§ 10.26 a.m.
§ The Under-Secretary of State for Scotland (Mr. Norman Buchan)
I beg to move,That the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order, 1967, a copy of which was laid before this House on 12th July, be approved.As the Schemes referred to in the two following Motions are related to the Order, perhaps it may be convenient, Mr. Speaker, to debate all three together.
§ Mr. Buchan
The Order dealing with the aggregate amount of grants increased the total sums available for subsidies from £46.25 million to £48.75 million, thereby covering expenditure on the subsidy proposals before the House. Perhaps I should make clear that expenditure on the Fishing Vessel Grants Scheme is not included in the Order.
The purpose of the Fishing Vessel Grants Scheme is simply to increase the rates of grant for acquiring or improving vessels by 5 per cent. on expenditure incurred during 1967 or 1968. This proposal has already been thoroughly dealt with. Indeed, we had several morning meetings dealing with the short Act which was created to enable the Scheme to be brought forward. The new rates of grant will be 45 per cent. for vessels under 80 ft. and 40 per cent. for other vessels. These are worth-while incentives to the industry to modernise and re-equip and increase its efficiency.
It is usual in a debate on the fisheries subsidies to look at the economic position of the industry before turning to the subsidy proposals themselves. While I am glad to report that the weight of total landings of herring and white fish in 1966 showed an increase over the 1965 figure, reaching over 900,000 tons, the value was only marginally higher at about £58.1 million. This was a new record but the gratifying totals unfortunately mask a deteriorating position in England and Wales. In Scotland, we saw a substantial value increase of over £1 million which was unfortunately largely offset by the decline in England and Wales.
652 The distant water fleet began to experience difficulties in 1966, and unfortunately, its position has deteriorated in the first half of this year. The total value of landings in the United Kingdom in the first five months of 1967 has been £16 million compared with £16.3 million in 1966—that is, they have dropped by about 2 per cent. Indeed, during the last few weeks, large quantities of fish have failed to be sold for human consumption at some of our ports.
Combined with a drop in earnings the distant water section of the fleet, in common with the other sections, is just now being faced with increased costs. As the House knows, however, a temporary surcharge has been authorised on oil prices and to the extent that it is put into effect this is going to raise operating costs, if not drastically, at least significantly. It has been estimated that the cost to the United Kingdom deep sea trawler fleets will be about £1¼ million in a full year.
We hope that the surcharge will be of a very limited duration, but neither the Government nor anyone can foresee how the political situation will develop so as to allow a resumption of normal oil deliveries. The cost to the inshore white fish and herring boats will be both absolutely and relatively less, and happily they are also in a better position to stand it.
The subsidy proposals now before the House are a further step in implementing the policy, following the Fleck Report, as set out in the 1961 White Paper and enshrined in the Sea Fish Industry Act of 1962. As the House is aware, the Government is now reviewing that policy in the light of five years' operation. We hope and expect that this review will be completed, and that the Government will have announced its findings, by the end of the year. It may well be that, as a result of our findings, we shall want to propose legislative changes, but in this scheme we are administering the existing Act and policy.
I know that hon. Members are inclined to criticise the Government for not having reached conclusions before now. I am sure, however, that there are many people in the industry who would be prepared to wait for a thorough review. This is a very difficult subject: it involves the uncontrollable natural phenomena of the 653 sea—and this, after all, is a hunting industry—as well as the activities of foreign fishing fleets and the actions of foreign Governments. I think that there are a good many just now who may be saying to themselves that it is a good thing we did not complete this review in 1966, and that we still have an open mind about the future policy.
During the debate on the comparable subsidies scheme in 1965, my right hon. Friend the Minister of Agriculture, Fisheries and Food announced with reference to the deep sea trawlers that the basic rates of subsidy—which in terms of the statute must be reduced annually by between 7½ and 12½ per cent. of the 1962 level—would be reduced by 10 per cent. in that year and in each of the two following years. That course was followed last year, and this would be the third year of the programme of 10 per cent. cuts.
The Government have, however, reviewed this decision and have decided that, without prejudice to any future year, for the subsidy year commencing on 1st August next the basic rates should be reduced by 71½ per cent. We do not pretend that this is a great concession; we appreciate that, in terms of extra subsidy assistance for the industry, it will mean only an extra £55,000 or so in a full year. It is, however, as far as we can go within the Act, and it should be taken as a gesture on the part of the Government to assist in meeting the difficulties which the deep water section of the industry as a whole has encountered.
The payment of supplementary rates of subsidy in addition to basic rates is authorised in the Sea Fish Industry Act, 1962, for classes of trawlers in special difficulties. These supplementary subsidies may not exceed £350,000 in any one year. This summer, the British Trawlers Federation put forward a claim for a number of classes which have recently found themselves in difficulties.
After a close study of the factors involved, we came to the conclusion that, for 15 classes at Hull, Grimsby, Fleetwood and Milford Haven, special circumstances as envisaged in the Act did exist, and the scheme now before the House provides for payments to these classes during the six months from 1st August next. We estimate that this provision will cost £85,000 in the period.
654 In Scotland, the Scottish Trawlers Federation put forward a claim for special subsidy for all trawler classes at Aberdeen and Granton. This claim was specifically to offset the cost of the oil surcharge to which I referred earlier, for the period during which the surcharge is maintained. In a six-month period, the claim would have cost about £60,000 for the Scottish vessels. The Government considered this claim; but, in accordance with the normal practice to assess the need for special subsidy on the results of a past period, we took the view that the relatively favourable Scottish results in the six months period to 31st March—which was the base period for all trawler classes—did not justify the payment of special subsidy.
We shall, however, be prepared to look at the Scottish position again, as well as the difficulties of the Welsh and English ports, in the autumn when we are conducting the next review, though we have some doubts whether the oil surcharge itself can be held to be suitable grounds for payment of special subsidy rates. Scottish trawler owners will, of course, benefit, with other sections of the trawler industry, in our decision to impose the minimum percentage cut in the basic rates of subsidy; this will be of some help to them.
I should like to turn to our proposals for the inshore and herring fleets. Nearly all the vessels concerned are of less than 80 ft. registered length, though a few of the herring boats are above that. Most of the vessels are dual purpose.
As the House will recall, the 1961 White Paper stated that the level of subsidy assistance for these fleets should be decided at annual reviews with the general intention of achieving a reduction in the level of assistance as quickly as possible in conformity with the needs of the fleets.
Earnings of these fleets from white fish and herring in 1966 increased by £1.2 million to £17.5 million; that is, by over 7 per cent. compared with the 1965 level. These are United Kingdom figures. Increases in costs absorbed some of the increase so that profits came out lower for some classes, while others had higher profits.
The year 1965 had been exceptionally good for the inshore and herring fleets, 655 and the 1966 profits, while lower for some, were still exceptionally good. Excluding the vessels under 35 ft. the characteristic return in 1966, after depreciation, on the estimated capital employed lay between 15 per cent. and 22 per cent. These are average figures for boats grouped according to registered length.
I do not want to attach too much absolute importance to them, but, relatively, they are good figures. The Government took the view that the 1966 position on profitability pointed to a further reduction in the level of subsidies. In reaching decisions, we took account of the fact that the changeover from stonage to daily rates for white fish vessels under 60 ft. was not full reflected in the 1966 accounts. While the percentage cuts vary somewhat between one rate and another, the reduction in total subsidy income to the fleets will be about 7 per cent. of the subsidy earnings in the present subsidy year.
The House will, however, have noted that we have made a substantial reduction in the daily rates for herring vessels over 80 ft. Until recently, this class consisted only of a dwindling group of older drifters, which regularly made serious losses. In earlier years, we did not reduce the subsidy for this category in step with the rates paid to other classes. This was to give these drifters an opportunity to be phased out and because they had become so unprofitable. We now feel that the time has come to bring this rate more into line. There are now new vessels of this size coming into operation, and these should not need any favours. We would expect to take another hard look at this next year.
I should also point out to the House that the quota and subsidy rate for herring surplus to the human consumption market, what is often called the "oil and meal" subsidy, have not been altered.
We gave confidential notice of our intentions about these changes to the inshore and herring fishmen's associations, as is the usual practice. I am not able to say that the associations have endorsed our proposals—indeed, some objections were raised—but I think that I can say that the fishermen regard these changes, if unwelcome, as not totally unreasonable.
656 The House will recall that the 1966 subsidy scheme provided for all white fish vessels between 35 ft. and 60 ft.—with the exception of those registered before 1st January, 1965, which had in 1965 earned less than £500 in combined white fish and herring subsidy—to be transferred to daily rates of subsidy from the previous stonage rate basis. We are well satisfied with the way this has worked out so far.
We now feel that, in the light of the past year's operation, it would be right to separate the vessels regularly engaged in fishing for white fish and herring from which can be regarded rather as part-time by taking a figure of £300 in place of the £500 figure.
