Examination of witness

Fisheries Bill – in a Public Bill Committee at 2:00 pm on 6th December 2018.

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Griffin Carpenter gave evidence.

Photo of David Hanson David Hanson Labour, Delyn 2:01 pm, 6th December 2018

Q 194 I invite the witness to introduce himself and his organisation.

Griffin Carpenter:

My name is Griffin Carpenter and I am a researcher at the New Economics Foundation. My work on fisheries policy takes a mixed-method approach; for example, last year I produced an economic impact assessment of Brexit scenarios across the UK fishing fleet—large and small quota holders and non-holders—and followed up the work this year by going to four case study ports and interviewing fishers about what future fisheries legislation could deliver for them.

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

Q You will be aware that our White Paper on the Bill set out our intention to start to depart from fixed quota allocation units as the basis of quota allocation, to create the possibility of tendering quota to producer organisations based on their sustainability track record, what they give back to local communities and what they offer new entrants, and to use quota to help with the discard ban and possibly to put more into the under-10 pool. Do you broadly support that direction of travel?

Griffin Carpenter:

Yes, I was pleased to see what was in the White Paper. We have been calling for some of those things for years. As the method of doing that we proposed something like a quota reserve, where the Government set aside some quota and some is allocated based on historical track record and some is set aside saying that we have multiple objectives for fisheries management—new entrants and the landing obligation, as you say—so this quota can be served for different purposes. I think of it a bit like agricultural subsidies where, over time, some continue to be based on production or land area, but some are set aside saying that we have many objectives in this sector. The Government need to retain some quota to do that.

The problem is that that is not followed up in the Bill, which just transposes article 17, which, as written, is not being implemented by member states. That is the problem with article 17. I was a bit disappointed to see the Bill not go through with what was in the White Paper. I think it could be more specific and say, “Rather than just transposing article 17, let’s put in actual criteria such as contribution to local economies or low environmental impact”, but that is not in there right now.

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

Q A lot of this comes down to the difference between a White Paper, which explains the Government’s policy on something and what they intend to achieve with a Bill, and the Bill itself, which is simply the legal powers required to carry out the White Paper. There is a clause in the Bill that gives us the power to have a super-levy on over-quota fish or, indeed, to have a tender regime for different quota. Does that not give all the powers we need? What powers are missing?

Griffin Carpenter:

The powers are there. I understand that the Fisheries Bill is enabling legislation and this Committee has had to struggle with asking questions about an enabling piece of legislation. I have a couple of comments. If we want to do something about existing quota—not just the idea of quota that is gained—we need to do something in the Fisheries Bill itself. For example, you have heard other witnesses say, “With extra quota we can solve all problems—any issues around new entrants, the small scale sector and so on—as long as the existing quota is protected.” Of course, that is their interest—they are the quota holders. But we have been working with people who do not hold the quota and they are interested in breaking the lock around existing FQAs.

In essence, fisheries have been accidentally privatised. Every year, quota is allocated to the same holders, and there is a legitimate expectation that that continues in future. The Department for Environment, Food and Rural Affairs and other organisations are too scared to break that hold on the quota and say, “This year we will allocate quota differently.” It has not been done; it is basically privatised now the claim is so strong. If there is ever a point to break that link, it is now.

We are redoing our fisheries legislation, so at the same time as allocating fishing opportunities, I would put something like a seven-year notice period. In seven years, all quota goes back to the Government and we can decide who gets to fish 100% of our quota, rather than just the idea that some quota will be gained. That is great if it happens, but we do not know for which species or whether that is the species required for the landing obligation or the small-scale fleet.

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

Q Do you accept that a lot of business models have been based on buying vessels with the quota attached and, therefore, there is a legitimate expectation, having paid money to get the vessel with its entitlement to some kind of property right, even though it is not an indefinite one?

Griffin Carpenter:

Exactly. When those purchases are made, it is not known how strong that property right is. There is an issue with banks not understanding if they can give a loan to a fishing vessel because they hold a quota: how long is that good for? If the stocks go up and down, what earnings will they have 10 years from now? The point of the notice period is to get around that. To give a couple of examples people can look into, the Faroe Islands recently renationalised all their fishing opportunities, and Denmark has a notice period and has extended it recently. It reallocated some quota from large to small and, as something of a compromise, extended the length of the notice period, to say, “Okay, we reallocated from large to small, but we won’t touch this again for 14 years—that’s your notice period.”

