Examination of Witnesses (Questions 500-519)
Mr Chris White and Mr Malcolm Morrison
1 MAY 2008
Q500 Chairman: Is not one of your
basic problems that any incoming potential developer would look
at 1.2% unemployment and say, "There is a problem for labour
supply and there is a problem for labour costs"?
Mr White: Absolutely. That said, I would settle
for a problem of 1.2% unemployment.
Q501 Lord Plumb: I think you have
adequately answered the next question on fishing capacity and
I was very interested in your comments. Through the difficult
period of the fisheries policy it does not seem to me that there
has been a lot of loss of employment and when we talk about capacity,
of course, having seen what we have seen and talked to a lot of
people this morning, it seems that technology is taking over,
as it is in all industries and new ships are being built and new
ships will come in but probably some of the older ships will be
going out. Do you see the need for change in that capacity building?
I was also interested in your comment about development policies.
Development policies, of course, overall have undoubtedly helped
the economy tremendously in Scotland, and I remember it being
said at the time these were fixed on a regional basis of areas
that were eligible for or in need of assistance to encourage growth
in employment and so on in these various areas. It was said that
the inspectors who were looking at those various areas walked
the length of England and they were so tired when they got up
to the border that they looked over and said, "Include the
rest". That was always the standing joke because a major
part of Scotland was included and there were many parts in England
that were left out that they thought should be included, that
I thought should be included, but that is another matter. On the
question, therefore, of employment overall I think your story
has been not only most interesting but quite encouraging to hear.
Oil procurement on the processing and the development on that
side is a point you make very strongly. We are now in the business
surely of taking big advantage of the export market in a way that
we have not been for a very long time because of the narrowing
of the gap between the value of sterling and the value of the
euro and that presumably will develop still further. I know from
experience that the export trade is now determining the price
of food goods throughout the whole of the United Kingdom. It is
leading the market; it is not the supermarkets necessarily leading
the price. Do you see that same sort of thing happening in fish
and could we not make a very clear statement that it does seem
daft in the interests of food miles to be sending these products
off far and wide and ten days later, or five days later I think
we were told yesterday, bring them back from the processing that
has gone on there to the market here?
Mr White: I concur with what is behind a lot
of what you are saying. It strikes me as bizarre that we are sending
prawns from Dumfries and Galloway to Thailand to get processed
to bring back to sell in Scotland. However you view sustainable
development, that is not it in my humble estimation. You could
parallel that with long debates we have had about simple things
like play areas. Should we be bringing coir matting from Sri Lanka
to put down on the bases of play areas or should we be using local
recycled tyres? I know which is cheaper but also which is the
more sustainable in terms of ongoing development and fuel impacts
on climate change. I think right across society we have some big
questions to ask. Your point about the pound and the euro is also
very apposite. We are picking up early stories of the Poles starting
to be paid more in Poland than potentially they were. If the whole
processing sector in Peterhead is underpinned by migrant labour,
and they have been very well received by the processors, I have
to say, because these are people who put in a full day's work
for a full day's pay, and that is now under threat, and the gentleman
on my right may know more about than I do, that certainly gives
me concerns. It is an industry which has really struggled to mechanise
and so it may well be that the capacity issues and the desirability
of employment in the industry needs to be re-focused and re-looked
at from a UK stance as well as a European one. There is a straightforward
assumption, I think, that everybody that works in fish processing
is from the Baltic States. It has definitely not been the case
in the past. Quite sizeable numbers of Portuguese and south east
Asian migrant workers have been active in Peterhead and it may
well be that if there is to be a reverse in the Baltic movement
we have to look again at what that means in terms of permitting
folk to come in from other parts of the European Union as wage
levels start to harmonise across Europe.
Q502 Lord Plumb: What about the property
market in Peterhead?
Mr White: That is a very interesting point.
Not very long ago you could have bought a four-bedroom flat close
to here for £50,000. Things would stay on the market for
a couple of years without shifting. Two things have been happening.
