HC Deb 26 July 1983 vol 46 cc1049-51 3.34 pm
Mr. Robin Maxwell-Hyslop (Tiverton)

(by Private Notice) asked the Minister of Agriculture, Fisheries and Food to halt the payment of subsidies to Danish shipyards until the propriety of Danish local and national subsidies has been investigated.

The Secretary of State for Scotland (Mr. George Younger)

I have been asked to reply, as I have joint responsibility for the Fishing Vessels (Acquisition and Improvement) (Grants) Scheme 1981.

In the case that has given rise to today's press reports an offer of grant under the scheme has already been made by the Sea Fish Industry Authority and has been accepted by the partnership of fishermen constructing the new vessel. They have now concluded a contract with the Danish shipyard involved. A legal obligation to pay the grant therefore exists and there can be no question of halting payment of subsidy in this case.

Under the scheme, grant may be paid for the construction of vessels overseas. To rule this out would deprive fishermen of the chance to take advantage of competitive prices where these are fair. In the present case, careful investigations by the SFIA and the Department of Trade and Industry were made. These reveal no basis within the rules of the scheme for withholding an offer of grant. The new information about subsidies in Denmark, mentioned in today's press reports, has already been drawn to the attention of Government and urgent inquiries are being made through the embassy. If unfair practices are revealed, grants will be refused in future.

Mr. Maxwell-Hyslop

Although I am grateful to my right hon. Friend for his reply as far as it goes, he has not said anything about the subsidies from the shipbuilding fund that can be paid to countervail unfairly subsidised foreign competition, or why a subsidy from that fund was not paid to enable the United Kingdom firm to match the Danish price. Will my right hon. Friend be in contact with the Secretary of State for Trade and Industry on that point, in respect not only of this case, but of any other cases that may arise. Is this not a further example of the practices to which the Danish national Government and local government give vent in, for example, maintaining a rate of duty on Scotch whisky that is imported into Denmark that is not balanced by an equivalent rate on Danish-produced schnapps?

We have yet another example of unfair competition within the EC. Should we not penalise those involved by methods that are within our power, such as through subsidies paid to fishermen when they order equipment from foreign firms?

Mr. Younger

I appreciate my hon. Friend's concern. We must remember that the main object of this scheme is to help fishermen with the costs of vessels that they want to buy. On the more general shipbuilding scheme, I am mindful—;as I am sure that my hon. Friend is—;of what my hon. Friend the Minister of State, Department of Trade and Industry, said on 18 July in this House. However, I shall draw my hon. Friend's comments to his attention.

Mr. John Evans (St. Helens, North)

Is it not remarkable that British taxpayers' money should be used to have ships built abroad, thereby putting British shipbuilders out of work? Surely subsidies should be given only when vessels are built in this country.

Mr. Younger

I appreciate the hon. Gentleman's argument, and it is obviously attractive. However, it must be remembered that the scheme is designed to help fishermen with the costs of their vessels. In this case the sad fact is that if the fishermen had bought the vessel in this country and had done without a grant, they would still have paid more for it here than in Denmark.

Mr. Albert McQuarrie (Banff and Buchan)

My right hon. Friend will be aware that the main reason for raising this subject today is that Campbeltown shipyard lost an order because its tender was 25 per cent. higher than that of a Danish shipbuilding firm. The subsidy, which is granted by local and regional development authorities—;not by the Danish Government—;amounts to more than is paid to a British shipyard worker, yet the Danish Government stipulate that no subsidy should be paid to any shipyard if it would then be in competition with another member of the EC. Will my right hon. Friend take up the matter? Out of 85 workers, 40 have been given their redundancy notices in one of the most successful shipbuilding yards in Scotland.

Mr. Younger

I very much appreciate that point. In the past few years we have often made special efforts to try to help Campbeltown shipyard, and on most occasions we have succeeded in helping it in material ways. Unfortunately, in this case the fishermen concerned would not have chosen to buy the vessel from that yard, because it would still have been more expensive, even without the grant.

Mr. David Penhaligon (Truro)

Can the Minister give the whereabouts of the fish that this extra boat will enable British fishermen to catch?

Mr. Younger

I do not understand the hon. Gentleman's difficulty. The United Kingdom's fishing quotas are large enough to exceed any of the actual fishing done by the United Kingdom's fishing fleet in any of the past 10 years.

Mr. Tam Dalyell (Linlithgow)

Is it not high time that Ministers looked at the whole system of Danish shipping subsidies? How come the British Government have chartered the Herta Maersk at an undisclosed but substantial fee to convey 12,000 tonnes of fresh water from Auckland instead of using an easily available British tanker? Why do the Danes have—;

Mr. Speaker

Order. I think that the hon. Gentleman is very wide of the question.

Mr. Younger

I do not know the circumstances of that case. Obviously, it is in the interests of everybody that, whatever the task, it is done at the cheapest possible price.

Mr. Bruce Millan (Glasgow, Govan)

Yes, but is it not absolutely intolerable that British taxpayers' money should go to subsidise boats that are being built in Danish shipyards, when our shipbuilding industry is desperate for orders? It is not good enough for the Secretary of State to say that there is a legal obligation in this case and that he cannot do anything about it. Is it not a fact that the assertion and allegation made by the Campbeltown shipyard, which has laid off 40 men because of its inability to obtain the order, is that the order has been obtained for the Danish yard because of unfair local and national subsidies in Denmark? In those circumstances, there can be no question of the order simply standing. It is up to the Government to see that the order is cancelled and that the work is put into a British yard. British shipyards are desperate for work and it is absurd that such work should go overseas at our expense.

Mr. Younger

I appreciate the right hon. Gentleman's comments, and they sound all very fine, but the fishermen concerned are certainly not prepared to buy a more expensive boat than they could get elsewhere. My information is that the fishermen who are ordering the boat have no intention of buying it at a higher price elsewhere.

Mr. Millan

The Secretary of State has missed the point. The allegation—;apart from the principle of the scheme, which we believe should be reconsidered because it is absurd that such orders should go abroad—;is that this order was placed in Denmark because hidden subsidies were available to the Danish shipyard. Will the Secretary of State examine that matter, or does he intend to accept it?

Mr. Younger

My original statement made it clear that I intend to examine the matter. We are considering it very carefully. I must make it clear that the trouble is that in this case, even with the grant, it would have been more expensive to buy the boat in Britain.