It is, therefore, proposed that all white fish vessels between 35 ft. and 60 ft., with the exception of those registered before 1st January, 1967—we have come forward two years on this occasion—which earned less in combined subsidy than £500 in 1965 or £300 in 1966, will be paid on daily rates. We also propose that herring vessels between 35 ft. and 40 ft. which are now all paid on stonage rates will be similarly dealt with, so that some of these will transfer to daily rates. All herring vessels over 40 ft. are already on daily rates.
That may sound a little bit complicated. The effect would be that any boat which beat the relevant par figure in either year—£500 in 1965 or £300 in 1966—will be on daily rates in the new scheme. So will any boat over 35 ft. registered after 1st January, 1967. The only boats of this size which will remain on stonage rates will be those registered before that date and which did not achieve the par figure in either 1965 or 1966. That is as clear as I can make it. The effect of these proposals in terms of numbers of vessels is not large, but we feel that this new figure will give rise to fewer anomalies between the regular and the part-time fishing vessels.
There are no further changes in the conditions of the scheme. One port, Fort William, has been added to the schedule for the purposes of the surplus herring subsidy.
The House will recall the very valuable Report on the Assistance to the Fishing Industry from the Select Committee on Estimates. My right hon. Friends have 657 recently submitted observations on the Committee's recommendations and these have been laid before the House. There may be some later opportunity for a debate on the Report.
I do not propose to say more today than that we were not able to accept the Committee's recommendation for rates of subsidy to inshore and herring vessels to be put on a regional basis principally because of the practical difficulties involved. Nor, at this round, have we felt it right to adopt the Committee's recommendation tht different reductions should be made in the basic rates as between one section of the deep sea industry and another.
In conclusion, I should like to emphasise that in arriving at decisions as to the rates and other features of the subsidies which are provided in the main instrument which is now before the House, the Government have worked within the framework of the 1962 Act and along the lines which have been customary. That is to say, the rates largely reflect the known facts about the costs and earnings of various sections of the fleet in the most recent past period for which accounts are available.
We all recognise that, at the present moment, the whole industry is facing a sudden increase in its fuel costs, while because of the industry's freedom from tax on fuel the relative effect of the surcharge, where it is applied, will be greater than for other industries. We also know that some deep-sea sections of the industry have begun to run into unexpected marketing difficulties, and we recognise that these appear recently to have become worse. We do not know for how long these difficulties—fuel costs and marketing—will persist or what other features, some of which may be helpful, will appear. These will be reflected in future reviews.
Meanwhile, we are following a system in which basic rates of subsidy are fixed for 12 months in advance, and special rates for six. We therefore have to have regard to the trends and not to the immediate present. We believe that the provisions set out in the scheme are right and appropriate for the purpose.
§ 10.43 a.m.
§ Mr. Patrick Wall (Haltemprice)
I thank the Minister for his lucid explanation of these fairly complicated Statutory 658 Instruments. I commiserate with him on the burden of work which seems to fall on the shoulders of Scottish Office Ministers, particularly as it affects fisheries and agriculture. The hon. Gentleman did not say very much about the crisis which we know has developed in the fishing industry. No doubt this will be referred to by hon. Members on both sides, and will be dealt with by the Minister when he replies.
We all welcome the decision to discuss fisheries at a morning sitting, instead of after midnight, as used to be customary in the old days, but I am disappointed that we have lost half an hour already because of a large number of Ministerial statements. In addition, the Select Committee on Agriculture is now meeting for its final Report to be presented to the House, and I must protest that an important fisheries debate is taking place at the same time as that meeting. I fear that the Leader of the House forgets that the subject of fisheries is part of agriculture. This outlook is too common today. I hope that I have made a point that will be noted.
I propose now to deal with the Statutory Instruments before us. As the Minister said, the first one gives the Government an extra £2½ million to use for the fishing industry. I do not think that there is anything we need say about that.
The first of the other two is concerned with operating subsidies, and the other with building and improvement grants. There are a number of points which arise on them. I propose to deal, first, with operating subsidies for the near, middle, and distant water vessels. Last year, these subsidies were cut by 10 per cent., and no special rate payments were made. This year the cut is to be the minimum of 7½ per cent. and the special rate payments are to be made.
This means that the operating subsidies for vessels over 80 ft. long will vary between £5 3s. 6d. and £8 12s. 6d. per day at sea. The special rate payments which were not made last year, but which are to be made this year, to certain oil-fired steam vessels of 170 ft. and over at £5 a day, and certain motor fishing vessels of 110 ft. and over, at from £4 to £5 a day, are to be paid only for the first six months. Perhaps the Minister will say why this is so. Can he also say approximately what percentage of the vessels 659 operating from the major Ports of Hull, Grimsby, and Fleetwood will be affected by the special payments in the first six months of the financial year? It appears from these provisions that no special grants are to be made to vessels operating from Aberdeen. I presume that this is because these classes do not operate from there. No doubt my hon. Friends from Scotland will take up this matter later.
There are two points which arise on the operating subsidies for near, middle, and distant water vessels. The first is that the basic cut of 7½ per cent. for the full 12 months represents about £125,000, or—and I think that this is the point—about £30,000 more than the British Trawlers Federation vessels are likely to receive from the six months supplementary payments. I think it important to remember that these subsidies are based on operating results, or on information obtained, between October last year and March of this year. As I hope to show later, these results, and, therefore, these subsidies, are completely irrelevant when we are considering the crisis at present facing the industry. They are based on figures when the industry was doing reasonably well, and this is no longer the case.
I turn now to deal with the inshore vessels. Last year, operating subsidies were cut by amounts varying between 10 per cent. and 48 per cent., depending on the size of vessel concerned. This led to strong protests from both sides of the House. This year, the average cut for inshore vessels is about 7 per cent. These cuts are represented by a reduction of 1d. per stone in landings of fish for human consumption, and a ¼d. in landings of fish for other purposes. I thought that the farthing had disappeared as a unit of currency. It is interesting to see it reappear in these provisions. I wonder how the computers, or the adding machines, will work this out? Voyage payments are to be extended to vessels of 35 ft. but, in general, voyage payments for other classes of vessels above 35 ft. show a decrease of from 5s. to 10s. a day on last year's figures.
It is very much the same story for herring vessels. Stonage payments are down by ½d., voyage payments are extended to vessels from 35 ft. to 40 ft., 660 but payments for vessels above this size are down by an average of 7s. to 8s. a day, and then there is the extraordinary cut for the few vessels of over 80 ft. in length which remain fishing for herrings. I wanted to ask whether this cut was designed to drive them out of herring fishing, but I think that the Minister has now more or less confirmed that that is what he has in mind.
It is true that, in general, inshore fishing has had a reasonably good year, but Scottish landings have been declining year by year. In 1966, they were 4 per cent. down on 1965, and, taking the first six months of this year, they are 8 per cent. down on the corresponding period last year Therefore, although inshore fishing generally has had a reasonably good year the trend, even in Scotland, seems to be downwards. I have no doubt that my hon. Friends who represent inshore ports, especially in Scotland, will have more to say about these matters.
I now turn to the scheme concerning building and improvement grants. As the Minister said, this was fully debated in May. It allows for a 5 per cent. increase for two years, including vessels bought in foreign yards. Two points were emphasised in the previous debate. The first was the need for competitive tenders and the second concerned scrapping ratios. Both points were raised by the Estimates Committee, but in his introductory remarks the Minister did not refer to those points.
The hon. Gentleman referred to the statement put out by the Department about the recommendations of the Select Committee and it seems to me the answer is that, as usual, both points are still under consideration. I ask the Minister whether the Government have made up their minds whether or not competitive tenders are still required. I am not saying that they should not be, but the industry should know where it stands.
Far more important is the question of scrapping ratios. Will the Government insist upon two conventional trawlers being scrapped for every freezer and 1½ for every new conventional trawler built? This is against the advice of the White Fish Authority, the British Trawlers Federation and the Estimates Committee, and the industry and the House are 661 entitled to know whether the Government intend to make up their minds on this important matter in the very near future.
A rather special problem has arisen under the parent order which is amended by the order that we are discussing. It refers to ships built abroad. Grants to those ships are limited to 20 per cent. and 25 per cent. instead of 40 per cent. or 45 per cent. unless the relevant Ministersare satisfied that the expenditure was incurred at a cost which compares fairly with the cost at which the construction of the vessel could be carried out in the United Kingdom.Surely the normal meaning is that foreign prices must not sunbstantially exceed the United Kingdom prices. That seems to be the common sense construction, but I understand that the Minister has taken exactly the opposite view—that foreign prices must not be less than United Kingdom prices. The industry has taken advice on this matter, and I notice that counsel's opinion refers to the upside-down posture of the Minister. Whether he is standing on his head or on his heels, this decision means a reduction in the 20 per cent. grants for vessels built abroad and, therfore, it is a matter of considerable importance.
