rose to move, That the Grand Committee do report to the House that it has considered the Decommissioning of Fishing Vessels Scheme 2007.

The noble Lord said: This is an important issue on an industry that is of great importance to coastal communities. I have come armed with a long and a short speech. In view of what has just happened, and because this is very important for the communities concerned, I will read the short speech but use the information in the long version for any questions that might arise, which would be more appropriate.

The statutory instrument allows us to set up a decommissioning scheme for vessels of more than 10 metres operating in the western channel sole fishery—area VIIe. The statutory instrument covers the criteria that fishermen and fishing vessels must meet to be eligible for decommissioning; namely, details of how they apply for a decommissioning grant, details of how we award a decommissioning grant and details of what successful applicants must do once they have been offered a decommissioning grant.

The Government have rejected a general decommissioning scheme open to all vessels more than 10 metres long because previous schemes have not proved effective in reducing fleet capacity or good value in terms of good conservation. Repeated decommissioning schemes create an expectation which delays fishermen making assessments on whether to remain in the industry.

We believe that there is a case for introducing a decommissioning scheme for beam trawlers in the western channel sole fishery. The scheme will let vessel owners make an assessment on whether they remain in the fishery, diversify or leave the industry. They will be able to get a long-term view of prospects for the fishery under the terms of the plan.

Scientific evidence shows stock here is at or near an historically low level. I fully understand that fishermen do not always agree with scientists. I have not had responsibilities in England for this, but I did during the brief period I was in Northern Ireland. Nevertheless, the UK has been negotiating a long-term management plan with the European Commission because of low stock levels. We want the levels to be sustainable for those vessels remaining in the industry. Running a small, targeted decommissioning scheme for beam trawlers in the area covered by the management plan is most likely to offer value for money and success for the conservation of the stock.

We will keep the basic eligibility criteria that have applied for previous schemes. The vessel must be at least 10 metres in length, at least 10 years old and registered as a fishing vessel in the United Kingdom. It must be currently licensed and that licence must show it is administered at an English port. The vessel must have fished for at least 75 days in each of the two periods of 12 months immediately preceding the date of application for the scheme. Vessels must also be allowed to spend days fishing for sole in the western channel to qualify.

I am grateful to the Minister for the way in which he has introduced this scheme, and for explaining it to the Committee in detail. We support the scheme, but I shall raise one or two questions.

All of us wish to see the conservation of our sole fish stocks. If we can in some way protect it better than the cod stocks were protected at the time, it must be for the benefit of the industry as a whole. The Minister told us that £5 million had been put on one side, likely to cover the cost of some 12 boats in total. Out of interest, that is 12 out of how many? I do not know how many other boats are involved. We are pleased that the Government have raised the payments by 16 per cent.

The Minister spoke about the communities involved. I reinforce what he said: it is a dangerous and precarious occupation. From the briefing that came with the statutory instrument, I gather that this applies to those fishermen who would be able to seek grants from Sussex, Devon and Cornwall. I do not think that there was anywhere else; again, I seek clarification.

The statutory instrument rightly says that the licence must show that the vessel is administered in an English port. Are any foreign vessels registered as such, which would therefore qualify, or is this all to do only with English fisherman and their boats? It is not totally clear; I may have misread it slightly, but I desperately try not to.

On the grants being paid and the vessel decommissioned, is it also written in—again, I could not see it—that once that owner has received the money, that money cannot be used to upgrade another existing fishing vessel? Certainly, there has been a worry in some of the decommissioning discussions we have had in the past that when the Spanish fleet in particular received their money, they invested heavily in upgrading the existing fishing vessels, meaning that they could land greater quantities of sole than they could have done in the previous vessels. I am not suggesting that this applies to the Spanish fleet, but has that been taken into consideration in relation to the scheme?

I would be glad if the Minister could give me more specific information about paragraph 4(6) on awarding a grant, which says:

“He must allocate the grant to the vessels that rank highest”.

Can he clarify how vessels rank highest? Are boats that catch the largest amount of fish ranked the highest? I am not sure how that works. The sub-paragraph continues,

“giving each grant in full until there is not enough money left in the scheme to pay any more bids in full”.

I therefore presume that there is that ceiling of £5 million, to which the Minister referred. However, there could well be more bids that went beyond that amount. Again, I would be grateful for any clarification.

The Explanatory Memorandum sets out the various impacts and options, and mentions the decommissioning of 10-metre vessels on the final page. Option 2 may have been considered and got lost in the wash in the scheme as it is. Under “Benefits to vessel owners”, option 2 says:

“Any vessel owner in receipt of decommissioning grant, irrespective of the option taken will benefit from receiving the grant money, and retain the economic value of the Fixed Quota Allocations previously attached to their vessel, which can either be leased or sold”.

