Rural Economy and Connectivity Committee

Meeting date: Wednesday, March 15, 2017

Official Report 628KB pdf

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Implications of European Union Referendum (Fisheries)

Good morning, everyone, and welcome to the ninth meeting in 2017 of the Rural Economy and Connectivity Committee. I remind everyone to put their mobile phones on silent.

No apologies have been received, so we move straight to agenda item 1, which is consideration of Brexit and its implications for fisheries. We will have a round-table discussion of the implications for Scotland of the outcome of the European Union referendum. This is the first in a series of sessions that the committee will undertake, and today we are focusing on fisheries.

I propose to go round the table and ask everyone to introduce themselves. I point out to those who have not been to a committee meeting before that the committee is supported by a clerking team, the official report and a gentleman from broadcasting, who will, when I nod at him, cut you off if you have been speaking for too long.

I will start by introducing myself. My name is Edward Mountain, and I am a Conservative regional MSP for the Highlands and Islands.

I am a Conservative regional MSP for North East Scotland and shadow cabinet secretary for rural economy and connectivity.

I am chief executive of the Scottish Fishermen’s Federation, which is a trade association that looks after a large proportion of the catching sector in Scotland.

I am the Scottish National Party MSP for Angus North and Mearns.

I am the group manager for the Scottish Seafood Association, which is based in Peterhead. We are a membership organisation that represents the fish processing sector.

I am a Conservative regional MSP for West Scotland and the party’s spokesman on connectivity.

I am chief executive of the Scottish Salmon Producers Organisation, which represents salmon farmers.

I am a Green MSP for the Highlands and Islands.

I am the SNP MSP for Uddingston and Bellshill.

I am the Liberal Democrat MSP for North East Scotland and the party’s spokesperson for everything on this committee.

I am professor emeritus of international law at the University of Dundee.

I am the SNP member for Banffshire and Buchan Coast.

I am head of conservation in Scotland for the Marine Conservation Society.

I am a Labour MSP for the Highlands and Islands.

I am national co-ordinator for the Scottish Creel Fishermen’s Federation.

I am the MSP for Glasgow Shettleston.

I am the SNP constituency MSP for Caithness, Sutherland and Ross, and deputy convener of the committee.

Thank you—we seem to have got round well. I hope that, in the course of the discussion, which we have split into themes, you will all look towards me so that I can try to bring you in. The aim is to bring you all in and make you feel included, so I ask you to try to catch my eye. If you feel that you have been going on for some time, I urge you to catch my eye, because I may want to stop you. That will save me from having to call you out and ask you to reduce what you are saying. The discussion is meant to give everyone the opportunity to say something.

The first theme that the committee would like to investigate concerns the benefits of being part of the common fisheries policy and the EU. John Mason has a question that might stimulate discussion on that area.

I am not an expert on fishing—you can take it from me that I am a layperson in this area. I hear different things about the common fisheries policy. Some people say that it is the worst thing ever, that they want to be totally rid of it and that there is nothing to learn from Europe, whereas other people say that, if it were not for the common fisheries policy, there would be no fish left in the sea. Is the CFP entirely good or entirely bad? Is there anything that we can take from it?

Who would like to start? I am sure that Bertie Armstrong is the right person to lead off.

Thank you, convener—I take on board your comments about brevity and keeping an eye on control.

Europe is not composed of stupid people and the CFP is not written by stupid people. To approach the policy from a slightly different angle, there are two problems with it. First, it allows common access to—or common grazing in—our waters. That was the norm when we entered the EU: everybody fished everywhere, aside from the territorial limits, and there were no quotas. The fact that that situation was perpetuated has created a great disadvantage. The second issue is the difficulty of organising such a policy among 28—going on 27—member states. I can produce evidence on that as long as your arm. The CFP operation is an uncomfortable stumble towards compromise. Nothing happens quickly. There are much better ways of operating.

Having said that, within those constraints—and leaving aside our enormous disadvantage in this land—capacity has just about right-sized itself at the same time that the CFP has existed and, since the turn of the millennium, fish stocks have been going very much in the right direction. Fishing mortality, which was far too high, is coming down.

The CFP is the wrong process for us, and we would be much better out of it. On the other hand, it has not been a complete disaster—recognising that we are hugely disadvantaged and that it is a cumbersome and wrong process for running a sea area.

Speaking as a politician, I would say that the CFP has presented some challenges in the way in which decisions are made. It would have made rather more sense if the parties round the table making decisions were limited to those states that have fishing interests. There was a period in the not hugely distant past when the commissioner was an Austrian—in other words, he was from a country without any maritime interests of any kind.

That practice has made the decision-making process unnecessarily cumbersome. It has exposed the decision-making process to a political risk whereby countries with no direct stake in fishing have used their influence in the decision making on the common fisheries policy as a trade-off for entirely unrelated matters. That has slowed things down and has led to sub-optimal outcomes. From a politician’s point of view, that would be one of the starting places for saying that the CFP in its present form is not fit for purpose.

Mr Armstrong, you spoke about the time before we entered the CFP. I would like to get a bit more information about what that position was like, historically, and how the fish stocks were doing at the time, when there was essentially a free-for-all and people could fish in one another’s waters.

There is an easily traceable story, which can quickly be scanned across. In the beginning, everyone thought—to generalise—that the sea was a bottomless pit of resource, and that we should have at it with the greatest of alacrity, which was roughly what happened. The war intervened and fishing lessened, so stocks increased. There was a phenomenon known as the gadoid outburst, on which there is a subject-matter expert in the public gallery. To cut a long story short, that meant that there were an awful lot of fish in the northern continental shelf. Everybody had at it with a will under those circumstances of what was basically a free-for-all. The inevitable happened and, one way or another, we had to arrive at an arrangement. By that stage, it was too late for us.

I am again generalising hugely, but the way in which the international community went about things was to put somebody in charge, which was the coastal state in whose waters the resource lay. As I say, it was too late for us. For us, the coastal state was the European Union, and that brought with it all the problems of vested interest that Stewart Stevenson has just described.

Clearly, we all want to have healthy seas with sustainably managed stocks. Getting to that position requires collaboration, supporting thriving coastal communities and respecting environmental and ecosystem limits. That is the important outcome from our perspective.

As for getting there, we must not throw the baby out with the bath water. There are a lot of good outcomes and articles within the common fisheries policy. Let us not think about completely starting from scratch. There is a lot of good in the policy.

Bertie Armstrong alluded to reform management and the fact that the industry has come on board. The Scottish fleet, in particular, has taken some progressive measures, and that has got us to a place where the fishing capacity matches the opportunity. We have gone from 90 per cent of stocks being overexploited in 2005 to 47 per cent now.

There are other good elements in the CFP that I wish to point out. Article 4 of the basic regulation on the CFP covers an

“ecosystem-based approach to fisheries management”

and

“an integrated approach to managing fisheries within ecologically meaningful boundaries”.

We need to take forward those sorts of aspirations.

I am sure that we all support article 17 of the basic regulation, which sets “transparent and objective criteria” to secure “environmental, social and economic” benefits. We would like wasteful discards to be ended. There might be better ways to do that, but we all agree that it is a good thing.

There are also world-leading regulations to protect the deep sea, which includes some of the most vulnerable ecosystems on earth. The deep-sea access regime, which finally came through in 2016, protects vulnerable ecosystems that are deeper than 800m and some that are shallower than 400m.

A lot of hard work has gone into getting the elements of the CFP to deliver collaborative management within ecosystem limits. Whatever our arrangements are, we can all agree that that is where we want to get to.

10:15  

That is interesting. Perhaps others will want to say more about whether the conservation and the work that is being done to stop the overexploitation of fish species are being led by the EU, by fishermen or by both.

It is worth bearing in mind the fact that the common fisheries policy is about not just the catching side but marketing, trade and structural aid. However, I assume that the committee’s main interest today is in the catching side.

It is fair to say that, until 2010 at least, the common fisheries policy was a complete disaster in managing stocks. The Commission admitted that in a paper that was published in 2009, which said that most stocks were being fished at unsustainable levels. The reasons for that are that the total allowable catches were set by politicians way above the limits that were recommended by scientists from the International Council for the Exploration of the Sea; enforcement was often poor; and there was a large amount of overcapacity in EU fleets—in other words, there were more vessels and more catching power to catch the fish than was justifiable on any economic scale. It has taken a long time to try to reduce capacity.

