Examination of Witnesses (Questions 490-499)
Mr Chris White and Mr Malcolm Morrison
1 MAY 2008
Q490 Chairman: Chris and Malcolm,
hello and welcome, and thank you for everything you have done
in making this visit so smooth this morning.
Mr White: Thank you, Chairman. I hope you have
a productive session as a result of that.
Q491 Chairman: Would you like to
kick off with an opening statement?
Mr White: I would like to make an opening few
comments. I have been asked to keep this as brief as possible
because your fish and chips are waiting for you at half past 12.
Can I reiterate the welcome that I am sure you have received from
the Peterhead Port Authority and welcome you to the town of Peterhead.
My name is Chris White and for the last eight years I have been
acting as Buchan's Area Manager for Aberdeenshire Council. Just
to explain that role, Aberdeenshire decentralises its decision-making
to a large degree. We are a unitary authority, one of 32 in Scotland,
as I am sure you know. We turn over something like £500 million
per year non-housing on council housing activity, so by any estimation
we are a substantial player in terms of the local economy, both
in terms of employment and in terms of the impact of what we do.
Most of that budget does not come my way so I have relatively
slim pickings from the table in terms of allocating financially
what we do, but we do meet here every three weeks. As an Area
Committee we look primarily at things like planning issues, consenting
issues, increasingly at policy development issues as well, so
we are starting to have a greater input into where we are going
in terms of in terms of housing management; we will be looking
at evidence from various scrutiny and audit investigations, so
that just gives you a very quick flavour of the decentralised
role of Aberdeenshire. I should also say I lead the Area Management
Team which consists of the heads of property, heads of planning,
heads of housing, heads of social work, so I have a fair grasp
of what goes on at community level in this town. That has some
input from economic development but not a huge one, so if you
are going to ask me technical questions regarding mesh size and
its implications you will meet a very blank stare. Malcolm Morrison,
my colleague, and Ann Bell, who has given evidence to you already,
deal with that job for the council and I rely upon them for information.
One of the joys of having an information service in Aberdeen is
producing some pretty good statistics which I hope the Committee
will find helpful, showing the changes in total allowable catches
over the years, the employment and fleet size in the north east
of Scotland and some of the value and fish landing statistics.
It may be that you are fully up to speed with these and it may
be that you are not, but it will, I think, give a good picture
of what has really been happening in the fishing industry in the
north east of Scotland over the last ten years or so, particularly
since 2002, which is the bit that you are most concerned with.
I will just explain a bit more of the detail of my remit. I cover
the town of Peterhead with something like 18,000 in this community
and 2,000 people in Boddam just two miles to the south. Peterhead
is a 16th century port which has grown and changed radically as
the fortunes of whaling, herring and other fish-catching issues
have emerged. The seventies saw Peterhead take off to a very large
degree and I heard one of the submitters of evidence recently
talking about oil and gas. It is probably as important to the
future of this town as fishing. The same could not be said of
Fraserburgh. Oil and gas have been a major logistics issue in
terms of Peterhead, access to the North Sea being its key advantage,
so the unique selling point of Peterhead is very much its access
to the North Sea and the issues which relate to that. It has been
a strength and a strength which has been played on increasingly
recently. My remit also covers 20,000 agricultural people just
ten miles to the west and north and south of here, so we have
a balance between town issues and country issues, and the combination
and inter-relation of those is always an interesting challenge
in that the issues facing rural Buchan are quite different from
those facing Peterhead. I want to digress a little bit onto statistics.
I have a couple of other roles for the council. One is leading
on external funding effort and the other is leading on a Scottish
Government initiative called the regeneration outcome agreement.
That is targeted around some useful figures—and I can get
some more figures to the clerk perhaps afterwards—in terms
of Scottish indicators of multiple deprivation. It looks at health
and employment skills, housing and income issues and charts those.
