Fisheries payments to the Scottish Ministers

Fisheries Bill – in a Public Bill Committee at 9:15 pm on 17th December 2018.

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‘After exit day, the Secretary of State must make available to the Scottish Ministers each year sums which are at least equivalent to the sums made available to the Scottish Ministers in

Brought up, and read the First time.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

I beg to move, That the clause be read a Second time.

It is a pleasure to serve under your chairmanship, Mr Gray. I bet you are delighted to be here in the final sitting tonight; the rest of the House has probably adjourned.

The new clause would ensure that the vital contribution that is made by the current European Maritime and Fisheries Fund to support sustainable growth in Scottish fisheries and aquaculture, inland waters, the seafood supply chain, conservation of the marine environment, and growth in jobs in coastal communities will be maintained in the future.

However, I must also add that the UK Government should be doing more to assess future opportunities such as rejuvenating coastal communities, and identify where infrastructure and subsequent funding might be required to maximise those opportunities. That would result in a bottom-up and needs-based approach that would lead to the establishment of a proper fund and the associated long-term planning. If we are to achieve the nirvana of catching more fish, landing them in Scottish and UK ports and processing them, further investment will clearly be required. The replacement EMFF would be an ideal vehicle for investment leverage.

Devolution is key here. We cannot possibly allow a repeat of DEFRA stealing the £160 million convergence uplift that is due to Scottish farmers—a redistribution that could have significant effects on future funding to farmers once historical payments are taken into account under any new UK scheme. Scotland currently receives 44% of EMFF moneys; that is obviously way higher than the pro rata figure per head of population, but it makes sense given the demographics of the fishing industry. I must put it on the record that there is no way we would ever countenance any future funding being allocated on a Barnett basis.

The situation appears even more stark when we look at the 2017 industry figures: 55% of employment in the sector overall, 58% of fishing industry employment and 75% of aquaculture industry employment are in Scotland. Scotland also accounts for 50% of fish processing, 67% of landings in the over-10-metre sector and 32% of landings in the under-10-metre sector. In a devolved context, it therefore makes sense that post Brexit, as an absolute minimum, the same allocation be made to the Scottish Government in the interest of effective distribution. Indeed, from the statistics I have cited, there is a clear case that Scotland should have further funding. I certainly would not want to see that happen to the detriment of other communities in the UK, but at the very minimum we should receive the equivalent of what we get now.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

I support new clause 2, which is a frankly common-sense measure. It is imperative that, as a result of the UK leaving the European Union, the industry must have both the certainty and the financial underpinning that it requires. The new clause would ensure that, so surely it must appeal to Government Members who want to provide such certainty. I appeal particularly to Scottish Conservatives present, who surely want to uphold the interests of Scottish fisheries. Here is a real test of whether they are part of Team Ruth or Team May: will they uphold the interests of the Scottish fisheries?

The removal of the EMFF presents a significant challenge across industry in Scotland. My own experience—

Photo of David Duguid David Duguid Conservative, Banff and Buchan

The hon. Gentleman will be aware of the announcement made recently—last weekend, I think—about funding in the implementation period. As the hon. Member for Kilmarnock and Loudoun will probably also appreciate, it was not Barnettised; I think the overall figure was £32.7 million, with £16.4 million going to Scotland. Does the hon. Member for Glasgow North East welcome that?

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

All I am looking for is a simple guarantee that there will be no financial detriment to Scottish fisheries. If you can encourage your colleague the Minister

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

Sorry, Mr Gray. If the hon. Gentleman can encourage his colleague the Minister to stand up and give that assurance, we will all be very happy and so will Scottish fisheries. That is all we are looking for—not smoke and mirrors or absolute figures cited in isolation, but an absolute guarantee that there will be no financial detriment as a result of this change.

As I was saying, there is a challenge facing the whole of Scottish industry because we are not sure what the so-called shared prosperity fund will look like. It will replace several models of European funding—including regional selective assistance, which I know from my former role at Scottish Enterprise was a crucial tool for promoting industrial development in Scotland—so we have to be very certain that there will be no financial detriment to industry as a result. An assurance to that effect would be welcomed by Scottish industry, including the fishing industry.

