Environment, Food and Rural Affairs Committee - Minutes of EvidenceHC 1563-ii

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Oral Evidence

Taken before the Environment, Food and Rural Affairs Committee

on Wednesday 2 November 2011

Members present:

Miss Anne McIntosh (Chair)

Thomas Docherty

George Eustice

Barry Gardiner

Mrs Mary Glindon

Neil Parish

Dan Rogerson

Amber Rudd


Examination of Witnesses

Witnesses: Richard Lochhead MSP, Cabinet Secretary for Rural Affairs and the Environment, Scottish Government, Linda Rosborough, Acting Director, Marine Scotland, and Mike Palmer, Deputy Director Fisheries, Marine Scotland, gave evidence.

Q178 Chair: Can I welcome you and your colleagues most warmly to our inquiry into the reform of the Common Fisheries Policy? I think it is fair to say you are the first Minister from a devolved Administration that we have had, so you are most welcome to one of our inquiries. Just at the outset, would you like to introduce your colleagues for the record?

Richard Lochhead: Yes, thank you very much. It is likewise my first appearance before a House of Commons Committee, so I am very much looking forward to the experience today. It is appropriate to be in the MacDonald Room, given that, if I had been MSP for Moray, which I represent, I would have been Ramsay MacDonald’s MSP back in the 1860s when he was born, in the fishing village of Lossiemouth on the Moray Firth. It is appropriate that we are meeting in this room today, given what we are discussing. On my lefthand side is Linda Rosborough, who is the acting Director of Marine Scotland; and on my righthand side is Mike Palmer, who is the head of our Sea Fisheries division.

Q179 Chair: At the outset, could I just ask you if you have a view on the legal basis that the Commission has chosen, that the Commissioner is proposing, for the reform of the fisheries policy and the fact that it is hoping to alter the way that fisheries policy will be administered in the future? Do you have a view?

Richard Lochhead: It is a good question because at the heart of the negotiations over the future of the Common Fisheries Policy is the Commission’s admission that decisionmaking has to be decentralised to member-state or regional level. Likewise, there is certainly a desire from the Scottish Government to support that, because we have felt that has been the biggest flaw in the Common Fisheries Policy: that too many decisions are taken at Brussels level.

In terms of reaching a view on the legal basis for decentralising the policy, it is quite difficult to reach a view just now, because we are awaiting more information from the Commission, and the Scottish Government asked for a paper outlining the legal basis by which they feel they can fulfil what they want to achieve, their aspirations for the reform, and certainly what many of us want to achieve as well. It is very clear that there are legal obstacles or at least hurdles to be overcome for the Commission to achieve its aspirations, which is why we do await what they refer to as a ‘nonpaper’ outlining some of the legal detail of what is and is not possible.

Q180 Chair: Do you think that is acceptable?

Richard Lochhead: No, I do not think it is acceptable, because we have this unusual but refreshing position where the European Commission itself accepts that Common Fisheries Policy has been hugely damaging over decades, that micromanagement by Brussels should be brought to an end and, likewise, our industries, stakeholders and governments-Scottish and, I believe, at UK level as well-believe there has to be an end to micromanagement. Therefore, if the Commission itself wants something to happen and is now perhaps struggling to find the legal basis for delivering that, I think that is unacceptable, but hopefully we can overcome it, because there is a desire to overcome it.

Q181 Chair: How involved are you in the negotiating process and what relationship do you have with the UK Fisheries Minister?

Richard Lochhead: There are two questions there. First, in terms of our current involvement, about 70% of UK fisheries are based in Scotland; therefore, we have a huge interest in what happens during the negotiations. We also have a lot of expertise, which is responsible for a lot of the input into the negotiations process. My officials have the expertise on many of the stocks that are in Scottish and UK waters, because we have a predominant interest in these stocks, so we are deeply involved in the negotiation process. Clearly within European negotiations, there are different levels that take place, so we have a lot of involvement in the working groups that look at the detail, the science and the proposals. As Minister, I regularly attend the Fisheries Councils as part of the UK delegation and I, as far as possible, work alongside the UK Minister throughout the negotiations and make sure that Scotland’s interests are taken into account. I welcome, as often as possible, the opportunity to contribute, both bilaterally with other member states and also trilaterally with the European Union presidency and the Commissioner during the actual heated negotiations themselves, which as you know revolve around this bizarre situation every December.

I feel we do have input; there is always room for lots more input. It has been a long-standing ambition of Scottish Ministers to speak at EU Council meetings, given that many of the agenda items are very relevant to Scotland and not so relevant to the rest of the UK in some circumstances. We feel that we could have the opportunity to speak and actually directly contribute. So far, the UK Government has rejected our requests to do so, other than on one occasion when the First Minister of Scotland communicated with the Prime Minister of the United Kingdom, and then the Secretary of State’s decision was overturned and I was allowed to speak on the issue of the mackerel dispute, which is virtually wholly a Scottish issue. Despite also the fact that the UK Government does take the position that they are relaxed about Scotland speaking at the Council, unfortunately they usually say no when we ask. Hopefully that will change and we are told that may well change, so we welcome that. Compared to other policy areas, we have more of an involvement for obvious reasons in fisheries than we do perhaps in other areas of policy.

Q182 Thomas Docherty: You have mentioned this dialogue with the Commission about going forward and the debate about the transferring of more decisionmaking powers to member states. Can I ask you if you have had a significant dialogue with Defra about how that might work? Obviously I appreciate what your logical position would be, but have you had discussions with Defra about what responsibilities you, as the Cabinet Secretary for Scotland, would either gain or lose in any shift of responsibility from Commission to member state?

Richard Lochhead: Yes, we have had lots of discussions along those lines. Indeed, on my way to London I was at Newcastle yesterday for my latest meeting with the UK Fisheries Minister, and we discussed this very issue of regionalisation and how we want to take it forward. I think it is fair to say we have not ironed out the detail yet, because we are still awaiting more information from the European Commission of what they feel is possible under the current legal constraints and what is not.

Clearly our position is we want to push that as far as possible, and we have made that point clear to the UK Government. So far, we have had a warm response from the UK Minister that he likewise wants to push for radical reform and more decisionmaking to come down to the regional member state level. Our position is that there has been so much damage inflicted on our fishing communities. I could mention Lossiemouth, where Ramsay MacDonald is from, which is no longer essentially a fishing community. It has a nice marina. There are many other communities the length and breadth of the UK, not just Scotland, that have suffered damage, so we have to get as much decisionmaking power back from Brussels to the more local and regional level as quickly as possible. That is our starting position.

Q183 Neil Parish: Good afternoon, Mr Lochhead. When you became Fisheries Minister, you wanted to pursue, quite laudably, the interests of Scottish fishermen. Does that bring you at all into conflict with the Commission over the sustainability and the fishing resource, because there is always quite an argument between the level of resource that the fishermen believe to be there and the level that the scientists and the Commission come up with?

Richard Lochhead: It is one of the most challenging responsibilities any fishing Minister faces of course-balancing the demand from our fishing fleets to go out and catch the fish with our responsibility to safeguard the stocks. Clearly, when we have our negotiations and discussions with the European Commission, we do want consistency. Perhaps where there is some conflict is the inconsistency we do sometimes receive from the European Commission. On the one hand, we are told that the Commission’s policy is to prevent discards and to abide by the science, and then we are subject to regulations that cause discards and ignore the science. That happens all too often. We are facing some negotiations this time around, in the coming weeks, in the west coast of Scotland where, hopefully, we will see common sense but, again, we face the position that discards will go up and we are not listening to the science in terms of what is being proposed. We want to negotiate that away in the next few weeks.

That is where the biggest tension lies: where we are saying, to the Commission or whoever, "Your policy is going to cause discards and you, like us, want to bring that to an end. Why do we have these counter-productive regulations we are being asked to impose in our waters?" There is a list as long as your arm of the regulations that have forced our fishermen to discard goodquality fish overboard. We have alternative policies, which we are putting forward, to leave some of that fish in the sea to breed, but others land more of what we do catch rather than discard it, so it is a winwin situation for fishers, conservation and for the income of the industry. We are pushing some alternative proposals but the main conflict lies around the counter-productive regulations.

Q184 Neil Parish: Is that through fishing gear in particular that you are talking about?

Richard Lochhead: Often they are technical regulations. On the west coast of Scotland, for instance to give you one example, we have Europe putting in place what, a few years ago, was referred to as an emergency measure, which a previous Commissioner said would be lifted because it was just an emergency measure, while we looked for more longterm solutions. That was not allowing the skippers to keep more than 30% of the haddock they caught on board. They caught a lot of haddock but, if it was more than 30% of their catch, they had to discard the rest. Now the haddock stock is recovering and the scientists are recommending an over 400% increase. We are not confident at the moment that we might get that; therefore, the fishermen are in a position where they will be catching lots of haddock, where there is an abundance of haddock, and they will be forced to discard it. As I say, we hope to negotiate that away, but there are these sorts of technical measures of catch composition rules. Years ago, we had all kinds of proposals. There was a haddock permit; if you went out to a certain part of the sea, you had to have a haddock permit to catch haddock. It led to all sorts of complications and bureaucracy, which was counter-productive. It is a combination of technical measures and policy.

Q185 Chair: Could I just ask whether you disagree with any proposal to land all catch then?

Richard Lochhead: Some of us poor Fishing Ministers have been banging on about the level of discards in the North Sea and elsewhere for many years, but now of course it is more of a story in the media, thanks to the support of some personalities. We very much welcome the support of people across society wanting to bring discards to an end. The question is how you do it. One of the reasons why micromanagement from Brussels has not worked, particularly in Scottish waters but this applies to some other UK waters as well, is because we have such a mixed fishery and yet we have a speciesbyspecies quota system in a mixed fishery, and at the same time have an effort regime. To control what is taken out of the sea, we have quotas telling us what should be landed ashore, combined with how many days the fleet should spend at sea. That is unbelievably complex to administer. It is counter-productive in many ways, because we have a mixed fishery that is difficult to manage species by species and with effort control at the same time. There is no simple explanation for how to end discards. The Commissioner’s proposal to land what is caught I have some sympathy for, but it is much better to concentrate on what is taken out of the sea in the first place and what is not landed.

