Fisheries Bill (Third sitting)

George Eustice Excerpts

Thursday 6th December 2018 Public Bill Committees

[The Chair]

Thank you very much for coming. You are very welcome. I invite the Minister to ask the first question.

[The Minister for Agriculture, Fisheries and Food (George Eustice)]

Q147 Could each of you explain to us what you think the main flaws and weaknesses in the current common fisheries policy are, but also which of its elements and principles you would like to be retained in a domestic Bill?

Andrew Clayton: I think the biggest weakness in the current common fisheries policy, following the reforms in 2013, is that those reforms have been under-implemented. For example, the legally binding requirement to fish at sustainable levels that was written into the CFP was a classic EU fudge. It was put in there with a deadline of 2015 where possible, and by 2020 in any event, so we are only now coming to the crunch in terms of delivering that and making sure that fishing limits are sustainable when they are set each autumn. The Fisheries Minister will no doubt have a torrid time in Brussels in two weeks, trying to make sure that deadline is achieved. The fudges in agreeing those objectives have added further delay to making that policy sustainable, even though a lot of work has been done in the four years since the policy came into effect.

Debbie Crockard: One of the weaknesses of the CFP is its lack of flexibility and ability to react quickly when situations arise. That is something that can be quite difficult if there is a situation that requires reactivity. That is one of the biggest weaknesses, but one of the strengths—one of the strongest things that came out of the last reform of the common fisheries policy—was the legally binding requirement to fish at maximum sustainable yield, which is definitely something that we would like to see.

Rebecca Newsom: We would say that the strengthened version of article 17 of the CFP was an important step forward, but it has not been implemented in the way that we need in terms of environmental and social criteria. We welcome the transposition of article 17 into the Bill, but it urgently needs to be strengthened in order to deliver on environmental, social, and local economic objectives.

Helen McLachlan: I agree with my colleagues and just add that the commitment to take a more ecosystems-based approach towards our fisheries management was a welcome inclusion in the CFP, and we need to take that broader perspective—take fisheries out of a silo and look at the environmental impact, not just on target stocks but broader than that, on other marine species and habitats.

[George Eustice]

Q Is it your view that if we move away from the multilateral kind of discussion that takes place at December Council, with qualified majority voting being the underlying principle for decision making, and instead we move to something that is more of a bilateral agreement between the UK and the EU, and given that we have set out clear environmental objectives that we have brought across from the EU in clause 1 of the Bill, then to answer Andrew Clayton’s point, it should be easier to deliver those objectives, because it will be a bilateral agreement rather than a qualified majority vote?

Andrew Clayton: I would agree that the deal making might be made a kind of cleaner process through that bilateral discussion, but the big concern for me is that the precautionary objective brought into the Bill is insufficient. It actually undercuts the CFP; it is a lower level of ambition than exists in the CFP at the moment. The UK is signalling with this text as it stands that it will aim lower, and that will certainly make it harder to get that kind of agreement.

[George Eustice]

Q Would you expand on that? I know that you have raised this point with me, and I can make a direct comparison between what we have—clause 1(3)—and article 2.2 of the CFP. With the absence of targets that are now past, or they will be past by the time this Bill is commenced, the wording is identical.

Andrew Clayton: The fudge that was agreed in 2013, and the legally binding objective that at the time was welcomed as a big win for the UK in negotiating that legally binding requirement, was CFP article 2.2, which is written in two parts. The first part of the CFP objective is an objective to restore biomass, defined in terms of maximum sustainable yield. It was felt at the time that it was very difficult to make a biomass objective legally binding, because you would be holding Ministers to account for putting fish in the sea, so it was agreed at the time that there should be a second clause to that objective with the aspiration to restore biomass. The second clause, which is the more important and more binding, actually relates to exploitation rates—setting fishing limits. It is that more binding clause that brings in those legal deadlines, saying that by 2015 where possible, and by 2020 in any event, fishing limits should be set in line with that scientific advice on maximum sustainable yield. It is that binding part that we can hold Ministers to account to and it is that binding part that is having an impact in the EU decision making. That is the kind of element that is in the forefront of Ministers’ minds when they are setting fishing limits in the December Council.

