Fishing Vessels (Grant)

Part of the debate – in the House of Commons at 12:00 am on 1st December 1975.

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Photo of Mr Alick Buchanan-Smith Mr Alick Buchanan-Smith , Angus North and Mearns 12:00 am, 1st December 1975

Nothing indicates more clearly the hand-to-mouth basis on which the Government work. Before a Committee of this House, they have no idea what they are to do for the fishing industry because they are awaiting crucial returns, but within 24 hours they are able to make an announcement. I cannot believe that even this inefficient Labour Government had no idea in the debate in Committee what they were going to do. If the hon. Gentleman is saying that the Government made up their minds within 24 hours of the Committee what the subsidy would be, it suggests that the Government have lost their sense of direction altogether. That is also the feeling in the fishing industry.

This episode typifies the attitude that the fishing industry has come to expect from the Government. I say seriously and with respect to the hon. Gentleman that if that is the sort of argument he intends to put to us, we will not accept it. Nor will the fishing industry be kidded. I move among fishermen and talk to them, and I know they feel that the Government act in a hand-to-mouth way in dealing with the fishing industry.

The hon. Gentleman mentioned, quite rightly, the help which the industry has received, and which I acknowledge—£6,250,000 for the first six months of this year. Has that sum been paid out in full? If not, what balance is left? Is the remainder to be paid out? Is the fact that a balance still remains due to administrative delay or delay in making claims? Does the hon. Gentleman expect the full sum to be paid out?

My information is that in the first six months of this year the Scheme cost not £6¼ million but £4¼ million and that the full cost of it did not come up to the Ministry's expectation. I should like clarification of this matter. If the cost was not £6¼ million, I should like to know what it was. There may have been some misleading of the industry in this respect.

I turn to the details of the Scheme and the position in the industry. The Minister of State quite rightly said that conditions in the industry improved in the third quarter of the year, and that it was on the basis of this improvement that the Government decided to reduce the rates and terminate the Scheme at the end of the year. I should like to consider for a few moments the question of costs in different sections of the industry. My hon. Friend the Member for Westmorland (Mr. Jopling) will deal more specifically with the English side of the question and I hope that the House will forgive me if I deal with the Scottish side, of which I have first-hand experience and on which I can more readily obtain information.

The Minister of State spoke of an improving situation in the industry, but in fact it is a loss situation. If I were an outsider listening to the debate who knew nothing about the industry, I should be excused for thinking that the industry was going into an improving situation, perhaps a profit situation, but nothing could be further from the truth.

I wish to deal with the three sections of the industry which interest me. The first is the deep-sea industry. The hon. Member for Aberdeen, North (Mr. Hughes) and my hon. Friend the Member for Aberdeen, South (Mr. Sproat) have an intimate knowledge of this matter. I have the figures relating to the number of boats in operation and the total average loss per boat, but I prefer to deal with the matter on a daily basis and not to burden the House with statistics. The figures which I shall use have been presented to the Government and have been audited. Therefore, they have not been simply plucked out of the air.

For the six months to 30th June 1975 the average loss per day of each of the 58 vessels operating from Aberdeen in the middle- and distant-water Scottish fleet was £86. Depreciation is £72—10 percent. on the insurance value of the vessel, which is very much below the replacement value. For the first six months of this year, the average operating loss on every day that those vessels put to sea was a total of £158. There was a subsidy of £56 per day, leaving an average operating loss of £102 per vessel for every day that it put to sea.

There has been an improvement in the two months for which I have the latest figures, July and August. There is normally an improvement in the third quarter because the weather is better and the vessels spend more days at sea. For those two months, the daily loss fell from £86 to £63. The depreciation is £76. Depreciation continues regardless of operating costs. Therefore, the total operating loss is £139 per day against an average subsidy payment per day of £53. There was a substantial loss of £86 a day for every day that the boats were at sea.

That is the improving situation of which the Government speak. Indeed it is an improving situation, but it still leaves the industry in a loss position. What other industry, except perhaps a nationalised industry or the motor car industry, can continue working every day and make a loss of that kind? The industry cannot continue on that path. I beg the Government to realise that fact.

