Examination of Witness

Fisheries Bill – in a Public Bill Committee at 12:00 am on 4th December 2018.

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Jerry Percy gave evidence.

Photo of David Hanson David Hanson Labour, Delyn 2:00 pm, 4th December 2018

In this afternoon’s sitting we will first hear oral evidence from the New Under Ten Fishermen’s Association. Will the witness please introduce himself?

Jerry Percy:

Good afternoon. Thank you for inviting me. My name is Jeremy Percy. I am the director of the New Under Ten Fishermen’s Association, the representative body for 80% of the UK fleet, which operates from vessels of less than 10 metres in length.

Photo of David Hanson David Hanson Labour, Delyn

I shall hand over to the Minister for the first questions.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

Q60 This morning we heard in evidence that the principle of relative stability had served the inshore fleet particularly badly because of the data and the absences of data in the ’70s and ’80s when the track record was established. What are the key priorities of the inshore sector as we leave the European Union and set our own domestic policy?

Jerry Percy:

We have long argued that relative stability needed to be reviewed, primarily because of the very bad deal that the under-10-metre sector has always had in the UK, not just because of relative stability but because of the way in which quota was allocated back in the ’90s, when we did not have a seat at the table and therefore, despite being nearly 80% of the fleet, ended up with less than 2% of the overall UK quota. Relative stability really does need to change.

Our priorities are, overall, to ensure that the under-10-metre fleet—unquestionably, it has been massively disenfranchised over the past few decades—comes out of it with a significantly increased allocation. We have argued strongly that the current method for allocating quota is unfair and discriminates against the under-10s, and of course the myriad coastal communities they support. I have been in the fishing industry as a fishermen and in other roles off and on for over 40 years, and I have seen the demise of any number of coastal communities, the fleets that they supported and the people who supported them over that period. Our main aim is to ensure that the under-10s specifically get a fair deal come the new horizon.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

Q On management, we outlined a number of ideas in the White Paper. Some have suggested that we should move away from a Marine Management Organisation-administered under-10-metre pool and towards a producer organisation for the inshore sector. What is your view of such an approach?

Jerry Percy:

You will not be surprised to hear that I am very supportive of the idea, having written the initial paper back in 2012. There is absolutely no doubt about that. To put it into perspective, at the moment I gather that the UK has had infraction proceedings served upon it by the European Commission for failure to manage and regulate its producer organisations adequately. I have not seen the detail but I would have thought that the Commission was concerned that, despite the fact that the coastal PO—the producer organisation dedicated to the under-10-metre sector—has had official recognition by the UK Government and by the Commission for over a year, we are still refused the ability to manage the quota of our own members. This is particularly important with the run-up to the landings obligation, where the ability to acquire quota retrospectively will be vital.

With the greatest respect to the Marine Management Organisation, the disparity between the rationale for MMO management of quota and that by the producer organisations, which are very focused on the commercial benefits of their particular members, is huge. This has resulted in this year to date, for example, in only just over 50% of the under-10-metre quota actually being fished, although that is down to a number of issues. One of them is undoubtedly the inflexibility in the Government trying to manage the quota, so I am particularly supportive of the coastal PO.

I fail to understand why the Government have not permitted us to have exactly the same rights—no more; no fewer—as the existing POs. In fact, in your own words, Sir, in a letter earlier this year, you said that as soon as we had the correct infrastructure in place you would like to see us going ahead and doing this sort of management. We have had the infrastructure in place for a considerable amount of time, yet we are still refused the ability to manage for the benefit of our members.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

Q But do you accept that there could be more than one PO covering the inshore sector?

Jerry Percy:

I do not think so.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

Q You shouldn’t force everyone to join it if they don’t want to.

Jerry Percy:

No, there is always a choice about whether you join a producer organisation or not. To be honest, there is absolutely no reason why any under-10 metre vessel even slightly reliant on quota should not join the coastal PO. The membership fee is £1. More importantly, however, membership should give those vessels access to far more flexible and user-oriented management of their quota, rather than the current situation.

Photo of George Eustice George Eustice The Minister of State, Department for Environment, Food and Rural Affairs

Q I have two other points that we raised in the White Paper that I want your views on. First, do you think that the under-10-metre category is still the right criteria to use, or should we look at other measures, such as engine capacity or the zone in which they fish, so that there would be a different way of defining the artisanal, small-scale fleet? Secondly, we have obviously had quite a lot of representations about the possibility of moving more to an effort-based regime for the inshore fleet rather than a quota system. What is your view of that?