Chair: We will come on to this in a moment.

Richard Lochhead: When you ask whether I support landing what is caught, yes I do, if we can find a way of eliminating the discards from that and concentrate on what is taken out of the sea in the first place, not simply landing everything that is caught and concentrating on that, because we will end up moving our problem from sea to on land, if we do not do it properly.

Q186 Amber Rudd: Mr Lochhead, the chief executive of the Scottish Fishermen’s Federation told this Committee here that he thought the fish were being underfished, not overfished. Do you agree with that?

Richard Lochhead: I can see perhaps where he is coming from with that comment in that, if the quotas are out of line with the fish in the sea, again that could lead to discards, because the fishermen catch their quota really quickly, but because we have a speciesbyspecies quota system, they still have quotas left for other stocks, so they have to keep fishing to catch their other quotas, but they also catch fish for which they have no quota, so they have to discard under the regulations. In a sense, if the quotas are out of sync with what is actually in the sea, there could be examples of underfishing.

Q187 Amber Rudd: I think his argument was not quite as finessed as that, if I may say so. I think his view, as it appeared to come over to us, was that the general view, perhaps the CFP view that the fish stocks were a problem, was not the experience of his members.

Richard Lochhead: A lot of good work has been taking place to help stocks recover, so sometimes there is a lag in the science or the science is incomplete. Where it is incomplete, the European Commission takes a very precautionary level, so we get an even lower TAC and therefore fishermen’s experience is that the stock may be a lot healthier than the science is suggesting. Therefore, that is where I think his comment is coming from. The stocks are there but, for various reasons, and because of the policy adopted by the European Commission of being very precautionary, and where the science is incomplete working on the assumption that the stock is in trouble, that can lead to the TAC, the quota, being out of sync with what is actually in the sea. There is a very strong argument that too often the Commission take an approach of cutting the quotas without evidence to do so and sometimes when the science does not justify the cuts.

Q188 Barry Gardiner: Mr Lochhead, you argued that perhaps the science is not quite there yet to be able to make the sort of assessments that one would wish. I think that is a fair point, but surely you would also acknowledge that, unless you do land everything that you catch, unless it has proven longevity out of water, you are never going to be able to get a proper assessment of the biomass and you are never then going to be able to get an accurate assessment of the stocks to make those decisions and to have the science at the level that you and I, I am sure, would both wish to see it at.

Richard Lochhead: That is a fair point. Having an effortbased system only, where you land everything you catch, is a legitimate option for fisheries management. My understanding in terms of what is being proposed is that, to end discards, the simple solution of "do not discard; bring it ashore" is what is being proposed, but we still have a quota system and everything else to back that up. That is where it becomes really complicated and complex, both in terms of conservation of what is taken out of the sea and also what you do with the fish that is landed ashore. I do not want to pretend there are any simple answers to this but, if the Commissioner was saying we will move to an effortonly system, where the fleet gets X days at sea and you can land and sell everything you catch, yes, that would tackle discards and it would be a legitimate option for fisheries management.

Q189 Barry Gardiner: Do you support that?

Richard Lochhead: I think it is something we should look at. Again, you would still have to have measures at sea, otherwise fleets could potentially target species, because they are allowed to just catch and land everything they catch. That would not necessarily promote conservation for some species. If fleets for instance went for the most valuable species, and they all went for it, clearly that is not good for conservation. Yes, it has a role to play and it is something we should look at for the future of fisheries management, but it is not necessarily the answer for a mixed fishery.

Q190 Barry Gardiner: The Commission’s proposal does not actually specify what approach should be used for mixed fisheries, where it is not possible to fish all the stocks at MSY levels simultaneously. We are agreed on the problem here. What I suppose I want from you is what your solution is. What do you believe is the proper response to this?

Richard Lochhead: To discards or the wider management?

Barry Gardiner: To the problem that they are not specifying how we should approach it in a mixed fisheries situation.

Richard Lochhead: I can talk about Scotland’s experience where, when I became Fishing Minister back in 2007 and I had been in opposition for a number of years, observing fishing politics, which as you all know is very difficult and complex-

Q191 Barry Gardiner: Mr Lochhead, you will know that the Committee has limited time. I do not want to stop you from what I am sure would be a very interesting story, which I would be happy to have afterwards, but what I want from you now is a clear response to the question as to your view about what the way forward for mixed stocks is.

Richard Lochhead: I think the common fisheries reform has to give flexibility to member states to do what is right in their own fisheries, working on a regional basis. What I was about to say is that we have explored some new innovative ways of trying to conserve fish stocks and reduce discards. The level of discards has reduced in Scottish waters more than anywhere else in Europe, between 2008 and today, and that is because we have adopted things like catch quotas. That is where the fleet is given the opportunity to increase the quota of what they can land in return for taking less fish out of the sea in the first place. When they exhaust their quota, they have to return to shore, so they cannot catch other quotas because they have caught their quota for one of the species.

Q192 Barry Gardiner: Is that going to get us to MSY by 2015?

Richard Lochhead: What I am saying is that we have reduced discards and the stock is improving in terms of cod, which is the main stock where we struggle to get MSY by 2015, but I do not think we are going to get to 2015 easily for MSY. That is why thankfully the regulation says-

Q193 Barry Gardiner: But you are committed to that. This is not an aspiration; this is a commitment.

Richard Lochhead: We are committed to the aim of getting to MSY by 2015, under international agreements. As you will know, under the international agreements as reflected in European legislation, it is an aim for 2015. It is going to be extremely difficult to get there for many of our stocks, because we do not even know the size of them, by 2015.

Q194 Barry Gardiner: We are going back to the initial problem, which-you agreed with me, I think-would be countered if we landed everything to get the proper science to then make an assessment of the stocks.

Richard Lochhead: Yes, and we have 30 stocks in Scottish waters, and we are just one country out of all the countries in the European waters. You are talking about a lot of stocks, and that is why the challenge of getting the right size to take decisions is huge. I do hope one of the outcomes of the CFP reform is more resource for science.

Q195 Barry Gardiner: It seems to me you are wanting to say, yes, the science is accurate but it is difficult because of the quotas: "We want to have our own system of quotas that can maybe just shiggle the science a wee bit and make sure that we do not get to MSY." That does not seem to me to be a position with integrity. It seems to me a political finesse, but it does not seem to me a position of integrity.

Richard Lochhead: I would put it to those who are saying we can get to MSY for our stocks in European waters by 2015 that that is just a political finesse and it is a line in a policy document. When it comes to the practicalities of an incredibly complex mixed fishery that we have in Scottish and UK waters, you cannot give any guarantee that you can achieve MSY by 2015.

Q196 Barry Gardiner: You see it as an aim, not as an international agreement. Is this how Scotland regards international agreements?

Richard Lochhead: No, I think you will find that the UK Government has taken the same position as well. For anyone to sit here and say we have the scientific knowledge to help us get to MSY status by 2015, for all of Europe’s stocks, they perhaps do not have as much integrity as they should have, because we do not have the science. What we have to do is do our best, and that is what we are doing just now. If you look at the key Scottish stocks where we do have the science, many of them are heading towards MSY by 2015. We are very much committed to this.

Q197 Thomas Docherty: The Secretary of State put a press release out a few days ago, in which she reiterated her view that it is important that the United Kingdom speaks as one voice. Are there any areas of disagreement between Scottish Ministers and Defra on the reform of the CFP?

Richard Lochhead: We think it is very important to work with our UK colleagues, because they are the member state within Europe. At the moment there are a lot of areas of agreement. We are still working out our position on a lot of issues to do with the CFP reform. There are some areas where we do have a disagreement with the UK, over for instance the introduction of individual transferable quotas, as I call them-I think Europe has now changed the terminology to concessions-where clearly the UK Government is favourable towards this European proposal. In Scotland, we are much more reluctant to support that, because the profile of our fishing industry is radically different north of the border than what it is from the rest of the UK. We think it could damage the future of many of our fishing communities. There are areas we are working through together hopefully. There is not wholly an agreement at the moment. You are best asking me that question the day that the CFP reform is signed, and I will let you know where we, in the dark rooms of Brussels, failed to reach agreements.

Q198 Thomas Docherty: Bertie Armstrong said to us that "there are no areas of dispute where there would be advantage or disadvantage gained if a direction were taken that would split the two Administrations". I think he meant yourselves and the UK Government. "We are vitally interested in this and vitally interested that the UK as a member state acts as just that: as a joinedup member state, and that we do not have any diversions of the argument that would serve one purpose or another other than the furtherance of sustainable fishing in the UK." Bertie Armstrong made it absolutely clear to the Committee that he wants to see only one voice in those negotiations. Do you agree with that?

Richard Lochhead: My Government’s policy is that we will further Scotland’s interests in these negotiations on any issue, and that continues to be the case. There are many instances, over the recent years, where I have had to intervene, and have done successfully, to protect the interests of Scotland’s fishing communities. That will continue to be my guiding principle. I am there to make sure that our interests are protected. Many times in the past I have done that with the support of the Scottish industry and I will continue to do so. Of course, we are not going into this negotiation for the sake of having a fight with anyone; we are keen to make sure we can work with people and secure the best possible deal for Scotland’s fishing communities. At the moment, we are getting some good support from the UK Government. Where that really will be tested is when it comes down to the hard negotiations in the wee small hours, in Brussels, where the UK Government will have the opportunity to show whether or not it believes that fishing is a political priority. It is at those times, in the negotiations, where the chips are down and we will find out to what extent fishing is a priority.

