FISHING VESSELS (ACQUISITION AND IMPROVEMENT) (GRANTS) (AMENDMENT) SCHEME 1971

HL Deb 12 May 1971 vol 318 cc1136-45

6.8 p.m.

EARL FERRERS

My Lords, I beg to move that the Fishing Vessels (Acquisition Improvement) (Grants) (Amendment) Scheme 1971, which was laid before the House on April 20, be approved. There may be some of your Lordships who, on seeing this Order, may have a strange feeling that we are covering familiar territory again. If that is so, let me re-assure them that the Scheme which is currently before the House is very similar to the one discussed on February 2. On that occasion I explained in some detail what the Scheme would entail. I do not therefore propose to weary the House to-day by going over the same ground, other than to say two things quite briefly. First, the purpose of this Scheme, like that of its predecessor, is to give effect, so far as the fishing industry is concerned, to the changes which the Government announced last autumn in the whole system of investment incentives. Secondly, it achieves this objective by restoring the rates of grant for the acquisition or improvement of fishing vessels to the level at which they were in 1966. In the case of inshore vessels, those of less than 80 feet in length, the rate of grant will again be 30 per cent. and in the case of deep sea vessels it will be 25 per cent.

In view of the somewhat unusual background to the Scheme, and particularly those issues which were touched on at Question Time on March 2, I will say a word about why the Government decided to introduce a new Scheme and about the respects in which it differs from the one originally laid before Parliament. The House will recall that different views were taken of the original Scheme by the Special Orders Committee of your Lordships' House and by the Select Committee in another place. The Special Orders Committee made no comment on the vires of the original Scheme because they considered that it was not ultra vires. The Select Committee of another place took the view that the Scheme purported to have retrospective effect. As the noble Earl, the Lord Chairman of Committees, who spoke on this on March 2 said, there is no reason why the views taken of the Scheme by the two Houses may not be different. However, the issue before the Government was whether or not they should seek approval in another place for the original Scheme in the light of the comments made by the Select Committee. As my right honourable friend the Minister of Agriculture made clear in a speech on April 6, it was, in the event, decided to lay before both Houses a different Scheme, and that is the Scheme before your Lordships to-day.

The essential differences between the two Schemes lie in the fact that this Scheme allows applications which were made up to and including October 26 last to be approved for grant at the old rates, whereas its predecessor required an application to have been received by the White Fish Authority or the Herring Industry Board by that date. In this way we are endeavouring to meet one of the points made by the Select Committee, who were concerned to see that the bona fide application made before the policy change was announced should in any case get the benefit of the old rate of grant, even if it happened to have been received after the deadline originally laid down. In addition, the new Scheme specifies that the lower rates of grant shall not apply to any applications approved before the Scheme comes into operation. The Select Committee were also concerned lest an application received on October 27 and approved on that same day could be nullified. The revised Scheme makes it clear that the approval given to any such application will still stand. My Lords, I hope that with that explanation the House will be prepared to approve the Scheme.

Moved, That the Fishing Vessels (Acquisition and Improvement) (Grants) (Amendment) Scheme 1971, be approved.— (Earl Ferrers.)

6.13 p.m.

LORD HOY

My Lords, I will try to keep this debate as short as possible. I did my best on the last occasion, but noble Lords opposite, assisted by those on the Cross-Benches, staged a filibuster, and there was nothing I could do. There are one or two serious points on this particular Order that we do have to consider because this is the second time the Order has been put, with slight variation; and we in your Lordships' House are in a slightly humiliating position this afternoon because on the last occasion the Order was said to beultra vires, and as a result a new Order had to be promoted.

I do not intend to go over all that was said before, but I am bound to say I take exception once more to the language chosen by the noble Earl, Lord Ferrers, who has talked about "restoring" the grants. I raised this point on the last occasion, and I hope that your Lordships will understand that this word "restoration" means, in fact, a 25 per cent. cut in the grants. I do not think this Order shows anything like the solicitude for the fishing industry that will be expressed during the next debate. There is still a question as to whether even this Order is ultra vires, because under the main Act, the Sea Fish Industry Act, if a Scheme (I think these are the correct words) is to be varied or revoked must be done by means of the introduction of a new Scheme. That is not in fact what happened. It was in a statement issued by the Minister of Agriculture. Fisheries and Food that this alteration was made.