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

Q Do you not think that might change from species to species? It might not be a straightforward seven-year period if you were to do things fairly.

Griffin Carpenter:

Are you saying what will not be fair by species?

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

Yes. A seven-year period might not be fair for everyone because some might have paid more for different types of entitlement.

Griffin Carpenter:

No. If we are dealing with this as a public resource, the claim is the same no matter which fish species it is. The idea is that it is a public resource. We are happy for some members of society to have that right to fish, and not others, but we still reserve the right to change that in future. That is true whether it is mackerel, herring, cod or haddock.

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

The NEF study of small fishers around the UK was interesting in highlighting the views of the under-10 fleets in particular. If there is an opportunity, as the Minister outlined, to reallocate future quota or, subject to amendments being accepted, reallocate existing quota, what do you think the opportunity is for small fishers in particular and coastal communities from any type of reallocation from our EU friends to those communities, or from big boats to small boatsQ ?

Griffin Carpenter:

There are two different types of potential reallocation: one from European fishers to UK fishers, including the small scale, and the question whether we change those distributions in the UK share. The principle is the same: can the small scale benefit from having additional fishing opportunities, however those come? Our research has shown that there is a desire for fishers.

There is some confusion because small-scale boats often target shellfish. They are not fishing a lot of quota right now; they are catching crab, lobster, cuttlefish and anything they can get their hands on. Nephrops are subject to quota. People say, “They don’t have quota so they don’t need quota,” but if you speak to them, they say, “If we had it, we would love to use it,” because a lot of small-scale fisheries are mixed—they will do something for one season and then switch to quota species if they have it.

There is also a problem with new entrants, which overlaps a bit. You heard earlier that, traditionally, the route into fisheries for young people—fewer are entering at the moment—is through shellfish, because it is so hard to get your hands on quota. You might be able to buy a fishing licence, but buying a quota is too much. Having some quota set aside for small scale, and the overlap of small scale and new entrants—young fishers—is a huge opportunity.

There is a sustainability point, too. There is increasing pressure on shellfish stocks and we do not have good stock assessments on those. Some of the warning lights are coming up now: we are getting lower catch per unit effort, which means that where you do not have stock assessment, that is the warning light. If there is too much pressure on shellfish, what will these guys do? They need some quota to release the pressure on shellfish stocks such as crab or scallops, so they have another seasonable fishery.

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

Q Having the Bill list fish as a public good has been mooted by some stakeholders as one way definitively to say that fish is a public good and should be allocated for the benefit of the country. From your research, is that something that would make a difference?

Griffin Carpenter:

Absolutely. When I have spoken to stakeholders, even the quota holders, everyone starts from the same premise that fish is a public good, but from my perspective that has not been followed through in the way we treat the opportunity to fish that public good. It is only in a couple of hands. You and I cannot go fishing; we do not have fishing licences and we certainly do not have quota, so that opportunity is limited. How do we think about that, as the public? I think we do so through having conditions attached to those licences: “If you’re going to fish, then X, Y and Z.” I know that you are interested in the economic link as an issue, but allocating quotas and the distribution of that matters as well.

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

Q You have the allocation of quota—who has the ability to fish—but the economic link is an important additional, complementary policy. I am especially concerned about those small communities around our coast for which fishing has historically been a very strong industry, but that strength has reduced over the course of our involvement in the CFP. Would requiring a national obligation to land at least 50% of your catch in any one quarter, but allocated on a species-by-species basis, make a difference? Where would the difference be most felt, in your opinion? Would it be in small communities or larger ones? How would it be distributed?

Griffin Carpenter:

I guess the first point to make is that every trend or practice we see in the industry is there for a reason. I am sure you are aware of that, but we need to think, “Why are the landings not taking place in the UK right now?” The first reason is probably the price effect. If you can get a higher price elsewhere, you land it elsewhere. If we are going to change some of the incentives, or have a conditional policy such as the economic link, be aware that basically we are accepting a trade-off: fishers might not be as profitable in the catching sector because they are getting lower prices on first sale in the UK, but we may well make up for that later in the value chain. Just be aware that that is the trade-off you are accepting.

