HC Deb 22 November 2000 vol 357 cc49-70WH

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Kevin Hughes.]

9.30 am
Mr. Frank Doran (Aberdeen, Central)

I am grateful for the opportunity to address the House on the United Kingdom's fish processing industry, which has a long and honourable history, but faces serious difficulties. That is not a Scottish problem; it is a UK problem—indeed, it is fair to say that it is a European problem.

Industry leaders have advised me that this is an historic debate, because it is the first time that the House of Commons has debated the fish processing industry in its own right. The subject is usually tacked on as an addendum to general debates on the fishing industry, in which the focus is always on the fish catching side, because it is much more dangerous and has a certain glamour. The industry is extremely important, employing about 136,500 staff in the UK. That huge figure comes from the recent Sea Fish Industry Authority report on training, which makes it clear that the industry is not limited to the catching side; it also involves processing, merchants, retail, fishmongering and the frying and restaurant business. The industry penetrates every aspect of our society.

I shall speak mainly about my local industry in Aberdeen and the Grampian region, which I know best, but this is a UK debate and many right hon. and hon. Members from around the country are present to take part. In the Grampian region, 5,000 people are employed in the fish processing industry, 2,000 of whom work in the city of Aberdeen. The past few years have been extremely difficult for the industry, mainly because it has had to come to terms with a raft of new regulations. The first sentence of the recent report on the industry by the Select Committee on Agriculture says: The fishing industry in the United Kingdom is often represented by itself and others as an industry of victims. That is a little harsh. However, the industry has had to cope with a tremendous amount of new regulation, although not as a result of the actions of the current Government; most of it has emanated from Europe and been applied by successive Governments. The regulations on food hygiene and packaging, the new veterinary regulations and the urban waste water directive have all applied pressure on the industry, and my local experience tells me that the industry has responded magnificently.

Today we have an industry that has modernised itself. It concentrates on providing consumers with what they want—a quality product at an affordable price. It is important to recognise that. There has been a big shakeout in the industry: both locally and nationally, there has been a considerable reduction in the number of its employees.

The industry relies, above all, on supplies of fresh raw product. The shortage of product is creating the most serious challenge that the industry has faced for many years. As I said, the problem affects more than the UK; it is Europe-wide. The industry depends on supplies of quality fish, but this year alone, landings at the quayside in the UK are down by about 40 per cent. My hon. Friend the Minister occasionally goes to Brussels and his officials are working away furiously behind the scenes in the current round of negotiations on next year's total allowable catches, although we do not know what to expect in terms of detail from these negotiations. We know that the Minister is doing an excellent job for the industry here, but the scientific evidence suggests that the news we hear will not be good. At worst, we expect a total ban on cod fishing and, at best, a 50 per cent. cut in cod catches, 23 per cent. in haddock, 20 per cent. in whiting and cuts in most other species.

We have had cuts before and casualties as a result, but the industry has always managed to pull through. This time, however, the situation is much more serious. In my area, the industry has always managed to deal with the inevitable peaks and troughs. In the good fishing months of summer, it stockpiles fish in cold store to be processed through the months of January, February and March when fish stocks are very low, but this year, it has been virtually impossible to stockpile because of shortages of fresh fish at the quayside. Yesterday, I spoke to an industry adviser who had been dealing with a company in Aberdeen. Its accounts are audited every year and its accounts for this year have just been audited: in 1998, it stored £390,000-worth of fish for the winter months; last year, it managed to store £ 360,000-worth of fish; this year, the figure is zero. The company would have bought fish if it could have, but it was just not there to be bought.

A reasonable question is why such companies do not import foreign fish, as they do, for example, on Humberside. Frozen fish can be bought from Norwegian, Icelandic or Faeroese trawlers and then processed. However, we in the north-east of Scotland have a particular problem with that sort of fish, because it is large. The north-east has traditionally processed smaller fish: that is what our skilled workers are trained to do and our machinery and equipment are geared to process. Therefore, we face a significant problem.

We have been buying Baltic fish from Russian trawlers, and several companies in the north-east have survived on that trade. However, I see that the hon. Member for Banff and Buchan (Mr. Salmond) is here, and he might tell us about a company in his constituency that specialised in that area, but has recently had to close its doors. There is a serious problem with Baltic supplies of cod and haddock—our staple product. The fish is not available to buy.

Recently, other Russian vessels have been selling fish at Aberdeen quayside—they have been selling cod and haddock caught off Rockall. Since the area was opened up, Rockall has become a fairly emotive topic, especially for our fishermen. There are no restrictions on the size of catches or quotas on fish caught off Rockall. Yesterday, I spoke to a fish processor who had been offered haddock that were only 6 in long—less than the minimum UK landing size; if the fish had been caught in the North sea, it would have been illegal. There is another potential disaster in the making off Rockall, because the seas there are being plundered. The fish caught there can be sold in the UK because it was not caught in the North sea, but it is not of the quality that our processors or the customer want. It does not meet the demands of the market, so it is not a long-term solution.

Another solution is under consideration in my local authority area. Aberdeen City council and the local enterprise company are examining the possibility of setting up a co-operative to buy foreign fish that currently goes to Humberside and other ports. Some risks are attached to the project and it is difficult to assess at this stage, because final decisions will not be taken until January. It will not be a perfect solution, even if the co-operative is established and is able to persuade Norwegian and Icelandic boats to land their fish in Aberdeen. Large fish are suitable only for large operators who can afford to adjust their processes; smaller and medium-sized businesses will be unable to do so. Furthermore, the price of foreign frozen fish has rocketed recently, so a new purchaser coming on to the market will have repercussions for the rest of the UK industry, and the price of that basic commodity and staple food source will rise even higher. I welcome the initiative of my local council and local fish merchants association in conceiving and pursuing their plan, but I am worried about the consequences for the UK fishing industry as a whole. We must consider that very seriously.

Mr. Anthony Steen (Totnes)

I am grateful to the hon. Gentleman for raising an important matter. I represent the second-largest fishing port in England and Wales, so I am familiar with the problems that he mentions. We have a co-operative comprising about 100 boats, which works extremely well. When the Government took office, the Minister stated that 50 per cent. of all fish caught by European boats would have to be landed in Britain. I wonder whether that has happened and whether it impinges on the circumstances that the hon. Gentleman describes.

Mr. Doran

To be honest, I cannot answer that question, but perhaps the Minister can. I know that there are significant landings of foreign fish in the UK, but we all know that the price of fish still goes up. If my local area attracts that sort of fish, we shall have to pay a premium price for it, which may affect supplies to other parts of the country—including Totnes.

