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Public Bill Committee Debates

Decommissioning of Fishing Vessels Scheme 2007

The Committee consisted of the following Members:

Chairman: Dr. William McCrea
Barlow, Ms Celia (Hove) (Lab)
Bradshaw, Mr. Ben (Minister for Local Environment, Marine and Animal Welfare)
Bryant, Chris (Rhondda) (Lab)
Curtis-Thomas, Mrs. Claire (Crosby) (Lab)
Field, Mr. Frank (Birkenhead) (Lab)
Goodwill, Mr. Robert (Scarborough and Whitby) (Con)
Henderson, Mr. Doug (Newcastle upon Tyne, North) (Lab)
Huhne, Chris (Eastleigh) (LD)
Swayne, Mr. Desmond (New Forest, West) (Con)
Ussher, Kitty (Burnley) (Lab)
Vis, Dr. Rudi (Finchley and Golders Green) (Lab)
Wallace, Mr. Ben (Lancaster and Wyre) (Con)
Walley, Joan (Stoke-on-Trent, North) (Lab)
Watts, Mr. Dave (Lord Commissioner of Her Majesty's Treasury)
Wiggin, Bill (Leominster) (Con)
Williams, Mr. Roger (Brecon and Radnorshire) (LD)
Wilson, Mr. Rob (Reading, East) (Con)
Susan Griffiths, Committee Clerk
† attended the Committee

Ninth Delegated Legislation Committee

Wednesday 14 March 2007

[Dr. William McCrea in the Chair]

