HL Deb 08 July 1968 vol 294 cc675-9

4.17 p.m.


My Lords, with permission, may I repeat a Statement made by the Minister of Agriculture, Fisheries and Food in another place:

"As my honourable friend the Parliamentary Secretary announced on May 15, we are satisfied that the deep-sea fishing industry can make an increasing contribution to import saving, given the assurance of adequate support and a continuing improvement in efficiency.

"We propose to give an assurance of continued support to the deep-sea fleet for a minimum period of five years. If the industry is to justify this support it is essential that it should take all possible steps to improve its efficiency both through technological development and through changes in structure and organisation which will promote better management and training. We intend, therefore, to operate the support that is being provided, so that the benefit will go to those companies which can make the most productive use of these resources. In addition, the Industrial Reorganisation Corporation, which has been studying the industry, has informed me that it is willing to help the industry to find the best means of improving its efficiency. The industry for its part has assured me of its readiness to co-operate to this end.

"On this basis and on the assumption that the industry will make satisfactory progress towards the objectives I have described (a matter which I shall be reviewing from time to time with the Industrial Reorganisation Corporation) we propose to introduce for the three years beginning August 1, 1968, a new form of operating subsidy. This will take account both of fluctuations in the industry's profitability and of the need to preserve an incentive to efficiency. This will be done by adjusting a basic subsidy of £2 million by reference to operating profits in the preceding year. If these are less than £4 million, the basic subsidy of £2 million will be increased by half the shortfall; if they are more than £4 million, the basic subsidy of £2 million will be reduced by half the excess. The total annual subsidy, however, will be limited to £4 million and will not be allowed to result in an annual level of profit plus subsidy exceeding £7 million. The distribution of the subsidy will be related to the operating efficiency of vessels and not as at present to their classification. The detailed arrangements will be worked out with the industry. The method of support after the first three years will be subject to a review in 1970 with the objective of maintaining a corresponding level of return in the two years commencing August 1, 1971.

"Legislation will be introduced early next Session to give effect to the proposals I have announced. Meanwhile, a scheme will be laid before Parliament providing for the maximum basic and special subsidies payable under existing legislation for the subsidy year beginning August 1, 1968. These subsidies will in due course be set against the total sum due to the industry for that year under the new policy."


My Lords, may I thank the noble Lord, Lord Beswick, for this Statement about the deep sea fishery industry? May I put to him one general point first? This I suppose, is the most hazardous and difficulty industry in the world. Profitability is still the ultimate criterion which determines whether a vessel goes to sea or not. As success depends to an exceptional degree on a mixture of skill, courage and enterprise, inevitably the pressure at the economic margin of the industry is acute. A subsidy cannot relieve the acuteness of the pressure, it can only move the position at which the pressure falls, and may blunt the incentive in the process. In the unique circumstances of the industry, have the Government considered the alternative approach of securing the home market for our own fishermen by suitable import controls and removing the whole subsidy structure?


My Lords, I wholeheartedly agree with the noble Lord's remarks about the hazardous character of this industry. I think that he will agree, that in so far as one can encourage efficient units within the industry, a formula of this kind is to be desired. The noble Lord asked whether the possibility of restricting imports had been considered. The answer is, that it has been considered. There are, of course, difficulties, especially those connected with our obligations to the EFTA countries, but my right honourable friend is proposing to have discussions about imports with our EFTA partners.


My Lords, may I thank the noble Lord for that answer and say that I hope the discussions may be fruitful because I believe that this would be a better approach in the long run? In the meantime, may I ask the noble Lord to confirm my impression that the new subsidy structure proposed is putting emphasis on efficiency of operation in order that in every way possible incentives may be given to the enterprise and adventure on which the whole success of the industry depends?


Yes, My Lords, that is the intention of the formula. As the noble Lord will see when he reads my Statement, this is something I have emphasised. The details of the formula will be worked out with the industry within this principle.


My Lords, may I welcome the Statement and thank the noble Lord for making it? It seems particularly satisfactory that the subsidy will be actuated with regard to classification and therefore the smaller vessels and the efficient vessels will have a better and fairer share than in the past. There are two small questions I should like to ask as subsidiaries, and perhaps they are a little off the mark. One is, will this have any connection with the new 12-mile limit and how has that been working for the past four years? Secondly, suppose this scheme is extremely successful, is there a danger of over-fishing so that there will be such a shortage of fish that there will not be as many fish in the sea as there used to be?


My Lords, I thank the noble Lord for his welcome for this Statement. I am afraid I cannot answer his question about the 12-mile-limit: it is not, of course, related to this Statement; but I will find out what has been done recently and I will let the noble Lord know. I understand his fears about over-fishing, but he will recall that I did say that there will be a limit to the subsidy, and I should have thought that would take care to some extent of his doubts on that.


My Lords, may I ask the noble Lord one question? How is this subsidy going to affect the present price of fish? Is it going to be maintained, or will this subsidy reduce the price so that really, the fishing industry will be no better off?


No, my Lords, I do not think that it will necessarily work in that way. In so far as this proposed new formula will encourage efficiency, I would have thought it would tend to result in the most economic industry possible. What will in fact happen to the price of fish over the years is, of course, another matter, but what we hope is that it will be as low as is economically possible.


My Lords, may I ask the noble Lord, Lord Beswick, not to pass too lightheartedly over what the noble Lord, Lord Rea, said about over-fishing? The ever-increasing efficiency of the industry really means that the distant water trawlers are fish destroyers and the stocks of fish in the oceans have been very seriously reduced. If we are going to take measures to increase the efficiency of the industry still further, we must at the same time increase our efforts to ensure the conservation of fish stocks.


My Lords, before the noble Lord, Lord Beswick, replies, may I support what has just been said by my noble friend Lord Inglewood? The beneficial effects of these subsidies will be nullified if over-fishing is allowed to take place again on the scale on which it has occurred on two or three occasions in this present century, particularly in the North Sea. Will the noble Lord and Her Majesty's Government bear in mind that it is far more important to get some international agreement to limit fishing, and to prevent over-fishing, than it is to protect the home market?


My Lords, may I say that I am surprised that the noble Lord, Lord Inglewood, should suggest that I was taking the question from the noble Lord, Lord Rea, lightheartedly. That was certainly not my intention and I hope that the noble Lord, Lord Rea, did not take my answer in that way. I was pointing out, on the basis of the information I have, that this is not an open-ended subsidy and to that extent, therefore, it would not necessarily encourage over-fishing. However, my Lords, there is a separate problem which will be present, irrespective of the type of subsidy, and if I can add usefully to the information about that problem I will certainly write to the noble Lords.