HC Deb 20 December 1974 vol 883 cc2035-49

12.17 p.m.

Mr. John Stanley (Tonbridge and Malling)

A number of hon. Members expressed a measure of incredulity that the hon. Member for Tonbridge and Mailing, representing a totally landlocked constituency, should wish to initiate a debate on the operation of the grant system for fishing vessels. Indeed, Mr. Speaker, one hon. Member even had the temerity to suggest that there might have been an administrative error in your own Department, but such things never occur and one has not occurred on this occasion.

I have in my constituency a major manufacturer of fishing vessel hulls which specialises in a particular type of material for hull manufacture. I refer to the Tyler Boat Company, which is engaged in the manufacture of what are known as glass reinforced plastic hulls, which I will for the convenience of the House subsequently refer to as GRP. This, as the Minister of State will know, is a relatively new branch of the vessel construction industry but a growing one.

Though this problem that I wish to raise has been brought to my attention by a particular company in my own con- stituency, I believe that it is a common problem that is shared with all those other firms which are engaged in the manufacture of hulls out of GRP. Indeed, I have today received a letter from a company called Halmatic Limited, of Havant, which is engaged in exactly the same type of construction as the Tyler Boat Company. This company, knowing that I was to have this debate today, has made exactly the same point to me as the firm which is situated in my constituency.

The Minister of State will be aware that the technology of the construction of fishing vessels has begun to change appreciably and that fishing vessels are now not always constructed of the traditional steel and timber materials. Today many fishing vessels are being constructed with GRP materials.

The rules for the making available of grants through the White Fish Authority have not, as far as I can see, been sufficiently adapted to take into account the presence of this new material for the construction of hulls for fishing vessels and, in particular, have not been adapted to the particular problems and constraints of production where GRP is involved as opposed to steel and timber.

The rule that I want to mention in particular is the rule that no grant is available unless, before any construction work starts, there has been approval of the grant by the White Fish Authority. This, as the Minister will appreciate, denies fishing vessel manufacturers the possibility of building for stock in GRP materials. This has very considerable commercial implications for their businesses. It is a rule which appears to be extremely rigidly applied, and I will refer to one point in particular to illustrate it. The Tyler Boat Company in 1972 began the development of a new series of GRP fishing vessel hulls, and it produced the first prototype of that series. The company built it exclusively to White Fish Authority specifications and the hull which it made was designed to incorporate all the machinery, electronics and so on which would meet the White Fish Authority specification.

Because the hull had not been approved by the White Fish Authority prior to the start of construction, the authority was not able to make any grant available, even though a large number of approved fishermen were willing to purchase this vessel. This episode had a somewhat ironic twist because the boat was rendered more or less unsaleable as a result of the application of this rule, and it was finally purchased by the Department of the Environment at a bargain basement price. I always endorse a good buy by the public sector, but the Minister will appreciate the sense of frustration of this firm at having had a vessel rendered impossible to sell through the normal channels by the operation of the rules of one Government Department, and having to sell it at a very much reduced price to another Government Department.

The effect of not being able to build for stock on those engaged on the construction of GRP hulls is considerable. This is because these firms are engaged in factory production methods in the construction of their work. Unlike the construction of hulls in steel and timber where it is possible to have a considerable unevenness in the work load to construct a number of vessels, and to discontinue the construction for a short period, the techniques and equipment involved in the construction of GRP hulls demands a reasonably even work load. Because of these factory production methods, some extremely expensive equipment is necessary for the moulding work in particular, and it will be evident that to get the most economic use of this equipment it is important to have a standard hull which can go into series production. Only in that way is it possible to get real economy and value for money for the ultimate purchasers, the fishermen.

Again, if it is not possible to build for stock, the companies concerned are not able to offer particularly rapid delivery dates. It is not possible for fishermen who may qualify for a grant to purchase a vessel off the shelf, so to speak. Therefore, delivery dates are extended, and this has adverse implications for the potential export business of these companies.

One final important point is that as long as these companies are not able to build for stock they are in a difficult position when they want to launch a new type of design. When a new design is launched it is essential to have a prototype model which can be used for demonstration purposes for potential buyers. There is no alternative but to build a prototype model for demonstration purposes, but that prototype model will not in any circumstances be able to qualify for a White Fish Authority grant because the grant is only available if it has been approved prior to construction, and that approval is tailored to the prospective purchase by a single approved fisherman when the boat has been constructed.

