Examination of witness (Questions 40-59)|
WEDNESDAY 9 MAY 2001
40. That they too are as interested in conservation
as anyone else because otherwise they will not be in the industry
for very long. That implies the need for the industry to become
its own regulator to some greater extent and I think the zonal
proposals certainly push them into that role in which they then
have a greater degree of ownership of decisions that are made
and also have, therefore, to bring their own membershipif
it is a member based solutioninto line and recognise the
unpleasantness of some of the decisions that have to be made.
(Mr Morley) I absolutely agree with you. The more
we can involve the industry in ownership of the industry then
the better it is. We have moved down that road with such things
as fixed quota allocations which the industry can invest in, they
can trade in and, of course, it is in their interests to make
sure that quota is managed and, of course, it is not in their
interests to see people who have not made that investment creaming
it off illegally, which does happen. I think the problem is that
there is common agreement between fisheries managers and the fishing
industry that there is a need for conservation management, the
disagreement is what exactly that conservation management should
41. Should not the leadership that Lembit Öpik
talked about, you can see it is now being done through the fora,
actually have been exercised much earlier because what fishing
needs is a definition of its future, how the Government sees it
and how the industry can feed into that future? We provided, I
thought, an excellent report in 1999 which did give the way ahead
and predict a future, as we saw it.
(Mr Morley) Yes.
42. That was based on the compilation of wish
lists that you mentioned coming in to Sea Fish. So instead of
repeating a wish list exercise through Sea Fish, which you have
done, the Government should have exercised the leadership at that
point. It did not and in my submissionand I will get your
reaction to it, which I do not suppose will be sympatheticit
did not because the Government's approach has still been living
from hand to mouth towards fishing. It cannot get the money from
Treasury and any new deal for fishing has got to be a combination
of financial support and regulation and involvement for the future
of fishing. It was subject to constantly changing pressures from
Europe, therefore it did not go ahead with what it should have
done, developing a national plan for fishing.
(Mr Morley) I think that we have given a strong lead
to the industry, although that has mainly been a lead focusing
on some of the difficulties that the industry have been reluctant
to face up to in the past, particularly on the conservation issue,
particularly on some enforcement issues, where difficult decisions
had to be made and a strong lead had to come from Government.
I think those decisions and those leads have come from Government.
They have not been altogether popular with the fishing industry,
and I understand that, but nevertheless it is not an industry
where you can allow things to just happen, there have to be some
decisions. There have to be leads given in relation to how to
help them deal with that. Also in terms of a strategy, what we
wanted to do was to actually give the industry involvement in
that which was why Sea Fish were the facilitators for a strategy
document that was drawn up from the industry. It is why I was
a bit disappointed that a lot of it were fairly familiar wish
lists which were quite costly as you know. I would not pretend
that there is not an interest of the Treasury in all these things.
I would not pretend that I do not have the same restraints as
any other spending departments in relation to the Treasury rules.
I would say very clearly to the Committee that one of your five
principles that you set down in 1999 was that the industry should
not become a subsidised industry and that if resources are used
they should be used in a way which is cost effective. Now we have
been working to those principles and it means that, frankly, some
calls from the industry have just been to subsidise them and it
is not a route we want to go down, and I do not think it is good
for the industry either.
43. That is not the evidence the NFFO have given,
and all the documents submitted to us have given, which is that
the industry has got to be helped from A, which is the present
situation where many of them are facing insolvency and a lot of
them are below the level of viability, to B, which is the regenerated
stocks which come from a proper management system.
(Mr Morley) Yes.
44. To get the industry between those two points
there is the need for finance. Other industries are getting it,
as you have shown us in the memorandum about the amount of support
which is coming from other governments; our industry is not.
(Mr Morley) Yes. On that memorandum, Chairman, you
might like an update on that in that it did say that the French
aid package had been suspended in February, following investigation
by the Commission. I understand now that Belgium, France, Spain,
Italy and the Netherlands are all currently under investigation
by the Commission in relation to the support packages that they
have provided. So I am not at all sure
45. That presumably has not stopped a lot of
money being paid out already?
(Mr Morley) It has with the French scheme which, as
I say, was stopped in February. So I am not so sure whether some
of these schemes are going to actually materialise. It comes back
to the point what is legitimate Government expenditure in relation
to the fishing industry? It is back to an argument that we have
had before within the Committee, when I have been before it, which
is is it sustainable to provide public subsidy for investment,
say, in fishing vessels if the industry itself cannot provide
the income from the fishing because are you then just propping
up artificially an industry or sectors of the industry which are
not sustainable which is not good for the industry in itself?
I think you have to think very carefully about where you are putting
that money, where it is going and what the end results are. What
I firmly believe you must not do is use public funds to prop up
unsustainable sectors of the fishing industry.