Jerry Percy:

In response to your first question, there is no doubt that the arbitrary under-10/over-10 metre divider has been an unnecessary nuisance, frankly, especially as time has gone on. Yes, 20 or 30 years there was a very significant difference between what was in the ’90s a much more artisanal fleet and today’s under-10 metre boats, which can be 9.99 metres and highly efficient. One of the purposes of developing the coastal PO initiative was that, rather like other examples one might think about in the current climate, you tend not to go to war with people you are trading with, and there has always been a difference of opinion between under-10s and over-10s and their POs.

Losing the 10-metre measure in the fullness of time would be a very positive step forward. Clearly, if you look at the breakdown of the under-10s, which are some thousands of vessels, you see that the vast majority are less than 8 metres in length, and again you can go down. So there is a strong argument for taking any boat up to 6 metres completely out of the quota system, whether or not you replace it with something like effort management. I can speak from experience. While a modern under-10 metre boat has a very significant fishing capacity, far in excess of what it would have been 20 or 30 years ago, it remains the case that boats that are less than 18 feet would really struggle to make any significant impact on stocks.

At the same time, we have said all the way along that although the effort management suggestion is ostensibly a fairer way of allocating access to the resource than quota, with all its issues and problems, we really need to have a proper, full-scale and focused trial before anybody could say unequivocally, “This would be the most effective and efficient way forward.”

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport

A real consensus is emerging around the Bill that there should be more focus on giving more quota—more fishing opportunities—to the smaller boats. The question is about how we do it. From your point of view, what would be the best way within the Bill, and within the powers it contains, to encourage more fishing opportunities to be held by smaller boats, which generally speaking are the least impactful on the environment and contribute more to their coastal communities?Q

Jerry Percy:

There are two main answers to that question. At the moment, despite the claims that we are going to be an independent coastal state and take back control, nearly 50% of the UK’s allocation of quota is held in foreign hands. Now, although a lot of that is the pelagic species, such as mackerel, herring and blue whiting, nevertheless fish quota, whether we like it or not—we do not—has become a commodity and gaining more access and a fairer balance post Brexit, when the Bill comes in, would be a particular opportunity.

There are opportunities. The Government have always been concerned that if you tried to repatriate quota, then you get a whole queue of people lining up for a judicial review, but it was clear from the judicial review in 2012 and from legal advice subsequently that that is entirely practical. In fact, the Faroe Islands has just instigated a similar sort of system. Rather than us arguing that one should rob Peter to pay Paul, it is at heart the allocation system that is at fault. It is based on historical rights.

As I said, I go back far too many years in this business. In the 1990s, the Government said to the over-10-metre vessels, “Go out and fish and record all your catches, and we will take a three-year average and provide you with your fixed quota allocation—your proportion of the overall UK cake.” Not surprisingly—the larger-scale representatives admitted this in the judicial review I mentioned—they did ghost fishing. If you went out and caught 10 tonnes, you might put down 12 or 14 tonnes just to make sure that you had good opportunities. I dare say that if I had been in that position I might have thought the same. The whole thing was predicated on a lie, frankly, and it has gone on ever since. Historical rights are really not an effective method, for any number of reasons.

The answer to your question, which we put forward in our response to the Bill, is that clause 20 effectively takes in article 17 of the common fisheries policy. We suggest that should be amended so that quotas are allocated according to social and environmental criteria and economic benefit for coastal communities. Some 80% of the under-10 metre fleet use passive rather than mobile gear, so their environmental credentials are better, and their economic credentials are certainly more significant. We would take our chances with everybody else, but that would provide a level playing field, irrespective of size of vessel, and your allocation of the resource would be based on environmental, social and economic criteria.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport

Q This morning I asked about strengthening the economic link, so if you catch fish under a UK quota you should land at least half of it in a UK port. Can you explain where the under-10 fleet—the small boats—mainly land their fish? Do they land it in UK ports already, or is a sizeable portion landed in foreign countries?

