HC Deb 06 December 1965 vol 722 cc199-210

Motion made, and Question proposed, That this House do now adjourn.—[Mrs. Harriet Slater.]

11.34 p.m.

Mr. Patrick Wall (Haltemprice)

The fishing industry is facing a serious position. Not only have costs increased but fishing grounds have become more limited partly through the action of foreign Governments extending their fishery limits and also through over-fishing. There is also uncertainty over the future of the voluntary minimum price scheme which the Government could correct by introducing a statutory scheme, but the most immediate problem is the grave uncertainty about building grants.

Before going into the whole question of subsidy and grants, I wish to make clear that I in particular and the distant-water vessel owners in general never wanted a subsidy but unfortunately events have made subsidies essential. Some examples of these events are found in the extension of fishery limits in Norway, Greenland and Iceland and the fact that middle-water vessels now, because of the extension of fishery limits, are now fishing in waters which were originally reserved for distant-water vessels.

I would now like to take the House back to the start of the subsidy scheme for distant-water vessels. I suppose that it arose from the Fleck Report in 1960–61. The House will remember that this Committee said that the policy for the next ten years at least should be to maintain the catching power of the fleet at the current level of supply. In November, 1961 grants for building vessels of 80 ft. and over were first introduced. Some of the conditions were that for every new ton built, two old tons should be scrapped, that grants would not exceed 25 per cent. of the cost of the new vessel, that the ceiling was £50,000 and that this money was available only for conventional vessels. The House allotted £2 million for the purposes of this scheme.

In December, 1963, the scheme was revised. It was agreed that two old vessels should be scrapped for every new vessel constructed, that the building grant should be extended to non-experimental freezer trawlers—experimental vessels being covered by certain other special grants—that the grant should still remain at 25 per cent. of the total cost, but that the ceiling should be raised to £80,000 for conventional vessels and £110,000 for freezers. But the House at that time voted no additional money, and it was not until July, 1964, that an additional sum was voted, in this case £560,000. I understand that at that time, in the summer of 1964, there was a total of about £1¼ million uncommitted for building grants on distant-water vessels.

The House will recall that in October of that year came the General Election. In November, the new Government announced that the whole question of building grants would be reviewed. I understand that the review will not be completed until the end of 1966. What was not made clear at that time was that by the end of 1964 available funds for building subsidies for distant-water vessels had run out. It was not until July, 1965, that a further £1.6 million was provided, and this sum was not only to cover the distant-water vessels but to cover the whole fishing industry, and it would have to last until April, 1967.

I want to make it clear that of the £1.6 million voted, £860,000 was voted for vessels of 80 ft. and above—distant-water vessels—which catch, broadly speaking, 83 per cent. of the fish sold in this country. The balance of about £740,000—the sum was, therefore, divided nearly 50–50—was allocated to the smaller vessels, inshore vessels and others, which altogether catch only 17 per cent. of the fish sold in this country. Although it may have been thought that £860,000 was a fair amount, it must be borne in mind that not only had this sum to last until April, 1967, but it had to fill the gap from the period when the funds ran out in November of the previous year. In other words, it had to be spread over two years and three months. I want the House, to consider the result of this paucity of funds for building grants, first on the distant-water fishing fleet, secondly on the White Fish Authority and in particular on the Port of Hull.

First, I will deal with the result on the distant-water fleet. No new grants have been provided since the money ran out at the end of 1964. I have said that the £860,000 had to cover no less than two and a quarter years from November, 1964, to April, 1967. I understand that it is estimated that already applications for building grants made to the White Fish Authority total between £4 million and £5 million—and this at a time when the total sum allocated by this Government and the previous Government to distant-water vessels amounts to £2¼ million, whereas the total sum allocated over the years to smaller vessels, the near, middle and inshore fleets, totals about £20 million. This emphasises the disparity.

I suggest to the House that this position is particularly serious because since 1960 the distant-water fleet has shrunk from 234 to 190 vessels or by about 20 per cent. Although new vessels are going forward. 31 of the existing vessels were built before 1948 and are due to be replaced in the early 1970s. Therefore, the distant-water fleet is facing a pretty serious future.

Turning to the effect on the White Fish Authority, I suggest that the Authority is set a virtually impossible task because it has to make £860,000 cover grant applications ranging up to £4 or £5 million. It has been suggested that there should be a lowering of the ceilings for grants, For example that the ceiling for freezer trawlers should be reduced from £110,000 to £80,000. This would be grossly unfair, particularly to the small firms. It is clear that the larger firms have the capital to build these expensive ships and take the initial risk. Now these vessels have been proved and the smaller firms are asking for grants to build them; if they are to be denied the same amount of grant as their larger competitors had originally they are placed in an invidious position.