Does that apply under the scheme, or is it just one of the options that were considered? If those stocks were increased and became much more sustainable, the restrictions placed on the amount of fish that can currently be caught might well be lifted. However, it is not very clear in the order. Presumably if the owner is still allowed to keep his quota, he—or she—might decide to keep it for himself in the future, or he might decide to regard that quota allocation as a tradable commodity. Again, I am not quite clear on that. Those are my questions about the scheme; the Minister has been very clear about the other issues.

I, too, thank the Minister for his very clear explanation of the scheme. I also thank the noble Baroness, Lady Byford, for asking her questions, as I do not have to ask some of them now. I certainly look forward to the answers to them. Decommissioning fishing vessels is never a happy process; nor is seeing boats with a long association with particular families and particular communities coming into port and being broken up, as the Minister rightly said. However, we are where we are and, like the noble Baroness, we support this small, tightly targeted scheme—I think those were the Minister’s words—to deal with this particular problem.

I have one question about the long-term management plan for sole in area VIIe, to which the Minister referred. Can he tell us whether it has now been approved at the European level by the Fisheries Council, or is it expected to be in the near future?

I want to follow up a point made by the noble Baroness about the number of applicants and how they will be chosen. Like her, I am not very clear exactly how that is going to be done. The Minister suggests that 12 out of about 60 boats will be involved in total, which is one-fifth of them. The very useful regulatory impact assessment that we have provided refers to the four options for choosing and suggests that option 4 is the preferred option. However, I am not clear whether option 4 is written into the option or whether it merely implies that that option and all the others are still on the table.

Option 1 is to do nothing. Options 2 and 3 are fairly simple—perhaps too simple—whereas the RIA says of option 4 that vessels will be,

“ranked in order using a system that takes into account the tonnage of the vessel, its fishing effort and catches of sole in Area VIIe in a continuous 12 month period in the two years immediately preceding the date of application, and the amount bid per tonne of capacity to be removed”.

There are at least three criteria there: one is the tonnage of the vessel, one is its fishing effort and its catches in the past two years—perhaps that is two criteria—and the amount bid per tonne of capacity. I am not quite sure how those would be judged against each other and ranked if there are more applications for decommissioning than can be paid for by £5 million. This is an important point, and I should be grateful to hear what the Minister has to say.

In relation to that, does the Minister, Defra or anyone else have an estimate of how many applications there will be? Is it thought that 10 or 12 vessels will be the level, or that it might be difficult to get to that level and that it might be more likely to be 20 or 25, in which case choices will have to be made? These are important questions on the practicality of how the measure will work in practice; but, having said that, we support the measure.

As the Minister reminded us, this is a small and well-targeted scheme. It is salutary to remember that previous decommissioning schemes have not always worked out as well as we would have hoped. Originally, those who offered ships for decommissioning did so when they had a ship that was no longer very effective, although I think that this scheme will avoid that. As my noble friend Lady Byford hinted, there was the danger that money that was received for decommissioning simply went to increase effort in replacement ships. It would be helpful if the Minister gave some assurance that that will not happen in this case.

The other factor that has to be taken into account to determine whether effort will indeed be reduced—which is, after all, the object of the exercise—is that some attempt must be made to quantify illegal fishing. It is a fact of life and happens in every fishery, not only in our own waters; it happens throughout the European Union and in other fisheries around the world. So to quantify how successful the decommissioning is in determining that the take has been reduced, someone must make some calculation about the quantity of illegal fishing at present and whether it is increasing or decreasing.

The ultimate aim is to manage each fishery and area effectively. That is part of a long-term management plan. As I understand the Minister, the decommissioning proposals will not be implemented if the long-term management plans for this area are not agreed. This plan must be welcomed, because all sectors are now involved in preparing these plans, which is highly important if they are to be effective. Can the Minister assure us that they will be in place by the appointed date, which I understand to be April?

I am most grateful for the response and I shall do my best to answer the detailed questions. The central issue is the long-term plan, on which the noble Earl has just finished speaking. The noble Baroness raised that issue, too. Approval is expected at the April session of the Fisheries Council. It has been informally approved; in other words, it has been agreed by the Commission of member states, so there is every expectation that it will be in place. All the vessels are English-registered vessels. I cannot say who owns them, but they are English registered.

The noble Baroness asked a question that was almost answered by the noble Lord, Lord Greaves. Some 60 vessels are engaged, so the figure of 12 is out of that total. I said that up to 12 vessels would be engaged. We cannot be precise about this. We expect the number to be somewhat less than 12, because we have had considerable discussions with the industry, so there will probably be only about eight or nine. These vessels work out of Plymouth and Brixham, the two ports that are centrally affected.