Moreover, under the main Act there is provision for consultation with the parties concerned. Certainly consultation did not take place on this occasion. Indeed, when the Government reached a decision to cut expenditure by 10 per cent. overall, these fishing grants were caught up in the process. On the day the statement was made— "statement" is an exaggeration in this respect, since it was in fact an Answer to a Written Question on the Order Paper— all that happened, as I understand it, was that a telephone call was made from the Department to the White Fish Authority and also, I imagine, to the Herring Industry Board, saying "Your grant is going to be cut". One could hardly regard that as consultation; nor could one call it general advice. You cannot say, "I am going to cut your grant by 25 per cent. and that is a piece of general advice I am giving you". This procedure will not stand investigation at all. If any noble Lord wants to find out more about what happened, let him read the proceedings of the Statutory Instruments Committee in another place, and it will there be proved conclusively to anyone of independent mind that these consultations did not take place. In one place, the Minister himself admitted that consultations did not take place.

Your Lordships are entitled, in these circumstances, to an assurance from the Minister on this occasion that the Government have respected the Sea Fish Industry Act and that this Order does conform to the power the Act gives— because it would be very humiliating if, having passed an Order once and having had it thrown back to us, we had to go through a repeat performance without any steps being taken to protect your Lordships. I am saying to the Minister that a great deal of responsibility falls upon him. If this Order is not passed it can only do harm to the fishing industry. Harm has in fact been done— let this be clearly understood by your Lordships— and because of the conduct of the Ministry and the Government. 700 people are still awaiting the approval of their applications and not a single application has been entertained by the Government since last October. This is retrospective legislation with a vengeance, and obviously if we do not pass this Order, it will cause further delay. But before we give him approval we are entitled to ask the Minister for that assurance.

I should like to put forward one final point for the attention of the Minister: I could not understand his remark about there being different views in different places of a particular Order. This is not the way the Act works. The Act lays down that this can be done only by Affirmative Resolution. That is why the noble Earl has moved this Order, and it is only when that Affirmative Resolution has been approved by both Houses of Parliament that the Minister is empowered to take action. So this is important. I will not prolong the matter because of the debate that is to follow, but certainly before we part with the Order we ought to have from the Minister the specific assurance for which I have asked.

THE LORD CHANCELLOR

My Lords, I do not want to intervene on a question of fact which the noble Lord, Lord Hoy, has raised; but since he talked at one stage about the vires of the matter I must reassure him on that point. He, referred to the argument about the degree of consultation which had taken place on the direction, if it was a direction, under Section 4 of the Act and he also referred to a particular telephone call. I do not want to enter into that, because any explanation or argument could easily be given by my noble friend. That does not affect the vires of this Order which was made on April 7 and, as the noble Lord will see from the Preamble, it is made under Sections 44 and 45 of the Act, after consultation as required by those sections. So whatever may be true about the politics of the matter, the legal side, in so far as it is raised by the noble Lord, is, I think, fully taken care of.

LORD HOY

My Lords, I do not want to prolong this discussion. I am grateful to the noble and learned Lord the Lord Chancellor for what he has said, but I think he would agree that in the main Act it is laid down that the Minister cannot take this action without consultation. I do not think there is any difference about that. Whether it is in the old Order or the new, I am suggesting that if the Order is to be held to be correct, the consultation has to take place before the Order is made. I am asking the Minister to say now, that even if they did not carry that out when the first Order was made, in fact that consultation had taken place before the second Order was made.

LORD BOOTHBY

My Lords, at the dire risk of delaying myself and the extremely important debate which is to follow, I must ask the Minister one question. Why has he reduced these grants? What is the policy of Her Majesty's Government with regard to the inshore fishing industry? That is what we really want to know, because it looks a bit sinister and ominous to me. I do not see why the grants have been reduced. Nobody denies that they have been reduced and I just want to ask that simple question.