The Minister will appreciate the serious constraints which are placed on these firms as a result of the application of this rule. The companies concerned are not in any way trying to circumvent the control that is at present exercised by the White Fish Authority. They fully recognise the need for this control. They believe that it is perfectly possible to enable them to build for stock without reducing the control exercised by the White Fish Authority. The companies recognise that there must be public accountability because it is public funds which are used for the grant. In addition, they recognise that there must be regular inspection both at design stage and during the construction phase of all vessels used by United Kingdom fishermen to meet the necessary safety requirements laid down by the Department. The companies believe it is possible to meet these public accountability and safety requirements while still being allowed to build for stock.

If the building for stock is allowed, the White Fish Authority can continue to inspect, supervise and approve the initial drawings and design plans. The authority can continue to inspect during construction, and it can continue to inspect the finished article. Therefore, the relaxation of this rule is wholly compatible with the maintenance of the necessary control which should be exercised through the White Fish Authority.

Unless building for stock is allowed, the United Kingdom fisherman will continue to have to pay more than he necessarily should for a vessel which is made out of GRP materials. He will have to pay more because the companies engaged in this form of construction will not be getting the full economy which their production process allows. As the fisherman will pay more, there is imposed here an additional and unnecessary burden on public funds, because the grant represents a percentage of the actual cost of purchase which is incurred by the fisherman, and therefore, if it is possible to reduce the cost of the boat it is also possible to reduce the amount of grant which has to be paid.

I suggest that there is here a clear-cut case for endeavouring to relax the rule to enable these companies to build for stock. I hope that the Minister will be able to respond sympathetically and positively to what I have said, and thus help a growing, thriving and potentially economically important industry.

12.27 p.m.

Mr. Kevin McNamara (Kingston upon Hull, Central)

The House is indebted to the hon. Member for Tonbridge and Mailing (Mr. Stanley) for initiating this debate. If I do not follow him in the ramifications of his constituency problem, I think he will agree that the question of the operation of the grant system covers not only his type of vessel but those vessels which sail out of the Humber ports.

In particular, we are concerned about the grants which our vessels will get as a result of applications which have been made for subsidies. I was surprised that when we met the vessel owners they had not seen fit to approach my trade union to ask it for its support in their application for grant. I find this even more surprising because of the good relations which have existed between the union and the owners in the past few years, and particularly because the owners were keen to have the co-operation of my union during the Icelandic fishing dispute. I should have thought that in the interests of good industrial relations, and also to give more power to their elbow, they would at this time, with a Labour Government in power, have asked the union to join them in their approaches to the Minister in connection with problems facing the industry.

If the vessel owners are to get the grants for which they are looking for their vessels, it seems to me, particularly with a Labour Government in office, that any Minister considering giving a grant should say to the industry "Is it not about time that you put some of your own industrial relations in order? Is it not about time that you started positive negotiations to decasualise the work force?" because from the age of 45 onwards a man may never know whether his calling as a fisherman has gone for ever. They should say to the owners "Why do you not look for ways of getting the Contracts of Employment Act and the Redundancy Payments Act applicable to your industry? Why do you not have a proper system of recruiting so that a tragic death such as that which occurred when the "Gaul" was lost could not happen again, because no ship should sail with a man on board who has signed articles only after the ship has sailed? Why do you not try to organise a proper pool of fishermen and a properly controlled basis between the unions and the employers on the lines of the dock labour scheme or the pool operated for merchant seamen?"

If the employers are concerned, as the President of the Vessel Owners' Association said in his message to the industry, about the hard times that are ahead regarding both the viability of the industry and the pressures that will come from international matters concerning the extension to the 200-mile limit, the Labour Government should insist that they put their own industrial house in order and get rid of the casual nature of the industry.

The present dispute at the fish dock in Hull would have been better resolved, much more quickly, if the owners had been under an obligation to pay men whilst they were unable to sail rather than that they should have to exist, even though on articles, on State support.

If the industry is to establish a proper claim for grants for these vessels, it has to establish its own case. Two points are evident. First, the industry is not quite certain what sort of subsidy it wants, whether it wants an operating subsidy for one group of vessels, or a subsidy on the basis of an intervention price or a deficiency payment if fish does not reach the price which the owners think it should reach in the market.

We do not know the precise losses which the industry faces. We have been given various figures. We know that the favourable oil contracts which the industry on Humberside had run out at the end of this year, and that there will be considerable increases in costs. We understand that, since these problems affect industry generally. We recall the record profits made from fish landings in Hull this time last year and at the start of the new year. There were record catches then, one after the other.