It is quite interesting in providing a balance between Peterhead
and rural Buchan issues. Rural Buchan, is uniformly in the second
top 20%, so four out of five in terms of ticks in the box in terms
of affluence. When you come to Peterhead things get much more
interesting. In three data zones immediately out of sight of this
window we have three zones of only six in Aberdeenshire in the
bottom 20%. We also have seven in the top 20%, so the picture
I am trying to paint for you is of quite a polarised community
in terms of affluence and issues of welfare between newer, bigger,
modern housing on the edge of the community and some definite
pockets of urban deprivation, not at a scale which is going to
even flicker on the Scottish register but nevertheless very much
a concern in terms of where we are going. I give you that as a
bit of background. I should also state that I have no responsibility
directly for Fraserburgh but I do look at the regeneration outcome
agreement for Fraserburgh. The figures almost exactly mirror Peterhead
in a slightly different shape in that immediately around the ports
you have got three data zones in the bottom 20%, so that is an
interesting view perhaps of slightly polarised community effects.
I am sure you will be well aware that Peterhead and Fraserburgh
are two of the most fishery dependent communities in the UK and
two of the most significant players in terms of landing and processing
of fish, and you will have heard, I am sure, in great depth about
all of that inter-relation. If there is a key challenge facing
both of the communities it would be peripherality in the European
context, peripherality in the UK context and even peripherality
in the Aberdeenshire context. When you look at the road transport,
which you will have used to get from the airport last night up
here, it is far from perfect, although there are plans to dual
the Balmedie-Tipperty road at the moment. This is not just in
terms of road transport but also in terms of IT infrastructure,
the companies in this area can feel very remote from not just
Scotland and the UK but also decision takers in various places
and I want to just develop that a bit further. 2002, when you
are looking at the Common Fisheries Policy, was very definitely
seen by the skippers in this town as being a far distant imposition
of some regulation that they could not really grasp and there
was a lot of angst and meetings at the Waterside Hotel, which
Malcolm might well have been at. I remember the Provost of Aberdeenshire
Council, who was trying to lead on fighting their issues, being
pilloried by the fishermen saying, "You are not doing enough.
You are doing this to us", a real feeling of distance from
the decision taker to the various sectors of the fishing industry,
and also I grasped at that time some real divisions within the
community where you had pelagic against demersal, you had catcher
against processor. Everything was somebody else's fault. It was
the French, the Spanish. There was really no consensus about where
the remediation might come from other than that it was becoming
increasingly apparent that it was not going to be a case of laissez-faire.
Something had to be done and some management had to be put in
place and that was going to come through the Common Fisheries
Policy. At the same time two very crucial decisions were going
on at UK level and at Scottish Government level. The economy at
this time was very much supported by 514 airmen based at RAF Buchan
just five miles to the south. I was talking to one of you from
Norfolk a minute ago. The decision was made to pull out of Buchan
and concentrate on RAF Neatishead. That immediately removed £10
million from the local economy and I think it was very much viewed
as Westminster as well as Europe being bad to Buchan. At the same
time the Scottish Prison Service announced the closure of HMP
Peterhead with the loss of 300 jobs associated with it, again
resulting in something like £10 million of annual turnover
taken out of the local economy. That decision became overturned
after a local community campaign, which I was certainly part of,
as were several other people in this town, quite a rare thing,
I think, fighting for retention of a prison just because, if nothing
else, that shows you the fragility and feelings of suspicion at
the time. Faced with those challenges, the council, along with
the local enterprise company, Scottish Enterprise Grampian, and
the local affordable housing provider on behalf of the Government,
Communities Scotland, as they then were, formed a tripartite agreement
called Building Buchan. That was to take a holistic look at this,
and I do appreciate you are looking at a somewhat sectoral issue,
but with all these various community threats coming up contemporaneously
there was a real feeling that the media might grasp onto, "The
world is full of doom and gloom, the world stops at Ellon. Nothing
ever happens north of there", and there would be a real drift
of folk and community apathy as a result of that. We therefore
took a very holistic look at where the towns were at through a
mechanism called the Aberdeenshire Towns Partnership and started
to produce some broad-range strategies, looking at as many different
aspects of community regeneration as we possibly could, and I
am very willing to be questioned on the detail of that later.
Most significantly, in terms of headline indicators, unemployment
hit a record in November 2007. It was a record low, 1.2 per cent.
