Examination of Witnesses (Questions 780
THURSDAY 20 MAY 1999
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 whateverthe 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.
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
(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
speciescod, haddock, whiting and saitheand 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
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.
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 1983you can almost date
this to the Spanish accession to the European Communityis
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.
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.
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
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.
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.
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.
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.
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.