Q199 Thomas Docherty: I am sure that that is a great answer to some question. It was probably a very good speech in Inverness last week, but my question was: do you accept Bertie Armstrong’s argument that there should only be one voice at the negotiations?

Richard Lochhead: Where we agree on issues of course there should be one voice, but the Scottish Government has a direct relationship with the European Commission and we will continue to do that, because many of the issues we pursue do not conflict with the UK Government; they are specifically Scottish issues. That is our attitude. We will agree with the UK Government where it is in Scotland’s interests, and we will disagree with the UK Government where we feel it is not in Scotland’s interests.

Q200 Thomas Docherty: Mr Lochhead, Mr Armstrong, the industry’s voice, is absolutely clear that there should only be one. Of course, where you all agree it would be a nobrainer that you would have one voice, but Mr Armstrong’s point was there should only be one voice at the negotiations. I cannot get a yes or no, forgive me, out of you. Do you accept there should only be one voice for the UK fisherman?

Richard Lochhead: Where we agree, yes. If there are disagreements, Scotland has to make its views known to the European Commission or anyone else and we will continue to do so.

Q201 Thomas Docherty: Even if Mr Armstrong disagrees with you, that is still your position.

Richard Lochhead: Bertie Armstrong and the rest of the industry I speak to regularly, and they, up to now, have been perfectly content with our situation, where we have to speak up for Scotland. Often, the Scottish industry asks the Scottish Government to make sure our voice is heard on certain issues. We will continue to do that.

Q202 Chair: On your point, if quotas no longer existed, then we would not need these latenight annual longintothenight sessions to carve up the quota, in an ideal world.

Richard Lochhead: Yes, that is one scenario. Also there is a big movement towards longterm management plans, so deciding the fine detail of dozens of stocks across scores of fisheries in Europe, into the wee small hours, with six European Commission officials sitting in a small dark room, with four PCs, trying to number crunch all the quotas-these days would end if we had more longterm management planning. As I said before, clearly as we were discussing, it should be decentralised around the various regional fisheries around Europe.

Q203 Dan Rogerson: Good afternoon. The Commissioner intends that member states will co-operate to develop regional programmes on implementing the multiannual plans but, given that there is a threemonth deadline to feed that information back to the Commission, do you think it is realistic for that co-operation to take place?

Richard Lochhead: This is why we need to find more information about how the regional setup will work. As you point out, the Commissioner’s evidence, which was very interesting, to your Committee just in the last week or two said that the multiannual plans would be set by Brussels and then implemented at regional level. That begs a lot of questions. I think it goes in the right direction. It is certainly a big step forward, but how much detail will be agreed at Brussels level as part of these plans and how much freedom would be left to the member states or regional bodies to implement the detail? That is where we are really concerned. How quickly can you change longterm management plans?

At the moment for instance, North Sea herring is part of a longterm management plan. The science has suddenly changed and said there should be 139% increase in the quota, but the management plan says you cannot go beyond a 15% increase in quota. Are we stuck with that for several years, even though the science is now saying something different? We have to make sure the management plans are flexible and that the regional bodies and member states are able to influence that.

Q204 Dan Rogerson: Do you think that timeframe is realistic? I accept you are saying what level would have to be discussed but if we are, I assume, aspiring for quite a lot of that detail to be settled locally, do you think three months is enough for there to be a meaningful feedback to the Commission?

Richard Lochhead: Hopefully yes. Clearly we have not reached a view on a lot of these issues. We would have to consider that.

Q205 Dan Rogerson: What amendments could be made to the CFP package within the legal basis of the existing treaties that would make it easier for member states to co-operate in that way, on a regional basis?

Richard Lochhead: There would have to be two issues settled. First, it is what the regional bodies would look like and who would sit on them, in terms of the member states. The Commissioner was maybe saying to you that the North Sea is quite a good model where it could work quite well, and the Baltics is where it is beginning to happen already. We would have to decide, first, how the member states, as in Governments and regulators, are sitting together and then, secondly, what is the body for the advice they will receive from the stakeholders. We want to use this process to put the stakeholders much more at the centre of decisionmaking, because they have been alienated so much in the past. We have to decide that kind of detail. Again, until we get some advice from the Commission of what the treaties will allow, we cannot quite answer that question.

Q206 Chair: On a legal basis, do you think it is clear what legal basis there is and where the member states agree to what the legal basis should be? Could it be interpreted differently in northern European countries to southern European countries what the Commission is proposing?

Richard Lochhead: I think our starting point is that the legal basis is not clear. We have the position where the Commission announced their proposals for regionalisation and now are trying to work out how to deliver it. That sums up the fact that things are a bit trickier than we expected when they first announced their proposals.

Q207 George Eustice: I wanted to come on to the issue of transferable fishing concessions, and I know you have come out particularly aggressively against that and effectively said it would spell doom for the Scottish fishing fleet, on the grounds that I think you fear that Scotland’s fishing rights could be sold internationally. Given that the proposal also requires member states to permit that to happen and to authorise it, do you not think that that gives the Scottish fishing fleet the protection that it requires and that you are overreacting to that proposal?

Richard Lochhead: We are doing some work to understand the safeguards that the European Commission is speaking about. Our philosophical objection to this is that the Commission is basing its proposal on two things: first, you can differentiate between artisanal fisheries and the big offshore fisheries. Artisanal fisheries help support smaller fishing communities, and then the big boys are big commercial operations and they should be able to trade among each other. In Scotland, our profile is different to the rest of the UK and many other countries, in that the large fishing vessels, which would not be counted as artisanal, are very crucial to small fishing communities. Whalsay in Shetland or any other of the smaller fishing communities around Scotland’s coasts are vulnerable if they were to lose the one or two big fishing boats that are based there. That is what the Commissioner is trying to protect by speaking about artisanal fisheries but, unfortunately in Scotland’s situation, that is not that fishery; it is the bigger boats. If they were to be able to trade away each other’s entitlements, that fishing community would suffer greatly, because the employers there and the families that are based there would disappear and suffer the socioeconomic damage.

The second basis of the Commission’s proposal is that this is a way of reducing capacity and reducing the number of fishing vessels and the impact on the stocks. In Scotland’s case, we have gone through that. We are way ahead of other countries. We have lost about 65% of our whitefish capacity already over the last 10 years or so. We do not quite know what the balance is that we should be achieving of course, because it is such a complex issue, but we are much further ahead with getting capacity in line with quotas than other countries, and we do not want to introduce this to put more people out of business, lose more vessels and close down a large section of the industry, because that would be bad for Scotland.

We are not sure we have the legal assurance from the Commission that we can stop, once it is introduced, quotas being traded outside of Scotland, and big multinationals, whether in 10, 20 or 30 years from now, owning the birthright of our fishing communities on our waters. I do not think England wants that either. I tried to make that point to the UK Minister: do you want big multinationals based on the continent owning the fishing rights to your own waters? Your own future generations of fishermen cannot fish these waters they can see out of their windows, because the current generation of fishermen sold their birthright. We have to be very careful. If we let that genie out of the bottle, we will all pay a heavy price in 10 or 20 years.

Q208 George Eustice: In terms of what you are saying, your fear is much more about the impact it might have on consolidating the fleet into larger concerns than the threat of fishing rights being transferred internationally?

Richard Lochhead: It is both, because you can have consolidation within Scotland or the UK. Even worse would be losing complete control. We are supposed to be in a single market after all. Once one country elsewhere in Europe introduces international trading, these people will start saying, "Why is it not happening in the UK? Why is it not happening in Scotland? We want Europe to do this; it should be happening." It is supposed to be a single market. We are supposed to be investing in it where we want. Once that genie is out of the bottle, it is just very dangerous. It is an internal issue but it is also an international issue.

Q209 George Eustice: Have you had any discussions with Defra about whether Scotland might have an additional veto on your own historic fishing rights being transferred outside of the UK?

Richard Lochhead: Yes, we have and the UK Government is looking at this just now. They share some of my concerns. They perhaps have more confidence that they can be addressed than I have, and they are looking at ways in which safeguards could be put in place along the lines of what the Commissioner was speaking about as well. Again, once the genie is out of the bottle, I am not sure how you put it back in.

Q210 George Eustice: Finally on this point about consolidation, do you not accept that the impact assessment that has been done suggests that, although in the short term there might be some pressure on fishing communities, in the long term this kind of consolidation is what actually guarantees it a future and makes it more profitable and viable? Is that something you reject or is it just that you are not prepared to go through that pain barrier, for want of a better term, in the short term?

Richard Lochhead: It just depends who you want to benefit from your fishing rights. At the moment, we have a socioeconomic benefit in Scotland, in that we have a familyowned industry largely, unlike other countries. They benefit from the current ownership structures. If you want to consolidate and introduce measures to encourage that, clearly it will change that and you will lose the socioeconomic benefit. While there is an argument and many countries support it-it could make the industry more profitable in some parts-I am worried that the overall benefit will be lost to Scotland, the socioeconomic benefits. Yes, you can concentrate economies of scale, with fishing entitlements in fewer businesses to make greater profits but, overall, the national interest suffers.

Q211 Mrs Glindon: Environmental charities have argued that transferable fishing concessions should be allocated according to some additional criteria, such as an operator’s track record for sustainable fishing. Do you agree with that?

Richard Lochhead: If any such system were to be introduced, I do agree there should be lots of criteria applied to it. The track record of any fishing operation, in terms of how sustainable it has been, should be taken into account if that is possible, yes. Again that is a question that more relates to once we have introduced that system, and my concern is maybe trying to avoid going there in the first place, because once there is international trading or even trading of any shape or form imposed by the Commission that spells some big threats for our fishing communities. I do agree there should be lots of criteria looked at. That does happen in any country.