I do not know your own conceptions of this, and I know some of
you are Scots based but, certainly when I was going through university,
1.2 per cent was well above what the rate of full employment would
have been regarded as, well below the UK and Scots national averages
as well, and so the overall impression as a straightforward headline
indicator is that we have traded through those three big impact
hits all contemporaneously in 2002, and community confidence at
the moment is about as strong as it has ever been, certainly in
my time in Peterhead, which goes back 20 years. I am not saying
for a moment that everything is a basketful of roses and that
things cannot go wrong again. We have some fairly fragile economies
which are very sectorally driven and it does not take much to
bring the threats back to the table. We are by no means complacent
and a lot of the effort of Building Buchan was about starting
to look at other activities that could happen. I will go into
the depth of it a bit more but a major factor has been the energy
industry. The St Fergus gas terminal is five miles to the north.
The North Sea oil industry has been going through some restructuring
with all the people who arrived in the late sixties, early seventies
reaching the time of life when they need replacing with incoming
folk, so to a large degree, I think, some of the actions outwith
the fishing community have been the saviour of some of the pain
that has had to be borne since 2002. I do not know if that is
evidence that you are getting from others. I did hear a comment
along those lines as I walked into the room, so the buoyancy of
the north east economy generally in construction, in oil and gas,
in terms of offshore employment has been very positive, and we
have just missed out on what would have been a very significant
contribution to climate change in terms of carbon capture, as
some of you may well know, at Peterhead Power Station which would
have been a world first. We got pretty close with BP and Scottish
and Southern to making that happen and the consent was on the
verge of being given but the finances in the end have just got
a bit too messy. Rolling forward, clearly employment has become
more of a concern. I said 1.2 per cent unemployment, but there
are also cited figures, the most recent ones being provided by
Grampian Racial Equality Council, in terms of migrant workers.
I know that is one of the things you are probably concerned with.
The most recent estimate is of 1,000 in Peterhead and 1,000 in
Fraserburgh who are currently working coming to live in the north
east and partly forming new communities here. I was talking to
Malcolm briefly and there is some counter evidence to suggest
that, with the strength of the euro and with wage levels rising
in Poland, there are early indications of a reversal of that trend.
What we are picking up is a bit of a change in that we have had
east Europeans, young, single male workers coming into the town
probably five years ago and now a second wave of more family orientated
people, children certainly coming to the local secondary and primary
schools. There are six primary schools in Peterhead. Peterhead
Central now has 26 different nationalities in the primary school,
just to give you a feel for the level of challenge it presents
to teachers, but secondly the width of nationalities coming and
being represented in the community, by and large, I have to say,
very happily. We have run literacy and other developments in very
close contact with Grampian Police and the Chief Inspector up
the road. We are not picking up on major problems. We have had
to explain one or two simple practicalities, things like, "Please
don't take your gun to the pub. That's really not acceptable behaviour
in Scotland", "Please don't leave your seven-year old
in the house overnight by himself", and, "You can call
the Fire Brigade without expecting a large bill. They will put
your fire out", very simple things which the Scots probably
take for granted but have been fairly major social integration
issues for the council and its partners. Can I pause there? I
have been provided with a set list of things that you might want
answered in a bit more depth but if there are general points about
my role and about what I perceive as happening in Peterhead since
2002 I would be very pleased to answer them.
Q492 Chairman: Can I say two things,
and they are not general points, I am afraid; they are specific
points? One of my indicators for community affluence is the number
of charity shops in a high street. You have a lot of charity shops
in the high street.
Mr White: That is undoubtedly true. I could
try and explain that away by saying that we have a lot of voluntary
sector activity—never underestimate the role of religion
in both Peterhead and Fraserburgh—and a lot of activity
by fishers' wives in terms of wanting to volunteer and be involved.
