HC Deb 08 July 1968 vol 768 cc54-60
The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes)

With permission, I shall make a further statement on the Government's review of future policy for the deep sea fishing industry.

As my hon. Friend the Joint Parliamentary Secretary announced on 15th May, we are satisfied that the industry can make an increasing contribution to import saving, given the assurance of adequate support and a continuing improvement in efficiency.

We propose to give an assurance of continued support to the deep sea fleet for a minimum period of five years. If the industry is to justify this support, it is essential that it should take all possible steps to improve its efficiency, both through technological development and through changes in structure and organisation which will promote better management and training. We intend, therefore, to operate the support that is being provided so that the benefit will go to those companies which can make the most productive use of these resources.

In addition, the Industrial Reorganisation Corporation, which has been studying the industry, has informed me that it is willing to help the industry to find the best means of improving its efficiency. The industry, for its part, has assured me of its readiness to co-operate to this end.

On this basis, and on the assumption that the industry will make satisfactory progress towards the objectives I have described—a matter which we shall be reviewing from time to time with the Industrial Reorganisation Corporation—we propose to introduce for the three years beginning 1st August, 1968, a new form of operating subsidy. This will take account both of fluctuations in the industry's profitability and of the need to preserve an incentive to efficiency.

This will be done by adjusting a basic subsidy of £2 million by reference to operating profits in the preceding year. If these are less than £4 million, the basic subsidy of £2 million will be increased by half the shortfall; if they are more than £4 million, the basic subsidy of £2 million will be reduced by half the excess. The total annual subsidy, however, will be limited to £4 million and will not be allowed to result in an annual level of profit plus subsidy exceeding £7 million.

The distribution of the subsidy will be related to the operating efficiency of vessels and not as at present to their classification. The detailed arrangements will be worked out with the industry. The method of support after the first three years will be subject to a review in 1970 with the objective of maintaining a corresponding level of return in the two years commencing 1st August, 1971.

Legislation will be introduced early next Session to give effect to the proposals I have announced. Meanwhile, a scheme will be laid before Parliament providing for the maximum basic and special subsidies payable under existing legislation for the subsidy year beginning 1st August, 1968. These subsidies will in due course be set against the total sum due to the industry for that year under the new policy.

Mr. Godber

Is the Minister aware that his statement is not only extremely important to the fishing industry, but also extremely complicated? Will he, therefore, ensure with the Leader of the House that we have an opportunity to debate it before the House rises for the Summer Recess?

May I ask the Minister some very brief points which I think call for immediate clarification. First, he has referred to the deep-sea fishing industry; and reference was made to this in the debate. The right hon. Gentleman will recognise that this is a phrase which we have used in the past. Will he make it quite clear that this covers all except the inshore fishermen, so that there can be no doubt about it?

Secondly, when does he propose to start paying the subsidy? We note what he has said with regard to the payment under the existing scheme, but when does he expect to start paying the new rate of subsidy? Will he bear in mind the need to make a very early payment if the distant water industry is to remain in being?

Thirdly, is there to be a division between owners and crews as before? If so, how does the right hon. Gentleman propose to achieve it?

Mr. Hughes

The payment of the subsidy will have to await the passage of the Bill which, I hope, will be brought before the House shortly after it resumes in the autumn. My right hon. Friend the Leader of the House has heard what the right hon. Gentleman has said about a debate and has, I understand, indicated that he is prepared to consider having a debate before the Summer Recess.

As to the distinction between the inshore fleet and the deep sea fishing fleet, my statement is applicable to the deep sea fishing fleet.

Mr. James Johnson

Is my right hon. Friend aware that his complicated but nevertheless generous scheme will give immense satisfaction to all Members representing fishing ports and, indeed, to the House as a whole? Will he confirm that this scheme involves double the generosity of any award made by any former Government? Will he further confirm that this will provide a solid basis acceptable to the owners and also give a basis for a decent wage for the workers, including deck-hands, in the industry? Lastly, can he tell us—

Mr. Speaker

Order. Briefly, please. We have many fishermen.

Mr. James Johnson

When will the further talks take place, and what will be the content of those talks?

Mr. Hughes

I am grateful to my hon. Friend for his expression of appreciation of what is a new policy and one which I am sure will be appreciated by the whole industry. The purpose of the discussions with the industry will be to find the best way of distributing the total sum to individual vessels so as to encourage efficiency of operation.

I cannot pre-judge the result, but I think that the objective is quite clear. The question of the payment of the fishermen is a matter between the employers and the unions. The unions will be brought into these discussions. The important thing is that the industry should be prosperous and efficient. This is the best way of improving conditions and wages in the industry.