I have tried to describe the biggest crisis that I have ever seen in the industry—the shortage of product. We are already seeing the consequences, both business and social, of that crisis. Pressure is being applied now. If my hon. Friend the Member for Aberdeen, South (Miss Begg) catches your eye, Mr. Deputy Speaker, she might talk about a large company in her constituency that has gone into receivership in the past couple of weeks, largely because of the problem that I have identified and the pressure that it creates. I know from contacts in the industry in my area that between now and Christmas, many companies are expected to go to the wall with many redundancies. The position is as bad as that.

One of the most serious problems is the attitude of the banks. Like everyone else, banks read press reports. Some companies are heavily committed to the banks, because they borrowed heavily to meet the new hygiene regulations and other requirements that I mentioned earlier. That has had a serious effect on their business. The banks are currently negotiating with the companies overdraft limits for next year. The banks are adopting a severe line, because they are worried about protecting their investment in the industry. I would not go so far as to suggest that the banks are panicking, but all the signs are there and additional pressure is being placed on businesses that are already seriously pressured.

I hope that today's debate will persuade my hon. Friend the Minister to send a message about the long-term future of the industry. Although he cannot say anything about individual businesses, it is important to give a clear signal about the future of the fishing industry, because that will help companies whose banks are putting them under pressure. In my area, a number of businesses are likely to go to the wall between now and Christmas, and the position is no different elsewhere. The result of the negotiations in Brussels will be a crucial determining factor. I hope that the businesses can fight through, but I fear the worst.

I especially concerned that the most exposed companies are those that borrowed heavily to meet the hygiene regulations and other requirements. They put quality first and are trying to cater for the market that they identified. My fear is that if those businesses go, the industry's hard-won reputation for quality will plummet because only those that have not modernised will be left. Such businesses managed to meet the minimum requirements of the regulations, but they have not worked in the same markets as the more go-ahead companies. That is a serious problem. The food industry's reputation has suffered a number of knocks from the BSE crisis and other difficulties. I would hate the fishing industry to be in that situation, although there is no fear of it at present. None the less, if the larger companies that invested start to fail, there will be serious difficulties.

There 2,000 highly skilled workers in the industry in Aberdeen, but those skills are not easily transferable. The workers' profile is interesting: about 50 per cent. of the work force is female, of whom 50 per cent. are single parents and therefore the main breadwinner in their household. The fact that their jobs are threatened is a serious worry. We do not have a major unemployment problem in Aberdeen, but the same cannot be said of other parts of the country, where the employee profile is likely to be similar.

There is a caveat: in the 1970s when the herring fisheries collapsed, there was no scheme to encourage the retention of the skills of the work force. Therefore, when herring supplies were reintroduced, the skills were not available to cope with the supplies. The north-east of Scotland lost that business because there was no one with the skill to take it on.

I am painting a bleak picture. I do not do so lightly. It is important to present the truth, with all the qualifications, but I am struggling to find qualifications, because the industry is heading for crisis and it is difficult to know what can be done about it. There might be short-term solutions. The problem of job losses must be considered. About 30 years ago, there was a temporary scheme in place to retain workers, who were paid a premium during difficult periods in the fishing industry, so that they would be available for work when fish were again landed at the quayside. I would appreciate the Minister's consideration of such a scheme, which would operate through the Department for Education and Employment. The banks, too, are important; some indication of confidence in the industry should be given to help customers' discussions with their bank.

There is a serious excess capacity in the industry—not only in catching and processing —which will continue at least for the next few years, although accurate predictions are difficult. There may be difficulty with North sea quotas for two years, and it might be as many as five years before the stocks recover. It is best to plan cautiously and to prepare for the most difficult eventuality. If a longer-term problem develops, the point about overcapacity will become even more relevant. We need to look seriously at restructuring an industry that is the epitome of private enterprise and the application of market forces —but which will not be able to survive with market forces as its only support. The Government must consider what contribution they can make to restructuring the industry.

As the Minister knows, the Select Committee on Agriculture reported, in its eighth report, on the sea fishing industry in the 1998-1999 session. It made a firm recommendation: However, our overriding concern is that the Government establish a settled, transparent long-term strategy for management of fisheries which takes into account the competitive position compared to other EU countries and within which the industry can plan, confident that any necessary changes will apply equally and be introduced fairly, with proper consultation and with regard to clear and agreed objectives. The Government welcomed the report and the Minister asked the Sea Fish Industry Authority to consider that recommendation. I stress the pressing nature of the case to the Minister. He is expecting a report in January but he should give some indication of our direction in regard to a longer-term strategy. Every business has to produce and apply a plan of operation and we need a long-term strategy for the whole fishing industry—the catching side as well as the processing side.

I began by mentioning the Sea Fish Industry Authority figure of 136,500 people employed in the industry. That is a significant level of employment. I am old enough to remember the major problems we experienced about 30 years ago, when potato prices went through the roof because of potato shortages. I remember the tabloid headlines about losing our fish supper, because, although we had the fish, we lacked the chips. The nation does not want to live on chips. We want to continue to have fish suppers.

9.52 am
Mr. Anthony Steen (Totnes)

I congratulate the hon. Member for Aberdeen, Central (Mr. Doran) on introducing the debate. As he said, it is the first debate of its kind. However, without being too churlish, it is interesting to note how many Scottish and how many English Members are present. I hope that, with your guidance, Mr. Deputy Speaker, the Scottish Members will not monopolise the debate—although we are grateful to the hon. Member for having brought the matter to the attention of the Committee.

Sir Robert Smith (West Aberdeenshire and Kincardine)

It is not in the power of the Deputy Speaker to determine who turns up for a debate and decides to take part. It is up to us to turn up if we wish to take part.

Mr. Steen

That is a fair comment, but Scottish Members have two bites of the cherry. They have both the Scottish and the Westminster Parliament for debate, but English Members have only one Parliament.

Mr. Alex Salmond (Banff and Buchan)

Is that not all the more reason why the hon. Gentleman's English colleagues should have taken the opportunity to attend today? Is not the fact that some—by no means all—Scottish Members have the opportunity to speak twice in fishing debates a comment on how their work rate compares with that of the hon. Gentleman's English colleagues?

Mr. Deputy Speaker (Sir Alan Haselhurst)

Order. It would be helpful if that argument were reserved for another place and we devoted our time now to the fish processing industry.

Mr. Steen

I am grateful for your guidance, Sir Alan, because the Minister is here to deal with English as well as Scottish matters—even though Scottish Ministers can also deal with Scottish matters.