I understand that there has also been a tendency for the larger firms to put in bulk applications for three or four vessels together, which is impossible for the smaller firms. Therefore, the reduction of grant would be very unfair to the smaller firms engaged in the catching industry. It has also been suggested that the White Fish Authority should set up some system of priorities—in other words concentrate the grants on the stern fisher freezers which are obviously the vessels of the future. This form of priority is possibly justified but, again, this is tough on the smaller firms who cannot afford this expensive and sophisticated type of vessel.

It is clear that many of the applications will have to be turned down and this will have an effect on shipyards, because if building grants are not available for the large programme for which applications have been made it is clear that many owners will have to go abroad where it will be cheaper to build than in this country, for example, to Poland.

The White Fish Authority has therefore been placed in an impossible position. It must have more funds before 1967 to carry out its task and to make an equitable allocation of grants to cover at least 60 per cent. to 70 per cent. of the applications already made. Faced with the Government's apparent lack of understanding of the position, it is perhaps no wonder that the Chairman of the White Fish Authority wrote an article in The Times on 12th November pointing out the many problems at present facing the Authority—problems of minimum prices, quality control, fish farming, and promotion.

I will quote only part of the article, referring to building grants, in which the Chairman said: There must also be fresh thought on the purposes of grant and loan assistance to encourage modernisation of the fleet. Referring to the industry as a whole he said, … the possibilities are so great and the money involved so comparatively small that, even in these difficult times, the nation would surely be making a sound investment. I believe that Mr. Roy Matthews was quite right in making that statement.

We must allocate more money to the fishing industry and in particular to the Authority to carry out the task which it has been set by this and the previous Government. I do not believe that it can carry out that task, not only as far as building is concerned but in other respects, without a further allocation of funds.

I turn finally to the effects of these problems on the port of Hull which is by far the greatest fishing port in this country. In Hull, the distant-water fleet has fallen in numbers in the last three years from over 140 trawlers operating from the port to about 110. In addition, many of the vessels were built between 1948 and 1952 and therefore will be due for replacement by the 1970s. An impossible situation is facing the owners. They cannot plan ahead. Applications have been held up for many months because funds will not cover them. Obviously an owner cannot start building until he has approval otherwise he loses any possibility of a grant. Thus, the forward planning replacement programme of the industry over the years is thrown out of gear.

Unless the Government can make more financial provision for building grants there will inevitably be further shrinkage of the fleet operating from Hull. The situation is serious and cannot wait until completion of the present review due at the end of 1966. I quote the Chairman of the Authority again: I hope the Government will reach a positive, a clear-cut and a happy solution of all these problems. Hull is feeling very sore, as no new trawler building grants have been approved since the Government took office. The roads programmee has been delayed until the 1970s. There is to be no Humber bridge and there is the threat of a new town in Lincolnshire and a rumour that Immingham may be built up as a modern fishing port to compete with Hull. The Joint Parliamentary Secretary may laugh, but Hull is not happy with the Government's present policy and wants to see positive results from the Government.

11.47 p.m.

Mr. James Johnson (Kingston upon Hull, West)

The hon. Member for Haltemprice (Mr. Wall) has a deep and personal interest in deep sea fishing. He is my neighbour. In his division are many workers from Hull. But I feel that he is somewhat closer to the fishing owners in his case tonight. I am Member for Hull, West and I have in my constituency fishermen, bobbers, filleters and auctioneers—those who work in the dock itself. Perhaps this explains our different attitudes. My constituents live and work in the docks.

The hon. Gentleman and I both wish to have a dynamic and healthy deep sea fishing industry in Hull. But, of course, this can be achieved in different ways. He wishes to shore up the industry by the taxpayers' money. I do not desire any subsidy for the owners. I believe that it is possible for these tough, individualistic, adventurous industrialists to stand on their own feet. He thinks they need help. Candidly, I do not think so in the manner he does.

I think that the owners have been doing fairly well. I have been there for two or three years, listening to the well-informed men on the dockside. I am not sure that all the owners themselves wish for a subsidy. All sections tell me that they are doing well and do not need help at this time. Obviously I am against the net subsidy of £12 per day for vessels which voyage into deep waters. This is given to all vessels whether good, bad or indifferent.