[George Eustice]

Q But the use of the term “exploitation rate” was only in the context of describing the 2015 where possible and by 2020 on all quota stocks.

Andrew Clayton: Yes.

[George Eustice]

Q So it is the date that is the only thing—

Andrew Clayton: Personally, I think the date is a moot point, because the UK is committed to achieving that date by 2020. I realise the timing of this Bill taking effect is uncertain, but either way the UK is committing to achieving that job.

The net effect of removing that second clause is that the future Fisheries Bill would therefore just have an aspirational objective to restore biomass at some point in the future, with no deadline. That still leaves Government and Ministers under short-term pressure every autumn to take that short-term view, to overfish in any given year, and there is always an excuse that can be made that overfishing for one more year might be justified in some way, with this longer term biomass objective in mind. The history of the CFP shows us this, but it is not even a historical point that I am making. We have just literally agreed and signed up to a deal this week to set limits for 2019 for mackerel higher than scientists advise, and the only kind of saving grace in that decision was that the Commission announced that they would not be able to do this again next year because of this 2020 deadline. This deadline is biting at the moment; we need to stick to that and not go backwards on the progress we have made.

[George Eustice]

Q Finally on that, there is something else in the Bill that is not in EU law: the requirement for a joint fisheries statement. That is a statutory requirement to have a plan agreed by all parts of the UK that sets out how we will deliver those statutory objectives in clause 1. Is that not the right place to define and describe in more detail how to deliver that biomass objective?

Debbie Crockard: That may be a good place to define it, but the problem with the joint fisheries statement is that, under clause 6(2), if a national authority takes the decision to act other than in accordance with the JFS, it simply has to state the reason why. There is no binding duty to follow that JFS. If it goes against the JFS and sets fishing limits that are not legally bound, there is nothing to hold it to account in that situation.

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

Q One of my concerns about the Bill is that it does not go far enough in addressing data deficiency. We have data for a number of stocks, but for an awful lot of stocks—some quota and some non-quota—we do not have a baseline stock assessment or an understanding of how much fish is in the water that we may be catching off-quota. What could be improved in the Bill to address that data deficiency?

Helen McLachlan: That is one of our concerns. It is not really addressed fully by the CFP either, which is why we think the Bill is a great opportunity for the UK to start to fill that gap. You are absolutely right: we do not have an effective means of documenting what we remove from the oceans. There are requirements to log what is taken. We have operated a landings-based system to date, but we should now move over to a catch-based system, with which we should be able to monitor what comes up in the net. We are not able to do that now; the systems are simply not in place. We would like to see the Bill address that with a verifiable, fully documented catch commitment, supported by the use of electronic monitoring in the first instance, for example.

As you say, it is not only the catch but what else comes up in the nets that we can start to gather data on, which can be fed into stock assessments, increasing confidence in those assessments. That, circularly, is good for best management practice. We advocate a verifiable, fully documented fishery approach with the support of electronic monitoring on the vessel. When under a piece of legislation that prohibits discarding, as we are now, that activity occurs at sea, so we need some means of monitoring effectively at sea to take account of that. Improving data collection would be absolutely fulfilled by that requirement.

--- Later in debate ---

[The Chair]

I thank our new set of witnesses for joining us. Could you please introduce yourselves very briefly?

Andrew Pillar: My name is Andrew Pillar. I am representing Interfish and Northbay Pelagic, which are primary processing and exporting businesses in Plymouth and Peterhead, but I am also wearing a hat here on behalf of the Scottish Pelagic Processors Association.

Mike Park: My name is Mike Park and I am chief executive of the Scottish White Fish Producers Association, representing over 240 businesses.

Andrew Brown: My name is Andrew Brown and I am the director for sustainability and public affairs at Macduff Shellfish, which is the biggest shellfish processor in Europe.

