Fisheries Bill [HL]

Lord Grantchester Excerpts

Committee stage & Committee: 4th sitting (Hansard) & Committee: 4th sitting (Hansard): House of Lords
Wednesday 11th March 2020 Lords Chamber

[Lord Teverson]

I shall speak also to Amendment 119. When I looked through the list of items that the Marine Management Organisation should be able to charge for, I was surprised that it did not include fishing vessel licensing. It is like saying that people do not have to pay road fund licence tax for their cars, which I am sure we would all like individually but would not be a good idea for the environment. In this case, for incumbents, we are not even charging for quota, or whatever, and yet vessel licensing is an important activity. I just do not understand why that is not in the list. The majority of the fishing industry can well afford to pay the administrative cost of licensing. All sorts of Treasury rules limit how much public charging can take place to ensure that it is reasonable. I know that variation of licences can take a lot of the regulator’s time, so I do not understand why it is not included. It should be. I shall be interested to hear from the Minister.

My other amendment states that the Marine Management Organisation should not be dependent on public funding. A huge number of regulators in this country do not receive any public finance. Two years ago, I asked a Question about that and the Government kindly sent me a list of 25 regulators in the UK that require no public funding because they charge the industry for regulating it. I will not read them all out, but it goes from the Animals in Science Regulation Unit, which I must admit I had not heard of, to much more important organisations, such as the Land Registry, the Office for Nuclear Regulation, the Office of Rail and Road, Ofwat and the Oil and Gas Authority. In financial services, there is the PRA and the Financial Conduct Authority. There is Ofgem in energy. There is the Civil Aviation Authority. All those organisations just say, “We provide an important public good, the regulation of an industry, and we expect the industry to pay for doing it.”.

I do not understand why we as taxpayers should have to pay subsidy for the industries that the MMO regulates, from offshore wind through to fisheries, all of which are extremely profitable. Why do the Conservative Government not expect the taxpayer to be relieved of that burden? That is obvious to me. That is why I have tabled the amendment. The Marine Management Organisation should fend for itself. It should be able to set sensible charges, as any other UK regulator does. I should be very interested to hear from the Minister why taxpayers should subsidise those extremely profitable industries, which include, as I said, offshore wind, marinas and most of the fishing industry. I beg to move.

[Lord Grantchester (Lab)]

I rise to speak to Amendment 118 in my name, which is a probing amendment and seeks to upgrade the regulations on this matter from negative to affirmative. While the Bill’s negative procedure has not been commented on by your Lordships’ Delegated Powers Committee or Secondary Legislation Scrutiny Committee, and may seem technical, it involves money.

Under Clause 34(5), the MMO has considerable discretion. The initial charging structure becomes important as the UK sets up the fisheries framework outside the CFP. Some questions arise, to which it will be important to have answers. Will the MMO undertake this charging function on the basis of full cost recovery? That lies behind the amendment moved by the noble Lord, Lord Teverson. Schedule 7 replicates that clause in relation to Scotland on page 74, Wales on page 75 and Northern Ireland on page 76. Is it expected that all the Administrations will set up identical charging structures to avoid any competitive imbalances?

I acknowledge that the MMO is an existing body with an excellent track record; its relationships with stakeholders are usually very positive and productive. However, if this legislation established a new public body, your Lordships’ House and the other place would have a strong interest in the exercise of this power and the procedure attached to it. When the Minister replies, I would be grateful if he could give as much detail as possible on the level of charges, the frequency of any changes envisaged and the relevant percentage of cost recovery that any sector of the industry will be required to cover.

This last point is of particular interest, as I have noted, and covered by Amendment 119 in the names of the noble Lord, Lord Teverson, and the noble Baroness, Lady Bakewell. I am curious about the noble Lord’s use of “appropriate” in proposed new paragraph (b) in relation to his subsequent use of “must” in proposed new paragraph (c), in that there may be some implicit contradictions in the amendment. I ask the noble Lord: does the maximising of charges on the 10 metre-plus fleet mean that it could pay more pro rata and therefore be seen, in some way, as partly subsiding the under 10-metre fleet? This amendment also seems to mandate the MMO to make full cost recovery across all its responsibilities. I await the Minister’s reply.

[Lord Berkeley (Lab)]

My Lords, I support the amendments in the name of the noble Lord, Lord Teverson, relating to the charging, or not, of the MMO’s services. He is absolutely right that in most other industries the regulators are funded by the industry.

I had cause to write to the MMO because a neighbour of mine in Cornwall had a problem with it over a small planning issue. I do not want to get into the rights and wrongs of it except to say that the general reaction of the neighbour and others was that the service was incredibly slow. In fact, it took a whole year for them to get an answer on whether they needed to apply for a licence. I suspect that this had a lot to do with the fact that the MMO was probably subject to government financial cuts and was not allowed enough people. I am sure that it is very good at what it does, technically and commercially, but it did not have enough people to answer on this small issue.

