WHITE FISH SUBSIDY (UNITED KINGDOM) SCHEME, 1958 (Hansard, 21 July 1958)

EARL WALDEGRAVE
My Lords, this scheme is necessary to provide for the continuance of the white fish subsidy for a further year from August 1 next. As your Lordships know, this subsidy is broadly made by one of two methods. Either it is given as a flat rate payment per vessel for each day at sea (the rates are set out in the Schedule) or as a rate per stone of fish sold. The object of the subsidy is to assist the industry through the difficult period when old and unprofitable coal-burning steam trawlers in the near and middle water fleet are being replaced by modern vessels which we expect will be capable of operating without subsidy by 1961 or at latest 1963. At the present time, a Committee of Inquiry under Sir Alexander Fleck is 10 engaged on the task of assessing the size and pattern and the implications of an economic fleet. I am glad to say that the modernisation programme continues to make quite good progress. Therefore we are working towards the time, in the next few years, when the industry will be able to operate on a self-supporting basis, without subsidy. I should emphasise that there is not now, and never has been, any intention that the subsidy should be permanent. Its object is to tide over the modernisation period. It is not to enable the old uneconomic vessels to remain in use indefinitely, bolstered up by subsidy.
The general pattern of the scheme is similar to that of the current scheme and I will briefly explain the changes and the reasons for them. The main change in the new scheme is a reduction of about 15 per cent. in the daily fishing rates of subsidy paid to the old coal-burning steam trawlers, which still number nearly 300 vessels. The stonage rates will remain unchanged as will the rates for diesel vessels. The reason for this is that until the early part of last year these vessels were being scrapped at a satisfactory rate of about 80 to 100 vessels a year, but since then the rate of scrapping has fallen to only half that level and we cannot avoid the conclusion that the rate of subsidy to these vessels must be now too high. We want to see the former rate of scrapping restored and we are satisfied that this would be in the best interests of the industry and that it is necessary to ensure healthy economic development.
New vessels continue to join the fleet at a satisfactory rate of 30 to 35 a year and we do not believe that there is any danger that a higher rate of scrapping of the old vessels will affect the supply of fish or cause harm to the industry. The proposed subsidy rates for the old vessels are about 15 per cent. lower than the present rates and the average subsidy they will receive will be about £14 10s. a day at sea instead of the present average of £17 a day. These lower rates will apply also to the older oil-fired steam vessels. I will not go into an explanation, unless your Lordships wish, as they are only a small number.
The next significant change in the scheme is an increase of 25 per cent. in the rates for seine net fishing vessels 11 which regularly make voyages of eight days or more. Most of these vessels are based on Grimsby and poor fishing results in the last year or so have not enabled them to keep pace with rising costs. We are reluctant to make any increase in subsidy at the present time but these vessels at present receive relatively low rates of subsidy and as an exceptional measure we have thought it right to give them this extra help in the coming year. We are proposing no changes in the subsidy rates for diesel vessels in the near and middle water fleet nor for the smaller inshore vessels. Apart from these changes in the subsidy rates, the only alterations are of a minor nature with which I do not think that I need trouble your Lordships. I commend the scheme to your Lordships for approval and beg to move that the Scheme be approved.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I am grateful to the noble Earl for his explanation. I have two questions to ask. The first is: what is the actual rate of the subsidy for the diesel vessel? What is its subsidy value to-day compared to that of the older coal-burning type of vessel on which it is proposed to reduce the subsidy? The second question concerns the seine net fishing boats. For how long is it assumed that this new subsidy will be required? What some of us are worried about, as in other cases where the removal of Government subsidy has brought a free market, is the lack of response in price, from the consumers' point of view, in relation to the Government help given.

§ LORD LUCAS OF CHILWORTH
My Lords, before the noble Earl answers my noble Leader's question, did I understand him to say that the reason for subsidising the solid fuel burning trawler was its uneconomic operation compared with the diesel vessel? Why, then, is it considered necessary to give the dieselengined trawler a subsidy at all? If the subsidy is to be lowered on the coal-burning trawler in order to accelerate its demise, why subsidise the new one?

EARL WALDEGRAVE
My Lords, perhaps it will be complicated if we get 12 into too much detail here. May I answer the noble Viscount's first point? The order in regard to seine nets is confined to one year, because the order is reviewed year by year. The diesel rates are all set out in the Schedule to the Order. Perhaps it is not simple to follow, but it is all based on the size of vessel, and the various sizes of vessels get a different rate of subsidy which tapers off to no subsidy for the modern large vessel. The whole thing is a transitional arrangement. Your Lordships will see in the Schedule to the Order the actual scales for the various boats. I think that answers the question also of the noble Lord, Lord Lucas of Chilworth. We are moving forward to an economic modern fleet, and it is only these small vessels in this short period that are having a subsidy; and that subsidy is being tapered off.

§ LORD LUCAS OF CHILWORTH
My Lords, what in the view of the Ministry is the efficiency degree of the modern diesel against the old solid fuel burning trawler? I cannot understand why it is necessary to give them this subsidy. The opening comment of the noble Earl was that the subsidy given to the trawler of the old type was given because of its uneconomic working, but we had to have them because we could not build enough diesels; and now we are building diesels, the subsidy given to the coal burning trawler is influencing the non-scrapping or the retention of those trawlers. Why give it to the diesels? What is the difference in the efficiency.

EARL WALDEGRAVE
My Lords, I think it is a question of turning over to the more modern type of boat. The whole basis of this scheme is that the small old boat, whether it is coal-fired, oil, steam or diesel, gets a tapering-off subsidy. The whole subsidy basis will come to an end in 1961, with a possible extension to 1963. The aim of the policy has been year by year to taper this subsidy down to the various classes of boats and ease the blow until it is finally tapered off. The question of why the diesel boats had it at all was much before my time, and I think it is irrelevant to this scheme, which includes the actual rates which should be paid next year.

§ LORD LUCAS OF CHILWORTH
To be continued—that is the germane point.

§ VISCOUNT ALEXANDER OF HILLSBOROUGH
My Lords, I should like to point out that there is not a great distinction in the terms between the inefficient coal-burning and the diesel boats. It is apparently a question of the size of the boat, based on the Act of 1957. With vessels of 40 feet you get the stonage payment; with vessels of 40 feet or over, but under 80 feet, you get £6 10s. per day at sea, and up to £10 a day at sea for steam vessels not exceeding 140 feet. Do these things include diesels? There is no other place where one can find that out in this Order. It seems to me, therefore, that the Government could well be paying on the larger more efficient diesel boat, not a higher percentage rate of grant in relation to the expenses of the trip, but a higher block grant per day than in the case of the smaller and less efficient vessels.