Q212 Amber Rudd: Back to discards if we may, the Scottish Government’s evidence called for a flexible fisherybyfishery approach to banning discards. Do you think that is workable? It sounds to us a little bit like a delaying tactic, rather than going for the whole proposal.

Richard Lochhead: No one has argued more against discards over the last few years than me, and that is why we have gone out of our way to introduce some measures to reduce discards. Again, I am speaking to you as the Minister for the Administration that has worked with the industry that has reduced discards more than any other country in Europe over the last few years. We treat this very, very seriously, as do consumers in many countries. Because we have a complex mixed fishery, we have to make sure we do not just have a discard ban; we have a discard plan. That has to be tailored to each fishery. At the moment, we are working on proposals to reduce the discards of cod and whitefish, and that is working. There are some good pilots happening in England as well, and we hope to learn from them, just as they have learned from us with some of the technical measures they have adopted.

Q213 Amber Rudd: You talk about a mix of incentives and regulatory approaches. What do you think is needed then in order to try to do that?

Richard Lochhead: I was beginning to say to Barry Gardiner earlier on, but I did not want to speak for too long-

Amber Rudd: Now is your opportunity.

Richard Lochhead: Too often in the past, everything was about penalties and not incentives. We have worked closely with the industry to introduce incentives over the last few years to change fishing behaviour. The catch quota scheme that is in place rewards fishermen who take part with extra quota for reducing discards. That is an incentive. We give fishermen more days at sea in return for adopting cod avoidance schemes. That is an incentive, so there are not just penalties. We have tried to change the philosophy and now that is being spread across Europe. The European Commission has been adopting some of the measures we have been promoting in Scottish waters to be options for other member states to use to try to cut discards, save stocks and give more incentives and not just penalties.

Q214 Amber Rudd: Whatever package of measures is used for trying to implement a reduction in discards, there is likely to be more fish landed and the production of more fishmeal. Do you have concerns about Scottish aquaculture as a result of that?

Richard Lochhead: Scottish aquaculture has been putting a lot of effort in to make sure that its fish feed comes from sustainable resources over the last few years and, in some cases, nonfished sources as well. There is a lot of research going on into that. I have no immediate concerns for the impact on aquaculture.

Q215 Neil Parish: On the discard plan, as you suggested, rather than this ban, basically if we ask all fishermen to land all fish, then the taxpayer, in some ways, is going to have to pick up some of this unwanted fish. They do not like discards but they also do not like spending money necessarily on the Common Fisheries Policy. What do you think their attitude towards that is going to be?

Richard Lochhead: I am not even sure that system that has been spoken about is workable. The logistics would be a nightmare to put in place. I totally agree with the sentiment that we do not want to waste fish resources, which is why my solution would be, rather than working out how to cope with landing fish that is not for the market, we should not remove it from the sea in the first place, and that is where the emphasis should be.

Q216 Neil Parish: That is what-different types of fishing gear?

Richard Lochhead: We should find new markets for other species that we do want to land. If we find there are no ways of avoiding it, you develop new markets. That is what is happening in some areas. Yes, using technical measures at sea is the best way to stop this problem in the first place, rather than trying to work out how to cope with all the fish being landed, which are not for market; they are for fishmeal or for other sources.

Q217 Neil Parish: I agree with you that we should actually promote more types of fish, but we have been doing this for quite a long time and still a lot of fish that is landed in Newlyn in Cornwall goes straight to Spain, for instance, because we would not eat it here necessarily. I am not saying we should not promote more of that, but I do not know that that is the solution in itself. The fish that comes over for fishmeal, I do not think, in the Commission’s plan, is such a problem because, in a way, that can be collected and ground down into fishmeal. One of the Commission’s proposals is to store this fish and give it to poor people. Now I am beginning to wonder how that is going to work. I do not know if you have looked at that at all or not.

Richard Lochhead: Like yourselves, I have just noticed this comment from the Commissioner over the last few weeks, and that is what I was alluding to when I said that lots of logistical problems come to mind. The industry is very sceptical about how it would actually work in practice. The sentiment is a good sentiment; if we are going to bring fish ashore and we do not want to put it into landfill-we want to use it for a good purpose. Clearly it is a valuable food, and it should be eaten, not discarded ashore, as opposed to being discarded at sea. However, for sustainable reasons, the much better solution is just not to take it out of the sea in the first place.

Neil Parish: It is laudable what the Commissioner was saying, but I think quite difficult, if Government or whoever is going to get involved in that process. Perhaps it could be franchised out or something, but it is quite impractical, I think.

Q218 Barry Gardiner: Mr Lochhead, let us continue our argument from earlier. You implied that the 2015 deadline was a nice thing if you could get it. I have just been trying to check up and the Commission communiqué in May this year, Communiqué (2011) 298, said that "MSY by 2015 is central to European fisheries management." I take it you accept that.

Richard Lochhead: I totally accept that.

Q219 Barry Gardiner: In that case, let us move on to your other claim earlier about the work that you have managed to do in reducing discards in Scottish fisheries. Do you recall the ICES’ advice in June 2010 in relation to cod in Division VIa of the west of Scotland? What that suggested was that, in the west of Scotland, over 80% of the fish caught is discarded. In the North Sea alone, between 500,000 and 800,000 tonnes of fish are discarded annually. 80% sounds pretty high to me and yet that seems to be something that you are quite happy with in the west of Scotland fisheries.

Richard Lochhead: Not at all, and the one issue we have accepted in the west coast is that the cod stocks are in trouble. I do not think there is any dispute between the industry, Government, regulators, scientists and NGOs that that is a fact and we do have an issue with cod stocks in the west coast of Scotland. All that we have pursued in the west coast of Scotland in terms of the cod situation is, when Europe proposed a zero TAC, it is very difficult to put that in place. All we asked for was a very small by-catch, so it is not targeted. We are not targeting the cod but, if you catch cod when you are fishing for other species, do you just discard it dead back into the sea or do you allow a small by-catch to bring it ashore? That is just a way of managing the fishery. It is very difficult to manage any mixed fishery when the fishermen are prevented from landing any of a particular species. We have put in place and have been working with the industry on longterm management plans for the west coast and technical measures. Thankfully, some of that is working for the haddock stock, which is now increasing dramatically, hopefully, and there are recommendations from the scientists of a 410% increase in the quota this year. It is working for haddock, but we have to continue to work on the cod stock, because it is not recovering to the same degree.

Q220 Barry Gardiner: You have been talking about projects such as finding new markets for fish or not taking fish out of the sea in the first place, rather than a discard ban. I understand what you are saying there, but surely best of all would be to implement them alongside a discard ban. What is wrong with that?

Richard Lochhead: We have to do both.

Barry Gardiner: I am glad we have got a point of agreement.

Richard Lochhead: We have to explore new markets for new species that move into our waters because of climate change or other reasons. That is happening as well, with new species moving into waters. We have to find new markets.

Q221 Barry Gardiner: This is not just about new species, is it? It is about species that traditionally have not been fished.

Richard Lochhead: My only plea about the discard ban is: please do not try to say that those who are urging a bit of caution about how it is implemented are against bringing discards to an end. I have said before that we have, I believe, done more than most member states in Europe to tackle the issue of discards in Scottish waters. I remember publicising the fact that we were told there was 1 million tonnes of discards in the North Sea across European fleets. That was a big story, because we wanted to make it a big story to wake people up to what was happening in the North Sea. We have led the fight against discards but, in terms of a ban, there is more to a ban than just a line in a policy that says there shall be a discard ban by 2016. We have to work very carefully.

Q222 Barry Gardiner: It has to have teeth, does it not?

Richard Lochhead: Yes, it has to be effective. You can achieve a discard ban by two routes. You can say to every fisherman, "You shall not go to sea. We shall have no fishing fleets," or you can say, "We have to work on a plan of how we can bring discards to an end and allow our fleet to still go to sea, and fish for food and commercially sustainable stocks as well." The latter is my preference.

Q223 George Eustice: I just wanted again to pick up on what we talked about earlier, about the socioeconomic impact of this. The impact assessment suggested in the long term, and they describe that as post2017, catches would actually go up by around 17% and profit margins could actually treble. My question is, and I know you made very clear that, short term, you think the current proposals would have a bad impact on Scottish fishing communities, but can they survive and hold things together for long enough for the brighter future post2017?

Richard Lochhead: We face a number of options. The Commission has taken the view that one option, such as individual transferable concessions, is one way of increasing profit, consolidating and allowing those who are not making much of a profit to leave the industry with some dignity and sell their entitlements to those who want to stay in the industry. That is one option. I have expressed my concerns about that. The other option is to change the basis of fisheries management, so that we have thriving fish stocks in our waters, and at the same time we are able to market that, catch for the markets and get a bigger bottom line for each fishing business. Is that not the perfect combination of having thriving fish stocks in our waters and much more value secured for what we do land on the quayside, so that there is more profit coming into the businesses? Again, that is how our policy in Scotland is based. We have a fisheries management policy and now, more than ever before, we have a seafood promotion policy as well to capture more value from what we do land. I think we could get to the same profit figures that the Commission is predicting, but from a different route.

Q224 George Eustice: I am not sure that they would disagree that that is what the objective should be. The argument they were saying is to get to Maximum Sustainable Yield, in the short term, you need to reduce or perhaps even stop altogether in some areas the fishing to get to that MSY by 2015. They have not put a figure on it themselves. Perhaps there is something in that in itself.

Richard Lochhead: It may be in some countries, where they have not reduced their fishing capacity anywhere near as much as they should have, that that may be an appropriate solution. I can only speak for Scotland where we have reduced capacity. If we can persuade the Commission and Europe not to impose measures that cause stocks to be wrecked through massive discards, that is one way we can get thriving fish stocks and the MSY targets achieved.

