I am sure that we are grateful to the Joint Under-Secretary for his very lucid exposition of the plans of the Government for loans and subsidies, but I must say that it was not a very convincing statement and that it will not satisfy many hon. Members on either side of the House.
First, may I say that all hon. Members concerned with the interest of the fishing industry, certainly my right hon. and hon. Friends, are gratified that the Government have at last acceded to the repeated demands of all of us who have taken part in these debates in past years that adequate time should be given to consideration of these Statutory Instruments, and at a reasonable hour. This is the first time for some years that we who have taken part in these debates have had an opportunity to approach these important matters at an acceptable time, with the prospect of being able to deal at length with a subject which affects our interests so vitally. I remember well that last year the Minister rose at two minutes before midnight, an unconscionable hour to move such a Motion, and that I left the building at a quarter past two. So we are grateful for the consideration which has been given to our complaints and I hope that this will be an augury for the future.
Having said that, I wish to register a protest, which, I have no doubt, will be supported by hon. Members opposite, at the restrictions which must inevitably be placed upon us in considering the wider interests and problems of this industry this afternoon. Our debate is concerned with examining the Instruments before us dealing with grants and loans for the building and conversion of vessels and with the subsidies for trawlers and herring drifters operating in inshore, near and middle waters. In considering the tremendous scope of the fishing industry, these play an important but not the whole part of our fishing activities. There is a wide range of interest which should be debated, but it would seem that we are never likely to get time to discuss them.
We dare not mention this afternoon the Icelandic trouble, the attacks on our trawlers and the dangers they run, or the Faroese Agreement, the general question of fishery limits, the over-fishing of certain waters, the general question of the conservation of stocks, or the disastrous falling off of herring fishing, particularly the great East Anglian autumn herring fishing. These are very serious problems, Mr. Speaker, but you will note that I am not discussing them—I am just mentioning them. We have no real opportunity of discussing the last conference at Geneva, or the vital importance of the next conference. The vexed question of quotas is barred and I suppose I must not say anything about processing, deep freeze, canning and animal foods.
The operations of the Fleck Committee are to remain shrouded in mystery. Worst of all, and this is almost unbelievable, we have not had, nor can we have in this debate, a discussion on the Reports of the White Fish Authority and the Herring Industry Board. We have not even discussed last year's Report and we have no opportunity of discussing this year's. I appreciate the value of these Reports. They are extremely able documents and it really is a tragedy that we never have an opportunity to say anything about them except incidentally.
I say quite seriously to the Government that it is time that we had a full debate on the fishing industry. We should not hide behind these Instruments to gag one of our major industries. The Government dare not do this to agriculture or mining, the other two industries which develop and exploit the natural resources of our land.
There seems to be a view prevailing in some fishing circles, and, indeed, in the House, among some hon. Members, that the inshore, near and middle-water sections of the industry play but a minor rôle in the fish production of the country. That is not so, as I will strive to show later by the relative figures taken from the White Fish Authority's Report. The Secretary of State for Scotland, during the Second Reading of the White Fish and Herring Industry Bill, on 20th January, 1953, used these words:
… without adequate rebuilding and with scrapping going on, the future of the fleets is obviously in grave danger. They must not be allowed to sink to too low a level. The inshore, near and middle-water men provide the best quality and greatest variety of our fish, and these cannot be replaced by imports. If we are to have the best quality fish for human consumption in this country, we must retain our inshore and near and middle-water fleets. I am afraid that at present prices capital is not forthcoming for the rebuilding of these fleets."—[OFFICIAL REPORT, 20th January, 1953: Vol. 510, c. 53.]
Note the phrase
The inshore, near and middle-water men provide the best quality and greatest variety of our fish, and these cannot be replaced by imports".
Britain, in spite of its maritime traditions, is not a great fish consuming community, although, latterly, there is a growing tendency on the part of animals to eat more fish, if we judge by looking at advertisements, particularly those on television. I am glad to see that someone is eating fish. To cultivate a taste for fish it is essential that quality and variety should be maintained. These are very largely the products of the inshore, near and middle-water fishermen. They are, as we all know, sole, plaice, turbot, halibut, hake and haddock, to name only a few.