Even stranger than this decision is the view expressed by the Minister that British equipment installed in a foreign-built hull is to attract the same grant as the hull. Some ships being built abroad are attracting a 25 per cent. grant although the engines for these ships and their refrigerating equipment are subject to a quite separate contract, and this contract is placed wholly in his country. The ruling is that the contract for the engines and refrigerating plant should attract only the 25 per cent. grant rather than the 45 per cent. grant because they are going into a foreign-built hull.
§ Mr. Hector Hughes (Aberdeen, North)
The hon. Member referred to an important matter when he mentioned counsel's opinion. Will he name the counsel and state the data that were placed before him which caused him to arrive at that opinion?
§ Mr. Wall
I do not think that the hon. and learned Gentleman will expect me to do that. I referred to a remark of counsel which seemed to me to be interesting.
662 I want to elicit from the Minister whether these are his decisions. I can understand the first one—it depends on the interpretation of the order—but I do not understand the second. The question whether grants for machinery built wholly in this country attract the grant payable for a hull built abroad is a matter of considerable importance, and I hope that the Minister will deal with it.
§ Mr. Hector Hughes
On a point of order. If the hon. Member is relying upon counsel's opinion it is surely right that he should give the House the information that I have asked for.
§ Mr. Wall
I am not relying on counsel's opinion; I am making a case to the Minister and I hope that he will give us a clear explanation of this involved matter.
I turn now to the state of the industry in general. As I understand it, the object of all three Statutory Instruments is to create a viable industry by 1972. That has been the purpose of the Instruments that we have discussed during the past few years. It may be said that subsidies are justified by the fact that competitive agricultural foods are far more heavily subsidised than fish, that Britain is now virtually an open market and that British fishing vessels have been cut off from their traditional fishing grounds and are prevented from landing their fish in many foreign countries.
That is the justification for putting taxpayers' money into the industry for a period. I want to quote from the recently issued report of the White Fish Authority. Paragraph 4 says:In England, on the other hand, a large part of the trawling fleet, and notably the distant water fleet, was severely hit in the latter part of the year. Not only did landings decline in quantity, but prices fell in a manner quite contrary to the normal pattern. Worse still, while the whole industry suffered from cost increases, once again the section most affected was the distant water fleet where operating costs rose by no less than 7½ per cent. The effects on the profitability of companies with large distant water interests were serious.This view is re-echoed in the foreword, by Mr. Basil Parkes, President of the 663 British Trawlers Federation, to the Federation's annual report. I shall not quote it, but I shall paraphrase it. He says that there was an improvement in economic well being in 1964 and 1965, and that this improvement stretched into 1966, but that towards the end of 1966 the crisis now affecting the industry started to develop. Both these reports are considerably out of date, because things moved very quickly in the months of June and July of this year.
I therefore ask the House to consider the problem of the earnings of British Trawlers Federation vessels. Broadly speaking, in 1964 the average earnings were £31.9 a day and in 1965, £31.2, which is a slight decline. In 1966, they fell to £24.5. At this figure they were unable to meet depreciation and therefore showed an operating loss of from £3 to £10 a day, depending on the type of vessel. In June, 1966, they made an average cash loss of £10 per vessel per day, and in December of that year there was an increase, to a loss of £11 per vessel per day.
In the spring of this year there was an improvement in that a greater number of vessels made a profit, but in June of this year the crisis developed and the average cash loss was £4.4 per vessel per day. In July, the position appears to be worsening week by week. Added to this story is the increase of £2 per ton on fuel oil, which means a £25 a day increase in operating costs. It is clear that the industry is seriously worried. The deterioration appears to stem from about last spring. It was concealed for various reasons, particularly because good conditions existed in the North Sea and other fishing grounds in the spring of this year.
I am glad to say that hon. and right hon. Members on both sides of the House, as Members of the Joint Fisheries Committee, have recently had an opportunity of visiting the Humber ports. Thanks to the B.T.F. they visited Hull and Grimsby last week. I am sure that hon. Members would like me to express our thanks to the B.T.F. for its hospitality. This visit was well timed. We were able to assess the seriousness of the situation, which had developed rather suddenly.
I do not blame the Government. This is a world-wide problem. It is affecting the fishing industry throughout the world, 664 and it presents a very serious matter for our own industry. The best advice that we could get was that the basic reason for this recession was the collapse of the American market, due partly to the decision of the Roman Catholic Church not to insist on abstinence on Friday—or perhaps the resulting disinclination of fish merchants of all sizes, from the small fish shop up to the major chains, to build up stocks. In a country the size of the United States, this can have a very big cumulative effect, and it meant that the Americans who had been importing large quantities of fish were very seriously reducing their imports.
To give one example, Norway increased her imports to America by 600 per cent. during the past three years. This market is now virtually closed to Norwegian fish, so that Norway is turning to this country. In Russia, the frozen fish stocks are so high that there is a shortage of refrigerated storage space. I understand that some of the fishing fleet is now being offered for sale. In Canada, the situation is even more serious. I understand that Quebec is giving 30 per cent, to 50 per cent. emergency subsidies for their fleet. In Norway and Iceland, the story is much the same as well as in the E.E.C. countries, where fish is selling at well below cost price, even in markets protected by an 18 per cent. tariff. This is a world crisis in the fishing industry.
Britain suffers from a special disability. We now allow virtually free entry since the E.F.T.A. agreement eliminated duties on imported frozen fillets, processed and preserved fish. On the other hand, although we allow entry into this country, we are not allowed to land our fish in a whole series of countries, for example, France, Belgium, Iceland and Norway. Restrictions, which virtually amount to prohibitions are imposed in Spain, Sweden and Denmark and quotas in Eire, the Netherlands and Spain.
In addition, as the House will know, most countries have extended their limits to 12 miles—so have we. But whereas, if someone is caught poaching in our waters, they are fined £100 to £300, British vessels caught poaching in Iceland are fined anything from £3,000 to £10,000, and have their fishing gear confiscated. The comparison is somewhat stark. Not only this, but our firms have no rights of establishment in countries such as Norway 665 and Iceland. In other words, they cannot set up an operating base or a fish processing plant in those countries. This does not apply the other way around, and if those foreigners want to establish in this country they can do so.
All these matters have built up to contribute to the present crisis which has been accentuated by the fact that the industry has precious little fat to live on, due to the continued, and agreed, cuts in our subsidies, which the House has approved over the years. We on this side of the House believe, and I think that there will be agreement for this on the other side of the House, that the Government must take positive action now.
Grimsby has imposed a ban on the landing of foreign cod, unless other fish is landed at the same time. To land one kit of cod, foreign vessels have to land two kits of some other fish. Obviously, this hits the merchants, who object. I would however suggest that this is really the only way in which one can prevent a glut of foreign-caught cod. Why should we allow foreign countries to dump their cod in this country when British-caught cod remains unsold? In my view, there is a great danger that this prohibition may spread to other British fishing ports. The situation is really serious, and I hope that the Government will take immediate action.
What action? May I make certain suggestions which I hope the Minister will consider carefully. First, the Board of Trade must be persuaded to use its antidumping powers. I know that this takes an awful long time, and I hope that the Government will use their influence to achieve some sort of voluntary limitation by the fish exporting nations. We are all caught up in this problem and everyone tends to dump on this country. Something must be done.
Another suggestion is that the Minister should immediately use the balance of the special fund of £350,000 which is still available. He is using some of it this year, and I think that the present conditions mean that he should use much more. If he wants to give immediate relief, what about giving the S.E.T. premium to the fishing industry? After all, fisheries are a producing industry. It does pay the tax, but it does not get the premium like other producing industries. Again, I 666 would suggest to the Minister that when he has his fisheries review he very seriously considers whether we should not have an annual Price Review for the fishing industry, on very much the same lines as the agricultural Price Review. This matter is extremely urgent.
I am told that the present state of world fishing, even given good conditions, could not be rectified in less than a year and a half. This shows that we have a long-term problem on our hands. Once ships are laid up, crews leave the industry and a rot may set in which would greatly damage the industry and the fishing ports.
Another rather more long-term problem is the question of the statutory minimum prices scheme. This has been rejected because of the ruling of the Restrictive Practices Court, and because of the very strong objections of the inshore fishermen, but, above all, because of the refusal of the Government to make a financial contribution. Everyone realises that this was an essential prerequisite, but it was refused by the Chancellor. The Minister had no option but to shelve the scheme, but it will have to be reexamined in the not too distant figure.
My final point is the whole question of the fisheries review, conceived, the House will remember, in November, 1964. It almost died at conception, and it has been in gestation for nearly as long as the Defence Review. It really only started in April of this year. I believe that it is still in great danger. Joking apart, there is now a recognition on both sides of the House of the real need for this review, because for the first time it can now clearly be seen that because of external factors over which we have very little control, the Fleck Report target will now not be met.