That is perhaps shown most particularly if we compare the number of vessels that were in Aberdeen two years ago with the number there today; there has been a reduction of about 35. I accept that this has not all happened during the last six months, but the loss has accelerated in the past 12 months. The Scottish middle- and distant-water fleet comprises about 80 vessels—the all-time low for that fleet. The facts of what is happening in the industry are before the Government and the House.

I turn to the overall position for the year to 30th September. I am working on estimates; audited figures are not yet available. For Aberdeen vessels, the loss will average about £30,000 per vessel after subsidy has been paid. That is the measure of the financial crisis facing the industry.

The inshore industry is important not only to places such as Aberdeen and Granton but to smaller villages and ports around the coast. For the boats fishing for white fish the situation is not quite so bad, but for the herring industry the situation is serious.

First, I shall deal with the Scottish white fish industry. I have had discussions with the White Fish Authority, which has supplied figures. About 400 vessels of between 60 ft. to 80 ft. in length fish for white fish from Scotland. For the three months June, July and August—the most recent period—there was an overall loss of £120,000 before depreciation for those 400-odd vessels. If depreciation is added, I am told that the figure is boosted to £2½ million. Therefore, the situation is extremely serious. Considerable loss has been suffered in that section of the industry.

I made some inquiries towards the end of last week to obtain more recent figures for the smaller boats which fish for white fish. Anyone who knows the industry will appreciate that it is harder to get figures for smaller boats. From inquiries made of fish salesmen, I managed to obtain a fairly representative sample of 28 vessels ranging from 50 ft. to 80 ft. in length. Smaller boats have lower operating costs, and the one gleam of optimism that I would grant to the Minister is that the loss has been only about £200 over this period. However, depreciation of £800 has to be added to that figure and, therefore, it is evident that these smaller boats were operating at a loss of £1,000 per boat—according to this sample—over that three-month period. Even in a section of the industry which has been doing better over the past three months, there is an average loss of £1,000 for every boat in the group.

The situation is most serious in the herring industry. I have been unable to get precise figures, although some of my hon. Friends may have been able to obtain figures over the weekend. However, I shall put three figures before the House. This section of the industry has been subject to the same costs as the rest of the industry—an increase of about 22 per cent. compared with a year ago—but it has seen a reduction in the weight of its catch, from 1st January to the Middle of October, of about 26 per cent., and a fall in its value is about 28·6 per cent. as compared with the similar period in the previous year.

With that kind of situation, a reduction in the catch—and it has suffered a far greater fall than the white fish industry—a very dramatic drop in value and a 22 per cent. increase in costs, we must realise the serious situation facing many of our herring fishermen.

Here I come to my third question to the Minister. This applies specifically to the inshore industry, the herring industry and the Scottish white fish industry. In the face of this economic situation and the reduction and subsequent withdrawal of the subsidy, what is the Minister's view of the position of the Scottish inshore fishermen in relation to those people meeting their repayments of the capital due on the loans which they have had from the Herring Industry Board and the White Fish Authority? My information is that about 40 per cent. of commitments that were due to be met in repayments at the end of September have not been met.

The inshore industry in Scotland has an almost totally clear record of always keeping up with these repayments of loans and interest in regard to the very useful grants and loans it receives from the statutory bodies. I understand that the authorities are being generous, as the Minister has indicated in a previous debate, in not pressing for these payments. However, if this figure is true and 40 per cent. of inshore fishermen are behind with their payments, it is a frightening matter and we must realise what it means. It means not only that repayments are being delayed but also that interest is beginning to accrue on what has not been paid. This is adding to the burden on those fishermen.

I hope very much that the Minister will be able to give some more reassuring picture. Again this is only an impression that I have been able to gain, but it has been gained from those who have first-hand experience of the industry. If 40 per cent. are falling behind with their loan repayments, albeit so far for only a short period—we are only at the end of November—this is something that bodes very ill for the future Scottish inshore industry.