Decommissioning of Fishing Vessels Scheme 2007

2.30 pm
The Minister for Local Environment, Marine and Animal Welfare (Mr. Ben Bradshaw): I beg to move,
That the Committee has considered the Decommissioning of Fishing Vessels Scheme 2007 (S.I., 2007, No. 312).
I am grateful to the Delegated Legislation Committee for arranging this debate. This statutory instrument will allow us to run a targeted decommissioning scheme for vessels over 10 m long operating in the western channel sole fishery in International Council for the Exploration of the Seas area VIIe. The Government believe that that is vital to enable fishermen dependent on that threatened stock to make an assessment of whether to remain in the industry, and to ensure sustainable stocks of sole. To that end, we have put aside £5 million for the scheme.
We have also negotiated with the European Commission to secure a fair deal for Cornish boats, and we have listened to the concerns of fishing industry leaders by increasing the amount of money available per vessel to reflect the current value of boats and licences. We also plan to put in place criteria for prioritising which boats should be decommissioned. The criteria will mean that we are better able to target those boats that have the biggest impact on the fishery, rather than those that are simply the cheapest to decommission. I will go into more detail shortly.
The SI covers, first, the criteria that vessels must meet to be eligible for decommissioning; secondly, details of how to apply for a decommissioning grant; thirdly, details of how we will award that grant; and, fourthly, details of what successful applicants must do once they have been offered a grant.
We thought long and hard before taking the decision to run another decommissioning scheme for fishing vessels. Fleet capacity in the UK has been decreasing over a number of years as fish stocks have declined. However, the reduction in capacity has not been in step with the reduction in opportunity. Consequently, some excess capacity in the industry has been bridged by illegal landings, fishermen operating at a loss, delaying investment, or a mixture of all three.
We looked at the possibility of running a general decommissioning scheme open to all larger vessels, but after looking at studies of previous general schemes and after taking current economic thinking into account, we concluded that such schemes are not the most effective way to reduce fleet capacity. That is mainly because many owners of decommissioned vessels use the grants to modernise another vessel, to buy a new vessel and licence or to fund retirement when they would have left the industry anyway. So, while decommissioning permanently removes capacity, the reduction is partially offset by the use of grants for vessel purchase or modernisation. In addition, repeated decommissioning schemes create an expectation that delays fishermen from making assessments about whether to remain in the industry.
Like others, the south-west beam trawl fleet, which the proposed scheme targets, may have delayed making an assessment of its future in the industry in the expectation of a general decommissioning scheme. However, it faced the additional uncertainty of the prospect of a long-term management plan for the sole stock in the area. Now that the management plan is about to be agreed, a decommissioning scheme for vessels in that fishery will allow owners to make an assessment of whether to remain in the fishery, to diversify or to leave based on a long-term view of prospects.
Scientific evidence shows that area VIIe sole stocks are near or at a historically low level, caused mainly by over-fishing, which has caused a downturn in the profitability of vessels in that fishery, exacerbated by recent high levels of fuel prices, as beam trawling is a fuel-intensive method of fishing. For the sector to be sustainable under current quota limits and fuel prices, there has to be a reduction in the fleet. Running a small, targeted decommissioning scheme for beam trawlers that are active in the area covered by the management plan seems most likely to offer value for money, as the reduction in capacity and effort from the fishery should help the plan to succeed.
In determining how the scheme will work, we have decided to keep the basic eligibility criteria the same as those for previous schemes, but there will be an additional requirement that candidate vessels must have been allocated days under the current days-at-sea scheme for area VIIe sole. As I mentioned at the outset, we have also decided against the previously used scheme, which simply selected the cheapest vessels for decommissioning, and risked ranking redundant vessels more highly than those which had the most impact in terms of conservation. Instead, we have chosen a vessel ranking system that takes into account the value of the bid per tonne of capacity to be removed, the fishing effort and the amount of sole caught in area VIIe during a reference period.
Bill Wiggin (Leominster) (Con): One thing that I hope the Minister will touch on before he closes is why it is necessary to allow the quota to remain. He has taken into consideration the days-at-sea element of fishing effort in defining the type of vessel that will be eligible. However, if he allows the fishermen to retain the quota, the problems of fishermen refurbishing other vessels or reinvesting, which he mentioned earlier, continue. Why does he not take the quota back too, when he decommissions?
Mr. Bradshaw: The quota is not ours to take back. Quotas are set, and they are owned by the skippers of the vessels, who can transfer them to another boat. We are not able to take that quota back, but we have reduced the quota year on year and I will give the Committee the figures in a moment. I urge the hon. Gentleman and anyone else who is interested in the technicalities of the matter to take the opportunity of having a technical briefing with my officials, because the criteria are extremely complex.
The system should remove from the fleet vessels that have the greatest impact on sole stocks in area VIIe. All vessels fishing in the area will be eligible for the scheme; vessels with more fishing effort and higher catches of sole will rank more highly. The £5 million set aside should allow us to decommission up to 12 boats. At present, about 60 vessels would meet the basic eligibility criteria for the scheme.
