It may be for the convenience of the House if with this we take the Motion,
That the White Fish and Herring Subsidies (United Kingdom) Scheme 1968, a copy of which was laid before this House on 15th July, be approved.
It may be helpful if I recall the general background to these Orders. I dealt at some length with the economic position of the industry in the debate on 15th May last. In 1967, the deep sea catch was maintained at the average level of about 520,000 tons achieved in 1965 and 1966. But the value declined from £41·2 million in 1966 to £39·4 million in 1967.
Inshore landings of white fish declined from the peak of over 270,000 tons in 1966 to 230,000 tons in 1967, owing to a reduction in Scottish landings. The value of the catch however was unchanged at about £15 million.
Herring landings declined slightly in quantity and value but shellfish landings increased substantially from £3·6 million in 1966 to £4·0 million in 1967. In the first five months of 1968 landings have continued to increase, but the average value of white fish has declined still further.
The volume of imports of fresh, chilled and frozen fish was about the same in 1967 as in 1966—about 120,000 tons—but the value declined by roughly £1·0 million to about £20 million. The reduction in the value of imports was therefore proportionately greater than the reduction in the value of our own catches.
In the first five months of 1968 there has been a small reduction in both the volume and the value of imports compared with the same period last year. Although total imports have shown little change, imports of frozen fillets from Norway, Denmark and Sweden have increased and are now in excess of the level of 24,000 tons a year which was expected to be the maximum when they were given E.F.T.A. treatment in 1959. We have accordingly invited our partners to discuss the position with us to see what can be done to moderate the increase. These discussions are to commence on 15th August.
More detailed figures on these and other aspects of the industry's performance are given as usual in the Annual Report of the White Fish Authority and the Departmental statistics. Hon. Members will also find a good deal of information in the published evidence submitted to the Fisheries Sub-Committee of the Select Committee on Agriculture.
I should like in passing to congratulate my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) and his colleagues on producing their report so speedily. It would not be proper for me to comment on their recommendations before they have been considered by the main Committee. But one recommendation at least has been met. We have announced our decisions on future aid to the industry.
Before coming to the measures now proposed, I remind the House that the value of existing support is not to be under-rated, though I fear it sometimes is. The total value of cash assistance from the Fisheries Departments in the financial year 1967–68 was no less than £7 million. Of this £3·7 million was grants, £2·8 million was operating subsidies and about £0·5 million was loans.
On 15th May I announced the removal of all restrictions on the number of grants available for new vessels, and an effective increase in the maximum rate of loan for inshore vessels to 45 per cent. as long as grants are at 45 per cent.; and 50 per cent. when the grants revert to 40 per cent. at the end of this year, maintaining the 90 per cent. There will be no limit on the funds available for these loans. These arrangements apply from 16th May last.
On 8th July, my right hon. Friend announced our new subsidy policy for the deep sea fleet and promised that legislation would be introduced early next session. He also outlined the arrangements for subsidies under existing legislation to the deep sea, inshore and herring fleets in the year commencing 1st August. These arrangements are set out in the Scheme now before the House.
I will deal first with the inshore and herring fleets. In the last three years, the increasing profitability of this section of the industry has enabled us to reduce the subsidies.
In 1967, the overall profitability of the fleet declined slightly from a little over £2 million in 1966 to a little under £2 million. This is still a reasonably good level of profit and, of course, much better than that of the trawler fleet. In these circumstances we have thought it right to maintain the subsidies at their existing level to encourage the further development of the fleet that we want to see.
For the deep sea trawler fleet of near, middle and distant water vessels the basic rates for the year are the maximum rates permitted by the 1962 Act. In addition, the maximum special rates of subsidy that can be paid within the limit of £350,000 permitted by the Act will be payable for the first six months of the year at rates proportionate to the basic rates, to all deep sea trawlers.
By the early part of 1969 we hope to be in a position to make payments under the new system announced by my right hon. Friend, and the sums the House is now invited to approve will be set against the total sum payable to the industry under this new system for the year beginning 1st August, 1968.
As my right hon. Friend explained to the House, the amount of the annual subsidy to the deep sea fleet will be calculated by adjusting a basic figure of £2 million. The industry will receive, in addition to this £2 million, half of any amount by which its profits are less than £4 million. The maximum annual subsidy will be £4 million and will not be allowed to result in an annual level of profits plus subsidy exceeding £7 million.
The distribution of the subsidy will be related to the operating efficiency of vessels and this principle has been welcomed by the industry The detailed arrangements for measuring efficiency for this purpose and for the payment of the subsidy are now being discussed with the industry. Two meetings have already taken place and progress has been good. Further meetings, including a meeting with the Transport and General Workers' Union, will be arranged as necessary, and I hope that it will not be long before the arrangements are settled. We shall be able to give the House a fuller account of what is proposed when we come to fresh legislation. Meanwhile, I ask the House to give its approval to the present Order and Scheme.
We all wish to express our thanks to the Minister for his usual lucidity in introducing this Order and Scheme. May I recapitulate what I believe to be the fundamental issues behind them. First, there is the basic grant that we are debating, running from 1st August this year until 31st July next year. That is cut by 7½ per cent. These cuts are to be ended, as was announced by the Minister on 15th May, but they must continue until the new legislation is introduced which, I understand, we are to expect at the end of the year, presumably in the new Session.
Dealing with the special grant, I understand that the Minister said, that the whole of the amount, £350,000, is to be disbursed in the first six months of the year under discussion, and that all vessels in the deep sea fleet will attract this grant. This means that more vessels will get a grant and there will therefore, be less per vessel in certain classes. May I quote the sums in round figures to be sure that I have got them right? Taking the first class of vessels, 80 ft. to 110 ft., the Order allows a daily operating grant of £2 14s. The last time we debated an Order of this kind, in February this year, a few of these vessels received £5, and a year ago they received £9.
The next class, 110 ft. to 140 ft. will receive £3 18s. a day. Last February they received £7 a day and a year ago £4 10s. It is a net reduction per vessel, although I appreciate that more vessels attract the subsidy. Finally, 140 ft and over are to attract £4 10s. a day. Last February it was £8, and a year before £5. The grants for white fish and herrings landed and for conversion to oil and meal, are to be exactly the same as in 1967.
Have I got the figure for the total operating subsidy that the Government have paid in 1967 correct? I understood that it was £1·3 million, but today the hon. Gentleman said something about £2·8 million. I was not clear whether that was for last year or for the forthcoming year.
That is £2·8 million in the past 12 months. Can the Minister say what he expects will be paid in the next six months? It will obviously be more than the £2·8 million, but will it be £3 million or £4 million? Both sides of the House agree that there is a need for greater subsidies. The new Government measures will grant subsidies of £2 million to £4 million based on operating profits. As the Minister said, we cannot start payment until January next year. Will the payments then be based on the profitability of vessels operating this year —in other words, will it be paid a year back?
We all agree that there is a world-wide depression in the fishing industry, and this has been worsened for this country because of the heavily subsidised foreign competition and because we are the largest open market in Europe and, excluding the United States, in the world. The Government have admitted that there are crisis conditions within the industry. On 15th May the hon. Gentleman gave three reasons for this. He said that it was due to adverse conditions of competition, the restriction of limits, foreign subsidies and so on; secondly the development of foreign coastal fisheries and the fact that their surplus supplies were being delivered to the British market, which was pretty well an open one; and thirdly he said that technical developments in the industry led to large stocks of frozen fish, particularly cod, being held.
My right hon. Friend the Member for Grantham (Mr. Godber), in the same debate, said:
This debate has clearly established that there is a desperate state in the distant water section of the industry…. It has also established the very low price levels that exist in this country."—[OFFICIAL REPORT, 15th May, 1968; Vol. 764, c. 1346.]
Since he made that statement I understand that price levels have dropped by nearly 10s. a kit in the following month. The problem is basically one of price rather than quality. I am not excluding the need for quality, because the quality, particularly of cod, can and should be improved. Basically the problem facing the industry is one of prices as there are plenty of good fish landed and unsold.
The B.T.F. has a voluntary minimum price scheme and reports that prices are undercut, dare I say it, from Scotland where there is no minimum price. I have a telegram which I received yesterday from an ex-president of the B.T.F. in Hull. He points out that owners have cut distant water landings to 15 days in order to improve the quality of the fish and he says that in spite of this top quality fish, something like 50 per cent. remains unsold in the Hull market. This applies equally in the other major ports.
In Hull, from January to June, this year over 250,000 kits of fish were unsold. Last Monday and Tuesday about 12,000 kits were unsold and therefore went to making fish meal and other purposes. This is not because of poor quality but because of low prices and undercutting. I want to quote two sentences from the telegram in which the ex-president says:
Enormous quantities of cheap fish quoted into English markets from Scotland and abroad…. It is impossible to sell 10-day Icelandic fish at 77s. 6d. a kit alongside the same article from Scotland at 29s. 6d.
I hardly dare, in this House, with the serried ranks of the Scots in front and behind me, criticise Scotland, but I should make the point that the distant water fleet support a minimum price scheme for all deep sea fish, near, middle and distant, but only catches 40 per cent. of this fish. The person who sends this telegram asks: Can this go on?
