§ 10.12 p.m.
§ The Minister of Agriculture, Fisheries and Food (Mr. James Prior)
I beg to move,That the White Fish (Inshore Vessels) and Herring Subsidies (United Kingdom) Scheme 1972, a copy of which was laid before this House on 12th July, be approved.I am glad that it is agreed that we should discuss at the same time the Motion dealing with the White Fish Authority (Research and Development Grants) Order. Both orders involve support for the industry, and if past debates are any guide I think it will be easier for my hon. Friend to reply in an orderly way if he does not have to tie his remarks to one Motion rather than the other. Having said that, I shall deal separately with the two orders, starting with the short and simple research and development grants order, and then dealing at greater length with the in-shore subsidies.
The White Fish Authority (Research and Development Grants) Order has only one substantive provision, which I can explain very briefly. Although paragraph 2 of the order refers to a limit of £2 million imposed by the Sea Fish Industry Act, 1970, that was a consolidation Act and the limit was in fact imposed in 1962. It was a limit not on any annual grant, which is taken care of in annual Estimates, but on the aggregate amount that could be paid.
Not surprisingly this sum, large though it may then have appeared, has now been 491 fully taken up, and if we are to continue to add any Government contribution to what the Authority devotes out of its levy income to research and development, then this order is essential.
Hon. Members will recall that in reply to Questions on Tuesdy, made an announcement about the future of the White Fish Authority and they may reasonably be asking what connection there is with this Order. The short answer is that, if we approve this Order, we are merely removing a constraint which has to be eased, even if one was not looking beyond the end of the present financial year.
Beyond that, the position is, as I made clear in my statement, that we see as among the continuing essential functions of the Authority the research and development which it conducts for the industry. We regard that as very important. The scale depends primarily on the amount which the Authority, in consultation with industry, decides to devote from its levy income to research and development.
The extent to which its programme can be approved and grant aided in future will have to be considered annually as it is now. That is what the order enables us to do.
The inshore subsidy scheme is in its old familiar annual form. It deals with subsidy arrangements for inshore and herring vessels for the next 12 months. The deep sea arrangements are dealt with under a separate scheme which has a further year to run.
Before explaining our proposals for the inshore fleet, I would like to set briefly before the House the facts about the economic state of the industry on which our proposals are based.
In 1971 United Kingdom landings of white fish and herring from inshore vessels were £29.5 million compared with £22.8 million in 1970; the comparable figure for 1969 was £19.3 million.
Thus over a period of 3 years earnings have risen by about £10 million, that is by over 50 per cent. This year up to the end of June they have risen by £4.1 million, that is another 30 per cent. up on last year. At the end of the day, however, it is net profits which are important to owners.
492 In common with other industries, fishing has had to face rising costs.
Even so, the average profits of United Kingdom vessels after depreciation have more than doubled over the past three years rising from about £1,000 in 1969, to £1,400 in 1970 and to £2,200 last year. In the face of these figures. I do not think that it can be denied that the industry's financial position has improved tremendously.
It is even better than a year ago, and I think I should remind the House that when my hon. Friend introduced the 1971 scheme he said this:I think it can reasonably be claimed that this is a pretty generous settlement, and this will have to be borne in mind when future schemes are considered …"—[OFFICIAL REPORT, 21st July, 1970; Vol. 821, c. 1620.]Therefore, in deciding this year's settlement, the Government have therefore not only looked at the 1971 profits but have taken into account the rise in profits over the last few years.
I think it can be fairly said that the last few years have helped to build up confidence within the inshore industry about the future; owners have taken advantage of improvement grants to modernise and increase the efficiency of their vessels, and there has been no shortage of applications for grants and loans for building new ones.
That is the background against which we had to look at the present annual subsidy expenditure of some £1.5 million—all of it going to the inshore fleet, because the deep sea subsidy has vanished under the formula which relates it inversely to operating profits.
This £1.5 million supplements boat earnings, on average by under 4 per cent. and so represents a small proportion of income.
While recognising that owners tend to calculate subsidy receipts as a part of their profits rather than of total income, we have obviously had to look at this in terms of the industry's buoyant returns from the market, and in the scheme before the House we propose to reduce the subsidy level by about one-fifth. This will be achieved by reducing the present rates generally by around 20 per cent. In view of recent profitability I consider that this is a very fair settlement for the industry.
493 It is surely satisfactory to be able to record that an industry is prospering and so be able to reduce a subsidy. This is what one should always set out to do. The industry should congratulate itself on the fact that it is in a position which allows this to be done.
The provisions of the scheme, apart from the rates, are similar to last year's. There is, however, one change in the conditions which I should explain. The definition of "gross proceeds" in paragraph 1(2) has been amended to allow any earnings additional to those from the catch to be taken into account in determining whether a particular voyage should qualify for voyage rates.
This will alter the effect under paragraph 12 (2) and (3). Where these additional earnings are greater than the value of the white fish and herring catch the voyage or daily rate will not be applicable; instead stonage rates will be paid on the catch within a maximum of the appropriate daily rate. This would operate, for example, in the case of angling party charters or salvage payments, receipts from which ought obviously, in fairness to owners generally, to be brought into the reckoning. We do not expect that there will be many instances where this new provision will apply. Otherwise, as I have said, the scheme conditions are unaltered.
Before leaving the subsidy scheme there are one or two issues which I know are of concern at present to the inshore industry on which I should say a word. I recognise that, although the picture at which we have rightly and properly been looking when taking our short-term decision on this year's subsidy is clear and bright, there are some worries in the industry. Some of these are justifiable and some, I would venture to say, are not. One which my right hon. Friends and I are taking very seriously is the problem that would arise if our deep sea fleet were so excluded from the grounds on which they at present rely that there was a real threat of additional fishing effort and consequent difficulties in nearer waters. I shall not say today what answers would have to be given to questions which are at present hypothetical, but I want to put on record that British inshore interests have been continually in the thoughts of my noble 494 Friend the Minister of State and myself during our recent negotiations with Iceland.
Other doubts in the inshore industry relate to membership of the EEC. I am not thinking primarily of rights within British limits, for responsible opinion in the industry now recognises that the settlement which the Government achieved in the entry negotiations took proper care of their essential interests. What is more it will enable Governments which succeed this one to continue to do just that. Where there is inevitably some uncertainty is in arrangements for marketing and support.