There are some indications that, since the common fisheries policy was reformed in 2013, the management has improved. There now seems to be a better correlation between total allowable catches and scientific recommendations.

It has been mentioned that, before we were in the EU and the common fisheries policy, there were no quotas. My fear as a layperson is that, if we are out of the EU, it will become a free-for-all again and there will be no control.

I do not think that that is a possibility if we handle it properly. We have just come from a study visit to Norway. The Norwegians’ central, top, overriding priority is stock sustainability, because all other good things flow from that. We should take a leaf firmly out of that book and, in retaining the good bits of the CFP, that should be the central aim.

It was emphasised at this morning’s Brexit breakfast seminar that the fish are in our EEZ, to cut a long story very short. They are zonally attached to our EEZ, so there cannot be a free-for-all. No other country can say that it is going to catch anyway, because it would have to come here to do that—to generalise a little—and, under international law, it is our right and responsibility to regulate that. Therefore, there is every possibility of getting it sustainably right for the future.

For the record, can you say what “EEZ” stands for?

I am sorry; it stands for “exclusive economic zone”.

I will pull the discussion back a wee bit to some of the things that Calum Duncan talked about as things that we could replicate if we are out of the EU, such as setting quotas and fisheries management. How do we negotiate that with other people who have an interest? Bertie Armstrong said that all the fish are in our EEZ. We have people fishing outwith that area as well. Where are the real differences between being part of a big family that manages fishing and being on our own?

That is an important point, which we are going to develop under theme 3. I will park that at the moment, and come back to the good and the bad aspects of the CFP.

I will follow up Robin Churchill’s point about there being too much catching ability a few years back. We now have better balance with a reduced capacity. Where did the vast bulk of the reduction in capacity take place? The feeling is that the reduction took place in Scotland rather than in other EU countries. Is that fair?

I am not sure, to be honest; it is some time since I looked at the figures for reduction in capacity. One problem with capacity is that it is not only about reducing the number of vessels; it is a question of catching power. Sometimes the number of vessels is reduced, but those that remain increase their catching capacity by having bigger engines and nets. The Commission publishes figures on that, but I do not know whether they are accurate.

My focus is on where the reduction in catching power took place. The feeling is that it was in the United Kingdom fishing fleet rather than elsewhere. Can anyone on the panel comment on that?

It was targeted very much at Spain and Portugal. I do not know whether it has been effective in those two countries, as I have not seen recent figures.

I can provide a broader ecological context. Around 100 stocks are fished by the UK, including Scottish boats, and by other nations, so the situation is very complex. The other side of the ecological equation is that a lot of the fish that come into the EEZ waters around Scotland, such as mackerel, spawn in the waters of other EU countries. That emphasises the ecosystem approach by thinking not just about where the fish are caught, but about where they spawn. That is where cross-border collaboration is key, in whatever structure we have.

So global management is important.

Yes.

Can Bertie Armstrong respond on who suffered the pain?

A great deal of sacrifices were made here.

Robin Churchill is right in saying that the equivalence of boat numbers is sometimes highly misleading. Some spare capacity is required; for instance, not many highly migratory species behave in the way that Calum Duncan described—a lot are much more localised. To catch mackerel on their migration in the north-east Atlantic, people need a big boat if they are not to kill themselves. They need catching capacity because the UK has a big quota, in normal terms. Therefore, as long as fishing is profitable, a bit of overcapacity is not necessarily a bad thing, provided that the regulatory regime takes charge. The vital central point is that fishermen understand that sustainability is in their best interests; although they could catch more, they do not do so. That is for two reasons: so that the market holds up and so that they are not engaged in a downward spiral to hell in a handcart.

I have a brief historical point that predates even Bertie Armstrong being at the SFF.

In the early 2000s, when there was substantial decommissioning of the Scottish fleet, a huge amount of ill will was created because the EU simultaneously provided funding to the Spaniards to increase the size of their fleet. To this very day, even though we have moved to a rather different environment, that situation influences the thinking of many people who are involved in the catching sector. The gross and demonstrable inequity of that essentially EU-driven intervention—on the one hand killing our fleet, on the other hand building up the Spaniards—is still something that you will not escape hearing a reference to in many conversations with fishermen in my area of the country.

Perhaps we will leave that issue there and note that it has not all been perfect in the EU. Peter Chapman wants to probe a little the policy of how to untangle domestic policy from EU legislation.

We have all discovered that fisheries policy is a very complex area that possibly cannot be solved in its entirety by the great repeal bill, which will be about taking all laws back into our hands in the United Kingdom. Will the great repeal bill work for fisheries and aquaculture? Do the experts have any particular concerns about how the great repeal bill will work?

Who would like to have a go on that? I would like to bring in the aquaculture interests at some stage—I give warning that I would like to push on that. However, we can start with Bertie Armstrong again.

That is a relevant question. If the great repeal bill means that the whole of the CFP will be embraced in UK law, that will not work, because relative stability and the ground disadvantage will be perpetuated. We have already discussed that with the relevant people in the UK Government. I am delighted that the word “inoperabilities” has arisen. If that was done, that would be inoperable for a number of reasons.

There is much that can be embraced. We have gone through the common fisheries policy with a pen and lined out the bits that are inoperable. Some of it is operable, provided that those big bits are taken out, but some new legislation might be needed. That will be a bit of an uphill battle, of course. Some new legislation might be needed for day 1 of Brexit, but we see that as doable. We hope that it will be.

I gave a warning to Scott Landsburgh. Obviously, you are very important and your industry is an important part of fish production for Scotland and the UK. Perhaps you would like to give your views on that.

On the great repeal bill specifically, our concern is regulatory equivalence. That is important to us. Our major competitor is Norway, which is in the European Economic Area. It has regulatory equivalence with the EU, and we expect something similar once the great repeal bill has been enacted; I know that the Cabinet Secretary for Rural Economy and Connectivity has expressed similar sentiments. We do not really have any issue with that. We have lived with the environmental regulation that we currently have. Occasionally, we might think that it is overprecautionary—I am sure that Calum Duncan has an alternative opinion on that—but nevertheless, we all seek world-class standards, and we have established them.

We do not envisage at all any dividend coming from repealing regulation. Our main concern is more commercial than anything else.

On the basis that a lot of operators in Scotland also operate in Norway, I presume that the standards are fairly interchangeable. Is that an unfair assumption?

“Interchangeable” is maybe not the right word. We follow a code of good practice with 540 compliance points; that is the framework for how we operate and farm. Although there is regulatory equivalence, there is a different interpretation in Norway, and the way in which environmental regulation is enacted in Norway is somewhat different from how it is enacted here. There are some parts of that model that we would quite like, and there are probably parts of our model that it would quite like, but the overall framework is set by the EU and we both operate within that.

There are differences in approach, some of which arise from geography. Norway’s coastline is considerably different from Scotland’s coastline.

Are there easier or fewer regulations in Norway compared with Scotland, or are they the same?

It is perhaps too simplistic to say that. In some instances, the approach in Norway could be regarded as more favourable to incentivising different behaviours. We are in continuous conversation with Marine Scotland about that.

Mr Landsburgh, what exactly do you mean by “regulatory equivalence”? I am afraid that I am not familiar with that term.

10:30  

Basically, the regulatory framework that we currently enjoy has its origins in the European Union. The regulation that the Scottish Environment Protection Agency deploys in Scotland is based on the environmental standards that are established in the European Union. We have what we call environmental quality standards, which are invoked here to ensure protection for the local environment and the wider national environment. Obviously, we have to abide by those standards. We respect that and we are relatively comfortable with it. We do not envisage that changing significantly once the great repeal bill comes in.

Again, I will not focus on any legislative solution. The important thing is that, in line with the Scottish Government and UK Government ambitions to be world leaders, and in line with the global management that we have talked about, we would like legislation to be strengthened and even to go beyond the current situation. I have touched on some things that we would not want to be lost and that are the best of the CFP, but there are also very good global standards from the world summit on sustainable development, the United Nations Convention on the Law of the Sea, OSPAR—the Convention for the Protection of the Marine Environment of the North-East Atlantic—and the North-East Atlantic Fisheries Commission. All those global drivers have to be taken into account.

