Eighth Standing Committee
on Delegated Legislation
Monday 5 November 2001
[Miss Ann Widdecombe in the Chair]
Fishing Vessels (Decommissioning) Scheme 2001
The Chairman: Before I call the Minister, I remind members of the Committee that they must ensure that their mobiles are switched off and that their pagers are on silent mode.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Mr. Elliot Morley): I beg to move,
That the Committee has considered the Fishing Vessels (Decommissioning) Scheme 2001. (S.I. 2001, No. 3390).
Before I begin, I welcome you to the Chair, Miss Widdecombe. I have not previously served in Committee under your chairmanship. Your wise remarks, which contained some sound advice, have got the Committee off to an excellent start.
I recognise the difficult position in which the fishing industry currently finds itself. This scheme is part of a £22.5 million package of aid that I announced on 2 April. It represents an important contribution to dealing with the industry's current problems. One key problem faced by the industry is the imbalance between the size of the fleet and the stocks available to it. There is therefore a need for permanent restructuring. We have held discussions with the industry, and we have listened carefully to its views.
Including the schemes run by the devolved Administrations, £36 million of public money is being made available to the fishing industry for decommissioning. Decisions on the terms of the scheme were taken after full consultation with the industry, and wherever possible we have reflected its views. Applications are open to all vessels that are more than 10 m long, that have a category A licence and that have spent at least 75 recorded days at sea in each of the past two years. Such vessels must also be at least 10 years old. The scheme operates on a competitive tender basis, with bids ranked on a pound per gross tonne basis. In previous decommissioning rounds, bids have been assessed on the basis of pound per vessel capacity unit. However, pound per gross tonne is more directly linked to our multi-annual guidance programme objectives, and is therefore a more appropriate basis for ranking bids.
Successful applicants will be allowed to dispose of or transfer their fixed quota allocation units to another vessel owner or to a producers' organisation. They will have up to three years to complete the transfer of FQAs. Some within the industry felt that the FQAs from decommissioned vessels should be surrendered to the Department for Environment, Food and Rural Affairs for reallocation. I have some sympathy with that argument, but in the overall scheme it does not represent good value for money. Furthermore, there are mixed views in the industry about such a measure.
I considered restricting transfers of FQAs to specific geographical areas, but that turned out to be impractical. I have some sympathy with the argument that if a quota is surrendered, it may leave a fishery dependent area and go elsewhere. There is an established trade in FQAs, and implementing measures to prevent it is extremely difficult, which is why that was considered impractical.
The principal method of disposal of decommissioned vessels will be scrapping, but we shall continue to make provision for the preservation of vessels of particular heritage significance, which is a variation that we introduced under the previous scheme.
This is the first scheme since responsibility for fisheries issues was transferred to the devolved Administrations. It is therefore necessary to define which vessels belong to which scheme. That will be based on the port in which a vessel's licence is administered, which is in keeping with the definition used for other vessel-based grants. It will represent a vessel's home port and the geographical area with which it has the closest economic links.
The scheme provides flexibility for Ministers to set deadlines. I have already announced that applications must be received by 16 November, and successful applicants will be expected to have decommissioned their vessels and surrendered all licences and entitlements before 27 February 2002. We aim to let applicants know the results of their applications as soon as possible after the closing date so that they have maximum time to arrange for the disposal of their vessel.
Decommissioning is always a double-edged sword. It reduces the fleet but may have an impact on fisheries-dependent regions. We must deal with the major problem of fishing capacity and the amount of fish stocks that are available. That cannot be dealt with by market mechanisms, so there is a strong argument for this form of intervention and use of public funds, which will help those who intend to stay in the sector to remain viable and to plan for their long-term future.
Mr. Keith Simpson (Mid-Norfolk): I, too, am pleased to serve under your firm but fair chairmanship, Miss Widdecombe. We worked together in the previous Parliament in a somewhat different context, and I know that you will bring e''lan to the Chair.
