be twelve months. I would be grateful if the Minister would clear up that point.

Mr. Soames

It was the British Trawlers Federation that was anxious that the period should be six months. My right hon. Friend the Secretary of State had discussions with the Scottish trawler owners, who took the opposite view, thinking that it should be for the year. After consultation, we decided that the arguments were in favour of the six-month period. I know that there are some hon. Members who feel that we should do it for 12 months and not take, as it were, more than one bite at the cherry, but the whole purpose of these special subsidies is to help particular sections of the fleet over a bad patch, and I look on them rather as a task force that we should not commit to a greater extent or for longer than need be.

We decided on the six-month period because it may be that at the end of this period we will see quite a different pattern emerging than we have seen up to date. The sum of money involved is not very large when compared with the total takings of the fleet, but it is probably wiser to do it six months at a time. It need not always be so.

For this six-month period we have committed about£165,000, which is rather under half of the maximum available for the year. The British Trawlers Federation put in claims for a large number of classes of vessels in England and Wales, and the Scottish Trawlers Federation asked for special subsidies for all classes, but did not propose any specific rates.

The detailed rates we have fixed are set out in the Scheme. I shall not weary the House by going through them in detail but there are some things that I must say about them. In view of the poor results this year, special rates are being paid to several classes of distant-water trawlers that have not previously had special subsidies. The hon. Member for Grimsby (Mr. Crosland) has in the past expressed the view that distant-water trawlers should be excluded altogether from the special subsidies—mainly, I think, because most of the fleet is owned by the larger companies—but we have to take account of what is happening to the class of vessel as a whole. I think that it would be unfair to the smaller companies in the distant-water section to exclude them merely because most of the vessels are owned by the big companies. It would also be unjust to the crews as well as to the owners to have different rates for similar vessels from the same port merely on the basis of ownership.

However, as I say, this is for a six-month period. We shall look at the rates again in the autumn and adjust them if the circumstances of the different sections of the fleet have changed, as well they might. As a general rule, I would not expect many of the newer oil-burning distant-water vessels to require special subsidies for any length of time, nor do I think that it would be right to continue supplementary subsidies for the very old distant-water trawlers that are now really obsolete.

Determining the special rates of subsidy must inevitably involve an element of judgment and cannot be expected to please everyone, but I think that, within the limits of what it is possible to do by way of supplementary payments, what we are proposing to do this time is broadly acceptable to industry.

These arrangements apply only to the trawler fleets. For the inshore and herring fleets we do not have the same arrangements for automatic reductions in the basic rate of subsidy as we do for the trawling fleet. While our aim is still to see a gradual reduction in subsidies for the inshore fleet, we look at the position year by year and take it on its merits. Inshore fishermen have been gratified by the Government's decision to free themselves from the various treaty obligations which bind us to the three-mile limit. [Hon. Members: "Hear, hear."] An extension of our limits would clearly be a major factor in long-term prospects for our fishermen, but they appreciate that that must await the outcome of the conference which we have proposed.

Last year most sections of the inshore fleet did rather better than in 1961 and some considerably better, though there are exceptions in specific ports in Scotland and in England and Wales. Pilchard fishermen, for instance, have had poor catches. The 70-ft. to 80-ft. trawlers have not done so well, and neither have the Danish type of seiners making longer voyages in the North Sea. The general picture, however, is reasonably good and we are leaving the basic rate of 1s. 3d. per stone for gutted fish unchanged from last year. We propose a reduction in the rates for ungutted fish from 1s. 1d. to 1s. per stone to give a more realistic differential, and we have added a new rate of 6d. per stone for ungutted fish not sold for human consumption.

Up to 1961 stonage rates were paid only on fish sold for human consumption. In 1961 this qualification was removed. This has over-stimulated industrial fishing, particularly for sprats and whiting in Scotland. The new rate will discourage this while still giving a reasonable subsidy to fishermen who have to sell to the market some of their catch for industrial use.

The industry has for some time wanted us to introduce daily rates instead of stonage rates for the smaller vessels, and last year we decided to switch to daily rates for vessels down to 60 ft. in length. This has been generally welcomed, though in Northern Ireland fishermen would like to see a stonage rate reintroduced, as a number of their people have been made worse off by the change. We have considered this but have decided to continue with the daily rates for this class. We are not yet extending these to smaller vessels which will remain on stonage rates.

The herring fleet did better in 1962 than for some years. Rather more fish was landed and there was a substantial rise in price as well. Average profits for the smaller Scottish vessels went up by more than£500, and for the larger English vessels by about£750. Therefore, we have been able to reduce subsidies all round by£1 a day. We are also proposing to replace the rather costly oil and meal subsidy operated through the Herring Industry Board by a direct payment to fishermen of 25s. a cran on herring sold for oil and meal. This has been accounting for less and less of the catch over the years and last year it was only 1 per cent.

All these subsidies together will cost about£4½million in 1963–64, and the third Order which is before the House will provide for a further£4¾ million so as to have a small margin of£¼million in hand, as one cannot attempt to be too exact over subsidies. This will bring the total amount spent or to be spent since these subsidies first started to£35 million. This is a substantial sum of money. It ought, however, to be seen in perspective.

The current rate of subsidy of about£4½million compares with the value of British landings of white fish and herring in the United Kingdom in 1962 of nearly£50 million. Therefore subsidies represent less than 10 per cent. of the industry's gross income. While not minimising their value to the industry, let us recognise that other factors are and must be even more important in determining the financial state of the industry. Nor would many in the industry like to see it any other way.

Conditions of access to fishing grounds, access to markets and marketing possibilities are all matters of great importance for the future of the industry. There are both domestic and international implications to this. On the domestic side there is a big job to be done in improving fish quality and expanding the market in this country, and I look to the White Fish Authority under its new management for constructive and positive policies in this field, to which I am sure the industry and trade will respond. There is a job to be done in fitting the fishing fleets to exploit the resources of the seas to meet the market demands for good quality fish, both fresh and quick-frozen. This is the industry's task with the help of the assistance which the Government have given and are giving by way of grants and loans for new vessels.

There is also the international side, and this, too relates both to production and markets. On the production side there is the problem of fishing limits and of access to resources, and there is the problem of working out and applying sensible conservation policies to the fishing grounds. On the marketing side, Europe is beset by protective policies for a product which is not in surplus if we look at Europe as a whole and where, indeed, there is scope for considerable expansion of demand.

We cannot solve the production and market problems independently of each other. Neither can any single country or group of countries solve this twin international problem of themselves. Nothing less than Northern and Western Europe as a whole together can do it. This is why we have proposed the European Fisheries Conference of the E.F.T.A. countries, the E.E.C., and neighbouring countries which belong to neither one group nor the other. The E.E.C. has 170 million people and it catches less than 2 million tons of fish. The E.F.T.A. has half that population, 90 million, and a fish catch more than twice as large. This is an imbalance which can be solved only by the two together.

Since my right hon. Friend the Lord Privy Seal announced our intention to convene such a Conference we have been explaining our ideas in more detail bilaterally to the countries concerned and finding out their views on the matters to be discussed. We have had discussions with our E.F.T.A. partners and they have agreed to the Conference on the basis that we have proposed, namely that it should consider questions of trade and access to markets on the one hand and access to fishing grounds on the other.

We have had talks with the European Commission and we are in the process of following up with E.E.C. countries the invitations which we have already sent to them and we hope to hear formally from them in the near future. But it looks as though September, the date which we originally suggested, may prove too early and that the conference will have to be held somewhat later in the year. We regard this conference as of the highest importance for the fishing industry. We have told other countries that the United Kingdom delegation will be led by a Minister and while, of course, it is for each country—

Mr. Deputy-Speaker

Order. I am sorry to interrupt the Minister, but perhaps he can help me. I cannot relate the arrangements for this conference to the Order which is before us. Could the right hon. Gentleman help me by saying how the two can be related?

Mr. Soames

I think there is something in what you say, Mr. Deputy-Speaker. On the other hand, with regard to the amount of money involved, I think that considerable extra moneys might be required if the conference were not brought to a successful conclusion.

Dame Irene Ward (Tynemouth)

Have another go!

Mr. Soames

We have told other countries that the United Kingdom delegation will be led by a senior Minister and while, of course, it is for each country to determine how it will be represented, we believe that other countries share our view of the importance of the work which this conference will have to do.

Mr. Loughlin

Will the Minister tell us whether he has consulted the various bodies affected, the various trade associations, the British Trawlers Federation, the merchants and so on, before giving instructions to the representatives of the British Government?