The average price of landings from B.T.F. vessels during the first four months of this year as compared with the same period last year has fallen. In March it was 21·4 per cent., April 3·7 per cent., May, 7·6 per cent. and June, 92 per cent. It is only fair to say that we have had exactly the same story from Scotland. One official of the Scottish Trawlers Federation was quoted in theFish Trades Gazette as claiming that the drop in prices had cost the Scottish fishing industry over £350,000 in five months —a fall of 12·3 per cent. on the previous year and incidentally exactly the same amount as the special grants the Government are to disburse during the next six months.
This is a matter concerning both England and Scotland and I am sure that this will be developed at greater length by hon. Members on both sides of the House. We all accept that the industry is passing through a time of crisis. What have the Government proposed to meet this crisis? There have been criticisms, and I do not necessarily join in them, that their proposals are too little and too late. Criticism is made of the present measures because they deal with only six months, and will not solve the financial difficulties of the industry.
Against that we in the House know, although it is perhaps not so widely known throughout the country, that the Government cannot under existing legislation, disburse more than they are doing. But obviously the industry must have more next year, and from what the Minister said it seems clear that it will get it. Plainly we cannot decide whether the Government's future proposals are right or whether the amount of finance which it is proposed to inject into die industry is correct until we hear details of the legislation.
There is however more validity in the criticism of "too little, too late". The Joint Parliamentary Secretary will recall that on 15th May he said:
If the industry is suffering—and I do not deny it—that flows from the policy laid down by the hon. Gentleman's Government in 1962."—[OFFICIAL REPORT, 15th May, 1968; Vol. 764, e. 1311.]
In answer to a Question from me on 26th June, he said:
The industry's present position is the direct result of the policy for which hon. Gentlemen opposite were responsible…. We have changed it."—[OFFICIAL REPORT, 26th June, 1968; Vol. 767, c. 422.]
But have they? The Order and the Scheme make no change at all. I agree that it is coming, but it has not come yet. The trouble is that the Government have maintained a good policy for far
too long. When the policy was introduced, it fitted the conditions. But conditions have changed. If the Minister examines his speech, he will see that he admitted that. Limits, foreign landings and techniques have changed, but the Government's policy has not changed. It will not change, I understand, until we have the new legislation in November or December.
The Minister will remember that the review was announced at the end of 1964. After continual pressure, it was finally stated that it was hoped that the Government would be able to make a final statement at the end of 1967. We have had an announcement in July this year, three and a half years later. We are still debating the old system. The details of the new system have not yet been worked out. It is clear that in 1969 the industry will be dependent on payments on a scale which we have not yet determined to offset losses under the Order we are now debating. All I can do is to quote the conclusions published in the editorial of theFishing News on 12th July. The last paragraph is a true and fair summing up:
All this does not add up to a dynamic, clearly expressed policy for British fishing; nor does it offer hope of relief from competition due to unrestricted cheap imports of fish from the surpluses of other countries. But it does reveal that the inter-departmental inquiry produced something more than a suggestion that the Fleck policy was out-of-date".
we shall obviously reserve our opinion until we hear the full details of the Government's policy. I hope that they will not be a palliative, but will do permanent good to the industry.
Since the Minister mentioned the new scheme, I should like to refer briefly to it and to ask two questions which he may be able to answer. I understand that, under the new scheme subsidies will be linked with efficiency and profitability, which is obviously to the good. When the Minister announced the scheme, he referred to the industry's profitability and operating efficiency. What profitability does he mean? He will know that operating profit does not include depreciation or interest on capital. One can still make a considerable loss, although one has an operating profit. Will the scheme be based on an operating profit so defined, or on a profit which takes all factors into account? This makes a big difference to the industry.
Secondly, grants are to be based on the profitability of a vessel in the previous year. Vessels will attract grant next year on their profitability this year. This will introduce complications concerning crew-sharing arrangements. How will they be met? Will the crew be paid a bonus at the end of the year covering the previous year?
The success of the Government scheme will finally be judged on whether it attracts fresh investment into the industry. That is what is needed. I hope that the Minister will consider the new fisheries policy which is being produced by the European Economic Community. I do not say that it will fit our problems, but we should examine it very carefully and dovetail our policy into it as far as possible. I will not go into that point further because it does not come within the Order. However, we are interested to note that this month the E.E.C. has produced an official fisheries policy, and I hope that the Government will take cognisance of it.
It would be wrong if I were to omit to deal with the question of imports, because this threat lies behind all the subsidies which we are debating and it must be behind the success or failure of the Government's proposed new policy. In reply to me, the Minister said that direct fish imports amounted to about £21 million a year. He will agree that there are only two open markets in the world— the United States and this country. The United States market has contracted considerably, which leads European exporting countries to send their fish to this country. The subsidies in Norway have increased in one year from £6 million to £14 million. I understand that Denmark has promised Greenland £200 million, spread over 10 years, of which 75 per cent. is for establishing a fishing industry in that country. This is the kind of competition which we have to face.
That brings me to the announcement which the Minister made on 8th July, which he repeated today, that the Government are to have talks with our E.F.T.A. partners. Today, he referred to the Stockholm Agreement and the fact that the limit of 24,000 tons of imported fillets has been surpassed. Will the talks with our E.F.T.A. partners solely con- cern the limit on fillets, or will the Government try to secure a gentlemen's agreement that surplus fish should not be dumped in this country? I accept that we cannot legislate against that, but I think that we should try to reach a gentlemen's agreement that fish landings should be limited.
I remind the hon. Gentleman of Recommendation No. 5 in the Report of the Fisheries Sub-Committee of the Select Committee on Agriculture:
Quotas, levies and minimum import prices to protect the British industry should be seriously considered and the matter pursued energetically with the E.F.T.A. countries.
I hope that during the talks this subject will be raised. Incidentally, this matter has been considered, not only by the Fisheries Sub-Committee, but by the main Committee.
Finally, may I ask what discussions are taking place about a statutory minimum price scheme, which will have some effect on foreign imports as well as to provide floor price for the market? I appreciate that there are difficulties and that there is no unanimity in the industry on this point. We should be grateful for any information that the Minister has to give about it.
I have no doubt that we on this side of the House will support the Order and Scheme. We look forward to seeing the details of the new legislation. We hope that it will solve the problems of the industry and will not merely act as a palliative. I should like answers to four specific questions. First, can the Minister give us more details about the back payments—in other words, payments made in 1969 for this year's operations —and about how they will be worked out? Secondly, will he give details of the talks which the Government propose to have with the E.F.T.A. countries? Thirdly, will he give an assurance that he will consider the recommendation of the Fisheries Sub-Committee on quotas, levies and minimum import prices? Fourthly, will he tell us how the discussions on a statutory minimum price scheme are going?
I commend the Order as it stands, knowing that it is only a bridging operation until the new legislation is introduced at the end of the year.
After the somewhat pugnacious opening of the hon. Member for Haltemprice (Mr. Wall) to a debate on what is usually a politically uncontrover-sial industry, may I begin on a happier note by thanking the Minister most sincerely for his felicitous words about myself and my colleagues on the Select Committee on Agriculture. We were given a job to do, covering a wide field, in a short time. We hoped to get the Report out before the statement made by the Secretary of State. We failed by about 12 hours. I am delighted that my hon. Friend the Joint Parliamentary Secretary said that he had already adopted Recommendation No. 5 in the Committee's Report concerning early action in the matter of aid or subsidy.
We have begun this morning speaking about the new Statutory Instruments, from which I find that there are no subsidy changes for the inshore fleet. I did not expect any subsidy changes, because one of our difficulties in the deep sea fishing section, certainly on Hum-berside and at other auctions, is that we are getting a good supply of first-class cheap fish caught by first-class vessels and men of the inshore fleet. In Hull, this now amounts to at least 20 per cent. of the fish which is sold on the market. Please, therefore, do not let us always talk about competition overseas—this is at home.
Sections of our fishing fleet are doing well, and I welcome this. I welcome the fact that our inshore fleet within 12 miles is doing well and is, therefore, thereby less of a charge on the national Exchequer.
Having said that, I turn to what I believe to be the nub of the debate. The Explanatory Note to the Order dealing with the aggregate amount of grants states that the object of the White Fish and Herring Industries Acts, 1953 and 1957, as amended by the Sea Fish Industry Act, 1962, is to promote
the landing in the United Kingdom of a continuous and plentiful supply of white: fish and herring".
At the moment there is no doubt that we are getting that plentiful supply of fish. This is one of our headaches— we are getting too much.
I also have with me the telegram, which was quoted earlier, which has been sent on behalf of the Hull vessel owners. I have no doubt that it is symptomatic of the feelings of other vessel owners in other ports. I do not know what is meant by the B.T.F. policy quoted by the hon. Member for Haltemprice (Mr. Wall) a short while ago. It was a pity that we had this note injected, because in the industry this question of subsidy has always been a non-party issue. I would have hoped that the vessel owners would have been thinking some time ago about their policy and I look forward very much to hearing something about this new official policy which the vessel owners are putting forward. I am sure that my right hon. Friend the Minister will be as intrigued as I am to know what is meant by that policy.
The gist of the Hull telegram this morning is that we are catching good quality fish which we should be selling to our home market. This is not being done. The difficulty, however, is that we have excessive landings. I do not altogether accept the use of the word "dumping" in this context. I was glad to hear the Minister say that on 15th August my right hon. Friend the President of the Board of Trade is to speak to his colleagues in E.F.T.A, about the whole matter of what I term excessive landings. I find it difficult to justify this as dumping under the G.A.T.T. provisions. It is excessive landing of fish at low prices, because there is this over-catching malaise about the North-East Atlantic—in fact, the whole world; and the Norwegians, like ourselves, are catching quantities of fish which they find difficult to sell. They land it for sale in Hull dock and elsewhere at the same price level as they attempt to sell it at Cuxhaven, Norway and elsewhere. The excessive amount of fish which comes into this country is one of our big difficulties. I have no doubt that the Minister knows this as well as we do.