The other key legal protections that are important are those that are delivered by directives such as the marine strategy framework directive, which contributes to sustainable fisheries management, and the birds and habitats directives. Those offer world-leading protection for important marine areas for species and habitats. Whatever the constitutional legal outcome, it is absolutely key that all those protections are strengthened and improved in order to meet the ambitions of all four nations.

I have a couple of fairly brief points. On salmon farming, given that Norway has very little tidal rise and fall, the environmental opportunity for the tide to disperse waste material from farming is much less in Norway than it is in Scotland. I make no comment about that, apart from saying that a different regulatory regime is clearly needed, simply because of that physical difference in the locations, and that is but one example of the differences. Therefore, I do not think that the same regulatory regime would work in the two jurisdictions.

I will move on to the real reason why I wanted to ask a question. Looking at domestic policy following the great repeal bill, we must not overlook the fact that we also have to address the issue of domestic practice. I am specifically concerned that the way in which we run enforcement will have to be different. We might need another fishery protection vessel for our enforcement response. I do not know the answer to that. I just say that, in the debate, we have to address that issue. It is not just about changing the law; it is about changing what we do as well. Our two fishery protection vessels are spread pretty thinly. If there are more of our vessels out there and we have a different enforcement regime, we will need to address that. I have no answers on that; only a question.

Yes, although perhaps the technology that is coming on stream will make that easier.

I am representing creel and dive fishing operations around the coastline of Scotland. On the west coast in particular, where many rural communities rely on their catches to provide them with benefits that flow through the community, our biggest concern is not really Europe, because we have exclusive access out to 6 miles and most of our membership works within that 6-mile area.

Currently, the biggest darkness on our doorstep is the salmon farming industry. It is using copious amounts of chemical pollutants to treat sea lice. Those chemicals are responsible for reducing crustaceans’ ability to form shells. We must seek guarantees from the Scottish Salmon Producers Organisation that the industry will clean up its act.

I want to try to defuse the situation. I understand your concerns, and that both sides have concerns. Perhaps we can look at the issue beyond our discussions on Brexit and the EU—Scotland needs to do that—but I take your point.

I want to put a point to Scott Landsburgh about regulatory regimes. Contrary to the view that was expressed by Stewart Stevenson, I imagine—correct me if I am wrong—that when we leave the European Union your exports will need to have the same regulatory standards to which the rest of the European Union operates in order to keep, or perhaps increase, the market share.

I was trying to make the point that although the overarching environmental regulatory framework means that we operate under similar regimes, the interpretation is different. SEPA interprets the framework differently from how the authorities in Norway interpret it. Stewart Stevenson was right in saying that there is less tidal exchange off the Norwegian coast, but Norway has a much deeper coastline than we have, which is to its advantage in terms of sedimentary control.

We are not comparing apples with apples; rather, we are comparing apples with oranges when it comes to the different environment under which we operate. Having said that, the overarching environmental regulatory framework comes from the European Union and—

And the standards are similar.

Yes. Calum Duncan mentioned world-class standards. We want to be world class. We export to 65 countries around the world. We could not do that if our production standards were not world class.

I wonder whether Michael Bates wants to respond on keeping the standards the same as they are in Europe. I am sorry—I am rather bouncing him into answering, so perhaps Peter Chapman could come in first.

At the moment, the industry is struggling with the landing obligation issue. That falls into this theme, too. No one wants to see good fish go over the side of boats, but there are issues tied in with quota, choke species and all that stuff. If we are to design a new regime post-Brexit, I wonder how that issue could be framed more suitably to allow our fishing community to live with it.

Peter, you will not enjoy me saying this, but I will hold that aspect until we discuss theme 5, under which we will ask the panellists what elements of EU policy they would like to see go. Throwing dead fish over the side of boats has been a difficult issue. I want to develop that under theme 5, and I will bring you in with the same question.

Does Michael Bates have any comment on keeping the integration going or on produce going to Europe?

We are of similar mind to the salmon industry. Our standards need to be maintained because of our successful export industry. We have many standards within the country, including safe and local supplier approval—SALSA—and the British Retail Consortium. Those standards are recognised throughout Europe. Furthermore, a lot of people in Europe are asking for suppliers to have those standards in place.

We will continue with our standards and, if possible, we will welcome any changes to them. We are already meeting a lot of what is in place; we do not have any compliance issues. Our issue is that interpretation of the standards is different between Europe and here. However, we interpret the standards in the way that our country wants to interpret them, and people in Europe meet the standards that are required abroad. We are successful in exporting our fish because of how we handle and look after it.

I want to pick up something that Mr Sinclair mentioned, although I am aware that you wanted to move on from the issue, convener. With the great repeal bill, there is the potential to replace the regulatory regime. Does Mr Sinclair see an opportunity with the bill to put in place more robust laws? A lot of people share the concerns that he has articulated.

I think that we have to do that, because things are now appearing in the press about the questionable behaviour of SEPA and others. The communities from where our fishermen operate are seeing, for example, applications for fish farms to be placed in marine protected areas. That makes a nonsense of having MPAs, and they do not want to see MPAs spoiled in such a manner. There is not only anecdotal evidence but genuine proof that some of the chemicals that salmon farmers have used in the past are detrimental to the sea floor. Anything that is on the sea floor is going to be affected by chemicals, which in turn will affect the guys who are out there fishing for crustaceans and so on. We have enough problems with microbeads and so on without any problems that we might get from the salmon farming industry.

Before I bring in Scott Landsburgh to respond to that, I will bring in Calum Duncan.

I have a small point to make in response to John Finnie’s question. I take the point that fisheries and MPA compliance might come under a future theme. There is a commitment in the programme for government to an inshore fishing bill. It has still to be decided whether “inshore” refers to a limit of 6 miles, 12 miles or what have you, so it might overlap with the CFP or CFP2. However, regardless of how we in Scotland and across the UK choose to manage fishing, particularly in offshore waters, we cannot let the opportunity to improve inshore management through an inshore fishing bill be lost. It seems to me that inshore fishing has been an overlooked, Cinderella area in terms of sustainability. We therefore welcome the introduction of an inshore fishing bill.

I will let Scott Landsburgh have a final comment before we move to the next issue.

I take John Finnie’s point that we are here to talk about the great repeal bill and then other aspects of Brexit. However, when I got here this morning I did not expect the salmon farming industry to be attacked. I think that some of the references to recent media comments are potentially inflammatory, because I feel that some of what has been written is suggesting that we are hiding something. All of the data that has come out in the media recently has been published and is in the public domain, and we are complying with SEPA regulations. If people want the regulations changed, that is fair enough. We can go through a proper lobbying process and have a discussion about it, but we should not hang salmon farming out to dry in the court of public opinion, which is being hijacked by campaigners.

Scott, I do not think that salmon farming is being attacked. The theme that we are talking about is interesting because we are exploring whether it is possible to untangle legislation. I think that the committee is hearing that there should be no reining back on the standards that are being set by Europe and that there is an opportunity to move the standards forward. That is my understanding of what has been said. Certainly, what we have heard from the SFF is that, with negotiation, it is not beyond the wit of man to make the process work. That is where I would like to leave this issue. However, I urge people to accept that what we are trying to do is to find a way forward and to improve everything that we can—that is the important point.

When I stopped Rhoda Grant earlier, we were talking about access to UK waters and quotas. Rhoda, do you want to rephrase your question now to ask about what will happen and whether there will be a free-for-all?

My question was slightly in the direction of our first theme because it was about what we would want to retain from the CFP, what freedoms we would get from coming out of the CFP and how we would police that. It was about how much is impacted by the CFP and how much is not.

Bertie Armstrong can respond to that. I ask everyone to think about the issue of access to the waters, not only those from nought to 12 miles but those from 12 miles to 200 miles, because I think that that is important. I will try to get everyone in who wants to comment. Bertie Armstrong will start and I will keep my eyes open for others wanting to come in after him. I see that Michael Bates and Stewart Stevenson want to do so.

