HL Deb 26 February 1976 vol 368 cc881-90

6.28 p.m.

Lord STRABOLGI rose to move, That the Fishing Vessels (Acquisition and Improvement) (Grants) Scheme 1976, laid before the House on 10th February, be approved. The noble Lord said: My Lords, I commence by apologising to the House, first, for addressing your Lordships once again and, secondly, for the delay in laying a Scheme which should have come into effect on 1st January. The delay arose through a combination of factors, principally the publication by the EEC in December of proposals for the restructuring of the inshore fishing sector, a matter which may materially affect national aid arrangements, and the decision to make last-minute changes in respect of the length of certain control periods. I shall refer to both these matters later. However, to avoid uncertainty the Government announced just before Christmas their intention to continue the grant at the 25 per cent. level. During the interim period the statutory bodies have been able to consider applications in principle and indicate where matters may proceed without prejudice. I can assure the House that through this procedure no applicant has suffered hardship.

The Scheme before the House today substantially repeats the provisions of the one made in 1967 as amended by five subsequent schemes. This Scheme renews for a further year the well-established procedures and arrangements for Exchequer grants for the construction of new fishing vessels and the improvement of existing ones. The rate of grant will continue unchanged at 25 per cent. of the approved expenditure.

It may help noble Lords if I explain briefly the way the arrangements work. Applications are made to the White Fish Authority or Herring Industry Board according to the type of vessel concerned. The appropriate statutory body satisfies itself about the applicant's financial standing and ability to operate the vessel, scrutinises the specifications for the work to be done and the form of contract to be used between applicant and contractor and seeks to make sure that the contractor is in a position to carry out the work. The statutory body approves the expenditure involved and, when the applicant has committed his own agreed share, arranges payment of grant. For vessel construction and major improvement work, payment is generally made direct to the contractor by stage instalments. Qualified staff employed by the bodies check the progress of aided projects for the purposes of technical and financial control. It is a condition of grant that the completed vessel be kept in fishing, as part of the United Kingdom fleet, and adequately insured for a specified control period. If the vessel is lost or taken out of fishing during this period all or part of the grant may be repayable. In the latter connection, I should like to draw to the House's attention a change which has been made. In paragraph 15(2) of the Scheme the control period has been standardised at five years for all improvement work. This removes a longstanding distinction whereby improvements to vessels of over 80 ft. in length, or those costing more than £10,000 for any vessel, were subject to ten year control periods. Much of the equipment may have, by design, a shorter, though fully effective, economic life. By removing the last remaining link in the Scheme with vessel length, we have completed the process started last year when vessel grants were standardised at a single rate for all vessels. Noble Lords will recall that this was done to ensure that investment decisions were not distorted by differing levels of aid determined by increasingly arbitrary and irrelevant distinction.

A second change occurs in paragraph 11 where the words "and on the completion of the improvement "have been inserted in the fifth line to give the appropriate body statutory right to inspect improvements on their completion just as they may do for new construction. This was a loophole in earlier schemes which, though not leading to difficulty in practice, is better closed.

I should like to turn aside from the order to say a brief word about external factors which may bear on this subject. The major problems and uncertainties of the fishing sector are so well known they do not need rehearsing here to day. But for both fishermen and agencies responsible for aid administration the questions of access and conservation are crucial to future investment decisions. Until real progress can be made on these issues, through general agreement, structural uncertainty seems bound to persist. Curiously it was against this background that the Commission decided, just before Christmas, to issue draft proposals for the restructuring of the inshore sector, seeking to ignore for the time being the essentially interlocked deep sea sector and the absence of information upon which meaningful estimates of future activity may be based. The proposals, which have been remitted for study in Brussels by an official Working Group, will clearly require very thorough examination. Whatever emerges is unlikely to have effect this year. The same applies to longstanding but as yet unresolved proposals for the harmonisation of national fishery aids given within the Community. But having regard to possible future consequences of all or any of these factors long term commitments are undesirable. We think it right therefore that this new grants Scheme should be made for one year only.