Q225 George Eustice: The other thing they suggested is this European maritime and fisheries fund, the argument being that, alongside consolidation of the industry, you would offer quite generous financial support to help fishing communities diversify into other areas. Tourism is always the one that is flagged up but potentially other things as well. Do you think that has mileage for Scotland?

Richard Lochhead: I do think it has a lot of mileage. There are a lot of attractive options within the proposal for the success of the European Fisheries Fund. I would like to see a lot of emphasis on science partnerships to support getting better science through the Fisheries Fund, and more support for catching for the market to help our fishermen be geared to land for the market, so they can get maximum value for what they are landing ashore. Some of the options mentioned there are good ones.

Q226 George Eustice: What about diversifying out of fishing altogether?

Richard Lochhead: That is a legitimate option as well and we do that at the moment with our existing fisheries funds. The option of increasing the Fisheries Fund is a good one; it is very important to help our fishing communities adapt to the future. Still on the scale of European funding, it is still going to be a small fund, so a 50% increase of not a lot of money in the first place is a step forward, but it is still not going to be a huge fund, so we should not get the impression this is going to be millions of pounds extra for all our fishing communities.

Chair: We are actually coming on to that now, if we may.

Q227 Mrs Glindon: I was going to go on about funding. Do you think it is appropriate for fishers to be compensated for loss of income resulting from the changes in the Common Fisheries Policy? If you do agree with that, who do you think should be funding the compensation?

Richard Lochhead: There can be cases where the public purse should step in and help fishing fleets or fishing communities where, as a result of regulation, they are denied fishing opportunities. In the past, we have had tieup schemes funded from public money; we have had decommissioning schemes funded from public money. I do think that is a legitimate use of public funds. There are areas where it should not be used. I know there is a huge groundswell of opinion that we should not use it for building new vessels, particularly in some of the countries in Europe that often use public money to build new fishing vessels and increase capacity, as opposed to decreasing capacity. There are areas where we should definitely rule out this, but I do think there are circumstances where public funds can be used.

Q228 Mrs Glindon: Would that be solely from European funds as opposed to domestic funds?

Richard Lochhead: Not necessarily solely. Clearly the European Fisheries Fund we have at the moment is partly domestic funding and partly European funding. There is a principle that, where regulations lead to certain dislocation in sectors, public funding is justified if the source is the regulation. If they are European regulations, European funding is justified.

Q229 Mrs Glindon: Another thing is the Commissioner has called for an end to the practice of scrapping subsidies. Do you support this proposal?

Richard Lochhead: That is exactly what I was just alluding to: scrapping subsidies. We have not reached a final view on that point, to be honest. That would be the decommissioning. My apologies; I was thinking about the scraptobuild policies when you said "scrapping". If it means decommissioning policies, there is a legitimate use for public funds for that and, moving forward, I think there would continue to be a public benefit from supporting that. My concern is that the European Commission again is using individual transferable concessions as a way of reducing fleets and capacity at the expense of the fleets and not public expense. They are trying to achieve it without using public funds through other policy means, but I think there is a legitimate use for public funds for decommissioning schemes.

Q230 Barry Gardiner: The data required to enable accurate scientific assessment of safe fishing levels are not available for, I think, 63% EU fish stocks. In your view, how should the new CFP address that?

Richard Lochhead: For the first principles clearly the decisions have to be based on scientific evidence and that should be part of the new CFP. That is proposed as part of the new CFP. Therefore it follows that more could be done at European level to make sure the scientific gaps are plugged through co-operation among member states and also through funding. I would like to see more Europeanwide funding.

Q231 Barry Gardiner: Does that mean that you are in favour of ecosystemsbased management, which is what the scientists recommend?

Richard Lochhead: Yes, I am. We certainly support that as well. Again, it is sometimes seen as a phrase. What it actually means in practice is sometimes a bit more difficult to define. We have been doing what we can in Scotland, through our Marine Bill and other legislation, to involve the fishing industry and look at the impact of fishing on these issues. In terms of the Common Fisheries Policy, which you asked about, a lot more should be done on scientific co-operation and funding. European co-operation is much more productive going down those lines than the micromanagement line. That is perhaps where the future should lie.

Q232 Barry Gardiner: Given that you support ecosystembased management, I presume that you would support Regional Fisheries Management Organisations that respected those ecosystems.

Richard Lochhead: Yes, that makes perfect sense.

Q233 Barry Gardiner: And therefore co-operation between all the various nations that are involved in this.

Richard Lochhead: Yes, as we are required to do under European Directives on maritime strategies and marine strategies. At the moment, they are all heading in that direction, so we support that.

Q234 Dan Rogerson: One of the aspects of the CFP should also be to educate consumers about the need to eat fish from sustainable sources. We have heard in evidence previously about maybe some conflicting arguments that consumers and society are faced with about eating fish, what fish they should eat and where from. Do you think that the CFP in the future should concentrate on that aspect of it as well, in terms of what we have heard about bearing down on discards?

Richard Lochhead: I think European co-operation on defining sustainable fisheries for the consumer is a good thing and I would support that. It is a very good debate and a very good point you have raised, because many different people from different sides of this debate have different definitions of sustainable sourcing of fish. I have gone in to fish and chip shops before, where I have seen on the wall that certain stocks are in decline and I have known that actually they are increasing. You are telling your consumers that the stock is declining when it is increasing. Therefore, we have to make sure there are reliable sources of information for the consumer as to where they get their information from, as to what species are sustainable or not. MSC status has been a great thing and more than 50%, by value, of the Scottish stocks are now under MSC status or certification. We now have MSCcertified fish restaurants in Scotland and elsewhere, so I think that is a good direction to go in and I very much support it.

Q235 Dan Rogerson: Should it be a core part of what the CFP does?

Richard Lochhead: My starting point is always that the CFP should do as little as possible, and let the member states and regional bodies do as much as possible. However, I do think there is room for European co-operation on that issue.

Q236 Chair: You would not wish to repatriate fishing policy.

Richard Lochhead: No, our policy is to work towards repatriation of fishing policy from Europe to member states, and then allow us to work on a regional basis with other member states, where appropriate.

Q237 Chair: Don’t you agree that the Commission is, in all but name, travelling in that direction?

Richard Lochhead: I very much welcome the direction of travel if we are able to get on that road and drive along it. That is why we are waiting to find out if it is legally possible. There are a lot of unanswered questions. There will still be some decisionmaking at Brussels level. There is how the regional body is going to work and how much decisionmaking they will actually have. It is a question perhaps you can ask me once we have the new CFP in place but, at the moment, we have great concerns over the principle that Europe lays down our seas as a common resource. We believe that these decisions should be taken at member state level.

Q238 Chair: You accept that little fish do not swim around with Union Jacks on them.

Richard Lochhead: Norway is not part of the Common Fisheries Policy and it enters into many agreements with the EU and other countries to manage those stocks across boundaries and migrate between different fisheries.

Q239 Chair: The key thing is that Norway is not at the table when the decisions are made.

Richard Lochhead: As someone who pays close attention to the EU/Norway negotiations that take place once a year, they have an unbelievable amount of influence on Europe’s waters, never mind their own waters.

Q240 Chair: When the Commission said that we can learn from other countries, like the US, Norway and Iceland, do you believe that we can?

Richard Lochhead: Yes, I think we should always learn from other countries. Iceland and the Faroes at the moment of course are teaching us some things we should not do, in terms of walking away from international agreements on the management of the valuable mackerel stock, so they are not perhaps the best states at the moment to highlight as examples for us to follow, but there are plenty of examples around the world. The catch quota schemes we are implementing in Scottish and UK waters at the moment have been learned from other countries in the world as well.

Q241 Chair: Can I just ask if you think that Defra agrees with you that decommissioning subsidies should be continued?

Richard Lochhead: I await their view on that particular point. All I can say is that most Defra policies are driven by the UK Treasury, so I suspect I can probably predict what the answer will be in terms of that question, because we all know who pulls the strings for Defra in too many cases, which tends to be the Treasury. If there is a penny to be saved for the Treasury, they will not want public funds used for decommissioning.

Q242 Chair: Does Defra agree with you on the catch quotas?

Richard Lochhead: We are working closer together on catch quotas and we very much welcome the support of the UK Government on this year’s negotiations. We are trying to get more vessels brought into the catch quota scheme, which will cut discards even more.

Q243 Chair: You mentioned specifically cod, haddock and mackerel, but is it not true that Scotland lands other fish that have now become very palatable to the Scottish taste, which we could possibly learn-this is the line of questioning we have pursued earlier-to sell different kinds of fish in England as well that are currently on sale in Scotland?

Richard Lochhead: Yes, I certainly agree with that. Hake and some other species are now being caught in greater abundance in Scottish waters, so there is a big debate about how we cope with that in the future.

Chair: Excellent. We would like to thank you very much indeed for you and your team being with us this afternoon, and being so generous with your time. I am sure we will have opportunities to meet again in future, but thank you very much.

Richard Lochhead: Thank you very much and good luck with your inquiry. I look forward to reading the conclusions.

Examination of Witness

Witness: Peter Hajipieris, Chief Technical, Sustainability and External Affairs Officer, Iglo Foods Group Ltd, gave evidence.

Q244 Chair: Good afternoon and welcome. I am going to need to ask you for some assistance; I would like to say your name correctly without causing any offence.

Peter Hajipieris: That is fine; I understand. It is Peter Hajipieris. You can call me Peter. I am sure you think that is easier.

Q245 Chair: We are most grateful to you for participating in our inquiry. At the outset, could you say a little bit about the company and the brands that you produce, possibly the number of people that you employ and particularly the contribution you make to the local economy?