I welcome the debate, as I represent the second largest fishing port in England and Wales, and pay tribute to the hon. Member for Aberdeen, Central who introduced it. He chairs the all-party fishing group—

Mr. Doran

indicated dissent.

Mr. Steen

Well, he talks as if he carries out that function. I am glad that the hon. Member for Great Grimsby (Mr. Mitchell), the real chairman of the all-party fishing group is here. English Members of Parliament have turned up in force to the debate, but we will not get much chance to speak given the number of hon. Members who represent Scottish constituencies who are here.

The problem with the fish processing industry is that it is dependent on the amount of fish that are caught. That reminds me of a debate that has been held many times in the House about the extent to which other European countries have access to our waters. Many people argue that the intrusion of Dutch and Spanish vessels has affected our fishing stock and fishing processing industry. Huge articulated Spanish lorries are on the quay each morning in the small port of Salcombe where I live. Inside those lorries are massive tanks in which are placed tens of thousands of crabs and lobsters. The lorries are then driven back to Spain each day. How much easier it would be if the crabs and lobsters walked across the water to Spain and France, and saved all the time and trouble taken to drive them there.

We are losing enormous quantities of fish and shellfish to the Spaniards who, of course, have over-fished their waters to such an extent that no fish are left. They therefore plunder our stock—albeit legally, as it turns out—by buying our quota. Instead of the fish being processed in Britain, they are processed in Spain, France or Holland. I do not know whether the Minister can do anything about that, but early in this Parliament he said that a new deal had been struck with the Europeans. I do not know if that was part of the Amsterdam treaty, but I recollect that 50 per cent. of all the catch of European boats had to be landed in this country.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley)

It might be helpful if I clarified the situation. The hon. Gentleman is referring to the economic link conditions that we negotiated. They included landing 50 per cent. of the catch in the United Kingdom for all UK-registered vessels. However, that was one of several conditions because, as the hon. Gentleman will appreciate, some UK vessels want the freedom to land wherever they like, and that includes the European market, which is an extremely important export market for his constituents. In Spain alone, it amounts to about 60 million for the south-west.

Mr. Steen

I am most grateful to the Minister, but there must be something that we can do to ensure that the fish that are landed in Britain are processed in Britain. I do not know how the hon. Gentleman can make such arrangements, but with his creative imagination and commitment to the fishing industry, I am sure that he and his officials could devise a fruitful and attractive scheme to deal with such a problem.

I welcome the opportunity to make a modest and short contribution to the debate. The procedures on bringing fish into the UK are full of red tape and made difficult for no apparent reason. The importation of fish is of prime importance, given that the diminishing stocks available of the relevant species in the United Kingdom make sourcing more difficult. Import tariffs need to be considered because if we cannot sustain our own needs from within the United Kingdom, it seems ridiculous to have to put trade tariffs on the necessary raw materials. I should be grateful to hear the Minister's response to that problem.

As for the European debate, the general feeling of the fishermen in Brixham, Dartmouth and Kingswear is that we are not playing on a level playing field. We have increased burdens of regulation on water. For example, effluent charges from our own water industry are about to hit our fishing industry, and grant funding available from Brussels through the Government seems difficult to access. Passing funding to regional sectors might help alleviate the problem. Fishermen feel that the Government, albeit with the best possible intentions, are allowing on-costs on the fishing industry that other European Fisheries Ministers are removing. Will the Minister comment on the on-costs on our fishing industry compared with the European fishing industry?

On profits, the United Kingdom fish processing industry is working on returns of about 1 per cent. on sales, which is a sub-economic rate. Increases in raw material prices and shortages in the supply of UK fish are creating a squeeze on margins because retailers and large customers are refusing to allow prices to be increased in line with market forces, which puts extra strain on processors.

Moneys collected from fish levies could be spent on research and funding aquaculture projects such as lobster restocking at Padstow, which is intended to restock the Devon and Cornwall shores with lobsters for the future. It needs more support. As the House may know, the 80 miles between Plymouth and Torquay has probably the most attractive crab and lobster catches in Great Britain. Stocks are being severely depleted not only by English fishermen but by French, as no quota applies to lobster or crab. I am sure that the Minister will say how much he is doing, but more needs to be done to restock those seas.

No one is more worried about conserving our fish stocks than fishermen, who are not the rapists of the sea that they are often made out to be. Of course there are a few rogues, as in any industry, but, in the main, fishermen have invested thousands of pounds in their businesses and are highly skilled business men. However, in this country, they are often viewed more as gypsies than as business men. Many have guaranteed their houses against loans of hundreds of thousands of pounds to keep their businesses afloat. They are encumbered by rules and regulations imposed by the Minister for Agriculture, Fisheries and Food, who is seen as the bogeyman, while his officials are seen as aiding and abetting him, and making their lives more difficult by burdening them with ever-more overheads on their already beleaguered businesses.

Technological improvements in catching fish have had adverse effects on the fishing stock, as is only too evident from the depletion of fish stocks in Spanish waters, which I mentioned a moment ago. We want fish to become even more of a delicacy, but it will not if the present arrangements continue. We can make an accurate assessment of developments in our fishing ports only by talking to those who are directly involved and have a vested interest in ensuring that our fish stocks are conserved—fishermen, wholesalers and the related industries depend on plentiful fish supply.

Fish wholesalers depend on fishermen to keep their trade going. Charles Newman, one such wholesale fish producer in Brixham, tells me that the situation is out of their hands. Everyone seems to be controlled by someone elsewhere whose finger is not on the pulse. It is of course in fishermen's interests to keep stocks well supplied. If fishermen try to rip out the heart of the sea in which they fish with other fishermen, nothing will be left for them tomorrow. They will be unable to cover overheads, and businesses may go under. Fishermen in Brixham are deeply put out by the fact that fishermen from overseas have the right to pillage their stock when, on the whole, they themselves have tried to conserve fish stocks in their area.

Let me give a fuller picture of the state of the fishing industry. We must look at the type of vessels operating in our seas. The local fish habitat in Brixham has been besieged by a fleet of nomadic Scottish scallop dredgers that have been working non-stop around the clock in what have, until now been the traditional grounds of the inshore fishing fleet. These huge vessels, towing gear weights eight to ten tonnes or more, are working those traditional grounds and are consequently causing great damage to the sea bed and the fish habitat. They are uncontrolled. They can bring in as much gear as they want to within the six-mile limit.

