Relief as EC drops shareholder case
ONLY six Shetland fishermen have had to pay back money granted by Shetland Islands Council after a state aid complaint to Brussels has been dropped after five years.
The complaint in 2005 threatened to force 78 fishermen to repay grants of £7,500 handed out to help them buy their first share in a boat to pay back the money. They would also have had to pay compound interest stretching back as much as 15 years.
On Wednesday the SIC’s economic development unit received a letter from the European Commission’s state aid unit chief Friedrich Wieland saying that they had closed the case.
The fear had been that the men would have had to pay back a total of £1.5 million to the council, threatening several businesses where a group of men had received grants to set up a business under the SIC’s First Time Shareholder Scheme.
After years of intensive negotiation, just six individuals have had to return £55,097 to the council’s coffers.
SIC vice convener Josie Simpson said: “We are pleased to bring this matter to a close after reaching a satisfactory conclusion to a situation which could have caused significant detriment to the fishing industry.”
Skipper of the Shetland whitefish boat Resilient, Arthur Polson, said he and his colleagues received grants of £7,500 to help them buy a share in a second hand boat.
The threat to pay back the grants had been hanging over them like a dark cloud for the past five years, he said, adding to the other pressures the industry is under at the moment.
“It is a big relief to hear that we don’t have to pay back the money, particularly with the way things are going just now with unconfirmed reports that the flat rate for days at sea could be reduced from 140 days to 102 days. You couldn’t run any other business like that.”
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Shetland Fish Producers Association chief executive Brian Isbister said it had been an anxious time for those affected and the impact would have been significant had the case been upheld.
“The council have worked very hard to avert the situation, and I am reasonably pleased with the outcome apart from, obviously, the six individuals and the situation they find themselves in,” he said.
SIC development manager Neil Grant said the European Commission and the Scottish government had been very helpful, working hard to find ways of interpreting the regulations so that the grants did not have to be returned.
“When we paid out these grants we felt we were operating within the rules. When the complaint was made they found we were not operating entirely within the rules, and 78 individual shareholders could have had to pay back the grants with compound interest. That’s where we were three or four years ago.
“It’s taken all this time to get it to the point where only a handful of shareholders have had to repay part or all of the grant.”
He said it had been a time consuming and expensive process reaching this conclusion. “There have been legal costs, but it’s been worth it because to strip out £1.5 million of investment in the industry would have been hugely damaging.”
The council does not know who the complainer was, but Mr Grant said he suspected they had a grudge against the council. “The irony is that the council wasn’t the entity that was going to suffer. I can’t imagine for one second the complainer had a grudge against these 78 individuals.”
Mr Grant said that there appeared to have been a change in the atmosphere at Brussels, with both the EC and the Scottish government playing a more supportive role than they had in the past when major projects were being developed.
“What I am finding at the moment is that they are being proactive and positive and also acting very quickly, whereas in the past we seemed to have to wait inordinately long for them.”
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