The idea of an economic link as a principle that the public resource should be landed in the UK is a valid economic one. I would go about designing the policy a bit differently. The economic link is very rigid; you are either above the line or below it, whether that is 50% of your landings or 60% or 70%. If you are already landing 90% of your catches in the UK, this policy does not really address you at all.

I would rather have a marginal incentive. For example, funding for fisheries management is not really talked about in the Fisheries Bill, although it is in the White Paper. That is fine, but let us think about it this way: if we are going to have a landings levy—in the same way that you might have a levy on stumpage fees in forestry—on aggregate extraction or on other resource industries, and if we are going to have the fishing sector pay for management, why not differentiate so that 1% of your landed value in the UK goes to resource management, but if you land abroad it is 3%? The idea is that there is a marginal incentive for every trip you make, rather than a threshold that, as far as I can see, would not affect most of the fishers who already land in the UK.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

Griffin, you have talked in quite a lot of detail about the reallocation of quota. From my perspective, representing a community that is a have-not, shall we say, that is music to my ears, but I am wary of the legal implications of that. I agree that fishing is a public right, but as we have heard in our evidence sessions, by ill fortune or bad management, it has acquired certain proprietorial rights. How far, legally, do you think we are able to go? The important thing is that this Fisheries Bill must be determined and made by this House, not by lawyersQ .

Griffin Carpenter:

Absolutely. I am not a lawyer—I am an economist—but the legal advice I have heard is that the use of a notice period goes a long way. I mentioned the international examples. We have to make some claim on FQAs as a public resource. Where you might get buy-in for this across the whole sector, including the large-scale fleet, is on something such as flagged vessels. When you hear about Spanish vessels in UK waters, they are almost never Spanish vessels in the sense that they have a Spanish flag and are fishing the Spanish quota; they have purchased UK fishing vessels and are fishing with UK quota, and a lot of coastal communities do not like that. For example, in Wales, most of the quota is caught by those vessels and either landed in Ireland or taken straight to Spain.

The problem is that, if you want to address this issue of flagged vessels—those who are foreign nationals but have UK quota—you must do so by saying, “FQAs are a public resource and we are going to take that away from you and then revisit the issue of distribution.” In a political sense, you can get buy-in for that idea. In a legal sense, I get that the notice period goes a long way. We heard the point made this morning that, because this is new legislation, some of the case law around the previous FQA distribution under the common fisheries policy might not apply. I am actually not sure about that.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

Sticking to the quota theme, you have already touched on the debate between this being enabling legislation and how much detail needs to be in the Bill. Do you think there needs to be more on how the quota allocation will work in future? You also mentioned potential quota reserves for new entrants—small-scale recreational anglers have also been mentioned—so is it your view that there should be more in the BillQ ?

Griffin Carpenter:

I think that is a political question. I understand the idea that it is enabling legislation and that for most fisheries legislation all the detail will come in secondary legislation, but if you have some priorities that you absolutely want to ensure are in future UK fisheries, here is an opportunity to introduce them. I understand that some of the ideas we are discussing might be incongruous with the tone, at least, of the rest of the Bill, but here is an opportunity where we can say, “Starting now, we are only in 2018 and we are already thinking about this issue. We are guaranteeing it is in the fisheries legislation, first and foremost.” From a political perspective, that is valid.

Photo of David Duguid David Duguid Conservative, Banff and Buchan

On the redistribution of quota, obviously, if you are a larger owner of quota versus a smaller owner of quota, or an owner of no quota, you will certainly feel that you are going to be worse off in this situation. How do you cater for the fact that a lot of the smaller vessel owners perhaps previously owned quota that they sold, benefiting greatly financially, and then moved into smaller vessels for which they did not need quota? How would you avoid that kind of gaming happening again in the future?

Griffin Carpenter:

That is a good question. The line that has always been used on quota allocation in the past was, “You’re robbing Peter to pay Paul, and we don’t want that in the industry.” Now we have the idea of a Brexit dividend of extra quota, we are robbing Pierre to pay Paul, so that is fine. We are fine as long as Peter is protected.