10:45  

Rhoda Grant has put her finger on the centre of the whole matter. On Brexit, governance of the exclusive economic zone will change radically and wildly from our present shared access, which we have been dismissing as common grazing, to the model that is already adopted around the world for coastal states—using that term with the specific meaning that those states have the rights and responsibilities. That is the big bit, so the question about access is completely relevant. The answer is that access to those waters is in the gift of the coastal state; as is the case for Norway, Iceland and the Faroes, it is up to the coastal state to decide who comes in.

The setting of opportunity is central. How much fish can be caught, where and by whom is the centre of sustainability—it either works or it does not. Something that did not quite come out in the seminar that some of you attended this morning was that there is already a template for that—the coastal states—in which the relevant coastal states with fish in their EEZs get together and thrash out how much of what can be caught and where. It is a well-trodden path, and it is much less politicised than the common fisheries policy, because there is a cage in the common fisheries policy with all the EU fishing nations in it, and they try to influence what the individual negotiator will then do in the coastal states process.

The coastal states process is much more direct. Norway negotiates simply on its own behalf—it has a seat at the top table, to use a phrase that you have heard before. That would be us, and who was in that seat would depend on the species. It would be one set of people, typically Marine Scotland, if we were talking about mackerel or herring—the grand migratory species. There is no coastal state arrangement for channel cod yet, but one would have to be made, and I imagine that Department for Environment, Food and Rural Affairs officials would be in the seat for that species, and we would not care as long as no Scottish fish were swapped for channel cod—but that is another story.

There is therefore a process out there by which the principle of sovereignty—coastal state rights and responsibilities—can be upheld and we will, at last, be able to negotiate for the advantage of the coastal state in the same way that everybody else does.

I have a comment on the common fisheries policy and international law. Despite having looked into the matter for years, it came as a surprise to me at the seminar this morning to be told that, within the Scottish part of the UK’s zone, one quarter of the fish in both quantity and value is fished by EU states other than the UK and one quarter is fished by non-EU states. I was under the impression that, if we came out of the EU, we would be in charge of our own affairs. Have I interpreted correctly from the seminar that there are other obligations that we have to adhere to under international law? Is it a fallacy that, when we come out of the EU, all the EU fishing capacity will be freed up for British and Scottish vessels? That is the key issue, as far as I can see.

I will let Bertie Armstrong come in, but briefly, because I would like to bring in Professor Churchill and, in due course, Calum Duncan.

Professor Churchill will without a doubt explain the matter lucidly, but the answer is that we would be in charge. Let us use Norway as an example. At the end of the EU-Norway negotiations, an amount of fish is given to Norway in exchange for other fish. Our problem in Scotland is that we are a big net contributor to that swap, to the tune of 110,000 tons of blue whiting that Norway gratefully receives and catches. A load of stuff comes back, but none of it to Scotland—most of it goes elsewhere. That inequity and disadvantage would be fixed at a stroke. It might still be the case that 25 per cent of the fish taken from our waters will be in non-EU hands, but we would get a much better deal than we presently get. The central, essential point is that sovereignty and control would fall to the coastal state and we could make arrangements on that basis, so the very short answer is that we would be in charge.

The short answer? [Laughter.]

I would like to add one or two little amplifications and qualifications to what Bertie Armstrong has said. The basic starting position in international law is that a coastal state has sovereign rights over the living resources of its exclusive economic zone. The coastal state is not obliged to admit any other state to fish for those resources unless there is a surplus. In other words, if the allowable catch is greater than the fish-catching capacity of the coastal state, the law of the sea convention says that other states must be given access to the surplus, but even after that the coastal state has complete discretion as to which states are given access, with the exception of landlocked and geographically disadvantaged states, although that is not relevant in the UK context.

However, there are two or three things that mean that that strict principle will not necessarily apply. The first is that most of the stocks in the North Sea are shared stocks. That is to say that, at the moment, they are shared between the EU and Norway. Post-Brexit, we would need some trilateral arrangement for the EU, the UK and Norway, and a lot depends on negotiation about allocation and the swaps that Bertie Armstrong mentioned.

I would like to say one thing about allocation. A few weeks ago, The Guardian published what was described as a leaked paper from the European Parliament, in which the European Parliament said that the principle of relative stability, which is what applies as the allocation key at the moment, should continue post-Brexit. That seems to me to be unacceptable. The EU has said strongly in recent weeks that the UK, if it comes out of the EU, cannot enjoy the benefits of membership. That principle should cut both ways, so that EU fishing states cannot enjoy the benefits that they have at the moment.

The basic principle of allocation in the North Sea between Norway and the EU is a principle known as zonal attachment, which means that it is the proportion of mature fish in each party’s zone that determines the division of the quota, broadly speaking. We should strongly hold out for that principle and resist any attempt to continue relative stability.

I know that I have gone on at some length, but I have one other brief point that I think should be borne in mind. When negotiating trade arrangements with other countries in the past, the EU has had a trade-off between greater access to the EU market and greater access for EU vessels to fishing grounds. That happened with Norway, where there is no free trade in fish, in principle, under the European Economic Area, but Norway was given greater access to the EU market. In return, Norway had to give the EU greater access for EU vessels to its waters. We need to be aware that the EU may try to play that card in the negotiations that will take place.

The point was made at the briefing this morning that giving access does not necessarily mean that you will catch more fish; it means that you will be given access to the areas where there are fish.

Robin Churchill has helpfully answered many of the questions that I was going to ask, but I have one little residual question that I am not sure is covered by any other heading in our proposed scheme of discussion. Would it be perfectly legal for us to abolish the existing quotas and replace them? I hasten to add, before a price is put on my head, that I am not proposing that, but I wonder whether it would be legal for us to do that and to replace the quota system with a different way of controlling, managing and allocating access rights. That is a question for Robin Churchill.

Professor Churchill, do you want to put yourself in the firing line on quotas?

The UK will be responsible for the management of the 200-mile zone. If it wanted to operate with total allowable catches and quotas, it could do that, but if it wanted to replace that system with a form of effort limitation—for example, saying that so many vessels could fish in certain areas at certain times—that would also be a possibility. We would have a free choice in the type of management measure that we adopted.

Does Calum Duncan want to come in on that? I am trying to work my way round the table.

Rhoda Grant asked about what we need to retain and what our freedoms are. To consolidate what I said earlier, I would like to retain a commitment to an ecosystems-based approach to management, including appropriate measures to address discards. A precautionary approach needs to be hardwired into that. I would like to retain deep-sea regulations and the principles enshrined in article 17 of the common fisheries policy—which relates to the point about effective monitoring and management—with transparent objectives for environmental, social and economic criteria and integration with the overarching marine strategy framework directive and the habitats and birds directives. I would also like us to retain a regionalised ecosystems approach to management, because, as I have mentioned, there are lots of straddling stocks and collaborations will be necessary.

We have the freedom to improve. It is the EU that is party to the North-East Atlantic Fisheries Commission, the United Nations convention on the law of the sea and the UN fish stocks agreement. However, in the absence of the CFP, it is not a free-for-all; there needs to be a sensible four-nation approach to negotiating with all those international frameworks to get sustainable, ecosystems-based outcomes. A big part of the improvement that is needed is effective spatial measures not just in relation to MPAs and special areas of conservation but in relation to the protection of critical fish habitats—for example, breeding and spawning grounds. The marine atlas highlights concerns about the health of the wider ecosystem. We should not focus just on stocks, because there are a lot of concerns about wider sea bed and ecosystem health that an improvement in the spatial management of fishing—in addition to improved stock management and other measures—could help to address. Improved management could come about through full documentation, which is an issue that we can perhaps discuss later.

I fear that your shopping basket of things that you are asking for may be overflowing.

I ask Bertie Armstrong to comment on what Calum Duncan has just said. After that, I would like to return to creeling. Perhaps Alistair Sinclair could tell us whether he sees any threats to creeling in Scottish waters from boats from other countries.

I will address Calum Duncan’s shopping list and Robin Churchill’s small diversion into potential management measures. There is no reason on God’s earth why all those things cannot be embraced with alacrity. The good bits of the CFP focus on sustainability and the freedom to use any method, although I have to say that an effort management-only system is untried and we are unlikely to go straight to that. All those things are, however, entirely possible. Once we are out of the cage of the CFP, we can do all of them and more. We start from a good position, because we are entirely compliant with everything right now, and we can move forward.

