Select Committee on Agriculture Minutes of Evidence

Examination of witness (Questions 1-22)




  1. Mr Deas, welcome to the Committee. You know the form as you have been here before. You have called on the Government to undertake "a reassessment of priorities" and "a change of emphasis from short term crisis management to strategic vision". You also describe the latest Brussels conservation measures as "the most draconian ever invented". It does seem, does it not, that the management of the fisheries policy can only go in the direction of a constant multiplication of controls and regulations? Do you have a vision for the future of the fishing industry which might see us moving in the opposite direction and actually having a more liberal, less regulated regime, but still consistent with conservation? Can you sketch a scenario in which that might be an option?

  (Mr Deas) First of all thank you very much for providing this further opportunity to present our Federation's viewpoint. It is appreciated. I think that the issue is not the multiplication of regulations, of which there has undeniably been an exponential explosion over the last ten years in the amount of regulation to which fishing vessels are subject. The key question is how effective are those measures. The answer that we come up with is that despite the fact that our members operate under a very heavy regulatory burden those measures have not turned round the stocks. The key question for us is not one of the liberality of the regime. It is a question of what are the effective measures that could be put in place to regenerate the stocks and how can those stocks be maintained at a stable level? That has to be the priority for us. There is certainly a great deal in the current arrangements that could be dispensed with under a more rational regime but, as you, Mr Chairman, in a previous life once said, if in the area of conservation there is no support for the regime that is in place it will not work. Our hope and aspiration is that we can rebuild the stocks, put in place a regime that works but has at least the tacit support of the fishing industry to give effect to those measures, which is why we have put forward our ideas of recovery and government investment in the recovery plans.

  2. What is the difference between active support and tacit support? Why cannot the fishing industry actually say, "Yes, we have got an interest in conservation and we are going to make it work"? One almost gets the impression that it is almost a sort of cultural thing, to be agin whatever system of regulation is in place. Is that unfair?
  (Mr Deas) I think there is a historical aspect to this, the fact that the regime we have is very much seen as being imposed from outside and, as well as that, ineffectual. That double whammy, those twin aspects, lead to a cultural view that they are out to get us. The evidence is that the industry certainly south of the border is withering on the vine. It is not a view that is completely without validity.

  3. How does one get out of this cycle then in which you have described as draconian the conservation measures which have been introduced? The industry says, "If you apply these we will not be able to earn a living and the industry will collapse, but if you do not apply these then we will not be able to earn a living and the industry will collapse". How does one escape from that cycle of ever more draconian measures as it were for a conservation policy which appears, in your words, not to be working?
  (Mr Deas) I think the critical factor, and you have put your finger on it, is the short term losses associated with effective conservation measures. Anything that is meaningful in terms of conservation will have short term losses for the vessels. The scientists can give you figures year by year on what that would mean for each stock. If we were to increase mesh size, for example, or have a closed area or tie the fleet up, the scientists can generally tell you what the short term losses will be and what the long term benefits will be. That is the focus that we have to keep in mind, those long term gains. That can be four years, it can be five years, it can be six years, but in the end, if the measures are taken, the stocks will rebuild and there is awaiting us prosperity. This is the critical point about the fishing industry. It should have a bright future. It is based on a renewable resource and the product which we present to the market is in demand and in growing demand. All the variables are there for a successful industry. What we have to get right is the stock management. Bridging the gap between the short term losses and the long term gains has to be the focus of government policy in our view and government investment is part of the picture. We call it investment, not subsidy, quite pointedly because this is a win/win situation for the industry and the Government in our view. An industry operated on stable, rebuilt stocks to safe biological limits, would certainly provide the basis for a prosperous fishing industry but would also provide the Exchequer with a great deal more income than is presently the case. The Government has recently invested some £93 million in enforcement: new patrol vessels and a new research ship. These are all vital in our view but we have to ask ourselves what for if the stocks are in decline; if we do not get the stock management right. And from our point of view that involves a change of strategy, a longer term view, there really is not a great deal of sense investing in the accoutrements.

  4. Is there a bright future for the industry in its present size or do you agree with the Commission that it has to be a smaller industry?
  (Mr Deas) Our Federation has agreed reluctantly that a decommissioning programme is necessary. In the context of these recovery programmes that are coming forward from Brussels, a smaller fleet would make those measures easier to take. We would not necessarily agree with the Commission's view that it has to be of the order of 40 per cent, but certainly some reduction in the size of the fleet makes it easier for those who remain. Ours is a twin track approach. We advocate a degree of decommissioning but also transitional aid for those who remain in the industry.