Obviously, exemption from various rates and taxes also plays a
big factor, and across Scotland we have definitely been facing
issues of town centres contracting, concentrating less on direct
retail and more on service trades. That is very common across
the north east, as you all know well. Peterhead has yet to lift
its boot straps on this. My contention would be that supermarkets
eat more and more of the general market and trying to compete
with supermarkets on quantity never works. You have to compete
on quality. There are towns in the north east of Scotland that
have done that extremely well and Inverurie is the best example
which has probably done better than most. Clearly these have been
about personal services and about trading on quality. Peterhead
has semblances of that but it is really not showing well. I am
more concerned for Fraserburgh. When you are in Fraserburgh at
the moment there are a lot of vacant shops, let alone charity
shops, and the overall impact of the town centre in Fraserburgh
at the moment, and Malcolm knows better than I, is not great.
Q493 Chairman: Would you also like
to say something about drugs?
Mr White: You can take several viewpoints on
drugs. First, the fishing industry itself has an implication in
it. Heroin in particular had a reputation in Fraserburgh for some
time and banner headlines were trotted out as soon as even minor
seizures were made of anything or there was yet another incident
of fatalities and health related issues. There was almost a denial
in Fraserburgh or a lack of willingness to address the issue and
I think that still exists to a fair degree. I am not saying for
a moment that it does not exist in Peterhead. However, when you
talk to the Police Service locally, the superintendent here has
returned fairly recently. He said he could not believe how low
the level of crime in Peterhead was generally. I hope I am not
being hopelessly naive here but there is an understanding of who
the dealers are, that it is a local market, and the view of the
NHS locally and Grampian Police is that it is contained. I am
not saying for a moment that for the families involved it is not
devastating and that as a parent it is very hard to contain your
emotions in terms of what that might mean. However, the level
of significance, as I understand it from the NHS, is that it is
not rising, it is contained and a large degree of it probably
comes down to the level of affluence that exists in young fishermen
coming back on shore with too much money immediately available,
who would traditionally have gone out and bought the biggest,
fastest car they possibly could before the tax bill arrived but
who now have another opportunity for spending that money on something
which clearly is not going to do them any good in the long term,
although neither would driving an Opel Manta GTE far too fast.
Q494 Chairman: When our predecessor
committee looked at the current fisheries policy in 2003 it made
the point that the economic return to fishing communities was
pretty low, profitability levels were low and there was declining
employment. It is difficult to get the mix because you have the
oil as well. What is your view on employment levels and wealth
coming in through fishing?
Mr White: I can give you my perception and it
is a slightly different one in Peterhead from Fraserburgh. The
Peterhead issue would be that it is pretty much right sized, to
use a horribly trite phrase, but nevertheless those boats which
were coming to the end of their shelf life anyway and those skippers
who were coming to the point of life when they would have benefited
financially from simply coming out of the fleet took the opportunity
to do so and by and large the view within the community was good
luck to them for doing so. Some of those folk will be living in
the bright blue top 20% areas in the town now, or possibly in
Spain. That is fair and good to a degree. I suspect also we have
seen a lot of investment into the pelagic fleet and Malcolm knows
about that far better than I do. The tradition has been that you
look at the fishing fleet as a whole but it is very definitely
two different sectors in my humble estimation. I think the biggest
impacts have been in white fish where boats were smaller, generally
more ageing. The profits and proceeds in pelagic have been rising,
certainly up until recently. I know there are real threats, which
I am sure you have been hearing about from others, about oil prices
and what that might mean in terms of future proceeds. It would
be simplistic to say that the overall view is that things are
now right sized, and you might hear differently down at the Dolphin
Café very shortly, but actually they are doing okay is
the perception that is reaching me, and that there still are plenty
of fish out in the sea, which they will no doubt be lobbying you
about, saying, "We need to ease off our quotas", or
whatever. The technical evidence perhaps is not quite that now
but nevertheless the overriding impression is of an industry which
had to go through turmoil, did go through turmoil and has probably
come out more healthy as a result of doing so.
Q495 Chairman: Looking at the fishing
industry and the difference between the catching side and the
processing side, where is the processing side now?
Mr White: I am sure you will have heard the
phrase "vertical integration". Going back to what I
said about 2002, definitely fingers are being pointed in all directions.