Peter Hajipieris: Sure. I am the Chief Technical, Sustainability and External Affairs Officer of a company called Iglo Foods Group. The Iglo Foods Group is actually the number one frozen foods brand across Europe, in 16 countries. You will know the business as Birds Eye in the UK, so you will be hopefully familiar with Birds Eye fish fingers, peas and so on. In continental Europe we are called Iglo, so there is a Captain Iglo in continental Europe as well, and we also own Findus Italy and have a Captain Findus in Italy as well. Collectively, the business has a turnover just around €1.6 billion. We have been selling fish under the Iglo and Birds Eye brands for over 50 years, and we have a very long and deep heritage in sustainable fisheries development, which I am happy to share with you, where we have formed organisations with WWF, such as the Marine Stewardship Council (MSC). I am very happy to answer more questions when the time arises. If you want to understand the size of the fish, we source over 70,000 tonnes of fish a year to feed mostly EU citizens.

Q246 Chair: How many people do you employ in the UK?

Peter Hajipieris: In the UK, we employ about 1,500 people. Across the group, we employ just under 3,500 people, and of course we support many other people through our supply chain, because we have a great deal of suppliers.

Q247 Chair: What percentage of your fish is caught in the EU?

Peter Hajipieris: We currently use about 20%. Now that is by a policy decision. We have a sustainable fisheries development policy, such that we will not source fish from recovering, depleted or overfished fisheries. If it is overfished, we will only engage in that fishery if we are able to influence its behaviour, so it actually operates at the MSY level, if that makes sense. We call them improvement schemes.

Q248 Chair: Your catchphrase could be "now you know where to Findus".

Peter Hajipieris: Indeed, I must remember that. That is excellent marketing, because of course we are marketeers as well. I must remember that.

Chair: I am at your service.

Q249 George Eustice: We are quite interested in the Marine Stewardship Council to which you referred, which you have been involved in, and also the responsible sourcing standard is another one. Could you say what percentage of the fish you sell are certified to those standards?

Peter Hajipieris: Across the group, we have a volume of certified fish that is about 46% of total volume and we are currently leading the certification of one of the largest whitefish fisheries on the planet of Russian pollock. We source a great deal of Alaska pollock on the US side. We are driving a great deal of engagement with a group of other companies, and we aspire to have everything certified hopefully by the end of next year. We are not that far away from it actually. Some of the species that are not MSCcertified are not necessarily because they are not operating at the right level, but actually some of the quota owners do not necessarily want to engage in the scheme.

Q250 George Eustice: You mentioned WWF. Was it WWF you have been involved with? There has been some criticism from some quarters of Greenpeace of MSC effectively saying it is granted in areas where it really should not be because sustainable fishing is not going on. Do you think there is any fairness in that criticism?

Peter Hajipieris: The difficulty with fisheries, as you just have gathered from the previous exchange with Cabinet Secretary Lochhead, is the fisheries are an extremely dynamic environment. We have, us humans, if I may say, a bit of an arrogant approach to think that we control ecosystems. We do not. We have an impact on them and we can try to measure them. We in fact lack a great deal of data. The Marine Stewardship Council was formed when my business was under Unilever with WWF, but we are one of the largest supporters of the MSC programme. One of the great change vehicles that the MSC has been for the industry is to get the debate of sustainable development in the industry. The fisheries industry is very resistant to change generally and it has probably been that benefit more than anything else that has been, for me, one of the great highlights of having an organisation like that.

There are other platforms and schemes that are just beginning to appear in the marketplace for wild capture fisheries. What that is doing is inspiring other national fisheries to engage in certification to verify their status, and that is very important. While I understand why Greenpeace will obviously want to attack certain certifications, it is actually no different from me when I have standards on my poultry or vegetables. Some of my farms are fantastic; some are not so good. You have to reach a point where you say, "This is the pass mark". There is annual surveillance. There is a public consultation process within the whole programme, where you can introduce new data and evidence to offer to the certification body if it should continue to be certified. Greenpeace is a stakeholder that is entitled to do that.

Q251 George Eustice: Could you just explain roughly what process people have to go through then to get this certification? We know what the criteria are, because they are set out publicly, but how much inspection is there?

Peter Hajipieris: It is an extremely demanding and unforgiving process if a fishery, quota owner or regional fishery has not gone through it before. Generally, first of all, you have to have a fisheries management structure; you have got to have an ecobased fisheries management approach and you clearly require some robust data to be able to measure, verify or even influence behaviour.

Those aspects and conditions generally are very difficult to come by, and that is why the MSC actually is a model that the market influences to happen. It is not necessarily a policy decision by nature. Generally, we in the market press a particular set of quota owners to engage in the programme, because we want to drive the fishery into certification. That requires a great deal of investment in time and resources. For the fishery itself, it is a very sharp learning curve, and it is a fact that some of the largest fisheries that are considered world class, which are MSCcertified-Alaska, Norway and some of the Icelandic fisheries now-have found it a very painful process, despite them operating some truly excellent management processes. One of the reasons for it is because the certification body has to get a lot of evidence. It is a bit bureaucratic; it is a long process. I would love it to be a bit more streamlined, but they are trying to make a claim that is a very, very big claim. "This fishery is certified as sustainable" is quite a big claim to make, so it is right that there is some due diligence in there.

Q252 George Eustice: You mentioned you are the drivers of change in the market. Is your motivation to do that because you in turn have been driven by consumer demand? Is there a genuine consumer demand for this or is it just the case that your longterm business model requires sustainable fisheries?

Peter Hajipieris: It is a very good question because I am regularly asked this at conferences and panels. Is it the NGOs and campaigners that are forcing you to do that? The answer is no. The way that I can answer it so hopefully you can understand it is just imagine that you drive your vehicle, and you expect it to go right and left and, when you apply the brakes, you expect it to stop. Our consumers tell us they expect us to be giving them food that they do not need to worry about. They want it to be safe; they want it to be tasty, affordable and they also expect nowadays for it to have responsible provenance. It is that simple.

We are a company that looks after brands of 50 years’ age. Consumers, young kids, are introduced to fish normally through fish fingers. There is a responsibility in our brand that we hold very dear to the way we operate. We put that at the heart of our thinking. We also have, within our corporate social responsibility programme, something called Forever Food. The mission of our Forever Food is to ensure our consumers have food to eat forever. That is what they expect of us. To do that, you have to put the right mechanisms in place to deliver that, so we lead on these issues or at least we try, because it is not as easy as it sounds, of course. That is the motivation. Basically the consumers expect it of us and we want to deliver that for them.

Q253 George Eustice: Finally, I understand they expect it from you, but how discerning are they in terms of seeking out a label?

Peter Hajipieris: Across all the markets, clearly some of the European markets, particularly towards the east, are more concerned about quality rather than sustainability. The more mature markets in northwest Europe, Germany, Austria, the UK and Holland are more aware of sustainability. The MSC logo has an awareness that varies. Their research is actually aided, but we have done unaided research of consumer logo recognition and it varies between 3% and 9.5%. However, what they do look at is the brand and the story behind the brand. Clearly we write on our packets something around our Forever Food story. They can go on the website and understand more if they desire to do so.

Q254 Chair: Could I just return to what you said, Mr Hajipieris, about the fisheries industry being reluctant to change? How confident are you that the Commissioner will be able to drive through her proposals?

Peter Hajipieris: That is the $1 million question, isn’t it? In terms of the CFP reform, it is clearly overdue. It is important to understand we have lobbied behind the scenes very heavily for CFP reform, because we recognise its failures; we all do. I would love to buy all my fish from Europe, for instance. In fact, I have even been involved in workshops with DG MARE staff to help them understand how the market operates, so we do get engaged. The proposals are very well intentioned. They are very, very specific in certain areas. My concern with the proposals is there is a lack of an understanding that this is transformational change that is being proposed. In the fish industry, transformational change, as you just heard earlier, is not that well received.

When you then overlay that with cultural differences that we have had perennially in the EU with CFP, these are really ambitious changes that are being proposed. Clearly we are going to support as much as we can from the market perspective for some of these things to happen, but we also have some strong views that they will not actually succeed without certain things happening and being communicated to the industry in a fashion that the industry can understand and assimilate, because it is very variable depending on the culture. In the UK, we speak in a particular dimension on fisheries management but, actually, fisheries management processes, from Government’s level downwards, actually have different ways of operating in certain countries. We deal internationally and we know the difference. The concern with this oneall approach is it misses that point sometimes, and it is a very easy thing to accommodate the fix, but we generally miss it in the EU.

Q255 Chair: Do you have any concrete examples?

Peter Hajipieris: Yes, sure. Let me give you an example around the way the CFP should really be communicated. I know this is a passion of ours as a business. It should be communicated as a realisation of food security for the EU. It is really, really important. We do import 70%, nearly, of what we eat; that cannot go on forever. We know that because I look at the dynamics that are going on in the Far East, and they are beginning to consume a great deal more of the protein, so that is very relevant for us. There is something around communicating leadership in a slightly different fashion from the more sensationalist approach. We are very supportive of things like discards, but actually we are concerned that that is drowning out some of the more root causes of what makes the CFP not a success. That concerns us.

Q256 Chair: Why should it be that the Department and the Commission looks in terms of food security for food but not for fish?

Peter Hajipieris: It is an interesting question that. I have been on some panels with the EU, and have even proposed in the past, for instance, that aquaculture should be part of the Common Agricultural Policy, because it is a farming method. It is not actually a wild harvesting method. That would allow it to access different budgets to help it become more successful in the EU. There is a disconnect between the DGs. We do need fish to succeed in the EU for far more reasons than just MSY. We have an increasingly obese population and fish is really important in helping ameliorate that. It certainly helps with the mental state of the population and that is a proven fact with omega oils. There is a disconnect sometimes between DG Health, DG Environment and DG MARE, and it would be great if they lined up their overarching vision and helped all the states and the businesses understand where they are going, if that helps a little bit in the thinking.