Jerry Percy:

No, it is almost exclusively landed into UK ports, although of course a very significant element is then exported to markets in France, where our European neighbours tend to pay far more for it. I think it is relevant to mention at this point that, with all due respect, we must not focus just on the quota issue, although that is vital because the quota has been so unfairly dealt out in the past. A very significant proportion of the under-10-metre fleet relies on non-quota species such as cuttlefish, shellfish, lobster and crab, and they in turn rely on direct export. About 90% gets exported, mainly to France and Spain, so the export market is key.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport

Q Finally, I have a question that is not about quotas—it is about marine safety. The Bill talks about our potentially being able to allocate quota that is drawn down from our EU friends in a slightly different manner from the FQA system we have at the moment, and to apply different conditions to that. You mentioned social, economic and environmental criteria potentially being some of those conditions. Marine safety is an issue for many small boats because of the pressures on those boats and the fact that the 10-metre limit has led to lots of dumpy boats with strength rather than stability. Would you give us a sense of the implications for the sector of amendments to the Bill that introduced a requirement for marine safety to be such a condition, to ensure that people who go out to catch our fish are safe, and tell us what the current safety levels are in the sector?

Jerry Percy:

Fishing, unfortunately, still carries the record as the most dangerous occupation in the world. I sit here having lost any number of friends and colleagues over the years in pursuit of fish. I do not think having to carry more fish should be a significant safety issue. It is going to be more relevant in terms of the forthcoming landings obligation, under which we can no longer discard any fish so we have to keep it all aboard. There are of course safety issues in that respect.

The Sea Fish Industry Authority monitors and measures, and ensures that vessels are safe to go to sea. We are effectively talking about capsize as a result of overloading, which is actually quite rare. It is perhaps more common in the pelagic fisheries, where a great bulk of fish is landed. For most small-scale fish fleets, I think fishermen and the authorities would ensure that there was no safety issue. Even in my wildest dreams, safety has never come to mind as being an issue if we had significantly more quota. I have never thought, “Oh, I’m going to catch too much fish and put myself at risk.” It does happen—even now, with non-quota species, you never throw it back.

Photo of Luke Pollard Luke Pollard Labour/Co-operative, Plymouth, Sutton and Devonport

Q On that point, there seems to be universal agreement that personal locator beacons attached to lifejackets are a good thing, but we know there is a cost to fishermen of buying new lifejackets with PLBs and registering them. Do you think that, if there were a specified improvement on marine safety in the Bill, lifejackets with PLBs could be one area that might make a big improvement in marine safety?

Jerry Percy:

Yes. Under the International Labour Organisation’s convention 188, it is now mandatory for fishermen to wear lifejackets unless the owner and/or skipper of the vessel can prove that he has sufficient guards in place to ensure that fishermen do not go over the side.

I still go to sea quite often. I have a personal locator beacon that I bought myself for about £170. It will tell the rescue people where I am in the water anywhere in the world. It is cheap. As far as I understand it, European funding would probably cover it because it is not a mandatory requirement, but surely, in terms of safety, it is a few pounds and it makes all the difference in the world.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

My question is a variation on the Opposition spokesman’s point. It is commonly recognised that the inshore fleet—the under-10s—has had a raw deal as far as access to quota and fishing opportunities is concerned. The Bill is largely based on the assumption that an increase in opportunities, as a result of taking back control of our waters, will give us an uplift that will provide additional fishing opportunities for the inshore fleet. Do you think that goes far enough, or do we need to look at something bolder and more radical in terms of quota allocation or fishing opportunitiesQ ?

Jerry Percy:

Our main concern is that the Bill is predicated on a successful fisheries Brexit, if I may call it that, with a significant windfall of quota. Again, with the greatest respect, that would get the Government out of the hole that successive Governments have painted themselves into—if I may mix my metaphors—in that because there is only so much in the UK pie of quota, they are somewhat hamstrung, in their view, in their ability to reallocate more fairly and effectively. Not surprisingly, we disagree with that version and there is legal argument that they could do so, albeit slowly—that was said by the judge in a judicial review in 2012.

I gave an answer earlier about moving the method of allocation to become genuinely reliant on the social, environmental and economic criteria, but I do say genuinely because the UK Government are also already subject to article 17 of the common fisheries policy, which says something similar about allocating quota on those three criteria. The Government have argued that they meet those criteria. I personally do not think that they even remotely reach them in many respects. If we are going to have a revised method of allocation, we need an undertaking or to ensure that the Bill does what it says on the tin.