In terms of the residential market the fish companies I am sure
have been very active players in terms of buying up a lot of that
surplus demand and have done pretty well out of it. Peterhead,
I think, was third in terms of the Scottish rises in property
last year, above 30%. Fraserburgh was top at 45%, so there have
been some very significant rises in real property prices. That
is not just down to houses already on the market suddenly being
snapped up. A lot of it is based on, going back to the blue areas
on the western edges, some fairly big and reasonably comfortable
high £200,000's, low £300,000's houses being built,
four and five bedrooms. I would love to do an analysis to find
out who is moving into these houses because they are being built
at a rate faster than at any time in the eight years I have been
Area Manager here. The overall mood is buoyant in the residential
sector. Part of it, I am certain, will be overspill from Aberdeen
where there has been a fairly constrained residential market just
in terms of the supply of housing coming up quickly enough and
you will get a bigger house for your money in Peterhead than you
ever would in Aberdeen, so that is certainly an issue and has
been an opportunity which has been seized on. It is also mirrored
in the commercial sector. We have B&Q, we have Tesco looking
round the town, we have Asda wanting to double, we have Morrisons
wanting to double, all at the same time, so there clearly has
been an uplift in terms of the general conception of the money
available and the economy and the threats that we were facing
in 2002. It gives me further evidence that we have traded through
that. We have not got an industrial premise I could let you at
the moment. They are all fully taken up and so we are now looking
at rationalising some of the industrial land and trying to bring
that forward, so overall I hate to be complacent but things are
looking reasonably bullish.
Q503 Lord Plumb: You do not see a
recession on the horizon?
Mr White: Never say never. Clearly UK-wide things
are constraining. A large part of that is down to the American
dollar and sub-prime mortgages, I suspect. There is no evidence
yet of any of that reaching the north east of Scotland. I was
talking to an Aberdeen solicitor who was saying she had been marketing
property at £600,000 that sold at £750,000 only a couple
of weeks ago, so that gives you a fair indication that there is
still plenty of money going round the local economy in the north
east. Not every house in Peterhead sells for those kinds of numbers.
What I think is starting to flatten off, and we are getting evidence
of this in Inverurie where there have been a lot of houses come
on to the market at the same time, is the new house market. There
are starting to be incentives given by some of the mainstream
builders to get folk in a bit quicker. It tends to be the case
in the north east that things slowly gravitate that way rather
than immediately impact. It does have its own internal momentum.
There are just starting to be one or two signs that things are
perhaps not going quite as fast as they were, but we also have
a new structure plan on the horizon which, whether or not Mr Trump
gets his golf application approved or not, will lead to a sizeable
number of new houses coming this way.
Q504 Earl of Dundee: To what extent
do you think that transitional aid will assist fish stock recovery?
Mr Morrison: What we are looking at here would
be to keep people afloat if there were temporary closures but
transition aid, as far as we are concerned in the north east,
should not be needed now for permanent cessation of fishing because
the fleet is in balance with the resource, which is generally
agreed, and there are figures coming from the Sea Fish Industry
Authority. In the future they may be needed as an incentive for
the further measures, the real-time closures, but not as a mainstay
of the industry.
Q505 Earl of Dundee: And within a
parallel yet slightly different measurement how far do you think
exit payments will cause a reduction in fishing capacity?
Mr Morrison: I do not think that is relevant
in the north east any more. I think the people that are in the
industry now are there for the long term. It is a sustainable
industry. They want to be in it, they want to have a future here.
I do not think we want exit measures here. I think that is a thing
of the past. There may be other parts of the UK where they are
looking for it but certainly not here.
Q506 Chairman: Why do we continually
get this story through the media that the poor old fisherman is
having a rough time and life is grim and awful and there is no
money to be made out of fishing these days? That is still the
popular picture, is it not? Why is that so rather than saying,
"It is a great success and we are off to Spain next week
for nine months because we do not have to work for another nine
months"?
Mr Morrison: It is something that we fight against.
You will never find a happy fisherman and a happy farmer. In terms
of the media, no news is good news, so it is a battle that we
are having to fight in the fishing industry here all the time
and we need to portray it as a good industry. We need to have
a perception in the media that it is a worthwhile industry, just
to make sure it carries on.
Q507 Chairman: Is it that Peterhead
is different from the industry elsewhere and the rest of the UK
does live up to that negative stereotype?
Mr Morrison: I honestly do not think so. I think
the industry throughout the UK is something to be looked up to.
It is a different model in the north east. It is still primarily
family owned and to me that is a great incentive for you to keep
your business going if your family is involved. It is a different
way of looking at it.