While there has been, I understand, no ban on imports, I look forward to tenacious and tough talks by our Ministers on this matter with our E.F.T.A. colleagues concerning what I believe to be the biggest single factor in our present difficulties: the amount of fish which is landed for the port auctions.
The debate today is being held in about as gloomy an atmosphere as the similar debate 12 months ago. It was worse for the industry in the sense that the figures show that besides the large quantities of fish which are being landed, the prices are something like 8 or 10 per cent. lower than they were a year ago. The industry, owners and workers, has had a particularly tough time in this matter and it is, perhaps, not an unhappy thing that my right hon. Friend the President of the Board of Trade is the Member for Grimsby and is absolutely on the inside in the whole question of landings and prices of fish. Our home market is virtually unprotected in this direction.
I believe that there are undeniable reasons against our becoming dependent upon imported food. I also, as someone who was born on an island, have my feelings about turning our backs on the sea. I do not think that the Government intend to do this. Their new proposals give the lie to anything which has been said in the past in that respect.
There can be no denial that there is to be a sharp increase in the subsidy. For the next three years it will be set at £2 million median. I have some figures which show what would have been the difference had we been working the proposed new subsidy scheme over the last year or two. Even in 1965, which was a good year, when the industry made something like £4 million, the industry would have benefited by at least another £¼ million under the Government's new proposals. In 1966 it would have benefited by an additional £800,000 in 1967 with £1,500,000. Therefore, whatever may be the unknown new policy of the B.T.F., no one can quibble at the measures which the Government are taking.
It is, however, a little ironic that the payments are to be made for five years. I view this as a holding operation. If the industry is to survive, it must become more efficient. That is why we are tying these subsidies to efficiency and profitability, and I am glad to say that the industry as a whole welcomes this. Both the producers and those of us who are legislating want an efficient and profitable fleet and one which will pay its way.
I am glad to see that a welcome has been given by the owners to the Governments proposals. I know that at least one leader in Hull has not done so, but he is alone. I believe these measures to be good. On the whole, they have had, if not a huge welcome, a cautious welcome by the leaders of the industry, who are aware of the Government's difficulties.
It would also be ironic, however, if in our efforts to make the fleet more efficient, the Industrial Reorganisation Corporation, after putting in its appearance, were then to advise making the changes in the structure of the fleet which were rejected a year or two ago by the Monopolies Commission. There need to be mergers in the industry. This is the pattern of national industry outside. I believe it to be beneficial that some units which at present are not efficient must slowly be phased out. I do not want to go into the details of oil burners, the age of vessels, vessels losing £4 per day or £64 each day they are at sea. I believe the industry will be made efficient following this Government's measures, which will come into operation as quickly as the owners and the industry can get them operating.
But then one comes to the 64,000 dollar questions: do we want a home-based fishing industry, and, if so, are we prepared to pay for it? This was the big issue which came before us when we were asking questions of witnesses before the Sub-Committee. The answer, of course, is a categorical Yes, and it would be sheer defeatism if we were to allow our fleet to go. Nevertheless, we always come back to this question of State aid. I believe that in the fishing industry we should attempt to get away in future, if we possibly can, from any aid, despite what is being done by Norway, by Denmark and other competitors. I look, in the future, to a smaller fleet, a more efficient fleet, but better ships for catching. I am forced to the conclusion that, as in the mining industry, if we close inefficient pits, we have fewer miners, so also if we dispense with inefficient vessels we shall have a smaller number of fishermen —this is inevitable—and a more efficient but smaller fleet. However, there will be better and safer working conditions for the fishermen, and there will be better pay for them. This is something we should look forward to in a more optimistic sense than possibly some people have done.
In making a comment on the speech of the hon. Member for Haltemprice, I look
at the memorandum submitted by the B.T.F. to the Select Committee. There is no doubt whatever that the facts speak for themselves. In paragraph 1 on page 40 of our Report hon. Members will find these words:
As a result of an international recession in fish markets, first-hand prices of fish have been at depressed levels for two years now. The depression has severely hit every fishing industry which is, in more than a very small way, exposed to the highly variable winds of international trade in fish. The general position is reflected in the fact that trawling companies the world over are ready to sell any or all of their vessels, but there are no buyers and, broadly speaking, nobody is placing orders for new vessels.
I accept this; this is a fact; but, as I said a few moments ago, we must have a more efficient fleet, even if smaller, to stand on its own feet in these difficult times.
We interviewed the White Fish Authority, whose chief executive put his finger on this whole matter of the future of the fishing industry and the help the Government are giving and what the industry has to look forward to in the future. It is wholly a question of confidence in the fishing industry, and whether in the future our fishermen and owners can look forward to something worth while. This is what he said:
I think above all owners are wanting, before they invest the very large sums of money that are called for when they are building vessels these days, to get a view a good long way ahead. This has been sorely lacking over the past few years. After all, if you are building a vessel which costs £600,000 and it has got a 15 year life, it is a 15 year view that you want of its future potential profitability. This has been gravely lacking. I am bound to say that I have always been puzzled that no Government Bill has looked a longish way ahead on a matter as politically uncontroversial as the fishing industry.
Earlier we had some exchanges across the Table, but now we can say we have a Government who are looking ahead. This was not done in the early 'sixties by a previous Government. Now, for the first time, it is possible to look forward to a future where the fishermen who catch the fish, and the owners who are investing in their boats, can look forward to a better prospect. I believe this, and I welcome this debate this morning.
Order. I hope to be able to call all the fishermen who seek to catch my eye. Hon. Members can help by making their speeches reasonably brief. We have begun very well.
I shall do my best to follow your injunction, Mr. Speaker. It is always a pleasure to listen to the hon. Member for Kingston upon Hull, West (Mr. James Johnson) when he is talking about fishing because he has great experience of this industry, and, if I may, I will echo what has already been said about the remarkable job which the Sub-Committee, of which he was the Chairman, has done.
I think he often sounds the theme that when we on this side criticise we are, he says, bringing politics into it. We have the job to criticise, and if we find that the Minister deserves criticism, it is up to us to give it. Parliament at the moment is very much criticised for being behind the times, but in the warnings which have come from both sides of the House about the fishing industry we have been ahead of the times. I have been rereading the debate which took place on 26th July last year when the hon. Gentleman talked about inspissate gloom, and it was pretty grim, but the Government can have been in no doubt of the dangers facing the industry and its possible decline. This can not be in doubt because hon. Members on both sides, on every conceivable occasion have brought the state of the industry to the attention of the Government, and that is the job of Parliament. Parliament was demanding action for a long time before it got any action from this Government. I am only sorry that today we are debating the old style of white fish Order. What we ought to be debating today is new legislation. I think there has been delay and a delay for which the Minister must accept responsibility.
I refer, while on this question, to paragraph 27, in the Conclusion, of the Select Committee's Report, which says:
Fishing sometimes appears to be the cinderella of the Department. We sensed in our witnesses a feeling of neglect amounting to a malaise, which we would like to see exorcised.
I do not know whether that was political, but it was certainly endorsed by the hon. Gentleman the Member for Kingston upon Hull, West. The sooner we
get rid of the idea that the fishing industry is a Cinderella the better for everybody concerned.
The Committee earlier put its finger on the whole question of the difficulties we are facing: are we to continue to have a deep sea trawling industry? I was particularly interested to read what the Committee had to say in paragraph 9 on page VII:
Socially, deep sea fishing is a way of life to an important part of the community; it would be defeatism for an island people to withdraw from the sea.
With that I fully agree, and what we have to ask ourselves is, are the Government's present policies going to ensure that we do not indeed withdraw from the sea?
Like everyone else who has connections with fishermen, I welcome the new Government subsidies and the increase. One cannot give a final judgment, of course, till one sees how the final terms will work out. I will express one doubt I have, and that is that whilst of course there has been a welcome by the industry for the fact that efficiency will be the test of how the new subsidy will be paid, difficulties remain. This I welcome.
It seems that from a practical point of view, however, it may be difficult to judge efficiency because of the state of the market. A ship may go to sea and fish as efficiently as it can but return to port at the same time as other trawlers, and because they all get back together the market may be low. On the other hand, an inefficient ship might produce greater profitability merely because it landed at the right time, and if that ship were to get more subsidy it would be wrong. It may be a headache to work out in detail the general principle that we seek.
While we welcome the Government's measures, do they amount to enough? I do not mean in money; I do not think the Government have enough room to manœuvre to continue to pour great sums of money into the industry, nor would it be wise in the long run. I refer to other aspects of the Government's policy. I am glad that they are to have talks with E.F.T.A. This may be the key. Unless we can get a measure of restraint from our friends in E.F.T.A. and, perhaps even more, some restrictions on imports from countries which are not so friendly towards us, we may be faced with crisis.
There is another facet of policy which the Government ought to pursue. I gather that they are having talks about a minimum national price scheme. Combined with the Government's financial measures, plus something about imports, this could mean the saving of the industry. Some of my hon. Friends from Scotland, particularly those representing the inshore fishermen, are not so keen, but I think that the Aberdeen trawler owners may be more inclined towards it. This is a terribly difficult industry because of the clashing interests which have to be reconciled. I do not envy the Government in their task of bringing those views together. However, we need a national minimum price scheme, and in that may lie the main hope for the future and the main hope of not having a constant flood of money going into the industry from the Government, which the industry has never wanted and does not want now.
