Annex B: Chronology of main events 1997 - 1999
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1997
01/07/97 The Member for Hull West and Hessle addressed the House of Commons about his concerns for the distant water fishing industry and outlined the ex gratia payment scheme introduced in 1993 following a Court of Appeal decision that trawlermen could, in certain circumstances, qualify for redundancy payments. The ex gratia scheme introduced arrangements whereby the Department of Trade and Industry (DTI) made ex gratia payments to trawlermen who had failed, as a result of being misdirected by officials of the then Employment Department, to submit a claim. Eligibility was restricted to those who had not complained to an industrial tribunal and who could, at the time of their redundancy, have met the qualifying conditions for a statutory redundancy payment, one of which was a period of at least two years’ continuous service with a single employer. Awards were calculated according to the usual formula for redundancy payments. During that address he said that the criterion for that scheme that a claimant had to have worked for the same employer for two years failed to recognise the unique nature of the industry and the way that ships were crewed. Trawlermen worked in what was called ‘the scheme’, also known as the ‘pool system’, which was operated by the ship owners and the then Employment Department and one of its objectives was to ensure that there was an adequate number of qualified fishermen readily available for all companies participating in the scheme. When a trawler was tied up, perhaps for a refit, the trawlermen were entitled to unemployment benefit and would remain in the scheme. However, if the Employment Department decided in conjunction with a participating company that it would be appropriate for a trawlerman to cover a vacancy on a trawler that belonged to a different company, the trawlerman was compelled to accept or had his benefit stopped. For that and many other reasons relating to the industry, discontinuity of employer was a fact of life. The referring Member then addressed the House and said that he echoed his honourable friend’s plea for a fair deal for fishermen.
05/11/97 Members representing three of the ports most affected by the collapse of the distant water fishing industry, Hull, Grimsby and Fleetwood, met the then Minister of Trade to discuss their concerns. Also in attendance were representatives of the British Fishermen’s Association (BFA) formed following the collapse of the industry to campaign for compensation for the former fishermen.
In a joint submission handed to the Minister at that meeting the Members set out the case for further government compensation. The submission stated that Hull, Grimsby, Fleetwood and Aberdeen were the only ports engaged in distant water fishing – Grimsby, Fleetwood and Aberdeen to varying degrees, Hull exclusively. An inquiry in 1969 had led to the setting up of Registration Schemes in all key ports. Within the scheme was an individual pension provision for holiday pay and the continuation of long standing arrangements whereby trawlermen had to be ready to work on any ship with any company. When a trawler was tied up for a period, perhaps for a refit, the fishermen would be entitled to unemployment benefit but were never redirected to non-fishing work. They were kept inside the scheme by explicit agreement with the Employment Department provided they were able to go to sea with another company. Such decisions by the then Employment Department led to discontinuous employment with a particular company, although continuity was retained within the scheme.
Because the arrangements under the ex gratia scheme that commenced in 1993 had followed the criterion for statutory redundancy payments (requiring a minimum of two years continuous service with a single employer), some fishermen with 35 years’ service in the industry had received only £450, while the exclusion of those who had pursued cases to industrial tribunals had resulted in 17 former fishermen who had unsuccessfully pursued such cases receiving nothing. The Members asked that a new scheme be set up to better reflect the working practices within the industry and to offer compensation more in line with promises that had been made by Ministers at the time of the industry’s collapse. DTI’s note of the meeting recorded the main points raised by the fishermen and their MPs among which was the statement that it had been the then Board of Trade’s requirement that fishermen signed off by ‘mutual discharge’ after each voyage, otherwise they did not get their unemployment benefit.
1998
31/03/98 The Members for Hull West and Hessle, Great Grimsby and Blackpool North and Fleetwood jointly signed a letter to the then Minister of State at DTI that attached a draft letter to be sent to all Labour MPs that was also jointly signed by the three Members. Paragraph 5 of the draft letter criticised the previous ex gratia scheme. It was completely at odds with the fact that trawlermen worked inside a ‘scheme’ operated in conjunction with the Employment Department that required them to be available to work for any employer that they were directed to.
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1999
Summer 99 Officials from DTI and the then Ministry of Agriculture, Food and Fisheries (MAFF) worked on a submission to be put to their respective Secretaries of State that outlined options available to respond to the campaign by the BFA and the port MPs. A meeting of officials at DTI on 10 August 1999 discussed the cause of the downturn in the industry, statutory redundancy payments, continuity of employment, a comparison with a compensation scheme for steelworkers and the position as to social security benefits. With regard to the latter it was noted that all deep-sea fishermen paid a full National Insurance stamp and schedule E PAYE income tax at the full rate. They were fully entitled to unemployment benefit. However, once in receipt of benefit the fishermen were never regarded as being ‘available for work’ by the Employment Department and so were never directed to non-fishing work. It was the normal practice for fishermen to be obliged to sign on at a special benefit office set up by the Employment Department with the support and assistance of the trawler owners and situated in the Fish Dock, rather than at their local office. Messengers, known as ‘ships runners’, liaised direct with the Employment Department and would inform them if a man was wanted again. This system was unique as the men were not technically unemployed and could have been paid ‘shore pay’ from their employers instead of benefit. The then Department for Social Security (DSS) had confirmed that trawlermen were entitled to social security benefits, in particular income support, which was not dependent on National Insurance contributions but was means tested.