Noble Lords referred to what has happened in the past. There have been general decommissioning schemes, but our evidence is that they have not quite delivered. Indeed, sometimes they have delivered almost the opposite of what was intended. That cannot be good for fish stocks or for public money. As for some of the details, there must be a way of ranking. We have agreed with the Commission to pay more than the current EU maximum to reflect market values. We will accept bids of up to £3,500 a tonne. Based on the average tonnage of vessels in this sector—93 tonnes—a successful bid of £3,500 would generate an average cost of £325,000. The top vessel in the fleet is 373 tonnes, so if a successful bid involved such vessels, it would generate more than £1.3 million, which is a large percentage of the money available.

There is a requirement on this, as I mentioned earlier. The vessels must have been there for a particular number of days for the past two periods of 12 months. The intention is that we get better value for money than from a general decommissioning scheme, because if we did not aim for the recovery of the stock, it would not be effective. By using 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 the reference period, we believe that we can remove from the fleet those vessels that have a greater impact on sole stocks in area VIIe, therefore supporting the new long-term management plan for the area. I fully accept that there is a considerable number of vessels under 10 metres that fish. We simply do not have knowledge and information about those, and we would be spending money on vessels that spend only a very limited amount of time at sea.

The noble Earl raised the issue of illegal fishing. I do not have chapter and verse on this, but I understand that there has been a big improvement in enforcement with regard to illegal fishing. It is believed that one consequence of that is the hardening of fish prices, which has been of considerable assistance to the industry. Apparently, people have seen a direct connection between improvements in enforcement and a hardening of fish prices, which has to be good for those who are operating legally.

The long-term management plan is being carried out in conjunction with the Commission and, of course, France. It has been negotiated for a while; we want a sustainable fishing industry in this part of the channel. The plan envisages a six-year period in which to bring the stocks back to a sustainable level, which should allow vessels remaining in the fishery a sustainable future. The quota would remain, so that when the stocks return to their levels, the quota is still available, having removed that capacity in the mean time. One does not want to chuck the baby out with the bathwater.

On option 4, the system ranking the bids will take into account the tonnage, the catch of sole and the effort in the fishing. A formula that calculates a ranking position will be made available to applicants. This will not be done in secret; they will know beforehand what they are doing. The formula puts a weighting on each of the criteria: 50 per cent on the tonnage and 25 per cent each on the catch and the effort. The figure arising from the calculation is then divided by the bid per tonne of the vessel, which gives a final ranking figure that could be made available to Members of the Committee.

The whole point about this is that the person making the bid has to know whether to make an economic, family or business decision to leave fishing, so they have to know what money is going to come back. This is therefore not a question of someone putting in a blind, sealed bid and then asking for the money; the person making the bid must know whether it is a viable business decision. After our discussions with the industry, we have said that the measure would involve up to 12 out of the 60 vessels, but our expectation is that it will be about eight or nine of the vessels. Because I do not have that information, I cannot give details of whether those vessels will be predominantly larger, more medium-sized or smaller, but if the average tonnage is 93 and there is a vessel of 373 tonnes, by definition there will be some smaller ones. That is a business decision for the fishing fleet to take.

Will the formula used to calculate the ranking be provided to people before they bid?

Yes, it has to be transparent. When the money runs out, that is the end. There is a limit on the finance of £5 million. Moreover, the scheme is not completely a UK one; there is European Union involvement with the management plan and everything else. The formula will be known, and they will know the tonnage of the vessel, how many days they have been at sea and what the catch has been. They have to meet the target of 75 days at sea in each of the two 12-month periods beforehand. So it is not a question of being able to manipulate the figures; the figures have to be up front. In other words, although it might be thought inappropriate, these are people involved in serious fishing. Even with the restrictions on the number of days allowed out, 75 days is serious fishing. Those people will know that if they have gone out on 150 days in one year and on no days in another year, they will not get in. All that is known up front, and, if successful, they will know to a fairly accurate degree how much money they will receive for the decommissioning bid.

I think that I have covered everything on my list of questions. If I have not, I shall stand corrected, and I will see whether I can get further information.

I should like a little clarification. Paragraph 5 on page 2 says:

“A successful applicant for a grant must … destroy the vessel to the satisfaction of the Secretary of State”.

Does that mean that the vessel must be totally destroyed and blown up? That seems the most appalling waste and destruction. Could the vessel not be converted for a different use?

No, it is a fishing vessel. It has been decommissioned from fishing and is therefore scrap. They will not be paid the decommissioning grant until the vessel is scrapped. It is not possible to do it any other way. That is the normal procedure with the decommissioning plans for the fishing fleet, and part of the EU rules. It also makes common sense.

On Question, Motion agreed to.