FISHING VESSELS (ACQUISITION AND IMPROVEMENT) (GRANTS) (AMENDMENT) SCHEME 1970 (Hansard, 2 February 1971)

EARL FERRERS
My Lords, I beg to move that the Fishing Vessels (Acquisition and Improvement) (Grants) (Amendment) Scheme 1970, which was laid before this House on December 17, be approved. The purpose of the Scheme is to implement, so far as the fishing industry is concerned, the changes which were announced by the Government during the autumn in the White Paper Investment Incentives (Cmnd. 4516) and it is in the context of the abolition of investment grants for industry generally that it should be viewed.
Before investment grants were introduced in 1966, the acquisition or improvement of fishing vessels attracted grant at the rates which appear in the Scheme before us to-day. The Government of the day did not make such vessels eligible for their new 20 per cent. investment grants, but they did add ten percentage points to the rate of grant for fishing vessels. What we are now doing is restoring the rates of grant to their original level—as they were in 1966. In the case of inshore vessels—that is to say, those of less than 80 feet in length—the rate will again be 30 per cent., and for deep sea vessels, it will be 25 per cent. This, of course, is what my right 1131 honourable friend announced in another place on October 27 last.
The main purpose of this Scheme is to give statutory effect to these new—or, more accurately, restored—rates of grant. We are following the general policy laid down in the White Paper on investment incentives which was debated in your Lordships' House before Christmas. With that fairly short description, I commend the scheme to your Lordships and hope that it will meet with your Lordships' approval.

§ LORD HOY
My Lords, we are grateful to the noble Earl, Lord Ferrers, for his very short explanation of this Scheme. One can perhaps understand it when the noble Earl says that what we are doing is restoring the grants to where they were. What he means by "restoring" is cutting, because that is exactly what this does. It cuts the grant by 10 per cent., and it means, of course, that the building of fishing vessels is going to be much more difficult. It was my privilege in another place to put up these grants by 10 per cent.; and indeed for a period to increase them not only to 40 per cent. but to 45 per cent., as a special inducement to the fishing industry to re-equip itself. In a way, the Motion which is before your Lordships' House to-day is rather a tribute to the Labour Government, because it is saying, "You did so well in your term of office that we, the Tory Government, can now cut the grant by 10 per cent.". That is exactly what the Scheme does, and we have to consider it in that light.
Obviously, it is going to be extremely difficult for those who want to do so to enter the industry. Indeed, every argument that I heard when I was responsible for this particular department was that individual owners could not invest in the industry unless they had a substantial grant for building purposes. Your Lordships will remember that last week, when we were debating the work of the Highlands and Islands Development Board, many of your Lordships who sit on the Government side of the House paid remarkable 1132 tributes to the work done by the Highlands and Islands Development Board in connection with the extension of the fishing industry in those parts. Not one noble Lord had anything other than a good word to say for the work that had been done. As a consequence of the Government's action, certain repercussions have taken place there, in addition to other parts of the country.
When I asked the noble Baroness, Lady Tweedsmuir of Belhelvie, whether the Government proposed to impose those cuts on the fishing industry inside the Highlands and Islands Development Board's area, the noble Baroness in reply said: … the reductions in grant for fishing boats will apply to this area. The Highland fishermen receive grants from the White Fish Authority or the H.I.B., and loans from the H.I.D.B. The Board have still to consider how to operate their second five-year fisheries development scheme, and may well propose to increase their loans to compensate for this particular provision."—[OFFICIAL REPORT, 27/1/71, col. 1049.] If one examines those words for a minute or two, one sees that the noble Baroness was not sure what these cuts were going to mean. She said, "Even though we impose cuts, perhaps some method will be devised which will permit us to soften the blow by extending the loans". So apparently the Government are not certain what effect this will have on this industry.
When the argument was being put forward before it was said that if skippers wanted to buy a boat they would have to have the grant which the Government of the day were providing. According to the Scotsman of January 26, a meeting was held about this particular proposal of the Government which, quite frankly, does not meet with any approval or commendation from any section of the industry. There are two things involved here. It involves not only the fishermen, but also the boat builders, and no one will deny that these grants have improved considerably the trade of the boat building industry. It says in the Scotsman: The reduction in grant means that a skipper who wanted to buy a 50 foot boat might have to find £.8,000 deposit instead of the former £4,000. I need not convey to your Lordships what a burden this will be on the individual owner who wants to go into this industry. 1133 Indeed, there are many who want to do so, as reflected in the figures returned by the Highlands and Islands Development Board.
This report in the Scotsman goes on to say: Though most of the boatyards around the Scottish coast are busy at present, long-term prospects are not bright. The grant cut is the measure causing immediate concern, and its implications are likely to be raised at a meeting of the Scottish Fishing Boat Builders' Association. So I give your Lordships proof of the effect of this proposal on this particular industry. Later on in the same report it appears that one boat builder says, We are busy because we got orders for three boats before the alteration in the grant-and-loan scheme, but we have not been asked to quote for a new boat since mid-December and I understand that some yards are down to their last boat. So this cut has had this effect immediately. Indeed, if we were to regard even the evidence of individual boat builders as being perhaps a little doubtful, then let me quote to your Lordships what the Authority says—and again I quote from the Scotsman of the same day: The Scottish committee of the White Fish Authority confirmed in Edinburgh yesterday that there had been a slowing-down of applications for grants for new boats since October 27, when the new scheme came into operation. I hope that I have proved to your Lordships that this Motion is not at all welcomed by the fishing industry in any part of the country, and certainly not in the whole of Scotland. It will mean a diminution in the fishing industry: it will mean a lack of expansion in the Highlands and Islands Development Area which was so strongly praised by your Lordships last week; and it will certainly mean a curtailment of boat building in the boatyards of this country. Altogether, I think that this is a thoroughly bad proposal. Indeed, when we talk about 10 per cent. being cut off the grant, in fact it represents 25 per cent. of the present grant. A number of people find it difficult to understand that a Government who assert that a 10 or 15 per cent. increase in wages is reprehensible, can come to the House with a proposal to cut a grant by 25 per cent. and think that that is acceptable.