§ Mr. Norman Buchan (Renfrew, West)
How on earth can the Minister say that he can guarantee that proper care will be taken? After 1982 the delegation ends and we have no means of preventing it.
§ Mr. Prior
The hon. Member always gets himself bogged down on all this. He knows perfectly well that that is not the way the Community works and that there will be every opportunity for making satisfactory arrangements after 1982. It does no service to the industry for him to try to cast doubts on what will happen after 1982.
There are areas here in which the Community regulation to implement the common fisheries policy have yet to be made, but I give the assurance that we shall keep closely in touch with the inshore industry, as with other sectors, when proposals are under consideration.
I thought it right even at the risk of getting out of order to look a little ahead, but I shall conclude by emphasising that it is not slanted in any way on any particular assumption about the future. It is the straightforward result of a review such as has been held annually for some 20 years in the case of the inshore fleet. We have found this time an industry which in 1971 has further improved on its already good results in 1970, and we have taken what I am sure is the right decision for the new subsidy period which begins next month. It is in the firm conviction that the inshore industry is in a strong position, and wishing every good fortune to the fishermen who fish for their living in the inshore waters, that I corn-mend the orders to the House.
§ 10.25 p.m.
§ Mr. Fred Peart (Workington)
I agree with the Minister that the two orders should be taken together. In the research and development grants order the Minister is increasing by £1 million the limit of £2 million imposed by Section 23 of the Sea Fish Industry Act, 1970. The Act permits this increase, and we accept that it is right.
There is a problem here which the right hon. Gentleman has mentioned. On 18th July he made a statement in a Written Answer about the future of the White Fish Authority and the Herring Industry Board. He said thatthe authority and the board should continue under existing law for a period provisionally set at five years.But he warned the House that there was a problem. He said:In considering the future of the White Fish Authority and the Herring Industry Board my right hon. Friends and I have had to take into account not only the position in this country but also what form of organisation will best serve our fishing and fish-using industries within the enlarged European Community. The Community's regulation foresee the establishment of a network of producers' organisations which, if fully achieved, would leave no separate regulatory role for independent national bodies like the board and the authority. On the other hand there are functions for which continuing provision may be needed."—[OFFICIAL, REPORT, 18th July, 1972; Vol. 841, c. 64.]There is still uncertainty about our entry into Europe and how it will affect the White Fish Authority and other statutory organisations which have been administered by various bodies under the umbrella of the Ministry of Agriculture, Fisheries and Food. Therefore, while we agree that this is a right step, there is still uncertainty.
The second order outlines a scheme for operating subsidies for the next 12 months. This will apply to inshore white fish vessels under 80 ft. in length and all herring vessels. As my hon. Friends who speak for various sections of the industry who are present—[Interruption.] It is a pity that there are not more here tonight, but we understand the reason. Unfortunately we cannot have a major debate on the matter. We are confined to the orders. Perhaps it is a pity that we are not having a major debate on the fishing industry, but I am not complaining to the Minister about that. He has done his best in presenting the orders 496 and he has opened up wide avenues of discussion.
This is not a matter that concerns the deep sea fleet, but inevitably what has happened to that will affect the inshore fishing industry. We have figures presented to us on an earlier occasion by the Minister of State, Scottish Office, who has said that in 1969 the industry was earning about £19.3 million. That increased in 1970 to £22.8 million and in 1971 to £29.5 million. I understand that in the first six months of this year earnings had increased by £4.1 million, which represented a 30 per cent. increase over the position in 1971. Profits have increased after depreciation, rising in 1971 to £2,200 per vessel, double the figure for 1969.
The Minister's case for a cut is that the industry is in a strong financial position and that the reduction in the subsidy level is therefore justified. The Government are pledged to reduce all subsidies, although we have some strange examples. That policy has been reversed in industry and development areas, one of which I represent. The Government have had to change their policy overnight. However, the Minister believes that there should be a reduction and no doubt he is anxious for the whole of the subsidy to be phased out. He has not deployed that case tonight. On many occasions, being the representative of a fishing port, Lowestoft, he has chided Governments for cutting subsidies. Tonight he plays a different role. I do not say that it is a right role.
§ Mr. Peart
I would not say that the industry generally was as prosperous as the right hon. Gentleman makes out. When one thinks of inflation and the costs which fishermen have to bear—and this applies to other sections of the fishing industry and agriculture—the Minister may well be wrong in his assumption. However, he is to reduce the subsidy by approximately 20 per cent. I have merely stated what I thought was Government philosophy—that industry must stand on its own feet. But the Government have had to reverse that policy in 497 many important industrial activities. Therefore, the right hon. Gentleman should be extremely cautious about what is happening in the fishing industry.
The Minister may have had approval from the fishing industry, and no doubt there have been consultations. I understand that the cut in subsidy will save £300,000 in a full year and £125,000 in the present calendar year. There is to be a reduction of subsidy from £1½million to £1,200,000. I should like to know whether the industry has agreed to what is proposed. It is strange that the industry should agree to a cut of this size. There are difficulties and the Minister must bear them in mind. He has warned the House of the effect of the Icelandic Government's decision to cut our right to go into their waters to the extent of 50 miles. He has rightly said that this could lead to over-fishing in waters close to this country.
The Minister should be extremely careful about his estimate of profitability in the industry. I am not trying to play the role of a modern Cassandra, but one must be realistic. It is my northern caution which makes me say this, but the Under-Secretary of State for Home Affairs and Agriculture, Scottish Office, is a Scot and he should be canny about this.
There are worries about this matter. A Press notice of the Ministry of Agriculture dated 28th July states:Prohibition of fishing for herring off the North Yorkshire Coast. An order prohibiting fishing for herring within our fishery limits between the Tees and Flamborough Head was laid before Parliament today. It comes into force on 20th August and covers the period 20th August to 30th September, 1972".As the Ministry rightly said,prohibition is a conservation measure designed to protect and assist in re-establishing spawning stock in the central North Sea.Conservation is a problem. We could have a problem of over-fishing in our inshore fishing areas.
