Select Committee on Agriculture Minutes of Evidence


Examination of Witnesses (Questions 780 - 799)

THURSDAY 20 MAY 1999

MR RON GILLAND, MR HAMISH GORDON AND MR IAIN MACSWEEN

  780. Have you got an idea of what it might be? Is there a reserve which can be used or not as needed?

  (Mr Gordon) Either something like that or, indeed, some agreed limit beyond which the TACs would not go down or would not increase by something agreed with the industry beforehand. I know the scientists may not agree with that. For example, ten per cent or whatever—the figure is out of my head -the quotas would not exceed that or indeed be reduced by more than that in the following year.

  781. You would not fish up to what the stocks could bear in the good years by not having to go below an economic limit in the bad years?

  (Mr Gilland) Yes.
  (Mr Gordon) That might be reckoned to be a price worth paying for the consistency and the ability to make forward plans.

Chairman

  782. Before I pass across to my right, can I just ask you to give some figures. In your memorandum, Mr Gordon, you said that those with quota entitlement can lease out their track records and make more money than those who actually go to sea. Would you be prepared to put some figures on the scale of that claim?

  (Mr Gordon) Yes, certainly. I did some figures before I arrived. I took what I assumed might be an average vessel's track record and I took the going rate for the four main species—cod, haddock, whiting and saithe—and I took 120 tonnes of cod at a going rental rate of £300 per tonne, the haddock at an average track record of 250 tonnes at £300 per tonne, 70 tonnes of whiting at, say, £50 per tonne and saithe 20 tonnes at £300 per tonne. All of that comes to £120,000. That is just the four main species in the North Sea. Someone leasing that out can sit back and do nothing and take in £120,000. I do not think that is a very healthy scenario when we have a restricted common resource with other people wanting access to fish who are prepared to go to sea but cannot get fish and someone who is prepared not to go to sea and holding out for that. I do not think that is a healthy situation.

  783. But the fish is being fished all the same. The fish is being caught.

  (Mr Gordon) Yes, indeed, if he is renting it out.

  784. You are saying it is more likely to go to people already in the fishery.

  (Mr Gordon) It is going to those who are willing to pay for it, the highest price.

Mr Mitchell

  785. Just a couple of questions that our specialist advisers have suggested. Mr MacSween mentioned diversification of catching patterns, can you elaborate on it?

  (Mr MacSween) Up until probably ten years ago the UK fleet and the Scottish fleet as well were dependent on, I suppose, cod, haddock and whiting, in that order. For very many vessels now these species have almost become back catches because of the pressure that has been put on the stocks and because of the historically low TACs that were set the vessels began to diversify into things like monkfish, megrims, nephrops. The major nephrops fishery in the Fladdon Grounds did not exist five years ago. Vessels have gone into the deep water for blue ling, black halibut. It has really been that diversification away from the cod, haddock and whiting stocks that has enabled the industry north of the border to survive and to invest in the kinds of new vessels we have got just now. The other bit that goes with it, and to some extent it began in 1983—you can almost date this to the Spanish accession to the European Community—is the market for these species developed. You will still get people who tell you that scampi is fake monkfish, it has not dawned on them that your average monkfish now costs ten times what your scampi costs. It is like reverse counterfeiting, it does not make sense. With Spain coming in and the market for monks, for nephrops, for megs, for dabs, we have developed a new marketing outlet and we are able to sustain these deep water fisheries.

  786. If POs are doubtful about establishing property rights does that mean they are content to allow the present trends to continue and all the practices that go with them?

  (Mr MacSween) I think it is very difficult for us. It is a very odd situation. Mr Curry has made reference to agreements and I guess all three of us every day see agreements which purport to sell and to buy fish. I keep saying to the lawyers who draw them up "How can you draw up a legal agreement to sell something that does not belong to you? How do you advise clients to buy something from somebody who has no proper legal title?" We appear to be in a system where there are quasi property rights and people believe that at some time in the future these property rights will become effective. Maybe the Scottish Parliament will take that view, I do not know. The other point that needs to be made is in our management regime all of us have vessels which get access to what I suppose we now call the pool quota that is available to every member in the organisation. Within the SFO we now have 120 of our 450 member vessels who have separate quota agreements with us whereby they can get access to some additional fish that they have bought, leased or whatever. Maybe it is the best of both worlds that we are now in.

  787. It is getting very complicated.

  (Mr MacSween) It gets complicated. It is extremely complicated.

  788. The problem is as soon as you establish property rights two things are going to happen. One is Government is going to levy them in some way with charges saying "we have now got an asset here on which we can raise money and that will justify us not giving the industry any support". Secondly, it is going to be a tax on the consumer for the enrichment of a few people within the fishing industry.

