HL Deb 03 May 1990 vol 518 cc1200-4

7.23 p.m.

The Minister of State, Scottish Office (Lord Sanderson of Bowden) rose to move, That the scheme laid before the House on 30th March be approved [15 th Report from the Joint Committee].

The noble Lord said: My Lords, my right honourable friend the Minister of Agriculture, Fisheries and Food announced on 20th December last year following the last meeting of the Fisheries Council that the Government proposed to introduce measures which would restrict grant aid to essential safety improvements and to cases where it was needed to back up EC grant aid. Under the new scheme the rate of grant for essential safety measures necessary to comply with the provisions of the Fishing Vessels (Safety Provisions) Rules 1975 will continue to be 30 per cent. with aid for vessels over 33 metres in length assisted as before at 10 per cent. The rate of back-up grant for EC assistance will be the minimum 10 per cent. required by EC structures regulation 4028/86.

The remaining conditions of the scheme are unchanged including the maximum grant of £250,000 payable in respect of any one vessel. The scheme as amended will continue to operate until the end of 1991 which is the mid-term review point for the EC structures regulation. It is anticipated that the changes in the rates of grant will produce savings of more than £18 million over the next three years.

As the announcement last December made clear, these new measures will end the distortion caused by subsidising vessel construction and will provide a freedom for vessel owners to take their own investment decisions where these can be justified in market terms. Moreover, they reflect our concern to ensure the conservation of threatened fish stocks and the need to match catching capacity more closely with fishing opportunities.

We are very conscious of the need to maintain a modern and efficient fishing fleet and have made available over £50 million in the last five years for modernisation and renewal work. But there is now general recognition that the industry faces a major problem of over-capacity and that it no longer makes sense to continue with the generous levels of grant assistance previously available.

It is for that reason that we have decided to make these changes in the availability of grant aid. We have however ensured that essential safety work continues to attract generous funding and that our fishermen will continue to be eligible to apply for assistance from the European Community. In addition we will be making substantial investments of public money in the fishing industry through expenditure on research in particular and on fisheries protection.

At the same time we are pursuing action on two main fronts to address the problems facing the fishing industry. We are working hard in the EC to secure improved conservation measures which will help restore the stocks, particularly in the North Sea. We are also seeking to improve our fisheries management arrangements so that they encourage the rationalisation of the fleet. We have already introduced a system of capacity aggregation which has been welcomed by the hard pressed boatbuilding sector aid will shortly be consulting the industry about entitlement aggregation.

I believe these measures represent the best way forward in the current situation facing the industry and that direct subsidies for fishing vessel construction are no longer appropriate. That is why we have placed the instrument before the House. I commend the regulations to your Lordships. I beg to move.

Moved, That the scheme laid before the House on 30th March be approved [15 th Report from the Joint Committee] .— (Lord Sanderson of Bowden.)

Lord Gallacher

My Lords, I thank the noble Lord, Lord Sanderson of Bowden, for explaining the purpose of the scheme and the thinking which lies behind it. In accordance with the normal customs and conventions of your Lordships' House we shall not be opposing it. Nevertheless there are a number of point:; arising from it which I should like to put to him.

The scheme was foreshadowed in a Written Answer by the Minister on 25th March this year in which he said that the present vessel grant scheme served to distort rather than encourage sensible investment by vessel owners. That view has been confirmed by the noble Lord, Lord Sanderson, today.

The Minister also said that he was proceeding to restrict the availability of the grants. We therefore have a scheme which provides aid only for essential safety improvements and in those cases where aid is necessary in order to back up an application to the European Community for grant aid. As I understand the position, the scheme does not make changes in the rates of grant, only in their availability. The measures as a whole are seen as part of a rationalisation of fleet capacity.

The Minister referred to past generosity, and no doubt the industry was grateful for it. But the industry has to live in the present and look forward to the future. Naturally, that is the subject matter of the questions which I propose to put arising from the details of the scheme.

First, perhaps the noble Lord can tell the House whether the reaction of owners of vessels to the scheme is hostile or favourable, sympathetic or understanding; secondly, whether rationalising the fleet capacity is seen as an alternative to a decommissioning scheme for the industry; and thirdly, whether Her Majesty's Government accept that the present quotas under the current common fisheries policy are having a serious effect on prices to consumers.

In another place on 2nd May in a Written Answer the Minister with responsibility for Fisheries in Scotland made much of the fact that landings are certainly down in order to meet quota requirements, in some cases by as much as 28 per cent. to 30 per cent. in Scotland, but that in cash terms, the decline in the value of the catches is only of the order of 1 per cent. to 3 per cent. That may be some consolation for fishers, but it is bad news for consumers. Undoubtedly, those who take an interest in these matters will have noticed that fish prices have risen markedly. Where they have not risen markedly and cannot be compared, the proportions have declined significantly. That is a great blow to those of us who enjoy fish, and also to the trade body which has the task of promoting fish eating because there is no way in which consumers will be able to maintain purchases if prices are to remain at or around present levels.

I should like to ask the Minister whether the problems affecting the fishing industry on the west coast of Scotland are to receive special consideration. I understand that a meeting concerning these interests was held a few days ago. Perhaps the Minister can say whether a Statement is to be made regarding the west coast of Scotland and, if so, when it can be expected.

Finally, following the recent announcement by the Government that they are to proceed with aggregational capacity, can the Minister say what is the anticipated effect on current problems?