The people I feel sorriest for are the white fish processing sector
who have been subject to fewer fish and much higher prices. The
knock-on effect of that industry-wise has meant contraction. They
have faced major rises in water charges, difficulties in keeping
retained labour with any great skills and several of the local
white fish processors have gone to the wall over the last few
years, particularly the smaller ones who did not have the economies
of scale and the breadth and tradition of knowing the markets
well enough. There have been some job losses in the white fish
processing sector generally. The overview on the pelagics has
been quite the opposite. As you leave the town you will see Lunar.
They are investing in a major new fish processing facility there,
but the general overriding concern is that we are bit too quick
to bang a lid on the box and send the fish away. We are not adding
enough value to the fish before it leaves the port to head to
Boulogne and other places across Europe. One of the other points
I wish to make is that we have not looked after the supply chain
well enough in terms of the overall look of the fishing industry,
the guys that make the ice boxes in the past that have been reliant
on marine engineering and the supply trades that have provided
the paint and the food to go offshore. A lot of these guys have
struggled pretty manfully and if you are looking around the inner
harbour, for instance, the marine engineering side has definitely
struggled.
Q496 Viscount Brookeborough: I think
you have almost completely addressed the two questions on employment
and nationality that I had. However, you do point out that Peterhead
is perhaps one of the exceptions in being able to take the downturn
since the year 2001 and 2005 and to and taking up other industries.
Where you do have problems with alternative employment have you
been able to access such funds as the European Fisheries Fund?
Mr White: Malcolm may have to add a bit of extra
detail but I would have to say that I do not think it has been
huge. I mentioned Building Buchan. One of the key things that
did was look at diversification. I talked about ice boxes, which
is about making polystyrene. There are other things you can do
with polystyrene other than provide fish boxes, so we did work
with quite a few of the local companies, 15 of them, to say, "This
market is not going to stay static. We need to diversify and bring
in new training opportunities and look at what your company does
which is going to allow you to thrive". That was run through
Objective 2 of the European Union's policy which provided 50%
of the funding to put that scheme to hand for them and work with
local business development advocates in terms of taking a good
look at business plans. Far too many of the companies we dealt
with had virtually no business plans so there is a certain amount
of maturing needed in terms of the commercial sector as well,
looking at how things are developing and where the new markets
would be in a world which was not terribly reliant on fish, so,
unless Malcolm is going to kick me under the table and contradict
me, I do not think the grants coming from the EFF have been seen
as being particularly helpful.
Mr Morrison: The previous Financial Instrument
for Fisheries Guidance did not have the same social aspect to
it as the European Fisheries Fund will have and Aberdeenshire
Council will be looking to work with the Government and try and
get some of the social funding aspects into the north east. They
already use funds on the agricultural side from the Regional Development
Fund, but they are debarred from the towns of Peterhead and Fraserburgh
so there will be a different kind of mechanism used for that.
In terms of the Financial Instrument for Fisheries Guidance, a
lot of the money did come to the processing side in the north
east. There was a lot put into fishermen's training and the improvement
of facilities around here but not specifically into the social
aspects of it. It is a different thing.
Q497 Viscount Brookeborough: You
have a high level of immigrant workers at the moment, as you said.
Does society here mirror agricultural in some areas in that the
children of current fishermen are getting a better education and
leaving, and, if so, what is the future effect in the long term
as to the following on generation?
Mr White: I will provide a few anecdotes here
in terms of answering that question. The Director of Peterhead
Academy said he had a 14-year old come to see him five years ago
who said, "What do you earn?". I will not share with
you what the Director of the Academy earns but it is a reasonably
substantial salary, and the young guy going into the fishing industry
said, "I will be making within two years more than you".
The world simply did not mean anything other than fish, but he
said that that has now completely changed, that whole attitude
of wanting to spend life out at sea, and the desirability suddenly
of jobs in the processing sector. Those of you who have been in
fish factories and smelt the vinegar and put on the hat know it
is not the nicest place to work in life. I am not saying there
are not other jobs which can be equally bad but it is not something
which I suspect the young up-and-coming Dux of the Academy immediately
thinks is the very thing they would like to do for the rest of
their days. It has become much more difficult, I suspect, to sell
life as a fisherman and to sell life as a processor. I heard the
words "Banff and Buchan College" being raised earlier
when I walked into the room. There has been quite an effort which
it has been leading in terms of trying to encourage marine navigation
skills and the development of ship-related activities in the widest
sense. I think several of the skippers probably literally jumped
ship to become oil supply experts, so again the skills transferred
relatively easily, I suspect, into other things which were still
making money.