Alistair, do you see any threats to creelers from leaving Europe?

I really do not think so. It would be too far for people to travel to make it viable. I do not think that we have any great concerns about that. Vessels come from Guernsey to take lobster and brown crab from the stock, but they do not have any real impact on local fisheries. They might have an impact in discrete areas, but the areas where those vessels fish are generally further out to sea, where the smaller boats cannot fish.

If everyone is happy with that, I would like us to move on to the next theme, which is access to funding, expertise, labour and resources. John Finnie will lead off with a question on that.

My question is on the European maritime and fisheries fund. The sum of money that comes to Scotland to support sustainable fishing and help coastal communities is 44 per cent of the UK’s share of the fund and may be particularly important for the fish processing sector. Will the UK and Scotland lose access to funding, expertise—in particular, scientific expertise—and resources that are particularly important for fisheries and aquaculture?

That is a very good question. I would like to hear from Michael Bates and Scott Landsburgh on that, as it will affect their industries, too. Let us start with Bertie Armstrong and work our way around the table.

11:00  

For the catching sector, it is quite simple. The amount of funding that we receive from the European maritime and fisheries fund is approximately 1 per cent of first sale and landing. We are not an industry that depends on subsidies; in fact, it would be a distortion if we were. When there is a fund available, we grab it with some enthusiasm. However, if a fund is not there, it is not going to kill us. We do not wish to develop into an industry that depends on funding.

The final short point to make is about the UK as a net funder. I know that life is more complicated than this but, all things being equal, if we pay in more than we get back, surely it is not beyond the wit of man for us to support everything that is currently supported by funds, if those arguments stand up by themselves.

I think that part of John Finnie’s question was to do with labour.

I had not come on to that, but an important element of the present situation is the free movement of labour. That is very important to people and we would like to hear about the implications of any alteration to that situation.

Michael Bates will speak for the processing industry but, without a doubt, there is some EU labour in the catching sector, although not a lot. I am seized with a thought: what country would not supply itself with the labour that it required? There is a difference between the free movement of all Europeans—as one of the four freedoms of the single market—and a country such as the UK allowing in people to do jobs that it wants people to do. I cannot see that we are talking about an unjumpable hurdle.

Before we move on, Mairi Evans indicated that she wanted to add something.

My question relates to the free movement of labour and exactly how important that is. I take Bertie Armstrong’s point that he does not see it as a hurdle. However, in other debates on other areas, we have talked about the point that we have a labour force here and that a section of that could be working. That is fair enough, but it depends where you are in the country, as that labour force is not concentrated in one place. I imagine that the issue of the free movement of people will have a big impact on the processing side.

Our sector relies heavily on nationals from other EU countries and we could not survive without them—there is no question about that. Our own workforce no longer sees the fish processing sector as a viable, lucrative area to work in. Since the oil industry came on board, pushing up wages and pinching workers, that became a more attractive industry to work in. We would certainly like all foreign workers—for want of a better description—who are currently working in this country to be allowed to stay, as we rely on them quite heavily. Without being able to offer huge wages to compete with other industries, I cannot see how we will be able to change the perception of youngsters in such a way that they see our industry as a career industry and as worth coming into. We really need those people to stay here, and we need other people to be able to come here and add to our sector as it grows. There are a lot of businesses that are keen to expand, but the uncertainty of Brexit is holding back investment. Once the situation becomes clearer and everybody knows what we are faced with and how we will progress, there will be a lot of companies that are ready to invest in the future. However, they will need staff.

Do you have a figure for, or a percentage of, how much of the processing workforce is made up of EU migrants?

It is difficult to give you a figure, but in most of the companies that I know of in the north-east, which are predominately in Aberdeen and Peterhead, as little as 20 per cent of staff are local people. There is a huge majority of EU nationals working in our industry. The figure is certainly well over 60 per cent.

I have a wee financial question. With the current limit of €30,000-worth of support over three years, the processing industry, like the catching industry, is not a big recipient of European funds. The European maritime and fisheries fund is, in essence, an infrastructure fund that supports communities and, I would suggest, it is usefully supporting harbours in their wider exploitation of opportunities, not just in fishing. I hope that I am correct in saying that the processing industry is similarly pretty detached from EU financial support.

Yes, unfortunately you are correct. We are very detached from it.

Scott Lansdburgh, will you tell us a little bit about your industry?

I will reiterate what Stewart Stevenson said. The situation for aquaculture is similar to what Bertie Armstrong and Michael Bates described. We do not enjoy a lot of EMFF support. We apply for match funding for one or two things, but that runs not to tens of millions of pounds but to maybe £1 million or £2 million a year. That is good—it is not to be sniffed at—but it is not significant or crucial to the industry’s future wellbeing. I would not say that it is a red-line issue for us. Nevertheless, such support is always helpful.

We have a lot of higher education funding going into innovation centres, which the Scottish Government established a few years ago. We are looking forward to some dividends from that in the near future, and I think that we will see some significant change in the management of the welfare of our fish through that—that was the main purpose of their establishment. It will take time, but we are definitely making progress. That should help with one or two frustrations with regard to salmon farming that we have heard about today.

As you can imagine, farmed salmon is the one fish that is guaranteed to go into processing plants every day: that point was made by a delegate at a Scottish National Party conference a couple years ago. It is the fish that arrives every day in our processing plant. We estimate that in our primary and secondary production for salmon about 8,000 people from the EU are involved in processing.

What proportion is that of your overall workforce?

I cannot speak for the processing side, but farming is not a labour-intensive industry: we employ about 2,500 people.

What percentage of those 2,500 people are EU migrants?

It is very small: about 10 per cent.

The witnesses were perhaps going to come to this, but I also asked about the potential loss of scientific expertise. A lot of academia in this area shares expertise—we are all dealing with the same water—and we have heard about a loss of shared expertise in the forestry industry. Does the panel have any concerns about a loss of scientific expertise?

Calum Duncan, will there be a loss of scientific expertise?

I am not close to the funding structures, but I can speak to the principle that there needs to be adequate resources to support sound science. Ecosystem-based management of fisheries stocks and wider management decisions, including those on aquaculture, need to be based on good science. In addition, the precautionary principle applies when data is lacking.

I would like to say something about incentives in relation to the fleet. Whatever the EMFF equivalence is, it important that it is allocated according to need and that the incentives encourage sustainable practice. In that way, we can get a race to the top and encourage improved gear selectivity and improved spatial and temporal management. Again, I am sure that everybody around the table can agree on the need for those things. We need financial incentives for the industry to encourage the sustainable practice that we want to see. That makes good business sense as well, because it means that people have a more sustainable product that has higher value and conceivably, or ideally, lower environmental impact. I am sure that that is the sort of vision that Scotland would want to project to the market domestically and globally. Resources are also important for monitoring and compliance.

I am assuming that, if panel members are not looking at me, they definitely do not want to come in and I will have to force them to come in. I think that Scott Landsburgh wants to come back in, and then I would like to ask Alistair Sinclair to say a wee bit about resources and labour from the EU as far as the creel fishermen are concerned.

I do not have the figures, but John Finnie’s question is a good one. We need to be aware that a lot of higher education support comes from the EMFF in particular. In our industry, I am aware that the institute of aquaculture at the University of Stirling, which is regarded as a world-class education and research establishment in the world of aquaculture, has some serious concerns about reduced funding.

Alistair Sinclair, what is the position for creel fishermen? Is there a contribution in terms of grants from the EU, or labour from the EU?

There is no great appetite to go out and seek funding from the EMFF because the creel industry, like the mobile industry, is a here-and-now business. The boats can be repaired and sorted in a couple of days and—bang—they are off to sea again. It is very difficult to get creel fishermen to do form filling. It is hard enough to get them to fill in their landing sheets on a weekly basis, never mind a long, convoluted form for EMFF funding.

Bertie Armstrong, do you want to come back in on any of those points?

Scientific support is exceedingly important. A lot of data leaves us for the International Council for the Exploration of the Sea, which is the recognised international body, and there is great assistance from the EU for that data to be provided. That needs to be replaced. There is money to do that, but that needs to be thought of. We cannot possibly have a degradation of stock assessments as a result of anything that we do.