Mr. Soames

This is not a matter of giving instructions to the representatives of the British Government. The process that we have been going through is to discuss with the nations who we hope will be participating in this conference, what the agenda will be. Of course, we have had discussions with the British Trawlers Federation. We shall be having other discussions on matters affecting the interests concerned before the conference takes place. There is a lot of preparation to be made for a conference of this sort, and we are in the process of going through those preparations in order that it will be successful.

Europe can together, but only together, develop rational and sensible policies for the fisheries that we have in common to the benefit of fishermen and consumers of all countries concerned. The measures of financial assistance which I invite the House to approve tonight must be viewed as only one part of the Government's policy of support for our fishing industry. Of much greater importance for the long-term future of the industry will be the successful solution of these problems, both on a national and an international level, of conservation, catching and marketing. In these the Government and industry have their part to play, and both will play it.

Mr. Anthony Crosland (Grimsby)

Will the right hon. Gentleman clear up one matter? I understood him to say that the total of subsidies amounted to 10 per cent. of the gross income of the industry. I have not heard this figure before, but if this is so it must amount to many times the net profits of the entire industry. Would that be the case? I am not trying to catch the Minister out.

Mr. Soames

The gross takings are of the order of£50 million a year. The subsidies are£4½million. There were losses after depreciation in the last year, but there were operating profits. I am afraid I could not give the hon. Gentleman the figure for which he asks.

8.15 p.m.

Mr. James H. Hoy (Edinburgh, Leith)

If I may take up the last point of the right hon. Gentleman, we are grateful for the fact that he is a little more informative about who is going to represent us at this proposed international conference than was his Parliamentary Secretary a week ago. Apparently at that time no decision had been made on whether it would be a senior Minister, or who it would be. All I wish to say on this point is that when the conference does take place—it will be very important for the future of this industry, and that is why I think it is related to the Order which we are discussing—I trust that we shall have adequate representation from all sections of the industry, including the workers as well as the owners. That is essential if we are to have a sensible solution to this problem.

I could not agree more with the right hon. Gentleman when he said that this problem cannot be settled unilaterally. We on these benches have been saying that for years, and, indeed, we have heard from the Government the case for having an international conference to deal with this problem. Inasmuch as they have now agreed on this course, we are grateful, but we are a little disappointed to hear the further intimation from the Minister that it may have to be postponed from September. We thought September was late enough. The Lord Privy Seal made his announcement in April of this year. We thought that the Government would have selected the team to attend the conference and would at least have made up their minds on what type of agenda they wanted. I only hope that a little more effort will be put into this and that the conference will not be put too far back, because it is of the utmost urgency that we get on with the job.

The Minister said that when these subsidies were being fixed certain matters were taken into account, such as changes which were taking place, including loss of grounds, new techniques, better quality and so on. He also said that we had intimated that we no longer felt ourselves bound to the three-mile limit which exists at present. This occasioned some "Hear, hears". The Minister has only given this intimation; he has taken no action. I agree that actions taken unilaterally, whether by this country, Iceland or any other country, will not solve this problem. The answer is to get international agreement. It may be that because of the circumstances of today we have got to take this action which is being forced upon us to preserve our own fishing grounds for our own fishing fleets.

The right hon. Gentleman, in reply to my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin), said that he had no figures of the average losses of the near and middle-water trawling fleets in the past year. But the Joint Under-Secretary of State for Scotland is a little better informed. According to the figures issued by the Scottish Federation of Trawler Owners, the losses last year of the near and middle-water fleets on average amounted to£2,700 for motor trawlers and£5,900 for oil-fired steam trawlers. I have not the figures for Great Britain as a whole, but these are the figures published by the Scottish Federation, and the Minister will be able either to confirm or deny them.

As regards the special grant, I am glad that the Minister rectified what he said. The Scottish owners feel that to take two bites at this little cherry is really too much. It is a very small amount. In any one year it cannot exceed£350,000, and, of course, it can be done only on a few occasions during the ten years, because the maximum grant for this purpose is£2½million. We took out the maximum last year, despite the fact that the grants were then running at their maximum rate. It is not something which one can repeat, because there will be no money to do it. This is the problem confronting the industry. Of course, the Minister can do something else. He can increase the£2½million which is at present available under the Act. Perhaps he will be compelled to do so.

I agree with the Minister when he says that all those figures must be put into proper perspective. We can do this only by examining the out-turn on the accounts for the year which has passed. One of the most misleading headlines I have ever seen in the newspapers was the one about£5 million a year more for the fishing industry. I: is, of course, nothing of the kind because, as a result of what we are discussing tonight, the fishing industry will get much less this year than it did last year. I hope that it was not the Ministry which was responsible for that headline; I can only say that every newspaper which I read had the same headline.

What we are doing, as the Minister said, is to make provision in the Order for an extra£4¾million and in the two Schemes we are dividing it between the white fish industry and the herring industry. We are doing no more than that. If we put it into proper perspective, perhaps the Press will understand exactly what we are doing.

Are the new rates of subsidy sufficient, having regard to last year's workings? Last year's workings provide some illuminating figures. In Scotland, payments due at the end of the last financial year showed that the accumulated arrears amounted to£515,800, that is,£308,000 due to be repaid on the principal and£207,800 of interest. That is what the industry had not met at the end of the year, when subsidies were running at a rate 7½per cent. higher than proposed under the Schemes before us tonight. This reveals a worsening of the position compared with the previous year to the extent of£355,700. It is not a very encouraging picture.

In Great Britain as a whole, the situation of the fleet has grown steadily worse. The total arrears are, according to the Annual Report of the White Fish Authority, on principal£746,097 and on interest£508,802, revealing that in Britain as a whole the industry has failed over the past year to meet its commitments to the White Fish Authority by rather more than£1½million. These are staggering figures, and they are to be compared with a deficit for non-payment of moneys due in the previous year of£417,000. In fact, the position has worsened by 200 per cent.

In the light of these figures, we have to consider the future. In the main, the figures apply not to the distant water fleet because most of these sections are vertical businesses rather than distant water enterprises only, except that there are some smaller concerns within the distant water fleet which are not covered by the large organisations. In the main, the losses were made by the middle and inshore fleets. The situation for the near and middle-water fleets is serious. Only last week, the Scottish Federation described it as extremely critical. In the circumstances, we must look a little further than the subsidies themselves.

First, however, let us just look at the subsidies a little further. Last week, the Scottish owners said that they thought that there should be a new formula. They felt that, in the light of the present facts, the subsidies ought to be based on need and not on the formula laid down at present. I know that any attempt to differentiate between one and the other would present difficulty, but this is the state to which they are being driven by the results of the industry.

Let us consider what will happen as a result of the Schemes. These are the figures which, I think, most people understand. If one takes the average middle-water boat fishing from Aberdeen, Granton and Lowestoft, they will all suffer substantial reductions compared with last year. At Aberdeen and Granton, the daily subsidy rate goes down from£4 13s. to£2 12s., at Fleetwood from£4 18s. to£2 9s., and at Lowestoft from£2 3s. to£1 4s. This is the sort of pattern throughout the whole of the proposals contained in the Statutory Instrument. But what it means in hard cash to the average trawler owner is that there will be a cut in subsidy of between£700 and£800 per annum.

This is a substantial cut to impose in view of the losses which the fleet has already returned. It is no use the Minister saying that this was to take it over a transitional period, because obviously it is not doing that. This was a provision laid down in the principal Act and which was reached in agreement with the British Trawlers Federation, but I am bound to remind him that it never commended itself to hon. Members on this side. We never believed that it would work from the start, and the Federation very quickly came to the conclusion that this agreement would not work in the industry. This is the position which confronts us, and we must face up to it.

It is the same with the herring industry. I was interested to hear the Minister say that the same applied in this instance, despite the improvement in the herring industry. There has been an improvement, but, as a result of it, it also will receive substantial subsidy cuts. I am sure that my hon. Friends and others will want to ask some questions about the proposal to pay 25s. per cran for commercial use. I know that at present this represents only 1 per cent. of the catch, but what is the intention? Will there be some great industrial expansion which will enable this catch to be used? Is the Minister getting rid of this section of the industry or freeing it to sell its products for industrial purposes? Is that his intention, or does he foresee any development in industrial plants to enable the catch to be used for this purpose? These are questions which must be answered.

I want to direct the Minister's attention to a new passage in the Statutory Instrument. It may have been in previous orders, but I cannot trace it. I refer to paragraph 12, headed "Conditions relating to payments for voyages" in the Statutory Instrument dealing with the white fish industry. Subsection (3) states: No grant shall be payable in respect of a voyage if the appropriate Minister is not satisfied that in the course of such voyage fishing has been diligently and vigorously prosecuted. I cannot remember having seen such a provision in any order before. However, I may be quite wrong. I should be grateful if the Minister would clear up that point.