Apart from those questions, we regretfully support the scheme as being necessary in the light of what has happened under the common fisheries policy. We believe that conservation is likely to be ongoing and that therefore the Government have little alternative but to do what it has done. Nevertheless, we feel that the overall position of the fishing industry is so serious that a wider approach than merely adjusting rates of grant for fishing vessels is perhaps needed. The country as a whole will want to know from the Government, certainly before the present year is out, whether there are plans for the industry because it faces a serious situation, as I have tried to indicate.

7.30 p.m.

Lord Kirkhill

My Lords, I rise to ask only one question. The Minister's statement that about £18 million will be saved over the next three years will be received with a great deal of difficulty and heart-searching by the fishing community because of his implacable opposition—thus far, at any rate—to any sensible decommissioning policy.

It is clear to those within the industry and to informed observers outwith the industry that a decommissioning policy is necessary. Such a policy should be produced and the Government should take an initiative to that end. It is an initiative which in political terms would stand the Government in good stead, if nothing else. That is some gratuitous information which I give to the Minister.

Lord Sanderson of Bowden

My Lords, I thank the noble Lords, Lord Gallacher and Lord Kirkhill, for their observations. I shall endeavour to answer the questions put by the noble Lord, Lord Gallacher, before I deal with the point made by the noble Lord, Lord Kirkhill.

The noble Lord, Lord Gallacher, asked about the reaction of owners. I think there is a realisation among fishing boat owners, skippers, and so on, that the capacity of the fleet must seek to equal the opportunities that the fleet has for catching fish. The difficulties which the noble Lord will know arose in regard to the Icelandic situation taught us many lessons; one of which is that it is very easy to get a decommissioning scheme wrong. I shall come back to that matter.

The difficulties we face with the quota situation are well known to the fishing industry. Perhaps I may add that the commissioner in Brussels would have left us with even worse quotas than we have at present if it had not been for the intervention of four government ministers at the negotiations in Brussels last December. Therefore, I can honestly say that the reaction of owners has been to understand the position. One should not go on paying out large grants when the capacity is going up, when what should happen is that the capacity should equal the opportunity.

As regards a decommissioning scheme, after very careful consideration the Government decided last year that at this stage it would not be a sensible use of taxpayers' money. First, I should say that it is not easy (as those who seek it believe) to advise a scheme which would avoid paying grant to vessels which would be leaving the fleet anyway. There would also be a real risk that the old, relatively inactive vessels would leave the fleet and that would not have brought about any real reduction in the catching effort.

Here I come to the comments of the noble Lord, Lord Kirkhill, who knows the situation in the north-east of Scotland very well. I accept his gratuitous advice on the political front. I understand what he is getting at. However, I draw his attention to the fact that the white fish fleet in Scotland amounts to about 2,000 vessels. Of those 2,000 vessels—we are referring to the difficulties in the North Sea and catching haddock in particular—approximately 1,600 smaller vessels catch 15 per cent. of the quota. The problem lies with the fast expensive vessels—the 375 to 400 vessels—that catch the rest of the total catch in the North Sea as far as concerns Scotland. It is very difficult, having experience of the previous decommissioning scheme, to see how one can devise a scheme that will take out those vessels and also to see, by offering a scheme, whether it would in fact be taken up.

In regard to quotas and the serious effect on consumer prices, it is true that the price of white fish—haddock, cod, whiting and saithe in particular—has risen. The noble Lord is also correct in his reference to the figures given at the turn of the year by my right honourable friend the Secretary of State for Scotland. The pricing of haddock in particular over the first three months of this year more or less equates with the prices for haddock over the first three months of last year.

However, I must also draw to the attention of the noble Lord the difficulties we are experiencing in Scotland with the fish farming industry. I should not let this opportunity pass without informing the noble Lord of the serious problems we have in that industry. What has happened is that the price of salmon has fallen dramatically. I understand that in one well-known establishment fish and chips means salmon and chips and not haddock or cod and chips.

The noble Lord, Lord Gallacher, also referred to the problems experienced with the fishing industry on the west coast of Scotland. Indeed, I met a delegation from that area last week. We are at present consulting and the consultation period is coming to an end. The Government have made some suggestions on what we might do to assist those who fish exclusively in those areas—the inshore waters off the west coast. Your Lordships can take it from me that the Government will look closely to see whether anything can be done to help those fishermen in those inshore waters and I hope that an announcement will be made very soon on that matter.

As regards entitlement aggregation, capacity aggregation having already been agreed—as I said, we are going ahead—there are major problems about aggregation of quotas. Those problems are under active consideration but I can assure the House and the fishing industry that consultation is very necessary in this area because the position is extremely complicated, involving major change and legislation on individual transferrable quotas should we ever reach that stage. Therefore, I assure the noble Lord that this matter is under active consideration. I also assure the noble Lord, Lord Kirkhill, that I am well aware of the difficulties. My right honourable friend the Secretary of State for Scotland is looking most closely at the economies of the ports concerned. We will be considering the matter over the next few months to determine whether there is likely to be further deterioration, particularly in the white fish fleet, and then make up our minds as to what action to take.

The Earl of Strathmore and Kinghorne

My Lords, I beg to move that the House do now adjourn during pleasure until 8.20 p.m.

Moved accordingly, and, on Question, Motion agree to.

[The Sitting was suspended from 7.38 to 8.20 p.m.]