England’s fishermen have been thrown “a lifeline” by the government, with £10m in cash grants to help them stay afloat amid the coronavirus crisis, as the export markets they rely on have collapsed.

About 1,000 fishing and fish-farming businesses are expected to benefit, with vessels up to 24 metres in length – small to medium-sized boats – which recorded catches worth at least £10,000 last year being eligible for a slice of the main £9m fund. A further £1m will be for schemes to help fishermen sell their catch in their communities.

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Most of the fish eaten in the UK is imported, while the vast majority of the British catch is sent overseas. With the closure of restaurants and few means of exporting fish, small boats in particular have been stricken financially. The price of fish has also fallen, by as much as 80% in some cases, meaning fishermen struggle to turn a profit even when they can make a sale.

Scotland, where the majority of the UK’s fleet is based, has already offered £5m to fund seafood companies initially, with fishermen on vessels of 12 metres or under able to claim half of two months’ average earnings. Northern Ireland is providing £1.5m to its fleet, and Wales has made grants available. The EU is also providing support to its fishing industry under the European Maritime and Fisheries Fund.

Some small fishermen were facing ruin as their markets collapsed. Their quota allocations and the fish they can catch are unchanged, making it hard for them to adapt to the upheavals caused by the Covid-19 crisis.

English fishermen have been in “anguish and despair” for weeks as they saw little sign that the government had recognised their plight, said Luke Pollard, the shadow environment secretary.

“Labour has consistently called for more support for fishing and this announcement represents a start of the support fishing deserved weeks ago. Ministers have waited too long to provide this support and there must not be any new delay in payments being made to fishers.”

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He pointed to his constituency of Plymouth, where cuttlefish makes up a large portion of the catch. The vast majority is normally sent to Spain, Portugal and Italy, but it is rarely eaten in the UK.

Fishermen are trying to expand the UK’s home market, but consumers have been reluctant to move beyond established favourites of cod, haddock, salmon and tuna. Less popular fish such as red gurnard, for instance, is plentiful, cheap and tasty, but overlooked. Schemes to deliver fish directly to consumers have helped, but have made only a small contribution so far.

“With our near neighbours backing their fishing industries with bolder financial measures, their fishers will emerge from the coronavirus crisis in a much better position than many in the British fleet,” Pollard warned.

The new support scheme will run for three months and will focus on helping fishers with their fixed costs such as insurance, equipment hire and port costs.

George Eustice, environment secretary, said: “This scheme will provide a lifeline for more than 1,000 fishing businesses so they can continue to maintain and operate their boats during this challenging time, which has seen falling prices and lack of demand for fish from the restaurant industry.

“We are continuing to work closely with the fishing and aquaculture industry to ensure that they are supported and can get back to their vital role of providing fish for the table while contributing to the economy of many of our coastal communities.”