I should like to know who will make the decision. Who will decide whether during the voyage fishing has been "diligently and vigorously prosecuted"? I think that this is a piece of nonsense and that the right hon. Gentleman or the Parliamentary Secretary had better give us a satisfactory explanation or propose an Amendment to remove it. I cannot see the purpose of it and I should like to know exactly what it means.

In its Report, the White Fish Authority says that we have to maintain the industry at its present level over the next ten years. I take it that that refers to the level of catch. But, like the Fleck Committee, it did not make any proposals about how that could be done. This is the important thing. If we are to do this, we have to decide what type of fleet we want to meet our needs.

The only excuse which I could accept from the Minister is that he has never faced up to this problem because we have to wait to see what international agreement we can get and then fit our fleet into the pattern set for Europe. That is the only logical excuse, and I am sure that the right hon. Gentleman never thought of it, but I give it to him. It would be the only tenable excuse because these subsidies will not do what the White Fish Authority wants to do—they will not give us better boats, newer techniques, better quality, or better marketing. These things must be done by the Government in conjunction with the industry, and only when they settle down to that task will they find a solution to the problems undoubtedly facing the fishing industry. What we are debating tonight will bring no solutions to the problems now facing the near and middle-water fleets. Unless conditions improve tremendously,£700 or£800 will be added to the next annual loss and out of that stage will be born bankruptcy.

I ask the right hon. Gentleman and the Secretary of State for Scotland—because the industry is vital to many parts of Scotland where it means the livelihoods of many men—not merely to pay lip service to the industry, or to the part it may play in the service of the country, but to be prepared to take the necessary action to make it possible for men to earn a decent livelihood during their working days.

8.33 p.m.

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

We have all enjoyed the speech of the hon. Member for Edinburgh, Leith (Mr. Hoy). I am not certain that he was not a little unfair when at one stage he was talking about the white fish subsidy and the automatic reduction of 7½per cent. each year. He said that Opposition Members had made their views perfectly plain and did not consider that this would be enough. There were also doubts from hon. Members on this side of the House, but the Opposition did not vote against the proposal and presumably thought that as the British Trawlers Federation had accepted it, it was reasonable for hon. Members to do so. The onus is very much on the Federation for having accepted the; principle of this scheme under the 1962 legislation. I am glad that the hon. Member mentioned the "extra£5 million" as it was called by the newspapers. This was generally reported throughout the country and gave a completely wrong impression of what the fishing industry was to obtain for the coming year.

The hon. Member's speech showed the difficulty of generalising about the industry. His experience must be very much coloured by what is happening in the Scottish ports, in the same way as my own is coloured a little by what is happening in my own constituency port of Lowestoft, where the picture is a good deal rosier than it is in Scotland. One is bound to reflect that, although some of the difficulties may be due to bad fishing, many could be overcome by good management, The management of the industry at Lowestoft is considerably better than in many other ports. No doubt I shall be shot down for having said that, but I believe it to be true.

One of the difficulties we have had this year is that the near and middle water fleet operating in the North Sea has been catching a lot more fish. This has probably been caused by the cold weather which has driven the fish further south. When we were making big catches in January and February, we were told that we were never again likely to see catches like them, but good catches have continued well into the summer and this again may to; due to the fact that colder water is now coming further down the North Sea. This undoubtedly means that at the moment we are catching more high quality fish than has been caught for many years.

The worry seems to be that although we are catching this good fish, prices in the shops are not rising, and in fact the demand for fish continues to fall. I think that this highlights the main problem of the industry today, which is to catch the right quality fish, and, having caught it, to sell it properly. We must concentrate on getting the marketing side right, be- cause unless we can stabilise the quantity of fish sold, and improve its quality and its marketing, it will not matter what we do on the catching side, which I think will largely look after itself.

I am certain that the distant water fleet is bound to decrease in size over the next few years. It has been catching a lot of poor quality fish for which there is no sale. I think that the owners of the big companies are capable of making the adjustment themselves, and my right hon. Friend's job will surely be to see that the White Fish Authority does not give more grants and loans to build new vessels than is justified by the scrapping policy.

We all welcome the setting up of this fishing conference, but I wonder whether we understand some of the difficulties that my right hon. Friend will have, and is having, in getting the other countries of Europe to sit round the table to discuss these problems with him? I was lucky enough to have the opportunity of going to Lisbon and listening to some of the remarks of our E.F.T.A. partners about the conference. They expressed a desire to co-operate to the full in setting up a fishing conference, but I was left with the impression that they were in no hurry to get round the table with us.

I congratulate my right hon. Friend on the initiative that he has taken, and which I think he is pursuing urgently. I wish that other countries, whether E.F.T.A. or E.E.C., would regard the conference with the same degree of urgency as we do. I hope that we shall get this conference going by the end of September, but if we do not, I hope that we shall hold it as soon as we can. It would be better to hold it later in the year rather than to try to rush it through and get nowhere with it. I can see only too well that if we try to hold a conference at a too early date it will get nowhere, and the spadework had better be done properly first.

The fishing industry is of vital importance. No one would doubt what the hon. Member for Leith said about it. Like every other primary producing industry, it has difficult days ahead of it. It is producing a commodity in competition with many others. One has only to think of the introduction of the broiler chicken to realise that this could have an enormous impact on the sale of fish, but if the merchanting and catching sides of the industry are prepared to co-operate with one another, I believe that the industry will preserve its own future and enjoy an expanding market. But if, as one fears at the moment, the industry is split up into different sections with the merchants in one part, the retailers in another, the fish friers in yet another, and the catching side standing aloof and not taking much interest in what happens, I think the industry will be in grave difficulty. I hope that my right hon. Friend will do all he can in the next year to bring the various sections of the industry together. This is of great importance. It is with this very much in mind that we welcome the fact that the industry, in England at any rate, is prepared to accept these subsidies for the coming year.

I am certain that from the point of view of my port of Lowestoft a supplementary estimate for six months—when fishermen can see what they are doing for the rest of the year—is much to be preferred to an estimate for the whole year. It is a supplement to the ordinary subsidy, and if the fishermen do not want it they should not have it. On the other hand, if they need it badly, as they may do—because in fishing conditions can change very quickly—by all means let them have it. With those words, I welcome the Schemes.

8.41 p.m.

Mr. J. Grimond (Orkney and Shetland)

Following your advice, Mr. Deputy-Speaker, I shall not say very much about the forthcoming conference, except that we realise that it will be of importance. I welcome it and hope that it will succeed. I have only three points to make about it. First, I hope that those who go to it will be very well briefed about the special problems of certain parts of the Scottish coast. Secondly, the question of preservation, which the Minister mentioned as being among the subjects to be discussed, is an important one. Thirdly, I hope that catching methods will be discussed.

This brings me to the question of the herring industry. This year Shetland has had a good herring season. Up to 10 days ago there were good shoals of herring, and prices were good. They have gone now, but even so the season has been successful. As the Scottish boats have gone, I take it that they are getting herring off the Buchan coast. Therefore, the outlook is not too bad.

Nevertheless, we are seeing more and more of these powerful fishing fleets in the North Sea. There are the boats of the Russians and the Poles, and lately there have been 10 or 12 Swedish boats at Lerwick, all trawling for herring. Perhaps it is a pity that they trawl herring. It brings the fish ashore in a bad condition, compared with the condition of herring caught by drift netting, but this is the way that they operate. Some years ago I went out with a well-known skipper, George Leslie, who had an experimental trawl at the stern of his boat. It was a mock-up affair. I do not know whether the Scottish Office or the Herring Board is carrying out experiments at the moment on trawling for herring, or what the view on trawled herring is, but this is a matter which requires close attention. It must be a very powerful method of catching herring. These steel ships, with their up-to-date apparatus, make our ships look rather old-fashioned, to say the least. One wonders how long the drift net will be able to hold its place.

I now want to turn to a specialised matter which is of great importance and urgency for some boats in my constituency. As the Scottish Office at least will know, one difficulty about white fishing at Lerwick is that there is a very small market in Shetland. This does not matter so much to the large boats, because they can either run to Aberdeen or ice the fish aboard and send it down in good condition with the south bound steamers. But the small boats have to look to the market in Lerwick or Scalloway. After there had been a crisis last with the two main buyers—Mac Fisheries and Ice Atlantic—to take the landings at Scalloway and Lerwick, but this arrangement runs only until April in the year, starting again in September.

