Islands council wins battle with EC over £1.5m fishery payments

A SCOTTISH council has secured a major reprieve from the European Commission in a long- running dispute over £1.5 mil-lion in local authority grants to the fishing industry.

More than 70 fishermen, 20 trawler owners and a fish- processing firm were ordered by Brussels bureaucrats to repay the grants to Shetland Council.

The repayment of sums ranging from 7,000 to 100,000 was ordered by the European Commission in November 2007, following a ruling that the council grants, dating back to 1994, breached state-aid rules. The money was paid out of the oil- reserve fund – established with profits made from running the harbour at the Sullom Voe oil terminal – through economic development schemes operated by the council and the Shetland Development Trust.

The commission ruled that the grants constituted a breach of state-aid rules because they gave the recipients an unfair advantage over other European Union citizens.

But yesterday the islands council announced that the EC had closed the case, following months of negotiations involving the council, Scottish Government and the Department for Environment, Food and Rural Affairs.

A council spokeswoman said: "Initially, the total sum of the recovery was set at 1.5m, including compound interest, but a period of intensive negotiation has resulted in the recovery being reduced to 55,097 from only a handful of individuals. These sums have now been recovered."

Council 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."