MPs lament ‘cod war’ compensation failures

The government’s failure to fairly compensate British trawlermen who lost their jobs after the ‘cod wars’ of the 1970s is “incredible”, MPs believe.

The distant water fishing industry collapsed when UK trawlers lost access to Icelandic waters after disagreements between the UK and Icelandic governments in the late 1970s. Only a prolonged campaign eventually resulted in the compensation scheme being opened nearly 20 years later.

The parliamentary and health service ombudsman found the scheme to compensate the trawlermen, which was open to claims for two years from October 2000, was seriously flawed.

It said the scheme was introduced prematurely, that it could not deliver what it was intended to provide and that there was no review of the failings.

Today’s report on the issue from the Commons’ public accounts committee found the Department for Trade and Industry (DTI) could not provide evidence showing that a quarter of the payments had been made within the scheme’s rules.

In total £42 million was paid out to 4,400 former Icelandic trawlermen and their dependents.

The DTI should have learned from similar failings in its coal health compensation scheme, the report notes.

“After 20 years of waiting, former trawlermen might have hoped that when a compensation scheme was finally announced it would be simple, practical and fair,” PAC chairman Edward Leigh said.

“Sadly, that has not been the case. After so long, it is incredible that the project seems to have been introduced before being fully thought through. let’s hope government departments will learn the lessons for any similar programmes in the future.”

A spokesperson for the Department for Business, Enterprise and Regulatory Reform, the DTI’s successor, said it fully accepted the design and launch of the scheme “were not up to standard”.

“We also accept that we should have undertaken a comprehensive review of the scheme in its early stages, rather than making incremental changes to it,” she added.

She said revised guidance published by the Treasury last year on similar schemes meant there would be a set of best-practice standards to adhere to in the future.