John, do you want to follow up on any of that?

No. That is helpful.

If everyone is happy, we will move on to the next theme, which is about which elements of EU policy members of the panel are keen to see go. Jamie Greene has a specific question on that. Earlier, Calum Duncan was adept at filling up a shopping basket. It will help the committee if you can focus on a couple of issues, if that is appropriate given what Jamie asks you.

I think that you have just asked the question for me, convener.

Sorry. That is me put in my place. You will never get another question, Jamie.

Just for the sake of being on camera, I will say a few words.

I have been quietly listening in the corner, and the conversation has been fascinating. In general, there seems to be a consensus that elements of the CFP have been positive and beneficial—it is not all doom and gloom. I appreciate that there have been and are many complexities and problems with it, but it is nice to hear that there is consensus on the general objectives around sustainability and ensuring that we have strong industries that also take into account the needs of the coastal communities that participate in them.

On the other side, however, I wonder whether there is any consensus on elements of the CFP that you will be happy to see the back of. Robin Churchill mentioned relative stability, and we have touched on landing obligations, quotas, technical regulations and so on. I would like to hear any views that you have on opportunities that are presented in a post-CFP, post-EU era.

Thank you for making the question your own, Jamie.

A lot of things will go simply through the UK leaving the EU and therefore leaving the common fisheries policy, and relative stability will be one of those things. Historical access rights to the 12-mile zone, which we have not mentioned previously, will go, I am sure.

You have rather caught me on the hop on that so I will leave it to others who have stronger views.

11:15  

You might have heard the phrase “sea of opportunity”, which defines the opportunities that come from leaving the CFP. Robin Churchill put his finger on it. The move away from relative stability and the gaining of sovereignty and governance in our waters will produce a gigantic game-changing opportunity for the seafood industry of Scotland and indeed of the UK. We will be able to behave on the world stage in the same sort of way that, for example, Norway does. There are a number of opportunities. All other things flow from the increased economic volume—if activity is increased, jobs can be made more attractive, we would hope, and our reputation could grow. There will be a stream of opportunity from additional economic activity that will fall our way, unless it is deliberately traded away or handled badly.

Mairi Evans, do you have a follow-up question?

Yes. We had some questions about quota hopping at this morning’s seminar and it was developing into an interesting topic. I want to hear more from Bertie Armstrong in particular about quota hopping and how much of an issue it is in Scotland.

It certainly exists. As Wendy Kenyon said at this morning’s seminar, it is not actually to do with fishing management; it is to do with the right of establishment of a brass plate and the purchasing of companies. Land Rover is beneficially owned elsewhere, for example.

Should the Governments of the land decide to change that situation, there would be an opportunity to do so. Norway does it differently, as I said at the seminar. It is not, however, the central question. We are not having our industries bought over in Scotland but it is something that we could guard against, recognising the underlying principle—which everyone here seems to support and which other countries seem to support—that the national resource of fish is indeed a national resource and it is something that we do not completely privatise. It is not like buying steel for making cars. It is different because it is a national resource. We can strengthen that or loosen it post Brexit, as desired. A unique opportunity exists post Brexit to do that in whatever way the Government decides.

I have a queue of people who want to come in. Stewart Stevenson is first.

It is a relatively small point that goes back to the point that I made earlier about decision making and policy making. When the Norwegians sit down to negotiate with the EU, the fishermen are part of the delegation. In the EU, it is the politicians and officials who negotiate, not the fishermen. I wonder whether there might be an opportunity to have as part of the negotiating team the people who are directly affected by the decisions and can inform officials and particularly politicians, who are rarely experts in anything—even if we come to Parliament as an expert, our expertise atrophies. Looking at EU policy, I wonder whether that is a key area to which we can draw more people who have relevant knowledge and experience to the table in order to get better outcomes.

I am going to bring John Mason in because there is a two-fold question here.

Bertie Armstrong paints a picture of us taking all the powers back on board, but the assumption is that the UK Government will say that it wants to get a special deal for the financial sector in London so it will give away part of the fishing powers, because fishing does not really matter to the UK. Are there bits of EU policy that Bertie Armstrong would want to keep and bits that he accepts that the UK will trade away?

There are two separate questions there. On the potential for the UK to trade fishing away, we will react as savagely as we can manage to anybody—any Government of any colour—trading away what we regard as a once-in-a-generation opportunity to take charge of our national resource. That is the central point. I hope that nobody is going to sell us anywhere.

We have to be careful about talking about suggestions that are not facts. We must take cognizance of the fact that there is a once-in-a-generation opportunity—I think that that was Bertie Armstrong’s expression, although I am sure that I have heard it before—to make a change, and you will not sacrifice that for anyone.

Perhaps we could leave that there. There was a question about the people at the negotiating table.

We have just been to Norway. In fact, I think that officials from the Department for Environment, Food and Rural Affairs and Marine Scotland are with officials in Norway as we speak. Stewart Stevenson describes the situation exactly. It is not that the lunatics are in charge of the asylum; it is that the relevant subject-matter experts are talking to the right decision makers. The Norwegians warned us that there is rough and tumble in the room when that goes on but it would be, if you like, our rough and tumble. We would not be one of eight people who are trying to influence our politician who then tries to influence a negotiator who decides what he is going to do in the first place, so the relevant expertise is much closer to the decision making. We will push as hard as we can for the relevant experts, including scientists, to be part of the decision-making process.

I am happy to let Calum Duncan in with a small shopping basket.

I do not have a reverse shopping basket of things to remove from the CFP but I will comment on some of the points that Bertie Armstrong made—not to disagree with them but to elaborate on them quickly.

I absolutely support the idea that stocks are a national resource that we cannot privatise. That is exemplified by mackerel, which spawn off Ireland and are fished off Scotland.

We heard about Norway. I also draw the committee’s attention to New Zealand and British Columbia in Canada, which are successfully using remote electronic monitoring. That helps to improve fisheries management and could help on the discards ban, in relation to which there is some grumbling about the CFP. I can draw the committee’s attention to a good report by WWF on socially just improvements that could be made in monitoring activities at sea and catch.

You are bringing more rather than taking away so I will move on and invite Peter Chapman to make a point.

Is there a better way that we could manage the landing obligation post-Brexit? We all want this to work, but it has to be sensible and work within the quota system as it is just now, especially given the worries about choke species.

We will deal with that briefly because we are going to come on to catching and processing.

I will answer with absolute brevity.

The problem with the CFP landing obligation is that it was politically driven, without proper regard being had to its practical application. It is a bit like banning road accidents, sitting back and saying that it is all done. How would that work?

The Norwegians operate a discards ban that is less bad than the UK one, and we might take that as a model. It must be done—we must reduce discards as far as physically possible—but the current EU model is preposterously unworkable.

If we can retain anything from the CFP, we would like Marine Scotland, which would probably be in charge of this area, to consider article 17, which clearly states:

“Member States shall endeavour to provide incentives to fishing vessels deploying selective fishing gear or using fishing techniques with reduced environmental impact, such as reduced energy consumption or habitat damage.”

We have to have that in whatever we create.

That is interesting. I think that Calum Duncan—and, from what I have heard, fishermen—would support you on that.

The next theme is co-ordination. I will say no more about that in case I steal Richard Lyle’s thunder.

Thank you, convener.

Most of the questions that I was going to ask have already been answered—or answers have been suggested. I am old enough to remember the cod wars and the British navy facing other countries. With the greatest respect, some of us think that the Scottish fishing industry has had a bad deal for years and that it will still get a bad deal, whatever comes out of Brexit.

I am interested in a comment that Professor Churchill made about just retaining all fishing areas for ourselves as a coastal state. Should we, do we have to, or do we want to co-ordinate domestic fishing policy with neighbours’ policies, or do we want to take it back? I am sorry that I could not make the Brexit and fisheries seminar this morning, but I know from committee meetings in the previous session that Scottish quotas have been bought by foreign boats. Brexit would do away with that. Do we want to co-ordinate with our neighbours, or do we want to keep all our fish, wherever they were spawned, for the Scottish fishing industry and Scottish fishermen?

The short answer is that, if we did not co-ordinate with the EU and Norway, there would be a real risk that it would be a matter of every state for itself, that there would be overfishing, and that each state would just take what it regarded as its legitimate share. Adding the catches together would probably come to more than 100 per cent of what scientists recommend as the total catch.