Mr Todd

  5. In what was, I think, generally a widely welcomed report by this Committee on the fishing industry we drew attention to the need for an agreed strategy for the industry involving government and the key players in the industry itself and made the statement that one of its objectives should be to minimise the complexity of regulation while maximising the responsibility for that process given to the industry consistent with securing compliance. Has any progress been made towards meeting that goal?
  (Mr Deas) The Sea Fish Industry Authority, at the request of the Fish Industry Forum, has produced a strategy document. It was rather hurried and I think that that strategy document and our Federation and the industry at large have been knocked sideways by the impact of the numerous recovery programmes that are being generated by the European Commission presently. We have the second year of the Irish Sea Cod Recovery, we have North Sea Cod Recovery, we have Hake, we have West of Scotland cod. All of those involve numerous meetings in various parts of the European Union.

  6. So you have not been able to focus too much time on the longer term because the short term is so threatening?
  (Mr Deas) Quite. I think that is it in a nutshell. There are some aspects of the recovery plans that are positive. For example, there seems to be an implicit acknowledgement that regional consultation and regional management, which is one of the main objectives of our Federation, is de facto the way to go and the consultations have been on a regional basis.

  7. One of the key recommendations in our report was to see transfer of responsibility to the industry itself to regulate its own behaviour in its own best interest. Has there been any sign of that actually happening?
  (Mr Deas) I cannot see that there have been large leaps and bounds in that direction. As I say, the recovery plans show that the Commission are increasingly consulting on a regional basis which is a positive sign. The 2002 Review will provide for institutional changes in that direction. The question is how far and how fast they will go. Certainly from where we sit I would not say that there has been dramatic change in that direction.

Mr Jack

  8. Do you think, Mr Deas, that the industry can go on trying to have its cake and eat it? If you go back to the immediate post-war period and look, for example, at the work that Lowestoft did on cod stocks, it is self-evident that if you leave the fish alone for long enough large stocks will build up. Yet the industry, which has a rapacious desire to fish everything that moves, backed up by the arrival of modern technology, has relentlessly pursued stocks in certain cases to a scientific view that it is almost to extinction. Is it not the case that the industry has brought some of these problems on itself and then turns round and looks for assistance from others to try and bale it out from its own self-imposed problems?
  (Mr Deas) I think that fishermen fish and the key issue is what sort of framework do they fish within. It is the regulatory regime that matters because I suppose, left to themselves, each individual fisherman, each individual vessel, will fish to the maximum. I think it in turn is naive to simply blame the industry for doing what comes naturally to fishermen. What we have to get right is the regulatory framework. That is the key point. It is that which has failed and that we must get right. What we say is that a combination of tough conservation measures and government investment in stock recovery, whether that government is national or European, is the prerequisite for rebuilding stocks to within safe biological limits. I certainly think that is desirable, but I also think it is achievable.

  9. You could argue that somebody looking at the figures, which show that the industry is worth, landed catch-wise, £662 million a year, might wonder what all the fuss is about because it is a relatively small industry; 75 per cent of our fish that come into the United Kingdom come from non-UK sources. Why do we not all back off, have a rest and let the stocks recover and just import fish from elsewhere? Give me a raison d'e®tre as to why we should continue to be concerned about a relatively small industry. Some big industries like coal mining have recognised that there are changes in the way that energy is supplied and there has been rationalisation. We will not have a debate on that. There has been a lot of pain and suffering but that has occurred. Could you argue the same case for the fishing industry?
  (Mr Deas) I think that the viewpoint you describe is one that appears to have been taken by the Treasury. If we look back to the early 1990s, the absence of the decommissioning scheme at that stage allowed the Dutch and Spanish to acquire a large number of licenses and the quotas associated with those licences, so from our perspective and the fact that the industry is disappearing, particularly south of the border—and if I may make one criticism of the 1999 report it was that yes, there are bright spots within the industry, notably the pelagic sector, but there is a danger in averaging. You can miss some of the salient points. Certainly south of the border the industry, particularly in the wake of the fuel crisis, is in desperate straits. Whatever sector you look at, whether it is white fish, beam trawl, gill net, all of them, certainly the demersal fisheries, are under a great deal of pressure. The question is, do we want a fishing industry in this country, an indigenous fishing industry? From our point of view the answer is self-evident. From an external point of view it has to be for others to make that judgment. I certainly do not detect from the people that I speak to that there is a willingness publicly to let the industry go down the tube but that does not appear to be matched within government as a whole.