However, that in no sense detracts from our firm belief in the value of this form of aid. Expenditure this year is expected to be about £8.5 million and about £6 million next year. These figures largely represent work commissioned a year or so ago. Currently, few orders are being placed for new vessels. This is understandable in view of present economic and operational uncertainties. But grants also provide valuable aid towards the modernisation of existing vessels, particularly so that they may take full advantage of improved technology relating to safety and efficient operation. It is clearly of great importance to the United Kingdom's ability to take full advantage of future opportunities that a strong core of modern, efficient vessels be maintained. That is central to the purpose of this Scheme. I therefore have no hesitation in commending the Scheme to the House. I beg to move.

Moved, That the Fishing Vessels (Acquisition and Improvement) (Grants) Scheme 1976, laid before the House on 10th February, be approved.—(Lord Strabolgi.)

6.37 p.m.

Earl FERRERS

My Lords, we are grateful to the noble Lord, Lord Strabolgi, for having introduced this order and for having explained the changes which it brings about. It is an annual order which allows the Government to pay grants on the building of fishing vessels and with that we have no quarrel whatsoever, though we may question not only the level of the grant but also the state of the industry for which grants are being given. I was grateful for the information which the noble Lord gave us.

Over the years, Governments of all Parties have paid out progressively more money in grants. In 1970–71, the figure was £2.7 million. The next year it went up to £3.5 million and the year after it was £6 million. This year, as the noble Lord said, it is likely to be £8.5 million. These sound fairly impressive increases, but I wonder how much of the increase is due to inflation. Presumably, as inflation takes place, the vessels cost more. Is it possible for the noble Lord to give us some indication of the number of vessels being built during these years and whether the number of vessels or the tonnage is increasing, or whether it is merely the cost which is growing?

This also brings into question the size of the fishing fleet and the Government's policy for fishing. The industry is going through a period of great uncertainty and anxiety and I believe that it is a measure of this that no new orders are being placed. I should have thought that this would be a cause for much regret. My belief is that over the last few years the number of vessels in the fleet has declined and if the noble Lord is able to confirm that impression I shall be grateful. Of course, it can be argued that acquisition and improvement grants should be questioned if the Government intend to see a contracting industry. Why, for example, should one stimulate the construction of more vessels if the Government wish to see a smaller fleet? Then there is the effect of the "cod war ". The catch from our traditional fishing grounds appears likely to be at least curtailed and vessels which have been specifically designed for those waters may be excluded. They may find themselves—as they are indeed already doing—turning to other fishing grounds where they are playing havoc with the livelihood of those who have been traditional fishers of these grounds. Then we find the stock of herring and mackerel being put in jeopardy.

My Lords, this is of concern at the moment, and I would refer to this particular point. Some of the deep-water vessels have filled their quota from the white sea area, and some of these vessels from Scotland and the Humberside have been coming down to Cornwall and fishing for mackerel there. I have no doubt they arc allowed to do this, but the fact is that they are taking the fishing away from the traditional inshore fishermen. I do not know whether your Lordships realise that one of these colossal ships can catch in one day more than the whole of the Cornish fleet together can catch in one day. The French market is now open, and much of the fish is also being sent up to Humberside to be made into fish meal.

A lot of this alteration in fishing may be due to the fact that there are large Communist fleets just beyond the 12-mile limit and Danish industrial trawlers which are working in the North. This has caused, therefore, a change in the pattern of fishing. This is causing much distress, and I advise Her Majesty's Government to have a look at this matter if only to avoid a repetition of history, when, in the 1890s, the Newlyn riots took place because East Coast fishermen, with their better and bigger boats, came down and poached off the fishermen's fishing grounds in Cornwall. I am sure that the Government and the industry are concerned to see that the effects of the "cod war "are not extended to those waters which are nothing to do with the prime area of concern.