That is absolutely correct. It simply will not be possible to take volume of stocks for all stocks. Other countries take their volume of stocks under relative stability in their own waters. There is a real and present danger, and of course we want to co-ordinate.

Would the other witnesses like to pick up on Alistair Sinclair’s point about sustainable issues and the retention of article 17?

The witnesses can build that into their answers.

I have a question for Mr Armstrong. How much has the UK Government included the Scottish Fishermen’s Federation, or fishermen in general, whichever part of the UK they come from, in considering what will happen after Brexit? I understand that we will all have to negotiate. We cannot go back to the cod wars; the navy does not have the ships now to go up and down the English Channel, the North Sea or whatever. To what extent is the UK Government including the Scottish Fishermen’s Federation or—dare I say it—the National Federation of Fishermen’s Organisations in the negotiations?

We have had meetings with David Jones’s department and two meetings with Andrea Leadsom. We will meet her again next week with officials in DEFRA in the south. We have had meetings ad nauseam with officials in the north, MSPs—who bore even themselves—and the cabinet secretary. We are talking to everyone.

We are not getting hard assurances from everybody about outcomes, but we are not being ignored. As I said, we will react as savagely as we possibly can if this opportunity is not taken.

The figures are stark. There is a zonal attachment paper on the proportion of fish that live here and the proportion that are caught. To pick out one example, 88 per cent of the herring live in our waters, along the northern continental shelf—that is a general statistic—but we get just 15 per cent of the TAC. We would like that to change. The study lists 17 cases, taken from the official figures, where there is a grand long period of disadvantage that needs to be settled. Of course, settling that should be a co-ordinated exercise, but there must be a robust approach to it. You do not leave the golf club and continue to pay the fees. To repeat a point that Robin Churchill made very well, it cuts both ways: if we have left the EU’s control, we want some of that control back.

11:30  

I think that Calum Duncan wants to answer John Finnie’s question on conservation.

I would have to be reminded of it—sorry.

It was on the issue that Alistair Sinclair raised when he was asked about what would be worthy of retention. He mentioned using sustainable methods and the low-carbon impacts. I had hoped to hear from Mr Armstrong on that.

It would be perfect if Bertie Armstrong would answer that. Calum Duncan will has chance to gather his thoughts and come in with a short answer.

Gear development, using less fuel, having less impact and catching less of what you do not want to catch—all of that is a moving picture. We apply a lot of time, effort and money to those issues, and I would envisage a redoubling of effort under our own management, rather than a cessation.

Calum Duncan will come in briefly. We will then move on to the next theme.

As I said, many things are worth retaining, and the approach in articles 4 and 17 of the CFP regulation provide for “ecosystem-based” management and “transparent and objective criteria”, as well as covering the deep-sea system regime.

To respond to Richard Lyle’s point, we would support an eco-region management approach. We need to collaborate. Although they are not perfect, the North Sea Advisory Council and the North Western Waters Advisory Council are a good start. We need to collaborate and, for the reasons that Robin Churchill mentioned, we need to preserve straddling stocks.

Perhaps we can now move on to the next theme, which is to do with the product.

This moves us away from the common fisheries policy and into trade. Much of our caught fish is sold to the EU, as is much of our processed fish. What impact will Brexit have on that? What outcome do people want? It is fine to have all the opportunity to fish, but if we do not have somewhere to sell it, there is a huge difficulty for the industry. How do we overcome that, and how do we negotiate?

Where else can the EU get its fish from? We currently export quite a lot of our product to the EU because the EU needs it. If we have a greater share of the raw material, that means that there is a lesser share for EU vessels, which would increase the demand for our product. The EU is catching less, but people are still consuming the same levels, so they will require the product. We feel that export sales, and even domestic sales, will continue; if anything, they will increase.

We are not afraid of any changes to tariffs. We feel that they will be minimised because of EU demand for our product. People cannot get the product anywhere else. Where can the EU get fish from if not from our waters and our processors if access by EU vessels is reduced? I am not saying that their access will stop, but it will certainly reduce. The EU requires that product. We are quite confident that this is a good opportunity for the processing sector.

If tariffs are in place, the cost increases. In basic supply and demand economics, how elastic is the demand? There must be a point at which tariffs would affect people’s buying power. Is there a concern, or are you confident that, no matter what happens—within reason, and one imagines that it would be within reason—it will not impact on sales?

You are again correct. There would of course be a limit but, because of the demand for the product, any increase in tariff would be as little as possible to avoid making the price of that raw material too high. Just because we have the product does not mean that we can demand any price for it, but demand is so high and strong—it is consistent throughout the year—that the level of increase would be minimal. People in the EU value and still want the product; they do not want to put a barrier in place to increase its cost. We feel that negotiations on tariff will be in our favour. There will be an increase, but it will be offset by the increase in demand for the product.

A queue of people are waiting to come in. Alistair Sinclair has been waiting the longest. I will go in the order in which people revealed their questions.

I agree with much of what Michael Bates said. Demand far outstrips supply in our sector, and Michael’s sector has probably the same situation. I cannot imagine Europe placing tariffs on the product that we have, which is second to none on the planet, for the sake of giving the UK a bloody nose. They cannot do that to our fishermen.

In my position as national co-ordinator for the Scottish Creel Fishermen’s Federation, one of the most encouraging things over the past two years has been receiving inquiries from as far away as China for the product that we sell. In recent times, China has developed a railway system that comes all the way to France. It takes seven weeks but, nevertheless, China developed that because it wants products from Europe. From Scotland, we have the tunnel now and we can get all the way to China. There are many benefits coming our way. It would be extremely foolish of Europe to give us a bloody nose.

There may be some locals who will miss their shellfish if they all disappear.

We have considered the worst-case scenario for what has been described as a hard Brexit or clean Brexit—we know now from the Prime Minister’s statement that the Government is looking for a clean Brexit. With World Trade Organization favoured nation status, we would incur a 2 per cent tariff on fresh salmon and a 13 per cent tariff on smoked salmon.

Putting those figures to one side, there have been significant fluctuations in market prices in the past 12 months. There has been huge variation and a huge price increase that has been beneficial to us. In 2015, Scottish salmon going into the European Union attained £3.92 a kilo; in 2016, it attained £5.74, which is a 46 per cent rise in our market price. In that background context, the tariff is negligible, whatever it happens to be.

Our biggest challenge is producing enough to meet the demand, no matter that we have a major competitor a few hundred miles away across the North Sea. I take on board Alistair Sinclair’s point about safeguarding other species; that is something on which we spend inordinate amounts of money, and we are about to do a lot more to help that situation. That is our big challenge.

The challenge that I foresee in all of this is not about tariffs; it is about potential physical impediments to moving perishable goods quickly to market. We can get fresh Scottish salmon on a white linen tablecloth in Manhattan within 24 hours of harvest, and we can do that in the European Union as well. That is on account of the free physical movement of the fish, with no paper barriers or physical barriers at the marine ports or airports. That is the big challenge; it is not really the tariff.

I feel eyes boring into me from all directions. I will try to get round everyone who wants to comment. Robin Churchill is next.

I understand perfectly the logic of what Michael Bates says, but I feel that EU practice is not entirely on his side. It looks as though what we will end up with post-Brexit is a free-trade agreement of some kind between the UK and the EU. Most free-trade agreements that the EU has concluded with other states do not include free trade in fish or agricultural products. Even with Norway, tariffs are payable on imports of many fishery products from Norway into the EU, so I am not convinced that the EU will give us a good deal on that.

Scott Landsburgh’s point about documentation is also important. If you export any kind of perishable goods to the EU, you have to comply with EU sanitary standards and you must have the documentation to show that you are complying. As far as future fish catching is concerned, there will have to be documentation showing that the EU’s rules of origin are being complied with as well. From a trade point of view, a hard Brexit is a nightmare because, apart from the tariffs issue, it will increase enormously the amount of documentation required.

I had two points to make. One was about documentation, but that has now been covered, so I shall skip that. I also wanted to make a general point that, in tariff terms, fluctuation in currency is a much bigger influence on the amount of money that the industry can make, and that is currently the bigger threat and one that is more difficult to manage.