The reason for this is that Mac Fisheries requires its plant during the summer for freezing herring. At the moment neither Mac Fisheries nor Ice Atlantic is buying white fish; their stores are full and the freezing plant is fully occupied with herring. So, for a period during the summer, practically the only outlet for the catches of the small boats in Shetland—of which there are 15 or 20—is, I am afraid, for, conversion to meal and oil. The catches are sent across to the gut factory in Bressay for processing. The fishermen have been getting a price of 1s. 10d. which is composed of 9d. for the price and 1s. 1d. subsidy. The subsidy for ungutted fish not for human consumption is now being reduced to 6d. This heavy reduction of 7d. will make the fishing unremunerative. I do not regard this as a satisfactory situation even at the best of times. At present good quality haddock is being caught. To my mind, it is wrong that good quality haddock should be sent to a gut factory. So I do not think the situation satisfactory even when it is working well.

But now we are faced with a period during August when there is no market for the fish for human consumption and there is only the unremunerative market provided by the gut factory. For a period the position of the fishermen will be serious. In the long run I think that we should attempt to find another outlet for their catch so that it may be used for human consumption. It may well be that we should go in for bigger boats. But there are these 15 or 20 boats and one or two of them are in places where the Scottish Office is trying to encourage the fishing, starting more or less from scratch. I hope that the Scottish Office will give this problem urgent attention to see what may be done in conjunction with the White Fish Authority.

I do not know what it is possible to do. It is plain that no one can amend the Order and therefore it is impossible to get a greater subsidy maintained for an extra month. It may be possible to make up the difference to these boats in other ways or to find some temporary outlet for the catch. One would think that what ought to happen is that the fish should be well iced and boxed and sent to Aberdeen, But in summer the fish would have to be well handled, and the crews find difficulty in handling the catch on their small boats.

Another thing which could be done would be to try to bring some other buyer to Lerwick or try to persuade Mac Fisheries or Ice Atlantic, even though reluctantly, to take the small amount of fish which is landed by these boats. The maximum landings would be about 240 boxes a day. Although there are 15 or 20 boats they are not all fishing. It would be a serious blow if the crews of these boats left the fishing. It would seem a pity that, for the lack of a market for a comparatively short time, great difficulties should be occasioned to their families. I am sorry to worry the House with this problem which is small as regards the numbers affected though serious. But this is an occasion when we speak of our constituencies, and my constituency will definitely be gravely harmed by the reduction of the subsidy from 1s. 1d. to 6d.

8.48 p.m.

Mr. G. R. Howard (St. Ives)

I make no apology, as did the right hon. Member for Orkney and Shetland (Mr. Grimond), for mentioning points affecting my constituency for this is a subject which is very important to my constituents. I am sorry that the Minister is not in the Chamber at the moment because I wish to praise him. Normally I am rather critical of my right hon. Friend on these occasions. He mentioned that it has been a bad year for the pilchard fishing in the West Country. I wish to ask what has been happening about the research into catching methods which the White Fish Authority has been conducting for the past two years. We were told that we should receive an answer soon last September, but we still had no answer. We suppose that the research is proceeding. The matter is one of great importance to my constituents.

I wish to refer to the extraordinary statement on page 4: No grant shall be payable in respect of a voyage if the appropriate Minister is not satisfied that in the course of such voyage fishing has been diligently and vigorously prosecuted. This seems to me a most extraordinary thing to put in a scheme. How anybody can say whether this is being done or not I do not know. I should like to point out that this is one of the reasons why we have been pressing for years that the smaller inshore boats, below 60 ft., should get the day payment. This is one reason why we have had our difficulties. I will not weary the House because I have referred over and over again to the question of unemployment benefits as they affect inshore fishermen. Because of this men tend not to go to sea, and perhaps when they read that paragraph they will be even less inclined to go because of the difficulties which I have mentioned so many times.

I come back once again to the shell fish industry. We have been on this question of limits for 14 years and we were told over and over again that nothing could be done, but, thank goodness, something has been done at last. Therefore, as long as I remain here I shall go on pressing this case for the shell fishermen. In my constituency in Porthleven they are beginning to freeze shell fish, and this will help.

I should like to refer again to the matter of the deputation which I took to the Minister, when we asked if the Government could give some assistance towards the provision of some central plant in Cornwall which would not only deal with processing and freezing fish but also with horticultural produce as well.

I am glad that the Minister has come into the Chamber because I wish to say publicly how grateful I am to him for what he has done on this question of extension of limits. I know that he personally has had a lot to do with it. He served notice in time to take action next year. A year's notice has to be given and it was given in time to reserve our right to extend.

The House will know of the appalling menace of the factory fishing methods. It is reported that in the next few years the Russians will have 750 factory trawlers, and this will be a terrible menace. We have already seen the effects in our part of the world where, by a sort of minesweeping operation, they steam up and down and drag everything out of the sea. This is a very great menace and it has to be dealt with. I am pleased that the Government are doing something about it.

As to policing, we shall have to think carefully on how it is to be done. I am going to make the somewhat revolutionary suggestion that it should be done by helicopter. I think there is no reason why it should not be done in that way, with the appropriate fishery protection vessel in the offing, so that it can be called up at the right moment. We know that helicopters have other jobs to do, such as air-sea rescue, but I suggest that helicopters might be very useful in this regard as they are when used by U.S. coastguards. I hope that the Government attitude will not be too appeasing as on many occasions I have thought that the Foreign Office ought to have "appeasement" written over its door. I hope the Minister will not be swayed by the objections of the French on some obscure agreement which is resting in the dust of some Foreign Office archives. I hope he will not pay too much attention to this as they have not paid very much attention to us in the recent past.

I welcome the Minister's initiative and his preliminary efforts in Lisbon towards convening this conference. We all know that it is extremely necessary at this time. I wish to add my word to those who have said that we should have adequate representation at the conference. Before they set out, those going to the conference should have adequate and frequent consultation with my right hon. Friend. I am sure that he is as pleased as I am to see the setting up of the National Association of Inshore Fishermen, a body of which the hon. Member for Edinburgh, Leith (Mr. Hoy) shares with me the presidency. It is a body with the aim of trying to co-ordinate the views of inshore fishermen and I hope for great things in that regard.

My right hon. Friend mentioned the imbalance between E.F.T.A. and the E.E.C. countries. This is extremely important. The Scandinavian countries have large catching fleets and not many people to sell to, while the E.E.C. countries have large populations and not many ships catching fish, but where do we come in? There is often a danger that the Board of Trade is so keen to encourage everything to improve our exports that it is apt to allow things to slide in, such as imports of frozen fish. That is a position which must be watched very carefully. I hope there will be adequate co-ordination between the Ministry of Agriculture, Fisheries and Food and the Board of Trade on this question.

Mr. Soames

It will not have escaped the notice of my hon. Friend that in the agreement we made within E.F.T.A. for the acceleration of tariff reductions fish were mentioned, but there was no acceleration or reduction in tariff when fresh fish or the present fillets were concerned.

Mr. Howard

I know that, but I want to be quite sure that that is kept to.

I take the point made by the hon. Member for Leith about long-term policy. While we welcome these subsidies and the help the Government give to the industry, we have to think about the long-term policy. We have had the Fleck Committee and all sort of inquiries into the industry, but they have not produced a long-term answer to its problems. We have dealt with limits, but what is thought about the future of factory ships and different trawling methods and the best grounds to explore in order to catch fish? What sort of ideas are there on first-hand sales? What sort of ideas are there on marketing? Is the supermarket to come in and direct selling to big stores? We want some more definite answer on all these things than we have had in the past. There have been inquiries, but no solution.

There is wholehearted effort by the Government to try to keep the industry going, but we have to face the question of its long-term future. For these reasons I welcome the idea of this and any other conference which can bring people together to develop this great industry which, as my right hon. Friend said, is not so prolific as some people might think. We have to think seriously of conservation and the long-term future. While I welcome the proposals and once again thank my right hon. Friend for what he is doing, I hope that the Government in the year after the conference will be able to give us views a little more definite on the long-term future of this great and vitally important industry.

9.0 p.m.

Mr. Charles Loughlin (Gloucestershire, West)

I am very much tempted to follow the hon. Member for St. Ives (Mr. G. R. Howard) and to have a little fun at the Minister's expense in relation to the paragraph of the Scheme to which my hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) referred. Even if the three Ministers went to sea and went fishing, I doubt whether they would be able, even though they were on the fishing grounds, to determine whether the fishing had been diligently and vigorously prosecuted. The Joint Parliamentary Secretary made a comment under his breath, but I would tell him that so many things are involved in fishing that I question whether he would be able to answer that point even if he were on the fishing grounds. I think that the Minister might look at this provision, because it is nonsensical.