We do not know what the precise profits of the industry or of the individual companies have been. Only one major public company is involved. All the others are private companies. It seems to me that, private companies or not, the figures of last year's profits must be established for the information of the British public. There must be a clear definition of profit and of public accountability. It is not sufficient to go to the Ministry and say "These are our figures." The public has a right to know if there are to be further calls on public funds. Indeed, in every other industry, where applications have been made for subsidies of one sort or another, the figures of company profits have been given. It is essential that we should be able to see those figures, because the degree of secrecy, which is a traditional attitude in the fishing industry on Humberside, makes it extremely difficult for people wanting to see a flourishing industry, with full employment, to make any sort of case when we do not know what are the precise figures.

Therefore, I urge the Minister that if a subsidy is to be granted he must demand of the companies that they establish their right to receive it, not merely from the Government, but with the British public, as anybody else has to do.

Mr. John Prescott (Kingston upon Hull, East)

Does my hon. Friend agree that it is a source of confusion when people see that the price of fish does not come down, yet the owners tell us they are making tremendous losses? We need to take this problem seriously. One of the contradictions is that, although the European Commission is being asked to look at subsidies for its own fishing industry and is seeking this kind of information from European fishing companies, Members of Parliament cannot obtain access to information concerning the economics of operation in the interest of public accountability, and we should not agree to any subsidy unless we are given such information.

Mr. McNamara

This is the contradiction. Although British fishing vessel owners want information about their European counterparts, they will not apply that information to us. This is a matter of considerable importance.

There is a great deal of frozen fish in stock, and there is bound to come a time when the economics of keeping that stock will be such that we shall have to flood the fish on to the market. We are already experiencing problems with white fish, particularly at the Boston market, which are causing concern to the industry.

I accept that if the industry is facing difficulties, and if we are to have proper employment in industry and to maintain an economically viable industry, it may well be that a case must be made for subsidies. But for the owners merely to put out statements of how much it costs a trawler to run today compared with how much it cost last week, and to make other vague statements, will not satisfy the British public, particularly at this time of financial stringency. It will not satisfy people when they know the whole absurd nature of employment practices within the industry.

We shall be glad to know what progress has been made with the application for subsidies and whether the Minister will bear in mind the points I have made. The Minister should say to this secretive industry "If you have a case, you must make it in full and give us all the facts". The mere generalisations we have heard are not sufficient. The industry faces problems, but assistance can be given only when the Government understand all the information and the whole problem. Merely to say "Give us the medicine" without telling us precisely what all the symptoms are is not good enough.

12.37 p.m.

The Minister of State for Agriculture, Fisheries and Food (Mr. E. S. Bishop)

I am indebted to the hon. Member for Tonbridge and Mailing (Mr. Stanley), who initiated this debate, because it gives the Government a chance to clarify some of the aspects which have been expressed in the correspondence between his constituents and the Ministry.

The hon. Member pointed to certain difficulties which may arise for certain vessel constructors. He mentioned two companies in connection with the problem of obtaining grants for fibre glass reinforced plastic hulls and the problems arising with regard to other companies.

To look at the problems which have been raised it is important that we should know the rules which apply for the provision of grants. The problem affects vessel constructors, especially those using new techniques of construction and new materials, particularly those engaged in continuous processes such as the reinforced glass fibre process for hulls, to which the hon. Member referred, through the application of the administrative rules relating to the grant. Those rules are intended to safeguard the money voted by the House.

The rules have remained consistent throughout successive schemes and provide that the work to be grant aided should have prior approval. The hon. Member made that point in connection with the White Fish Authority and the Herring Industry Board. Secondly, the two authorities must satisfy themselves that the work has been carried out in accordance with the agreed specifications, and thirdly, that they shall have the right to inspect the vessel concerned during construction. This may be the point where the differences may arise regarding manufacturers.

These arrangements are no more than is usual in similar schemes involving public expenditure in other areas. But that is not to say that the authorities are inflexible in their application of the rules. It has proved possible in the light of experience to make approval more or less automatic for certain standard items of proved quality. That is a matter which the hon. Gentleman should bear in mind when he suggests that the present position creates difficulties for people who want boats made to a standard specification.

However, extension of this principle to embrace finished complete vessels embodying a great number of components brought together from differing sources—even small fishing vessels are quite sophisticated nowadays—is a very different matter. There would be real problems in doing so, and we would not wish to risk the waste of public money or the safety of fishermen's lives by the automatic approval of devices or construction methods until they had proved themselves under operating conditions. This is very important. We are concerned not only with the use of public money but with ensuring that the standards of vessels are adequate in terms of seaworthiness and the safety of those who operate them.