The idea of quota shares is actually a bit confusing because they are percentages rather than tonnage. Now that stocks are recovering, and the quota increases each year, you can have a situation, even if you are taking from Peter and giving to Paul, where everybody is better off. You can have this as a conditional reallocation. Let us say you get a certain share in the large-scale fleet—you have a large-scale vessel—and you are guaranteed 1,000 tonnes every year. If the quota is going up, some of the surplus quota of that year can be reallocated to the small-scale fleet in a pool or through whatever system you do that. There is a bit of a difference between tonnage, which is what actually affects your bottom line, and the percentage. I suggest that we can have these thresholds in place.

The other thing is that, with additional fishing opportunities potentially coming in, hopefully, we can do a reallocation all at once so, again, the large-scale fleet will not necessarily be worse off. They might have a smaller percentage of haddock, let us say, or some demersal stock that the small-scale fleet really wants, but they are getting all the extra herring and other species from the North sea from our EU colleagues. There is the potential for doing all this at once: revisiting the allocation system and making everyone better off.

Photo of Mike Hill Mike Hill Labour, Hartlepool

That was an interesting answer to the question I was going to ask. I was going to ask you to clarify the position that the only way to redistribute quota fairly, if I heard you right, is to break the hold of the larger fishers and bring fisheries back into public ownership. You suggested something like a seven-year notice on that, but what you were just talking was a potential incremental progression towards that through redistribution of surplus tonnage. Were you right in the first instance that fisheries have to be brought back into public ownership for fairer redistribution, but have you also realised that there can be incremental changes to benefit new starters or the under-10s as we proceed?

Griffin Carpenter:

That is a good question. Unfortunately, it is an awkward one with Brexit timing, because we are not sure if or when the additional quota will come online. One of the issues about not dealing with the fixed quota allocations is that right now it really does not matter to a small-scale fisher if there is a theoretical extra quota that may or may not come. The more important point is that, given the timeline right now, it will probably need to be incremental, where first we will deal with the additional quota, then we deal with the existing FQAs. But that requires in the fisheries legislation at the first available opportunity to give notice, because every year you delay is another year that you cannot do the reallocation that we propose. The Fisheries Bill is the right place to do that.

Photo of Bill Grant Bill Grant Conservative, Ayr, Carrick and Cumnock

On the same theme, I have come across the theory of using days at sea. What are your thoughts on days at sea in relation to quotas? It is admirable that you suggest giving that time period of 14 years to reduce the larger quotas, to give a better share for the smaller vessels and under-10s. While the capacity for the last vessels is there, how do you see us increasing the capacity of the smaller vessels over that period of time, and attracting new people into the industry to absorb the redistribution of quotasQ ?

Griffin Carpenter:

There is lots going on there.

Photo of David Hanson David Hanson Labour, Delyn

You will have to be relatively quick because we are running short of time.

Griffin Carpenter:

I will be as brief as possible. There is a number of reasons why young people are not getting into fishing. Let us just stick with one of the most obvious: it is expensive to get in and get that quota. The UK could have a system, through the quota reserve, where it is allocated for free on a loan. Denmark does that—it is called a fish fund—and you can get more detail there.

Photo of David Hanson David Hanson Labour, Delyn

Exceptionally quick. Thank you.

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

Your report, “A Fair and Sustainable Fisheries Bill” made a number of recommendations. How much of that has been translated into what we have in front of us? Do you think that the Fisheries Bill represents radical change or preservation of the status quo? Is it a missed opportunityQ ?

Griffin Carpenter:

It has been discussed many times that it is an enabling piece of legislation. Many of our policy ideas are not in there, for the reasons just discussed. In my opinion it is a political choice whether you get overly detailed in one area. That is a trade-off, depending on what you want to prioritise now and your trust that it will come in secondary legislation.

We were calling for redistribution of quota. Something I think is missing from the Bill, which was discussed earlier, is commitments to maximum sustainable yield—not just the stock commitment but the flow, so how much you are taking out. Many of us were surprised that was not in the Bill. We would like more focus on inshore fisheries management; those are shellfish stocks that are left out of the discussion on quota.

Also, there is a lack of trust in the fishing industry. The way you build trust is through repeated social interaction. The only realistic way to do that is to have inshore bodies, where all the stakeholders meet together to discuss issues in the inshore waters within 12 miles. Those bodies should be empowered to have jurisdiction up to 12 miles and control the number of pots, and so on.