The proportion of fish caught in 1950 goes in this ratio: from distant waters, 45·2 per cent. to the value of £22¼ million; near and middle waters 31·4 per cent. to the value of £18,800,000; inshore, 14 per cent. to the value of nearly £6½ million. This shows that just over half the total catch by British vessels, ignoring the foreign imports landed in this country, come from inshore, near and middle waters and more than half the value by over £2 million.
The tonnage of landings is almost equally divided. I say this to emphasise the importance of this great section of the fishing industry—the Instruments which are being laid before us today relate to its prosperity—and to illustrate what an important element the smaller type of vessels constitutes in the economy of the whole industry. There is also the immense contribution to fish supplies by the herring fleets, although their returns, in spite of what the hon. Gentleman said this afternoon, during the past three years have been tragically disappointing. How can he take such a complacent view about the position of the herring industry today?
We all know that the costs of reconversion are steadily mounting. There is a desire to build larger boats. They are more economical and better deploy their manpower. They provide, of course, better amenities for the crew. Some of the older vessels are utterly out of date in amenity standards and on that ground alone ought to be scrapped. Today's costs soar into the region of between £120,000 and £150,000 whereas, before the war, one could get a tolerable vessel of the same kind for about a quarter of that sum.
To be fair, the Government have realised this and have proposed to raise the maximum grant from £30,000 to £37,500 for trawlers, and a corresponding sum for herring drifters. The industry contends that this is not enough. It is reinforced by the opinion of the white fish authority, which suggests raising the figure to £40,000. Even then, it leaves a huge sum to be provided by the owners, and the tragedy of this is that the small man, or the small family concern, will find it almost impossible to provide the rest of the capital required, which is an enormous sum.
One quarter of £120,000, is a valuable grant, but for the small firm to provide the rest is quite impossible these days. This means that there must be fewer small undertakings able to operate, and the industry must inevitably fall to fewer owners and into the hands of large companies, where there is a tendency for a monopolistic character of the industry. We do not think that this is a satisfactory development in an industry which prides itself on a strong competitive individualism.
In finding the necessary capital for new vessels the position is aggravated by two important factors. One is the tremendous fall in the price of scrap. In these debates a few years ago we used to say, with a great deal of reason, that the returns from scrapping three old vessels, with the grants and loans then available, would provide the capital for a new ship. Today, the price of scrap has dropped, I am told, until it would be necessary to scrap six or seven old vessels, and some say even more, to get the same return in cash.
The White Fish Authority points out what would be the effect of raising the maximum grant to £40,000, not the £37,500 on which the Government have decided. Incidentally, the Government have not yet given a reason for that discrepancy and have not explained why they disregard the views of the White Fish Authority, the statutory body set up by the Government to advise them. The White Fish Authority points out that raising the grant to £40,000 would bring the grant back to the original intention—not a rigid intention—envisaged at the beginning of a 25 per cent. grant.
I note that just on £6¾ million has been given in grants. When we compare this with the huge sums available for agriculture—of which I make no complaint, unlike my famous namesake in the House, whose views I do not follow in this matter—it shows that the Government have not been over-lavish in their generosity.
Another cause for anxiety and a source of much irritation is the amazing fluctuation in the interest rates on loans. The amount of loans granted to date is about £16¾ million. Incidentally, I find it difficult to reconcile the figures in the White Fish Authority's Report with those kindly furnished to me by the Minister in an Answer to a Question which I put to him some time ago. There seems to be some discrepancy somewhere. It may be that we have confused our dates.
These loans have been operated at no fewer than eighteen different rates of interest since 1953. If hon. Members look at Appendix VI of the Report of the White Fish Authority they will find that in August, 1953, the rate of interest was 4½ per cent.; in October of the same year, 4¼ per cent.; in June, 1954, 4 per cent. In 1955, the figure rose to 4¼ per cent. and in July, 1955, to 4½ per cent. The rates of interest rose and rose until we reached the catastrophic result in 1957 of a rate of interest no less than 6¼ per cent., since when it has dropped a little.