I do not believe that we will have a viable fishing industry by 1972 because of these external problems. There must be some changes in our policy. I conclude by commending to the Minister the prescription of Sir Roy Matthews, which he gave for the industry in his farewell speech. I take this opportunity of paying him a tribute for the magnificent leadership which he has given to the industry as Chairman of the White Fish Authority. I also welcome Mr. Hardie, who has now taken over.
667 Sir Roy Matthews' description, summed up briefly, is this. A 20-year development programme for the seas under a British Ocean Development Authority; recasting the subsidy system so as to encourage enterprise; step up research and development; improve the ports, and, above all, distribution. I hope that the Minister will consider all these matters in his review.
To that prescription, I would only add one sentence. Whatever party may be in power, it is essential that the Government of a seafaring people should take a real interest in, and have a real understanding of, the sea.
§ 11.9 a.m.
§ Mr. James Johnson (Kingston-upon-Hull, West)
I would begin by pleasing all my colleagues when I say that I intend to make a brief speech, and I hope that others will follow suit. May I say that, I too, take exception to the amount of time that we are allotted. This is our only chance to discuss this industry, perhaps the oldest in our islands. I hope that whoever may be in charge of the business of the House will take note of this.
I begin by quoting from the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order, 1967. The Explanatory Note says:The White Fish and Herring Industries Acts of 1953 and 1957, both as amended by the Sea Fish Industry Act, 1962, provide that with a view to promoting the landing in the United Kingdom of a continuous and plentiful supply of white fish and herring, schemes may be made for the payment of grants …We have a plentiful and continuous supply of fish, but the vessel owners are not satisfied. I will not call the hon. Member for Haltemprice (Mr. Wall) the champion of the vessel owners, but he has spoken on their behalf. However, let us not forget, without quoting the landings of the Boyd Line in Hull—it is a very good line—that the fishermen are not satisfied, either.
I was a member of the delegation which visited Humberside. We listened not only to the vessel owners, to whose hospitality I pay a 100 per cent. compliment—they were charming hosts—but also to the union delegates, besides the skippers and merchants. The leader of the T.G.W.U. in Hull said to us that 668 there are deckhands going away for 22 days and longer—sometimes seven weeks—perhaps to the Arctic waters who have a basic pay of £12 for an 84 hour week. Therefore, let us not forget that on the system of added payment on poundage, these men are suffering as much as the owners.
There is a co-operative effort in the fishing industry. The boats could not catch the fish if the deckhands did not go to sea, whatever private capital may be pumped into the industry or whatever Government subsidies may be given to it. Although the industry may not be viable, I do not think that it is ailing in the complete sense about which we have just heard.
Our delegation spent three or four days on our visit and we met, if I may use an old-fashioned word, inspissated gloom on the part of all concerned. I was shocked to hear pessimistic speeches by vessel owners whom I have known for some years, who would never have said what they said I am sure; unless they were convinced about their difficulties.
This industry is almost the most typical of all our activities. We live in an island, and these are people who sail in the waters about it to catch fish. The gloom is present, but it is a global malaise and other nations also suffer. Without mentioning names, Trade union leaders and vessel owners, skippers and merchants all on Humberside said that there is a glut of fish; that the Belgians and Danes are landing fish, and that this glut leads to immense difficulties. I will not go into technical points about how much is paid per kit for what is sold or how much surplus unsold is sent to the pet food manufacturers or to the fertiliser industry.
However, not all sections of the industry are doing badly. I will not comment about the better situation north of the Tweed, but I do understand that the inshore and the middle water fleets are not doing as badly as the people on the Humber, particularly those in Hull, which lands something over 90 per cent. of cod. At Grimsby, we were told of the difficulties of the merchants concerning the one-to-two ratio, that is, 1 ton of cod for 2 of other fish. Continental fishermen of both E.E.C. and E.F.T.A. countries dump—they are equally as bad; it makes no difference whether they 669 are fishermen from a country of E.F.T.A. of which we are a member or of the E.E.C. which we hope to join—are landing fish.
I say, after meeting them, that trade union leaders and vessel owners alike feel that it would not be a bad thing if we were to consider the matter of the 1 to 2 ratio carefully; and the ensuing competition from these foreign landings at this difficult time, during the summer months, when the demand for fish is low and many people eat salads. The hon. Member for Haltemprice mentioned the difficulties which arise from the decision of the Catholic hierarchy in giving their dispensation. There is no doubt that at this time demand is not what it could be, nor has been in the earlier months of the year. I have much sympathy with workers and owners in the industry who face the dumping by Common Market and E.F.T.A. fishermen. There is a case for the stand which the Grimsby people have taken.
I know that there are minor complications about the "bobbers" in Hull and the "lumpers" of Grimsby. Obviously, they are landing fish, and the more fish which they land the more employment they have, whatever union they belong to. Nevertheless, the damage has been done on the Humber by these imports of fish.
This situation was not foreseen by the industry. There was no pessimism. If it had been foreseen, why were the owners so optimistic as to invest in magnificent boats costing over £500,000? They cannot complain of any Government action, because this Government has given more help this year to owners in the fishing industry than any previous Government. I understand that this year over £1 million has been given by way of the 40 per cent. grant towards the building of new vessels. Whatever may be the ins and outs of the matter—whether a certain owner has built two vessels in Gdynia, and received 2½ per cent. or 5 per cent. less in Government help—I say that over £1 million has been granted in respect of the building of seven vessels. I stand to be corrected. I hope that the Minister will mention this matter later.
It is no good anyone coming to the Government with a begging bowl too often. I do not say that in any derogatory sense. The fishing industry should 670 get some financial help. I understand that it gets less assistance than agriculture—perhaps 7 or 8 per cent. as opposed to 13 or 14 per cent. of the total costs. It may be argued that much of the present difficulty stems from the fact that the fishing industry is having to compete by selling cod or any other fish with an unfairly subsidised food which has come from the agricultural sector. There are arguments that the fishing industry should be put on an equal footing with agriculture.
Without looking to the future too much, if we go into the Common Market both the fishing industry and agriculture will be on the bottom together. We shall both be flat and we will have to fight upon our own and be viable, tough and efficient to compete with the Danes, Belgians and Norwegians. I believe that we can do so. It would not be so bad if we went into the Common Market on this basis alone, speaking purely as a Member representing a fishing port.
§ Mr. J. M. L. Prior (Lowestoft)
Would the hon. Gentleman agree that the fishing industry is not very interested in coming to the House with a begging bowl? What it is interested in ensuring is that its position is not undermined and that its subsidies are not undermined by imports over which it has no control.
§ Mr. Johnson
I think that hon. Members know me well enough to realise that I used the phrase "begging bowl" in a colloquial sense. I could equally well have said that the industry has come legitimately to the Government, which some members of it elected, I hope, for financial aid, just like the farmers. I hope that some farmers also vote for my party.
I warn the House that this situation makes not only vessel owners, but our colleagues in the trade unions, nervous. If vessels are tied up, men may not return to the industry. I compare this situation with the situation in the mining industry. Once a pit closes, miners get a job in the town and do not return to the pit. It is much the same with fishing. There is a great danger that we may lose part, and the best part, of our labour force—the sons of fishermen. I know that there are men going into the industry who are not sons of fishermen and that recruits are coming from the city. Obviously, this is not such good stuff. 671 These men have not been born near the fish dock and their fathers have not been in the industry. There are difficulties about discipline which leads to the danger of accidents at sea, and to a lowering of morale and teamwork on the boat at sea when in dangerous conditions.
Unfortunately I have not time left to talk about the subject of accidents. However, if we wish to keep our labour force, not merely must the men have a ship to go back to after each voyage, but, even more important, there should be good working conditions and maximum safety at sea. Statistics have been bandied about in the House, on television and in the papers for the last six months since we had the sad loss of the "St. Finbarr", into which a committee is now inquiring.
I saw the following in the Hull Daily Mail, a fine paper:'New charter for trawling industry'.A proposal that a joint committee of trawler owners and the unions should be set up to consider the wages structure, trading, hours and conditions for about 12,000 trawler men throughout Britain will be made to the Joint Industrial Council for the industry in September. The proposal was agreed at a meeting of a sub-committee in London today. Its terms of reference include registration and decasualisation, safety in relation to the operation of fishing gear, grievance procedure, shipboard representation and negotiating machinery.The vessel owners in Hull are doing a a job, but there is still much more to be done about safety and working conditions. If this joint action goes ahead it will not only help the industry to compete with our continental competitors, but also continue to make it a viable and lasting industry into the seventies.
§ 11.22 a.m.
§ Sir Cyril Osborne (Louth)
I shall take only three minutes, so that other hon. Members can participate in the debate.