As the Minister explained, the UK fishing industry is going through a very difficult time. He concluded, rightly, that it is no good looking only to market mechanisms to deal with the conundrum of how to preserve our fish stocks while allowing our traditional fishing industries to remain viable.
I do not represent a fishing constituency. Mid-Norfolk is land-locked, but its borders are close to traditional fishing areas such as King's Lynn, Yarmouth and Lowestoft, so although we are not directly involved in the bad times that they have been experiencing, there is a knock-on effect.
The decommissioning scheme is, above all else, about preserving fish stocks. That was stressed in the paper entitled ``The Case for Change'' by Dr. Joseph Horwood, DEFRA's chief fisheries science adviser, which he gave at a conference this summer. His conclusion states:
``Whilst there are many improvements that can be made to the CFP, and whilst the environmental dimension will be an increasing challenge, the single most important factor for the future sustainability of fisheries is the need to reduce significantly, and permanently, the size of international fishing fleets.''
We must consider not only whether the scheme meets that important criterion, but whether our fishing communities believe that the proposals are fair compared with the position of fishing communities in other European Union countries. People sometimes feel that complex negotiations and agreements have placed them at a disadvantage, and the onus is on the Government to ensure that even if our fishing communities do not like the final outcome, they believe it to be as fair as possible.
At the end of the previous scheme in 1996, there were 1,408 applications for decommissioning, of which 578 were successful and 314 were from English fishermen. At that time, a MAFF survey showed that 33 per cent. of fishermen who had not yet applied would consider applying, and that 71 per cent. of the industry believed that decommissioning was a good policy. Thus the scheme has the support of the industry, including the National Federation of Fishermen's Organisations.
However, the Government's decision to introduce the decommissioning scheme for fishing vessels rather contradicts the Minister's reply to a question on 21 July 2000 regarding whether he had any plans to introduce such a scheme. He said:
``We had envisaged that a limited fishing vessel decommissioning scheme might have been needed to meet our EU obligations to reduce capacity of fixed gear vessels. However, capacity in the lines and nets segment of the fleet is already within the MAGP IV objectives for end 2001, and the tonnage of shellfish fixed gear vessels is close to the 2001 objectives. We do not therefore plan to hold a decommissioning scheme in present circumstances.''[Official Report, 21 July 2000; Vol. 354, c. 372W.]
Will the Minister explain what has changed since that reply on 21 July 2000.
It cannot escape our notice that the fishing industry is still crying out for a firm and wide-ranging recovery programme to produce sustainability and to balance stocks with the fishing effort. That, of course, stresses the need for money, and I know only too well that the Minister is aware of how much money has been and will continue to be spent on such intervention.
The fishing industry throughout Europe faces innumerable problems, which occur not only in our own country but elsewhere. Massive increases in fuel costs and the added implications of regulations have exacerbated an already dire situation. Declining fish stocks and slashed quotas are most certainly not the only worrying factors.
We must emphasise the fact that United Kingdom fisheries are a national resource, and that whole communities throughout the country are dependent on the industry. As hon. Members know, during the past 20 years there has been a severe reduction in the size of our fishing fleet and the number of people directly employed, which has had a major impact on local fishing communities. That has created much anxiety in those communities and among their representatives in Parliament. The Minister is well aware that on 24 October the hon. Member for Waveney (Mr. Blizzard) had a debate in Westminster Hall on fishing communities and the regeneration initiative. The hon. Member for Great Grimsby (Mr. Mitchell), who is in the Committee, and others made a number of points. They may not be directly relevant to the issue before us, but I raise them because there is a connection and, if you will allow me, Miss Widdecombe, I shall point that out. The hon. Member for Waveney stated:
``It is clear that the country and the Government need a plan for the future of fishing, which we can ask the Treasury to fund.
He went on to outline the problem.