Daniel Whittle: I am Daniel Whittle from Whitby Seafoods, which is the UK’s largest scampi manufacturer. We are somewhat unique, in that we are entirely supplied from the UK and supply into the UK. I would say we are also representing Northern Ireland, because we have a factory there and are very dependent on its supply.

[George Eustice]

Q Obviously, some of our most important fisheries agreements are those with Norway and the Faroe Islands and the coastal states agreements on species such as mackerel, all of which are currently handled by the EU, where we do not have a direct seat at the table in the way the other coastal states do. Would you explain some of the consequences of that lack of representation by virtue of the fact that we are an EU member?

Andrew Pillar: I have attended many of those meetings with teams travelling from the UK, and it is an extremely frustrating position to witness that power being taken out of the hands of a team representing the UK and placed in the hands of the EU, making decisions that are not best aligned with the interests of the UK catching and processing sector. We have seen in recent years this becoming a very difficult issue in terms of negotiating away access to UK waters, in the coastal states agreements, for a period of time that has been inconsistent with the best interests of the UK.

Mike Park: You will be aware that the EU-Norway negotiations are going on in London as we speak. They failed to come to a conclusion last week. I have been going to these negotiations for over 25 years, I think, and one aspect of the negotiations that we look at with envy is the Norwegian Government always sitting with their sector. They normally have five or six fishermen bound roundabout them so that they can feed from one another in terms of what the appropriate output should be.

I also feel sorry for some of the member state officials, such as the officials from the Department for Environment, Food and Rural Affairs and Marine Scotland, who sit in these meetings, because very often they are kept out of the heads of delegation meetings, where the detail of the discussions and sometimes the conclusion agreements are set. For 25 years we have sat there, looking at Norway with envy, thinking that at some point we would like to do that, and I think that, as we move forward, perhaps we will. For us, it has always been a negative that the fishermen of Europe are not talked to in any way other than a loose way, and we are certainly not bound into any of the negotiations to feed in in an appropriate manner.

Andrew Brown: I can say a little about this: I used to be involved in these negotiations for the Scottish Government. It was very difficult to try to continue the dialogue with the industry as the negotiations went on. One of the roles I had was to speak to Mike and his like as the negotiations continued. I think there is something in what Mike has suggested.

Daniel Whittle: I do not get to go to the negotiations, but in the previous session there was talk about TAC being set above the recommended scientific advice, and I know a good example of where that happens: area 7 in the Irish sea, for nephrops, where there is a large, 20,000-tonne fishery. Every year they set it above that because the French and the Spanish have quotas that are largely unused, so they set the TAC above what the recommended scientific advice is, to allow that to happen. There is nuance in when the TAC is set above what the scientific advice is.

[George Eustice]

Q In conclusion on this point of the important fisheries in the North sea, is it your view that British interests get traded away by the EU in order to get advantages for other member states?

Andrew Pillar: The opportunity for us is not to be underestimated—to be at the table as a coastal state. That is the prize we in the industry see. Mike touched on that point about the industry working with Government to best achieve those objectives. There will be some trading and negotiations, but they need to be right for the UK and at this moment we are not in that position because we are not a coastal state, but this framework will enable that and delivery of a coastal state has to be the objective.

Mike Park: There is a typical example going on just now in the current negotiations, where the quota of North sea haddock next year will come down by approximately 30%. We would like to get some trade in from Norway to help us through next year, but that has now been balanced against north Norway cod, which the Spanish and French are lobbying heavily to get. That could mean that we do not get the haddock we want in the North sea. The answer to your question, Minister, is yes, it works against us at times.

[George Eustice]

Q All of you export some of your products. In the event of a World Trade Organisation scenario with most favoured nation tariffs, how high is the tariff on the fresh fish that you sell, and are you more worried about tariffs or the possibility of border inspection posing some disruption to the supply chain? Which concerns you most when it comes to trade?