  Mr Mitchell: That line of questioning is fascinating because the same advice should be given to the car industry and the steel industry and the textile industry: back off and give it a rest and let the competition take over. I think that is very sensible economic advice. It is extraordinary, just to redress the balance of questioning in this Committee, that the fishing industry has managed to sour the attitudes of two former Tory Ministers who were responsible for it. Now they are attacking them as whingeing scroungers.

  Chairman: You have not heard Mr Todd fully yet.

  Mr Jack: Could I on a point of order just say, Mr Chairman, that because one asks probing and searching questions to allow industry representatives to have their say about justifying their line of policy it does not necessarily mean that the question is attacking the industry. I am disappointed that Mr Mitchell launches such a vitriolic and personal attack on the Chairman of this Committee and other members when we are merely seeking after information.

  Chairman: Now Mr Mitchell will ask his question.

Mr Mitchell

  10. If I were to be attacked in the same way I would give the same pompous reply. The essence of what I draw from what you are saying is that if the fishermen were involved in the formal issue of policy and if they felt it operated fairly so that any reduction of catches or effort or conservation measures on their part would not be immediately undermined by competitors coming in and taking advantage because they are not as effectively policed, then we would have a much healthier situation because the industry would be a stakeholder in its own future. That has been a formula for success in Australia, in Canada, in New Zealand, in all the other countries which have taken their 200-mile limits. The problem is a common fisheries policy which is largely political and which is not administered with equal justice between the states.
  (Mr Deas) There are two problems we face. One is, as I have said, the failure of the management regime to halt stock decline. The other one is distorted competition and these are intertwined with each other. That is why we are in the dire straits that we are in today. The fuel crisis was a classic example when the governments of France, Belgium, Ireland, other Member States, jumped to their industries' support, saw this as a short term problem, gave them the support that was necessary to see the spike in oil prices pass through, and then, with the industry on a stable keel, backed off. That was a classic example of the difference between the way the British Government through successive administrations has treated this industry and the way that the industries have been treated in other Member States.

  11. And the conclusion from that is that those industries which are better financed to survive the immediate problems will be there to grab the opportunities provided once the conservation problem is in order and to buy up British licences and quotas as they did in the early 1990s.
  (Mr Deas) There was a very real fear during the crisis in oil prices that that was precisely what would happen, that there would be a second wave of quota hopping and further licences would go to the highest bidder. Who would the highest bidder be? They would be those vessels from those Member States that had received government support.

  12. Having got that off my chest can I come to the specific question I was asked to ask. You mentioned the plea for financial assistance which I think is a very strong one and said that the Government's offer of £22.5 million, whatever it is, is minimalist. What are your priorities for the industry and how have you costed it? What would go on decommissioning? What would go on new gear and re-equipment? What would go on simply financing the industry to come through the period of reduced catches, bridging that gap you mentioned?
  (Mr Deas) We have not got a formula as such, how much on decommissioning. What we need to do is re-focus on the recovery programmes and invest in the recovery programmes. That could mean decommissioning, it could be mesh size, it could be more selective fishing gear through things like square mesh panels and grids, it could be closed areas. Which particular measure we would be talking about would depend on the particular region we are talking about. What is appropriate for the Irish Sea would not necessarily be appropriate for the North Sea. What we would want to do is secure a commitment for the Government to talk to us about investing in the recovery programmes and sit down with government and talk about the appropriate balance in each area.

  13. Why do you say that the Treasury has been so hostile to a policy of support or aid for or investment in the fishing industry? Is it because of the Fontainebleau formula, that they do not want to put up the money which other nations are prepared to do to get matched funding from Europe because we have received so little from Europe and others have received so much, or is it just a general desire to save gambling on it?
  (Mr Deas) We have no idea because despite numerous requests for meetings with Treasury Ministers those have been declined. We can only go on the basis that we have had frequent meetings with MAFF ministers to discuss the fuel crisis, to discuss the economic consequences of the recovery programmes, the closed areas, the new gear, and we have been met sympathetically. We have not been challenged on either the economic consequences that we have foretold would be the impact, nor with indeed our analysis. But time and time again when we have met for the second, third and fourth times, the response has been, "Well, we have made approaches to the Treasury but the Treasury are not playing". The six million pounds was for decommissioning; the £22 million was the combination of a variety of elements including components of European funding that had been announced a year before, but even the six million only materialised as a result of the Scottish Executive breaking ranks and providing an aid package for their industry. The arguments that in fisheries there would always be consistency north and south of the border as far as possible became too great to sustain so you had a conflict between the government policy on devolution and government policy on aid. From our point of view six million pounds was scrambled together out of the existing MAFF budgets. There was no new money in there. The Treasury certainly did not contribute anything. That was then made to appear to be some sort of equivalent to the £25 million for decommissioning in Scotland which we found incredible and still do.