I want to follow the hon. Member for St. Ives on the last point which he made—the policy which the British fishing industry will pursue in the next 10 years. It is accepted by all sides of the industry and by the Minister that these 10 years are the important years in the industry's future. My hon. Friend the Member for Leith closed on this note. But there can be no major policy in the fishing industry until the Government afford the industry the importance and significance which it rightly deserves. We are debating the industry earlier this evening by coincidence, by a slip-up; somebody did not get to the beat as quickly as he should have done. Had he done so, we should have been debating the industry about 2 a.m. This is a disgrace. I believe that the fishing industry is of sufficient importance to the country to justify a full day's debate. I put it to the Minister that he ought to consider the future policy to be pursued by the Government, if they are to be here for long, and the industry as a whole, and that we ought to have a debate in the House on the industry's future policy.

At present the industry is divided into three separate component parts without any co-ordination of any kind, although each of the component parts is vitally dependent on another. It is true that in certain aspects of the industry there is a vertical chain, which means that there is some co-ordination of policy—not much, but some. There is not sufficient even in that section of the industry, and I shall refer to that in a moment. We have the producing side with a complete absence of organisation for fishing; it is pursuing a policy which is most costly in time and money and which compares unfavourably with that of every other fishing nation in the world.

Then there is the merchanting side. In each port there is a multiplicity of merchants working on the basis of a domestic industry. I understand from the Grimsby merchants that pre-war there were 600 merchants in Grimsby, as compared with 400 today. I ask hon. Members to imagine the colossal waste involved in 400 merchants operating in such an industry. There is no control over inland merchanting.

I am fortunate in that I have been deep sea fishing and have gone through most of the processes involved, even inland wholesaling and retailing. There is more money lost to the industry by some of the malpractices in the inland markets than I care to think of. We are putting into the industry subsidies which, according to what the Minister said tonight, are designed to assist it for the next 10 years. I remember our discussions on the Bill under which these subsidies and Orders arise. The deep water fishermen then made a plea—I should say that the companies made a plea, because it is the major combines in the industry that make the plea and not the fishermen themselves—that, if we extended subsidies to the distant water section of the fleet, they would organise themselves and explore possible developments.

The hon. Member for St. Ives asked whether it would be possible to go in for factory fishing, whether it was best to devise the fleet on the basis of stern trawling, or whether it should be a mixture of the refrigeration and the factory ship. The plea was that, if we gave them subsidies in the same way as we were at that time giving subsidies to the inland and middle water sections, they would use the subsidies to organise themselves on the producing side. We have just heard that the British Trawlers Federation is in such dire difficulties as to the future organising of its side of the industry that it wants to limit landings and fishing and, all in all, it wants to contract.

The hon. Member for St. Ives talked about fleet fishing. He condemned the Russians and the Poles for fishing in this way.

Mr. G. R. Howard

I did not condemn them. I merely said that they were fishing in this way and that, unless we had an extension, there would be a grave threat to our inshore fishermen.

Mr. Loughlin

I invite the hon. Gentleman to read in Hansard tomorrow morning what he said a few minutes ago.

I went to sea last year. The best way to examine this problem is to go to the fishing grounds and see what is going on and what the deficiencies are on the producing side. I had the privilege of being a guest aboard the Grimsby trawler "Northern Jewel" owned by Associated Fisheries. We went to Bear Island and I went along for two main reasons. I wanted, first, to bring myself up to date on the latest navigational and fish-finding aids. Great strides forward have been made with this equipment and I wanted to learn about the latest methods. Secondly, I wanted to see if any changes had taken place in the organisation for fishing as a result of the introduction of the latest instruments.

I saw just how wasteful is the British fishing industry. I am not being discourteous to the company of which I was a guest. After my visit I prepared a memorandum and sent it to the firm. I indicated the sort of criticisms and suggestions I had in mind, pointed out that I intended to make use of the information I had gained but said that I would gladly consider any information they would wish to give me on my views. I have yet to receive a reply from the company. It seems that it is so much concerned with the industry and the importance of fishing that when an hon. Member of Parliament makes certain suggestions and criticisms it does not take the trouble to reply to his letter. I say this without wishing to be discourteous to the firm.

The ship on which I was a guest was skippered by probably the most efficient captain I have ever known—and my brother is a skipper. His approach, including his attitude to the latest scientific aids, was excellent. He had all the necessary records with him and, particularly from the scientific point of view, he is probably more efficient than a great proportion of the skippers fishing from this country. This ship is owned by a company within a combine, and within that combine are a large number of companies. I regret to say that there is absolutely no co-ordination of the activities of the various subsidiaries and, to prove this, I give merely one example.

When we were on the fishing grounds there was a fish stop. On the V.H.F. radio a conversation was going on and I gathered that the fish were running in a certain spot. We were searching for fish, as were a number of Grimsby and Hull trawlers belonging to the same combine. We eventually discovered that a ship of a sister company to the "Northern Jewel" had discovered where the fish were running. That sister ship was fishing on grounds along with the Russian fleet, the German and Scandinavian fleets and, more important, the Norwegian ships which were fishing for the British market. We were searching for fish and I thought then, as I do now, that all the time that trawlers spend searching for fish costs a great deal of money. If British trawlers are wasting time and money on the fishing grounds the subsidies are being wasted.

What happened was that before the fish ran off the other countries' ships had got their pilot boats away and were searching for the fish. They transmitted their information back to the ship that was in charge of the fleet, and they all steamed off. We eventually came across them again, fishing as fleets. That means that they were producing fish at a far cheaper rate, because they were able the catch in quantity without waste of time or money—because it must be remembered that when a vessel is finding the fish it is using a lot of expensive fuel. If we were producing fish at the same rate, I am convinced that these subsidies, particularly for the deep-sea side of the: industry, would be such chicken feed that they would not matter.

When considering paying these subsidies we must first get clearly in our minds what we want to do. Do we simply want to bolster up an industry that does not desire to be efficient? Associated Fisheries, apparently, does not want to know anything about the co-ordinating of ships on the fishing grounds, and if that is so it cannot plead with us far assistance. The situation is fantastic. If we have an enormous number of ships operating in the same combine for the same owners but so organised as to make ours the most inefficient industry in the whole of the Continent of Europe, at least, and we are then asked to subsidise the vessels, it is in the nature of a scandal.

We must tell the industry, tell the British Trawlers Federation, that we are prepared to give it every possible assistance, that we will accept that it makes a tremendous contribution to our food supplies and to our balance of payments problem, and is vital in defence, but that if it wants Government assistance for an unlimited period it must be prepared to make itself a little more efficient.

As to the forthcoming conference to which the Minister has referred, it will be recalled that I asked him whether he intended to consult various sections of the industry. I understand that the merchants whom we met quite recently have complained that they have never been consulted by the Minister on the Conference or on any other matter. I say to the Government that the only possible way to secure efficiency in the industry and a successful conference is by obtaining the opinions of all sections of the industry, including, as my hon. Friend the Member for Leith said, the workers' side.

The fact that I criticise the industry does not mean that I am standing on the sidelines carping about its defects. I think that the industry will have increased difficulties next year when the limits are extended to twelve miles, and in waters other than those to which the limit applies at present. At the moment a very high proportion of our Iceland fleet is fishing round the 6-mile limit. I received a letter at the weekend from a friend who is a working skipper in the industry. He says that while he is not too badly off at present he does not know what will happen to British fishermen fishing the Iceland grounds in twelve months' time.

It is essential that the Minister should look again at our relationship with Iceland in the matter of the 12-mile limit, because this will mean in part a 24-mile limit. It will mean that the Iceland fishermen will scoop the cream of Iceland fishing. This has nothing whatever to do with conservation. It means that the Iceland Government are hoarding to themselves a fishing ground which traditionally has been part and parcel of the British fishing grounds.

I do not think that we should have a 12-mile limit here, but in our attitude towards other Governments on the question of fishing limits we must be a little tougher than we have been in the past. I do not believe in gunboat diplomacy. I do not believe that although possibly from a military point of view we could bully Iceland or bully Denmark in relation to the Faroes we should do that. That type of diplomacy and of bullying is a bad thing in which to indulge, but we, too, ought not to be bullied. We should at least be saying that if the attitude is to be that the British fisherman is to be denied the traditional fishing grounds we shall have to look clearly at the question of the landings of fish in this country by the nationals of countries which seek to exclude us from those fishing grounds. I hope the Minister will exercise his authority with his Cabinet colleagues so that we can have a full-dress debate on the problems of the fishing industry, which will enable us to formulate a policy acceptable by both sides of the industry, and that he will at least attempt to introduce into the industry a policy that will be worth while not only for the ten years for which these subsidies are supposed to operate but beyond that period.

