Examination of Witness (Questions 1-19)
MR BARRIE
DEAS
16 NOVEMBER 2004
Q1 Chairman: Welcome, Barrie Deas. You
are Chief Executive of the National Federation of Fishermen's
Organisations, and also a member of the Sustainable Fisheries
Group, which is carrying on the work of the Strategy Unit in which
you also played a part. We might be somewhat interrupted today
because of the divisions intermittently, so we will have to play
the time by ear. Let me kick off straight away because I think
you have concerns about the 13% decommissioning target. Could
you tell us what needs to be done before that target can be addressed?
Mr Deas: The Strategy Unit case
for a further 13% reduction in capacity is to achieve improved
profitability for the whitefish fleet. That is not a principle
that we in the NFFO have any great objection to; where we have
concerns is that this projection is based on a model and, like
all models, depends very much on the assumptions on which it is
based. We consider that more work needs to be done to make those
assumptions realistic. This is a point with which we are in discussion
with Defra, through the working group structure that has been
set up to look at the Strategy Unit recommendations. In particular,
the one I recall is that the Strategy Unit model did not seem
to take into account the improved profitability that would arise
from an improved catch per unit effort that would be associated
with improved stocks. So it is things like these that need to
be looked at in some detail before we would have enough confidence
in the model to make those kinds of projections. Then we would
make a decision on what sort of level of fleet reduction would
be acceptable or necessary in order to make the fleet internationally
competitive.
Q2 Chairman: There is also still the
problem of what steps other European fishing nations are taking
either to decommission or perhaps to enlarge their own fleet.
What is happening there and what bearing is that going to have
on our own decisions on decommissioning? Some of them are still
building, are they not?
Mr Deas: Some of them are still
building on the basis of public funds to the end of this year,
and then that is ended. You are quite right, from a stocks point
of view and from an equity point of view, that is a very serious
flaw in this approach. However, it should be recalled that the
Strategy Unit proposal for reducing the size of the UK fleet was
not primarily based on ideas about stocks and improving sustainability
of stocks, it was about improving profitability and achieving
some kind of optimum level of profitability. So it would be in
those terms that we would have to think about a further round
of decommissioning. But you are quite right that the Irish, French
and Spanish fleets that operate in our waters and fish on the
same stocks have been expanding and modernising their fleet and
obviously that puts them at a competitive advantage. And of course
there is what might be called "inherited toxicity" from
the state support that has gone into those fleets over the last
20 years and has been denied the British fleet.
Q3 Chairman: So the danger is that we
shall decommission, reduce our fleet and they will have more effective
and modernised fleets to take the stocks as they improve?
Mr Deas: The first concern would
be that the stocks would not have improved because you have this
increased modernised capacity at work on them, but the second
order question is that they would be in a stronger, competitive
position, that is right.
Q4 Chairman: You also described that
the industry financed tie-up scheme was an ill-thought one, which
is presumably because you are going to have to pay for it?
Mr Deas: In an otherwise very
well thought through report this proposal, this recommendation
stands out as being patently absurd because the Strategy Unit
has indicated that the whitefish fleet is not profitable, it is
operating the very margins of profitability, and yet this proposal
that the industry fund a tie-up scheme for four years to assist
stock recovery should be introduced. So our question would be:
where is the money going to come from? In the absence of external
funding it is not going to happen, so I think we should put that
one aside.
Q5 Chairman: It should be financed by
government, should it?
Mr Deas: If we are going to go
down that road the industry could be interested in a government
funded tie-up scheme, but over the last 10 years or so signals
coming from government are quite clearly that the money is not
going to be available for that. I think because of that it is
really a distraction and we should focus on the other elements
within this Strategy Unit that are a bit more positive.
Q6 Mr Drew: The crunch point for all
this change, as identified by the Strategy Unit, is the alteration
in quota arrangements, and according to the evidence you see merit
in this idea of Individual Transferable Quotas. But I also gather
that you do not want to completely remove the Fixed Quota Allocations
that we have grown used to over the years. Can you explain the
logic of going to the one but wanting to keep the other?
Mr Deas: I think the central point
is that we already have tradable quotas and if you were to move
to ITQs it would simply be a re-branding exercise in many respects.