The Minister mentioned the question of Europe. I do not want to reopen the argument about Europe—[Interruption.] It is not a bore, I assure the Minister's PPS, who no doubt serves the right hon. Gentleman well. We did not have a proper debate on this matter during the passage of the European Communities Bill. Although this is a matter for the Treaty of Accession, and despite what the Minister said in reply to one of my hon. Friends, no guarantees have been given.
498 The inshore fishing fleet in many parts of the country faces worries and uncertainties. Added to that it faces competition in areas near to our coast from foreign fleets seriously over-fishing and causing difficulties to our home fleet. So this is an important matter which cannot be dismissed lightly. We shall come back to this, but not this evening.
What has been agreed or not agreed on Europe will inevitably affect the long-term prospects of our inshore fishing fleet. Then there is the argument about inflation and costs which will affect our fishermen. While it may be argued that they are making profits—and the figures have been given—our fishermen also face high costs. Let the right hon. Gentleman exercise caution. We are not opposing the orders; we merely ask him to be sensible and not starry-eyed, because he could well be wrong and a subsequent Government may have to face the consequences.
For these reasons we believe that the Minister, after consultation with the industry, has made a case, but we are rather sceptical about it. We are prepared to let him have the orders, we offer the suggestions I have made and we hope that the Under-Secretary of State when he replies will be constructive and not seek to make a party point.
§ 10.36 p.m.
§ Mr. Patrick Wall (Haltemprice)
My right hon. Friend the Minister in introducing the orders said that the second and more important of the two deals only with vessels under 80 ft. in length, namely inshore vessels. Last year when similar orders were introduced the level of subsidies was maintained as in the previous year. This year there is to be a cut of about 20 per cent. Will my right hon. Friend confirm that he is satisfied that allowance has been made this year for the increased cost of constructing and operating vessels?
The Fisheries Organisation Society, which is to be congratulated on organising the inshore fishermen, has pointed out that increased costs in the past year averaged about 11 per cent. If there is to he a cut in the subsidy of 20 per cent., that means that vessels will have to make at least 31 per cent. to make any profit at all in the coming year. I hope my hon. Friend will assure me that he has allowed for this in the level of subsidies 499 contained in the order. I remind him that about 60 new vessels of 40 ft. or more have been constructed this year. They will not be in operation until next year and therefore will not benefit by the profitability which has been realised by the industry in the last two or three years. I hope he will bear their future in mind.
A ridiculous statement has been referred to in the fishing Press that the cut in subsidies this year is to pay for fishery protection off Iceland in the future. That must be arrant nonsense, and I hope the Minister will make it clear that it is indeed nonsense.
That brings me briefly to the question of Iceland which has been mentioned by my right hon. Friend and by the right hon. Member for Workington (Mr. Peart). Both made the point, which I hope is understood clearly by all the inshore men round our coasts, that if Iceland gets away with this extension of limits, distant and middle water vessels will inevitably fish closer to our coasts and this will seriously affect our own inshore vessels. On this matter the industry is as one. Often there are differences between sections of the industry, but here the whole industry—the catching side, the fish merchantmen and the distributing side—are in this together. They will all be affected by decisions of the Icelandic Government and, above all, many millions of housewives will feel the direct result in the increased price of fish. As these proposed limits are due to come into operation on 1st September when the House will be in recess, I will briefly put one or two questions to my right hon. Friend on this matter.
I understand that during the next few days the Government will be seeking an injunction in the International Court. Have they the support of and have they co-ordinated activities with the West German Government which are also concerned? If we obtain the injunction, will our fishing trawlers be provided with adequate protection when fishing on the high seas? I suggest that this protection should be given not only in terms of surface vessels but also by helicopters. There is a vessel H.M.S. "Engadine" which would be suitable for this task and whose helicopters could warn our trawlers when Icelandic vessels were in the vicinity.
500 I very much hope a settlement will be reached with Iceland. I believe the dispute will be detrimental not only to ourselves but above all to Iceland. Therefore, I hope that common sense will prevail. We are after all discussing a problem which will arise between now and the summoning of the Law of the Sea conference in 1973–74. It is only an interim problem and I hope the good sense of the Icelandic Government and people will prevail in the end and that they will come to an agreement on an interim solution before we enter a second cod war which could only adversely affect the traditional friendship which has existed between our two nations.
The British fishing industry should prepare for a gradual extension of the limits in favour of coastal States, as I believe that this will be the eventual result of the Law of the Sea conference. I suggest that this extension will be phased over ten years or so, and therefore the industry, both the distant industry and the inshore industry, should make preparations now for what may happen in the future. However, we cannot be coerced by unilateral action on the part of Iceland which would prejudice the whole of the important subjects which are to be discussed at that forthcoming Law of the Sea conference.
I am grateful for having had this opportunity to make these few remarks since, as we all know, this matter will be settled one way or the other on 1st September when the House will be in recess. I thank my right hon. Friend for the order which is to introduce off the Yorkshire coast a closed herring season from 20th August to 30th September. It will be well received by inshore fishermen in that part of the country.
When we debated inshore fishing in July, 1971, the discussion lasted from 11.09 p.m. until midnight; our debate on deep-water fishing in November, 1971. lasted from 11.19 until 11.59 p.m. Now we are debating these orders for a period of 1½ hours. I suggest that this is not good enough and that we should return to the tradition of having a full day's debate on the fishing industry each year. I put this to my right hon. Friend the Minister now and I hope that through the usual channels it will be arranged that we shall have a full day's debate 501 on our return from the Summer Recess when the Icelandic situation will be foremost in our minds. I hope that in making this suggestion I shall have the backing of hon. Members on both sides of the House.
In conclusion, I wish to ask my right hon. Friend to keep in touch with those of us who represent the major fishing ports during the recess if the Icelandic situation deteriorates. I support these orders and congratulate my right hon. Friend on what he has done for the industry during his tenure of office.
§ 10.43 p.m.
§ Mr. Robert Hughes (Aberdeen, North)
I agree with the hon. Member for Haltemprice (Mr. Wall) about the length of time we have to discuss fishing topics. It is a pity that in agreeing to take the two orders together we cannot double the time available. I appreciate that that would not suit the Minister since, by proceeding in this way, he is getting two orders for the price of one.