9.26 p.m.

Mr. Patrick Wall (Haltemprice)

When the hon. Member for Gloucestershire, West (Mr. Loughlin) started his speech he was far from fair. He implied that the Government took little interest in the fishing industry. He knows as well as I do that we spent long hours debating the 1962 Act which is an extremely important Measure.

The hon. Gentleman has already, in a way, paid tribute to the Government for calling this fisheries conference, when he said that this conference will be vital to the future of this country's fishing industry. Criticisms have been levelled against the state of the industry, but the matters complained of were largely beyond the control of the industry. I am thinking of matters like fishery limits, and so on.

The hon. Member referred to the timing of the debates on these subjects. Up to about three years ago I would have agreed with him. We seemed to make a habit of debating fishing at midnight. But I think it is true to say that due to pressure from the Minister, and through the usual channels, we now normally debate fishing at a reasonable hour. I cannot see a queue of Members waiting to speak, and I should be very surprised if this debate were to continue until a very late hour.

Mr. Loughlin

I should like the hon. Member to be absolutely fair. I said that we were by coincidence debating this matter early tonight because somebody on the Front Bench, either on the Government side or on our side of the House, failed to rise to his feet when the previous Question was put.

Mr. Wall

I apologise. I remember the hon. Gentleman made that point. But it is my understanding that it has always been assumed that this debate would start at some time between 7 o'clock and 8 o'clock, so I do not think the hon. Member was quite fair in his criticism.

The hon. Gentleman said that the industry was too compartmentalised—in other words, that the catching section was too divorced from the merchants and so on. I entirely agree. The burden of the hon. Member's speech was, however, devoted to criticising the catching section of the industry. I think he was a little unfair. We heard along account of his experiences, and I wondered what he was getting at. I understood him to say that trawlers of other nations seemed to be able to find fish, communicate with other vessels in the fleet, and follow the run of the fish better than we can. I should have thought that the trawler on which he was sailing was unlucky, for I understand that our fleets do communicate by R/T. I may be rather unkind, but it seemed to me that the real burden of the hon. Gentleman's complaint was that his suggestions had not received a reply from the company concerned and that he was cross about it.

The hon. Gentleman referred to Iceland. I would refer to the danger not of the existing 12-mile limit but of the possibility that the Icelandic Government might try to push it up to 100 fathoms. That would be very dangerous indeed. However, our agreement with Iceland which ended our last dispute includes the safeguard that any further dispute arising from any further extension of limits could be taken to the International Court.

The burden of the speech of the hon. Member for Edinburgh, Leith (Mr. Hoy), who opened for the Opposition, was that the industry had suffered pretty severe losses this year, as it did last year, with particular reference to Scotland. All English Members accept that Scotland has had severe losses. I do not think that one can say that these subsidies affect the Scottish industry unfairly. If my arithmetic is correct, the Scottish fleet represents something like 30 per cent. of the total, and I believe that it is receiving about 40 per cent. of the subsidies, so I think that the balance is in Scotland's favour, as it should be, and is about right—

Mr. William Ross (Kilmarnock)

We have more losses.

Mr. Wall

—and 40 per cent. of the subsidies which should compensate in some way for the losses. I suggest, therefore, that the subsidy is going where it is mainly needed.

I take it that it will not be argued that, because the industry has had a bad year, the whole design of the 1962 Act to cut the subsidies by 7½per cent. each year and tail them off in 10 years is wrong and that we should pay more subsidy to compensate for the greater losses this year. If that were the argument, it would not be based on reason. The truth is that we actually caught more fish last year, but the fish fetched less money. In other words, an answer to the problem lies in quality. If we caught better quality fish, the industry would not have such severe losses as it has today.

Mr. Hoy

The hon. Gentleman should take his argument a little further. He, together with other hon. Members, met the retail merchants recently. They, perhaps, have benefited, but the catching industry, which is what we are talking about now, says that it has had to bear increased losses but there has been no corresponding reflection in reduced prices to the consumer. The price to the consumer has remained the same.

Mr. Wall

I accept that, but I think that the point I was making is clear to the hon. Gentleman. The industry has had two bad years, and I suggest that we must examine the background of the problem as it affects the two principal sections of it, the catching section and the merchanting section.

As the hon. Member for Leith reminded us, the returns to the producers fell by£2½million last year while, at the same time, the purchaser in the fish shop and the fish and chip shop gained no benefit because their prices did not fall. Why was this? There are certain basic reasons. One is that we have too large a fleet. The merging of the distant and middle water sections has meant that too many vessels are fishing off Iceland, and to a large extent off Bear Island and other areas. Also, of course, the extension of limits off Iceland and, next year, off the Faroes makes fishing more difficult, particularly fishing for quality fish. I understand that 60 per cent. of the vessels which were constructed with grants and loans are, in fact, in arrears on their annual repayments, showing that this section of the industry is not in a very happy position.

When we met the merchants, I was impressed that their theme song was "Better quality". They say that, if they had better quality fish, a lot of the trouble would disappear. Not only better quality is required but better public relations or better advertising. Obviously, schools and institutions try to buy fairly cheaply and sometimes receive poor quality fish. If a child is given cheap fish which is rather unpleasant, he does not buy fish when he grows older. It is most important that good quality fish should be sold, and that it should be bought particularly by the schools.

One wonders, also, whether the merchants could do something to help themselves. It has already been said that there are 400 merchants in Grimsby. This is a very large number, and there seems to be a good case for rationalisation.

Against this background it has been suggested that supplies should be limited to 15 million cwts. a year and that 3 million cwts. of this should be imported. This, of course, would require a licensing system and statutory minimum prices, and the whole scheme would have to be controlled by a special organisation or Fish Supplies Board. The suggestion has merits; under it, the producer would get a fair return for his fish, and it could mean better quality for the consumer. But it also has great defects because, as hon. Members on both sides have pointed out, this is a restrictive scheme and it is going against the whole trend of world trade. We are trying to increase trade. Therefore, it did not, and I think rightly, receive a very good Press. Again, it must depend on foreign agreement. If we restrict our own markets, we must restrict imports, but will other countries agree to that?

The industry is facing difficulties which sometimes are not within its own control, such as reductions of its traditional fishing grounds and demands for better quality fish, which create a need for a different type of ship. The industry in Hull has almost completely re-equipped itself since the war with modern deep water vessels. Now it probably needs ships like the stern-fishing "Junella" which can freeze fish on board. This means further sums in re-equipment when the majority of the fleet are already modern ships. In other words, it looks as if further money will have to be spent, which means that some will have been wasted.

It is of supreme importance to have a conference to try to get agreement between the various fishing nations not only on markets but on limits. The Minister pointed out that this necessitates agreement between members of the European Economic Community and members of the European Free Trade Association. They must come together. I think that the industry would indeed render a service to the world if it could come to such an agreement. Agreements between the Six and the Seven have not been very frequent or notable!

Obviously British limits must be discussed at this conference. There is a very strong case for extending the British limits. Surely what we really want is a standard limit throughout Western Europe. It may be six miles or it may be 12 miles, but let us at least have a standard limit, and at the same time have similar rights of landings and common agreement on the setting up of processing plant among the countries which sign whatever agreements come out of the conference.

It is clear that this conference is vital to the future of the industry, and we cannot get much further in discussing the type of fleet that we want until this conference has met and until, as we all hope, it reaches agreement, because, whatever is to be done in the future, must be done in conjunction with other fishing nations of Western Europe.

Finally, may I say a word or two about the White Fish Authority, which, after all, administers all the loans and subsidies that we are discussing. The Authority has been in existence for 12 years. One wonders how much it has done for the industry. Obviously, I should be out of order if I went too deeply into this question, but I wonder whether my right hon. Friend would make it clear to the new chairman, who has an excellent record, that the great fishing ports of this country where the Authority is not very popular would be prepared to pay the new levy and to support it provided it did something positive for the industry and does not duplicate research and advertising which the industry is carrying out itself.

I believe that this is the last chance for the Authority, which is an expensive organisation. It must show the industry that it is working for the industry and is doing a special service for it. If it cannot prove this, I commend to the Minister's attention an editorial in the Fishing Newsof 12th July, which suggested that it might be replaced by four fisheries boards for England, Ireland, Scotland and Wales, I will not develop that point because I should be ruled out of order if I did. I commend this view to the Minister and hope that he will make it clear to the new chairman that the industry expects the Authority to do the research that is needed but not to duplicate work which is already being done by the various sections of the fishing industry.

9.39 p.m.