But for some companies the building subsidy may well make all the difference—the small fishing firms which may be short of capital, for instance. These are what I term the old family firms in Hull. The Fleck Report said certain things about the future of the industry. I know that the fleet has declined in numbers. The hon. Gentleman was quite correct with his figures. But there are still some 30 vessels left in the fleet which were built before 1948. These will be obsolescent by the end of the transitional period in 1972. The big combines—Associated Fisheries, the Ross Group and others—are, I believe, doing very well. They can raise their money in the open market. The hon. Gentleman spoke of the smaller firms. A case can be made out for the middle sized firm found in Hull, the older family firm. I believe that the firms must justify their applications with facts and figures when they go before the White Fish Authority.

I believe that the British Trawler Federation has asked for about £2¼ million for the immediate future for all purposes. The Minister said some weeks ago that £860,000 was available until May, 1967. In view of the financial stringency facing the country, in my opinion the vessel owners must accept this with good grace and not complain. When I think of what is happening to other sections of our economy, particularly the coal mining industry, to which my people belong, when I think of pits being closed and thousands of men who have worked 30, 40 and 50 years in the pits being asked to do something else, I cannot believe that the fishing industry cannot also play its part in the future of our economy.

11.51 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy)

I want to say something in reply to the debate raised by the hon. Member for Haltemprice (Mr. Wall). His peroration had nothing to do with the fishing industry—absolutely nothing. He thought that it was not a bad start to make to a by-election that will take place in Hull, and anyway for him it was a change from discussing Rhodesia. I am sure that Hull was delighted that he had time in his Parliamentary itinerary to mention it tonight. That was what the peroration was about.

The hon. Member also spoke about the £4–5 million. My hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) took a very balanced view of the whole matter. I am a little surprised at the hon. Gentleman and those associated with him. They are for ever coming to the House and telling the Government that they must cut taxation. They say that we must have cuts in taxation. Then they come along every night to demand that the Government provide more and more money for every possible subject. Hon. Gentlemen opposite had better make up their minds where the money is coming from.

Mr. Wall

The Conservative Government provided it.

Mr. Hoy

They did not manage to do that. They laid down a programme, but they did not provide the money. The present Government have had to provide the money to meet what was laid down then. In 1964, the then Government were always handing out money no matter who came along. They said "This is going to be an Election year. Have all the money you want. Have all the approvals you want." But the present Government have had to find the money to pay for it. The hon. Gentleman had better keep that in mind when he goes to Hull.

The hon. Gentleman said that there were applications for £4 or £5 million worth of vessels. That is just not true. It may be an expression of intention, but there have been no applications to that exent The hon. Gentleman had better not get the two things mixed.

Mr. Wall

What do the applications come to?

Mr. Hoy

They would be made to the White Fish Authority, and there have not been hard and fast applications. They do not come to us, as the hon. Gentleman knows. It is for the White Fish Authority to receive applications and make decisions accordingly.

I should like in the time available to discuss the question of the adequacy of the funds that have been provided for grants for building fishing vessels, because I think this is important. My right hon. Friend in July, as the hon. Member said, made clear what was happening. My right hon. Friend recalled that we were continuing the policy which had been laid down even by the hon. Gentleman's own Administration. To that no objection was taken. The effect of that was that there was limited assistance for replacing old vessels without expanding the fleet. The hon. Gentleman said that, and this is what is happening. My right hon. Friend went on to say that the modernisation of the near and middle water fleets had been substantially achieved, and he accepted that the distant water fleet had further to go. But he recalled that a substantial number of freezer trawlers are being built—that is exactly what I was saying to the hon. Member—and, I may add, being paid for this year and next. The approvals were all right, but the cash had to be provided; and that is what is being done now.

My right hon. Friend went on to remind the House that there were great uncertainties—these had been expressed on previous occasions—about the numbers and types of vessels which would be required in the future. One of the objects of the review of policy which is being undertaken is to try to resolve these uncertainties, and I think that this was the intention of the previous Administration also.

It is against this background that. we have provided a total of £1.6 million for grants to be approved this financial year—that is, what remains of it—and next. I accept that this is not enough to assist as many vessels as the industry could conceivably build, but that is not our object, and neither was it the object of the previous Administration. There has always been a limit to the amount of new building it would be wise to encourage. The sum provided is, in our view, an adequate amount of assistance for the rate of building which is required in the short period involved.

