WHITE FISH SUBSIDY (UNITED KINGDOM) No. 2 SCHEME, 1955

HL Deb 20 December 1955 vol 195 cc339-47

2.47 p.m.

EARL ST. ALDWYN rose to move, That the White Fish Subsidy (United Kingdom) No. 2 Scheme, 1955, reported from the Special Orders Committee on Wednesday last, be approved. The noble Earl said: My Lords, the House will remember that the White Fish Subsidy Scheme which was approved in July last provided for the continuation of the subsidy until the end of the year with no change in the rates or conditions of payment. The rate of subsidy has therefore been unchanged since the increase given in August, 1954, although the 1954 trading accounts of the owners of near and middle water vessels and the records of proceeds on sales of fish this year have revealed greatly improved earnings. At the same time, costs have undoubtedly been rising, and we have had to consider what the net effect of this race between increasing costs and increasing earnings is on the various sections of the fleet.

For the near and middle water fleet we are fortunate in having trading accounts which give full details of the costs and earnings of every vessel for several years back. In 1954, there was a very noticeable net improvement over 1953, and since the beginning of this year there have been further improvements in earnings which should more than compensate for the increases in cost that have fallen on motor vessels. Steam vessels have shared the improvement in earnings; but they have had extra costs to bear for fuel, and, because they are, for the most part, old and uneconomic vessels, they are not so well placed to withstand increases in cost. We have therefore decided that the flat rate which is paid to all near and middle water vessels should be reduced from 4d. to 2d. a stone on fish landed and sold for human consumption, but that steam vessels should be given substantial increases in the voyage subsidy.

For inshore vessels we have, unfortunately, no such reliable information on the costs and profitability of the fleet. We do know that the inshore fleet's gross earnings were 8 per cent. higher in 1954 than in 1953, and 11 per cent, higher in the first ten months of 1955 than of 1954. As your Lordships will know, we have considered and reconsidered the inshore subsidy, with the result that the Scheme which was laid before your Lordships on December 6, and which would have reduced the inshore subsidy from 10d. to 6d. a stone, was withdrawn a week later and replaced by a new scheme reducing the subsidy to 8d. a stone. I should like to say how grateful I am to those of your Lordships who serve on the Special Orders Committee for agreeing to consider this new Scheme at exceedingly short notice, so that it could come before the House to-day.

The actual total of subsidy payments in any year depends on the landings and price of fish during that year, and we cannot forecast it with any certainty. However, on the basis of the actual fish landings and subsidy payments made during the last twelve months, the net effect of all the changes we propose will be to increase the total subsidy by about £150,000. The increase all goes to the steam vessels, which will be some £325,000 better off as far as subsidy goes, while the motor vessels of the inshore, near and middle water fleets will receive £175,000 less subsidy.

This is the first time that the subsidy paid to any section of the fleet has been reduced, and we cannot expect it to be entirely welcomed by the industry. I would remind your Lordships that our present authority to pay any subsidy expires, under the White Fish and Herring Industries Act, 1953, on March 31, 1958; that the subsidy is now running at a high rate; and that its intention has never been more than to limit the losses incurred by the fleet until the new boats built under the Grants Scheme and the international measures to improve fish stocks have, between them, put the industry on a reasonably economic basis.

There are three small changes in the subsidy rates about which I should say a word. Until now seining vessels under 70 feet in length have all been treated, for subsidy purposes, as inshore vessels. The new Scheme applies near water subsidy rates to those seining vessels which are at sea for more than a week at a time, partly because it is more logical to give them the same treatment as the bigger trawlers which fish the same grounds, and partly because we think the combination of voyage subsidy and flat rate which they will now receive is more suited to their needs than a purely flat rate such as the inshore subsidy.

The second change is an increase in the rates of over-70 feet vessels fishing the Shetland grounds. These are a long way from most ports, and we feel that they should be subsidised on the more generous basis which has hitherto applied only to Faroese waters. The third change is an extension of the Faroe rates to another class of vessel, this time to those which engage in three-snip pair fishing. This is a new method of fishing to British vessels, but one which is practised by Spanish ships, apparently with much success; and we hope that the new rates will encourage British owners to experiment with this new method of fishing.

I should like to make it clear that the changes which we are now proposing do not represent any change either in our policy towards tie industry or in our attitude to the principles of the Act of 1953. We are satisfied, on the best evidence we can obtain, that these changes are reasonable and fair and in accordance with the spirit of the Act. We have every intention of continuing our efforts to help the fishermen of this country in their progress towards greater prosperity and efficiency. I beg to move.

Moved, That the White Fish Subsidy (United Kingdom) No. 2 Scheme, 1955, reported from the Special Orders Committee on Wednesday last, be approved. —(Earl St. Aldwyn.)

2.55 p.m.