I want to make one urgent plea. Last night, I saw three trawler owners from my constituency who are the most heavily hit of the whole lot. They are small owners with half a dozen to two dozen ships. They have not the resources to see them through a long period of depression. They made the point to me that of the £2½ million of the supplementary subsidy fund only £750,000 has been used over the first five years. There 672 is still £1,750,000 to be used. The maximum has been £370,000 per annum.
They asked whether that cannot be doubled now, because unless something is done now some of the private owners may be put out of business and there will not be the men there to receive a subsidy in three or four years' time. Something must be done before the House rises or these people and the men who work for them are likely to be right out of business. This is desperately urgent, and on their behalf I plead for something to be done before Friday.
They also asked me to press that it is useless for their men to go to sea and catch fish and bring it into Grimsby if the market is not protected. They told me that about 25 per cent. of the fish landed in the English ports last year came from foreign-caught fish. Why cannot we have the protection for our fisheries that other nations give theirs?
This is a matter of urgency. Unless the Government act before Friday some of the smaller men in my constituency may be ruined. I beg the Government to take some action now to save the small privately-owned firms. If they go out there will be no one to take their place. Will the Joint Parliamentary Secretary—I know that he is tired, but I should like him to listen to me—promise to do something before Friday?
§ 11.25 a.m.
§ Mr. Ted Leadbitter (The Hartlepools)
I prepared an excellent speech, but have put it aside in deference to my hon. Friends and hon. Members who wish to participate.
I do not know whether the hon. Member for Louth (Sir C. Osborne) is being honest or realistic in wanting something done before Friday. I suspect that many hon. Members on both sides of the House have during the past three weeks been anxious to get away from it all on Friday. Nevertheless, I think that the hon. Gentleman will be satisfied. I am sure that the Government are actively examining the policy on fisheries.
The Statutory Instruments are a continuing process following the decisions immediately following the war when we were left with an out-dated and highly unprofitable fleet. The attitude of the Government of the day was supported 673 by the recommendations of the Fleck Committee, published during 1961. Having said that, I look upon the Instruments as merely touching the fringe of the problems of the fishing industry.
The record is remarkable. The distant fishing fleet has been reduced from 290 vessels to 200. Although its problems in relation to profitability and vessel age following the war were not as grave as those of the inshore, near and middle water fleets, since 1962 there have been 22 orders to lay down vessels for construction and 19 of these have involved hold freezing. The inshore fleets have been reduced considerably, but modernised to satisfactory standards laid down by the White Fish Authority. The near and middle water fleets have been reduced in size from 817 to about 400 vessels, which are now up to a standard for which Governments following the war can equally take credit.
The subsidies system the purpose of which was to bring about a better and more efficient fleet, was also geared to the increased problem of competition. It is in the field of competition that our fishing owners and the men working on the vesels are now meeting the greatest amount of difficulty. In addition to the other imponderables, such as weather and the vagaries of the sea, there are the problems of the depletion of known sea fishing areas and the vexed problems arising from fishing limits.
In spite of the fact that modernisation has taken place, questions arising from competition loom very large at the moment. It has to be admitted that it is a grave situation for the industry. I urge hon. Members that, instead of getting involved in technicalities, they should for a moment imagine themselves working on the ships and suffering the immediate impact of the problems that such an occupation involves, such as going to sea for varying periods and facing the hazards. It is one of the most dangerous occupations of all.
I should have thought that it would be admitted that there must be a great deal of uncertainty in the sense that since 1950, arising from the modernisation of fleets and from increasing efficiency, the labour force has been reduced from 39,000 to 20,000. My hon. Friend the Member for Kingston upon Hull, West 674 (Mr. James Johnson) referred to the nature of the employment force. Traditional fishing families are not having their sons continuing in that kind of employment, and he rightly spoke of disciplinary problems arising from that.
Projecting ourselves into the occupation of a fisherman, as I have tried to do, we are bound to be convinced that there is uncertainty. Having noted the statisical information which the hon. Gentleman opposite gave and the amount of other detailed information which will come in the next year, I might well try to end by saying how best to get over the uncertainty.
I am convinced that we are but on the fringe of providing solutions for the fishing industry's problems. We must from now on accept that there is uncertainty, that the industry is subject to cyclical changes, that it has its good and bad years, and that it can be supported only by thinking about it, as a whole—the marketing side, the distributive side, the sales side, even down to the fish and chip shops, form an industry as a whole. Because it is a large industry producing a primary foodstuff, it must have an organisation which reflects that bigness.
That is why I am very sad that the recommendation of the Estimates Committee which looked into the question of assistance for the industry has not yet been accepted by the Ministry. That recommendation was that the Herring Board and the White Fish Authority should be merged into one large department with two sections, one responsible for England and Wales and one for Scotland. There would be one overriding department for the United Kingdom. I felt that the recommendation would appeal to the Ministry because the department could command all the forces and resources for research and development. It would also have had the power to look again at the whole question of the industry's place in its relationship to agriculture.
Why should not the fishing industry be treated on a par with agriculture, having the benefits which the agricultural part of our primary food production has through the annual price review and the other elements subsidising the fertility and proper utility of land? Benefits of this kind could come to the fishing industry if it were treated on a par with agriculture.
675 The Government would be wise to look at the industry in that kind of way. I hope that that is their thinking on the review that is now going on. I am satisfied that they are aware of the problem and will respond to the wish of the House. Although we have but a short time to speak on a morning such as this, I am sure that the urgency of the matter has been sufficiently expressed on boh sides of the House for the Government to come up with the kind of solutions I have tried to indicate towards the end of the year.
§ 11.35 a.m.
§ Mr. Peter Mills (Torrington)
In considering the Instruments, we must look at the economic position of the industry as it is today. I want to consider the position of the inshore fishermen, particularly those in the South West. Other factors besides grants have a very real effect on the industry. It is not much use giving grants to build new boats and modernise others unless other factors are taken into consideration, such as the antidumping regulations and the control of fishing limits.
I should like to say a few words about fishing limits. The continuation of their control and seeing that the rules are enforced very strictly are most important. Otherwise, we shall find that over-fishing will take place within the limits, and there will be no chance of building up the stocks of fish, as is happening now. The livelihood of our inshore fishermen would be severely affected if that happened.
I have recently returned from a trip on a fisheries protection vessel. My eyes were opened to the considerable complications of the job, with the different limits, mesh sizes, and so on. The vessels do a wonderful job, and I only wish that there were more of them so that the boundaries could be effectively controlled. There is no doubt that at present French skippers, in particular, are taking a definite risk as they seek to come into our grounds. They freely admit that the reason is that their own grounds are being over-fished. There is real danger of syndicates of foreign fishing boats being formed, two or three joining together and one "diving" inside the limit and hoping to get away with it. If he fails the rest share the cost of his failure; and if he succeeds they share the success.
676 There is strong resentment by our own skippers of these foreign trawlers poaching. I agree with what has been said this morning that our sentences are nothing like strong enough. I cannot understand why our lads are penalised so much abroad but our own magistrates are not prepared to deal severely with offenders. The regulations need to be clear. Simple language should be used so that all trawler skippers understand them. The Ministry should have encouraged the use of helicopters to control limits and fix the position of poaching trawlers.
Other hon. Members wish to speak and I must soon end my remarks. I feel strongly that the 12-mile limit, in particular, should be enforced and that more help should be given to our fisheries protection vessels so that they can carry out their job continually.
Grants are given to build trawlers abroad, but I believe that we should encourage trawler owners to have their ships built in the United Kingdom instead. This brings problems, because it is easier to get more favourable financial terms abroad. Appledore shipbuilders, in my constituency, who build quite a large number of trawlers, have found this. There is a particular problem in Lowestoft, because some of the shipping owners there wish to build new trawlers and are finding it difficult to finance them. The smaller rather than the larger boats are the problem, as the financial terms for them are very short. This is a problem which ought to be looked into, because we should encourage the building of trawlers at home, and it means the provision of adequate finance on favourable terms.
I know that there are other hon. Members who wish to speak, and I make only those two important points. The 12-mile limit must be continued, patrolled and enforced, with consideration given to the use of helicopters in this connection. Second is the question of financing the building of new trawlers. They should be built at home, and favourable terms to finance them ought to be provided to encourage this wherever possible.
§ 11.40 a.m.
§ Mr. Kevin McNamara Kingston upon Hull, North)
I wish to turn attention 677 away from the problem of the inshore fleet to that of the distant water fleet. It is particularly sad and yet apt that this debate should take place today, after the worst day in the history of the markets in Hull since 13th June, 1962. According to that excellent paper, the Hull Daily Mail, to repeat the commercial of my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson), of the 825 tons on offer, 321 tons were not taken up. That shows the parlous situation into which the distant water fleet and the market have got.