Mr Mitchell: What I am suggesting and what the
NFFO have been suggesting is that we look at the World Wildlife
Fund proposals in respect, for instance, of the Channel fishery
where the return is currently minimal but with investment, and
Treasury never has a concept of investment, it seems to be obsessed
with candle ends or cod ends
Chairman: Do not go into cod pieces.
46. Not cod pieces, no. There has never been
the investment which would, as the study shows, yield a substantially
higher return over the long term.
(Mr Morley) What the Treasury are never going to do
is put money into what they think should be market-led investment
from the industry sector concerned. It is true that the fishing
industry are under pressure because of a fall in fish stocks and
the priority is to regenerate those stocks and that is being done
at the present time. What you are talking about, to be blunt,
is paying to tie up fishermen and pay them for not fishing. That
is a very unattractive proposal because it does not really address
some of the structural problems that the industry has because
theoretically you could tie them up and, yes, it takes temporary
pressure off the fish stocks but if they simply go back and you
cannot tie them and pay them forever and hit them as hard as they
have been hitting them in the past then you have just wasted a
lot of money. Resources are limited so, therefore, you have to
think about where you put those resources to get the best results
for the fishing industry in terms of the best cost benefit analysis.
The other point, which is a philosophical one but it is worth
saying, is if we want the industry to take ownership, particularly
of conservation, and I think that is right, and we are developing
that more and more, I am not sure it sends a very good signal
if we accept that the cause of the problem is over fishing but
the reward for over fishing is automatic subsidy in relation to
tying up. It does not really send the right signals to the industry,
47. That is a caricature of what I am saying
or the industry is saying. You are saying pay them not to fish.
There is support for farmers on set aside not to farm but that
is just a debating point. What I am saying is that there are substantial
costs imposed by re-equipment, by more selective gear, by new
gear, by different mesh sizes, by square mesh panels, all these
kinds of selective operations, which are not financed by Government
and which would help the industry to be more selective and to
(Mr Morley) But the Treasury response, Austin, would
be that all this investment is for the benefit of the industry
who will reap the benefits of that so, therefore, where is the
argument for the state to put money into that? I know that is
a simplistic argument, and I understand what you are saying about
the comparisons with the agricultural sector, but the agricultural
sector through the CAP is not sustainable in itself and that is
going to change.
48. It is being sustained. It goes on year after
(Mr Morley) No, it is going to change. I think that
there is a growing mood within Europe for that kind of change.
I do not think we should be saying we should have a similar unsustainable
support regime for the fishing industry that we have for the agricultural
industry. We need to get away from that kind of support for the
49. If the fishing industry is not helped in
some wayyou are doing a brilliant job, an excessively generous
job, if I may say so, of defending the Treasury's positionif
it is not supported in some way and other industries areand
despite what you said about France, Spain is being supportedwe
will get the same situation we got in the early 1990s when the
Government refusal to support the industry led to licences being
sold, a lot of it closing down, sold on to quota hoppers who then
took the British quota and legally could do so. You will have
that again. Industries which are subsidised to survive will tie
up quotas and assets in this country because the Government is
not supporting them to re-equip, keep going, to sustain the future.
(Mr Morley) I should say I am not defending the Treasury
position, I am explaining it, Austin, really.
50. You referred to it as simplistic a short
(Mr Morley) We have to live in the real world in these
things and that is the attitude, of course, which is a long standing
attitudethere is nothing new about thiswhich applies
to a whole range of different sectors. Yes, there is a case for
financial support and I recognise that in my discussions with
the industry and I have tried to respond to that with the support
package which we announced very recently which is about £22.5
million with a combination of support. That is a reflection of
our accepting the case that the industry have made. There are
limits to this and I would not take such a gloomy view of the
industry as you presented because while I do not doubt the current
problems and financial pressures within the industry, which are
very real and very genuine, investment is going on. New boats
are being built, the industry is putting that money in. Those
who have a vision, and those who are good business people and
innovative, are thinking ahead and finding the funds to make sure
their business does have that investment. I do not think the risk
of quota hoppers buying up licences is as real these days as it
was in the past because there is no doubt that there are a range
of factors which actually discourage that kind of quota hopping
these days, not least the economic links condition which has proved
to be a deterrent.
51. Let us move on to the aid package announced.
You always had a package in view and indicated to fishing MPs
something would be forced. In essence, was it not forced from
you by the decision of the Scottish Executive to support the Scottish
industry more generously?