This puts the owner and the contemplating buyer of a new vessel in a most invidious and difficult position. He contracts to build a vessel to a certain price at a certain rate of interest, but before he has proceeded very far he finds that, through circumstances over which he has no control—Treasury policy, Government financial policy, or whatever it may be—the rates of interest have increased alarmingly and he is saddled with a new rate of interest, which he had not contemplated, for possibly up to twenty years. That is a disability which very few undertakings can foresee and with which very few of them can cope. An outstanding example of this occurred when, owing to the financial crisis of 1957, interest rates rose to the highest ever level of 6¼ per cent., whereas in 1954 the rate had been 4 per cent.
The industry considers that this state of affairs is contrary to the spirit underlying the introduction of loans and grants and that ways and means should be provided of ensuring that owners do not have to pay interest at rates much higher than those in operation when they negotiated the loans. The industry also suggests—and this is a very constructive suggestion on its part—that they should be enabled to raise a new loan from the Authority to pay off the old loan if the interest rates subsequently fall.
When the loans scheme was started short-term rates of interest were below the Bank Rate and long-term rates were very near it. Why the change of policy? Today, the rates are higher than the Bank Rate. Is it because the rehabilitation of the near and middle-water fleets has to have secondary consideration to monetary policy and the dead hand of the Treasury has to prevail? This is not what Parliament intended when it decided that the major consideration was the rehabilitation of the fleet.
Another source of irritation is the charge by the White Fish Authority of ½ per cent. over and above the Authority's borrowing rate from the Treasury. This is for administrative charges and to make a reserve for bad debts. Surely the large sums derived from the levy which is taken on all fish landed in the country should be enough to run the White Fish Authority. Why should the good borrowers be responsible for the bad borrowers? This seems to the industry, to my hon. Friends and to myself a most unfair imposition, and I hope that the Minister will bear this complaint in mind, will bear in mind the high interest rates prevailing over many years and will see what can be done about them.
I will leave the special problems of inshore fishing to steam vessels to those more competent to deal with them. I see an imposing, almost a formidable, array of Scots and Cornishmen here today, and they are much more concerned with this problem than I am, and, I am sure, much more knowledgeable about it. I have the privilege of representing in the House the Port of Lowestoft, where we have undertaken a most comprehensive scheme of reconversion. We have now the most modern fleet in the country, with only one steam vessel operating.
When I turn, as I do now, to the question of subsidies. I want to make only one general observation on the question of the steam trawler. It seemed to me a most unrewarding policy when, a few years ago, the subsidy for steam vessels was raised so as to prove a distinct disincentive, I thought, to conversion at that time, and then, last year and this year, was reduced so as to make the operation of these vessels almost wholly uneconomic. I remember saying in the debate then that if I were the owner of a steam vessel, and had a subsidy of £20 a day, the last thing I should want to do would be to convert that vessel to a diesel vessel, which received nothing like that amount of subsidy. I do not want to impinge on that topic today, however; I am just mentioning it.
In discussing the subsidy rates now proposed, I should like to say a word about the herring industry. Everyone knows that this is one of the most difficult problems in the fishing industry today. I speak with much feeling on this topic, because Lowestoft, with Great Yarmouth, is the combined centre of the great East Anglian autumn herring fishing, the decline of which, over recent years, has been catastrophic. I see that the hon. Member for Yarmouth (Mr. Fell) is here, and I am sure that he feels the same anxiety as I feel about this.
Time will not permit me to go into the causes of the decline, but one major factor—and I have said this in the House many times—is the indiscriminate trawling for immature herring in the lower North Sea by the Danes, Belgians. Dutch, Germans and even the Poles—and I am not sure that the Russians are not in it, too. I have been consulting practical men who have fished these waters for many years. I know that some hon. Members opposite do not agree with me entirely about this, although I think that they would go a long way with my argument.