The Minister in introducing the orders stressed the buoyancy of the industry, how well it was doing, how satisfied he was with the earnings and how it had enabled him to reduce the subsidies. We see from the figures that since 1969 earnings have risen from £19.3 million to £29.5 million last year, and it is reported that earnings this year are up by 30 per cent. However, behind these figures, which appear to be extremely satisfactory, is the worry that these earnings come entirely from increased prices.
If we look at the catching side of the industry we find that, although in general there has been a marginal increase in catches—for Britain as a whole the increase is from 761,000 tons to 762,000 tons—this represents for England and Wales a 5 per cent. reduction in catch whereas in Scotland there is an increase of 10 per cent.
In spite of these reduced catches in England and Wales, earning capacity has gone up by 19 per cent. The increased catches in Scotland of 10 per cent. have brought increases in earnings of some 35 per cent. We are seeing here an increase in profitability not in the sense that the fleet is catching more fish but in the sense that more money is being taken from the consumer.
I was disappointed by what the right hon. Gentleman had to say in introducing 502 these orders just as I was last year when he brought in the previous orders. He did not spend any time dealing with the price of fish to the consumer. He did not say how he saw it being stabilised, how it had increased over the year and what steps he was taking to ensure that the consumer got a fair deal.
These orders are concerned primarily with subsidy to producers. As a result the Minister is limited by the rules of order to the terms of the orders. However, hon. Members on the back benches would not object if he widened the area of discussion by slipping in one or two bits and pieces which were outside the scope of the orders, and I am sure that the right hon. Gentleman would be adept at doing that if he wished to. I hope that he will not use the rules of order as an excuse for not considering the consumer. The consumer should have an important part in any discussion of these matters yet he is always left out of it.
We should consider how much the consumer is paying to whom. Who really gets the increased earnings? I am not altogether satisfied that it is the fisherman. Is it the middle man? Is it the processor, the man who buys in the market and processes or simply ships from one part of the country to another? How far are his increased earnings reflected in the price of fish? To what extent is the retail getting a cut? Do we get value for money in relation to the catch? People in our fishing ports have a right to ask. The difference between the price of fish realised on the quayside and in the retail shops is considerable. What is the markup? I have some knowledge of the industry. It is not on interest in the usual sense because I gain no money from it. But I have relatives and close friends in the industry, and I have my suspicions about how much is taken from the consumer's pocket and how much value is given him for that money.
I want to take up the Minister on his point about grants and loans for the building of vessels. He said that there was no shortage of applications, and that may be the case. But I wonder why it is that the right hon. Gentleman, apparently, is the only Minister in the Government not to have learned the lessons of the past.
Paragraph 132 of the report of the White Fish Authority draws attention to the fact that at the time of the last order 503 dealing with building grants there was a 10 per cent. cut in the rate of grant for fishing vessels. It points out that there are difficulties as a result of changes of Government policy in other directions. When the Government cut grants for industry generally in their full flight of shooting lame ducks, they included the fishing industry. They said that it had to take cuts in building grants since cuts were being made right across the board. But the Government have reversed their previous thoughts. They have returned to the system of investment grants. Almost every day they boast of the way they have given unprecedented help with a view to bringing industry generally out of the trough of depresion. Yet the fishing industry is not involved in this.
The White Fish Authority makes the point clearly. Many fishing ports are situated in development areas and the introduction of grants at the rate of 20 per cent. and 22 per cent. in capital expenditure incurred on buildings, plant and machinery and mining works worsens the fishing industry's relative position.
§ Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)
Has the hon. Member made any assessment of the orders in the yards for fishing vessels since these cuts were brought in?
§ Mr. Hughes
I have not made any assessment of the reduction in applications or the reduction in the number of vessels being built as a result of the 10 per cent. cut. If the hon. Member for Aberdeenshire, East (Mr. WolrigeGordon) cares to read the report of the White Fish Authority, he will see that the 10 per cent. cut worsens the industry's position vis-à-vis other industries, which is regrettable. That is a straightforward comment from the White Fish Authority.
It is surprising that that should happen at a time when we all know that the fishing industry is facing uncertainty and is facing indirectly the threat from Iceland that all our vessels now fishing off Iceland will be driven into our home shores. If those vessels displace the middle water fleet, that fleet will be forced in on the inshore fleet and so on. We will get not only theoretical poaching off Iceland but actual poaching off our coast where there are all kinds of difficulties relating to po[...]ts and the size of vessels.
504 The situation is not clear. Any Minister who claims to have an interest in the industry should at least have asked at Cabinet level for the same investment grants as any other part of industry. I hope that the Minister of Agriculture. Fisheries and Food will not take the same kind of view as the Minister for Transport Industries, who said that the nationalisation of the railways and other industries was a complete fiasco. That remark shows that he does not speak for the industry for which he is Minister. I hope that the Minister of Agriculture, Fisheries and Food speaks for the industry for which he is Minister and that he has been fighting in the Cabinet against the 10 per cent. cut. However, I regret he has said that he is not at this stage prepared to restore the 10 per cent. cut which he made on a previous occasion.
Although we are accepting these orders, and we recognise that the cut of £300,000 in relation to the total earning capacity of the industry is not much, we hope that the Minister will be flexible in his approach because of the difficulties and uncertainties facing the industry, and that he will approach the matter with an open mind and be prepared to consider the points we have raised tonight. With the Icelandic situation, we are likely to face steep price increases, and experience of the recent past has shown us that retailers appear to put up their prices within 24 hours of difficulties. I cannot imagine how the difficulties with Iceland can have such an immediate affect on prices. However, the public always has to face price increases immediately difficulties arise.
I hope that the Minister will apply his mind to how he can protect the consumer from increased fish prices. His Ministry represents not only the producers but the consumers. I believe the Minister lays far too much stress on the producing side and far too little on the consumer side.
§ 10.54 p.m.
§ Mr. James Johnson (Kingston upon Hull, West)
Because of the time we can make only a few cursory comments on the Minister's speech. First, I emphasise that we would like more time for fishery debates. I hope the Minister will speak to his Cabinet colleagues about the matter. Secondly, I am pleased to 505 see that the Minister has increased the research and development moneys from £2 million to £3 million to the White Fish Authority. In view of the Minister's past behaviour, when he was an arch critic of the White Fish Authority—he, like myself, thought of abolishing it—are we to take it that he now feels confidence in the authority? I sincerely hope so in view of what he is doing.