  14. What about the impact of Fontainebleau?
  (Mr Deas) Fontainebleau is always trucked forward as one of the arguments. What weight that actually has I will leave to others to say. From our point of view the British taxpayer, because Britain is a net contributor to the EU budget, has contributed to the modernisation for example of the Spanish fleet, the French fleet but not the British fleet because it is all too difficult because of Fontainebleau, which seems outrageous from our point of view.

  15. You calculate a drop in earnings of £70 million or £80 million. Several fishermen in Grimsby have put it to me that they are on the verge of going bust and they are just not viable. Has your prediction of a drop of £70 million to £80 million been justified so far and what proportion of the industry are in a position of just fishing on but not viable?
  (Mr Deas) I think the point is that we have got recovery plans right round the coast and they impact not just on the specific fisheries, for example, cod, but they will also have an impact on associated fisheries where vessels are diverted from cod on to nephrops for example or from hake into in-shore fishing. Calculating the direct losses is a difficult task because of the consequential impact on other associated fisheries. There is absolutely no doubt about it that many vessels are on the brink of insolvency as a result of the combination of the recovery programmes and the impact of the fuel crisis. I do not think the industry has ever been so low. It is extremely despondent and dispirited. I have absolutely no doubt that the six million south of the border will be snapped up by people who are desperate to leave, either that or pushed by their bank managers. It is a desperate situation. From our point of view it need not be that way. If we went into negotiations in Europe and said, "What sort of mesh size is consistent with the stocks that we have, the recovery, the rebuilding, and what would the short term losses be, what would the long term gains be?", and those short term losses were underpinned, fishermen's incomes would be underpinned while those short term losses went through, then you would have the basis of a movement to a viable fishing industry and we would not have to look for handouts or government assistance. I think this is the point, that what we are looking for is not long term subsidy but a short term, time limited, financial package to move us to a situation in which we would be sustainable and financially viable.

Mr Öpik

  16. Amazingly, it is true to say that the first political speech I ever made was during the cod war when I had to defend Iceland and where I won by 19 votes to 17. The reason by way of introduction that I say that is that I have always had a slight interest in Iceland but as a lay person who does not really know a great deal about the financial structures in other countries I hear you saying that other countries tend to have been more supported by government. A country like Iceland, with whom we have competed in the past, what is their financial structure in comparison to ours? I know the figures will be different because of the different sizes, but just in strategic terms.
  (Mr Deas) The most important feature about the Icelandic system is their reliance on individual transferable quotas. They have a company sector and their artisanal sector. The full blown system of ITQs appears to work reasonably well there. I think in fisheries where you have a single species fishery, principally a cod fishery there, overwhelmingly a cod fishery, it is a system that can work. There are down sides to it inevitably. It does mean a monopoly of fishing opportunities by those who hold the rights. We have a kind of hybrid system at the moment in the United Kingdom where quotas are held by producer organisations, collectives of fishermen, but there within that system a fair degree of latitude to trade quotas. However, with the key stocks being in the state they are there is not a great deal of trading going on at the moment.

  Chairman: It is probably true in the pelagic sector that we are not a long way from ITQs. They are within practical reach.

Mr Drew

  17. Given the current interest in the total re-negotiation of the common agricultural policy what hopes do you have that that radical re-thinking which followed in train in other parts of the Community will transcend into fishing? Is that something you would support?
  (Mr Deas) You do mean the common agricultural policy?

  18. I mean the common fisheries. We have got just now an understanding that we cannot go on the way we have been going with the CAP. Do you think that is something that will follow in train now with the fishing industry?
  (Mr Deas) There are some hopeful signs given the fact that the Commission's Green Paper on the common fisheries policy for the first time acknowledged that the common fisheries policy in its conservation aspects has not worked, and if it is to work radical changes are required. Certainly some of those changes we would support. How far those will be taken up we will find out during the course of next year. We are just at the start of the process on the Green Paper at the moment. I think we would have to say that we are hopeful that the movement is in the right direction. The key question is whether there will be many of us left here to take advantage of it because, as I said before, there are many vessels within our membership that are in desperate straits. Certainly the way things move within the European Community, not with the speed of light, that would be our principal fear. Things like the involvement of stakeholders, the involvement of the industry, the regionalisation of decision making and advisory functions are all movements that we think would be in the right direction. Unfortunately they are somewhat contradicted by the current use by the Commission of its emergency powers and the draconian measures that they have introduced and more are in the pipeline under these recovery programmes. They have the authority to introduce measures that last for six months and the closures in the Irish Sea, the West of Scotland and the North Sea were brought in under those measures and likewise the very draconian increase in mesh sizes which is proposed, if it was introduced without derogation, would certainly make large parts of the United Kingdom fleet, both north and south of the border, unviable.