I have presented a picture of how the delivery process simply did not work and how policy objectives set in Westminster went amiss.''[Official Report, Westminster Hall, 24 October 2001; Vol. 373, c. 135WH.]
I am raising the matter because the feeling among parliamentarians and the agriculture and fishing communities is that time and again in debates on DEFRA subjects the Government fail to deliver. Does the Minister believe that the scheme that he outlined will meet the requirements of the fishing community? The issues that he highlighted, but put on one side, may come back to haunt him in a few months, if not a few years. The programme must be comprehensive and sustainable. It must finance not only decommissioning, but investment.
The European Commission recently produced a Green Paper on the future of the common fisheries policy, and the Government produced a formal response which set out the need to establish the right balance between fishing effort and fish stocks, to strengthen the involvement of fishermen and to give greater priority to environmental issues. That will be the basis for the final decision on changing the CFP by December 2002, which is barely a year away. I look forward to implementation of those recommendations and to hearing the Minister outline the details at the Dispatch Box.
A particularly learned report from the Lords Select Committee on the European Union in December 2000 highlighted the well-versed shortcomings of the CFP. The Committee cannot but remember one of the report's conclusions. Paragraph 20 states:
``Many of the failures of the CFPparticularly the failure to bring about real reductions in fleet capacitycan be attributed to a lack of statesmanship and political will on the part of the Council.''
That relates to a point that I made at the beginning of my contribution: the fishing community feels that the United Kingdom does not always get what it deserves.
At the last EU quota negotiations, the Minister claimed victory because the cuts agreed were not as big as those originally proposed by the European Commission. I realise that there is a long history of Fisheries Ministers from both major political parties making such claims, but as the chief executive of the Cornish Fish Producers Organisation said:
``It is a political game. The Commission ask for more so ministers can then return home saying that they secured a better deal. The fact is we are being told to cut catches by half and that will mean our boats will not be viable.''
We all agree that we must see an end to this political game. The livelihoods of entire fishing communities depend on the annual quota negotiations, and no amount of spin can detract from that fact.
DEFRA has admitted that the tender scheme has allowed the Government to pay awards to fisherman that are
``considerably below the perceived commercial value of the vessel.''
I remind members of the Committee that DEFRA statistics have shown that, as measured by insurance value, the value of capital removed from the industry as part of the 1996 decommissioning scheme represents £80 million, or approximately £913 per vessel capacity unit. The average price paid per VCU throughout the four-year period was £411. I hope that all members of the Committee believe that the vigilant control of public expenditure is a good idea. However, I suspect that many members of the United Kingdom fishing community would say that DEFRA has not paid sufficient compensation. I should be obliged if the Minister would comment on that.
What really worries the English fishing fleet about the scheme is the lack of equitable treatment of fishermen in Scotland and Northern Ireland by their respective devolved Governments, when compared with the United Kingdom Government's treatment of fishing vessels in England. Many fishermen in Scotland have been able successfully to sell their vessels to third world countries, rather than simply disposing of them as scrap. The scrap industry has diminished in recent years, and fishermen can benefit financially by selling their vessels to interested parties. Why does the scheme not allow English fishermen to sell their vessels to third world countries?
The implications of the diminished UK scrap industry lead me to my next point. Given the time scale of the scheme as outlined by the Minister, the industry will be hard-pressed to scrap such a vast number of vessels by the deadline of 27 February 2002. The scrap industry's capacity has been reduced, which has prompted the NFFO to suggest that the deadline be extended. Will the Minister consider extending the deadline?
I am not, I hope, putting these questions to the Minister in a carping and negative way. The Conservative Opposition support the scheme because it is the best available, but the Committee should ask the Minister further to explain his comments. I hope that we can persuade the fishing industry that we are alive and alert to its anxieties, and that we can make certain that, in difficult circumstances, English fishermen get as good a deal as fishermen in Scotland, Northern Ireland and other EU countries.