Andrew Brown: As a shellfish processor, we are highly reliant on exports, particularly to Europe, which is the destination for 95% of our scallops, for example. At the moment we enjoy free and frictionless trade, so the implementation of MFN tariffs would have significant effects. We have done some calculations for the shellfish industry as a whole. We are looking at perhaps £43 million in additional costs on shellfish exporters if we moved to that, plus, with third-country agreements with the likes of South Korea, probably another £5 million on top of that—that is per annum. Whether some of that can be absorbed by the customers and buyers in Europe is a difficult one to see. It is a competitive market; therefore, we have concerns that this will have an impact on our competitiveness and on how well we are able to sell our product.

The non-tariff barriers are equally, if not more, important. If we move to a stage where we need health checks and border checks at both sides of the border, that will cause a delay. For shellfish—a highly perishable, high-premium product—a 12-hour delay can reduce value by almost 50%. If you are delayed for 48 hours, you have more or less lost that consignment. The non-tariff aspects are really significant for the shellfish sector and for other sectors.

[George Eustice]

Q On scallops, the MFN tariff is 8%. Arguably, that is a bit like VAT—it is a tax on the consumer, ultimately. I know some in the fish processing sector have said, “Yes, we would obviously rather have tariff-free trade, but don’t sell out the catching sector on our behalf.” I wondered whether an 8% tariff, at the end of the day, given the fluctuations in market price anyway, is hugely problematic.

Andrew Brown: Of course, we do not welcome such a tariff. We have to remember that the shellfish sector is not really gaining anything in additional quotas through Brexit. These are non-quota stocks, other than the langoustine, which we already have a very large share of, so there is no benefit to us—to the shellfish sector—from the Brexit process. We do not expect our catches to be able to go up much, and we require access to some European waters for scallops and crabs, so there are multiple threats to the shellfish sector. We need to ensure that the sector is not forgotten about in the larger discussion on fin fishing.

[Luke Pollard]

In previous sessions, you might have heard me asking about a national landing obligation—a requirement to land fish caught under a UK quota in UK ports. Would that have an impact on the processing side of the businesses that you represent? In the interest of complete disclosure, I also declare an interest, because Mr Pillar and Interfish are based in the constituency that I represent. What impact would a landing obligation to land fish in UK ports have on your sector? Would it be beneficial?

Andrew Pillar: One of the key things in the port that we originate from, in Plymouth, is the market—the auction—and the opportunity for fishermen at all levels to access that and sell their catch. That is from the under-10 fleet right through to larger vessels. As it stands, that business has absolutely no security and no certainty that there will be a supply of fish coming into that marketplace if operators were to choose to put their fish into the back of a lorry and send it directly overseas, which can and does happen. In some ports around the country, that has evolved under the CFP to a situation where markets have failed and there has not been the opportunity to have a diverse marketplace for small, medium and larger vessels.

In the pelagic sector, the opportunities around employment export, upstream and downstream, are wide-ranging. To be competitive in many of those markets, it is essential to have a critical mass—a business must have that critical mass. In the UK, we operate with very different bases for business in terms of business rates, labour costs and harbour costs, which do not put processing on an even playing field with many of our competitors, but we must recognise that it is a competitive market. What we do have is some of the best, highest quality seafood that we will stake our case for being sustainably produced within British waters. That is a highly desirable product and not to be undervalued.

Mike Park: From a Scottish perspective, in terms of landing to the market, up in Scotland all our vessels operate locally. We do not fish north Norway, the Mediterranean or the Pacific or anything; we fish around our coasts.

The vast majority of the demersal fish comes in to ports such as Peterhead, which is the largest white fish port in Europe, and Fraserburgh, which is the largest nephrops port in Europe. You see the investment going on there: we have a new fish market there, and last week we landed 36,000 boxes of fish into that fish market, which is unprecedented elsewhere. You see a significant investment in new vessels—replacement vessels, not additional vessels. You see an enthusiasm up there, which is built on the fact that the stocks are on our shores, we take care of them and we land it back to our markets. There is a small amount that goes to northern Denmark for the Christmas market—we utilise their market for saithe over that period—but apart from that, everything largely comes back home to Scotland.