LORD FERRIER

My Lords, I also am unhappy about this Order, although perhaps not quite so unhappy as the noble Lord, Lord Hoy. I would cap something that he said. It is not only the fishing industry that is concerned; the boat-building people are concerned as well.

LORD HOY

Certainly.

LORD FERRIER

I think that we should bracket them together. Take, for instance, a 60-foot craft such as is built on the East Coast of Scotland to-day at a cost of £50,000. This Order means that a fisherman contemplating investing in such a new boat will now have to find 20 per cent., or £10,000; the balance being made up of 50 per cent. loan facilities and this 30 per cent. grant. Under previous Orders he had to find only 10 per cent.— £5,000— with the 40 per cent. grant that then existed. Accepting the principle— which the noble Lord, Lord Boothby, does not— behind the action of the Government of making industries stand on their own feet, and that sort of thing, it is worth contemplating that in view of this increased tranche to the fisherman they might contemplate increasing the loan facilities from 50 per cent. to 60 per cent. Perhaps the noble Earl could give us his view on that. The doubling of a fisherman's tranche is a serious problem, especially for a young man starting in the fishing. It may militate against his deciding to launch out for himself; especially when— and most important of all— the future of inshore fishing is so clouded by the uncertainty arising out of the Common Market proposals to which the noble Lord, Lord Boothby, is about to draw your Lordships' attention.

EARL BATHURST

Before the noble Earl replies to the noble Lord, Lord Boothby, I wonder whether he would tell us what is the effect of this Order in comparison to the draft subsidies and loan terms available in the Common Market. Is it possible for him to tell us that, or must we have another loan Order to bring us to parity?

6.25 p.m.

EARL FERRERS

My Lords, I thank those noble Lords who have taken part in this discussion and I will try to answer the questions in reverse order. The answer to my noble friend Lord Bathurst is that this fishing vessels Scheme relates to the grant applicable to fishing vessels now, while we are still outside the Common Market. This Scheme is designed to enable people who wish to buy new boats to be able to have a grant for so doing. As I understand it, were we to enter the Common Market, the situation would not be within the ambit of this particular Scheme. I should prefer to leave the matter like that, because I think that my noble friend's concern is about whether fishing would prosper were we to go into the Common Market, rather than whether an operator would be entitled to get a grant for his boat.

I take the point raised by my noble friend Lord Ferrier, who said this was having an effect on the boatbuilding industry, and asked whether it would be possible for the Government to increase the loan to shipbuilders. At the same time I will answer Lord Boothby's question. I should be the first to accept that there is a reduction of grant and of course it will have an effect on a person who is entertaining the idea of spending some money on purchasing a new vessel. The noble Lord, Lord Boothby, asked whether a reduction of grant was necessary. The answer is, that up to 1966 there was a rate of grant of 30 per cent. for inshore vessels and 25 per cent. for deep sea vessels. The previous Government introduced a 10 per cent. investment grant over all industry, and therefore in 1966 there was an investment grant attributable to these boats which lifted the amount of grant from 30 per cent. to 40 per cent. and from 25 per cent. to 35 per cent. Now it has been decided, following the Chancellor's announcement on October 27, that all investment grants should be reduced. Therefore this part of the grant applicable to fishing vessels is removed.

I would say to the noble Lord. Lord Ferrier, that the fishing industry does reasonably well. It may well be that it should do better, and I can understand anyone involved in the fishing industry not liking a 10 per cent. reduction in the grant. In fact, a person who wishes to purchase a boat is enabled to get a 50 per cert. loan; on top of that he may get a 30 per cent. grant, which means that 80 per cent. of the purchase price of his boat can be found at the outset. Admittedly, it used to be 90 per cent., but I think the fact that 80 per cent. of the grant can be found at the outset does not indicate to anyone that the Government are not concerned about the prosperity of the fishing industry.