On the success of the Government's policy and the success of the trawler owners in overcoming their difficulties rests the real chance of improving working conditions for the men on board the trawlers. While the industry is depressed, the task of getting better safety standards, better ships and better quarters for the crew is made doubly difficult. It is in the interest of everybody that we should have a viable and profitable industry as early as possible.
There has been a very cautious but very real welcome for the Minister's statement on 8th July from the industry, certainly in my part of the world. The good will gained on that occasion has probably been increased by the transitional arrangements which we are discussing.
The statement has rightly been taken as evidence of the Government's determination to have a viable fishing industry trading profitably in future. Very few tears have been shed for the old subsidy system, the fag-end of which we see this year, with its tapering subsidies disappearing in 1972.
The operating subsidies announced in the Minister's statement represent only the first part of what I hope will be a much more comprehensive packet for the industry. The inter-departmental review must have made a large number of other suggestions for dealing with the problems that face the industry, but the financial arrangements are obviously basic and important.
We are discussing, as the hon. Member for Haltemprice (Mr. Wall) said, in effect a bridging arrangement. We have the minimum reduction of 7½ per cent. under the 1962 Act together with a special grant paid right across the board. This is particularly welcome to the Scottish middle distance fleet. If my arithmetic is correct, a boat of over 80 but under 110 ft. getting £5 3s. 6d. as a daily operating subsidy last year can look forward next year to a rate of £7 4s. at least until the end of January. That is welcome.
I have one small point about this, however. I suppose it is conceivable, though not likely, that a boat receiving the £7 4s. under the transitional arrangements might when the criteria of efficiency come into operation find itself after the end of January, 1969, in receipt of less. While it was made clear in the opening statement that the sum being disbursed at the moment would be set against the industry's total amount for the coming year, I should like to know the position of an individual boat getting more during the transitional period than it will ultimately get. I take it that there would be no claiming back of the payment or reduction of future grant made as a result of any unintentional generosity of the Government during the period now being discussed.
Everyone has welcomed the emphasis on efficiency in the new arrangements. We are glad to get away from the blanket arbitrary footage categories that we had for so long. But great questions are still being begged relating to how the scheme will operate. Discussions are going on and all sides of the industry are doubtless moving with the greatest expedition to a solution.
The hon. Member for Haltemprice made one or two points on how the operating profit of a boat is calculated under a scheme of this type. I do not want to go into the ramifications of that, but there are one or two points of importance. I should be very doubtful of any scheme which took depreciation into account. Depreciation is always a very difficult and doubtful subject in the fishing industry. One can take replacement cost or historic cost, the 6½ per cent. that the White Fish Authority is apt to give in its accounts or the more realistic 10 per cent. which firms have to take into account in drawing up their budget. One has also the problem of the older oil-burning boats which are now fully written down. When one talks about a more efficient fleet and the phasing-out of the archaic parts of it, one should be cautious about accepting depreciation as a proper allowance against profit because one may be giving a great advantage to older boats and penalising the newer sections of the fleet where depreciation is a meaningful allowance. For these reasons I should like to see depreciation excluded.
There is a strong case, for two obvious reasons, for excluding wages. If wages are not excluded for subsidy purposes there may be a marginal tendency artificially to hold wages down, and it is important for the fleet and its future that there should be a contented work force as well as a contented body of employers. In the fishing ports there is talk about the difficulties of recruitment. Everyone is aware of the very great disincentive to recruitment represented by bad working conditions, and all would like to see the problem overcome. But wages are very important incentives as well and must be attractive to the type of permanent crews that we want. Adequate financial incentives must be given, and anything in this scheme, however indirect, which may give encouragement to hold down wages should be avoided.
The second factor is safety. If wages are included, there may be a tendency again—indeed, a temptation—to under-man boats so as to push up profit margins and got as much as possible out of the Government. In the present atmosphere, and bearing in mind the recent tragedies that have occurred, safety must be a matter of prime importance. For these two reasons, crews' wages and safety, I hope that when considering operating profit for purposes of subsidy, wages will be excluded.
I have been fascinated by the possible rôle in the fishing industry of the Industrial Reorganisation Corporation. My right hon. Friend mentioned this issue in his statement of 8th July and on that occasion I questioned him about it. Understandably I received only a cursory answer; and my questions were more in the nature of giving notice, so to speak, of my interest in the subject.
I do not know exactly what the I.R.C. will do for the fishing industry. Will it merely give high-powered advice? I am sceptical, in view of the past record of the industry with advisory bodies, of such a rôle for the I.R.C. being effective. The White Fish Authority has been giving good advice, as have the Government, and a large number of other parties have been trying to persuade the industry to make necessary structural reform.
Unfortunately, we have seen only little action in the past. If it is thought that the I.R.C. will make a significant impact and that its activities will be geared to the new subsidies with the object of creating efficiency, then it will have an important rôle to play. But if not, many others will be sceptical about it. The I.R.C. must take a more active rôle in the affairs of the industry if it is to be really effective.
I do not suppose that the I.R.C. will actively promote mergers in the sense of putting in capital or entering the industry on its own account. I hope that the Minister will comment on the sort of rôle he thinks the I.R.C. will take between the two extremes of giving helpful advice and active intervention or participation. The I.R.C. must have a defined position if it is not to become part of a meaningless verbiage, a screen attached to the subsidy handouts to give them an acceptable appearance.
Reference has been made to the minimum price scheme and, while I did not intend to comment on this subject—because I seem to refer to it in every speech I make about the fishing industry —I must mention, since the attitude of Aberdeen was raised, that the Aberdeen middle-distance fleet has been a faithful supporter of the minimum price scheme from the beginning. It is disappointing that in the latest Report of the White Fish Authority it is stated in paragraph 10 that there has been no real swing of opinion in favour of this scheme in those sections of the industry which pressed for the repeal of the original proposals. I agree with the hon. Member for Haltemprice that there must be a scheme with a national basis and that it is no good leaving the matter to individual ports to organise in a piecemeal fashion.
Such an attitude—leaving it to individual ports to organise—would not result in the stable basis which we want to see established in the price structure for the domestic market. I assure the Minister that there will be every support from the Aberdeen fleet; and I hope that the Government will not be put off merely by the same sort of opposition from the same sort of places. I hope that the Minister will use any pressure that is necessary to push the scheme through.
Much has been said about imports and I accept the complaints that have been made. This is a worrying factor for every section of the fishing industry. However, I am always suspicious of attempts to protect the domestic market. As a trading nation, Britain should always look carefully at any case that is put up for protecting a sector of industry. We must remember that we can not afford to lead the way in this sphere and that expanding world trade is the basis of our prosperity. But the White Fish Authority has emphasised that we are about the only free market left and that every nation with which we trade has some kind of restriction covering the entry of fish imports. It is fair, therefore, that we, too, should look carefully at this matter.
One need only consider the examples of some of the countries with which we trade. For example, Iceland has a total population of only 10,000 people more than my city of Aberdeen. In the last six or seven years we have had an unfavourable balance of trade with Iceland, largely because of the massive imports of fish and fish products—I am including fish products used for animal feed and so on; I do not have edible products only in mind—into this country. Those imports have been worth between £7 million and £8 million a year and it is inevitable that we should look carefully at this state of affairs.
Would my hon. Friend agree that one must adopt a humanitarian attitude in this matter, remembering that Iceland has nothing but fish on which to live and trade and that it must, therefore, export? Would he agree that we must keep this matter in perspective?
I do not wish to single out Iceland for particular criticism. Some sort of mutually advantageous arrangement must be reached to limit, or at least control, the import of fish. I am thinking particularly of imports from our various E.F.T.A. partners as well as from Iceland. It would be sensible and justifiable if we could reach an agreement along these lines. I accept that that is a big "if", as any realist would be the first to agree.
I have often said in the House that there is no town in Britain to which the fishing industry is more vital than it is to Aberdeen. We are a service centre for industry and fish is by far our most important and basic industry. I am anxious to see the present negotiations come to a satisfactory conclusion so that both sides of the industry, employers and men, can enjoy stability.
The hon. Member for Haltemprice made a passing reference to the special subsidy which is now being divided among more boats. The implication of his comment was that perhaps some of the older boats which urgently required aid last year may still be in the same economic position this year, but are receiving less. I appreciate why he made that remark. However, he will be the first to accept that fishing is a fluctuating industry and that while the Scottish middle-distance fleet had a good year—I use the word "good" in the context of what has been happening to the distant-water fleet in England—there are signs that things are even less happy now in my part of the world. In the first five months of this year, I have been informed by the Scottish Trawlers Federation, there was an 8·2 per cent. increase in landings, prices were down by 12·3 per cent. and the total value of the catch was down by 5·1 per cent., facts which add up to the £350,000 loss to which the hon. Member for Haltemprice referred.
I will not dwell on these figures because I do not wish to spread unnecessary gloom. Nevertheless, statistics of this sort show how important it is for a new formula to be evolved with the absolute minimum of delay so that the industry knows where it is and can get on with the job of increasing the efficiency of the fleet and of what I hope will be the important contribution to import saving which the industry can and must make in the years ahead.