I will not repeat a great many of the points which have been made on both sides of the House, because the sense of urgency and concern for the industry has been eloquently displayed by nearly all hon. Members who have spoken. However, I would underwrite one point made by the hon. Member for Haltemprice (Mr. Wall) when he spoke about the decision of the Catholic hierarchy in the United States. If Friday abstinence is done away with in this country, it will be sad news for the fishing industry. In the diocese of Middlesbrough, of which Hull is one of the major parts, at the back of churches after Mass on Sunday there was a little questionnaire asking what parishioners wanted to do about Friday abstinence. This puts many people into a quandary.
There are certain points which have to be made, some of which concern many people employed on all sides of the industry. One which I wish to stress is that of foreign landings. We should be able to stop foreign landings and the dumping of unwanted fish from abroad on to the British market. It is not a problem which has just arisen. It has existed for a long time in our fishing pods, and the party opposite did nothing about it when in office. It is rather strange that hon. Gentlemen opposite should now call upon the Government to do something about it, as though it is a problem which has just arisen. Nevertheless, it is a real problem and one which affects the wages and livelihoods of the men employed in the industry, as well as the profits of the companies involved.
The rationalisation of the fleets is going ahead, and that is to be welcomed. If we have larger units within the fishing fleet, we are able to get both the amount of capital investment required and the 678 improvement of working conditions of everyone in the industry. My hon. Friend the Member for Kingston upon Hull, West spoke about the miserable conditions of men in a hunting industry at a time when market conditions result in their taking home very low wages, which are made even lower when one considers that before they go to sea they have to purchase from their own money or on tick their knives and overalls and, in the case of Hull, their own bedding.
This is also a particularly sad occasion because of the tremendous improvement that there has been in labour relations in the industry, particularly in Hull. My hon. Friend spoke about the agreement of the N.J.I.C., and there is no worse time for both sides of the industry to be discussing improved conditions, training, the whole ambit of labour relations and the future of the industry than at a time when the market has gone completely for the product which both sides are trying to sell. Therefore, we want to see some positive action from the Government to get the fishing industry back on its feet and to put wages and profits on to a proper basis.
I wish to refer briefly to the suggestion of a statutory minimum prices scheme. When the industry was doing well, there was a great deal to be said for the State not making a contribution towards a statutory minimum prices scheme, but it is particularly important to realise that with such a scheme throughout the industry—inshore, middle and distant water fleets—we shall be able to supply a proper bottom to the market on the basis of which those in the industry can plan properly. I am not convinced of the need for an Exchequer subsidy, because there is a great deal that the industry can do for itself, but, taking the fisheries review as it is going, we must look at the problem again because of the parlous state into which the industry has fallen.
§ 11.47 a.m.
§ Mr. W. H. K. Baker (Banff)
I am sure that the hon. Member for Kingston upon Hull, North (Mr. McNamara) will forgive me if I do not pursue many of the points which he made. But, like other hon. Members, I must protest at the extraordinarily small amount of time allocated to this most important debate. We have a chance to discuss the fishing industry only once a year.
679 Last year, we saw savage cuts in the fishing subsidies. I am glad to see that the daily rate for this year has been extended to boats under 60 ft. for white fish subsidy and to vessels of between 35 and 40 ft. for the herring subsidy.
On average, the cuts in subsidies this year are between 6 and 9 per cent. overall for the inshore fleet, whereas losses continue to be made. In the inshore fleet, the profitability factor of vessels up to 80 ft. is going down. If that level of profitability is to be taken as a proportion of capital involved or, in turn, the insured value of the depreciation figure, then we find that only in the 35 to 40-foot class of vessel is there any increase in the profitability for the year 1966 as opposed to the year 1965 and that it is only 1 per cent. for that class of vessel.
In the under 35 ft. class, there was a drop of 6.3 per cent. to 2 per cent. In the 40 to 45-ft. class, there was a drop of 2 per cent. to 21.7 per cent. In the 45 to 55-ft. class, there was a drop of 3.7 per cent. to 19.2 per cent. In the 55 to 65-ft. class, there was a drop of 5 per cent. to 17.7 per cent. In the 65 to 80-ft. class, the profitability factor was static at 15.4 per cent.
Any industry—and fishing is not alone—must be economic to survive. The experts will tell anyone who is inclined to find out that a minimum profitability figure of 20 per cent., taking all factors into account, is essential if the fleet is to survive.
To get that into perspective, one has to realise that, in 1966, the profitability factor of no vessel in the Scottish inshore fleet went as high as 20 per cent. The number of vessels only increased in the under-35 ft. class. In the range of 35 to 80 ft. there was a net reduction of 11 vessels. In these classes only one showed an increase. That was the 55 to 65-ft. class where there was an overall increase of four vessels.
Another means of measuring the viability of the inshore fleet is to look at the labour share per man. In 1966, the labour share per man showed very little variation over 1965. The only exception was in the 65 to 80-ft. class where the increase was of the order of 8s. per man per day. That is a tragic situation. If the industry is to progress it is absolutely 680 essential that we must have young men attracted to it. Adequate allowance must be made for the hazards and uncomfortable nature of the problems in the fishing industry. The average working week is 80 to 84 hours. In no other industry are men asked to work that length of time, nor would they work that length of time under the extreme difficulties and hardship that the fishermen have to face.
What about costs? These are continually rising. In spite of what the Government say, they are going up and up. The latest impost is about £2 per ton increase on bunker fuel. In an Answer from the Secretary of State on 19th July, when I asked for a specific undertaking that assistance would be given to the fishing fleet in these present circumstances, he said:No, Sir; this cost will be taken into account at the periodic reviews of the costs and earnings of the industry when its full effect is known."—[OFFICIAL REPORT, 19th July, 1967; Vol. 750, c. 267.]However, we do not want that sort of pie-crust promise and no implementation. I would like an undertaking from the Minister that this will be taken into account when the next review takes place on subsidies and not just shelved and passed over for the industry to absorb.
I was astonished when, in his opening remarks, the Joint Under-Secretary said that the inshore section of the fishing fleet was better equipped to absorb this increase. I should like some justification for these remarks because, in my view, they are completely unjustified. In the view of the Scottish Inshore White Fish Producers' Association the restoration to the 1965 rate of subsidy is the only one which will encourage the industry or which will help it to become viable.
I remarked earlier on the reduction of 6.6 to 9 per cent. in the subsidy rate. This cannot go on if the fleet is to maintain its present position. We have to get away from this so that the fleet can go on. We have difficulty in manning and in landings; in fact, we have difficulties all round the board in this industry. It is a key industry in Scotland and I hope that the Government, in their review, will do something tangible to give the industry a helping hand.
§ 11.54 a.m.
§ Mr. John P. Mackintosh (Berwick and East Lothian)
I am grateful to my hon. Friends on both sides of the House for restricting themselves so that those of us interested in the fishing industry can say something on the subject.
What troubles me is that I do not see any development in the attitude of the Government and of the administration of fisheries to the present changing situation both in international trade and in the import problems facing this country. We are still proceeding, in dealing with the inshore fishing and distance fishing fleets, on the assumption on which the Fleck Committee reported. The Fleck Committee said that, on the whole, our fishing fleet was too large, we wanted to cut it down, and scrap ratios. It said that we were landing too much fish and what we wanted was a smaller fishing fleet landing a smaller quantity of fish, but economically.
The same policy was pursued in agriculture after the 1957 Act. The theory was that there was too much food in the world. That Act aimed at squeezing the area open to farming in this country by slightly restrictive price reviews. In 1964, we changed that policy in agriculture. Because of the changing position not only of world food supplies, but the import bill that this country faced, we changed to a policy in agriculture of selective expansion. We looked at the agricultural industry for this purpose, and had a very satisfactory price review last year to this end.
What bothers me is that I have not seen the same change in the fishing industry and its administration. I know, as most hon. Members know, that a Cabinet committee looked into the question of how far expanding food production in this country could cut our imports bill. I know that it looked into the question of agriculture. I do not know, and I have seen no evidence, that there was an equal study of the fishing industry.
When I made the point in my speech last year my hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) took me to task because I included in the fishing figures the import figures for tinned and frozen products. I asked him a detailed question on this matter, and on 14th February this year he was kind enough 682 to reply. It appears, breaking the whole thing down, that we are spending £96 million on imported fish—I have worked this out as carefully as I can—of which £60 million is fresh or frozen fish which we could catch and land ourselves. I have carefully excluded everything tinned, prepared or preserved.
Therefore, we have to consider whether it is possible to change our fishing policy so that we could land some of the £60 million worth of fish, much of it fresh or frozen white fish, which is landed here. I do not see any careful thought about the structure and status of our industry which would allow us to do this.