Mr White: I would like to make one other point
which I have not got over yet. I was talking about 2002 and the
fractured nature of the industry and almost the denial of the
fact that there were issues to be faced. I think there has been
a complete reversal, and I would be interested to hear what you
hear from the skippers, in terms of attitude in working consensually
towards taking matters forward, a recognition that the safeguarding
of their industry is based on good information, working alongside
fishery protection, working alongside the scientific community
in terms of assessing fish stock, making sure that where there
are increases in supply that is known about and is authenticated
and validated. I am sensing a very definite change in attitude
from people who would have simply said, "No, this is not
an issue. We are going to land as many fish as we can as fast
we can", to a recognition that landing quality fish means
higher values, which leads to longer employment, which leads to
a sustainable future. I hope that is the message you will get
from Peterhead as a whole but it is certainly one that is related
here recently.
Q508 Baroness Sharp of Guildford:
We have talked already a bit about structural funds and in some
of the earlier work this Committee has done on the Common Fisheries
Policy we noted that the Financial Instrument for Fisheries Guidance,
the FIFG funds, had not been taken up in a big way, partly because
of the way in which the UK rebate system worked. Is there still
room or are you still eligible for structural funds and is there
room for use of structural funds if the national authorities here
in Scotland or the UK authorities were to take a slightly more
helpful attitude? Can I add to that another issue that I think
again came up from the discussions this morning where your Harbourmaster
was very anxious that we should recognise the potential of the
port here for expansion. You were saying that you have seen an
increase in the landings of quality fish over the last two or
three years and he feels that if the facilities in the harbour
were improved there would be greater potential for expanding the
capacity of Peterhead as a fishing port or as a landing port potentially
for processing but certainly for passing on. That needs infrastructure
funds. Do the structural funds provide a possible source of funds
here?
Mr White: They do and they do not. I will answer
this by saying that, if you were to take a rational approach,
when you look at what the Scottish Government is doing with Scottish
local authorities at the moment, forming single outcome agreements
which say, "These are the things we want to achieve and this
is the amount of money that we are prepared to give you to allow
you to then go and develop it", you can then parallel that
to European funding which works very much more sectorally in complete
silos for different types of activity which do not always combine
and do not always relate very well. There is real frustration
there that when you look at the individual schemes which exist,
some of which have their own separate and almost conflicting eligibility
requirements and a huge amount of administration with government
issues that relate to them as well, it is not all that easy to
draw down funding for the right purpose despite very often the
business case being right, despite very often the need for widespread
impacts in the community having been quite easily recognisable
and the opportunities very deliverable. I find that very frustrating
from a personal point of view, that I can see where we want to
get to but we cannot use the existing tools that we have, instead
conflicting house of cards type funding packages, to allow each
of those strands to support each other to deliver.
Q509 Baroness Sharp of Guildford:
But these constraints are community constraints?
Mr White: Yes.
Q510 Baroness Sharp of Guildford:
Neither the Scottish Government nor the UK Government can do a
great deal to help you on this.
Mr White: Certainly to date. I would love to
see that change.
Q511 Baroness Sharp of Guildford:
Obviously, it is open to the UK Government or to either Government
to put pressure on the EU authorities to change the rules.
Mr White: Yes, and certainly I would cite the
concentration on outcome as being the most important thing. Clearly
the money is there for a purpose and if they put the purpose before
the money I think that is perhaps a way forward.
Mr Morrison: Aberdeenshire Council has lobbied,
with the introduction of the European Fisheries Fund, to make
sure that the intervention rates do not stay too low. If the funds
are not being taken up then raise the rates so that people find
it more attractive to go for something and they are all getting
the funds, but we will see how that happens.
Q512 Viscount Ullswater: We have
had evidence from Regional Advisory Councils and they are very
complimentary about the assistance that you have given them, both
financially and in the provision of meeting rooms, probably this
one.
Mr White: They have been here, yes.
Q513 Viscount Ullswater: The concept
is still in its infancy but what we have been hearing is that
perhaps they may develop to becoming more management type councils
rather than purely advisory. Do you think the composition is about
right to reflect the catching sector, the processing sector, the
socio-economic sector, which I would put you in? Do you sit on
it? Does Buchan sit on it and how do you see it? Is it too dominated
by the catching sector?