THE EARL OF LISTOWEL

My Lords, I do not think the noble Earl opposite will be surprised to know that I and noble Lords on this side of the House will have something to say, quite briefly, on this slippery subject of white fish. Everyone agrees—this is common ground —that the subsidy for white fish should be renewed, as the Government propose, for a further period of time; but the first thing about which we complain is the manner in which the Government have arrived at the amount of the subsidy which they propose in this Scheme for the approval of your Lordships. This also involves, of course, the amount of the reduction of the existing subsidy which runs until the end of the year. Here are the facts—they are absolutely beyond dispute. About three weeks ago the Government introduced a new Scheme, reducing the amount of the existing subsidy, and submitted that Scheme to Parliament. The reception of this Scheme in another place was apparently adverse, and the original Scheme was withdrawn. The present scheme, the No. 2 Scheme as it is called in the Order, was introduced in its place. The present Scheme is not merely a minor alteration or modification of the original Scheme; it is something radically different. It does not just slightly reduce the original cut; it halves the amount of the cut in the subsidy for landed fish, the amount being now not 4d., as in the original Scheme, but 2d. a stone. There is a proportional reduction by one-half.

Those are the facts. They are admitted and agreed, and it is difficult to know what has caused the Minister to propose, first of all, a big cut in the subsidy and, just a. few weeks later, a halving of the original cut. We are all entitled to our own views about the causes of these phenomena but I should like to submit mine for your Lordships' consideration. It looks to me as if the Minister's better judgment about the original Scheme had been overruled by the Treasury and that after this Scheme had been submitted to Parliament he was then able to go back to the Treasury and say that public opinion would not accept such a big cut in the white fish subsidy. I know the present policy, the "waiting" policy, of the Budget and of the Chancellor of the Exchequer, and we know that it is not acceptable, in many cases, to the spending Departments in what they would like to do. So I do not think my surmise is too unreasonable.

If this is what happened, it is surely an example of how the amount of the taxpayers' money spent on a subsidy should not be decided. After all, the only relevant evidence for fixing the subsidy—we all agree about the policy; the Government have said that they are continuing the policy of subsidy for this industry, and it is only a question of method—is the financial condition of the industry. Other factors are completely irrelevant. Complaints in the House, the desire of the Chancellor of the Exchequer for economy and so on, are irrelevant to the policy which the Government have laid down to enable fishermen to earn a reasonable livelihood from the business of the fishing industry. Whether or not they are earning a reasonable livelihood is a matter to be decided after consideration of the financial facts of the industry. I cannot imagine that these financial facts have changed in the last few weeks. The Government cannot have it both ways: one or the other of these schemes has been a grievous error of judgment.

As to the merits of the present Scheme, I am sure your Lordships will agree that it is certainly an improvement on the last one, because it offers more help to the fishing industry, and, above all, to the marginal element in the fishing industry. There is at the present time, as most of your Lordships will have observed, an important, and indeed alarming, division of opinion about the effect of this Scheme on the inshore fishing industry. This is the only section of the industry about which I wish, briefly, to speak. The value of the Scheme as a whole will fall down if any part of it goes seriously wrong. This is the division of opinion. The Minister, the noble Earl, Lord St. Aldwyn, and members of Her Majesty's Government believe that the reduction in the subsidy as proposed in the Scheme can be absorbed by the profit margin of the fishermen, but the fishermen's organisations and representatives of fishing constituencies in another place take the opposite view. They think that it will be impossible for many of the men to earn a reasonable livelihood if a reduction of this magnitude is made.

Looking through the Report of the discussion in another place yesterday, I noticed that although there were twelve speakers of all Parties, other than the two Ministers, there was only one who supported the Scheme. The opponents included the two Conservative representatives for Banff and Aberdeenshire East, who represent the largest section of the inshore fishing industry. So that this is not a matter of Party opinion at all. The representatives of all sections of political opinion expressed their views when this was discussed in another place and, as I have said, only one speaker supported the Scheme. I do not think it possible for me to express any opinion on the merits of the Scheme. Here is a clear division of view by authoritative persons, and I am a mere layman—an outsider. Of course, the future will show who is right. If any of these unfortunate men find that they cannot earn a livelihood from fishing and drift off to other occupations, that will show that the critics are right. If they do not do that, it will show that the Government are right.

However, I should like to make one comment. I think that this Scheme, and indeed any Scheme based on the data used by the Government, is vitiated because the Government have not taken into account all the relevant data. It seemed to me that this was admitted by the Minister in his case for the Scheme in another place. If your Lordships will permit me —I think it is permitted to read a statement by a Minister—I should like to quote his words. [OFFICIAL REPORT (Commons), Vol. 547 (No. 78), col. 1677]: In the case of the near and middle water vessels, as I have said, we get accounts of the results of each vessel each year, and that gives us full information. But with the inshore fisheries"— it is the inshore fisheries about which I am talking now— we are not so fortunately placed. We know the gross earnings fairly accurately. but we receive no comprehensive figures of the expenses from the industry and we have to make the best estimate we can on average experiences. That statement amounts to this: that although the Minister knows what the earnings of the inshore fisheries are—that is easy enough, because he knows what prices they get for their fish—he does not know with any degree of certainty what their costs are. After all, a reasonable figure for the subsidy must depend upon the relationship between the fisherman's costs, which are certainly rising—labour costs, the cost of repairs to boats and so on and so forth—and his earnings.