The huge scallop dredgers can use three times more gear than the local vessels, and, by the time they move on, they leave a completely wrecked sea bed in their wake. Those big fleets have been working right up to the six-mile limit—the traditional fishing ground for the small fleet of vessels operating in Brixham, which incorporates 250 inshore men. Those men are having a terrible struggle against the huge vessels, which are not subject to any legal controls. The Ministry of Agriculture, Fisheries and Food is doing nothing to help, although that is no surprise, because there is no regulatory framework for this type of fishing. The big vessels can tow the type of gear that no Brixham fishermen have at their disposal. Fishing vessels of 9 m beam are the norm in the local fleet in Brixham. They have to stay outside the 12-mile limit and operate on less than 22 1 kW. In contrast, the huge dredgers from Scotland are in excess of 800 to 1,000kW and, quite legally, up to 40 m of beam in length.

In only three months, the effect on the infrastructure of the sea bed has been devastating. Unless the problem is looked at immediately, the inshore grounds of Brixham and Devon will soon resemble a barren lunar landscape, and the local economy and way of life will be put at risk because of a few vessels whose owners have little interest in the future prosperity of the Devon area or, it seems, any care for the conservation of fish and the environment.

Although I have made an impassioned plea for the Scots to get off the Devon sea bed, I should add that the Scottish boats do not land their fish in Brixham. Therefore, there are a great number of fish-producing organisations and inshore fishermen who do not benefit from the fish caught by the influx of new fishermen. Kingfisher, Riddlers, Samways, South-West Fisheries, Brixham Fish Marketing, Channel Fisheries Ltd. and Paramount 21 Ltd. are all involved in fish processing and all deeply worried that the supply will be reduced. If the problem continues, and the Scots come down to Devon and plunder what Devon fishermen regard as their traditional fishing beds, may those fish processors will be unable to continue in business. I hope that the Minister will deal with that point in his winding-up speech because it is causing tremendous upset and concern, not only among the fish processors, but among the fishermen of Brixham.

Mrs. Marion Roe (in the Chair)

I remind hon. Members that the winding-up speech customarily begins at 10.30 am. If all hon. Members who are seeking to catch my eye are to be called, it is necessary for hon. Members to be brief.

10.8 am

Mr. Austin Mitchell (Great Grimsby)

Today, we are talking about the problems of the processing or merchant side of the fishing industry; on Monday night, we debated the problems that fuel charges were causing the fishing industry. My hon. Friend the Minister is getting a bashing from both sides of the industry this week.

The basic cause of the processors' problems is, simply, the shortage of fish. We have a massive conservation crisis around the coast: landings are down by 40 per cent., as my hon. Friend the Member for Aberdeen, Central (Mr. Doran) said, and there is a world shortage of quality fish. In addition, vessels are staying at sea longer to catch less fish, so the fish is not as well-preserved or of such good quality when it is landed.

I agree with the hon. Member for Totnes (Mr. Steen) that the basic cause of the problem is the common fisheries policy. The problem was foreseeable. It might be unfashionable to say so. but if we controlled our own waters, the problem would not have happened, because we would have been in a position to exercise effective control. Such controls exist in Canada and Iceland, and, although stocks are currently down in both those countries, they are rebuilding thanks to national controls. It is worth stating at the start that lack of control is the basic cause of the problem, although there are additional causes to which I will not refer because the matter is too emotive. Today's debate focuses on the consequences of the fish shortage.

The industry, especially the primary processing sector, is, rightly, calling for help from the Government. The big processors, including those based in Grimsby, also have problems, but they are problems of restructuring. Owing to the traditional ingenuity of the industry, constant upgrading, adding new value, preparing new dishes and exploitation of marketing power, big processors are in a better position to deal with the problems than the small primary processors on the quayside. The big processors have benefited from the high pound because it makes imports cheaper, but small ones have been penalised because they export the product and the high pound makes exports dearer and less competitive.

The industry has two needs. First, it needs financial help from the Government for restructuring and reorganisation. Some such help is available, but the processing side of the industry has not had grant in aid for three years. Of the £10 million available through the financial instrument for fisheries guidanceFIFG—£5 million is predicated for the south-west, which leaves £5 million for the rest of the country, for three years. That is not very much money, so financial help is needed if the industry is to face the crisis and restructure.

Secondly, burdens on the industry need to be eased. There is an accumulation of burdens and increasing costs, which press heavily on an industry that primarily comprises small producers. Traditionally, this country gold plates European regulations and there is overzealous enforcement: for example, Grimsby was in the front line in respect of waste water charges, and the Department of the Environment, Transport and the Regions was, to be frank, of little use in restraining the rapacity of the water companies. My hon. Friend the Minister did his best, but the Department concerned did not. At the end of a long battle, the water companies agreed to reduce the charges, but they still represented a heavy increase to an industry that was already facing difficulties. That increase is now spreading to Scotland: I have heard of a Scottish merchant who is facing a 300 per cent. increase from 1 April 2001. There should have been a national approach to the matter to ensure that charges throughout the country were equal.

That is one example of our propensity to increase charges on an industry that is already in financial difficulty and unable to sustain the burden. Another example is the veterinary inspection charges made necessary by European regulations. Those charges would have been even larger, but I persuaded the deregulation taskforce to consider the issue, and Lord Haskins secured some modifications to those regulations, thereby establishing a more sensible approach. None the less, the charges are still substantial, and Grimsby merchants feel that they are paying substantial charges to the environmental health department of North East Lincolnshire council for a service that they are not receiving—an inspection that does not take place.

Such charges for unnecessary services are especially problematic in relation to imports. There is intense competition in the fish industry throughout the world; we are dependent on imported fish and must compete for it with other nations, and prices are on the increase. Thanks to port health authorities' excessively stiff approach, cargoes are being turned away or held up by pernickety inspection procedures. The matter may not fall within the portfolio of my hon. Friend the Minister, but I hope that he will take it up with the relevant Departments. Veterinary charges for inspection are five times as high on frozen fish—which does not present a health problem—as on wet fish landed in this country. European Economic Area imports are subject to five different levels of charges, depending on whether the fish is chilled, frozen or fresh and where it is going. None of that is related to the cost of inspection of the raw material. Charges on the processor accumulate as fish is transferred from one side of processing to the other. If, as is the case in Grimsby, companies are scattered over several sites, a charge must be paid each time the fish is transferred to another factory, even if it belongs to the same company.