Looking at all the regulated industries mentioned by the noble Lord, Lord Teverson, some of which I know about and some of which I do not, whatever one thinks of their decisions, they usually operate in a timely and professional manner. If they do not, we can still raise issues in your Lordships’ House. At least it is not an issue that they do not have enough money to employ the right people. I would be very interested to hear from the Minister why this sector gets all the regulation for nothing while in virtually every other sector, the people who are regulated have to pay.

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[Lord Randall of Uxbridge (Con)]

My Lords, I support the noble Baroness in her amendment; she spoke very eloquently about the need for it. Having been in the other place for some considerable time, I know that it is always easier to change legislation when it is in the draft form. I have found that Governments of all colours are more loath to change once they have laid the actual regulations. Some of these are of sufficient importance that interested parties, including Parliament, should have a good look at anything being brought forward. That is the way forward and it will allow us to improve not just regulations. I am very keen to see this type of amendment in this Bill and others.

[Lord Grantchester]

My Lords, I am grateful to my noble friend Lady Young of Old Scone for moving Amendment 121, which allows the Committee to probe into the consultation process, the input consultation and from where it comes, in relation to the regulation-making process powers in the regulation concerning fisheries and aquaculture, and to the devolved Administrations and the joint fisheries statements.

This proposed amendment to Clause 41 widens the consultation process to include Parliament in a quasi super-affirmative, as well as wider industry bodies under proposed subsection (1A)(d). The drafting of subsection (2) makes the resolution affirmative—that is, with the express approval of Parliament—in certain fundamental aspects only. Yet this does not include the wider industry. Can the Minister confirm whether the affirmative procedure necessitates a wider industry consultation in this respect only?

As my noble friend has said, this wider consultation allows for ideas and concerns to be fed into the system and duly considered before a final instrument is laid. I am also grateful to the noble Lord, Lord Randall, for his remarks. The Committee, over the past three sessions, has expressed disappointment at the lack of ambition in the Bill: it does not take UK fisheries much further than replicating the CFP. It is vital that forthcoming regulations have the full scrutiny that this wider consultation would demand.

Should the Minister consider that there are adequate opportunities for scrutiny and consultation in this clause—and the Bill in general—I hope she will provide additional assurances by specifying how this would work.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I am grateful to the noble Baroness, Lady Young of Old Scone; I understand her desire to support better scrutiny of secondary legislation.

Amendment 121 would add a new enhanced parliamentary procedure for regulations made under Clauses 36 and 38. Under this amendment,

“The Secretary of State must … have regard to any representations”


made during the consultation period, and respond to any resolutions of either House and any recommendations made by the Select Committee. The powers under Clauses 36 and 38 will, among other things, allow us to continue to meet our international obligations as members of the regional fisheries management organisations, make amendments to technical requirements in retained CFP measures and keep our aquatic animal health regulations up to date.

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[Lord Teverson]

My Lords, one of the central themes of Brexit was escaping the common fisheries policy. However, a bedrock of that policy is the producer organisations and I do not think that the Bill refers to them anywhere. They are effectively co-operatives in the fishing industry, but they are an essential part of the common market organisation which is the core of the common fisheries policy. They have important powers and abilities, which stem from the fact that they allocate the vast majority of quota—itself a very valuable national resource—among their members.

I am not against producer organisations. There might be better ways of doing this in future, but I do not disagree with the Government ejecting them and finding some other method. What is exceptionally important, given the value of the assets they distribute, is that there is maximum transparency about who owns them, their legal structure, how they make decisions about their constitution, how they distribute their assets and who their members are—all information we want to know when taking about valuable assets that are part of the national resource of fish stocks and quotas.

This is a probing amendment more than anything else, to try to understand the Government’s approach to producer organisations. Will it be just carry on as you are? I believe there is a need for full transparency about how these organisations operate. I will be interested to hear from the Minister how the Government will ensure transparency about this key national asset. I beg to move.

[Lord Grantchester]

I thank the noble Lord, Lord Teverson, and the noble Baroness, Lady Bakewell of Hardington Mandeville, for tabling Amendment 122 on producer organisations. It is right to say that the more someone learns about the fishing industry, the more they realise they know very little. This is certainly true of a key part of the fisheries industry: the boat fraternity, its ownership, quota and producer organisations. It is far from transparent, which makes for a difficult task when trying to appreciate the consequences and implications of Government policy. This amendment is one way to shed light into this opaque part of the industry. Whether it is the right or best way to bring transparency the Minister can help to determine. If there are other, better ways, perhaps he can bring them to our attention, which would be to the benefit of everyone.

