WHITE FISH SUBSIDY (DEEP SEA VESSELS) (UNITED KINGDOM) SCHEME 1971 (Hansard, 30 November 1971)

§ BARONESS TWEEDSMUIR OF BELHELVIE
My Lords, I beg to move that the White Fish Subsidy (Deep Sea Vessels) (United Kingdom) Scheme 1971 be approved. This Scheme gives effect to the announcement which my right honourable friend the Minister of Agriculture made on August 3 last, about continuing for a further two years the subsidy arrangements for the deep sea fishing fleet which the previous Government introduced in 1968 and which the noble Lord, Lord Hoy, piloted through another place. These arrangements provided subsidy for deep sea vessels on a new basis related to profitability. They were to run for a first period of three years and the industry was given an undertaking that a corresponding level of financial support would be available for a further two years after that. The Government have reviewed the situation, and have provided for an increase in the level of support.
As your Lordships will recall from the approval given to the previous Scheme, the total amount of subsidy which the industry may receive is related to a profitability formula of £4 million over a 12 months' period. If total profits exceed £4 million, the basic subsidy of £2 million is reduced by one half of the excess. On the other hand, if the profits fall short of £4 million, the basic subsidy of £2 million is increased by half the shortfall. In reviewing the level of support, the Government have considered the views put forward by the trawler owners' Federations in Great Britain. The Federations referred to the considerably increased costs of building new vessels and higher operating costs—in particular the costs of meeting the new vessel safety measures which will arise from carrying out the Holland-Martin Committee's recommendations. Therefore, bearing in mind the absolute need to keep the fleet's capacity and efficiency in good heart, the Government have accepted that some extra financial support is necessary, and they have accordingly increased the profitability norm, as it is called, from £4 million to £4.8 million. That will have 146 the effect of increasing the subsidy which the industry can receive by £400,000, subject to the operation of the ceilings on subsidy provided for in Paragraph 9 of the Scheme. In the present Scheme, we have increased the ceiling on operating profits plus subsidy from £7 million to £7.8 million. This Scheme, of course, provides a guarantee of support when profits are low. Your Lordships will know that this year the industry has had considerable benefit from a general revival in world fish prices and earnings have been very buoyant. Costs have, of course, increased, but, even so, the industry's profits are likely to be higher than last year and the call on the Exchequer for subsidy will be correspondingly smaller. That, we think, is good news for everyone concerned. It is our real hope that this situation will continue and that the industry will thereby be placed in a better position to meet the need for capital replacement.
Apart from minor drafting matters, the Scheme is otherwise unchanged. The method of distributing subsidy to individual owners will continue to be in relation to the efficiency of their vessels as measured by their "added value". This is the sum of a vessel's operating profits and crew costs, including training. Some vessels and some ports have, of course, done less well than others under this Scheme, but that is an inherent feature of the Scheme and one which the industry has accepted as a fair and sound arrangement. As I have said, the Scheme we are now considering will continue for two years until July 31,1973. Before then, we shall be reviewing the question of further support arrangements for the industry, taking into account the implications of our joining the European Communities.
As your Lordships know, further discussions, very difficult discussions, on fisheries policy began yesterday with the members of the European Economic Community. I regret that it is impossible for me to say anything while the talks are still going on, but a Statement will be made very soon. The Government are certainly trying hard to ensure satisfactory arrangements for the industry. Among the uncertainties facing the deep sea industry is Iceland's proposal to extend her fishery limits next year to 50 miles. We have reminded the Icelandic 147 Government of their obligations under the 1961 Agreement and have made clear to them our determination to defend our rights under the Agreement and in international law. We are, of course, prepared without prejudice to discuss the possibility of conservation arrangements to meet Iceland's concern about the threat of overfishing, and we are now having informal discussions with the Icelandic authorities on that basis. I beg to move.

§ LORD HOY
My Lords, I rise to welcome the Motion the noble Baroness has moved, and obviously I should not object to it as it was my job a few years ago to introduce this Scheme in another place. I am grateful to hear from the noble Baroness that the Scheme has worked very well, because many efforts were made to devise a scheme to meet the needs of the fishing industry, and at last we have apparently succeeded in so doing. I should say that I not only approve the Scheme but also approve the changes. I wonder whether the increase from £4 million to £4.8 million to meet the needs of the industry to implement the recommendations of the Holland-Martin Report is a figure agreed between the industry and the Government. Did the industry feel that this proportion was the right one? Because when the Holland-Martin Report was adopted, it was specifically spelled out that the cost of implementing the Holland-Martin recommendations would be shared by the Government and the industry.
I was grateful to hear what the noble Baroness had to say about what was happening in Iceland. I myself went to Iceland rather more than a couple of years ago and I found the people there very pleasant indeed. We all realise how important the fishing industry is to Iceland. Without a fishing industry I dread to think what their economy would be. But obviously we have considerable rights—I think "rights" is perhaps the correct word—to fishing off Iceland, and this provides a considerable proportion of the catch of the distant water fleet, the very fleet concerned by this Scheme, because 148 it affects no other section of the fishing industry but the deep water fleet. If we have entered into negotiations, it will be interesting if the noble Baroness can keep the House informed on how they are going. The Icelanders need have no fear about conservation. Indeed, if every other country had engaged in conservation as actively as we in this country have, many of the problems with which we are now confronted would have been avoided.
As to the negotiations in Brussels, it seems that they have come to a fairly difficult point. As I understand it, the negotiations went right through the night to six o'clock this morning and were resumed at half past ten, and so far no solution, apparently, has been found. I realise that the Minister has laid it down quite clearly—of this there can be no doubt—that if there is no agreement on fishing, there will be no signature so far as E.E.C. is concerned. That is what he has said. So this industry, which is important to us, takes on a much greater significance when one thinks that all that has been done in connection with negotiations might at the end of the day have to go by the board because of this particular industry. I recall this point to your Lordships to remind you how important it is in the European context. If agreement is reached, I hope that the Government will take steps to make an announcement to this House. It is extremely important that we safeguard considerable sections of our country where again, like Iceland, fishing plays such an important part in their economic wellbeing. Having said that, I am very happy to be able to support the Order moved by the noble Baroness.

§ BARONESS TWEEDSMUIR OF BELHELVIE
My Lords, in replying to the points raised by the noble Lord, may I say how glad I am that he has welcomed this Scheme; indeed, it was all his hard work which helped to make it operate successfully in the first place. He asked me some specific questions about the cost, in particular, of carrying out the Holland-Martin recommendations on greater safety for deep sea vessels, and the stability test costs. If it were necessary to undertake any construction work, this expenditure would rank for the normal capital improvement grant of 25 per cent. If, on the other hand, such matters as, for instance, reater manning or more 149 rest periods had to be taken into account, they also would qualify for the operating subsidy calculation.
The noble Lord in particular asked me whether I could keep the House informed about what is happening with Iceland. I certainly will see whether that can be done, and what is the best way of doing so, although there is nothing to report at this moment. On the negotiations in Brussels, the noble Lord asked whether it was still the fact that, because these negotiations have run into such difficulties, the Government still stand by their pledge not to sign the Treaty of Accession if they had not reached satisfactory arrangements on fishing. My Lords, that is still the case. I cannot possibly give any more details because my right honourable friends are at this moment about to fly back from Brussels, but I understand that my right honourable friend the Chancellor of the Duchy of Lancaster is to make a Statement in another place tomorrow, and I have been asked to repeat it here if it is convenient to the House.