The arrangements for funding the scheme are more complicated than for previous ones. In choosing to run the scheme for vessels prosecuting the area VIIe sole fishery, payments for vessels based outside Cornwall will be made under the Financial Instrument for Fisheries Guidance, or FIFG, and will be made upof 50 per cent. from FIFG funds and 50 per cent.from Government expenditure. However, there is a possibility that some of the eligible vessels will be based in Cornwall, which, thanks to this Government, isan objective 1 area—a region whose GDP is less than 75 per cent. of the Community average—and it receives its own budget for FIFG payments.
The Cornwall Monitoring Committee, which controls the Cornish budget, has no remaining funds in the decommissioning budget line, and has committed its budget to other areas. Consequently, we sought and received permission from the European Commission to use state money fully to fund any successful eligible Cornish vessel. That will not contravene state aid rules.
We also listened to members of the industry who pointed out that the maximum payments available under the FIFG regulation were not high enough to cover the current values for vessels and licences. The Commission agreed with our assessment and has agreed to our paying more. We set our own maximum level of £3,500 per tonne for bids, which is based on figures indicated to us during the consultation period and is about 16 per cent. higher than the current EU maxima. We did that to encourage applications for the scheme because full utilisation of the available funds will offer the management plan the best chance of success.
The previous approach to decommissioning without a sharp focus on stock conservation would not now provide the best value for money, and the proposed scheme will be successful in protecting stocks.
2.37 pm
Bill Wiggin: First, I put on record that I gratefully accept the Minister’s kind offer of a technical briefing.
Decommissioning has an important role in fisheries management. One of my first impressions from the Minister’s reply about fishing boats being decommissioned was that, of course, we cannot take away the quota because it belongs to the fishermen, but, equally, so do the fishing boats, which is why there is decommissioning. I am not sure that the logic works completely, but we will revisit the matter in due course.
The scheme needs to be put into the context of the proposed sole management plan and I hope that the Minister can confirm whether the plan will still be formalised at April’s Fisheries Council. Will he also give further details of the methods that will be used by the UK and other EU countries, specifically France, further to reduce fishing effort as planned for 2010 to 2012?
From a joint statement made by the Council and the Commission, it seems as if Europe wants to reduce fishing effort in area VIIe in 2010 to 2012 by 15 per cent. compared with the 2007 level, having already reduced the level between 2005 and 2007 by 20 per cent. As I understand it, that is to be achieved through a reduction in days at sea. Does the Minister think that that will be sufficient to recover sole stocks and manage them at a sustainable level? Aside from the planned reductions in the total allowable catch, what other measures does he think are necessary? Moreover, is there likely to be any further area VIIe decommissioning?
Decommissioning is supposed to bring environmental benefits and the risk assessment states that the scheme
“should have a small beneficial effect on the marine environment”.
“Small” is not specific, and I hope that the Minister will elaborate further on what he means by that. Does he know by how much the scheme will improve local stocks or reduce the damage to the sea bed surface, for example, or the impact that it will have on discarding?
A vessel owner who qualifies for a decommissioning grant will still retain their fixed-quota allocation, which can then be sold or leased. Given that in the last couple of years landing area VIIe sole has been within ahair’s breadth of the maximum—in 2006, uptake was 99.8 per cent. and in 2005 it was 98.5 per cent.—does the Minister think that it is likely that the quota from a decommissioned vessel will still be used? Following on from that point, how will the proposed marine Bill have an impact on area VIIe fishing? I know that the White Paper is out tomorrow, but if there are any proposed measures that will assist us with that discussion, it will be helpful if the Minister could let us know.
Decommissioning schemes in the past have usually not been regarded as particularly successful. Fishermen have, for example, reinvested the money in other boats, as the Minister said. Does he expect that the vessel owners who decommission will use that money to upgrade other vessels? Given the targeted nature ofthe scheme, I hope that it will be different and bring benefits to the environment and to the fishermen affected.
Can the Minister update us on plans for future decommissioning schemes? The Prime Minister’s strategy unit report, “Net Benefits”, supported the need for a certain amount of decommissioning: some 13 per cent. of the white fish sector. What further studies are the Prime Minister, the Department for Environment, Food and Rural Affairs and the European Commission conducting to look into the effect of decommissioning on fish stocks and fishing communities? I acknowledge that the EU has given permission to pay a higher rate for this scheme than the usual maximum, and that is welcome.
How much more interest does the Minister think that that higher rate will attract? It is likely that that will set a precedent for future schemes affectingUK fishermen. I understand from the regulatory impact assessment that eight to 10 vessels will be decommissioned. I do not know if that is correct; the Minister mentioned 12. If there is insufficient funding around the time of the scheme, when will there be a further scheme to match potential demand?
The Minister may be aware that when the SI was debated last week by their Lordships in the other place, Lord Rooker stated that £5 million
“should allow for the decommissioning of up to 12 boats.”—[Official Report, House of Lords 7 March, 2007; Vol. 690,c. GC21.]
It would be interesting to find out why DEFRA thinks that 12 is now the right figure instead of 10 or eight.
It says in the explanatory memorandum that for
“the scheme to be successful, there needs to be sufficientnumbers of applicants to make the bidding for grant funding competitive.”