Photo of Brendan O'Hara Brendan O'Hara Shadow SNP Spokesperson (Inclusive Society)

Thank you for coming along, Mr Percy. We have heard a lot about control of our own waters, but that has to be set against access to markets, particularly for your members. How confident are you that the interests of your members are fully understood and fully protected by what is in the BillQ ?

Jerry Percy:

I do not think it goes far enough in some respects. Again, going back to the common fisheries point, the European maritime funding document says that member states shall produce an action plan for the development of their small-scale fleets. To date, we have not really seen anything to that extent, and there is nothing specific in the Bill in that respect.

Our main concern is that, from a non-quota, shellfish perspective—this is particularly reflected in our members and colleagues in the Scottish Creel Fishermen’s Federation, who asked me to mention it, which I am more than happy to do—the whole business of hundreds, if not well over 1,000, boats around the west coast especially, and the east coast of Scotland to some extent, as well as Wales and the rest of the UK, is based on seamless transport across the channel to our markets in France and Spain. Their main concern, of course, is that if any issues come up in a post-Brexit scenario where we seek to take back control, not only will we get tariffs, which will make a big difference, but what is more, there will be non-tariff barriers in terms of the requirement for veterinary inspections of live shellfish. At the moment, the only two ports with those facilities are Dunkirk and Rotterdam, neither of which we use and neither of which, effectively, is a Channel port. To date, the French have not exactly been quick off the mark in building new facilities in time for next year.

We are equally concerned about the fact that French fishermen, like French farmers, are renowned for taking very direct action should they feel that something has upset them. You will remember that when the French farmers got upset about some aspect of Welsh lamb exports, they actually burned the lorries as they came off the ferry in France. We are very concerned that if we do have an independent coastal state, and so on and so forth, it would kill that transport overnight. We only need a few hours’ delay for it to make all the difference in the world.

Photo of Brendan O'Hara Brendan O'Hara Shadow SNP Spokesperson (Inclusive Society)

Q As the Member for Argyll and Bute, I take on board what you are saying. We are absolutely dependent on speed of access to market. What should we in this Committee be looking at over the next few weeks to ensure that vital shellfish market remains open and there is that speed of delivery from Loch Fyne to Madrid, for example? How do we ensure that that is as seamless as possible, and that we keep those vitally important markets?

Jerry Percy:

There has to be a balance in the negotiations, permitting some level of access to our waters—although much less than currently—to ensure that we do not have those non-tariff barriers, and that the facilities, including on the French side, permit us to have that seamless transport and that there are no road blocks in the meantime.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

On access to market versus access to waters, I think you mentioned that there would be some exchange of access for quota in any future arrangement. I presume you would agree that it is important that, as an independent coastal state, we have full control of that access so that we can use it as leverage. I hesitate to use the phrase “bargaining chip”, but when we go into future annual negotiations, that has to be the leverage that we have.Q

Jerry Percy:

Absolutely. We should start with a clean sheet: “We are an independent coastal state. That’s that.” We have a clean sheet and nobody has the right of access. Then there will inevitably be negotiations and bargaining, and that balance is going to be extremely difficult, because Mr Macron, the Commission and others have already made clear that they want the status quo to be the basis of any further negotiation. The Government will have their work cut out to try to sort that out.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

Q Is there anything in this Bill that you think we should focus on, in order to add more power to our elbow in those future negotiations?

Jerry Percy:

Our concern about the Bill is that there are a lot of phrases in it like “intend to”, “will consider”, “could include”, “aim to”, or “DEFRA intends to be”. There is not a great deal of certainty about some elements on which we would have liked to have seen more certainty and absolutely unequivocal statements: “We will do this.” The Government have made it clear to date that they want an unequivocally clean sheet start. Whether we actually achieve that, of course, is open to significant debate.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

Q One more question, if I may. Going back to what you were saying earlier, I think your exact words were along the lines of “Unfortunately, quotas have become a commodity.” With quotas being sellable and buyable, they are an asset, at least. If quotas were to be more fairly distributed among the smaller vessels in future, how would you avoid them just becoming sellable commodities, bought up by others?