The Government have realised the importance of the rôle which fishing has to play. Its importance was emphasised in the Minister's statement of 8th July. There are signs that the Government will provide, in the next few years, the aid that is required. It is now up to the industry persuaded or, if need be, goaded on by the Government, to implement its part of the pledge and use the time it has been given to put its house in order.
I will not discuss many of the matters raised by the hon. Member for Aberdeen, South (Mr. Dewar) because, as he knows, the problems facing the fishing industry in my constituency are somewhat different from those facing his constituency. However, I quarrel with him in one respect, and that is his remark about Aberdeen depending more than any other town on fishing. It is fair to say that at least two towns in my constituency are equally dependent on fishing, but I will come to that.
Paragraphs 1 and 2 of the Order refer to the percentage of herring landed at the ports specified in any month. The Government will have to look at this again very carefully, because there is no doubt that if only 20 per cent. of the total landing goes for fishmeal, that is a wholly unsatisfactory state of affairs, because it means that the larger catches of herring are penalised and that it is totally uneconomic for larger landings to be made.
I understood that the Government's inter-Departmental inquiry, which has been going on for the last 3½ years, was being conducted on behalf of the whole fishing industry, but in his statement on 8th July the Minister specifically excluded the inshore fleet from his remarks. This was a grave omission. The inshore fleet was able to take some sort of cold comfort from the fact that the right hon. Gentleman said that the subsidy position for the current year would be no different from that of last year. Presumably, what the Government have in mind—at least, I hope that this is what they have in mind —is that the arrangements for the deep sea vessels are transitional and that all sections of the industry will be covered by the new legislation, but it seems a little hard to the inshore section that it should have been specifically excluded from the right hon. Gentleman's statement.
It is not good enough to say that the inshore fleet has had a good year and that the Government are therefore being gracious when they do not reduce the subsidies for the inshore fleet for the ensuing year. As the hon. Member for Aberdeen, South said, the phrase "good year" is only relative. The Government should say that there is no decrease in the subsidy to make up for the rising costs which all sections of the industry, not least the inshore section, are having to face. Costs have risen astronomically in all directions and for all facilities and all types of gear—ropes, fuel, victuals and everything else.
It is fair to remind the House that these subsidies were introduced to cater for such things as increases in the cost of ropes and gear generally. The statement did not take account of the fact that over the last five months inshore vessels have not been doing so well, again relatively. Neither does the standstill, as it were, take account of the increased efficiency which the inshore boats are achieving through the use of very sophisticated electronic aids, which are extremely costly to buy and very costly to hire.
In its Report for 1967–68, the Research and Development Department of the White Fish Authority states that the fishing industry as a whole
must be prepared to face radical changes, but the tragedy of the fishing industry is that this was not both realised and acted upon much earlier.
The Report pleads for more funds which, it says,
would be a real contribution to the support of the industry.
This is something in which the Government can directly intervene to the enormous advantage of the entire industry, and it would be an earnest of their intentions towards the industry as a whole. There are three parts of the work of the research and development organisation. It tries to bring about increased vessel efficiency; it tries to do work and report on improvements for handling, processing and the distribution of fish, both at sea and ashore; and it does exploratory work for new fishing grounds. These are all extremely important contributions to
the future of the industry, and perhaps the most important is the increased efficiency factor which it is always trying to get.
I am glad to see from this Report that the amount expended by the W.F.A. on research and development rose by £13,000 between 1966–67 and 1967–68. Paragraph 133 of the White Fish Authority Report to March, 1968, refers to this, but paragraph 135 makes it clear that the increase was due almost entirely to increased costs of administration and so on. The direct and specific grant which I suggest that the Government make to the Authority for research and development would pay rich dividends and, for as little as £50,000 a year, would be of enormous benefit. The Government may say that they have no powers to make such a grant. I hope that they will take such power when the new legislation comes along.
In his statement of 8th July, the Minister served notice on the industry at large that efficiency was the main factor which would govern the future degree of support. How is this efficiency to be measured? In its editorial of 19th July, theFishing News said:
There can be few exact measurements of performance in fishing Luck as well as good management is needed to keep a vessel among the top earners.
I echo the next words:
We hope, therefore, that the formula for the payment of the new subsidy will be based on something more than what the vessel catches and earns.
This morning, the Parliamentary Secretary said that the profitability of the inshore vessels declined from more than £2 million in 1966 to less than £2 million in 1967. Is this degree of profitability to be one of the yardsticks for measuring efficiency? Perhaps the Under-Secretary of State for Scotland will answer that question when he winds up the debate.
One of the chief problems which the Research and Development Department of the White Fish Authority has to face is getting across the results of its investigations to skippers and crews. There are two reasons for this. First, there is the shortage of staff in the Department and, secondly, there is a degree of reluctance among some skippers and crews to try out new methods. One of the problems to be faced, therefore, is selling the work of the Department to the professional practitioner. Making more money directly available to the Department would be one way in which to get its work across.
The willingness of more progressive skippers to accept and adopt new and proven methods and techniques could well be the criterion for future support payments. I give one example. A great deal more could be done to encourage the use in Seine net vessels of power-block crane methods for bringing the haul in. That not only reduces labour but reduces the time of the haul and therefore increases the catching capacity of any one vessel.
As the hon. Member points out, there is also the safety factor. The inshore fishing fleet is facing many difficulties, as are other sections of the industry. One of the biggest difficulties at the moment is recruitment of crew. To say the least, fishing is a hazardous calling at the best of times. One of the most important things holding back recruitment is the need for a long-term assurance in the industry. I trust that when the Government bring forward their legislation in the next session we shall have some long-term assurance which we most certainly need, not least for the inshore fleet.
Will this new legislation cover the entire fishing fleet? Will it cover not only the deep water section but the inshore section as well? I re-iterate a question put by other hon. Members: do the Government envisage that when the legislation is brought forward it will incorporate a statutory minimum price scheme for the whole industry? Will it be operable in certain sections only? May we have the Government's view on that?
We in this House have a strong responsibility for the fishing industry. We have all too few opportunities for debating it. It is certainly a non-party issue, in spite of what the hon. Member for Kingston upon Hull, West (Mr. James Johnson) said earlier this morning. Because we have this responsibility, I hope that when the legislation is brought forward it will be in the form of a long-term assurance for the entire industry.
We have had much talk this morning about this being a non-controversial subject and a non-party issue. If that is so it is a sad reflection on the House. It should be a controversial issue because of the criticisms we have heard this morning concerning organisation of the industry, labour relations, the accident rate, the way public money is to be spent and the record of the parties on the way in which they have dealt with the industry. These are controversial matters on which we should be stating an opinion. This is our rôle. We stick our necks out and either have our heads chopped off or, sometimes, achieve a halo. This is the essential way to approach the problems of the industry.
I am not criticising my hon. Friend in any way. I was criticising what was said by the hon. Member for Banff (Mr. W. H. K. Baker), who spoke about this being a non-political issue.
I shall return to that. As I see the policy, outlined in this fag-end of the present statutory instruments which we are considering, the minor provisions which are made are being made to a policy which was criticised by my hon. Friend the Parliamentary Secretary at the time it was introduced. He said that if the industry wanted this system it should have it, but he did not think it would be successful. That has proved to be the case. It is no good hon. Members opposite saying that we did not know what would happen in E.F.T.A. or we did not know about improvements. The policy did not have the flexibility which could foresee, even a few years ahead, the technical changes, although they must have been on the drawing board at that time. That is a criticism, not only of the Government which introduced the scheme, but of the industry itself.
As I understand the policy of the Government about what is to happen to the industry, I see this as a four-pronged attack. The Government have to be successful on four points if we are to have the viable industry which we want. We have to consider the new subsidy structure, negotiations with E.F.T.A., the rôle which the I.R.C. will play and—last, but by no means least—what is to happen in the labour relations of the industry arising from the proposed alterations to the Merchant Shipping Act, which I hope will get rid of the nasty penal clauses and set up a proper system of industrial relations, and the effect of the Holland-Martin inquiry on safety, of which we hope to hear later this year.
The decision to have a subsidy based on productivity and efficiency will undoubtedly be the most controversial. That will be not only because of the difficulties involved in working out a system but, as my hon. Friend the Member for Aberdeen, South (Mr. Dewar) said, because of the problems of the safety factor, the size of crew and the wages paid. To have any sort of system which will take account of these, particularly the safety factor—this industry has the highest fatal accident rate of any—we have to remove from the area all controversy about crews' wages. Therefore, I should like to see a subsidy based on an estimated fair return for the catch and the operational cost of the vessel. We have to have an operational cost which takes into consideration problems arising out of depreciation. If we can get that with the market price raised for the fish taken into consideration in the formula, we shall arrive at a situation in which perhaps we can get the industry set on its feet.
In the market price which the catch gets we have the biggest problem, for flooding all the British markets are cheap frozen fillets from Norway and Iceland. This has meant the laying up of vessels in Hull and Grimsby and a plaintive bleat from some owners for the control of foreign landings. I call it a plaintive bleat because in some degree it is hypocritical. The fact that some Hull owners are acting as agents for the foreign sellers and buying their fish to put into cold storage while at the same time calling for Government subsidies suggests that the only people who are suffering are the actual fishermen whose settling sheets after recent trips have shown only miserable sums to their credit. This cynical policy of some of the owners is indicative of their short-term approach to the problems of the industry which has prevented its development. They have considered only what is happening today and have never considered the problems of the future.