Can the Minister let us know how many applicants will be needed for there to be a sufficient number, and if there is not a sufficient number, will the funding for decommissioning still be made available to those who applied? The RIA also states that there are 58 vessels that have landed sole caught in area VIIe in 2005 and 2006. How many of those will fulfil all the criteria of paragraph 2, and what is the time frame for the application process? When will it begin and when will it end?
The awarding of decommissioning grants appears to involve a somewhat elaborate scheme, whereby the Secretary of State devises a ranking system taking into account the criteria outlined in paragraph 4(5) of the SI. Those criteria are the bid figures: the vessel’s tonnage and the size of the sole catch. However, it does not really specify how the ranking system will work. For example, we do not know whether it will result in a higher ranking for vessels with higher sole catches, or ones with larger tonnage. It would be helpful if the Minister could let us know how vessels will be ranked, and the formula that he will use to do that.
The statutory instrument states that the Secretary of State must allocate decommissioning grants to the highest ranking vessels until there is no longer any of the £5 million left. I note that the RIA estimates that the vessels with the highest tonnage will qualify, and that that the figure may be some £1.3 million, but it does not leave a great deal of money for the rest. In the event that there is not enough money left in the pot to fund the decommissioning of a vessel that is next in the ranking list, if there is one with a lower ranking but whose grant bid would not cause the £5 million to be exceeded, will that vessel be allocated funds? That is quite important because we want to get as manyvessels decommissioned as possible, and if there isonly a certain amount left in the pot, that might decommission only a much smaller vessel, but obviously that would be better. Would any of the unused funds be lost or paid back to the European Union? What would happen to money that was not used for decommissioning?
Options 2 and 3 of the RIA, which the Minister declined to take, suggested that
“the least expensive bid be ranked top.”
The ranking system proposed in option 4, which the Minister has chosen, does not prioritise the least expensive bid. What would be the difference in the number of vessels decommissioned and the difference for fish stocks and the environment of using the option 4 ranking system as opposed to the least expensive bid?
2.45 pm
Mr. Roger Williams (Brecon and Radnorshire) (LD): I, too, welcome the scheme, although my party recognises that previous decommissioning schemes have not been as successful as might have been hoped because the money has been reinvested in more efficient and effective vessels. However, the parlous and unsustainable state of the sole stocks in the area should encourage Ministers to take action, and we believe that decommissioning is the right way at this stage.
Many of my questions have been asked by the hon. Member for Leominster. It would be useful if the statutory instrument included a suggested application form, so that we could see what the administrative burden would be on the people who applied, and how clearly they were told what the requirements of the scheme were.
The Minister said that he anticipates that 12 vessels will be covered by the scheme, although other figures have been mentioned in other places. Could he give us some indication of the reasons behind his estimated figure?
The hon. Member for Leominster asked about the ranking scheme. Under previous decommissioning schemes, the cheapest were ranked top, but that is not going to be the case here. I welcome the Minister’soffer of a technical briefing, because the matter is complicated. Can he tell us whether the most important criterion is going to be the number of days at sea or the total tonnage of sole that has been taken?
If any money is left over when most of the £5 million has been allocated, will it be used in a proportional decommissioning scheme, or will it be made available for the decommissioning of a boat that has not had such a high ranking in the scheme?
That covers our concerns. We look forward to hearing the Minister’s response.
2.47 pm
Mr. Bradshaw: In response to the question from the hon. Member for Leominster about whether we still expect the scheme to be agreed at the April Council, the simple answer is yes. One can never be sure what is going to happen at Fisheries Councils, but that is our expectation. The agreed principles of the recovery plan involve an initial 20 per cent. cut in fishing effort this year, compared with the 2005 base line, with a further 15 per cent. cut in 2010 if necessary, and the TAC to be set in line with the reduction in fishing mortality. The days at sea in 2007 are 192, down from 216 in 2006. I said that I would give the TAC and quota figure as well. In 2007, that was 529 tonnes, down from 553in 2006.
On the timing, we are going to invite applications before a closing date in May, and we hope to make payments by November. It is not possible to prevent owners from using any money that they might receive to upgrade other vessels. However, because this is a targeted scheme, the opportunities to do that will be limited, because people will need to obtain the necessary days at sea if they are going to target sole. However, they could use the money to upgrade vessels that are targeting other species. To be honest, there is no reason why they should not, so long as they are practising in a sustainable fishery.
The hon. Gentleman asked whether the recovery plan is sufficient to recover the stocks. We shall have to wait and see. We do not rule out having to take further measures and the plan allows us to do that if the measures that we are taking are not seen to have an effect in the immediate future. He asked also why it was necessary to allow the quota to remain. It needs to remain because when, as we hope, the stocks recover, the vessels remaining in the scheme will not have enough quota to remain viable. In addition, if the quota were decommissioned, it would cost us a lot more, so we would have to buy the quota out, too.
I think that that covers all the questions, but if I have forgotten any points raised by hon. Members, I shall gladly write to them.
Question put and agreed to.
That the Committee has considered the Decommissioning of Fishing Vessels Scheme 2007 (S.I., 2007, No. 312).
Committee rose at nine minutes to Three o’clock.

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