Apart from the imports position, which was the same last year, we have, as in agriculture, new trading patterns arising from the development of the Common Market and dumping in this country, as many hon. Members have pointed out. I see no reason why we should not protect our industry. We cannot protect it against our E.F.T.A. partners, but we could protect it against the E.E.C. countries and the non-E.E.C. countries from which fish is being dumped here.
I hope that in the process of this we can have an annual review in the fishing industry, because it is highly variegated. Not only has it many different components, but the factors which determine the end take-home profitability of the industry vary enormously. I will give the numbers which come into the calculations in the fishing ports in my own constituency. I have detailed costs but we have the marketing problem. British Railways' costs of marketing this fish in taking it to London have been increasing. The price of boats has been increasing, but I am glad to see that we have a slight increase in grant for those. The price of fuel is increasing. We do not know fully by how much.
We have comparable wages. The wages of deckhands on the 45, 55, and 65-ft. boats in the inshore fishing fleet have gone down by between £50 and £80 a year, compared with last year. We have the trading policies to take into consideration and we have the problems of the shell fishing industry. I was on a joint deputation with the hon. Member for Fife, East (Sir Gilmour) when we put before the Government our case for including shell fishing in the subsidy 683 arrangements. I think it is a pity that this has not been done, because the small shell fishing boats are earning a lower rate of pay, and this is a rapidly declining section of the industry where the import bill is heavy.
I hope that we can have an annual review of fishing policy in this country which will take these varied factors into consideration so that we can have a more flexible policy and can consider building tip the industry, prior to joining the Common Market, as a serious factor to curing our balance of payments problems.
§ 12 noon.
§ Mr. Walter Clegg (North Fylde)
I must join in the protests which have been made about the amount of time allocated for the debate. I am grateful to hon. Members who have made short speeches for the opportunity now given to me. Instead of the speech that I wished to make I want to address my remarks to the Minister mainly in respect of the Port of Fleetwood, which I represent. Many of the other points that I had intended to make have been made by my hon. Friend the Member for Haltemprice (Mr. Wall) or the hon. Member for Kingston upon Hull, West (Mr. James Johnson).
The factors which apply to Grimsby and Hull apply equally to Fleetwood. I am more perturbed and more than ever impressed by the urgency of the situation because already in Fleetwood there is a serious unemployment problem which, so far, has not been contributed to by the fishing industry. Our percentage of unemployment is 5.5—the highest in Lancashire. If there is unemployment in the fishing industry there will be no jobs available for fishermen or for all the other people who rely upon the port.
As in Hull and Grimsby, the signs are already there. Fish is going to the fishmeal works. Men coming back after a trip and making a good catch are in debt. There are signs of trawlers being laid up. Two of our trawlers have already gone to fish out of Aberdeen. This makes the employment position in the town worse. The Minister must have heard enough from hon. Members on both sides of the House to have become convinced of the need for urgency. We cannot await the outcome of a review or wait even for two or three months. What we 684 need now is first aid, and the first aid that we require can be given immediately by the Government, in the restriction of imports.
I am not too hopeful about a surcharge on imports. The Board of Trade moved unconscionably slowly. I come from an area that has already had one industry—cotton—broken on the wheel of cheap imports without much activity from the Board of Trade. I hope that the Minister of Agriculture can convince the Board of Trade that it should act speedily in this matter, because if it does not, from what I have heard of Hull, Grimsby and Fleetwood, we shall have ships laid up and men laid off. If those men are laid off they may never come back. I am frightened of the possibility that ports may die. Milford Haven died as a fishing port, and I do not want to see the same sort of thing happen to Fleetwood. That is why I stress the need for urgent action.
That is the message that has been given to me. The responsibility is the Minister's. He has been told by hon. Members on both sides of the House what the situation is and he should be in no doubt about it. I hope that he will take the necessary action.
§ 12.3 p.m.
§ Mr. Donald Dewar (Aberdeen, South)
Very understandably, great emphasis has been placed upon the troubles of the deep sea fleet putting out from the Humber ports. Conditions in the fishing industry are however highly volatile and change is quick. I want to remind the House that although the Report of the White Fish Authority, issued recently, talks about comparatively good conditions in the Scottish fishing fleet in the past six months, it was only in December, 1966, that the Estimates Committee was comparing the much more gloomy forecasts for Scotland with the more optimistic view taken by the B.T.F. That organisation felt then that it had every hope of achieving viability by 1972.
The Scottish inshore and middle distance fleets may be a little better off, or may not be doing quite so badly as the hon. Member for Kingston-upon-Hull, West (Mr. James Johnson) put it, but over a reasonable stretch of time it will be seen that fixing depreciation at the unrealistically low level of 6⅔ per cent. 685 of historic cost the majority of boats have made a substantial daily loss. In respect of the middle distance fleet there is a strong case for immediate help.
The fishing industry has an enormous future part to play if there is a recovery in the British home market or the world market, and it has golden prospects if we join the E.E.C., but if these opportunities are to be capitalised on we must have a surviving industry, and if that is to be the case we need a sympathetic hearing from the Minister. I do not have time to go over all the possible forms of help, most of which have been mentioned this morning. The balance in the special subsidy should be released, and we should untie our hands from the effects of the 1962 Act and put the whole industry on the basis of the inshore fleet, so that the Minister is not forced to make an arbitrary cut in subsidy.
The problem of rising costs was heavily emphasised by the W.F.A. and calculated at 8 per cent. last year by the B.T.F. I was discouraged by the Minister's reaction to the oil surcharge, which represents an increase of £2 per ton in the cost of oil and about £25 extra a day in running costs. Action in this respect is not apparently likely, but I hope that the Minister will reconsider his position.
Imports have been thoroughly dealt with, and I endorse almost everything said about them. I end on a blatant constituency point. Aberdeen is the dominating fishing port in Scotland, being responsible for about 80 per cent. of the total trawl landings. It has had a difficult time, and conditions will be even more cramped as a result of the loss of 600 ft. of quay that has been found unfit for use.
I hope that when we have to come to the Government, now that the problem of dual control of the fish market is being resolved, and ask for some kind of financial aid for the regrettably heavy outlay inevitably involved not only in restoring the status quo, but in introducing the necessary improvements which must be put in hand if Aberdeen is to be an efficient fishing port, we shall have a more than conventionally sympathetic response.
We fall between two stools. We have too small a general harbour to attract major public investment, and we are ex- 686 cluded from the special provisions of the 1955 Act. In the last few years large sums of money have been given under this, as, for example £200,000 in respect of developments at Peterhead. This can make an enormous difference, but we have been excluded from that kind of help. We are faced with a major problem in the basic industry in Aberdeen, and I hope that in the not too distant future, when we look for aid, we shall not look in vain.
§ 12.8 p.m.
§ Mr. Patrick Wolrige-Gordon (Aberdeenshire, East)
I am grateful for the chance to say a word in this debate. I wholeheartedly agree with what the hon. Member for Aberdeen, South (Mr. Dewar) has said. I hope that the Government will bear in mind his point about Aberdeen harbour.
The general effect of the Statutory Instruments is to make a cut in subsidy but an increase in the rate of grants for new vessels. No one would oppose the second provision. My experience with the fishermen whom I represent is that their present concern is not so much with the rate of grant as with the overall cost and, sometimes, the slowness in getting permission to move ahead. The price of new fishing boats has risen steeply even during the years that I have been a Member.
The cost of a new boat with new gear today is almost prohibitive for any young man starting out. Thank goodness the industry is rich in self-help and co-operation, because without these qualities it is doubtful whether the young men on whom the future depends could get started. It would not be possible without these grants, and I am glad that the Government have increased the rate. I hope that the Minister will succeed in speeding up procedures. I am grateful for the work that he is doing in that respect.
My hon. Friends have already dealt in detail with the cut in subsidies. As it affects our inshore fleet this year it amounts, on average, to 7 per cent. and the trend in inshore fishing in Scotland is going down—the wrong direction. Sir Roy Matthews has already been quoted. It is very easy to quote men with vision with approbation and do absolutely nothing about their vision.
687 I very much hope that that will not happen to this industry. Sir Roy said that the spirit in which the future is planned is no less important than the plan itself. I believe that it is more important and that that spirit will be in the industry. I am sure that it will be there, if it is in the Government.
§ 12.10 p.m.
§ Mr. Anthony Stodart (Edinburgh, West)
Everyone would agree that this debate has been run on thoroughly cooperate lines, reflecting to take up a point made by hon. Gentlemen opposite, the spirit existing among all those within the fishing fleets. I hope that the Parliamentary Secretary will convey to his right hon. Friend the Leader of the House the fact that there is a limit beyond which short speeches, good as they are, ought not to be expected to go when trying to deal with such an important industry as the fishing industry.
We are now half-way towards 1972, from that act of faith undertaken with regard to viability being reached within ten years. We are half-way there, with a crisis on our hands. It is absolutely essential for the Government to take careful but urgent stock of the situation confronting all sections of the fleet. It is for this purpose presumably that the review is going on.