Now that the industry is to start negotiations in August with the E.F.T.A. countries, I should like to see a proper system of a controlled market on the lines of the bacon agreement. I should like there to be an agreement which would give a definite percentage of the British market to the British fleet to enable it to overcome the difficulties which have arisen because of the extension of limits, particularly by Norway and Iceland. I agree with my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) in thinking that we can in no way meet the problem of Iceland. Iceland has particular problems. Over 90 per cent. of its national wealth depends on fish. If we were to put up a tariff Iceland could automatically devalue. I should not want us to be engaged in an operation against Iceland in that way. I think we can tolerate Iceland, but the problem which comes from Norway needs negotiation as does the problem of the future, which was raised by the hon. Member for Haltemprice, arising from Greenland.
If we can get an agreement on the lines of the bacon agreement we might be on the way to solving some of these problems. We have to get it properly established. It is surely possible to get for the deep sea fleet, in particular, which is increasingly becoming concerned with the frozen aspect of fillets for fish fingers, away in some degree from the fluctuations of the market day by day.
It is in the sphere in which the I.R.C. will come in that the most controversy will arise. I do not think that the future of the industry will be properly assured until it has been reorganised. On the catching side alone, it is over-fragmented. Only half a dozen large firms in England and Wales own over 20 vessels apiece, amounting to 280 vessels and 62 per cent. of the fleet. The remaining 38 per cent. of the fleet, numbering 169 vessels, has 40 owners, of whom 13 own only one vessel, according to the White Fish Authority's Report for this year.
Most of the firms, with the notable exception of Ross and Associated, are private companies. With a certain degree of hindsight, it was probably a mistake when the Monopolies Commission did not agree to the merging of those two firms. Because they are private companies, it is impossible to get a real overall picture of the industry. This is because of family connections, interlocking directorships in the ancillary industries—some large, some small; such things as fish meal, the ice company, oil, fish wholesaling, cold storage, trawler owners and repairs, shipbuilding, and the actual distribution. The whole set-up of the industry needs to be carefully inquired into so that we can know exactly where it is going, what it is trying to do, how efficient or otherwise it is.
I believe that there is a need for horizontal and vertical integration. The severe slump in fish prices in the Hull market was never shown in the price demanded for the commodity in the shops. This is a criticism of the industry as a such. Although there was a slump in prices, the retail price demanded from the housewife hardly decreased at all. This was at a time of rising meat prices. The share of fish in the market has been constant, although it should have been rising because of the slump in price and the rise in the price of meat. This is a tremendous criticism of the wholesaling and retailing side of the industry. The price that the men have been getting for their fish in their settling sheets after they receive their basic pay and the price demanded from the housewife prove that both the fisherman and the housewife have been taken for a ride somewhere in the industry.
I have said before that advertising in the industry has been sporadic; aggressive marketing has been conspicuous by its absence, and the industry has itself yet to agree on a minimum price scheme based upon quality. It is here that the introduction of the I.R.C. can be of such tremendous importance. Under the terms of the I.R.C. Act, the Corporation can establish its own body corporate to compete with existing firms and act as a pace setter. Although it is doubtful whether it will have the courage or will to do this, or whether it would even be commercially sound, the advent of the I.R.C. amongst: private companies in this indus- try is a happy precedent and is to be particularly welcomed.
I must say in fairness to the owners that the Scottish owners asked for the I.R.C. and that the English owners were prepared to go along with it. This illustrates a realisation amongst the owners of the sorry position into which the industry has got. Nevertheless whether the I.R.C. sets up a body corporate or not, the Corporation, using commercial criteria to invest large sums in the industry, and perhaps acquiring a large equity holding, which I would like to see happen, means that a long overdue process of rationalisation, integration and marketing efficiency will be introduced. A new management structure, fresh capital, new techniques and new men could create the framework for a flourishing industry prepared to look ten years ahead and not just to the quick buck of this year's profits.
The I.R.C. can bring a new approach, by being prepared to look ten to 15 years ahead at possible developments in new fishing grounds. It is a reflection upon us that there has been no discussion this morning of the White Fish Authority's Report on the developments of the South African coast and the prospects that these may hold for the industry. It is also a criticism of the industry that it has not followed up to a much greater extent what the Poles, the Russians and others have been doing.
I also believe that the introduction of the I.R.C. is a clear indication that the Government have at last accepted the failure of the White Fish Authority to play a decisive role in the development of the industry, as has been demonstrated by the almost total disregard paid to its services or advice, most of it basically sound, by the industry as a whole.
Published the day following the Minister's statement on the new scheme for the industry, the Report of the Fisheries Sub-Committee of the Select Committee on Agriculture, presided over with such distinction by my hon. Friend the Member for Kingston upon Hull, West, and of which the hon. Member for Haltemprice was a member, said that
either the Authority should be abolished and its duties of research and development carried out by an advisory body within the Department or it should be given very much more real power—and this must include money.
The arrival of the I.R.C. on the scene is an indication that the Government think that the White Fish Authority has failed, for a whole number of reasons, not least the fact that it could not overcome the innate conservatism within the industry.
It is, however, in the replacement of the fleet that the problems of reorganisation are best illustrated. Not even the larger firms seem to have had a general policy for the scrapping and replacement of vessels. The old scrapping ratio of 2 for 1, to qualify for the building subsidy, was altered earlier this year to 1 for 1; and this alteration was welcomed. Despite this, the age of the fleet has increased and the number of older vessels has remained almost constant.
There has been no forward planning of the future needs of the industry, the type of vessels which may be required ten years hence, or the developments in design that might be needed with the opening of new grounds. The advantage of a common design team in reducing the overheads of the industry and the impetus it could give to the smaller shipyards outside the development areas which are now complaining about the effects of R.E.P. scarcely seem to have been examined. I raised this subject in the House earlier this year. Three individually ordered trawlers getting the British subsidy have been built in Poland and are being delivered this year. All could have been built in British yards.
Surely the Ministry of Technology—I realise that it is that Ministry's problem rather than that of the Ministry of Agriculture, Fisheries and Food—should bring together the I.R.C, the vessel owners and the shipbuilders to look at the advantages that might be gained from common design teams in a common programme of building, instead of buying vessels in an almost will of the wisp manner, ordering them individually, with all the extra costs that this entails in overheads.
I believe that the new subsidy structure applied intelligently to a reorganised industry with a better managed market, coupled with the reforms involved in the new Merchant Shipping Act and the fresh approach to labour conditions which it is hoped will flow from the Holland-Martin Inquiry, could reform the in- dustry. The question is whether the industry itself is prepared to shake itself out of its traditional attitudes and take what is in fact this last chance being offered by the Government.
I, for one, have always believed that, if Government money is going into the industry, the Government should control the way in which the money is spent more directly than it does even at the moment. I would be quite prepared to see a State-controlled fishing fleet acting as a pace setter for the industry; or, if necessary, the State could take the industry over completely. After all, all the usual criteria for nationalisation of poor labour relations, inefficient organisation, and the need to control an important sector of industry within the economy, are present in this industry. I would weep no tears if the industry went out of private and into public ownership. If this does not happen, and if the industry does not take advantage of the opportunities which it has been offered in this last chance, I do not think that we can hope to see the viable industry for which all hon. Members have asked today.
There is one last point on which I want to congratulate my hon. Friend. In the past the trade union within the industry has always felt that it has been ignored—not deliberately, I believe—by Governments of both political complexions. I believe that this has happened because within the union the fishermen are only a small segment and because the industry has always tried to keep itself out of the public eye as much as possible and away from governmental interference. I can understand the motives for this. Although I do not necessarily approve of it, I can well understand that attitude.
I congratulate the Minister, therefore, on his statement today that the Transport and General Workers' Union is to come at an early stage into the negotiations regarding the subsidy structure for the industry and the effect which it will have on crews' wages. We want a highly paid, highly skilled crew in the industry. We want the men well trained. Again, one could write books about the lack of training facilities in the past. For these reasons, I particularly welcome my hon. Friend's statement that the trade unions will come in at an early stage.
I believe that we shall have the developments in the industry which are needed. I do not take the pessimistic view adopted by some hon. Members who say that the help offered is too little and too late and that the Government are to be criticised on that account. In fact, the Government have done a very good job in the way they have approached the problem. They have done it in a short time, as it is only since 1966 that the industry has been losing money and not making profits. The Government are to be congratulated for the helpful and friendly attitude which they have taken towards the problems of the industry.
The hon. Member for Kingston upon Hull, North (Mr. McNamara) naturally concentrated upon the deep water trawler fleets. I shall speak about both parts of the fishing industry, the deep sea trawlers and the inshore fleets.
The deep water fleets have been suffering from the severe difficulties which hon. Members on both sides have described, and I welcome the Government's announcement, made last week, of a special scheme to assist the trawler fleets. I am only sorry that we cannot embark on the introduction of the special scheme today and it has to wait for about six months before it can be brought in.
The first main cause of the difficulties for the trawlers is that other countries, those countries whose fishing fleets are competing with ours, seem to be pouring money into their fleets. Secondly, in addition to that, they are pouring imports into this country. There is, therefore, cut-throat competition between the fishing countries as to who can most subsidise their fishing fleets. In this situation, the countries concerned ought to be able to come together and work out a sensible solution, while preserving healthy competition among the fleets.