What I should have liked to see is a continuation of the subsidy at the existing level, until an inquiry had been made to ascertain the costs of the inshore fisherman, and the production of a new Scheme based on the relationship between his costs and his earnings. I regard it as most unfortunate that this Scheme has not been based on this essential evidence. It was said, I think, by one Minister yesterday that an inquiry is intended before a new Scheme is drawn up, and I am glad to hear that. I should like the noble Earl, Lord St. Aldwyn, in the first place, to say whether, when that inquiry is completed and before the new Scheme is submitted to your Lordships, a statement will be made about the whole financial position of the inshore fishing industry. In the second place (although this may not be possible simultaneously), I think that all Ministers ought to consider at the present time making a statement about their policy in relation to the white fish industry.

As the noble Earl pointed out, the effect of the 1953 Act expires in 1958, and what I think Parliament would wish to know is whether the Government consider that the industry can be pat on an economic footing by that date, or whether this payment of quite big subsidies will have to continue until the industry is modernised and re-equipped. I think that your Lordships, and Parliament generally, would welcome a statement of policy of that kind before measures based on policy are submitted for their consideration. As I have said, we disapprove of the present Scheme because, in our view, it is founded on inadequate data, and although it would be quite inappropriate for us to divide the House as was done in another place, we wish to place our views on record and to express the hope that the defects, which we believe are substantial, will be remedied before another Scheme is submitted.

3.5 p.m.

EARL JOWITT

My Lords, I should just like to acid this to what my noble friend has said. This is a most unsatisfactory state of affairs. First a cut in the subsidy is proposed; then there is a little agitation in another place, and the cut in the subsidy is halved. Now, I gather, we are told that there are really no data at all upon which to ascertain what the subsidy should be. I am most surprised if that is so. I remember perfectly well that when I was Lord Chancellor the solicitors agitated for a rise in their general level of costs. I remember that the Treasury gave me a table—not, of course, revealing the earnings of any particular solicitor, but giving me the average earnings of solicitors as a whole, showing how they had gone up year by year. The same information in regard to trawler owners must be available to the Treasury, because trawler owners have to pay income tax. Surely, before they considered what should be done about this subsidy the Government had the figures; and if they had the figures, surely they ought to have announced their decision and stuck to it, instead of going "on the run" just because a political agitation was started. I think the whole thing is most unsatisfactory, and I am grateful to my noble friend who has just spoken and who has exposed the situation.

3.7 p.m.

LORD WISE

my Lords, may I add another word from this side of the House about this particular matter, which is very much in the forefront of the news in Norfolk and Suffolk. There we have large fishing areas, and in the last few days I have, been surprised at the number of meetings which have been held and at the reports circulated in the papers about the disapproval of the fishermen at the action of the Government. I notice that in another place the Minister said that unless the Scheme was passed at once, there would be no subsidy after December 31. It is obvious, therefore, that vie cannot divide or throw out the Scheme. However, I wish the Government to take notice of the fact that in Norfolk and Suffolk, and I expect elsewhere, the debate in the other place yesterday has caused a good deal of anxiety concerning the future of the fishing industry.

The Minister said either yesterday or a few days ago, that in bringing in another Scheme full merit would be given to the figures which could be produced in the meantime of earnings and otherwise. I have before me a note of the Lowestoft figures for the past eleven months, which show a decrease not only in landings, to the extent of 36,000 cwt. of fish, but also in earnings from the boats of £38,000. So far as one can see from these figures, the earnings and landings have been decreasing month by month. I do not know what will happen in the future. Apparently the fishermen there are particularly perturbed about it. I want to endorse what was said by a previous speaker. Instead of bringing forward a "half-baked" Scheme of this sort, to last for about six months, I think it would have been better for the Government to have considered the renewal of the existing Scheme until a new Scheme could be produced. I therefore hope that the Government will see to it that the fishing industry in this country does not go backwards.

3.10 p.m.

EARL ST. ALDWYN

My Lords, I should like to make it perfectly clear that the significant difference between the revised Scheme and the original Scheme is the alteration of 2d. per stone in the rate of subsidy for inshore vessels. In my earlier remarks I tried to explain that our information on the costs of these vessels is, frankly, nothing like so reliable as it is in the case of the near and middle water fleet. The noble and learned Earl, Lord Jowitt, feels that we should have got hold of fuller figures; but one of the troubles is that, unlike solicitors, inshore fishermen have other means of supplementing their earnings, through the holiday trade and the shellfish business, which is entirely outside this Scheme but is very remunerative to them; also a great many of them —the small men—keep no accounts at all. As a result, we are naturally disposed to give fishermen the benefit of any doubt there may be about the cost of inshore fishing.

After we had laid the first Scheme, various sections of the inshore fishing industry called attention to the effect of the cuts we were proposing and the results at various ports and on particular types of vessel. It was this information, which came in between the laying of the two Schemes and which was supplementary to that we had before, which led us to believe that we should be justified in not reducing the rate of subsidy by as much as we had originally intended. The noble Earl, Lord Listowel, asked about the forthcoming inquiry. It is a departmental inquiry and I shall be happy to give any information upon it when the Scheme is laid next July, a Scheme which I hope will be to your Lordships' satisfaction.

On Question, Motion agreed to.