I ask the Minister to attempt to achieve what I believe to be the most important activity of the authority at the moment—the development of fish farming. As a result of the dangers of the distant waters and of our being pulled back into our home waters, we must look at fishing not so much as a hunting industry as in the past, with all its dangerous work in the deep Arctic, but as farming. No more than in deep coal mining do we now expect to send our sons into the deep fishing of the Arctic, which is dangerous and difficult. We should attempt to do far more fish farming to get supplies of fish on to the slabs in the shops.
The other order cuts back Government money. It is somewhat sardonic that a Conservative Minister should be cutting back subsidy in view of the past history of the fishing industry. Will the right hon. Gentleman watch out for the ups and downs of the industry? Catches and making money notoriously go in cycles. Next year could be bad, particularly in view of the Iceland difficulties and of our entry into the EEC and other happenings. Without being a Cassandra, like my right hon. Friend the Member for Workington (Mr. Peart), I caution the right hon. Gentleman to keep a canny eye on this matter and to be prepared to give back some help to the fishing industry.
I represent a deep sea fishing port but I find it fascinating—indeed, I am quite pleased—that our inshore fishermen catch over half the fish put on the slabs for the housewife. Their achievements, reflected in the statistics, are staggering. On behalf of the housewife, I give thanks to them.
Do not let us for a moment, however, think that the fishermen get paid anything like a proper percentage of the price in the shop. That is by no means so. No one can make more money by 506 saying on the quayside, "You must pay more for the fish." We have auctions, which are keen and competitive. The additional cost is tacked on to the fish as it moves stage by stage to the kitchen. The Minister, who is supposed to be the guardian of the housewife, should set up an inquiry into how fish gets to such astronomical prices on its way from the vessel.
The earnings at first-hand sales at the quayside last year were just under £30 million and the figure has risen to £37.1 million. On that basis the right hon. Gentleman says that the fishermen are making a lot of money and the Government must cut back the subsidy. I do not think things are as simple as that. Contrary to other old-fashioned basic industries like mining and steel, shipbuilding and textiles, fishing is actually gaining manpower. More men are now going fishing; more vessels are at sea than there were 12 months or two or five years ago, and this is encouraging. The number of vessels over 40 ft., for example, has increased. On that basis the right hon. Gentleman cuts back. Does he honestly think that £2,200 a vessel is all that much? Many are family vessels. The payment is £40 a week but in a vessel there may be two, three or four or five adults working as a family, particularly in Scotland. I do not think this is quite the basis on which to invest a fleet for the future.
There has been very little hullabaloo or discussion about these cut-backs, as distinct from what happened under the Labour Government when we cut back in this way. The industry has behaved like mice—not like church mice, as there has been no squealing or anything like that. Year after year, however, I have found it fascinating that in debates of this nature, when we have done this sort of thing, there has been an enormous concatenation of complaints; but not tonight.
I should be out of order in discussing the EEC limits and the Icelandic situation, but those are important factors. They will push back our deep-sea vessels into middle waters and back further into inshore waters. There are big question marks about the future of the men fishing within these narrow limits as compared with the deep sea men.
The Department may present a good case for cutting back subsidies as the 507 industry is doing so well, but the Government should bear in mind the ups and downs. This year it is up; next year it could be down. The Minister knows this, so I beg him to keep it in the forefront of his mind.
§ 11.1 p.m.
§ Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)
Some harsh words have been spoken tonight about lame ducks. I shall speak in support of the Government on the introduction of the orders.
The 10 per cent. extra subsidy on the building of fishing vessels was temporary anyway. My right hon. and hon. Friends were quite right to remove it when they did, although it created a certain crisis of confidence for a short time in the yards. But the yards are now busy again and the fishing industry as a whole is doing extremely well.
The hon. Member for Aberdeen, North (Mr. Robert Hughes) spoke of doubts and fears about the future. This is always possible, and doubts and fears are often more prevalent when something is going well than when it is going badly. The hon. Member ought to remember, however, that the present Government are spending a great deal more money in developing the fishing harbour at Aberdeen than the Labour Government ever thought of doing and that the present Government's support for the fishing ports, in Scotland at any rate, is extremely generous.
Having said that, it is a little difficult for my hon. Friends who speak for the industry to cheer enthusiastically when Government support for it is withdrawn. That is one of the worst aspects of wholesale Government support. The hon. Member for Kingston upon Hull, West (Mr. James Johnson) complained that orders such as these were always badly received under the Labour Government. But the truth is that they always did the wrong thing at the wrong time and for the wrong reasons.
In this case, I am extremely pleased that from now on the orders are to be administered from Edinburgh. This is a very great step forward for our industry.
§ 11.3 p.m.
§ Mr. Kevin McNamara (Kingston upon Hull, North)
In discussing the first order the Minister mentioned the Written 508 Answer to a Question on 18th July concerning the future of the White Fish Authority and the Herring Industry Board, in which he saidThe major uncertainties affecting the future of the authority and the board have now been removed."—[OFFICIAL REPORT, 18th July, 1972; Vol. 841, c. 65.]That is far from being the case. In his answer, the Minister indicated the uncertainty of the problems associated with joining the EEC and the future of the White Fish Authority bearing in mind the Commission's rules and regulations. But there is, in particular, a tremendous degree of uncertainty among those employed by the White Fish Authority and the Herring Industry Board.
Like Lord Vestey with Midland Cold Storage, my trade union—the Transport and General Workers' Union—has a subidiary, the Association of Clerical, Technical and Supervisory Staffs. We organise the office and other workers at the White Fish Authority in London and Edinburgh and those who work for the Herring Industry Board. This is what the officer responsible for the organisation in the London area states:Since you wrote to me we have of course had the Minister's statement together with the statement by the White Fish Authority which at this stage only indicated in very broad terms the proposals for the unification both of the various White Fish Committees and the Herring Board.Our current difficulties are that although this situation could well have been anticipated no detailed information about the Authority's future structure etc. is yet available and the current forecast is that we will be unlikely to get any realistic information from the Authority prior to the next statutory meeting which I believe is on September 13th. Needless to say, the situation whereby a Minister demolishes a workpeople's employment and then leaves a complete vacuum in information terms for approximately two months is extremely unsatisfactory.When discussing the future of this important statutory authority there is an extra obligation upon the Government, whatever their political complexion, to take the workpeople into their confidence and discuss their employment prospects with them. It is deplorable that there have not been discussions between the trade union and the authority.