Q498 Viscount Brookeborough: And
do you ever look into the crystal ball or do you dare look at
what life might be like after oil?
Mr White: We have to. I remember arriving from
Pimlico in 1985 to be told that oil was drying up in the north
east and that within five years we would be turning off the flues
and shutting down the power stations. Quite palpably that has
not been the case 20 years on. Oil and gas is still a major player
in the north east economy. Expertise exists in this area. For
instance, Westhill has become the world base for subsea technology
and Peterhead is one of the places you can exemplify for training
of new subsea vehicles. That is going to be transferable knowledge,
that critical mass of expertise and skills worldwide. I certainly
have neighbours and colleagues that are increasingly spending
their time in Azerbaijan. The world has become a smaller place
and the skills which have existed in the north east economy in
the oil and gas sector, I suspect, are going to stay here to a
very large degree. My concern will be for the next generation
who have no immediate need to stay in the north east of Scotland
but we very much want to encourage them to do so, and particularly
to exert their acumen and business experience that the generation
before them exerted through the major corporates, so that as the
world has increasingly become less corporate in that particular
sphere we make sure those skills are developed and continue to
develop in the north east. My overall conception is that energy
will always stay important to this part of the world. Oil and
gas is going to be a major player in this part of the world for
at least the next 20 years and as the price of oil rises by the
day it means that previously marginal fields are no longer quite
as marginal as they were and as demand for oil continues to rise
along with demand for associated technologies. I mentioned briefly
carbon capture. Carbon capture is probably more relevant to coal-fired
power stations and the transfer of that technology. There is no
reason why some of the skills that have been developed around
oil and gas cannot transfer to other technologies which will become
the future of worldwide concerns.
Mr Morrison: The local industries were aware
of the fact that there was a problem with recruitment and they
are working with the Banff and Buchan College to try and make
sure that there are discrete educational results given to young
guys to come into the industry and work their way through and
prove that if you have been a fisherman you are not just stuck
there; you can do anything you want in the world. You can go and
become a Merchant Navy officer, you can go into port operations,
you can do anything, but this has always been sadly lacking in
the past. There was not always this discrete path through education.
It is recognised that even if it does take 20 years fishing will
be sustainable in that it will be here after oil and gas and the
industry is trying to address these things now.
Q499 Baroness Jones of Whitchurch:
You were talking about training and retraining, and obviously
fishing is going to be a key part for a very long time to come,
but are you also trying to encourage people to stay for other
reasons? Do you have another couple of sectors you are trying
to grow here, that you are trying to diversify into, or is it
fishing and energy or nothing?
Mr White: Not quite energy or nothing. Rather
analogous to the pelagic/demersals, energy is far from one sector.
Decommissioning is potentially extremely large money, not necessarily
very labour intensive but definitely is a market which Peterhead
is looking at very seriously at the moment, not in terms of wanting
great hulking rigs sitting in the bay for a long period of time
but there is a company called Score on the south edge of town
which has individual valves worth £5 million sitting in boxes
inside its sheds, just to give you a flavour of the extent of
the value of some of the reworking of oil and gas. Renewables
is another one which we are definitely targeting and increasing
activity on. Transportation links are probably the principal barrier
to the development of renewable technology. You cannot land a
wind turbine in Peterhead. If you move it anywhere it gets stuck,
so very simplistic things like that prevent some of those technologies
being applied more but the skills definitely exist. Also, the
quality end of food and drink still exists as a possibility for
Grampian. That is something we have traded on for a very long
time and there still will be opportunities, as the world becomes
increasingly hooked on biofuels and the use of land for other
reasons, to look at some of the key potentials which might link
well to fishing, some of the analogous trades, but again it is
back to the value added thing, that we are far too quick at getting
rid of our product once we have made it and do not do enough with
it to add value before it goes.
|