18/10/99 A DTI policy official sent a submission to the Secretary of State. Attached to the submission was a paper concerning compensation for former trawlermen which discussed, under subheadings, the background to the request for a scheme by the trawlermen, an analysis of their case for compensation, conclusions, options and potential costs. The submission noted that, in dealing with the question of any compensation scheme administration, payments would relate to time spent at sea over a period going back some 40 years. That would produce practical difficulties of administration and a number of hard cases for which the Government would face criticism.
The attached paper noted that the BFA accepted that Government was under no legal obligation to set up any scheme of compensation. Their case was essentially a moral one. The paper acknowledged that the nature of employment arrangements in the fishing industry precluded normal redundancy or social security benefits at the time, as the former trawlermen were wrongly regarded as ‘casuals’. The paper also noted a previous suggestion by the then Employment Department for a Government funded scheme of compensation. That had been opposed by Treasury, and concerns had been expressed by Ministers in Cabinet in June 1976 over the difficulty that would be encountered in identifying those who had suffered genuine hardship as a result of the agreement with Iceland, and in devising clear eligibility criteria. At that time MAFF had estimated that up to 600 jobs would be lost as a result of the agreement with Iceland. However, almost all distant water trawlermen were made redundant over the following few years. It would clearly be impossible to tell which jobs were lost as a result of the agreement with Iceland and which due to other factors, so any new scheme of compensation would have to be open in principle to all former distant water trawlermen who were made redundant during the relevant period – say, 1976 to 1986. The paper also noted that it was in 1983 that the then Employment Minister made a commitment that eventually led to the establishment of the ex gratia arrangements. The paper explained that those arrangements were always envisaged as having the quite different and specific purpose of compensating former trawlermen whose circumstances indicated that they could have been disadvantaged by official misdirection as to their statutory entitlement.
The paper pointed out that, if Ministers were to decide in favour of establishing a special scheme of compensation to meet the former trawlermen’s demands, there would be two significant practical obstacles to overcome. The first was that neither MAFF nor DTI had any spare capacity within their budgets as set following the Comprehensive Spending Review. Treasury would therefore have to agree to provide new money before any such initiative could be taken. The second obstacle was that, although the annual Appropriation Act would as a matter of law give Ministers sufficient authority to make payments to the former trawlermen, the Government’s own administrative rules on finance indicated that a scheme lasting more than two years and involving payments of more than £900,000 per annum would need to be the subject of primary legislation. That had been confirmed with Treasury officials. Given that there was no immediate prospect of parliamentary time being found for such legislation the practical consequence was that the bulk of the payments would have to be made within two years of the scheme’s establishment. Any made after that period (e.g. where late claims or appeals were allowed) would have to be kept to an absolute minimum. That would clearly impose constraints on the scheme’s rules and operation.
If those practical obstacles were overcome administrative arrangements would then have to be established for the delivery of a new scheme. One option was for that to be taken on by the DTI’s Redundancy Payments Service (RPS), a division of DTI located in Watford. That, however, would represent a significant new workload for RPS at a time when resources were already very stretched. There was clearly a considerable difference between processing claims based on and calculated in line with statutory redundancy entitlement, as was done under the old ex gratia arrangements, and administering a completely new scheme of compensation payments for former trawlermen. Equally, MAFF had no experience in dealing with employment matters in the fishing industry. Which department should take on any scheme would ultimately be a matter for collective ministerial decision. The paper noted that the best estimate of the overall net cost of a scheme that met the demands of the BFA in full would be in the region of £25 million with administration costs of £200,000 plus. The paper suggested imposing clear eligibility criteria. Examples were two years’ continuous employment in the industry as a whole, taking into account only complete years of service in calculating compensation, excluding claims from dependants where the former trawlerman was deceased, imposing a strict time limit for the submission of claims and requiring clear documentary evidence of entitlement. The paper recognised that some of those suggested rules could be legitimately criticised as unfair – a requirement for clear documentary evidence, for example, would be likely to exclude many otherwise eligible claimants as officials knew that complete fishing records were often unavailable so long after the event. Recognising the concern of Ministers in June 1976 regarding the framing of eligibility criteria, the paper acknowledged that the problems after twenty-three years would be many times greater.
25/11/99 Officials at HM Treasury sent a submission to the Chief Secretary. They advised him that there were issues about the practicality and effectiveness of a scheme intended to provide compensation to a group of people adversely affected by a Government decision more than twenty years previously. At the time it was estimated that the conclusion to the Cod War reduced employment in fishing by about 600. It was, by 1999, impossible to disentangle those 600 from the wider decline in the fishing industry at the time which was due to other trends. MAFF and DTI had proposed that any new scheme be open to all distant water trawlermen made redundant between, say, 1976-86. They estimated the total number of claimants at around 4,000 (but with a wide margin of uncertainty). That would plainly weaken any link between the compensation scheme and the actions of the Government. MAFF and DTI had also identified a number of serious administrative problems with operating a scheme so that it was both (a) equitable and (b) defensible in terms of accounting for Government money. Those problems did not appear to have been resolved.