Photo of Peter Aldous Peter Aldous Conservative, Waveney

Q Richard Benyon, when he was Fisheries Minister, fought very hard in the 2015 review of the CFP, and the general consensus was that it was a good deal. One of the main things won was article 17, so you worry me by basically saying that no one takes any notice of it. In transposing article 17 to the Bill, what can we do to give it teeth, so that people take notice of it and it is implemented?

Griffin Carpenter:

Exactly. This refers back to the first discussion we had. We as an organisation were one of the groups advocating for article 17 in the CFP. The CFP—people might disagree with this—actually gives quite a lot of power to member states, for better or worse. The EU did not want to say exactly how each member state should allocate its fishing opportunities. It just says, “Tell us how you are doing it. Be transparent and objective about how you are doing it. Is it based on historical catch records? Are you giving more to the small-scale fleet?” and so on. Every member state continued allocating quota as they were. The UK has done some things with unused quota, but never actually referred back to article 17. It was just that the small scale wanted more, so they gave some more.

The problem with transposing that is that it seems like we are missing an opportunity to be specific. Article 17 was vague so that each member state could use their own criteria. Now we are transposing that, but we are the member state—we are one entity—so we can say exactly, especially in the case of England, how we are going to do it, and we can say that right now. It seems strange to transpose something that was intentionally vague so each member state could be specific.

Photo of Owen Smith Owen Smith Labour, Pontypridd

As a Welshman, I am obviously worried about the prospect of robbing Dai to pay Pedro. On the issue of flagged vessels that you mentioned, is there anything in the Bill that would stop the Welsh from addressing that issueQ ?

Griffin Carpenter:

Nothing that stops the Welsh from addressing the issue, but nothing that addresses the issue per se. Again, devolution is extremely awkward in fisheries, where we have a Bill that empowers the fisheries Administrations and stops there. It would be up to the Welsh Government to do something, presumably in their licensing.

Photo of David Hanson David Hanson Labour, Delyn

We have just over three minutes, if there are any further questions.

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

Q The Bill envisages a joint fisheries statement, but also something called a Secretary of State’s statement, which would include a whole plan for the English fleet about how it contributes to coastal communities and supports livelihoods. In what way does that fall short of what you are seeking? It is a clear commitment for a plan that will outline how we allocate fishing opportunities to help those objectives.

Griffin Carpenter:

It is a commitment for a plan, but I am saying we should think about that plan right now and what should be in it, rather than leave it to each Government to decide. We have seen that, through article 17, it has always been in UK jurisdiction to decide how to allocate quotas. That is not a power that the EU had that we are taking back; it was always up to us and we have not taken that opportunity. Now is the right time to have that conversation, and the Bill is a piece of legislation that we can put that in.

It is roughly the same with the discussion about MSYs. Yes, in the fisheries statement, they can say how we are doing—how the stocks are doing in reference to those MSY values—but we should have that as a duty. Be specific in the Bill and say, “You cannot fish above MSY.” We are going be post 2020, so you might as well just say, “We will be fishing in line with MSY.” We are past the deadline.

Photo of Alan Brown Alan Brown Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Energy)

Q A few witnesses have commented that they do not think there is enough information or transparency regarding the discards prevention scheme that is in the Bill and how it will actually work in future. Do you have any views on that?

Griffin Carpenter:

It is an interesting question. From my reading of it, it seems to take from the Norway model, which is that some discards are landed but there is a fee attached to that. Instead of the landing obligation, we will say, “The quota is set at this level. You cannot fish above that, otherwise you get choke problems.” It is more of an economic incentive, rather than a hard line.

That needs to be compensated for with lower quota, because we are saying that there is going to be some fishing above that line, but we will have an economic incentive so you do not land as much. I think the principle is a fair one—switching incentives—but that should be compensated for in our expectations about how much above that quota we are actually going to fish.

Photo of David Hanson David Hanson Labour, Delyn

Q We are into the last 45 seconds or so of the session. Is there is anything you wish to say that has not been said so far, Mr Carpenter?

Griffin Carpenter:

One quick point, if I may. We have spoken a lot about quota, but non-quota species are very important. More work should be done on stock assessments. That is something that could be in the Bill to say, “We are not going to be fishing stocks anymore if we have no idea how much we can be fishing.”

Photo of David Hanson David Hanson Labour, Delyn

Thank you for your evidence to the Committee.