I was interested to hear what the Minister said about the question of imports. He told us that the amount of frozen fillets from Scandinavia had reached the maximum foreseen in the talks in 1959, and he reported that the volume of imports was the same as in the previous year. I thought it significant, however, that they had decreased in value by about £1 million. This gives ground for the suspicion that these imports, or some of them, are subsidised or dumped. The volume remains the same but the value has declined.
I welcome, therefore, the statement that discussions are to start with some of the countries, three Scandinavian countries, I understand, on 15th August. I urge the Government to tackle the problem robustly when they meet these other countries and have discussions about imports in general.
The situation in which the deep water trawlers find themselves is described very well in the leading article inFishing News of 12th July, another part of which was referred to by my hon. Friend the Member for Haltemprice (Mr. Wall).Fishing News said:
For two years now the industry has taken such a battering that it is still not sure the cure has arrived in time to help it.
The special scheme is being introduced rather late in the day, but I, like other hon. Members, very much hope that it will give the industry the assistance which it can use, so long as it is allied with discussions with the other countries with which the present fierce competition is taking place.
I turn now to the inshore fishing fleet. The Minister reported that its profitability had declined slightly in comparison with the previous year. I do not find that surprising because it accords roughly with the estimate which I had made from my own observations of the fleets in the North of Scotland. The Government must carefully watch the position of the inshore fleets. This section of the industry provides the fresh, newly caught, fish which is essential for our food supplies in this country.
Through these Instruments, the Government propose that inshore boats shall receive the same rates of subsidy in the coming year as they have been receiving in the past year, but it seems that the proposal is to include some more boats in the voyage rates rather than in the stonage rates. I hope that the Minister who is to reply—I am sorry that he is not here at the moment, but I realise that he is probably preparing for his reply—will explain the Government's policy on this and state whether they propose to move more boats on to the voyage rates and away from the stonage rates.
In his opening speech, the Minister confirmed that the shell fish side of the industry is expanding. Again, this is not surprising. The shell fish market is growing and shell fish are becoming more popular as a food. I hope that the Government will encourage expansion in this sector and help to remove any obstacles as they arise.
The hon. Member for Kingston upon Hull, West (Mr. James Johnson) spoke of the competition which can develop, and is developing in some areas, between the two sides of the industry, the deep water vessels—the trawlers—and the inshore boats. I mention one aspect of this which will be of increasing importance. There have been requests from some British trawlers to operate in certain inshore waters which are now prohibited to them. I am thinking particularly of the Moray Firth. The Cameron Committee is at present considering this question along with other matters of conservation and fishing limits around our shores.
Although I am very sympathetic towards the plight of the trawlers in their present situation, I urge the Government to be very chary of allowing trawling in the Moray Firth, because this could cause great difficulties for the inshore fleets, the local boats based upon the Moray Firth which traditionally fish in these waters. Their operations could be made difficult not only because of the large amount of sea needed for a trawling operation, but also because damage could be done to valuable breeding grounds and nurseries for young fish. As the Parliamentary Secretary knows, this was the original reason for imposing the ban in the past. The inshore boats in the north of Scotland will be able to carry on at the same rates of subsidy as before only if they continue to be served well by the boat builders of the north and east of Scotland. Without the skill and close co-operation of the boat-building firms the inshore boats would not be able to carry on at these rates.
The hon. Member for Kingston upon Hull, North spoke about this important matter of boat building. I should add that in the north and east of Scotland there are very special difficulties for boat builders arising from increasing costs and shortage of skilled labour. One problem that perhaps does not seem obvious to hon. Members representing other parts of the country is that the prices and incomes policy can cause skilled men to be attracted to jobs with other firms and in other industries. They can move to higher rates of pay without infringement of the policy. This happens particularly when firms from the South with higher rates start working in the North on a new project or contract. I ask the Government to give special consideration to that and similar problems of the boat builders in the North, because without them the whole subsidy scheme before us will not work; without their contribution also safety, which is very important, cannot be guaranteed. We have, unfortunately, had the importance of safety tragically brought to our notice in the past year.
I hope that in his reply today the Minister will tell us something about the latest position concerning the proposal for a minimum prices scheme. Are there still objections or reservations in the one or two quarters from which they previously came? My hon. Friend the Member for North Fylde (Mr. Clegg) suggested that it was the port of Aberdeen that was objecting, but the hon. Member for Aberdeen, South (Mr. Dewar) told us that it was not objecting, and that was welcome news. Therefore, we should like to hear from the Government what the latest position is. We may find that there are no longer any objectors to such a scheme, and that a national scheme— I agree that it would have to be a national scheme—can now be considered.
I am glad to see that the Undersecretary of State for Scotland is now here. Earlier I put a question which I hoped his hon. Friend would pass to him. I recognise that the hon. Gentleman cannot be here all the time, for he was no doubt preparing for his reply. I hope that he can tell us the latest position on the proposal for a minimum prices scheme.
We have had a debate that some of us would describe as agreeable. Compliments have winged their way across the Floor of the House in a slightly unusual manner, rather to the distraction of the hon. Member for Kingston upon Hull, North (Mr. McNamara), who could take it no longer and started being healthily controversial. I shall likewise distract him by saying that I should like to congratulate the Sub-Committee of the Select Committee under the chairmanship of the hon. Member for Kingston upon Hull, West (Mr. James Johnson) on its work. The sort of document it produced is of great value to those of us who take part in fishing debates. Such Reports always provide us with much information that is of great interest in getting to the root of the various problems with which we deal.
I would not criticise the Government's action over subsidies today, but shall pay them a slightly back-handed compliment by saying that they could really do no less than they are doing in view of the gravity of the situation and the industry's plight. It is no better than it was when we debated the matter a few months ago; if anything, the position has deteriorated.
The hon. Member for Aberdeen, South (Mr. Dewar) gave certain figures concerning the Scottish trawling fleet. More days were fished in the first five months of the year and more fish was landed, but the price was down by 10s. a cwt., and the value of the catch was down by about £150,000. When one adds on the increased costs, one sees that the fleet is worse off in those five months by the £350,000 that has been mentioned. All this follows upon the disastrous 1967 figures to which I referred in great detail in our debate on 15th May.
One or two hon. Members have spoken critically of the cheap supplies of fish from Scotland. I can well recall that when I was in the position now occupied by the Under-Secretary of State, I used to hear great complaints of the invasion of the Minch by what were called foreign trawlers. We were told that they came from Fleetwood. I am one of those who do not want the border of Scotland to turn into a frontier, and I think that my views are shared by one or two others in the Chamber. Therefore, particularly as the fish from Scotland is superior to any other fish, I am sure that it is to to the great advantage of the English market to get it.
One tiling disturbs me, and it has not been mentioned this morning. There have been bad prices, and there has been no increase in consumption. The interest- ing point was brought out by the Sub-Committee that there has been no increase in the consumption per head of fish for many years. It is entirely static, and the only thing that is keeping gross consumption is the rise in the population.
I beg the hon. Gentleman's pardon. He must have made that point during the five or 10 minutes of the debate when I was out of the Chamber. I emphasise that it is an important point. I read the other day that a survey showed that only one family out of 10 eats fish for breakfast. The other nine are missing a great deal. I only hope that greater efforts will be made to increase consumption, and that there will be better results. I know that the White Fish Authority has been making great efforts to try to increase consumption, but the situation is very like that in agriculture, where the consumption of lamb is falling steeply for no reason that anyone has discovered. There is tremendous room for an increase in consumption, and things would be much easier if that happened.
There has been mention this morning, not unnaturally, of the policy initiated by the Fleck Report, which is now coming to an end. It is all very well to blame the Fleck policy, and for hon. Members to blame us for having introduced it into legislation. But the principle of Fleck in the Sea Fishing Industry Act did not meet any pronounced opposition on Second Reading. It is only fair to say that Fleck has not been assisted by imports being allowed virtually to knock the bottom out of the market.
The hon. Member for Kingston upon Hull, North said that we had been guilty of not looking ahead. With great respect, I do not quite know how one looks ahead to something which at the time does not exist. The advent of frozen fillets was something that no one could then visualise, though freezer trawlers were beginning to be talked about. There has been a tremendous revolution in what I would describe as the husbandry of the sea. As well as in the husbandry of the land. Anyone who 10 years ago could foresee what would happen in farming would indeed have had second sight, and that applies to the husbandry of the sea as well.
No one can tell for certain, but I should have thought that had there not been this tremendous flood of imports there might have been a chance of the Fleck policy succeeding. As I say, no one can tell for certain, but presumably the British Trawlers' Federation thought there was a chance of its succeeding, because they agreed to it. The only people who were fairly adamant in believing that it would not succeed was the Scottish Trawlers' Federation, which did not like the idea from the very beginning. Undoubtedly it would have been very rough going, though the fishing fleet has been getting increasing efficiency. Nevertheless, I am quite certain that imports have completely put paid to that policy and have finally wrecked it.
According to the latest figure in the White Fish Authority Report, imports of white fish amounted to 152,000 tons in 1967 compared with 140,000 in 1963. That is a nine per cent. increase over four years. British landings were up by only six per cent. in the same period. There is not a trace of any import-saving policy there. As with the agricultural industry, the Government will not get round to thinking in terms of saving food imports, wonderful potential though there is because temperate foodstuffs from the land and from the sea, that we could produce, are responsible for one-sixth of our total import bill.