Mr White: To answer the direct question, no,
I do not sit on it. I do have very good links with Ann Bell, which
is the reason why I am talking to you today, I suspect. Across
the council we clearly have a series of corporate roles and we
play those in different ways. My colleague, Jim Knowles, the Head
of Economic Development, is very influential in terms of the North
Sea Regional Advisory Council. To answer your question about the
catching, processing and onshore, ongoing industries, you could
argue that it is, of course, catching dominated because that is
certainly where the majority of issues begin. Whether that is
quite balanced off with as much capacity as it should be in terms
of the other sectors I am sure Malcolm will have a view about.
I would certainly make a case for a widespread discussion being
far more useful than a very narrowly focused one.
Mr Morrison: The Regional Advisory Councils
themselves are very aware of the shortcomings on the socio-economic
side particularly and they are making moves to try and address
those. It has been very difficult to get anybody from the consumer
groupings to attend these things. It is an ongoing work strand
trying to get consumers and even indeed to keep the NGOs engaged
with it because they need to be there but they do not always see
it as being quite as important as they should do.
Q514 Viscount Ullswater: What we
have heard as a result of meetings is that if they come out with
a unified voice coming from different sides then the Commission
does really listen to it, so that is obviously a step in the right
direction.
Mr Morrison: That is my understanding from the
top of the Commission at the level of Mr Borg, that that is how
he sees it. If it is a unanimous voice it has to be listened to.
Q515 Lord Cameron of Dillington:
Judging from conversations that I have had this morning, leasing
of quota, and leasing indeed of days at sea, seems to be alive
and well in Peterhead. I am just wondering what you think about
the idea of more permanent individual transferable quotas. We
are talking, obviously, from the point of view of the local community.
Would the big guys all buy out the small guys, which might not
be quite such a good thing? There are several boats from Inverness
I see in the harbour. Would they go further afield? What is your
view? On the other hand it would give quite a lot of permanent
flexibility because there is no doubt that the annual leasing
charge is a real bane of a lot of people's lives?
Mr White: I hate to sound overly parochial but
I am going to be a little bit here, I think. What I have written
down is that to a large degree fishery operations are classic,
small family businesses and that is the point we have made. I
think long term sustainability is based around the continuation
of traditional family-based concerns with clear buy-in from family
members to their future, and certainly in terms of buying out
large elements of that local control that is possibly not something
which I would want to encourage. I could potentially see major
threats and Inverness is one thing but you do not need to go too
much further before you start thinking that it is a world economy
and things are much more subject to control, back to 2002 a little
bit, a feeling of alienation, of decisions being taken in far-off
ports which are affecting Peterhead too closely, so my overall
view would be against that.
Q516 Earl of Arran: Would this come
under the heading of stewardship rights? The previous speaker
this morning was very loathe to comment.
Mr White: I am only unwilling to comment from
ignorance rather than anything else.
Mr Morrison: The Scottish Government is about
to have a consultation on it.
Q517 Earl of Arran: That is right,
the same kind of idea as you have told us.
Mr Morrison: They will be wanting to examine
how this can be resolved because at the moment north of the border
it is mainly family owned businesses that are fishing. South of
the border you have quite a development of company businesses
and with the introduction of tradable rights and these scenarios
a lot of these companies are now owned by Dutch and Spanish interests.
Within a given time that could disappear, so ideally in a scenario
like the north east of Scotland where you have Fraserburgh and
Peterhead you have MacDuff, Burghie, you have all these communities
which are hugely reliant on fishing. They need to have the resource
there available to them in order to continue fishing, so if you
take the resource away that is the end of the industry.
Q518 Earl of Arran: I suggest that
it could be very controversial.
Mr Morrison: Yes, so it is going to be a very
important consultation.
Q519 Chairman: The trouble is that
we did a report on the European wine industry and we went to parts
of Europe where wine is produced of very poor quality not intended
to be drunk at all but is grown for the distillation subsidy,
and the argument there was, "If we do not do this we do not
have any employment, we do not have any money and we have to do
it". I am afraid that argument received pretty short shrift
from us, but here it is very different in that the fish is a high
quality product.
Mr Morrison: They are not looking for subsidy.
They just want the right to make a living.
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