(Mr Morley) No, it was absolutely not forced from
us because it was always the intention to put together a case
for the industry and to find them a package of support measures,
some of which have been funded from within the Department's funds,
some of which have come from DETR funds, but that was done. It
would certainly be true to say that if there was a scheme for
the Scottish industry and not one for the English industry, that
would be very unfair to the English industry and very hard to
defend and I would frankly concede that.
52. The Scottish Executive submission to us
indicates this is new money in Scotland. You say, and you have
just said it now, that the money ". . . has been secured
from savings redeployed from elsewhere in the fisheries budget
. . .", six million. How can that be described as new money?
(Mr Morley) It is new money because it is money which
is from the Department and it need not necessarily have gone into
the fishing industry, it could have gone into a number of spending
headings. It was a decision to put that money into a package of
measures for the industry to reflect the particular problems that
they are facing at the present time. I would also say in relation
to the Scottish budget, Austin, a very large part of that £27
million that was announced was from the FIFG budget, it was not
new money in that sense either. They did add some money on top
of that but what they have done is rolled their FIFG budget into
a decommissioning scheme.
53. What you said was "secured from savings
redeployed from elsewhere in the fisheries budget".
(Mr Morley) Yes. There is no guarantee, Austin, within
the Department rules that necessarily has to go into the fishing
54. There is a disparity there, is there not,
because the Scottish Executive says up to £25 million for
decommissioning? You say six million.
(Mr Morley) Yes.
55. That is totally unrelated to the relative
scale of the two industries.
(Mr Morley) That is not the case. It is actually roughly
pro rata to the two industries. If you take into account the average
number of fishing days which are calculated, if you include the
demersal sector, nephrops sector, then approximately in relation
to the size of the active fleets it is roughly pro rata. Now I
do not particularly want to argue that it was done in a clinical
pro rata calculation, because it was done basically as part of
the package that we put together to address our own industry's
needs and it was a combination of factors but, if you look at
it, Austin, it is roughly pro rata in relation to the fleets.
56. I look at it like Oliver Twist. Number of
fishermen 39 per cent in England; number of fishing vessels 50
per cent in England, value of landings 31 per cent in England.
That bears no relationship to six million versus 25 million. However,
let me move on. I would like to ask you about the effect of that
on the balance between the two industries. First, is it correct
that several English fishing vessels are in fact registered in
Scotland and will, therefore, be eligible for decommissioning
financed by the Scottish Executive?
(Mr Morley) This is a new situation because of the
fact that this is the first decommissioning scheme that has been
introduced under the new devolved arrangements. Generally speaking
the country of origin of fishing vessels is taken as their port
of registry. If they are registered in a Scottish port then they
are Scottish vessels. I am not a legal expert on this, I have
to say, Chairman, I must put that caveat in right away.
57. What is the relative effect going to be?
Will we have more decommissioning in Scotland, more bankruptcies
(Mr Morley) I do not necessarily accept that argument
that there will be more bankruptcies in England. It is a voluntary
scheme, of course. It depends who wishes to put their vessels
in to the scheme. I think it is very hard to predict that. Of
course, the whole intention of a decommissioning schemeand
it is a one-off one year scheme in both countriesis to
remove some of the capacity and, therefore, to allow more quota
to be shared out amongst the remaining vessels and, therefore,
make them more viable. On the points you were saying of pro rata,
I have found the figures now. If you basically assume the scheme
would apply to the demersal, seines, nephrops, lines and nets
segments of the fleet, include active vessels with a minimum of
75 days at sea per year, the capacity ratio of Scottish to English
vessels is 3.8 to one which is very similar to the ratio of £25
million to £6 million. Now, I do not want to make a big thing
about this but it is very roughly pro rata.
58. If I can just take you back to the Common
Fisheries Policy. We have used the analogy with the CAP and it
would seem what is beginning to make the possibility of change
a reality rather than a dream is the change in the Germans' approach.
What nationality or what factor would force that change that most
people want to see with CFP?
(Mr Morley) I think the most important thing is if
there is a consensus amongst the North Sea states in relation
to the way that the CFP should change. At the last Fisheries Council
there was a round table discussion on the Green Paper to get a
feel of what people thought about it. It was very clear from that
round table discussion that there was a consensus, I think, emerging
around the Green Paper proposals. The only note of dissent was
from Spain. I was a little bit surprised because in discussions
with the Spanish Minister I thought that there was a fair degree
of agreement about the way that the CFP should go. Clearly part
of these are negotiating issues. I think that there is a consensus
emerging around the central themes of the Green Paper and that
is absolutely right and I think that is quite good news in relation
to what we want to see from the UK.
59. I wonder if I could just ask a couple of
small questions about the package before we move on to talk about
sustainability. I see that part of it was a £5Ö million
grant from the DETR for retraining and what is described as rejuvenation
of fishing ports.
(Mr Morley) Yes.