§ Mr. Prior
The authority is an independent employer of labour. It is the authority's responsibility to do this. I have carefully noted what the hon. Gentleman has said. I am willing to facilitate 509 discussions between the authority and its employees and to help in any way I can. However, I repeat that it is primarily the job of the authority to do this and it is not for the Government.
§ Mr. McNamara
I am grateful for that undertaking by the Minister which I know that he will honour. The point is that it is a strange situation in which the Ministry is responsible by Statute for authorising the payment of moneys and for the raising of levies and paying subsidies to keep an organisation in existence, but when it comes to changing the direction in which that body is travelling the responsibility is on the body itself and not on the Government which has just decreed the change.
What plans are there for research into the problems which will face the inshore fleet whether or not the Icelandic Government are successful in their attempt to extend their limits to 50 miles? In particular, what consultation takes place with fishing authorities in other countries, particularly those that fish the southern North Sea? I am thinking in particular of the effect of the Dutch Delta scheme upon some of the nursery grounds for flat and other fish in Dutch waters fished by British, Belgian and Dutch fishermen and on occasion by German and Norwegian fishermen.
The Delta plan is a plan to reclaim a lot of land following disastrous North Sea floods. It involves the closing of many of the tributaries of the Scheldt and Rhine. Some of them were industrial sewers, some brackish, but some were swept and kept clean by the sea. One of them—the Oosterscheldt—has been a primary nursery ground, particularly for flat fish. The fish have spawned and have grown there in four or five years into a size at which they can be fished and then have come out again into the southern North Sea.
Part of the Delta plan was to enclose the Oosterscheldt. I know that this is a googly, but will the Government if necessary write to me about any discussions which may have taken place with the Dutch on the problem and say whether it has been considered by the fishing industry? Have the various countries bordering the North Sea come together to discuss their conservation plans and, in particular major schemes such as the one I have mentioned.
510 Whatever happens about Iceland, there will have to be more international cooperation and more and more research into the type of vessels, the type of mesh and the periods during which we shall have to prevent fishing in particular areas. This will become more important as the pressures of world population increase the demand for fish as a primary item in people's diet.
Like the hon. Member for Haltemprice (Mr. Wall) I share the Minister's hope that even at this late hour the Icelandic Government might think particularly about what the future holds for them if they turn down agreement with Britain, and what it will mean for people in this country whose livelihoods depend on the issue. We know that the "Miranda" will go back on station and that the Royal Navy will patrol the area. Is the Minister satisfied that even more help will be needed, particularly in the height of winter off the coast of Iceland? This applies particularly to meteorological reports because of the conditions which can suddenly blow up as they did when we lost three vessels in recent years. While there have been stability tests of all sorts, the problems of weather still exist.
May I bowl the junior Minister another googly? My union, the Transport and General Workers' Union, has said that if the Icelandic Government go ahead with their ban it will not land any fish from Iceland or from Icelandic vessels with exports to Iceland. May we have an undertaking from the Minister that in that event none of the parties to the contracts will make application to the National Industrial Relations Court in relation to actions for unfair industrial practices or improper interference with commercial contracts?
§ 11.13 p.m.
§ Mr. Norman Buchan (Renfrew, West)
I suspect that after that googly the Minister will regard the pitch as it was at Leeds last week. We are grateful to the Minister for setting the orders in the context of the fishing industry as a whole, including the question of the White Fish Authority. We have rare opportunities to discuss the fishing industry and the hon. Member for Haltemprise (Mr. Wall) is right when he says that the time is more than overdue when we should have 511 a fuller discussion on the fishing industry, especially in view of the international situation which now faces it.
The cut in subsidy is genuinely based on an assessment of the best fishing experience. As my hon. Friend the Member for Aberdeen, North (Mr. Robert Hughes) said, it has been demonstrated how inappropriate it is to base support for the industry on figures of profit. Therefore we want to know whether the Minister is basing his case entirely on the inadequate concept of profitability. At least, to do so would be to base it upon one factor affecting the whole of the British industry. Or, as some suspect, and after the Minister's speech I more than suspect, is it a double-pronged attack in two similar directions, one towards his own basic policy and the other towards Europe?
I stress this because the Minister was right to say that he always welcomed cuts in subsidy. He has been honest in the past about this. It was in a debate on orders concerning the fishing industry that he enunciated his basic philosophy when he said that he hoped the time would come when there would be an end to all subsidies, both in fisheries and agriculture. He said that the time had come when prices should rise, because the British people had been mollycoddled for too long with cheap food. [Interruption.] I have used this quotation before, and I intend to use it again.
The trouble is that these damned orders come so late at night that the debates on them are never reported in the Press next day to put on record that the right hon. Gentleman wants to reduce all subsidies on agriculture and fisheries and that he wants prices to increase because he believes that the British nation has been mollycoddled for too long on cheap food. Therefore, all his protestations, that he does not like prices to go up, whether fish prices or beef prices, are denying his own philosophy. It would be more helpful to tell the British housewife that he wants higher prices. If he has changed his philosophy perhaps he will let us know. If not he must take this, much as he may dislike it.
It is against the background of a 10 per cent. increase in production in Scot- 512 land, emerging as a 39 per cent. increase in prices, that the right hon. Gentleman looks at the cut in subsidies. In other words, he is not basically concerned with the industry and the needs of the community. He is concerned only with subsidy in this narrow concept of the profitability or otherwise of the people in the industry. If their income is too low, he says "Let us subsidise it." He must come on to the idea of seeing it as an important industry for the nation. Profitability might increase, and yet it might still be proper to increase the subsidy, because that is what the industry might require in the interests of the nation. The right hon. Gentleman should consider the matter not from the narrow point of view of increasing the income of the fishermen, important as that is. The question is close to me because I sometimes think that half the fleet in Aberdeen are my cousins. The Minister must think of the nation.