In relation to port health authorities, there is a constant argument about what constitutes packaging. The country of origin and establishment number has to be indicated on the packaging, but does it have to be on the outer or inner packaging? Most fish and other products are imported in two sets of packaging—inner and outer. Incomprehensibly, port health authorities insist that both must be labelled, even though the European Commission has ruled that only the outer packaging must be labelled. The Department of Health has agreed with port health authorities that it is more practical to ensure that both inner and outer packaging are marked, which is barmy. Packaging is being ripped open to inspect whether the labelling is the same inside and outside. Furthermore, port health authorities are refusing to admit products labelled with adhesive labels, even though adhesive labels are not proscribed.

In one instance, a shipment of Chinese fish marked "Quindao" instead of "China"—Quindao is the main source of Chinese fish—was turned away, even though the documents said its origin was China. Products have been returned to distant countries and arguments have taken place about whether the name of the vessel was spelt correctly on the packaging. Russian fish, on which Grimsby is dependent, often comes in via a third-country port, and some port health authorities require certificates from the country of origin and the third country involved, which causes long delay, during which the products deteriorate. That is insane and a handicap on our industry. The industry is also subject to the burdens of the climate change levy, about which I have had a major correspondence with a Grimsby firm; packaging legislation, whereby firms are charged for the disposal of packaging; and the increase in fuel costs. The industry is in difficulties, and needs help to sustain itself.

My hon. Friend the Minister knows that there are about 12 jobs on shore for one at sea—ancillary jobs in transport, packaging and support services backing up the processing industry. That is not generous enough to the catching side—although, clearly, the balance must be swung towards supporting both. Support must be given to assist reorganisation, restructuring, and upgrading of quality and marketing techniques on the processing side. If today's debate has one outcome, I hope that it is a united industry —across England and Scotland and the whole United Kingdom—that pleads that something be done about the crisis if faces.

10.19 am
Mr. Alex Salmond (Banff and Buchan)

I congratulate the hon. Member for Aberdeen, Central (Mr. Doran) on securing this debate. The hon. Member for Totnes (Mr. Steen) was anxious about contributions from Scottish Members. If he were a Member of the Scottish Parliament, which is not likely to be imminent, his speech would have been restricted to four minutes. Perhaps the Westminster Parliament would be wise to consider such an innovation for debates such as this. I shall speak for less time than the hon. Gentleman—probably for only slightly more than four minutes—so that others have the chance to contribute.

I agree with the hon. Member for Aberdeen, Central. I have been Member of Parliament for Banff and Buchan for 13 years, and the crisis now facing the processing sector is the most severe it has had to face during that time. There is a general crisis afflicting the fishing industry, but certain aspects of it are bearing down hard upon the processing sector. I shall not rehearse all the arguments, because the hon. Gentleman touched on most of them.

First is the key matter of supplies. This year alone, there have been 40 per cent. fewer landings in Scottish ports and a 47 per cent. increase in quayside prices, which have caused the processing sector severe difficulty. As the hon. Gentleman said, the industry has been unable to build up stocks for the lean times of the coming winter. Secondly, the sector has suffered the imposition of an extraordinary number of regulations—packaging regulations, veterinary charges regulations, the climate change levy, inspection charges and, crucially, the urban waste water directive, several aspects of which were introduced recklessly and irresponsibly.

Thirdly—these are matters on which the hon. Gentleman did not touch—those changes have combined with a 29 per cent. increase in transport costs during the past year. That affects Scotland in particular, as its fishing industry is export-driven: about 75 per cent. by value of our white fish and shellfish products are exported. In addition, in the past three years, we have suffered a switch in exchange rates of 30 per cent., relative to other European currencies. Even the price of fish boxes has risen—a few years ago, the industry was pressing hard for new fish boxes, but because they are an oil-based product, the price rose last year by 40 per cent. That combination of pressures is bearing down hard on the industry.

The hon. Member for Aberdeen, Central said that I would talk about Abacus Seafoods at Mintlaw, a fish processing company in my constituency that is facing closure; it is still operating, but the staff are now working out their redundancy notice. Although 30 workers have been found temporary jobs in another company at Fraserburgh, at least 100 jobs remain at risk. It is a modern factory with a fine work force and, crucially, it has its own water processing plant, which is a huge and substantial advantage, given the charges that bear down on other companies. The loss of 100 jobs in Mintlaw, which is a rural area in central Buchan, is the equivalent of the closure of a massive steel mill or of a shipyard in a shipbuilding area, because the firm is the largest employer in an area with little alternative work. Unless we are very careful, that story will be repeated in one fish processing area after another.

I realise that the Minister does not have a magic wand. We have known each other for some years. I have spoken in just about every fishing debate in this place and I know that he has good will toward the industry, but I want to suggest some priorities to him. First, we are approaching a vital round of negotiations. The crisis is deep, not only in cod stocks but in stocks of other fish. It must be remembered, however, that a continuity of supply is essential in a mixed fishery if the processing sector—let alone the catching sector—is to remain in existence next year. Measures that are optimal for one stock are not necessarily optimal for another, or for securing future supply and, thereby, the future of fishermen and fish processing workers. The Minister understands that and is experienced enough to argue a position that offers the industry the maximum benefit over a period of time.

Another factor that has a big impact on the industry is water charges. One processor in my constituency has reduced water consumption by between 80 per cent. and 85 per cent., but that required prudent investment. Given the pressure from banks, many companies do not have the capital available to invest. Such investment, however, would help conserve water, and help the industry soften the impact of water charges. The Government can and should act—although I am of course aware that it is a matter for the Scottish Executive as well as for the Minister.

Another factor is transport charges. Two weeks ago the Chancellor announced some relief for the haulage industry. There is a strong case for more relief to be given to the fish processing sector, because of its huge dependency on transport in terms of exports and the fact that much of its production takes place in outlying areas.

We have been speaking largely about the white fish sector and to some extent about the shellfish sector, but we should also remember the pelagic sector. I am not going to rehearse all the detailed arguments that I have put to the Minister in private meetings. However, I believe that, if the right approach is taken to regulation, our mechanism could make it easier technically for the Scottish pelagic boats to land their product in Scotland. The Scottish pelagic fleet—the tank boat fleets that are crucial to my constituency and to Orkney and Shetland, for example—could allow more landings to take place in Scotland, rather than Norway. The impact on jobs in pelagic processing would be substantial and would help to offset what I fear will be a substantial loss of jobs in the white fish sector.