In discussing the scientific aspect I have only to mention the name of Dr. Hodgson, former head of the Lowestoft Marine Laboratory, who supports me in thinking that it is not a question merely of millions of immature herring being taken—herring too young to breed—but a question of millions of millions. They are scooped up from the bed of the ocean to be converted not into human food, but into fish meal. The herring is a pelagic fish which is caught, when mature, on the surface of the sea by drifters using the long-reaching drift nets.
The past few seasons have been calamitous, particularly for the East Anglian herring fishing. The hon. Member spoke about the prospects for herring. May I quote from the Report of the Herring Industry Board. Referring to herring fishing, it reads:
The fishing was quite the most disappointing in all its long history. Landings totalled little more than half those of the previous year—itself an exceptionally lean one. From the viewpoint of catches, the only redeeming feature was that prices reflected the state of scarcity and enhanced unit earnings went some way towards making up for the smallness of the catches.
I quote that with reference to the Government's proposal—despite the difficulties
that the herring industry is experiencing—to retain the same standard of subsidy, and I ask them to look again at the subject, and to consider whether they cannot do something far more helpful for the industry.
If this decline proceeds we shall see fewer and fewer vessels in the business, and a once prosperous industry go further into trouble. Already, the number of vessels is the lowest on record. One result will be that with the poor return shared by the crews it will be virtually impossible to recruit the men necessary even for the small number of drifters now going to sea. There is already a tendency for driftermen to go into the trawl business, because there they get a share of the subsidies, while the men's share of the earnings of the drifters is so low as to make it absolutely essential that they should look for other employment. I urge the Government to look again at this and, if not now, at least in a few months, to bring in another scheme.
In discussing the subsidy figures for the near and middle waters, I want now to present some figures that I have collected for my own port. These are typical of many other ports engaged in near and middle-water fishing. As I have already said, I exclude inshore fishing, because those concerned in it do not present their accounts in the same form. In presenting these figures, I want the House to realise that they are compiled, audited, checked and approved by the Ministry's officials.
Before I go into details the House should know that it is agreed with Government officials that the cost of running motor vessels during the next twelve months will increase by 2·7 per cent., and that the estimated decline in earnings will be in the region of 2½ per cent.—yet the subsidy is to remain the same. The industry, in these circumstances, and justified as it is by the figures agreed with the Government, proposed a new scale. This was the scale submitted to the Ministry not so very long ago. It is proposed that for vessels of 70 ft. to 80 ft. in length the present £5 should be raised to £7 5s.; 80·90 ft. from £6 to £9 15s.; 90·100 ft. from £11 to £14; 100·110 ft. from £8 10s. to £13 10s., with other, smaller, amounts as the length of the vessel increases.
That claim, made by the industry itself, is based on actual earnings and, as I have said, those earnings are agreed by the Government. At present, all the fleets have shown a loss, and I have here some figures to illustrate how the fleets are operating at the very moment when the Government are considering these subsidies. I know that this looks a most formidable document, but I do not propose to go right through it. It shows that in 1958, on vessels 70–80 ft. long, there was an average loss of £603 on each vessel. For vessels 80–90 ft. long, the average loss was £219; 90–100 ft., £57, and 100–110 ft., an average loss of £34. Whoever prepared this sheet has very optimistically headed the column "Average Net Profit and Loss" but there was no profit at all. The Government ignore those figures, and retain the subsidy at its present level.
Another thing that the industry does not like is the fantastic allowance of only 6⅔ per cent. for depreciation. That allowance applies to vessels that go to sea every day, in all sorts of weather, all the year round. Their machinery is operating all the time, unless they are in port—and even then it is working in a moderate way. Yet depreciation on such vessels is calculated at 6⅔ per cent. The depreciation allowance on office furniture is othen much higher than that. There is no realism about such a percentage. It should be drastically reconsidered and a reasonable figure allowed. Again, in calculating subsidy, the charges for interest are not allowed at all.
This great industry deserves more consideration. It is a vital part of our economy and those in it often face great risks and hazards that are often wholly beyond human control. I urge the Government to take back these Statutory Instruments and to come back with new ones before 31st July. I can assure the Government that if they bring back a more realistic set of figures we on this side will do our utmost to facilitate their passing.