It is incumbent on the Minister to support the new clause because it would provide that degree of certainty. I thought that that was what the Conservative party was all about: providing certainty to business and allowing enterprise to flourish. Is that not music to your ears? I think you ought to stand here—

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

Sorry, Mr Gray—it is rather late and I am forgetting my pronouns. I think they ought to stand here and support the new clause.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Northern Ireland)

I have essentially reached the same conclusion as the two previous speakers, for slightly different reasons. The EMFF money has been of massive significance to the industry and to communities around the UK coastline. I support some sort of guarantee that that money will continue to go to our fishing industries and communities. The amendment deals, of course, only with guaranteeing that the money will continue to go to Scotland, but it would be unthinkable that the same would not then apply to fishing communities in Wales, Northern Ireland and, indeed, England. I would not start from this position; but ultimately, from the point of view of the industry in the communities, I think the amendment would get us to where we need to be. For that reason I support it.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I disagree with putting a provision of this nature in the Bill, for reasons I shall explain. It is very important with legislation to separate the legal powers that we seek, to engage in such activities as giving financial assistance to the fishing industry, from the way those obligations are funded. That is, and always has been, predominantly a matter for the spending review. Such a provision would be unhelpful.

As to the legal powers, we have set out in clause 28, for England, the legal powers we need to make grant payments; so we are not, as was suggested, relying on some shared prosperity fund. There will be bespoke grants for the fishing industry, and we set out the powers to do that for England in clause 28. Clause 28(8) sets out the fact that there will under schedule 4 be similar powers for the Welsh and Northern Ireland Governments.

Ironically, at the time the Bill was drafted and on Second Reading, the Scottish Government told us they did not want the powers; so I put it to the hon. Member for Argyll and Bute that before the Scottish Government start to say that we must guarantee the money, they should work out how they will guarantee how they will get the legal powers to pay any money out in the first place. They are now asking us whether we may be able to make amendments later, to include those powers.

At the moment there is clearly a gap in the Bill, but that is a consequence of the position that the Scottish Government have adopted, so that they do not have the legal powers to make any grant payments.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Northern Ireland)

The Minister said earlier that the money should come through the spending review, as has long been the case. The EMFF funds have never been part of the spending review; he should know that. The amendment would guarantee the money as a funding stream for the future. What guarantees are there for that funding stream in clause 28?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

EMFF comes from the EU budget and is part of the EU’s budget when it is set. It is typically set for a period of five years and is reviewed periodically. As recently as 10 December, the Secretary of State announced that the Government will put in place new domestic long-term arrangements for post-2021, which will enable us to create schemes similar to the EMFF in each of the four Administrations. In addition, he announced an extra £37.2 million of funding to boost the existing EMFF programme, to help the fishing industry prepare for the opportunities coming its way, as my hon. Friend the Member for Banff and Buchan pointed out.

I do not, therefore, believe that the new clause is necessary or appropriate. We have demonstrated, as recently as last week, our commitment to funding fisheries in the future. The Bill makes explicit provision for grants to be made in three of the four Administrations and I would simply say that the hon. Member for Kilmarnock and Loudoun should first consider obtaining the legal powers.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport

In response to an earlier intervention from the hon. Member for Stafford the Minister set a baseline, effectively, on relative stability—about what that meant. Is not it appropriate that there is also a baseline set on funding shares, which is effectively what the amendment says—so that no pennies are lost for Scotland or, indeed, any other part of the UK? Is not that a key attribute, which should be embedded, to follow the logic of what the Minister said to one of his hon. Friends?

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs 9:30 pm, 17th December 2018

I do not think it is the same logic at all. That was a different clause, addressing a different issue—a negotiation with the European Union or a bilateral negotiation with a different country. It was not at all about a collective position that a Government might take with the Treasury. That is different. The Treasury might sometimes adopt positions that not everyone would agree with, but it is certainly not a foreign country; it is part of the Government. For all those reasons I oppose new clause 2 and I hope the hon. Member for Kilmarnock and Loudoun will withdraw it and perhaps consider what might be done on Report to ensure that Scotland has the legal powers it needs to do this.

Photo of Paul Sweeney Paul Sweeney Shadow Minister (Scotland)

Even though the new clause may not succeed, it would be worthwhile as a matter of record if the Minister could provide assurances to the industry that it is the Government’s intent that there should be no financial detriment as a result of the changes to the EMFF and the transition to the new financial frameworks that may supersede it.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I think we have demonstrated our intent in the announcements we have made just in the last week that there will be new schemes to replace the EMFF, and the fact that the current scheme will be boosted by £37 million. I oppose new clause 2.