EARL FERRERS
My Lords, I listened to what the noble Lord, Lord Hoy, said with interest and indeed great respect, for who would not? The noble Lord spent a number of years as Parliamentary Secretary to the Ministry of Agriculture. Indeed, I think I am right in saying that it was under his auspices that the grant was put up to the level from which it is now coming down. I can therefore well understand the noble Lord using, so to speak, every argument in the book to complain about its coming down, and I would be the first to recognise that the fact of any grant coming down is bound to be not acceptable to those who are affected.
The noble Lord knows the fishing industry well. I fully accept that they are concerned that this grant should come down. One knows that this is unpleasant and that it is bound to pinch somewhere on certain feet. But I think that possibly the noble Lord made a slightly "strong" case on this aspect. This matter of course goes right back to the different philosophies of the last Government and of the present Government, because there is a feeling about the fact that this Government believe on principle that grants which are given a blanket application are not necessarily the best way of helping an industry. It is for that reason that in this case the grant is being reduced. But for all that, even though it is being reduced, the Government are still giving a considerable grant. The grant is still to be at 30 per cent. for inshore vessels and 25 per cent. for vessels engaged on deep sea fishing. This is a quite substantial grant, coupled with the fact that of course the fishing industry is in a better position on some points than is ordinary industry. One particular point of which I am bound to remind the noble Lord, and which he knows perfectly well, is that the fishing industry is allowed a 100 per cent. free depreciation which is not granted to other industries as a whole.
So although this is a reduction in the rate of grant which I acknowledge is, as a reduction, unacceptable, I hope that the noble Lord will at least grant that the Government are concerned about the fishing industry; they are concerned that it should succeed; they are concerned in so far as it is given special treatment 1135 from the point of view of grants, of depreciation and also of other loans which are available to it specifically to help newcomers to the industry. While I accept the noble Lord's arguments in the spirit in which they are meant, I hope that nevertheless he will feel content to agree this Order.

§ LORD HOY
My Lords, may I say that the argument used for reduction of the grant is the opposite to that used by noble Lords opposite only a short time ago. Indeed, the noble Earl's honourable friends in another place always assured me that by giving 40 or 45 per cent. I was being too mean; that they required every penny of it. I just note the difference.