I would like to refresh the Minister's memory about the eighth report of the Select Committee on Agriculture, published last August, which was generally welcomed and recognised as a positive and forward-looking report. In its key recommendation it stated: We recommend that the Government establish for the first time a clear, agreed and coherent strategy for the management and development of the United Kingdom fishing industry, which will unite all concerned in working towards greater efficiency and competitiveness. That was in August last year. I know that there are moves planned for January of next year, but the Minister should announce that that strategy is in place now—not that it is going to be in place, or that it might be in place in the future. The crisis is upon us, the factories are beginning to close, the outlook is not bright, and I fear that, unless the Minister can offer substantial initiatives, there will be a shakeout of, not hundreds, but thousands of jobs, and not in one constituency, but in many. We will see the decimation of a way of life for many of our constituents.

Mrs. Marion Roe (in the Chair)

The official Opposition spokesman has kindly offered to forgo some of his allotted time, which will allow me to call other hon. Members to speak before the Minister winds up the debate.

10.27 am
Mr. Lawrie Quinn (Scarborough and Whitby)

I echo other hon. Members who have welcomed the opportunity to debate this important subject. I speak on behalf of the fishing communities of Whitby and Scarborough. I am sure that my hon. Friend the Minister knows that there are roughly 1,000 onshore jobs connected with the fishing industry in my constituency. Unlike the 40 per cent. reductions that have been experienced in Scotland, we have experienced a 14 per cent. reduction in landings. The reduction has, to some extent, been mitigated by an increase in shellfish—a direct consequence of the northwards migration of fish such as cod, which benefits shellfish.

Whitby, which is well known to many parliamentarians, is synonymous with fishing and sea fishing. I am concerned on my constituents' behalf about the socio-economic impact of reductions on such a small community. It is evident that, throughout history, the fishing industry has comprised people from the private sector who have responded positively to challenges and change. However, since the 1930s, there has been a serious decline in sea fishing, especially in Whitby and Scarborough. Partly as a response, the families involved have been inclined to diversify and find other ways of responding to immediate challenges.

I congratulate Scarborough borough council on its recent work in the spirit of diversification and finding other ways to make a living. The council recently established the Yorkshire coast fishing forum, and I am grateful to the secretariat of that organisation, especially Mr. Duncan Amos. He took the job after a considerable period in the Canadian fishing industry and first-hand experience of its failure, which involved 45,000 jobs. I hope that he is not preparing for a similar failure here. The impact will be no less considerable in my constituency, unless concerted action is taken. I am disappointed that Yorkshire Forward, the regional development agency in Yorkshire, does not appear to recognise the importance of the issue for part of my constituency and its community. Wards in Scarborough and Whitby immediately associated with the fishing community are the top 10 unemployment wards in the region. A considerable decline has already taken place.

I think it was the hon. Member for Banff and Buchan (Mr. Salmond) who stated the need for some sort of national initiative. I support that approach. The problem is no less significant to my community and to those others represented in the Chamber than was the possible failure of Rover is to its local community. It is time that we, as a nation, thought about taking concerted action in the form of a taskforce. I recall the Coalfield Communities Campaign; perhaps Members of Parliament should consider setting up a fishing communities organisation to lobby in a similar way.

There has been diversification over the past 70 years in my constituency. My hon. Friend the Minister will know that the recreational side of sea fishing is now important: in Whitby alone, it contributes about £2 million annually to the local economy. I ask my hon. Friend to consider the impact that any quota arrangement would have on that vital part of the community. The matters are linked: the families involved in fish processing are the ones that are involved in recreational activities. In a community of about 16,000 people such as Whitby, £2 million would be an extremely large loss.

Fishing and Whitby go together. We want to plan for a positive future and for diversification. I commend the recent arrangements that have benefited my constituents who are involved in agriculture, and I would like to see the serious question that faces many others of my constituents given a high national profile.

10.32 am
Miss Anne Begg (Aberdeen, South)

I shall try to be brief and not to repeat what has been said, as I realise that time is getting on. My hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) suggested a fishing taskforce. That is a good idea, but I think that we can be slightly more optimistic about the fishing industry and fish processing than about other industries, such as those of steel or coal. Fish are a renewable resource and the industry is sustainable, not necessarily ailing.

I want my hon. Friend the Minister to provide some solutions to the industry's temporary problems. I know that, even with the best will in the world, he cannot magic fish into the sea. A large part of the problem is the lack of fish due to over-fishing, and there is nothing for the processors to process if the fish is not there. The amount of fish landed in Scotland is down 40 per cent. My hon. Friend has a difficult circle to square—I do not envy him—but I want something to tide the industry over its short-term blip, until the longer-term measures being put in place take effect and the stocks begin to recover.

I believe that the brood stock in haddock in the North sea is good, but it will be three years before it can be fished. My contacts in the industry in Aberdeen say that supplies of black fish have virtually stopped, so the regulations are tightening up. Good things are happening in the industry, but their results are not yet apparent, and will not be for another two or three years. Perhaps I am overoptimistic, but I am sure that the industry is not on its last legs and that it will not die, provided we secure help for it in the short term.

My hon. Friend the Member for Aberdeen, Central (Mr. Doran) mentioned a company in my constituency that called in the receiver a couple of weeks ago. I have had contact with several processors in my constituency that have cash flow problems and whose creditors are beginning to call in their debts. Those debts are not new, having arisen, not in the past couple of months, but in the past few years, but the creditors are beginning to lose patience. They foresee a bleak two years and that is why they are calling in their debts. That is causing great problems.

Many of the processing companies involved are primary processors, producing a product of very high quality. The company that has gone into receivership was processing fish for Marks & Spencer and Harry Ramsden's and the receiver hopes to find a buyer. However, meanwhile, half the work force have been laid off. Those are the people I worry about. What will happen to their skills in the short term? Many such skilled workers live in Torry in my constituency. Already they are looking for jobs. Perhaps we in Aberdeen are lucky, in that it is possible for them to find other jobs, but if their skills are lost, they cannot be brought back into the industry.

I recently spoke to a young woman who was looking into a job as a care assistant in an old folks home, which might pay less than a job in the fish industry. Should she go, she is unlikely to return. There is reason to worry about the skills base of the industry. If it disappears, there will be no people to do the work if fish stocks and the industry recover. Short-term help is needed to prevent the loss of the skills base and to enable people such as my constituents to remain in the industry. A strategy is needed so that what happened to the herring industry in the late 1970s does not happen to the industry based on cod and the other fish that we process in Aberdeen. When the good times come, we shall need workers with skills to take advantage of them.

10.37 pm
Sir Robert Smith (West Aberdeenshire and Kincardine)

I appreciate that we are now running quite late. Not only is it important for Back Benchers to contribute, but if they are to get anything out of the debate the Minister must have time to respond, so I shall try to keep my remarks short.