But on top of this come two other problems. The first is the EEC proposed Directive, to which the noble Lord referred, which aims at the restructuring of the inshore fishing industry. As at present drafted, this would withdraw 17 per cent. of the British inshore vessels from service and give a grant to those who leave the industry. I wonder whether the noble Lord is in a position to go a little further than he did on this matter, because it is very germane to this order which we are discussing. I hope that the Government would oppose this Directive, or at least try to get it altered, as it comes at a time when the fishing industry is, as I said originally, in a very uncertain state of affairs, and when it is already contracting. Further contraction will weaken the United Kingdom's bargaining posi tion in the negotiation of the common fisheries policy—and that is the second problem to which I should like briefly to refer.

My Lords, I hope that the negotiation of the common fisheries policy will result in the Minister bearing in mind that, within the 200-mile European limit, 64 per cent. (which is just about two-thirds of the fishery interests) belong to the United Kingdom. Of all the European countries, the United Kingdom has the biggest stocks of fish; it produces the most food from the sea and has the greatest consumption of fish; and 80 per cent. of the fish which we catch goes for human consumption—and that is far greater than is the case with any other EEC country. So I hope that the Minister will vigorously guard our fishing rights, because otherwise there is no point in subsidising vessels to be built if we are going to lose our fishing grounds and contract the industry. I hope that the noble Lord, Lord Strabolgi, will be able to say that that is his right honourable friend's intention.

I have only one other point of pure detail about which I would ask the noble Lord; that is, that the Statutory Instrument does not, I think, mention mackerel fishing. As I understand it, mackerel is n5t a white fish; therefore, it does not come under the White Fish Authority. Nor is it covered by the Herring Industry Board. I would be very grateful if the noble Lord could say whether mackerel and vessels used for mackerel fishing are covered by this order; and, if not, why not.

6.45 p.m.

Lord MACKIE of BENSHIE

My Lords, unlike the noble Earl, I do not really want to widen the subject too much, although I am aware that it raises many other points. I think the extension proposed in the order must be welcomed, as even in bad times provident people want to improve their boats and replace them. Certainly the fleet, particularly the inshore fleet, needs to be kept at a high standard of efficiency, and the grants have certainly played an enormous part in doing this. I have only one question. I assume that the loans, which normally are as important as the grants, do not need any extension, and that they go on. Otherwise, no one, I think, could do anything other than welcome this order. It might have been more welcome to the fishing industry if perhaps it had contained a renewal of the subsidy, but at the moment, at least, this is very useful.

6.46 p.m.

Lord STRABOLGI

My Lords, I am grateful to the noble Earl and to the noble Lord, Lord Mackie of Benshie, for what they have said, and for the general welcome that they have given to this order. I have noted carefully the various points the noble Earl, Lord Ferrers, has made, which I shall do my best to answer. First, he asked me whether the recent increase in grant expenditure was due merely to inflation. My Lords, the levels of expenditure in recent years reflect both the increased costs of vessel construction and improvement work and an increased level of approvals for construction in 1972–73 and 1973–74. The renewal of vessels is of course a continuous process. Naturally, new vessels are designed to be more efficient, and so some reduction in the size of the fleet does not necessarily imply a reduction in catching capacity. The total number of registered fishing vessels is increasing each year. The overall figure conceals a fall in the number of deep-sea vessels. For example, there were 498 in 1972 and 455 in 1974 but there was an increase in the inshore fleet from 5,829 in 1972 to 6,461 in 1974. Complete figures are not available of course for 1975, but preliminary returns show that these trends continue.

The noble Earl asked if these grants were payable for mackerel vessels and I think the sort of vessels which are also used for weekend pleasure trips. The grants are available for all vessels which are built for and engaged in fishing. No type of fishing vessel is specifically excluded by the terms of the scheme. The White Fish Authority and the Herring Industry Board have regard to the wider issues of efficiency for the fleet as a whole in giving approval for grant aid. In reply to the noble Lord, Lord Mackie of Benshie, I may say that the loans continue as normal. They operate under separate schemes.