We have a functioning system which has evolved over time and it
has struck a balance between a facility for fishermen to trade
quota, to obtain quota if that is what they want to do; but also
a collective element in as much as the allocations are made to
producer organisations, and therefore there is a community or
regional element involved. We think that is probably the right
sort of balance. So the issue is not one of moving to trading
quotas, because we already have that; the issue is whether the
allocation should be made at vessel level, and we have some doubts
whether it is practical to allocate 120 quotas then to vessel
level.
Q7 Mr Drew: So at what level should the
quota be fixed?
Mr Deas: I think the system that
we have now serves us reasonably well; that is not to say that
it could not be improved, we could perhaps give some more parity
to the issue of legal entitlement, and we could make a number
of improvements. Essentially I think the right balance is already
there between tradability and the regional community based PO
system—producer organisation system—that provides
some kind of stability and administrative framework. It is interesting
to note that although the Dutch started with a pure ITQ system
they have evolved what they call a group system, which is actually
very similar to ours in as much as individually owned quotas are
grouped collectively and managed collectively because of the additional
flexibility that that provides.
Chairman: We will take a break now; we
will be back in 10 minutes.
The Committee suspended from 3.45 pm to 3.56
pm for a division in the House
Chairman: Can we start again, please?
Diana Organ.
Q8 Diana Organ: I want to ask some questions
about improving UK and EU information and compliance. As you know,
the Strategy Unit has recommended a number of measures to improve
compliance and information, but do you feel that these are adequate
and sensible measures? Are they realistic and are they really
going to tackle enforcement and compliance issues within the industry?
Mr Deas: I think if you do not
have good information then you cannot have good management, and
at the present time we have a broken system for a variety of reasons.
Landings data is, shall we say, imperfect. As a consequence there
is a great deal of uncertainty about the scientific assessments.
So it is a vicious circle because as a result we get lower total
allowable catches and that puts economic pressure on the fleets,
and there is pressure therefore towards illegal landings, and
the whole thing spirals downwards. If we are to break out of that
system we need to establish a good information system and a good
working relationship with the scientists. I think that is really
the core of the matter. So we agree with the Strategy Unit that
we should aim to move towards a high compliance system, but we
also agree that a fundamental element of high compliance system
is economic viability of the fleet. So it is how to move forward
on all of these fronts at the same time. Our Federation has, over
the last two years, with money from Defra, established Fishing
Science Partnerships, where we supplement the official science,
the more formal assessment techniques with particular projects
aimed at specific problems of concern, both for the scientists
and the industry, and I think that has been a very effective way
of breaking out of the cycle. But to repeat myself, if we do not
have information we do not have a good management system.
Q9 Diana Organ: One of the things that
the report also goes into is that it believes there would be a
lot of improvement if there were introduction of progressive recovery
of management costs from industry, and I know that the NFFO have
said that at present they think it is inconceivable that the Government
could move in this direction of cost recovery. What reservations
do you have regarding this, and would there be any circumstances
that you could foresee the industry contributing to management
costs in the future? Or are you just right out into the long grass?
Mr Deas: The view we take is that
at present, under current economic circumstances, there simply
is not the money in the fleet to make a contribution to management
costs. On the other hand, in circumstances where the Strategy
Unit outlined where you have a high profitability fleet operating,
we think it would be fair and reasonable for the industry to make
some level of contribution and we would be willing to discuss
an appropriate level. So we are not saying no. We are saying two
things: we are saying that the fleet has to be economically able
to pay that amount; secondly, there needs to be some kind of level
playing field within Europe because we cannot be put at an economic
competitive disadvantage if we are the only ones within Europe
paying for enforcement. So those would be the two pre-conditions,
but we are not saying no.
Q10 Diana Organ: Do you think that effort-based
systems are the best way of being the most effective way of managing
mixed fisheries?
Mr Deas: No. I think that effort
is a very crude way of managing fisheries, a very blunt way of
managing fisheries, and the effort systems that we have in place
should be regarded as temporary. The rationale for effort system
is primarily that the TACs and quota system alone has not worked
and needs to be supplemented to ensure that quotas are not exceeded.