Q257 Amber Rudd: If the CFP proposals are implemented as they stand, how do you think your business would be affected?

Peter Hajipieris: Discards is such a big discussion, isn’t it? I abhor discards; we all do. It is just such a poor example of resource utilisation. The difficulty with discards is it is fiendishly difficult to solve. There is an overexpectation that discards can be solved. In fact, they cannot. That is my opinion. What we can do is reach a compromise. Once we accept that as a position mentally, we can start to take some positions and help the discards debate. In terms of our business, if regionalisation does materialise and helps, it offers us an option to influence that fishery towards better practices. That could be quite a powerful tool. We have demonstrated that we can do that in certain parts of the world, but there should be an understanding that, when companies like ours do get involved in projects such as that, they are fantastically resourcehungry and there is a big lack of capability and capacity to do those kinds of projects-whether it is us, the NGO sector helping us or fisheries scientists. There are just not enough people to do these kinds of projects, and I know that from some of the other projects we are involved in around the world. There is an attraction around markets helping getting involved in regionalised improvement programmes, and clearly that is an opportunity that we look forward to exploring. That is one thing.

I am concerned though that there is, on the regionalisation thing, no model that has been offered to the industry so that they can analyse and understand. We would propose, for instance, that if you do want to have countries adopt and understand how a regionalised model would work, you need to give some beacons of examples of it somewhere, because the industry generally works better when it sees it in action and it can copy. It needs a topdown clear modelling process that defines the roles and responsibilities of the key players within that regionalised model, and that has not been put through. At the moment, it is taxing the industry on how this is going to work. It sounds a great idea. Of course, if you overlay that from the well intentioned-and we do not generally like politics, but fisheries is full of it for obvious reasons-when you take regionalisation a level up on politics, you have other dimensions that emerge and they start to spoil the well intentioned model that I am suggesting. I will stay there on the diplomatic front. That is one thing.

Discards have been a great story. My CEO was the first to support Hugh’s campaign; we think it is a great thing to bring into the open. The reality is that you need specifically suited business models that can accommodate those kinds of species to enable discards to be used. However, underutilised species can be successful and we have pioneered that. You may not be aware of it but, in fact, the omega3 fish finger that is now the bestseller in the UK, we actually did that to help cod stocks recover.

Barry Gardiner: You went to pollock.

Peter Hajipieris: What we did is we went to Alaska; we used MSC Alaska pollock. What we did in the cod fisheries is we worked with our suppliers to help those fisheries improve in the right sense, eradicate IUU and all the kinds of things that are required to go towards MSC. In that process, we have probably moved about 3,000 tonnes of cod a year. We have stopped fishing it to help that process to recover, and we pioneered Alaska pollock, but it was not a success because the great British public loves cod fish fingers as you will recall. In fact, they are eating pollock fish fingers now and they do not know it. The way we have pioneered that is that we have created the omega3 story as a key driver around change. The discussions I have had with Hugh Fearnley-Whittingstall are that it is great to have the campaign but do not catastrophise sectors, but it is innovation that generally will drive a change in behaviour. That is certainly our belief, because we are innovators. The difficulty in the industry is that the raw material supply chain and the policymakers do not get the bit we get. We get the consumer in a different way. There is a disconnect sometimes between the raw materials supply side and companies like us, because actually we do not have as great or as big a dialogue as we should do around how we make that work.

Q258 Mrs Glindon: The Commission’s reforms are likely to reduce the amount of fish being caught in EU waters, at least in the short term. Do you think this is likely to lead to fishers charging higher prices?

Peter Hajipieris: It is a globalised market and, as long as there are no protectionist policies imposed in any of this, generally fish prices go up. It is definitely a supply-and-demand situation at the moment. There is far more demand on fish than there is supply globally, so I would expect that. However, it does depend on the species that are going to be affected. We are very much a frozen food business with a very narrow business model. We do not deal with some of the wider species, for instance on fresh or chilled, which you would have on fish counters. It could be that some of those species might get affected. It might be that chilled prices might go up.

Q259 Mrs Glindon: You already referred earlier to the difference between some countries liking quality fish and others being concerned about sustainability. Where people are concerned about sustainability, do you think that the consumers there would be prepared to pay more for fish?

Peter Hajipieris: We have done a recent survey, not too long ago in the summer, to understand that actually. We are currently at a phase across all of our markets around economy and all the bad news on economies, etc. Generally, we have done research that repeats itself in most of the countries. The question has been: here is a frozen pack of fish; what are the things you look for? They generally fall in a row, which are, in order of importance, affordability is number one. Then it is actually the quality of it, then it is the taste. Then they start to think about provenance, but they do not connect it as much as we might think because we are close to it around whether it is from a sustainable fishery. Only a small part of the population connects it. What they do connect with responsibility is, "I trust that brand because we know it does certain things and it has been doing them right for years." They do not look it in the same way. They actually think around climate change and other issues.

However, in the UK in the last year, there has been so much campaigning as you all know-Fish Fight weeks, Channel 4, Project Ocean and all of this. For the first time, it is evident that the consumer in the UK is aware of sustainability issues for fish. I do not think yet that we are at a tipping point where the consumer is prepared to pay more, simply because we are in this phase now where everyone is looking after their pennies.

Q260 Amber Rudd: Do you think that the strengthening of power of the producer organisations that the Commissioner envisages will affect your business?

Peter Hajipieris: It is an interesting concept. You could argue that, if you had producer organisations that did consolidate and were able to manage and could influence in a far more collective fashion, you could probably get better management of some fisheries. That is one advantage. There are parts of industry though that are concerned that overconcentration in an unmanaged way will start to have other social impacts. We understand that. There is concern around that. The thing that I am unclear about is, if you are going to have these kinds of mechanisms, does that have a potential to distort the market to the detriment of other aspirations? If you are going to give these people concessions, clearly they have to be related to some kind of ecobased driven programmes. There has to be something that they have got to be delivering in return for those concessions.

Q261 Amber Rudd: You have not seen any evidence of that at the moment.

Peter Hajipieris: No.

Q262 Amber Rudd: That is interesting. If we are going to make them stronger, we ought to give something back in return.

Peter Hajipieris: Yes. Clearly there has to also be-well, we certainly think there should be-some conservationrelated measures in the overall package. There has to be something that generates a reward for that kind of a concession.

Q263 Neil Parish: When you started your evidence, I think you said that only 20% of the fish you use actually come from EU waters. Is that very much to do with the fact of price or is it to do with sustainability?

Peter Hajipieris: It is both. We have a very clear sustainable fisheries development policy. If I can give you an example, not only do we not accept fish from recovering or depleted fisheries, or even overfished, we do not even sell tuna yet as a business. There is sustainable tuna around, but we do not consider that we want to sell tuna unless we are absolutely 100% satisfied that it is from a supply chain that we are comfortable with. It is dependent on the company. Not everyone is able to do that kind of a model. We have taken the decision; it costs us sales but we would rather not have the problem, because there are aspects of fisheries that we consider are too high-risk. We have a very specific business model and we manage the risk around that.

Also, it is very important to understand that we have very strict criteria or specifications for quality, product and product size. For instance, in Scotland there may be MSC fish but actually the size is too small to suit our business, because we have very highly efficient factories. We run the largest fish-processing factory in the world in Bremerhaven in Germany. So you can understand the output that this factory delivers, it is in the millions of fish fingers a week. The annual production of it, so you can get a sense of scale, if you put the fish fingers end to end, they would wrap the equator five times.

Chair: An interesting concept.

Peter Hajipieris: It is, but the point is size is very important to our business. We obviously have highly efficient capex, what we call equipment, and a lot of our fish is blocked. It is frozen; it has to be a specific size. It is all fillets. As a result of that, because the fisheries are not necessarily operating at those size levels in the EU, we eliminate some fisheries straight away just on size.

Q264 Neil Parish: The question really to you is: will the Commission’s proposals enable the processing industry to have sufficient say in decisionmaking? Can you get these points over to the Commission, do you think?

Peter Hajipieris: We are going to try. There is a dialogue. The way the Commission generally does operate it obviously has to take a particular position; it cannot accommodate everybody. We are, I suppose, one of the good guys in the whole landscape. We do a hell of a lot of things on sustainable fisheries development, so we are asked a great deal for our opinions, but it is very important to understand the processing sector, of which we are a part, is very different in different parts. There is the chilled. There is the restaurant sector. There is the food service sector. There is the very highvolume frozen food sector that I occupy, where consumers expect very affordable food. Then there is the chilled sector, which is at a high level, high value. It could be off fish counters or in chill packs. All of these processing sectors are actually quite fragmented but, in the UK, we do have some very good and large companies. I am sure that they will be looking at issues such as discards, particularly in the chilled sector, with a great deal of interest, because they do offer, particularly in the chilled sector if you have fish counters in supermarkets, some local sourcing options to run some of these underutilised species and sell them.

Q265 Barry Gardiner: Mr Hajipieris, can I just say I really enjoyed your presentation to us this afternoon. It was very refreshing. Your story about pollock: there is a bit of it, I think, that you missed out, which might be helpful for us.

Peter Hajipieris: Remind me and I will fill in the gap.

Barry Gardiner: The bit is that you started marketing, did you not, the pollock under the MSC banner or as sustainable foods but, because of the colour, because pollock is slightly greyer than cod, it was not acceptable? Your marketeers came up with the ruse that, instead of going down the MSC route and sustainability route, they decided to go on the omega3 and improve your child’s brain power, so that the mums took it off the shelves.