[Lord Gardiner of Kimble]

My Lords, I am grateful to the noble Lord for his amendment. We fully support the move towards greater transparency within the fishing industry, including producer organisations. Our fisheries White Paper recognised that producer organisations have a key role to play in managing our fisheries. This includes managing quota for their members, supporting their members to fish sustainably, matching supply with consumer demand and adding additional value to their catches through effective marketing. All of this is to support our industry to get the best possible price for the fish it catches. In future, as we reform our domestic fisheries management, implementing polices which are tailored to our fisheries, Defra will continue to work with English producer organisations to build upon their strengths. This work will also consider how to improve transparency.

The amendment would require corporate information about members, accounts, constitutions, funding and boards to be published on each producer organisation’s website. It would also require information about quotas and management plans to be published. It is worth noting that much of the corporate information on producer organisations, such as their annual accounts and details of their directors, is already published in public registers such as Companies House and the Mutuals Public Register. On top of this, some producer organisations also choose to publish further information. For instance, the Cornish Fish Producers’ Organisation has a clear, published list of board members and their vessels on its website.

It is important that any requirements to publish additional corporate information add to, rather than duplicate, the information already available. However, I acknowledge that not all producer organisations routinely publish all this information—at least, it is not published on their websites in an easy-to-access location. More could be done here, and we encourage all producer organisations to do so, but we must consider this matter carefully before introducing new statutory requirements. As well as not wanting to duplicate existing requirements, we must also consider whether such information would ordinarily be considered commercially confidential. It is not clear, for example, what exactly would be covered by information on sources of funding and what the impact of requiring disclosure would be.

Information on quotas and management plans is often published already, or at least is available to producer organisation members and the MMO. For example, the MMO already publishes monthly information on quota statistics. From this, it is possible to see the quotas held by each producer organisation and how they vary throughout each year. Earlier I gave the example of the Cornish Fish Producers’ Organisation—this is for the benefit of the noble Lord and my noble friend Lady Wilcox, who is not in her place. It also publishes a monthly bulletin setting out the catch limits that apply to its quota pool, and other producer organisations also publish such information.

Producer organisations are also already required to submit production and marketing plans to the MMO. They require information about landings, turnover, volume of catches, marketing strategy and ways in which they will pursue their sustainability objectives. They also include a financial plan, which includes costs, expenditures and expected financial resources for each measure to be implemented within the plan. Progress against these plans is laid out within an annual report, which includes the expenditure associated with implementing the plans.

Again, I acknowledge that more could be done to improve transparency on quotas, but that is true of the quota allocation system generally and is not specific to producer organisations. In our debates so far on the Bill, we have discussed the complexity of the quota allocation system and how it makes it hard for lay persons to understand. We have undertaken work in the past to improve this—for example, through the introduction of the FQA register in 2013, which enables anyone to see who holds fixed quota allocation units. We aim to continue this work and to make the system easier to understand in the future. The Bill supports this aim by providing greater transparency through the Secretary of State’s determination of UK fishing opportunities, which will be laid before Parliament.

We have also said that we will continue to work with producer organisations, as well as other parts of industry and other stakeholders, to develop a new approach to allocating the additional quota that we expect to secure now that we have left the EU. As part of this, we will consider how to make quota management simpler and, importantly, more transparent.

There are also some practical issues relating to this amendment to draw to the attention of your Lordships. For example, the quota position of producer organisations will change during the year as a result of quota swaps carried out between them. It could therefore be administratively burdensome to have to produce an up-to-date record to comply with the provision as proposed here, especially if this is already published, albeit in a slightly different form, by the MMO. It is also unclear how this provision would be enforced in a practical sense and which body would have responsibility for doing so. It would not appear to form part of the existing compliance regime for producer organisations.

Therefore, I say to the noble Lord, in particular, that work is ongoing to explore the role of producer organisations in England and to move towards greater transparency within the fishing industry. In reviewing the functions and duties of producer organisations in the future, we will commit to consider specifically the need to improve transparency. We also recognise the need to improve the transparency of the quota system more generally. While this work is ongoing, we do not feel that it would be appropriate, or indeed probably wise, to include on in the Bill greater regulation for producer organisations.

I have a note from the Box to clarify for the noble Lord that producer organisations are mentioned in the Bill as a purpose for which regulations can be made. They appear in Clause 36(4)(m),

“the functions, objectives or regulation of producer organisations”.

I hope that that is helpful.

To clarify the point made by the noble Lord, Lord Teverson, about the allocation of quota, producer organisations have a number of functions including marketing and planning provisions. They do not allocate quota but manage their members’ quota. I say that from my knowledge; I am sure that the noble Lord is well aware of it.

Should we believe that legislation or legislative changes are required, then indeed Clause 36 would give the Government the powers to do so. We would, of course, consult stakeholders on the exercise of those powers as required by Clause 41. I fully appreciate that the noble Lord said that this was a probing amendment. I hope it is helpful to say again that this is a work in progress. The absolute guts of what the noble Lord said relate to work on which we are embarking. I hope that, with that explanation, the noble Lord will feel able to withdraw his amendment.