Mr. Wall

Can the Minister confirm that the sums he has talked about are for operational subsidies only and that building subsidies will continue? Is his Ministry looking into the question of import control as part and parcel of this scheme?

Mr. Hughes

The answer to the first part of the hon. Gentleman's supplementary question is in the affirmative. I am glad to be able to announce today that we have asked our principal E.F.T.A. suppliers to discuss the import position with us.

Mr. Dewar

My right hon. Friend will be aware that his statement will give great pleasure to the industry as a whole, offering the promise of long-term, or at least reasonable-term, security. Has further consideration yet been given to the minimum price scheme? Can he add a little more about the rôle of the Industrial Reorganisation Corporation?

Mr. Hughes

I am in touch with the White Fish Authority about its proposals for a statutory minimum price scheme. I have received the industry's assurance as to its readiness to co-operate with the I.R.C. I have made it clear that I shall be looking from time to time, with the I.R.C, at the progress of these discussions. The object of this exercise by the I.R.C. is to help the industry to improve efficiency.

Mr. W. H. K. Baker

May I press the Minister a little further? He said that his statement was about the deep sea fishing industry. I understood that the Government were having an inquiry into the whole fishing industry. Is not this so? Can he give an assurance to the House and to the inshore fishermen that some action will be taken to reconstruct that industry as well as the deep sea industry?

Mr. Hughes

The hon. Gentleman must distinguish between inshore fishing and deep sea fishing. There is here a very important distinction. I refer the hon. Gentleman to the speech made by my hon. Friend the Joint Parliamentary Secretary on this point, among others, on 15th May. The inshore fleet has done much better than the trawler fleet, but to encourage expansion we are proposing to maintain the existing level of inshore subsidies for the year commencing 1st August next. There is no question of cutting subsidies for the inshore fleet.

Mr. McNamara

My right hon. Friend's statement is very welcome, but will he take it that it will be even more welcome if it has a more positive showing on the settling sheets of the crews in the near future? From the longer-term point of view of the industry, when may we hope to see some of the positive results of the negotiations with the I.R.C, so that we may have a strong and viable industry in the years ahead?

Mr. Hughes

I hope that the I.R.C, which is now having detailed discussions with the industry, will report as soon as possible. I have had an assurance from Sir Frank Kearton to that effect. The important fact is that, taking the statement which I have made today with my hon. Friend's speech on 15th May, we have now created a new and forward-looking policy which will inject new confidence into the industry.

Mr. Bessell

The right hon. Gentleman's statement will be generally welcomed, but will he be preparing a similar statement for the longer term to secure the future of inshore fishermen? Second, how will the operating efficiency standard be worked?

Mr. Hughes

As I have said, inshore fishing is in a much better state than the deep sea fishing industry, and we believe that it is fully secured by the policies which we are now operating. I have heard no arguments to the contrary. As the detailed working out of the scheme is complex, perhaps, with your permission, Mr. Speaker, I might give a little more detail to help the House.

The amount of Government aid is a basic subsidy of £2 million payable if the industry's profits are £4 million. If the industry's profits are more than £4 million, the subsidy declines, and for each £1 million of industry profit above £4 million the Government will deduct £½ million from the basic subsidy of £2 million. Thus, if the profits are £5 million, the subsidy is £2 million minus £½ million, giving £1½ million subsidy.

Again, if the industry's profits are less than £4 million, the subsidy increases. For each £1 million by which the industry's profits fall below £4 million, the Government will add £½ million to the basic subsidy. If the profits are, for example, £3 million, the subsidy then is £2½ million.

I hope that hon. Members will read that in HANSARD tomorrow in elucidation of my original statement.

Mr. Speaker

Order. An additional detailed statement of that kind might well have been circulated in the OFFICIAL REPORT.

Mr. Dalyell

On what criteria for subsidy purposes will the concept of operating efficiency of a vessel be judged?

Mr. Hughes

I ask my hon. Friend carefully to read the statement which I have made, in which I have tried to help the House on this complex subject.

Mr. Prior

The right hon. Gentleman's statement is welcome as a step forward, but does he realise that the crux of the matter will still be what can be done about imports, especially as other countries will always subsidise their fishing much more than we do?

Mr. Hughes

The question of imports is important, and I shall be having discussions about it. However, the fact remains that it will be largely the Exchequer which will benefit now if there is any restriction of imports.

Mr. G. Campbell

Will the right hon. Gentleman clarify his use of the term "deep sea fishing"? Does it cover all sea fishing other than inshore fishing? Second, will he state clearly whether the new subsidy proposals, with the ceiling which he has announced, will in no way affect the inshore fishing fleet?

Mr. Hughes

My statement was not applicable to inshore fishing. It dealt only with deep sea fishing, that is, fishing in near, middle and distant waters.