Photo of James Gray James Gray Conservative, North Wiltshire

Mr Lefroy, you look as though you are trying to get my attention, or the Minister’s attention. If you wish to speak, you can just stand up.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

Thank you, Mr Gray; I was not sure whether I could come in once the Minister had finished. The new clause comes to an important point regarding both fisheries and agriculture. Until now we have had one line on the budget, something like £8 billion to £10 billion a year net, that we have been paying to the European Union. That includes subsidies in fisheries, agriculture and many other areas, such as regional funds. All those budget lines will now be on the national budget, and they will not be guaranteed in the same way that they were before, through the mechanisms of the common agricultural policy or the common fisheries policy.

I think there is a justifiable concern across the fisheries sector and across the agricultural sector that, because these budget lines will now be subject to Treasury action—hopefully positive Treasury action, but not necessarily—there will therefore potentially not be the same kind of long-term commitment to fisheries and agricultural funding that we see under the CFP and CAP. Would the Minister very kindly give us some fairly strong reassurances on the record about the Government’s intentions on fisheries funding for the medium to long term, and not just in the short term? Obviously the CAP is ultra vires here.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I am grateful to my hon. Friend for making that point. I understand his anxiety; this is the first time in half a century that we are taking control of these policies. I will simply say that the point he raises could be applied to any other area of Government spending. We could argue that there is no guarantee that we will increase spending on the national health service or on schools, and yet we do, because of political pressure brought to bear by hon. Members on both sides of the House, not least on this side. Of course, it is always open to hon. Members, if there is a Budget put forward on the Floor of the House with which they disagree and which does not contain the elements they seek, to vote it down. When we leave the European Union, new checks and balances will come in, and those checks and balances will be the opinion of hon. Members such as him, not the European Union.

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

My hon. Friend is right, but he knows perfectly well that we are not the Bundestag, where they go through budgets line by line; in this House it is in effect an all or nothing thing. Nobody is going to put a Budget in jeopardy over an area such as fisheries, which—absolutely vital though it is—is a relatively small part of the Budget. That points to a real problem that relatively small areas of public expenditure, which are nevertheless extremely important, have in the way we deal with budgets.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

I understand that point, but conversely, one could say that the DEFRA budget is small compared with other Departments such as the Department for Work and Pensions or the Department of Health and Social Care. Big changes to our budget actually make a small difference to the overall maths, so far as the Treasury is concerned, so that argument can be made either way.

As I said earlier, we also have the levies, charges and tender incomes referred to in earlier clauses. I gave an undertaking that, on Report, we will seek to give more clarity to hon. Members about how those funds might be deployed to support our fishing objectives.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

The Minister is optimistic about the future prospects and in thinking that I will withdraw the new clause. I thank the right hon. Member for Orkney and Shetland and the hon. Member for Glasgow North East for their contributions.

I think the hon. Member for Stafford actually made the point for me when he expressed his concerns, and looked for reassurances from the Minister, that the money will go to the Treasury. Frankly, I do not trust the Treasury. I say to the hon. Member for Banff and Buchan that at one point there was a £1 billion fund for carbon capture and storage that looked like it was going to go to Peterhead, but the Treasury overrode the Department for Business, Energy and Industrial Strategy and withdrew the funding. That is the problem with funding reviews by the Treasury: it can put a red pen through the funding at any time it likes. The Treasury holds the purse strings.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

The general point that I think the hon. Gentleman is trying to make is that, while we are in the EU, we get the EMFF. However, does he accept that there is no guarantee of that same level of EMFF funding for member states in the future?

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

No, there is not. That will be part of the settlement with the EU. However, the point is that the Treasury will control the funding. It will come back to the UK Government, and we are asking for a guarantee of funding at least equivalent to EMFF. It will be in the gift of the UK Government to do that. That is the whole point of the new clause, and that is why I was drawing attention to the fact that no guarantees are given in the Bill; it is left to the Treasury and is therefore a risk.

The Minister made an argument about the legal powers. The Scottish Government obviously believe they have the legal powers to give the grants, but that is an argument for another day. That would not stop that money being guaranteed for Scotland. I take the point of the right hon. Member for Orkney and Shetland that other areas will want the same guarantees. That is fine. I touched on how, going forward, I would like to see Scotland get more funding, but not to the detriment of other fishing communities around the UK. With that, I will press the new clause to a vote.

Question put, That the clause be read a Second time.

The Committee divided:

Ayes 8, Noes 9.

Division number 16 Fisheries Bill — Fisheries payments to the Scottish Ministers

Aye: 8 MPs

No: 9 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly negatived.

New Clause 3