Mr. Anthony Crosland (Grimsby)

I shall be very brief because most of what I feel at the moment concerns either the question of grants and loans or the rôle of the White Fish Authority. Unlike the hon. Member for Haltemprice (Mr. Wall), I shall leave that to a more suitable occasion next week when we shall be discussing the doubling of the levy.

I want to make three brief points, but before doing so I must deal with the references which the hon. Member for Haltemprice made to the speech of my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin). The hon. Gentleman totally missed the point of what my hon. Friend was trying to say. My hon. Friend was making the well-known point—it is well-known at any rate to anyone who has been trawling—that whereas foreign trawlers tend to fish in fleets British trawlers tend to fish in highly competitive individual units. Unlike the foreign trawlers fishing in fleets, British skippers typically do not exchange information about where the fish is. My hon. Friend was absolutely right to say that this was not a very efficient way of fishing and I could not see that he merited the rebuke which the hon. Member gave him.

Mr. Wall

The point I was making was that British ships in the same company do exchange this information. This is how they find their fish.

Mr. Crosland

The hon. Member's knowledge is slightly out of date in this respect.

The three points which I want to make are all brief. First, looking back to 1962, the trouble with the industry was quite simply that production went up and consumption went down. Those are the two main figures which stand out in the calculations, and they led to lower average values for production. There are two possible alternative ways of dealing with this. One is the way which the British Trawlers Federation wants, which is to reduce production, and the other is to do something about increasing consumption. I very much agree with those hon. Members who have stressed that there cannot be any question of accepting some B.T.F. inspired restriction plan until far more has been done by the industry itself to improve the distribution and marketing side and to increase consumption by increasing quality and the efficiency of distribution.

The second point concerns the Minister's remark about subsidies coming to 10 per cent. of gross income. When I pressed him on this, he went on to say that profits in the industry were virtually zero so that the subsidy amounted to the whole of the industry's profit, as it were. This gives a correct impression provided that one is not thinking in terms of actual financial units in the industry. If one is thinking in terms of trawlers, it gives an accurate impression, but if the trawlers are owned by particular firms and one then thinks in terms of those firms, it gives a rather false impression.

For the two largest firms in the industry, Ross and Associated, trawling amounts to less than 50 per cent. of group turnover. Ross Group trawling is only about 8½per cent. of total group turnover and for Associated the figure is about 38 per cent. Most of the rest of the turnover is perfectly profitable and although these two companies had a bad year in 1962, with a decline in profits, over the last five years—and I am happy to say this because the prosperity of Grimsby is founded upon them to a considerable extent—there has been a substantial rise in trading profit, net profit, and the amounts earned on ordinary capital and paid on ordinary capital.

This has always been one of the difficulties about subsidies. We all want to pay subsidies to the industry, but this involves paying money to companies making very healthy levels of profits. I do not know a way out of this. It would be very hard to discriminate between one company and another and it may be that there is no solution, but it remains an anxiety about the whole subsidy scheme that while all the money goes to individual vessels which need it some goes to companies which do not.

The third point is that we have heard a lot from the British Trawlers Federation and others about the threats which imports pose to the prosperity of the industry. But imports cannot be used as the scapegoat for 1962, because in that year they showed a rather surprising and sharp decline. One of the few encouraging things about 1962 was that it was a year in which the balance of imports and exports for the fishing industry changed substantially in our favour. There was a marked decline in imports and a marked increase in exports.

I very much welcome this increase because a Grimsby firm, Britfish, is largely responsible for it. It has been extremely go-ahead in opening up markets in frozen fish, in Soviet Russia and Australia particularly, but all over the world. It is an encouraging sign that these efforts are now beginning to reflect themselves in steadily rising export figures.

9.45 p.m.

Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)

I agree that herring fishermen have had a better year this year, and naturally I am very pleased that the grounds off the Scottish coasts have proved more lucrative than they have in the past few years, but the subsidy for these fishermen has been cut, and although it is true that they have made more money this year than in previous years, the fact remains that they are as subject to the cost of living index as anybody else. As prices rise, the cost of their materials increases. They have to pay more for their nets and other equipment, and although they may make more of a profit, they find themselves having to pay more on outlay to make their profit. This cut in subsidy is a serious matter to them.

In particular, I draw attention to the change in the direct grant of 25s. per cran on all herring sent for fish meal and oil. Fishermen are angry about this. My right hon. Friend can say that only 1 per cent. of the fish caught last year was used in this way by the industry, but last year fewer herring were caught than in any year of which I know. In a good year when many herring are caught this market is of prime importance to the fishermen. It is used for absorbing the vast majority of their catch if they catch anything like the number that they used to do in the old days. They are now told that they will get 25s. a cran for their catch this year, and they do not know what will happen in the future.

What, they ask, is the purpose of the Herring Industry Board? The indications are that they are going to be responsible for marketing and selling their catch themselves. The whole business is being put back into their hands. A field in which the Herring Industry Board had a virtual monopoly for several years is suddenly handed back to them, and they are told to get on with the job. Not unnaturally this make them angry.

I often wonder what position in the administrative life of this country is comparable to the position of the Herring Industry Board and the White Fish Authority. The National Coal Board runs the coal industry. The Railways Board runs the railways. The Herring Industry Board and the White Fish Authority are there, and have a big influence on the industry, but they do not run it. I often wonder what the farmers of this country would think if the allocation of their subsidies was considered not to be a normal function of civil servants. Speaking as a Scotsman, I regret very much the apparent lack of faith in the Scottish Office which appoints two large boards to administer an industry, which could do it itself if it was given the chance and the necessary co-operation with the Scottish Office.

This has one other serious consequence. It means that the fishermen take less and less interest in the administration and running of their industry because they feel that there is so little they can do about what is happening in it. I heard on the telephone tonight that representatives from my part of the world were asked to discuss these Orders in Edinburgh today with a view to their point of view being put forward during the debate in the House tomorrow. If this is so, they were completely misinformed, even about the date, but at any rate it is significant of the feeling that they have, that their interest in the progression and development of their industry is increasingly being disregarded. Personally as a general rule I would prefer to trust the wisdom of men who have to go down to the sea in ships and make them pay rather than those who simply sit in comfort in Whitehall or Edinburgh.

There are two other matters to which I wish to refer. One was raised by the right hon. Member for Orkney and Shetland (Mr. Grimond) who referred to the use of trawls to catch herring. This is an experiment which is being conducted by the Herring Industry Board.

It is a very destructive way of catching herring. Many people in the industry wonder whether it is wise to continue with this kind of research and create a catching process which could sweep the seas in exactly the same way as we accuse the foreigners of sweeping the seas at the moment. If, as I hope, the extension of our limits comes before too long, conservation will be as important for our inshore industry as the catching of fish, especially herring. I am certain that we shall be able to catch all the herring we need for our own market by the traditional methods, without having to use the trawl at all.

I want to make one final point about the conference which we have discussed so much this evening. It is of great importance to Scotland. There seems to be some disparity of view in the industry about this conference, and about many other matters growing up between the British Trawlers Federation and the inshore fishermen. The inshore fishermen of Scotland are a tremendously important part of the country's economy, and I hope that in the course of these discussions their voice will be given due weight.

9.51 p.m.

The Under-Secretary of State for Scotland (Mr. R. Brooman-White)

The discussion this evening has covered three Statutory Instruments affecting all the main sections of our fishing fleet. Attention has naturally focussed very much on the problem of the major trawling ports. I in no way underestimate the difficulties to which the hon. Member for Edinburgh, Leith (Mr. Hoy) and others have referred, and which affect this section of the industry, but it would be right to view the fortunes of this section in their true proportion, and in relation to the fortunes of the other sections—the inshore and the herring fleets—and the contribution that they make to our fishing industry as a whole.

The trawling fleet provides the main balance of the catch in the United Kingdom, but it employs only about 12,000 fishermen, whereas it is estimated that 15,000 are employed, either full-time or part-time, in the inshore and herring fleets. The inshore fleet plays a much larger rôle in the life of Scotland. About 60 per cent. of the white fish, herring and shellfish landed at the Scottish ports is landed by small boat fishermen.

In the course of the debate hon. Members, including my hon. Friend the Member for Lowestoft (Mr. Prior), said that it was extremely difficult to generalise. Their speeches have reflected wide regional variations. This industry, probably more than any other, has fluctuating fortunes, not only from year to year, month to month and even day to day, but between the various sections of the fleet and the various ports.

As my right hon. Friend explained, the English distant water fleet has not done at all well during the early months of this year. The earnings of the English near and middle water fleet, on the other hand, have been substantially better this year, while the Scottish trawling results have been slightly worse. With inshore fishermen, and especially herring fishermen, there has been a marked improvement in results during the past year, and this improvement has been maintained during the early months of this year. That is the overall picture.