It is no more than prudent to take stock of the freezers now coming into the fleet and try to assess future requirements before committing ourselves to the longer term. Comparisons between one year and another can be overdone. New building tends to be undertaken in fits and starts, and limited periods, therefore, tend to be unrepresentative. The average of £800,000 for approvals this year and next compares favourably, to put it no higher, with the average of £700,000 in 1962–63 and 1963–64. True, it is only half the figure of £1.6 million for the peak year 1964–65, but £1.2 million of this represents the existing programme of freezer trawler building which is still going on. It is not a figure to be matched every year, and neither was it ever intended to be.

I come now to the division of funds between the trawler fleet, on the one hand, and the inshore and herring fleet on the other. The allocation to inshore and herring vessels is £740,000, somewhat less than half the total sum, but a good deal more than was provided in previous years. We have accepted the view of the White Fish Authority that rebuilding in the inshore fleet has been somewhat restricted in previous years, and we have taken steps to put this right. The allocation to the trawler fleet is £860,000, and it is this that the hon. Gentleman has criticised. I accept that the proportion allocated for the current year is £190,000. It is small, but the hon. Gentleman will recognise that there is not very much of the current year to go. The balance of £670,000 for next year is a fair figure for a full year and, frankly, it is in line with the industry's own view.

Mr. Wall indicated dissent.

Mr. Hoy

Yes, that is so. It is no good the hon. Gentleman shaking his head. He was confused in his figures. He mixed up a three-year period with a one-year period. This is for next year. If he cares to treble it for three years, he will get nearer to the figure for which he has been looking.

In saying that the sum available for trawlers this year accords with the time available for giving approvals, I do not overlook the fact that a year has passed since the funds provided for approvals by the previous Administration were exhausted. I realise that the industry has felt some impatience—

Mr. Wall

The year during which right hon. Gentlemen opposite have been in power.

Mr. Hoy

It is easy to give approvals and not provide the cash, as I have explained. We have had to provide the cash for the programme which the previous Administration approved without finding the cash. It is fair to recall that a substantial programme of freezers has already been approved and these vessels are now in the process of joining the fleet. The previous Administration made no provision for anything more and it fell to us to carry out the review which it had proposed. I think that all concerned in the Authority and the industry appreciate how difficult this has proved to be.

Nevertheless, we have made this further provision despite the need for economy in expenditure and despite the uncertainty of the future. We have done so because, as was said in the Gracious Speech, we believe in promoting the economic development of the industry and we are prepared to back our judgment. I underline the word "economic" because we owe it to the taxpayer and the industry to encourage what is sound in investment. Anybody who knows anything about the industry will know just how correct that is.

It has been suggested that the trawling industry has far more building in hand than the grants available will run to. We should be failing in our responsibility if we set out to provide for every vessel which might be built. The previous Administration said quite clearly in its 1961 White Paper, which the hon. Gentleman will recall, that the industry might well finance some of its own building. What we have set out to do is to provide sufficient assistance for the amount of building which we consider reasonable in the short term. Only time will tell whether there is more to be done and that is the purpose of the studies which are now in hand.

As the hon. Gentleman said and as my hon. Friend reminded us, it is true that in the past three years there has been a reduction in the size of the trawler fleet. About 50 vessels have left the distant-water fleet and about 100 have left the near and middle-water fleet, but as against this about 25 new distant-water vessels and about 50 near and middle-water vessels have come in. We must remember that the new vessels' are much more efficient catchers than those which they have replaced. If the hon. Gentleman wants the reason for that—and his hon. Friend the Member for Cornwall, North (Mr. Scott-Hopkins) can remind him—the previous Administration laid down quite clearly a replacement ratio of broadly one new vessel for two old. That is exactly what has happened. It is no use the hon. Gentleman complaining about it as though it were some responsibility of the present Government, when the plan was laid down by the previous Government. Nor need he get excited about because we all agreed to the programme. He regards the falling number as though it were something terrible. I am simply saying that this was the programme which was laid down by the previous Administration.

I have given the House the broad allocation of the funds between trawlers and other vessels. As I said in the fishery debate in July, the Government have never laid down precisely what should be spent on each section of the fleet, or on what type of vessels. No Government have ever done that. This is the responsibility of the White Fish Authority which has taken the industry into its confidence in this matter. It is a responsible task to decide how the approvals should be given, but I know that the House has confidence in Mr. Matthews, the Chairman of the Authority, the Authority itself and his colleagues on it. We are well aware of our debt to him, and I have expressed it on a number of occasions. The hon. Gentleman says—

The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at four minutes past Twelve o'clock.