I come now to the point made by the noble Lord, Lord Hoy. He was worried that this Order also was ultra vires That is a serious thing to be worried about, and I hope I shall be able to explain to him that the Order is not ultra vires. Before I do so I must clear up one point. The noble Lord said he did not understand why different views were taken by your Lordshops' House and by another place over the original Order. Before an Order comes before your Lordships it goes before the Special Orders Committee. In another place it goes before the Select Committee on Statutory Instruments. It is up to each of these Committees whether they come to independent conclusions. The fact that one Committee came to one conclusion and the other came to another does not mean that there is inconsistency in the Order itself.

Nor, my Lords, does it mean that the two Houses of Parliament came to different conclusions; it was the Committees which did that. The Special Orders Committee passed the original Order, and so did your Lordships' House. It was the Select Committee in another place which said that there was an element of retrospective legislation. The Government decided to respect that view, as indeed they should, and they withdrew the Order which had been passed by this House. They introduced another Order, which they hoped would be accepted by the Special Orders Committee and the Select Committee in another place, and this proved to be the case. But the noble Lord said that this could be ultra viresbecause there has been no consultation. I should like to make it abundantly clear, because this is important, that that particular criticism really has two limbs to it. The first is, as the noble and learned Lord the Lord Chancellor said, whether this particular order is subject to consultation, which is the particular point we are discussing; and the second is whether there has been the necessary consultation about it.

Under Section 44(1) of the Sea Fish Industry Act, the Minister is bound to consult with the White Fish Authority over the introduction of a new order. I can assure the noble Lord that full consultation has taken place with the White Fish Authority over the construction of this Order, and there is no question of lack of consultation or its being ultra vires. The point on which I think the noble Lord really meant to put his finger was whether there had been any consultation with the White Fish Authority over the giving of a direction, which the Minister is obliged to do under Section 4(2) of the Act, which says: The Ministers may, after consultation with the Authority, give the Authority such directions of a general character as to the exercise and performance by the Authority of their functions". I think what the noble Lord inferred was that there was inadequate consultation, because the Minister indicated to the White Fish Authority that, as from October 27, grants should be withheld until such time as a new order was laid before Parliament.

My Lords, this needs a certain degree of explanation, because my right honourable friend the Chancellor of the Exchequer made an announcement, as I explained earlier, which covered all forms of investment grants. That announcement was made in the afternoon of October 27. There could, of course, only be limited consultation with the White Fish Authority beforehand, because, as this statement was in the nature of a budgetary announcement, it would have been quite improper for detailed discussions to have been involved before the announcement was made, and the noble Lord, Lord Hoy, would be the first to recognise this. In fact what happened was that my right honourable friend the Minister advised the White Fish Authority in advance that a directive would be given to them later in the day to withhold the approval of grants. There was therefore that element of consultation—

LORD HOY

What element? If the noble Earl will allow me, this is exactly the point I was making. The noble Earl says that the Minister issued a directive. A directive is not consultation, and if he cares to look again at the words he is quoting he will see that the Minister does not have the power to issue a directive. The Minister only has the power to issue directions of a general character. These are the words he has himself read out.

EARL FERRERS

That is perfectly true, but on the other hand it is a question of what consultation is. Consultation in some cases can be a matter of two minutes, and in other cases a week may be inadequate for proper consultation. In this particular case, the White Fish Authority were told in advance that later in the clay they would be requested to hold up the approval of grants. They had every opportunity of objecting; they could have objected, but they did not object. And indeed I quite agree with the noble Lord, Lord Hoy, before he gets up and says so, that it would have been a very difficult situation if they had. But if the noble Lord is saying that there should be full consultation before an announcement of a budgetary nature, as to whether or not a particular level of grant should be reduced. I would suggest that that would be an impossible situation. There was this form of consultation, admittedly limited, but it did take place.

My Lords, with that explanation, I hope that your Lordships will feel that this Order should be approved. It is an Order which has been delayed, for reasons about which we know, and I hope therefore that your Lordships will approve it.

On Question, Motion agreed to.