I now come to the difficulties, within this broad picture, of the trawling industry. I do not want to minimise it or to argue detailed figures with the hon. Member for Leith, owing to the variation which all hon. Members have stressed. One could draw a wide variety of conclusions by a selected choice of figures, but the broad basis on which we all agree is that the majority of vessels in the Scottish near and middle water fleets—and they are in the most difficult position—are making operating profits.

I accept the hon. Member's contention that they are making overall losses. But when we are considering policy in general, so long as they are paying their way on the immediate operating profits, the problems relating to meeting their obligations to the White Fish Authority and laying aside reserves for replacement purposes are longer term. I suggest that it cannot be argued that there is an immediate pressure for any sort of fundamental change in the subsidy policy such as was suggested by the hon. Member for Leith. He said that we should look beyond the subsidy when considering those problems and that has been the general opinion during the debate. It was referred to by my hon. Friends the Members for Lowestoft and St. Ives (Mr. G. R. Howard) and by the hon. Member for Grimsby (Mr. Crosland). They all drew attention to the broad problems of marketing, access to fishing grounds and conservation. There has been general agreement when considering this underlying problem, which must be solved to achieve the general objective of securing a sound and viable industry, that in the long term attention must centre on international arrangements and the outcome of the conference to which my right hon. Friend referred.

To turn now to specific issues which have been raised I wish to mention the detailed point raised by the hon. Member for Leith and the hon. Member for St. Ives cm paragraph 12(3) of the White Fish Scheme which states: No grant shall be payable in respect of a voyage if the appropriate Minister is not satisfied that in the course of such voyage fishing has been diligently and vigorously prosecuted. This is a new provision introduced to deal with a limited number of cases and to give a reserve power to the Minister in cases where a vessel has made a number of unsuccessful voyages and the subsidy represents a high proportion of the total proceeds. This has happened in a limited number of cases but it was felt right to include such a provision so that the Minister should have reserve power to withhold the subsidy.

Mr. Hoy

One would have thought that the Minister would have mentioned this sanction when he introduced the Scheme. Who is to say whether the fishermen have been fishing diligently? In view of the considerable losses which have been made, I will not argue that. It is possible for the crew of a vessel to have a run of bad luck. The hon. Gentleman says that there are a small number of cases. How many cases have occurred? If he cannot produce better proof than that, I suggest that this provision be scrapped altogether.

Mr. Brooman-White

There are cases where the subsidy represents a considerable proportion. When the inspectors consider the claims, they will be in a position to make a pretty reasonable judgment about whether a vessel has been persistently making unsuccessful voyages and whether the subsidy represents a high proportion of the total proceeds.

Mr. Loughlin

This is a serious problem. A crew may have a series of bad trips and, therefore, the subsidy will be needed more. Often fishermen are fishing more diligently and harder when they do not get a good catch. The Minister must not smile and brush this matter aside. There may be a series of bad voyages although the crew may be fishing diligently. How is the Minister to determine whether or not that is happening?

Mr. Brooman-White

The obvious yardstick is the direct relationship between that vessel and other vessels of a similar type fishing in similar waters in the same area and unless the discrepancy was very glaring, and inexplicable by the ordinary standards of the industry, no action would be taken.

The hon. Member for Lowestoft, the hon. Member for Haltemprice (Mr. Wall) and others have referred to the marketing problems of the industry which are obviously of great importance, and I think it has been agreed that a major improvement in marketing conditions is inextricably associated with import policy, which again turns on the developments in the international field, Hon. Members will have noticed that my right hon. Friend in his opening remarks stressed the importance he attaches—I am sure that the White Fish Authority will also—to carrying out any improvements that can be made while these long-term and wider discussions are taking place.

The hon. Member for Leith referred to the special subsidy arrangements for Scotland, and the six months' condition. My right hon. Friend intervened to say that the Scottish industry has initially asked for a subsidy covering the entire period, and I think that he will appreciate, from the remarks that have been made, that there is a substantial advantage in the changed circumstances between the last six months of last year and the first six months of this year, to withhold half the subsidy until one sees whether these are ephemeral changes or whether they will continue throughout the whole year, before the subsidies, which are aimed at assisting special cases of difficulty, are committed to the latter part of the year.

The right hon. Member for Orkney and Shetland (Mr. Grimond) referred to specific questions of interest to his constituency and to herring, to which I shall come in a moment. Perhaps I might mention first the question of the lower rate of subsidy for white fish in the smaller categories. He will appreciate that the 1s. 3d. rate can be obtained for gutted fish irrespective of the use to which they are put. We entirely appreciate the special difficulties of his area and of a certain number of boats in finding a market for fish for human consumption, rather than using them for industrial purposes. Discussions are continuing with those concerned in the industry and in the right hon. Gentleman's constituency, and this is a specific local marketing problem to which we should very much like to find an answer.

My hon. Friend the Member for St. Ives mentioned again a local difficulty on pilchards. He appreciates that the existing subsidy is high in relation to the value of the fish. But the investigations, of which he has been patiently awaiting the outcome, have been completed and a report is being prepared and should shortly be available. My hon. Friend also raised the question, which he persistently pursues, of shellfish. Shellfish have been unsubsidised and remain unsubsidised, but total landings have been increasing. They get a degree of assistance in rebates for fuel, eligibility of grants for new vessels and a degree of tariff assistance.

The right hon. Member for Orkney and Shetland, dealing with herring problems, referred to the specific question of hearing trawling. He asked if we were carrying out investigations. We are, and Appendix B of the Board's Annual Report gives an account of the trials in 1962. He asked about the dangers of foreign herring fishing and its possible impact on stocks. The scientists have been reassuring on this point. They do not think on the evidence they have that fishing in the Orkney and Shetland area is having any damaging effect on supplies.

A wider point which he raised was also mentioned by my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) and the hon. Member for Leith. That was about the 25s. arrangement for oil and meal. This is a payment irrespective of season of 25s. per cran for herring landed at certain ports. I understand that the manufacturers of oil and meal are prepared to offer fishermen in the region of£7 10s. a ton, 25s. a cran, and the total return would be about50s. gross. Although there is a wide variation in transport costs, the fishermen, after meeting the industry's levy and harbour dues and the transport costs, will overall be in a slightly more favourable position.

At the same time, the new arrangements will represent a substantial economy to the Board. Difficulties have arisen in maintaining a large administrative and processing structure to deal with this very small proportion of total landings. My hon. Friend the Member for Aberdeenshire, East expressed apprehension about this, but I do not think it is shared generally throughout the industry. This is a practical arrangement which was thoroughly discussed with the industry. He said that in the herring fishing industry there was despondency and a feeling that the fishermen were not fully in the picture and did not have a voice in these affairs, but he went on to say that a conference was held yesterday. That was a discussion of certain detailed points which had no relation to the briefing for this debate, but it is a good instance of the degree in which the industry is kept in consultation and of the general wish that the men should share in the planning and development of their future.

Those are the main points raised by hon. Members. I can assure the hon. Member for Gloucestershire, West (Mr. Loughlin) that his experience with sea fishing vessels has been different from mine, as perhaps I am not quite so good a sailor as he is. Hon. Members on both sides of the House have been agreed on the approach to the fundamental problem. They have welcomed the efforts made to get at the long-term root of the difficulties of the industry. I hope that in that context the House will accept these Schemes.

Mr. Hoy

With the leave of the House, I must tell the hon. Member that his reply about Scottish fishing is not very satisfactory, nor do we accept the argument that we must accept that the cost of the repayment for the vessel, depreciation, and interest to the White Fish Authority is not part of the operating costs. That is a complete nonsense which is trundled out from St. Andrew's House year by year.

The trawler owner must meet this cost. He has entered into a commitment with the White Fish Authority, and the money must be repaid over a period of years. The interest on it must be met. It can be met only out of the operations of the vessel. The hon. Member should not use that argument again, even if it comes from a well-written brief by civil servants. I ask him to look into the matter himself and to consider whether any business could possibly operate without taking into account expenditure on capital equipment, depreciation and the interest charges which have to be met. No other industry is expected to do that, and it should not be expected of the fishing industry.

Question put and agreed to.

Resolved, That the White Fish Subsidy (United Kingdom) Scheme 1963, a copy of which was laid before this House on 4th July, be approved.

Herring Subsidy (United Kingdom) Scheme 1963, [copy laid before the House, 4th July], approved.—[Mr. Brooman-White.]

White Fish and Herring Subsidies (Aggregate Amount of Grants) Order 1963, [copy laid before the House, 4th July], approved.—[Mr. Soames.]