I welcome the success of the hon. Member for Aberdeen, Central (Mr. Doran) in securing today's debate. I am pleased to see the Minister here. I know that he has other pressing issues to deal with, but the subject that we are discussing affects many of our constituents and a major United Kingdom industry. I appreciate his willingness to meet representatives of the industry. Members of Parliament articulate constituents' worries, but those whose work gives them an understanding of the technicalities and problems can communicate more directly with the Minister about possible solutions.

As has already been explained, regulations are frustrating enough at any time, but in a crisis, when there are no profits, they really hurt. I hope that the Minister will try to avoid gold-plating and that he will attend to what our hon. Friend the Member for Great Grimsby (Mr. Mitchell) said, especially about some aspects of imports and labelling. If it was not obvious that the city in question was in China, I wonder what the people who looked at the labels were thinking about.

If there has been a 40 per cent. drop in fish landings, the key issue to be dealt with is the shortage of fish to sustain the industry. The hon. Member for Totnes (Mr. Steen) made the point that fishermen are not the villains of the piece. They need to fish: an individual confronted with the choice of paying the bank manager or conserving stocks has no choice but to pay the bank manager. However, in the long run, everyone will lose by that approach. We must acknowledge the way market forces are heading. The industry is highly regulated and controlled, so the Government are part of the equation and cannot avoid being part of the solution, which is sustainable fishing.

The key message that I have received from the industry is the need to decommission excess fishing capacity, to establish a retirement scheme and to secure a balance between fishing capacity and long-term sustainable fishing stocks. That will provide a stable future for the industry, which the processors can plan around.

Will the Minister explain what is happening about square mesh introduction in England? Small fish that are not caught become bigger fish the next year and can be caught then. The message from the industry is that fish do not respect boundaries, so management of the whole fishery is crucial. That is why the Government's role in Europe and their willingness to make the issue a priority in their European negotiations are so important. We need to work towards zonal management of fishing sectors, in which both those affected by the consequences of decisions and those affected by the need to sustain fishing have a say and play some part in the control of fishing policy.

The hon. Members for Banff and Buchan (Mr. Salmond) and for Scarborough and Whitby (Mr. Quinn) highlighted the need for action. Our communities and the industry they rely on may be small, but the impact on them when things go wrong is proportionally as serious as on major industries. What happened in coal, steel and farming means that the Government should not turn their back on restructuring the fishing industry. Fishermen expect, not permanent support, but a restructuring to enable them to achieve a sustainable, long-term and effective fishing industry.

Fish processors need fish and a viable catching industry needs fish processing to get its fish to the market. The Government must recognise the seriousness of the situation. Fishing may not be as sexy or headline-grabbing as other industries, but a great deal of dedicated hard work in Europe will be necessary to deal with the problems. That work must be done now, not in a few years time. We must secure the right balance, a sustainable fishery and a sustainable fish processing sector.

10.42 am
Mr. Malcolm Moss (North-East Cambridgeshire)

I congratulate the hon. Member for Aberdeen, Central (Mr. Doran) on securing today's timely debate. He has chosen a topic—fish processing—that is an important feature of his own constituency, but every speaker this morning has highlighted the essential problem of lack of fish stocks, lack of fish landings and the wider crisis of sustainability that is facing the industry.

I have two main questions for the Minister, following on from the hon. Gentleman's point about processors and the bankers. We need to hear a strong message from the Government that they want our fishing industry in all its aspects to have a viable future. There is less Government money going into the fishing industry now than at any time in the past. The Government must recognise the crisis and the Minister must approach the Treasury for funding. Why can the French receive fuel subsidies whereas our Government refuses to respond to the real problems faced by our fishermen right now? Why are decommissioning and safety grants restricted or taken away? More money must be invested in the industry. As I said, the Government must send out a strong message that they believe that our fishing industry has a future.

10.44 am
The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Elliot Morley)

I am grateful for the opportunity to discuss the issues and I congratulate my hon. Friend the Member for Aberdeen, Central (Mr. Doran) on securing the debate and on the manner in which he made his case. Being Minister with responsibility for fisheries is not the easiest job in the Government, but one positive aspect is that hon. Members who attend fisheries debates do not come along for petty knockabout. They represent fishing constituencies, many have been involved in the industry for many years and they speak with great experience, knowledge and sincerity about an important industry. I accept the points that have been made by my hon. Friend the Member for Great Grimsby (Mr. Mitchell), the hon. Member for Banff and Buchan (Mr. Salmond) and others about the need to recognise that fish processing is a vital part of our food sector. It employs many thousands of people, contributes to national GDP, it is important for regional employment opportunities and we as a Government want to give it our full support.

I am the UK Fisheries Minister. I am pleased that hon. Members from all parts of the UK have taken part in this debate, because there is a strong interrelationship between all regions. A lot of the fish that is landed at Peterhead goes down to Grimsby and keeps the factories there going. The whole industry is important nationally, but, having said that, I recognise that there are important regional elements. I work with my colleagues in the Scottish Executive. I pay tribute to my hon. Friend the Member for East Lothian (Mr. Home Robertson) for his work as part of the UK team. Rhona Brankin has now replaced him: she has already met with industry representatives, and I know that she understands their concerns and the importance of the industry in Scotland, which are matters for the Scottish Administration.

One way to help the industry involves the regional dimension, as my hon. Friend the Member for Scarborough and Whitby (Mr. Quinn) pointed out. The regional development agencies in England will play an important role, as will the Scottish Parliament and the Welsh Assembly, in delivering support to their industries. We have given an undertaking to the Agriculture Committee that we will develop a fishing strategy; we are consulting now and we hope to bring it forward as quickly as possible. My officials have invited the Fish Industry Forum and the Sea Fish Industry Authority to take the lead in drafting the strategy by January. That will provide a basis for broader consultation with the industry. It is clearly sensible for the industry to take a prime role in putting that strategy together—people have to be involved and it takes a bit of time, but I recognise the importance of the issue. I am also aware that the Scottish Executive is drafting its own strategy in consultation with the industry.

There are back-up funds that we can offer the industry. The financial instrument of fisheries guidance is providing £6 million over the next three years in England, and there are funds available for Scotland within that scheme. The scheme will provide support for capital investment in the fish processing sector; it will include marketing and processing grants and options to improve fish quality on both the catching and the processing sides. My hon. Friend the Member for Aberdeen, South (Miss Begg) made a valid point, which is that the value of the processing side can be increased by concentrating a bit more on the quality side.