Mr. Stanley

Before the hon. Gentleman leaves the subject of safety, it is clear that the White Fish Authority has an absolute obligation to concern itself with the safety of fishermen, and it would be wrong for it to give grant approval simply to drawings. But where equipment exists and where whole hulls exist which have the necessary operational experience, once it has been decided in principle that they meet the White Fish Authority's requirements, surely there is no reason why approval should not be regarded as applying to series production.

Mr. Bishop

I appreciate the hon. Gentleman's point. However, the White Fish Authority must be satisfied not only with the specification and that it is adequate to do the job expected of the vessel but also that the processes of construction at various stages are adequate to ensure that the specification is met.

Mr. Stanley

I hoped that I had covered this matter in what I said earlier. There is no question of any of the firms to which I referred wishing to change the right of the White Fish Authority to do any inspection work that it likes during the constuction process in series production. What they want is the assurance that where a given set of equipment or a hull has the necessary approval of the authority, they can go ahead and build for stock knowing that grant will be forthcoming. This does not inhibit or reduce the right of the authority to make inspections during construction.

Mr. Bishop

I take the hon. Gentleman's point. Perhaps I might deal with some of these matters in my subsequent remarks.

The grant scheme is to assist those engaged in the fishing industry. It does not aim to interfere with sensible and progressive building operations in the shipyards, and I am satisfied that the statutory bodies do all they can to avoid such interference. Of course disagreements may arise from time to time over technical matters, but I am sure that the statutory bodies do their best to deal with points as helpfully as they can consistently with the proper discharge of their statutory responsibility for ensuring that the use of public funds is properly safeguarded.

I want now to give a little of the background to the fishing vessel grants, which, the hon. Gentleman may know, are paid under the Fishing Vessels (Acquisition and Improvement) (Grants) Scheme 1967, and that has been amended by the Fishing Vessels (Acquisition and Improvement) (Grants) (Amendment) Scheme 1971 and by the annual renewal schemes of 1973 and 1974. Under the Sea Fish Industry Act 1970, grants on new fishing vessels and on improvements have been payable by the Government through the White Fish Authority and the Herring Industry Board. Rates have varied from time to time reflecting Government policy and the need to control public expenditure. But the point should be made that the purpose of the schemes has remained constant—to provide the necessary incentive to invest in new or modernised vessels so as to ensure the maintenance of an efficient fishing fleet able to supply a continuous and adequate supply of fish.

That background to the operation of the grants legislation is important. Applicants have always been required to find the major proportion of expenditure from their own resources with the aim of ensuring that the design and investment decisions have been taken primarily for commercial and operational reasons.

I move on now to deal with the requirements which have to be met. All the schemes made have carried the same statutory clauses to safeguard public money. They include the need for prior approval by the statutory authority of plans before contracts are made. I am sure the hon. Gentleman will accept that as being reasonable. Then the White Fish Authority or the Herring Industry Board must satisfy itself that construction, etc., is carried out in accordance with the agreed specifications—

Mr. Stanley rose—

Mr. Bishop

I suspect that the hon. Gentleman may be seeking to return to his point about this.

Mr. Stanley

The key question here is the need for prior approval. Does not the hon. Gentleman agree that, once a specification has been laid down for, say, a hull and approved by the White Fish Authority, if the hull then goes into series production and identical hulls are coming out one after the other, there is no reason why it should be necessary to get prior approval for each hull? Surely that is logical. If there is to be insistence on prior approval for totally standard, identical hulls, the result is the loss of the economic benefit to the fishermen and of the commercial benefit of series production.

Mr. Bishop

I quite see what the hon. Gentleman is saying. However, I remind him that the grant is payable to the person ordering the vessel, not to the manufacturer. I think that that is the situation as it should be. After all, the person wanting the vessel has to put in a claim for the use of the vessel. The specification and the contract have to be approved. This is a commercial matter and not just a matter of grant eligibility and of making sure that the vessel is made to specification. Inspection is made at various stages of production. It is in the interest not only of the Government who pay the grant but also of the purchaser that the inspection should be adequate.

The White Fish Authority is not inflexible on this, and all that it needs to be satisfied about is that the money being paid from public funds is paid in a way which is justified. I emphasise that the two authorities concerned ought to have the right to inspect vessels at any time during construction or improvement and on completion. Therefore, there are problems when vessels are taken out of stock. However, I am sure that these are matters which can be discussed with the two authorities concerned. As I say, they are flexible in their approach to these matters.

The hon. Gentleman's constituents have said that they would like to consider the question of the safeguard. It has been looked at by the Department, and I think that the procedure so far followed by the two authorities is adequate and proper for the payment of the funds.

My hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) made several other points which should be borne in mind. He asked about grants for vessels and the financial statements which are made to the Government in order that we may take account of the financial situation of the industry when considering grants, subsidies and general support.

The House will be aware that the present arrangement expires at the end of this month. My right hon. Friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland have had consultations with the statutory bodies and the bodies representing the industry about the future of the schemes. They intend to lay before the House an order, which will be subject to affirmative resolution of both Houses, providing for an extension of the scheme to cover the calendar year 1975.

It has been decided that the present distinction of five percentage points between vessels of up to 80 ft. and others is no longer relevant to the fleet situation. Hence the rate of grant will be the same for all vessels.

Clearly the industry might have liked a rate of 30 per cent. grant for all vessels, but we cannot neglect the impact this might have on public expenditure. At the current rates of grant it was necessary for our predecessors to impose a moratorium on grants for several months earlier this year. The present Government were able to lift that moratorium last June. To lessen the risks of such a situation arising in future, the order will provide for a single rate of grant of 25 per cent. for all vessels. My right hon. Friends are satisfied that this will constitute an adequate incentive for the level of investment we need and will ensure that operational considerations are paramount in the design of vessels and in improvements rather than the existing small differential rates of grant.

Having referred to the present and future situation in relation to grants, my hon. Friend talked about other aspects of financial aid through subsidies for fishing. The Government have received representations on the subject of the subsidy from organisations representing the trawler fleet. These representations raise many difficult and complex issues which we must examine with care. I cannot at this stage give any indication of the outcome, but we recognise the need for urgency in the matter.

My hon. Friend raised queries about consultations with the trade unions. There is no statutory obligation for consultation to take place with any particular bodies, although, of course, we have consulted the British Trawler Federation and other organisations about future policies. As I pointed out a few weeks ago in the House, if the unions have any representations to make we shall be pleased to receive and consider them, but I must tell my hon. Friend that none has been received. I hope that he and the unions concerned will bear this in mind.

My hon. Friend also spoke about the industrial relations aspect. I remind him that this is a matter for my right hon. Friend the Secretary of State for Employment and that he will be able to make representations in that direction.

Mr. McNamara

Surely my hon. Friend is not saying that his Department is not concerned that there should be good, happy, convivial industrial relations in an industry to which public money is going.

Mr. Bishop

I thought it unnecessary for me to say that good industrial relations are essential in all industries, including the fishing industry, which has its own particular problems. But it is a matter for my right hon. Friend the Secretary of State for Employment and undoubtedly it is being borne in mind by him.

On the aspect of the grants being payable to ensure proper working conditions for officers and crew, I remind my hon. Friend of the provisions of the current legislation with regard to grants. Statutory Instrument No. 372 of 1967, dealing with sea fisheries, boats and methods of fishing, states: No grant shall be payable under this scheme in respect of an improvement unless the appropriate authority are satisfied that the expenditure in relation to which it will be payable is likely to result in an increase in the efficiency or economy of the operation of the vessel". Amongst the aspects taken into account are the catching of fish, the handling, processing and storage of fish, and the working conditions of the officers and crew. Another is the safety and seaworthiness of the vessel. Quite properly, as my hon. Friend implied, we have regard to the conditions in which the crews have to operate—not only their safety but also their general conditions and comfort.

My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott)— who has had to leave for Hull where he is attending a visit by my right hon. Friend—spoke of the need to know the figures in relation to the EEC. This is a matter which one would like to take into account. If my hon. Friend will write to me about it, I will look into it.

My hon. Friend the Member for Kingston upon Hull, Central also referred to the evidence and figures given by the British Trawler Federation and others about financial aid. The figures are made available to the Government, who have to consider them. These things are in some cases matters of commercial judgment, but the Government have to take due notice of them. I am sure it is not possible to make the figures public because of the commercial considerations. In any case, when decisions are made we are subject to scrutiny by the House and would need to justify our policy in relation to the evidence which had been put before us.

Mr. Stanley

I have listened most carefully to the hon. Gentleman, and having done so I do not believe that there is any incompatibility between what I have said and what he has said. I do not think there is any incompatibility between giving those who are manufacturing GRP hulls the ability to manufacture standard hulls for stock and retaining the right of inspection by the White Fish Authority that is the necessary requirement of public accountability. I hope that the hon. Gentleman will enable me to see him to discuss the matter further.

Mr. Bishop

I think there is only one boat involved, but the White Fish Authority is flexible about the general rules and there is no particular rule about GRP hulls.

No doubt, as a result of this debate and the representations made by the firm concerned and others in the industry, we shall continue to bear in mind the need for changes which may result from the new technology and methods of production which may make such reconsideration necessary.