New tax measures announced in the Finance Bill to encourage investment in the fishing fleet have received a strong welcome from the Marine Food Council.

A three year accelerated capital allowance scheme is to be introduced for investment in approved vessels for fishing for whitefish. According to Mr McGinty, director of the council, the new measures are an important step towards creating "a climate in which investment in the whitefish fleet and the process of fleet renewal can at long last be considered."

However, he said the full impact of the scheme can only be assessed when the details of the capital grant programme and the eligibility criteria for the capital allowances are considered.

The new allowances are aimed at personal and corporate investors and owners of fishing vessels. They will come into effect after the scheme has been cleared by the EU Commission. An accelerated capital allowance of 50 per cent in year one will be available against all the investors income. It will apply to expenditure incurred over a three year period on vessels approved by Bord Iascaigh Mhara. The new measures include a new proposal that the allowances will be available to "passive individual investors" against non-leasing income. But the allowances will apply only to expenditure incurred in the first two years of the scheme.

But the chief executive of the Killybegs Fisherman's Organisation, Mr Joey Murrin, warned that "the champagne corks will remain in the bottle" until the proposed tax based reliefs are fully analysed. "A lot more is required, particularly on the amount of grant aid," he said. The Minister for the Marine and Natural Resources described the proposals as "a huge step forward to deliver the much needed renewal of the whitefish fleet by providing exceptional incentives to attract investors". Dr Woods said he would soon announce a capital grant programme for the fleet.

Because of the underdeveloped state of the Irish whitefish fleet and its high average age of 27 years, Dr Woods said he was confident that the EU Commission would support the proposed tax reliefs. He called on the industry "to examine these proposals closely to ensure that steps are taken urgently and that they are used to maximum effect".

The whitefish fleet, which concentrates on high value fish species such as cod, monk, plaice, whiting and megrin, employs 9,000 people and accounts for 60 per cent of the employment in the industry.