  19. Obviously you make great play, and no doubt other fishermen will make great play, of the differential regulation. Can you give us some examples of where that occurs and what the impact of that is?
  (Mr Deas) In the previous evidence we gave we listed things like satellite monitoring, where the other Member States paid for the installation of the equipment whereas the United Kingdom did not. There were light dues, there was tonnage re-measurement. We too would like to have a systematic understanding of the regulatory costs associated in the different Member States and have urged both through the Commission and through the Fish Industry Forum for a study which we thought would be funded by the European Commission but have heard recently that that has been turned down. That would give a systematic basis to our claims.

  20. In a sense one of the ways to sort out regulation is to have a more federated scheme where you have a sort of common policing. Is that something you would encompass given that most fishing organisations would want to move in the other direction? How do you square the circle there?
  (Mr Deas) I think there is a tension there because on the one hand we do believe, and indeed the Commission's own reports have confirmed, that the United Kingdom is somewhere towards the top of the league in terms of enforcement, but other Member States do not do quite as well. Whether we would want to transfer the powers currently held by the Member State to the Commission is a step probably too far and I think that viewpoint is shared by the Member States. The Commission have proposed a halfway house which is an agency which would involve enforcement bodies collaborating at a European level but not actually surrendering their powers. That could be a halfway house. That could be a way of squaring the circle as you say.

  21. Can you explain the concept of zonal management that you say is a way in which you could possibly produce more of a level playing field, if that is not a contradiction in terms on the sea? Is this the way forward? Are you getting a sympathetic ear from this government and subsequently the Commission?
  (Mr Deas) The current system operates on the basis of decisions made by the Council of Ministers on a proposal from the Commission. That is too inflexible a system for day to day fisheries management issues. I think that is generally recognised. Zonal management would focus on natural sea areas, whether that is the North Sea or the Western Approaches or the Irish Sea, and would have at its heart a committee involving the industries of the various Member States that have fishing entitlements in that area, scientists and representatives of the Member States. They would essentially be the decision makers for that fishery. The formal decision making structure might have to remain with the Council of Ministers but we would hope that that would be a rubber stamp for long term fishing plans for the next four to five years that are put forward by the zonal committees. As to whether that is likely to be a model that is adopted, I think there is movement in that direction already. The consultative forums for the recovery plans have all followed that type of model with the Member States' representatives, the industry and scientists in the same room for the first time, so there is some movement in that direction. The weakness in the present arrangements is that we simply perform for the Commission who cherry pick the elements they like and implement those, whereas we as a federation would want that group to have authority to make the decisions themselves. The Commission would probably have a role as a Chairman in that sort of function but would not have the final say, would not be the final arbiter.

Mr Jack

  22. You have outlined your own industry's recovery programme and ideas. How much support does that command with your sister fishing representative organisations in other Member States?
  (Mr Deas) On the zonal management front I think many Member State industries were quite sceptical to begin with. Over the last three years the dialogue that has taken place I think has convinced most of them that some decentralisation of the common fisheries policy is desirable. Some of them would want to ensure that the zonal committees would have advisory functions only and they would be a little anxious to go beyond that at this stage. From our point of view that in itself would be a significant step forward in the direction that we would want to go. As to the content of the recovery plans, it is difficult to give a sweeping answer to that because the content will depend on each individual zonal management committee. The basic approach, which would be the zonal management committee advancing a fisheries plan for the next few years covering things like the level of TAC, not, I would like to underscore, the share of the quota—that would be governed by relative stability—but the TAC perhaps over two or three years, the mesh size, the selectivity gear, the kinds of things that make a difference not to the share of the cake that people get but the size of the cake, that is our overall focus, the size of the cake, not the share.

  Chairman: Mr Deas, thank you very much indeed. You are very welcome to retire to the rear of the room for the Minister's evidence. Thank you very much for coming to what is the last meeting of this Select Committee in this Parliament. None of us knows quite what shape it will take in the next.

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