The noble Earl, Lord Ferrers, touched on—as I knew he would be bound to do, and as indeed it was his duty to do—the wider issues involved. I may say that, of course, a lot of this impinges on the forthcoming United Nations Law of the Sea Conference which is due to reconvene in New York on 15th March. A broad consensus has emerged at the Conference in favour of 200-mile economic zones and the United Kingdom supports this concept. The Government have taken every opportunity to urge all countries to reach a negotiated settlement at the Conference and we are still hopeful that this will be achieved. If other coastal States go ahead with unilateral action, however, the Government will be ready to consider any steps necessary to safeguard the United Kingdom's interest Sometimes noble Lords ask from the other side of the House whether there could not now be an extension of the United Kingdom limit to 200 miles. The Government support the concept of a 200-mile limit but we lay great stress on the need to proceed by international agreement, and to act unilaterally now could prejudice our position at the Conference. It is certain that other countries would not agree to be bound by a new unilateral move on our part.

The noble Earl referred to the breakdown of talks with Iceland. The Government very much regret Iceland's action in breaking off diplomatic relations, but this does not alter our desire to obtain reasonable agreement. Although catches are good we regret the need to use Naval vessels for protection. We are willing to recognise Iceland's dependence on fisheries and to abide by the requirements of conservation; but any agreement must also take account of the dependence of our industry on the waters off Iceland. After all, we have an unemployment rate of 8 per cent. on Humberside—and I speak as the son of a former Humberside Member of Parliament—and in Fleetwood; and Iceland has no unemployment.

In order to build up breeding stocks of cod, the Icelanders have argued that there should be drastic reduction in fishing, the brunt of which would fall on the British fleet. We have replied that the same conservation effect could be achieved by a more moderate reduction in fishing sustained over three years. We should be willing to play our part in this, while taking our interests into account. At present, the British fleet is voluntarily restricting its catch to 100,000 tons a year.

The noble Earl asked whether it was true that United Kingdom vessels excluded from Iceland are now forced to fish off Cornet all. Our vessels have continued, and are continuing, to fish at Iceland. There were a number of new vessels fishing off the South-West of England for a brief period recently, but these mere mainly Scottish vessels driven South because herring, stocks were at low level. Only a few are currently in the area and these vessels are not of the same type as our trawlers off Iceland.

My Lords, I should like to deal briefly with the present position on the Common Fishery Policy referred to by the noble Earl. The Common Fishery Policy provides for access for all Member-States to fish in the waters under the jurisdiction of any other Member-State. In practice, this is qualified by the derogations in the Treaty of Accession which provide that waters within the six-miles limit are reserved exclusively for United Kingdom vessels. Fishing in the waters between six and 12 miles is restricted to certain specific countries and specific species. A reappraisal of the Common Fishery Policy is currently under way to work out the changes which will be necessary to meet the very different circumstances which will prevail in the Community following adoption of 200-mile limits.

The noble Earl referred to the new Commission Paper on the Common Fishery Policy to provide a basis for Ministers to discuss these changes in the policy. The Commission have now prepared a new Paper, as he says, which contains suggestions for development of the Community role in conservation, for the division of resources among Member-States, and for reserved coastal belts of 12 miles. I realise that this last element does not match the demands from some sectors of our industry, but the proposal must be considered as a whole and the Government have made it quite clear that they will negotiate with all the strength at their command on this important issue.

There is also a draft EEC regulation on the restructuring of the inshore fishing fleet which applies only to the inshore fleet. The Government take the view that proposals should be prepared for the restructuring of the whole fleet once the current uncertainties over future fishing opportunities have been resolved. Proposals on restructuring on our sector alone are therefore premature. The draft regulation was published as recently as last December it will not assume its final form for many months and it is unlikely to have any effect in reducing the size of the fleet while the access provisions of the Common Fishing Policy arc being re-appraised.

My Lords, I hope that that answers the various points. It goes beyond the scope of the order, but I thought it might be useful to give the latest position on the points raised by noble Lords. In conclusion, I can assure the House that the Government are very well aware of the industry's problems and anxieties. We are working vigorously to achieve by way of general agreement a solution which will be both fair and durable. Despite the present difficulties, it is important that the heart of the fleet be maintained in an up-to-date and efficient form, and to this end I am grateful that the House has indicated its support for the scheme in this order.

On Question, Motion agreed to.