We all recall the pledge that was given by the hon. Member for Edinburgh, Leith (Mr. Hoy) in July of last year. There could not have been a more categorical pledge. It was a simple undertaking to protect the fishing industry. I am sure that the hon. Gentleman will remember it perfectly. It was an unusually lucid expression of opinion. There was no hedging of any kind. He stated:
If countries abroad are undercutting our own industry in certain ways by subsidies, we shall take action to protect it."—[OFFICIAL REPORT, 26th July, 1967; Vol. 751, c. 691.]
Nothing could be more forthright than that.
Now we are to have talks. Talks do not always constitute action; otherwise there would not be that well-known phrase about action being better than words. I think that talks are a good thing, but I hope that the talks will go to the very root of the problem; that there will be no limit to their scope, and that the hon. Gentleman whom I presume will take part in them will probe very deeply and examine the problem quite ruthlessly, because if by any chance these talks were to be limited to some rather superficial subject it would indeed be a case of action being more important than words.
This is not the place to discuss the Government's new proposals, partly because we do not yet know the details, but I hope that the Government realise and are fully appreciative of the urgency of the matter. When the legislation comes along, as I hope it will early in November, it will be our duty to examine thoroughly all the proposals, including the efficiency factor. Although in principle I think that this is a good idea I share some of the views and some of the slight misgivings mentioned by my hon. Friends. If the matter is to be judged on sheer naked profitability we shall have to look very carefully at the proposal, because I agree that profitability in the fishing industry, which has so much at stake, is by no means the best yardstick for efficiency. We shall examine the proposals closely, and in view of the urgency of the situation we shall examine them with expedition.
In these debates, the fishing industry is rather looked on as being all underneath one umbrella and the position of the inshore fleet tends to be overshadowed by the trawling industry. We have been told that the inshore fleet's profits were down slightly. I know that the inshore fleet has been doing better than the trawling industry, but if one were to say that it had been doing well I would put the word "well" in inverted commas, because I do not think that the return that any section of the industry gets today, considering the effort put in and the risk involved on the capital employed, matches what could be expected in other spheres of industry.
As I say, I welcome the renewal of the subsidies and of the supplementaries. My continuing concern is that the Government should realise that the potential of the fishing industry to contribute to a solution of our balance of payments problem has not yet been harnessed to any degree at all. It is on the opportunities that are to be given to the industry to contribute to the solution of this chronic problem of ours that we shall judge the Government's new proposals when we see them.
This debate has been rather muted, partly because of a certain amount of recognition of the difficulties of the industry, and partly because controversy could not really enter into it, as hon. Members opposite know the very real urgency and support that we are now giving, perhaps after a rather long time, to the industry. What we are doing, as my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) said, might have been welcomed a little more than it has been. I remember that when I closed the last debate on fisheries I said that the main thing that had emerged was that people wanted to know when and how much.
Today we have explained the dating of the new proposals and we know how much. The hon. Member for Banff (Mr. W. H. K. Baker) asked for long-term assurances—we have given long-term assurances for three to five years. This is extremely important for the deep sea fleet and these measures refer to the deep sea fleet, not the inshore fleet.
We are not talking about that in this context. What we have done about the inshore fleet has always been done in a different form of subsidies. What we have done is to make a standstill on the cuts where there is movement towards viability—an effective step, perhaps negative in the sense that there is no change, but positive in the sense that it reverses the policy of cuts.
I want to deal with Fleck and the position in 1962. Hon. Members opposite are being unfair to the Joint Parliamentary Secretary. I have read the discussions at that period and he warned us clearly of the possibilities that might arise. It is not good enough to be told that he was correct then but that hon. Members did not accept that such things could happen in future. The policy has been said to be far too inflexible, and this is one reason why we changed it. We have been told that it is because of the problem of imports, which we did not envisage. The frozen fillet problem was known as far back as 1959. Hon. Members should recognise these facts and be a little less grudging about the measures that we are now taking.
The hon. Member said that in his speech. He said that it was not too little, for which we should be grateful, but that it was too late. It seems a curious argument that when we alter a policy brought in by the party opposite, we should be accused of being rather late in bringing about a change. He said that what had been wrong with his party's policy was that it had maintained a good policy for too long. It is a curious but interesting definition.
I would like to pay tribute to the hon. Gentleman's speech. He regarded this as a four-pronged attack, and he summed up the problems facing us well. First there are subsidies, secondly E.F.T.A. and imports, thirdly the I.R.C. and fourthly the human aspect, such as the Merchant Shipping Acts. On subsidies, he and my hon. Friend the Member for Aberdeen, South (Mr. Dewar) raised the question of what factors should be included in examining efficiency. The hon. Member for Haltemprice said that we should take wages into consideration and my hon. Friend said that we should not. These matters are subject to discussion with the industry which will no doubt note the points made.
The hon. Member for Haltemprice also touched on an important point when he said that the problem was one of price. This is a problem about which we can get a little confused. He asked whether it was true that the earnings of the Scottish deep sea fleet in the first five months of 1968 were down by £350,000 compared with 1967, which would represent a loss of 12 per cent.
This base has been used once or twice during the debate. It is a problem introduced by the modern age, because it is a computed figure, taking account of varying factors, for example more time being spent at sea this year than last. The actual earnings were down by only £137,000, not £350,000. He also asked about operating profits in terms of the new subsidies which involve the balance we are striking between the earnings of a vessel and the cost of operations aggregated over the whole fleet. We have been pressed to extend the discussions on imports, which are to take place on 15th August, beyond frozen fillets. I think that we should leave it at this, which is the important subject at present. I would rather not comment any further upon that. 1 cannot agree with the hon. Member for Edinburgh, West (Mr. Stodart) that this is a superficial matter. It is extremely important, and I was impressed by his comment that we want action, not words.
In a matter of this sort, involving an agreement, words are what matter. They are a form of action, and I hope that the hon. Gentleman was not suggesting other than that we should come to an agreement with our E.F.T.A. partners on this. The criticisms made about the import side have been a little muted too. The hon. Member for Haltemprice asked about subsidy payments, and whether the crew would share that subsidy. This is a matter for negotiation between the owners and the unions.
Many hon. Members asked about the minimum price scheme. My right hon. Friend will be discussing this with the Chairman of the W.F.A. shortly, and I cannot pre-judge the outcome of this. There has been a slight movement on both sides, but we should leave this for those who have statutory responsibility-the W.F.A. Questions have also been asked about the owner having to refund any part of the daily rate. The details of the new arrangement are still being worked out, but in the circumstances put forward there would be no question of an individual owner repaying part of the daily rate.
My hon. Friends the Members for Kingston upon Hull, North and Aberdeen, South raised the question of the I.R.C., with my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) keeping a watching brief. It would be wrong to say that this is yet another advisory body to which we shall not listen. It has relationships with other aspects of industry which can throw fresh light on the fishing industry.
My hon. Friend the Member for Kingston upon Hull, North was correct when he said that the industry as a whole needs considering and that part of the problem is the failure to adopt an aggressive marketing policy. This is borne out by the points which have been made about consumption. More attention should be paid to what happens to the fish when it leaves the point of landing and reaches the breakfast plate. Perhaps the I.R.C. has a role to play in this regard.
It may have been doing it for some time. The I.R.C, by reason of the fact that it has experience of other industries, may be able to cast fresh light on the problems of the fishing industry.
My hon. Friend the Member for Kingston upon Hull, North also referred to the conservatism of the fishing industry. I would not call anyone "conservative". I would rather say that perhaps the traditional aspects of the fishing industry should be changed.
Since so many of the valuable points have been raised from behind me, it is inevitable that a few remarks should be addressed in that direction.
The hon. Member for Moray and Nairn (Mr. G. Campbell) asked whether there was a move towards voyage rates instead of stonage rates. The movement has been quite marginal—only 20 boats out of 900.
I asked also whether the hon. Gentleman could state the Government's policy on this matter —whether it was the Government's intention to continue this movement.
This is not a movement of any significance. There is no basic change in our attitude. The movement could easily have been the other way.
The hon. Member for Banff asked whether the new legislation would cover a minimum price scheme for the whole industry. Legislation exists to enable a statutory minimum price scheme to be introduced if there were agreement between the White Fish Authority and the industry.
We all recognise the difficulties of the industry; they have been clear to us for a long time. Equally, we recognised that a change had to be made in our subsidy arrangements. There has been a general welcome for the arrangements which will be introduced, we hope, next Session. The right kind of pressure must be brought to bear on the industry and the industry must be given incentives to bring about the efficiency. This is the end to which the subsidies will be directed.
The hon. Gentleman has answered one short point about the minimum price scheme, but he has not made any statement on the latest situation for which several hon. Members on both sides of the House asked.
I said that there had been a slight change in attitude in the industry. This is a matter for the industry and the White Fish Authority. I can say no more than that.
The hon. Member for Moray and Nairn referred to the Cameron Committee and related it to the Moray Firth. He asked for comments about trawling in the Moray Firth. He will know as well as I do the complex mesh of arrangements which exist there. Because of that, we established the Cameron Committee. We shall have to see its report before we do anything about the matter.
I welcome the emphasis which has been put on the need for furthering the research and development work of the White Fish Authority and the other bodies involved. Undoubtedly research into the industry is important.
We need to bring not the least pressure on the marketing side of the industry. It is not a question of not catching fish; the trouble is that we have not projected fish as an alternative to other foodstuffs. In view of the concentration of import saving, the industry has an opportunity, if it is taken aggressively, to make an improvement—I do not wish to exaggerate it— in its present position.