Jerry Percy:

There are a number of global examples where you can retain quota as a national resource without allowing its sale. There obviously needs to be flexibility in-year to move quota about, to ensure that those people benefit from it. It is not an easy situation to resolve, but there are global examples of what can be done to ensure that almost half of our national resource is not in foreign hands, as has happened here.

Photo of Mike Hill Mike Hill Labour, Hartlepool

IQ represent Hartlepool, which is one of those coastal communities affected long ago by unfair quotas for under-10s. There is an argument that our industry could be revived if fairer quotas were allocated. In your opinion, how many ports would benefit from an uplift in quotas?

Jerry Percy:

It is not just ports; there are harbours, coves, small areas and small coastal communities. It would be dozens, if not hundreds. Going back 40-odd years, I can remember fishing out of Lowestoft as a boy fisherman. There were myriad groups of small boats all the way up and down the coast, all providing a significant benefit to those local communities. They may not show up on an economist’s spreadsheet, but those people are nevertheless paying their mortgage, taking their kids to school and keeping the local infrastructure going. I am not exaggerating; it could certainly be in the hundreds that we could revive and have some level of renaissance. There is no doubt whatever.

Photo of Mike Hill Mike Hill Labour, Hartlepool

Q I get the impression from representatives from the larger fleets that they would oppose quota redistribution. What arguments are there against that?

Jerry Percy:

Well, why should they get more? To an extent, it is based on greed. They already have approximately 98% of access to the quota, 50% of which is in foreign hands, and a very significant proportion is in the hands of the five richest families in this country. It has become a fundamental nonsense and is grossly unfair socially, environmentally and economically that nearly 80% of the fleet in the UK has access to only 2% of the quota. The idea or argument that any additional quota should be allocated according to the existing fixed quota allocations frankly is just grossly unfair. There is no sensible economic or social reason why that should be the case.

Photo of David Hanson David Hanson Labour, Delyn

Does any other Government Member wish to ask a question?

Photo of Jeremy Lefroy Jeremy Lefroy Conservative, Stafford

Thank you very much, Mr Hanson. I am very interested in what you said about 50% of the quota being in foreign hands. Is there an example, as far as you are aware, of any EU coastal state that makes better use of the common fisheries policy for under-10 metres or smaller boats, or is it just universal that it is dominated by large vesselsQ ?

Jerry Percy:

You could say that across Europe the scene is dominated by the larger scale vessels. They have more resources, more PR companies and more paid lobbyists; they were at the table when the rules were set, and we were not. It is only in recent times—NUTFA was created in 2006—that we have had actually had a voice, and it takes time to build up. Hopefully with the Fisheries Bill we are now on an equal footing with a seat at the table to ensure that the 80% of the fleet gets a fair deal.

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Chief Whip, Liberal Democrat Spokesperson (Northern Ireland)

Briefly, I want to explore with you how we get from here to there. As you say, there is a case for the redistribution of quota. I am very interested in your thoughts about how you stop quota or other management tools from becoming a tradeable commodity. As you say, some of these interests are big and well resourced. Rich people have good lawyers and a legitimate expectation in their property rights. How do you get to the point where you can change the nature of quotaQ ?

Jerry Percy:

By negotiation, but our response to the Fisheries Bill was the first step. We are particularly concerned that there is a suggestion within the Bill that an element of the UK’s fishing opportunities should be put up for auction. I struggle to understand the logic in that when the whole thrust is in terms of environmental, social and economic criteria. The Government Minister identified the fact that we need to support and enhance the small-scale fleet for all the very tangible benefits that are there to be taken. I struggle to understand why you would then take a piece and sell it off to what will inevitably be those who already have financial resources. If we are going to have flexibility in the quota, we need to bring in new entrants and we need to make it attractive. The cost of quota is one of those significant areas that keeps out new and young entrants.

Jerry Percy:

Anything but, sir.

Photo of David Hanson David Hanson Labour, Delyn

We have 35 seconds if anyone has a one-word question and a one-word answer. Is there anything else you wish to say to the Committee, Mr Percy?

Jerry Percy:

Thank you for the inquiry. The Fisheries Bill gives us an opportunity. There are some failings in it, but we seriously look forward to conversations with Government and others in that respect. I am grateful for the opportunity to talk to you.