The matter is doubly important when we set it against other aspects of food consumption in this country. Between the last quarter of 1969 and the last quarter of 1971 fish consumption dropped by about 25 per cent, from 4.1 lb. per head per annum to 3.2 lb. We see an increase in fishing production and a trebling of profitability but a drop in consumption of fish. The corollary of the increased price of fish is that people are eating less fish. At the same time, the increase in beef prices has cut back meat consumption.
The right hon. Gentleman's policies, based upon high prices, are drastically affecting the nation's diet. They are especially affecting the low income groups. Between the last quarter of 1969 and the last quarter of 1971 prices increased as follows: cod fillets, 53.6 per cent.; haddock fillets, 31 per cent.; smoked haddock, 33 per cent.; and herring—the poor man's diet in the old days—40 per cent.
That is the background. At a time when the price of beef is going through the ceiling it is very serious to see the price of fish—which some people wrongly regard as a substitute for beef—also going up.
§ Mr. Buchan
I am talking about the last month or two. I am talking about the right hon. Gentleman's figures. We can see that the change in price cuts consumption. We saw it particularly in relation to the right hon. Gentleman's figures for old-age pensioners. His own figures show a drop in consumption. He must put the two things in the same context. He cannot tell me, after what he did to beef prices in May and June, that more people were buying beef. My butcher said that people were terrified to go into his shop.
The House of Lords debated this question. It does not always understand our problems but Lord Leatherland, speaking about the cut in subsidy, said:I speak feelingly because I live almost entirely on fish. Every time I say to my wife, let us have lemon sole today,' she says. But lemon sole has gone up since last week.' If I turn to Scottish salmon it is the same"—[OFFICIAL REPORT, House of Lords, 27th July, 1972; Vol. 333, c. 1517.]He goes back to the second-best—Scottish salmon—and finds that the price has gone up. It is clear that the right hon. Gentleman is not just hitting the poorer section of the community; he is also inconveniencing the rich.
§ Mr. Buchan
One nation—all suffering indiscriminately. That is the Minister's policy.
What about the cuts in relation to Common Market policy? In a Press Notice of 18th July of this year the right hon. Gentleman said that the White Fish Authority would have to change because we were entering the Common Market. He said:The Community regulations foresee the establishment of a network of producers' organisations which, if fully achieved, would leave no separate regulatory rôle for independent national bodies like the Board and the Authority. On the other hand there are functions for which continuing provision may be needed.My right hon. Friend and I have had arguments about the future of the White 514 Fish Authority and the Herring Industry Board—long, involved discussions—as to whether we should have a combined board. It now automatically follows, not on the basis of the needs of the industry but on the basis of entering the Common Market. I suspect that the cut in subsidy is linked to the same movement. Will the Minister be able to continue the subsidy—the deep water formula and the ad hoc examination of profits—once we are in the Common Market, or is it just his instinct to push up prices?
The other related question is the matter of joining the two bodies together. If we are to see the end of the independent existence of these two bodies tribute should be paid to the work they have done in the past. A great deal of the success that the Minister is now using as an excuse to cut the subsidy on the fishing industry is due to the work—research and otherwise—of the White Fish Authority and the Herring Industry Board in the regulatory aspects of the industry. More credit should have been given to them for their work. We are told that they will somehow be joined together. We could have done with more details.
I thank the Minister for his comment on the point made by my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara). One needs a compass to deal with speakers in fishing debates in this House. One man is "West" and another is "East"; it is like a Dutchman's beard.
I welcome the suggestion that if we join the two bodies together the location of their headquarters should be in Scotland. That seems a sensible decision with which no one can quarrel. There are very good reasons why it should be in Scotland. Some of us will go out of our way to stress the advantages of its being there.
The right hon. Gentleman said that permanent guarantees have been given to the fishing industry as a result of discussions with the Common Market countries and the signing of the Treaty of Accession. This is just not so. There is no existing guarantee, particularly on the question of the continuation of the limits in relation to 1982 and the existing derogation. It is not true to say that a permanent guarantee has been received. The best the Minister can do is to hope 515 that the other countries will listen to his pleas, if he is still in power then, as we approach 1982, but there is no veto that can be used.
I accuse the Government of conning the industry and their own supporters into believing that that was how the veto functioned, but it functions in exactly the opposite way. The Minister of State, Scottish Office, at that time, Lady Tweedsmuir, I believe out of innocence, assured the Lords that that was the position but, as I say, I believe she spoke out of innocence, because I cannot believe that a Minister would allow herself to be so wrong.
When the derogation ends in 1982 we can argue, and we shall argue, that it should continue, but if any one member State of the Six—the Ten as it will be then—says "No," the derogation will end and we shall have lost the guarantee of our present fishing limits. We then revert to the common fisheries policy. So do not let the Government try to con the nation, even at this late hour, into believing that permanent and proper guarantees have been given to the industry. They have not been, and they cannot be now that we have signed the Treaty of Accession and, God help us, put the European Communities Bill through the House.
These matters are all in the background of the orders. We deplore the cuts because we believe that the Government have ignored the needs of the industry in making them. We think that the basis of the assessment was wrong. We are glad that the industry has been doing so well, but we do not take pleasure, nor do the fishermen, in the fact that this return has been based on the price of fish rather than on an increased production. The fishermen are holy people—they believe in what they are doing. They would rather the return came from producing increased food for the country than from over-charging.
Incidentally, I wish the right hon. Gentleman would control his very attractive Parliamentary Private Secretary. [HON. MEMBERS: "Oh."] She is the most attractive of the three, without any doubt whatsoever—
§ Mr. Buchan
What I may say may be out of order, Mr. Speaker, but at any rate in saying it I have reached agreement with one Member of the party opposite.
I welcome the increase of £1 million for research, but I would like to have more detail about how it is to be used. It seems a pity to increase the amount by £1 million while at the same time cutting back the advertising levy. Perhaps the Under-Secretary can give us some information on that point in particular.
§ 11.29 p.m.