My hon. Friend the Member for Great Grimsby talked about the funds that are available, but we must bear in mind that there are funds from different agencies and different options. I mentioned the regional development agencies for England. Also coming on stream is the new English rural development programme, which will include both marketing and processing grants. Fishing is especially important in isolated areas, and the rural enterprise scheme can make capital grants for marketing and processing.

There is a range of opportunities for financial support for the industry, including for restructuring, but an operating subsidy for the processing sector would be against state aid rules and it would not resolve structural problems. The regional development agencies have funds for training and retraining, and a regional approach is crucial, as is the Government's national framework of grants from structural funds.

As hon. Members have said, the bottom line is the shortage of supplies—especially of cod—which creates problems for the processing industry. The Government intervened to secure Russian landings into the United Kingdom and I had talks with my opposite number in Iceland to ensure that we secure the supplies needed by our processing industry. The processing sector has always relied more on imported fish from third countries than on fish landed in the UK.

The processing industry has expanded considerably to supply quality, value-added, prepared foods. There are good new markets for the processing sector—for example, to supply fresh, quality fish for restaurants—but there must be fish to supply those markets. Therefore, we are taking action to develop a more sustainable fisheries policy and introducing recovery plans, such as that for cod in the Irish sea.

I accept the point made by the hon. Member for Banff and Buchan that the North sea is a mixed fishery and that some of the proposals for recovery, such as one-year bans or tie-ups, which will affect supply and have knock-on effects on shore jobs, will not necessarily work in mixed fisheries. The matter is being discussed with the European Commission and we emphasise that there should be a range of options for cod recovery in the North sea.

We pressed for cuts in import tariffs—a matter that was raised by the hon. Member for Totnes (Mr. Steen). I can tell him that the duty on cod will be reduced from 12 per cent. to 3 per cent. next year. That will significantly reduce the cost of imported raw materials, which will be of considerable help to the processing sector.

Conservation measures are needed for shellfish and we shall introduce a licensing scheme for shellfish, including scallops, although I recognise that we must be careful about changes in fishing patterns. Fishing is a dynamic industry and regulations must be enforced fairly and effectively. I had the impression that the hon. Gentleman thought that regulations were bad for fishermen in his constituency, but good for Scottish fishermen—he was keen on the enforcement of regulations for the Scots, but felt that it placed a burden on local fishermen. However, some of his constituents have been using gear such as French dredges, a very bad method of fishing for scallops, which causes me great concern.

I believe in fair enforcement in respect of all who fish in our waters, wherever they come from, even though that may not make me the most popular person in the fishing industry. Some of the industry's previous problems, including lack of enforcement and black fish landings, have mostly been squeezed out of the system, but they had already done great damage.

We want improvements in quality, and I accept the point made about on-costs and waste water charges. The negotiated agreement between the processing industry and the water companies in Grimsby is a model for other sectors of the industry and other parts of the country. A balance must be struck between the need for hygiene to protect consumers and acceptance of the principle that the polluter pays for pollution.

My hon. Friend the Member for Great Grimsby has years of experience of the industry and is one of its greatest advocates. I am concerned to hear about petty regulations on labelling and I ask him to write to me about that. I would be only too pleased to pursue the matter to ensure that a more sensible approach is adopted.

Mr. Salmond

The Minister—whom I have heard speak many times—is being his usual sensible, informed and reasonable self and it is difficult to dislike, let alone disagree with him. The case that I am not alone in making is that the ingredients exist to generate a full-scale crisis in the processing sector. The Minister may find himself overtaken by that crisis, as we all will when our constituencies suffer a blizzard of closures. Will he acknowledge the scale of the potential problem? In the face of the threat to our constituents, sensible and informed logic is perhaps more important than niceness and reasonableness.

Mr. Morley

I accept the hon. Gentleman's point about the potential pressure on the fish processing industry. My hon. Friend the Member for Aberdeen, South said that we should not exaggerate by presenting the fish processing industry as being on the verge of collapse, but I accept that it has problems. In the light of the restructuring that the catching side may have to undergo, particularly in regard to recovery plans, we may have to reconsider certain matter, for example, the amount of funding available for decommissioning. I remain open to changing that and am prepared to make a case for it if necessary.

However, funds are available now and new funds are coming on stream in April, some of which are directed towards the processing industry, which I am sure will not be slow to consider what use it can make of them. I have written to hon. Members representing areas where fish processing is important, such as my hon. Friend the Member for Great Grimsby. He is already ahead of the game: he has taken up the issue by asking what the future holds for the industry, explaining that funds are available and that the processing sector should be thinking about how it can help, particularly through investment in machinery plant and infrastructure. I am also keen to get more pelagic landings into the UK. That, too, will involve investment in processing infrastructure, some of which may qualify for grant assistance. If we can get more landings into the UK, that is all to the good.

Sir Robert Smith

Will the Minister give way on the issue of square-mesh panels?

Mr. Morley

I have only 3 minutes, but I intend to address that point. Our proposals on square-mesh panels are awaiting clearance from the Commission. There has been a delay, for which I apologise, but we intend to have those important regulations—of which I am a firm supporter—operational as quickly as possible in English waters.

I hope that I have covered most of the other points that have been raised, but if hon. Members feel that there are issues that I have not addressed—such as the difficult issue of the reduction of transport costs, I am happy to do so outside the Chamber. My right hon. Friend the Chancellor has taken action, especially in respect of vehicle excise duty, which for diesel vehicles has been cut considerably. I suspect that, like all things, the cost of fuel goes in cycles: we are at a peak of the cycle, as there is maximum demand for heating oil in winter, which affects the price of diesel, but as we go into the spring, we will see a notable fall in prices, which will have a beneficial knock-on effect on the industry.

On-costs relating to waste water and the climate change levy were mentioned. The Government have offered the industry an 80 per cent. rebate in the climate change levy. Our energy targets are not unreasonable and the processing sector should be able to achieve them — indeed, the fish processing industry will enjoy overall savings if it meets the target. In addition, under the climate change levy, there will be a reduction in employment taxes; that will be beneficial to the labour-intensive processing industry. While those extra costs present difficulties, they are important in terms of pollution control and health and safety and thereby benefit the industry. Hon. Members should bear in mind that our business taxes and social taxes are the lowest in Europe.

I assure all hon. Members who have spoken that the Government take their points seriously and we will follow them up. I am happy to meet representatives of the processing industry to see what we can do by working together nationally, regionally and locally to help that important industry.

Mrs. Marion Roe (in the Chair)

Order. I remind hon. Members that the House has decided that members of the Chairmen's Panel who take the Chair in Westminster Hall should be addressed by name. I should be addressed as Mrs. Roe.

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