  (Mr MacSween) I am not sure that the Government gives the industry any money but I am sure that that nice Mr Brown has noted all these vast sums of money that are paid for licences and will soon be wanting his share and it is difficult to argue against that. It seems to me what they are doing is no different from what Mrs Thatcher did when she privatised the public utilities. We are piecemeal privatising the common resource of the ocean and inevitably taxation will follow. In a sense, the nonsense of the whole thing seems to me in the long-term that once Government begins to tax the thing the incentive of the property right will be diminished.

  789. And if it settles down at some multiple of the value of the entitlement it is a tax on the consumer.

  (Mr MacSween) In effect that is correct.

Mr George

  790. I have got about ten minutes and seven questions. You are all in contact with your members, what proportion of the catch of your membership is blackfish would you say?

  (Mr MacSween) None.
  (Mr Gilland) None.

Chairman

  791. Mr MacSween, you were really impressing us up to now. The Clerk said why do you not comment on each other's membership rather than your own.

  (Mr Gilland) Quite simply the purchase of additional fish has been one of the main incentives against the landing of blackfish because quite clearly if somebody has purchased a track record to legally land what he catches he is very quickly aware that he does not want anybody to be landing blackfish, if you want to call it that, to undermine the value he is going to get for the additional fish he has bought. Quite simply, the incidence of blackfish now is zero.

  792. Why do the Government feel it is necessary to introduce designated ports?

  (Mr Gilland) I do not know.
  (Mr MacSween) Designated ports are one of the reasons that blackfish —

  793. It is a contributing factor.

  (Mr MacSween) There seem to be two things that have wiped out blackfish which undoubtedly were contributing factors. One is in the pelagic sector, the disappearance of the Russian factory ships, the Klondikers. Most of the UK pelagic fish is now landed in Norway which is very rigorously policed and with designated landing ports and guys having to book in before they land, I think blackfish has receded into history which is a good thing because it was a major disruption in the past, you were only landing more fish to reduce the price.

  794. So you acknowledge it was a problem four or five years ago but it is no longer a problem now, is that right?

  (Mr MacSween) It was a problem the year that the haddock quota was reduced from something like 120,000 to 70,000 tonnes and there was an abundance of haddock.

  795. Just coming back to the question we had earlier about the cost of the privatised common resource and the income gained by fishermen and former fishermen for their licences and their track records. Would you agree that given this new money available in the industry that it would be right for the industry itself to contribute something towards enforcement, monitoring and research? You mentioned earlier that Mr Brown may come at you for his money.

  (Mr MacSween) He may do but I think fishermen as part of the general economic community pay taxes like everyone else and these services should be provided from general taxation. One of the other aspects of this whole privatisation business that needs to be highlighted is that it is becoming extremely difficult for young fishermen now to acquire their own vessels with licences changing hands for hundreds, indeed in some cases millions, of pounds. The lifeblood that we need to come into this industry is financially unable to do it. It is a real concern that we will end up with a population of aged but rich fishermen with no young guys coming through to take command of the boats and that is a recipe for stagnation.

Mr Hayes

  796. Are you familiar with the way that is being handled in Shetland? When we were in Shetland they were talking to us about how they could help young people get in by effectively providing a loan system. We likened it to tenant farming in the sense that people would have to find the cost of half of their investment/licence but would be subsidised for the rest through some sort of loan system working with the local community and the fishermen's organisations. What do you think about that? Could it be extended?

  (Mr MacSween) I think it is an excellent idea. Again, it arises because of the ability of the taxes that the Shetland people get from the oil companies. Fishing is increasingly a young man's job and it is essential that young skippers should be able to acquire their own vessels. The only way in which they can do that in a place like Shetland is by having access to some sort of central funding. I wish Aberdeenshire and the other councils would do the same thing.

Mr George

  797. Because of the cost and because of the difficulty of getting new blood into the industry, do you think it is inevitable that there will be, if you like, vertical upstream investment from supermarkets? Will they be buying in? Is there already evidence that they are in Scotland?

  (Mr MacSween) I think it is rumoured that some of the supermarkets have bought fishing vessel licences but I am sure Mr Mitchell can almost remember the days when Ross Fisheries tried the same thing.

Mr Mitchell

  798. In reverse.

  (Mr MacSween) Yes, in reverse. It seems to me that the fishing industry is not one that is prone to vertical integration. The business of running a fishing vessel and catching fish requires a breed of person who does not fit easily into the accountant plc type of set-up.

Mr George

  799. Just coming back to the issue of designated ports and generally the approach taken by the Protection Agency. How do you, as POs, rate the performance and efficiency of the Protection Agency in Scotland?

  (Mr Gordon) The answer is there is a good relationship between the fishermen and the enforcement agencies and everything should be done to encourage and foster that. If you started charging for it that would have the opposite effect. I think the view of fishermen would be that they are over- efficient, they are doing too good a job.


 
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