§ The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith)
On few occasions in fishing debates have I seen the Opposition toiling more strenuously to find arguments for criticising the Government. It was noticeable that the hon. Member for Kingston upon Hull. West (Mr. James Johnson) was particularly careful to dissociate himself from the Cassandra-type remarks of his right hon. Friend the Member for Workington (Mr. Peart). The hon. Member for Aberdeen, North (Mr. Robert Hughes) is usually in a Cassandra-type role. He did not particularly identify himself with it tonight but he achieved it well, and I shall be happy to deal with his arguments. The hon. Member for Kingston upon Hull, North (Mr. McNamara) was careful not to identify himself in any particular way and raised some constructive points with which I shall be pleased to deal.
One realises what difficulty the hon. Member for Renfrew, West (Mr. Buchan) must have had in pacing the corridors during the last few days trying to scrape up the arguments to throw at the Government about the way they have treated the fishing industry. His figures of consumption were of doubtful origin and not based on fact, he mixed up questions concerning the European Economic Community and he did not really understand the industry. Anyone outside the House who reads his speech will wonder what kind of argument he was trying to put forward.
517 The position is not in any way as some hon. Members on the Opposition side have tried to paint it, although I certainly do not look on the industry with any complacency. No one concerned with this great industry and the men who work in it throughout the country and on the high seas could ever be complacent about it. As my right hon. Friend the Minister said in opening the debate, however, the last year has seen a greatly improving profit situation in the industry. It is this profit situation that I emphasise tonight.
One must be very careful not to confuse figures of earnings and figures of profit, to which my right hon. Friend rightly referred. He in no way confused these figures in opening the debate. He spoke about earnings but he also spoke about profits. If I may repeat what he said, after depreciation—this is the important point—the figures for United Kingdom vessels have more than doubled over the past three years, rising from about £1,000 in 1969 to £1,400 in 1970 and to £2,200 last year. Those are the figures not of earnings but of profit.
The hon. Member for Kingston upon Hull, West mentioned an average profit figure of £2,200 and said that it was not very much for a vessel with four or five owners on a share basis. I remind him and the House, however, that the profit is after paying the working crew. For Scotland, in which I am particularly interested, the average wage of each crew member in 1971 was almost £1,800. This is additional to any share in profits. I hope that this puts the figure in perspective.
When we talk about profits, we mean profits. These are profits after the labour share has been paid out. This should demolish some of the Cassandra-type remarks we have heard from hon. Members on the Opposition Front Bench but which we heard rather less from their hon. Friends behind them.
In looking at the Scottish industry, I find it extremely significant that over the last three years annual earnings, including those from shellfish, have increased from £16.8 million in 1969 to £24.3 million in 1971. This is almost a 50 per cent. increase. During the same period, average profits per vessel after depreciation have increased from about £1,700 in 1969 to £3,300 in 1971, an 518 increase of about 90 per cent. I believe that the Scottish fleet has improved its profits position most significantly and there is every indication that this upward trend will continue this year.
In the period to the end of June, earnings from white fish and herring landings amounted to £11.9 million campared with £9.3 million in the same period in 1971 and the corresponding figure of £7.4 million in 1970. This indicates that within the United Kingdom figures to which my right hon. Friend referred the Scottish industry is enjoying a prosperous time.
§ Mr. Buchanan-Smith
The hon. Member for Aberdeen, North was correct. One of the main factors here has been the increase in the price of fish. But what matters to the fishermen—and I know people in the industry—is the cash return. The financial position has improved and we should be pleased about that.
The question of consultation with the fishermen's associations is important. The associations were fully consulted when we discussed their results for last year. The Scottish associations have not made any further representations, and while those in England and Wales have expressed disappointment at the subsidy reduction their suggestion that the industry's rising costs were not fully taken into account is not correct, as I have indicated in my distinction between earnings and profits. Our assessment of the industry's financial position is based on its profit figures and not on earnings alone. If the associations had looked at the profits situation and not at the earnings situation alone, they would have seen that a different picture was given.
I turn to the question of Iceland. This can have an effect on the inshore industry. As my hon. Friend the Member for Aberdeen, South (Mr. Sproat) said in a very effective letter to the Scotsman a week ago, this is something which will affect the Scottish inshore fishing industry. We do not have many boats fishing in Icelandic waters, but we have many boats fishing in the waters of the Faroes. It is naïve to assume that what happens in Iceland will not affect the situation 519 elsewhere. If some of the deep sea boats come into inshore waters, it can have a very serious effect on our inshore industry in Scotland.
That is what makes totally incomprehensible the attitude of the Scottish National Party in openly supporting Iceland's attitude and claims, not only as they affect the inshore industry but in the wider sense in that it is completely wrong to believe that we can solve the problem of conservation on a purely unilateral basis. This matter concerns us internationally and we must solve it, as we have sought to solve it, by international negotiation and co-operation. This is what we have offered Iceland. The hon. Member for Kingston upon Hull, West pointed out how important it is that we pursue this matter. We are in touch with the Dutch industry, as we have been in touch with others, over this problem.
§ Mr. Buchanan-Smith
Yes, we are in touch also with the West Germans on these matters.
My right hon. Friend dealt with the question of the White Fish Authority. I understand the point that consultation with the White Fish Authority is important, but this is basically a matter for the authority itself. In trying to achieve dispersal of Government offices outside London these problems inevitably arise, and we should not let them hinder our attempts to achieve dispersal.
To deal finally with the question of confidence in the industry, I should say that in the first six months of this year applications from Scotland for grants for new vessels received by the Herring Industry Board and the White Fish Authority totalled 53, against 86 for the whole of last year and 51 for the whole of 1970. In other words, in the first six months of this year we received more applications than in the whole of 1970. From the deep sea fishing industry in Scotland we have received six applications against two in 1970. These figures completely contradict the cries of woe of hon. Gentlemen on the Opposition side and show the confidence of the industry.
While I regret to some extent the reductions contained in the order, I give 520 the House and the industry an assurance that any change in the fortunes of the industry should it arise will be fully taken into account in future orders, but the present situation does not indicate the lack of confidence expressed by right hon. and hon. Gentlemen opposite tonight.
§ It being one and a half hours after the commencement of Proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business).
§ Question agreed to.
That the White Fish (Inshore Vessels) and Herring Subsidies (United Kingdom) Scheme 1972, a copy of which was laid before this House on 12th July, be approved.
That the White Fish Authority (Research and Development Grants) Order 1972, a copy of which was laid before this House on 6th July, be approved.—[Mr. Priori]