In 1962, one of the factors considered was the size of the fleet. Already, it is down by one-fifth from 1,655 vessels to 1,331 today. This drop has been spread very equally over all parts of Great Britain, but with the heaviest emphasis on the seine netters, and the lightest on the distant water fleet. During the last six years the catch has gone up appreciably, by 20 per cent. Yet despite the reduction in numbers, despite the rising catch, things are by no means set fair.
During a recent visit to the Humber ports it was startling—and here I echo the words of the hon. Member for Kingston upon Hull, West (Mr. James Johnson)—to hear that action had to be urgently taken if the fleet there was to survive. This is particularly disturbing, after all the capital which has been spent on modernising it into what all would agree is one of the most efficient fishing fleets in the world.
688 Urgent action is needed, and only the Government can act. It is here that the Government are open to criticism, because there has been a fairly substantial increase in imports in the first half of this year. If one goes right across the board, including fish processing, one finds that between January and May of last year we spent £25 million on imports. This year we have spent, in the same period, a total of £30 million.
Incidentally, purely from the balance of trade point of view, our exports of fish are down in the same period by nearly half. It is recognised that, bad though things were at the end of May, they have worsened appreciably since, and the momentum seems to be increasing. To isolate the wet fish imports into those ports in the first five months, we have had an increase of about 60,000 kits of wet and frozen fish.
This is a situation in which I see an unhappy similarity to the present meat situation. The price of fresh cod imported during the first five months of this year is 8.7 per cent. lower than it was two years ago. Without question, fish is being dumped on to our extremely substantial market, access to which is more liberal than any other in the world. Whereas, across the North Sea and the Channel, there lie the countries of the E.E.C. with the high common external tariff on fish imports of 18 per cent. all over.
I know that the catch of cod has been extra good, and I appreciate the reasons for the drop in consumption on Fridays in France and the United States. I realise that there is a tendency here for consumption to be slightly on the downgrade. I also know that all the deep-freeze installations of many countries are bursting.
I blame the Government for none of these things, but they must come to grips with the import situation. They must reconsider the position of a statutory minimum price with Government backing. Costs have risen sharply, 4 per cent. in 1965, 8 per cent. in 1967, and the additional costs of fuel will equal or exceed the whole of a boat's profit, so I am informed. That increase will hit the Scottish fleet too, whose position is admittedly better than the position of the fleet in the south, but only relatively so.
689 In many ways I agree that the increased fuel duty should not be a subject for special subsidies. It should be treated quite differently and there is a very strong case for exempting the fishing fleets from the extra £2 a ton altogether.
I want to say a word about special subsidies. About £2½ million were granted up to 1962. From the calculations that I have made, about £750,000 of those subsidies have been used. This means that with half the period still to go, there is £1½ million left. The moment has surely come to indent upon this. There is a backlog of these special subsidies which was not used in the last 18 months. I can recall the Parliamentary Secretary making it quite clear that this would be available for later years, if it was not used.
Could he say whether it is a fact that the Government, despite having these special subsidies in reserve from a year or two back, are bound by the maximum of £350,000 in a single year, and cannot therefore spend more, even if none was spent last year? If this is the case, there is a strong argument for altering this, and I would certainly say that we would facilitate any move to do so.
I do not know whether the fleet can be viable and free from subsidy five years' hence. I have always had suspicions. Maybe we and the British Trawlers Federation, in agreeing to that prospect, made the mistake of being over-optimistic five years ago. If that is the case, let us admit the mistake now. If the Government find that more than £2½ million is needed, they should ask for it, because they will get a very friendly reception from this side of the House. But immediate action is needed. I can well understand the Government wanting hard facts and figures. If the industry provide them, as I am sure it will, I hope that the Government will act not only with sympathy, but with speed.
§ 12.20 p.m.
§ The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy)
I shall do my best to reply to the many points which have been raised.
We always want more time to discuss the fishing industry, but our record compares not unfavourably with that of right hon. and hon. Members opposite. In both 690 March and May of this year we had opportunities to debate the fishing industry. To that extent, our record is much better than that of the Opposition when they were in power. However, I agree that we always want more time to discuss the industry, and I do not object to a request for it.
There has been considerable discussion about imports. In 1966, total supplies of fresh chilled and frozen fish were £84.7 million, of which £23 million was in respect of imports. We think that the hon. Member for Edinburgh, West (Mr. Stodart) has included some canned fish in his figures. That can be easily done when dealing with statistics. In January to May, 1966, we imported 55,000 tons of white fish and in the same period of 1967 the comparable figure was 58,000 tons; the value in both years was £6.7 million.
People say that we should ban imports altogether. We cannot do that. The hon. Member for Edinburgh, West knows that we cannot do it, because he has been in charge of fishing matters. We have certain international agreements such as G.A.T.T. and we cannot use them when they suit us and break them when they do not. The hon. Member for Louth (Sir C. Osborne) knows that. If people were taking action in respect of something which he was exporting, despite agreements, he would be the first to complain. We cannot take unilateral action of this kind. We have to consider the people with whom we have made agreements.
Hon. Members have suggested that perhaps we should impose stiffer penalties on people who contravene our laws. That is not for the Government to do. It is for the judge to impose the sentences. I have been asked what the maximum sentences are. For the first offence, the maximum is a fine of £250. For the second offence, it is a fine of £500. There is also confiscation of the catch and the gear. I am told that for a second offence three months' imprisonment can be imposed as well. We must remember, also, that we are not comparing like with like. Our vessels which get into trouble for poaching in other countries' waters are usually very large, compared with the small vessels which frequent our coasts.
The hon. Member for Haltemprice (Mr. Wall) asked about the number of vessels 691 qualifying for special subsidy and also why this was only for a period of six months. Out of 430 vessels in England and Wales, 125 receive the grant. We agreed with the industry that the grant should be paid at six-monthly intervals. We have conformed to this agreement. I should point out, so that it is not overlooked, that my right hon. Friend and I met representatives of the British Trawlers Federation yesterday and we have asked them to submit figures to us. The hon. Member for Edinburgh, West talked about the industry letting us have hard facts. If we receive hard facts, we will give them sympathetic consideration. That can be done; and we have agreed that we might take into account the four month period which has just elapsed. We do not under estimate the difficulties through which the industry is going.
My hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) asked for the figures of subsidy paid for 1966–67. The evidence submitted to the Estimates Committee was fairly optimistic. It showed a confidence which present circumstances do not bear out. But let us be clear about what the Government have done. In 1966–67, we replaced two distant water conventional ships at a cost of £96,000. We gave permission for five new freezer trawlers at a subsidy of £937,000. In the near and middle water fleet the subsidy amounted to £84,000. In other words, there was a subsidy to these sections amounting to no less than £1,117,000. I think that hon. Members on both sides of the House will agree that this is a generous form of encouragement. We have stepped it up by the recent action which we have taken to provide more by way of grant.
The hon. Member for Haltemprice said that if owners had boats built overseas the grant was cut. He introduced a note about what counsel said. I am bound to say that it did not impress me. We took action to protect our own shipyards. Does the hon. Gentleman suggest that if people have boats built abroad, despite whatever subsidy they may be getting from the Governments of the countries in which they are built, we should also pay a subsidy? If countries abroad are undercutting our own industry in certain ways by subsidies, we shall take action to protect it. This is what we have done. I 692 am sure that the hon. Gentleman would not dissent from that.
§ Mr. Wall indicated assent.
§ Mr. Hoy
Concerning machinery, I should say that were grant to be paid it would be difficult to keep track of where it was going. If owners have boats built abroad, they have to accept the responsibility for it. We cannot spend tremendous sums of money in tracing the different places to which machines are going.
My hon. Friend the Member for Aberdeen, South (Mr. Dewar) referred to the question of assistance for the ports. I do not agree with all that he said about what is happening in Aberdeen. That fishing port has a long history, and it is a very good one. But I should draw attention to another step which we have taken to assist the industry and that is that for the first time we have made provision for 20 per cent. grants for improvements at the major trawling ports. I hope that this will render considerable assistance to the industry.
I know of the deputation which my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) and the hon. Member for Fife, East (Sir J. Gilmour) led about the shell fishing industry. This section of the industry has done reasonably well. I do not want to go too much into the figures. But there have been very substantial increases in earnings during the past 12 months.
§ Question put and agreed to.
That the White Fish and Herring Subsidies (Aggregate Amount of Grants) Order, 1967, a copy of which was laid before this House on 12th July, be approved.
§ Resolved, Fishing Vessels (Acquisition and Improvement) (Grants) (Amendment) Scheme, 1967, dated 10th July, 1967 [copy laid before the House 14th July], approved.—[Mr. Hoy.]