Seafood exporters missing out on £23m post-Brexit rescue fund, industry figures say
The UK Government is under pressure to redesign its £23m support scheme for seafood businesses disrupted by Brexit, as many say they're falling through the cracks and missing out on funding due to flaws in the criteria.
The scheme, announced earlier this month, will provide grants worth up to £100,000 to fishing businesses whose exports to the Continent have been disrupted by the introduction of time-consuming new customs and health paperwork on 1 January.
Lengthy delays have resulted in some European customers cancelling orders and fresh fish exports being destroyed on its way to the EU.
Before the UK left the EU's single market and customs union, fresh fish caught in Britain would reach European buyers within 24 hours.
In order to apply for funding under the Seafood Disruption Support Scheme, businesses must submit evidence of financial loss caused by disruption to their EU exports.
This must include accompanying documents for the attempted exports: customs paperwork, export health certificates, and catch certificates.
However, the industry is warning ministers that many traders who are entitled to the financial support cannot provide these documents.
Some traders have decided not to attempt to export to the Continent in fear of getting caught up in disruption, while others have been left with nothing to export due to European customers deciding against placing orders, they say.
Traders impacted by the EU's permanent ban on cockles, mussels and other live shellfish caught in class B waters are excluded from the scheme entirely.
That's because the scheme, which will release funding next month, “is focused on losses that arose during export and does not cover opportunity losses where an export did not take place”, according to the Department for Environment, Food and Rural Affairs (DEFRA).
All of which is leaving traders substantially out of pocket.
“This is called a disruption scheme, but most seafood businesses facing disruption are unlikely to see any financial support,” said James Withers of Scotland Food & Drink.
“Cancelled orders or exporters who have been unwilling to take the risk and gamble in trying to get their high-value products through the system won’t be covered.
“Also, larger businesses are excluded too and they have probably spent the most time and money getting ready for the new rules but still found themselves facing IT system failure and delays through no fault of their own.
“For those that have proof of lost stock and lower payments, any support will be welcome. But it won’t arrive until next month and won’t cover the real costs of a disastrous start to 2021.”
Donna Fordyce, chief executive of Seafood Scotland, last week told Northsound News: “It has to be a verifiable loss, so they must have proof that they lost the sale or that the product had to be destroyed... The main issue that companies have come across just aren't covered in the scheme.”
She warned that many fish traders were “on the brink” and that “it's going to be absolutely devastating” unless government makes it easier for affected companies to apply for funding.
Industry representatives have asked DEFRA to accept recent account information as evidence of financial loss, so that businesses whose sales have been torpedoed by post-Brexit disruption do not miss out on the support.
This change could be implemented quickly and would address cracks in the system, they say.
“It is often the same disconnect between policy and people in business,” said Elaine Whyte of the Clyde Fishermen's Association.
“Policy makers meet and discuss for weeks how to develop considered policies.
“Unfortunately, by the time they’re finished, the reality is many of the business that needed help are already going under – the world of competitive business moves at a faster pace.”
Luke Pollard, Labour's UK shadow environment secretary, called on DEFRA “to start getting a grip on this situation and fast” and warned that fish traders nationwide “are seeing mounting losses because ministers are failing to recognise the consequences of their actions”.
He called on traders affected by the permanent EU ban on live shellfish caught in class B waters to be added to the scheme.
“Government should face up to the fact that their deal is going to drive a considerable part of the shellfish sector to the wall,” he said.
The Liberal Democrats’ home affairs spokesperson, Alistair Carmichael, said: “Compensation needs to reflect the real impact of trade changes, not the politically convenient fantasy sold by the Conservatives – it is time to fix these gaps in support.”
DEFRA did not respond to a request for comment.