But if we are moving to a high visibility, high compliance system
and we achieve that, then there is no rationale left for an effort
system. Apart from our fundamental objection, which is, of course,
that tying your principal capital asset to the quayside for a
good part of the year does not make sense in terms of economic
rationality, and which would be our starting point.
Q11 Chairman: How would if affect relative
stability if you had an effort-based system?
Mr Deas: That is a good question
as well. I think it would destabilise it.
Q12 David Burnside: Mr Chairman, as I
raised before the meeting started—and I think it is a national
comment which reflects the whole of the industry—today,
back home in our own industry, we have a funeral taking place
of a young man who went down on the Emerald Dawn last week,
Colin Donnelly, and I think we should all of us recognise that
it is an industry that still has dangers, and our thoughts would
very much be with the family of that young man today. Turning
to some of the recommendations in the report on the regionalisation
of management, perhaps you could flesh it out a little? Could
regionalising the management function have gone further? And when
the management structure takes place over the North Sea, the Channel,
the Irish Sea and the different fishing regions, how does the
UK Government nationally support these Advisory Councils? What
do you expect the Government to do to support them? Is there a
financial input?
Mr Deas: First of all, I think
that this part of the Strategy Unit report has received widespread
support in the industry because rolling back the role of the Commission
out of day to day management decisions, more towards an audit
or refereeing role makes sense, particularly against the background
of the last two December Councils where very poor decisions have
been taken; and we have been working for the next six to nine
months to rectify them before we come round to the next December
Council.
Q13 David Burnside: My understanding
from my home ground or my home sea view point is that we have
our own submissions for quotas, for example from the local areas,
for the December quota meeting. So how does this new management
structure affect it?
Mr Deas: Under ideal conditions
the Regional Advisory Councils would develop long-term management
plans that would set harvest levels for various stocks, and we
would operate on that basis, and that would have a buy-in from
the industry, rather than the kind of horse-trading that goes
on every year with the Commission in a kind of bullying role.
That would be where we would want to move towards. As to what
the UK governments—
Q14 David Burnside: Or the Scottish Parliament
or Northern Ireland.
Mr Deas: Yes. As to what governments
should be doing, I think first and foremost there needs to be
financial and technical support for the stakeholder representatives
on the Regional Advisory Councils, and I think that is already
happening. The North Sea Regional Advisory Council has only been
up and running a matter of a fortnight or so, but already we have
seen willingness of government to provide the kind of technical
support needed. It is going to be an evolving system and we are
going to have to see how it works out, but I detect a change in
attitude. I think things are changing. The question is whether
other Member States will see this as the opportunity that the
UK certainly does, and the Strategy Unit certainly does.
Q15 David Burnside: How do you mean?
Can you take that further?
Mr Deas: The Regional Advisory
Councils will only work if they are supported and provide credible
advice to the Commission and the Council. So it is (a) the quality
of the advice that is coming forward, and (b) the receptiveness
of the Commission and the Council to that advice that will determine
whether it is successful or not, and those are open questions.
I think that the administrations in the UK can provide a great
deal of technical support that would ensure that those Regional
Advisory Councils are indeed effective and credible bodies.
Q16 David Burnside: So overall you are
happy?
Mr Deas: Yes.
Q17 Chairman: I think it is fair to say
that success has many fathers, but now that many people are claiming
the idea of regional management, the actual truth is that it came
from the NFFO and the SFF as they retreated from their original
policy of withdrawal from the Common Fisheries Policy. Would that
be a fair summary?
Mr Deas: Yes, it is an idea that
evolved and that is, I think, where the different paternity suits
came from.
Q18 Chairman: What kind of role would
you like the catching side to play in it, apart from running it?
Would you like a defined role in the Regional Advisory Councils
for the catching side?
Mr Deas: The catching side has
a defined role.
Q19 Chairman: I meant a more powerful
role really.
Mr Deas: I am quite content with
what we have. Two-thirds of the Executive Committee are from the
catching sector, which I think is right and proper. It is one
thing to have an interest in fisheries, it is another to have
a livelihood dependent on it and I think that justifies the proportions
that have been set. The first outing of the North Sea Regional
Advisory Council in Edinburgh a fortnight or so again worked very
well. There was input from all the stakeholders, but certainly
the catching sector had full opportunity to play its part. I do
not see it as a problem, though others may.
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