Peter Hajipieris: That is not exactly right. What actually happened is the business-it was just before I joined-launched hoki, and it was hoki that was grey. It had a particularly fishy flavour that we in the UK just did not like. It had a particular overtone, and it just was not successful. It was hoki that did not succeed. The feedback from the consumer was about the colour, flavour, etc. In a bizarre sort of a way, it is important to understand that most food that is enrobed or breaded, poultry included, actually consumers like it to be neutral in flavour. They do not want it to be fishy. When you eat your chicken, remember that the flavour is in the crumb; it is not in the breast. This is really important. That is one of the reasons. Omega3 fish fingers, now, we do have cod species as well; it is important to point that out, and haddock, but Alaska pollock is very much a great success story.

Q266 Barry Gardiner: From the point of view of a parent, I want to see children eating more fish. From the point of view of an environmentalist or conservationist, I want to see that our stocks are kept at not just sustainable levels but at the proper biomass levels. Is there a tension in the Government’s message that says, "Eat more fish"? Until we actually have got those transitions into other fish that are not part of our diet at the moment, we are going to give added impetus to overfishing.

Peter Hajipieris: It is a logical thought process to have, if you believe what you read. In fact, these stories of 2050 and extinction, that science has been disproved. Crumbs, we do not know what the weather is going to be next year, let alone in 2050, so we need to get things in context. The answer to what you say is as follows: if we only sourced from the EU, then there would be a problem because, as we all know, 74% or 75% of fisheries-it used to be 88%-are overfished. Sadly, although they are overfished, we are discarding some really good edible fish. That is where the crazy thing about discards gets a bit emotional for everybody. We are throwing fantastic cod this big back in the sea. Part of the problem is the policy modelling itself.

The fish that actually most UK companies are using, particularly companies like us, are coming from really well-managed fisheries, otherwise we would not be there. That is why we are driving them into certification: to be able to demonstrate that. It actually does something a bit more than us worrying about the logo on the pack, because people get a bit obsessed about it. Companies like us have far more standards than we talk about to the consumer. You would not believe what we have in our pack of food. It actually pressure tests the fisheries management system by putting them through that process. That is why we do it.

I know probably more about Alaskan and Russian pollock fisheries and Baltic and Barents Sea fisheries than anything around the UK. We know all the fisheries management science. I even have QA inspectors who are on the board of the fleets that catch the fish to make sure that it meets certain specifications that we insist. Very few companies do that. We are very comfortable in what we sell, but I understand that there is a generic message that gets out there and that becomes distorted. It is no different actually from the pressure we have on other protein sources, because there is a problem with food supply. That is a fact. It is just that the fish is taking a great deal of attention. I am comfortable that the fish we sell to kids and consumers is responsibly sourced.

Q267 Barry Gardiner: That is what worries me, that parenthesis, that "we sell". You are talking to us today as a commercial business that wants to be in the same business in the future, in 50 years’ time, in 100 years’ time. There are others who see the oceans and fisheries as a commodity, a commodity that can be moved into and moved out of once it is exhausted, almost like mining. What I would be interested to know is what your company is seeking to do in terms of global fisheries agreements that can make sure that those agreements allow companies like you to prosper, but make sure that the companies that are effectively mining the resource of fish and happily would do so to extinction are not able to operate in the same way.

Peter Hajipieris: I understand. Clearly we are not policymakers. We are a food business; we are not a fish business, by the way. Fish represent 33% of our total sales. The answer to the question is as follows: we operate three levels of engagement in our sustainable fisheries development policy. One is policy reform, where we think it is needed. We help create standards and we certify those standards.

If I can give you an example about an area where you would not think we would be occupying, aquaculture, we view as a key part of the future. In fact, my business is around 90% wild capture. Despite that, we actually led with the International Fishmeal and Fish Oil Organisation-it took four years-the creation last year of a global standard for fishmeal and fish oil that goes into fish farming. It is a standard that now has had 33% of global supply certified. That standard takes account of whether the fishery is responsibly managed. Does it have good manufacturing practice, because there are food safety and adulteration issues with that kind of supply chain? We did that to enable and to encourage fishmeal that goes into fish farming to come from responsibly managed sources. We did not have to do that, but we did it because we view aquaculture as a key part of the future of the industry.

The business also sponsors me. I sit on the supervisory board of the Aquaculture Stewardship Council, which is the counterpart of the MSC for farmed. It takes a great deal of time and we are helping create a body that will certify responsible aquaculture to drive a similar change from the market. We do some things. We also probably speak as much as any other company around the world at global conferences on fisheries. The reason we do that is because we believe one of the problems in the industry is education itself. We take for granted some of the expertise that we have, but we like to offer that. We do encourage forums; we run a fish university, an internal academy, and we invite supermarkets to visit us as well and understand how we operate. We cannot do much more than that at this point in time, but we also influence some international fisheries. Last week I was in Norway; I gave a speech at their annual general meeting on where the landscape lies. We do that very, very often.

Q268 Mrs Glindon: Now that you have already touched on some of the aspects of labelling that your company does, the Commissioner envisages that producer organisations will be able to set up their own labelling schemes. Do you think it is necessary for that to be done or are there enough already?

Peter Hajipieris: There certainly are enough already if you are in the industry. Actually, there are a lot of businesstobusiness schemes-roughly 30 including aquaculture. The consumer does not necessarily see them. We are a brand and we have our own story, and clearly it is up to each company to develop their story, but labelling is an option. Actually, legislation already exists for labelling products. We generally tend to forget that. There is an area that is a bit greyer around how you define or label something that is sustainable. In fact, we do not believe there is a sustainable fishery because, to measure sustainability, you have to measure the carbon inputs and the social measures, and no one does that. The MSC only certifies aspects of the ecosystem.

Q269 Chair: The Commissioner actually said whether it was going to be fresh or frozen. Morrisons, I know, had a bit of an issue with that. Sometimes they wanted to sell it as fresh and actually it had been frozen before. On that particular issue of fresh/frozen-

Peter Hajipieris: That is fine. In fact, the law already, the Trade Descriptions Act, our labelling regulations, requires a product that is on the fish counter to say "previously frozen". It does already require that. That is the law.

Q270 Chair: In this country, but I think the Commissioner’s point was that perhaps it is not the law in other EU countries.

Peter Hajipieris: Fine and I think that that should absolutely apply. There should be a harmonised labelling approach, because that it is clearly duping the consumer. If you are buying something that has been defrosted, it should be labelled as such. It has previously been frozen. However, what we are concerned about is that we do not want that to imply that something that we freeze at sea, where we lock in the freshness just like we do with our peas, within less than two hours, implies that it is not fresh. It is really important to understand that much of the fish that we import is frozen, but it is frozen at sea; there is nothing wrong with it. As long as the labelling is around the specific designation around the state, because of that concern-we certainly do not want the labelling implying that frozen is inferior to fresh, because in fact fresh might be 10 days old.

Q271 Neil Parish: Do you support a total ban on discards, as the Commission is talking about?

Peter Hajipieris: Where do you start with discards? I explained it was a fiendish thing to sort out. We do support a ban on discards. The speed of transition needs to just be calibrated, if I could put it diplomatically. The industry is going to end up with a transformational change that it has never had to deal with before. There is a real issue around lack of discarding rates. For us, for the whole thing to operate, there has to be some kind of a harmonised approach to the data capacity and capabilitybuilding process. Currently I am unclear what structure is going to exist that is going to enable this process to happen. There has to be somewhere where there is a body or organisation. Clearly we have an element of ICES involved, but the actual coordination of all of this is unclear to me.

If we just take the UK, we have Marine Acts, Marine Strategy Framework Directives, Water Framework Directive, Habitats Directive and the FAO Code of Practice on by-catch. How do you actually coordinate all that? The proposal is very well-intentioned and we support the ban of discards but to deliver it you must have an underpinning model that is going to capture how you are going to deliver that in a scientific sense. Then you worry about the aspects of market.

Q272 Neil Parish: Is there not possibly an opportunity? You talked about how, through your business, you are able to change people’s tastes in what fish you were using. Is there not an argument that, if you were going to bring lots of types of fish in that may have been discarded before, you might be able to find a use for that? Have you seen a positive angle on it?

Peter Hajipieris: We are investigating that, although we are a frozen business and, as I have said, we have specific machinery and stuff that does certain things. It is highly unlikely that I am going to get some little red gurnards, which is a highvalue restauranttype species. It is going to operate in a highvalue space, where people are expecting a pack of frozen fish or fish fingers at a specific price point, but I do take the point that there are some business models that can accommodate that, particularly in the chilled sector.

Q273 Neil Parish: The other part of my question is that the Commission actually said that one of its proposals was that the overfished quota might be distributed in some way to the poor and the deserving. Would that affect your business, do you think? Would it create competition at the lower end of the market or what?

Peter Hajipieris: It is possible. I would like to understand how that is going to work. This is the problem: we have these lovely proposals but it is unclear how they are going to be implemented. There is a difference between making the statement and actual implementation. We are implementers; we run businesses and we get the industry very well. I am still unclear. It is very laudable and I would be interested in trying to help, if we could make it work. For discards, we do support the discard ban but we do not support this blanket approach. There has to be incentivisation for the fishers in particular to engage in this process. We would encourage, for instance, the use of funds that used to be used before for subsidising failed policies to be redirected into encouraging fishermen to use selective gear technology. That has to be one of the first steps in helping discards, simply because it will stop them being landed in the first place. That really has to be a key driver for me.

Q274 Chair: Can we thank you, Mr Hajipieris, for being with us and being so fulsome and comprehensive in your replies? You speak with great authority and great knowledge, and we have benefited greatly from your contribution. We would like to keep in touch, if we may, going forward. Thank you very much indeed for being with us this afternoon.

Peter Hajipieris: Thank you very much. Good luck with your endeavours.

Prepared 23rd February 2012