I agree with Stewart Stevenson, but even a 12 or 15 per cent currency movement against the euro would be only a quarter of the 46 per cent that I mentioned. The dynamics of the market are really the driver.

I was going to come back to Scott Landsburgh in a minute. You have jumped the gun, but I will let you away with it on this occasion.

Robin Churchill alluded to documentation, and. The hoops that we might have to jump through could be another way of getting us.

Documentation is proving a grave concern.

We must not imagine that the single market, or Europe, is the only market in the world. There may be 33 countries and 400 million people in Europe, but there are another 178 countries out there, with 7.5 billion people in them. When the Russian sanctions were applied and we lost the pelagic fish market, we were able in fairly short order to reset that fish to other markets, and it opened up a market in the far east that has been very good thus far, and a market in Africa for lower-quality and lower-priced fish. We should not forget that there is another world out there that will be open to us.

I want to comment on something that Scott Landsburgh said. A lot of our members are keen to expand their business to take advantage of increased orders, but they are holding back because of the uncertainty about what is going to happen. Once everybody knows what we are faced with and all the agreements have been reached, our sector is looking to move ahead and expand.

To go right back to the fundamental rationale behind tariffs, the whole point originally was to stop imported produce competing with locally produced products. Tariffs were intended to stabilise those markets. In the case of salmon, for example, the fish was being sold to countries that had neither the ability nor the desire to produce that product. I am glad to hear that Bertie Armstrong thinks that there is a worldwide demand for our products outside the EU single market.

I was intrigued by Scott Landsburgh’s point that it would be not only tariffs but more logistical barriers that would prevent markets from flourishing. From a political point of view, it is worth bearing in mind that it is about not just contracts and financial tariffs, but physical logistics. Certainly, that is a point that I will take away from this meeting.

11:45  

Mr Landsburgh, you jumped the gun earlier, but do you want to go back to something that you were going to say earlier?

No, I am fine.

Calum Duncan wants to come in.

It is just a quick point. I appreciate that this evidence session is mainly about export, but I take the opportunity to emphasise that there is the potential for shortening supply chains, keeping high-quality produce and growing the markets for those in Scotland and the UK in terms of opportunities and things to incentivise, irrespective of constitutional arrangements.

I support what Calum Duncan just said. There seems to be a bit of a contradiction between being sustainable and transporting food halfway round the world. I believe that it is about trying to maximise local production and consumption.

I totally agree with Calum Duncan’s point, which John Finnie has just backed up. There is an opportunity to reduce fish imports that could work in our favour, because that would in turn increase the demand for local fish throughout the country. It is ironic that we export 80 per cent of what we catch and that 80 per cent of the fish that we eat is imported. We have an ideal opportunity to try to redress the balance by minimising imports, which would be offset by the increased availability of raw material from the catching sector and which the processing sector could handle. Those who cannot export, whether to Europe or further afield, would welcome the opportunity to increase sales within the UK, but that would also be welcomed by all sectors.

Can Michael Bates give the value of the two 80 per cents, if he has them?

No, I do not—sorry.

I will bring in Alistair Sinclair shortly, but we are coming to the end of the evidence session and I think that it is only fair to tell the people who have been kind enough to give us evidence that there are two questions coming their way, so they might want to gather their thoughts on them while Alistair Sinclair is giving his thoughts. The first question is a simple one: are there any other implications for your sectors that you have not had a chance to bring up during the evidence session? Secondly, what one thing do you think needs to be done now to prepare for leaving the EU? Those are our two concluding questions but, before we come to them, I will ask the committee members whether they have any further questions.

I want to return to the issue of supply chains and how far products travel. For the Scottish fish and chip shop of the year awards a couple of years ago, Seafish, the body responsible for looking after the interests of the fishermen who prosecute their fishing in the North Sea, went abroad to pick up the fish for the purposes of those awards.

I will let Michael Bates come back in on that.

Those fish and chip shop awards are sponsored by Norway.

But we could supply the fish.

We could easily do that.

The discussion could delve into areas that we would never get to the bottom of. However, I think that everyone round the table would agree that the fish produced in Scotland is excellent and that the fish caught by Scottish fishermen is excellent.

Before I ask each of those who have given evidence for their final thoughts, do members have any more questions for the witnesses?

I asked Michael Russell, the minister for Brexit, in the chamber yesterday what the Scottish Government’s policy was on full membership of the European Union. He said that the Scottish Government’s aim is to have full membership of the European Union. There could be a scenario where we leave the European Union and, after a referendum, come back into the European Union. Does anyone have any thoughts on that?

I understand the question, but it might be best left hanging there, because it may open up a whole lot more issues.

Good try, Mike.

Good try.

John Mason has a different question.

If, as in Bertie Armstrong’s perfect world, we see our catch increase hugely, would that be spread among more vessels and owners or would it make the existing small number of big ships a lot richer?

That is a very good question. We wrote an inshore paper as part of our suite of evidence on that whole issue. It would be perverse if we ended up with the present catches swelling, and that would not work. There is an opportunity to spread the largesse much further and we are committed to doing that.

Okay—perfect. I am going to leave it there. Is there anything that the witnesses have not raised? What one thing needs to be done now to prepare for leaving the EU? We will start with Scott Landsburgh.

The one thing that the UK Government, as the negotiating Government, can do is to get early agreement on the security of EU migrants. There is certainly pressure in the public domain on that issue. I do not know whether the UK Government has any control over the issue; it seems to me as though the EU is recalcitrant on that point. Securing that agreement would be helpful for us all.

The Scottish Government paper “Scotland’s Place in Europe”, which reads well, seeks a “differentiated solution”. We now know that, if it does not get that, there will be another referendum. I do not want to get political here, but I need to make the point—indeed, I have been instructed to make the point—that the UK market is crucial to our future in Scottish farmed salmon. We need to do all that we can to ensure that there are no impediments to trade in that market—forever, basically.

I am happy for you to leave it there, Scott.

One thing that we would like now is a guarantee on the security of EU nationals who already reside here. I am pretty sure that every industry in our country that is reliant on EU nationals and not just the fish processing sector would agree with that. It is vital to have them; we cannot replace them.

Are there other implications? I have touched on all my points—the tariff, single market access, sustainability, investment and employment. However, there is now the double uncertainty. Up until last Friday, we were thinking about what Brexit will do for us. Before we know what that will be, we have a political uncertainty, shall we say, about what Scotland wants to do. We would rather have had Brexit dealt with, gone out of the EU, seen where the country was and then dealt with the second question.

I will speak in the briefest possible terms. Although it has not been stated, the implication is that the balance of benefit from Brexit’s sea of opportunity far outweighs the challenges that are coming our way. We regard this whole thing as one of the bright spots.

We make a plea to both Governments to work together to make certain that, under any constitutional arrangement, we do not end up back inside the common fisheries policy. To borrow a phrase from our Norwegian friends, who I am sure were very taken with yesterday’s announcement, if the issue is well handled, it will keep the lights on in coastal communities around the United Kingdom that would not be kept on otherwise.

I agree with the latter part of Bertie Armstrong’s statement: we must keep the lights on in rural communities along our coastlines. Furthermore, we have to try to look at Brexit as an opportunity. If we do that, there might be an opportunity to bring more of our own folk back into the industry, from villages where those roles were lost. That is the ethos under which we work.

I am nervous about what will be on your list, Mr Duncan. [Laughter.]

On the implications aspect, I did not mention two things. The first is bycatch. It is important that whatever arrangements we have effectively address bycatch of marine birds, marine mammals, basking sharks, turtles and so on as part of the spatial measures that we think can deliver more benefit; indeed, more can be done to meet environmental criteria in that regard. Secondly, functional unit management should be looked at, so we need to look at the grounds that fish and shellfish associate with.

To echo Bertie Armstrong and Alistair Sinclair, before we leave the EU, all four Administrations need to work together. The joint ministerial committee is the place where that could and should happen. The Administrations need to come up with governance and management arrangements that are compliant with the Aarhus convention, irrespective of the constitutional arrangements, and that deliver socially and environmentally just fishing within environmental limits.

I am here in a personal capacity; I do not represent any sector. One matter that I would stress and that we have not said a lot about is the importance of having in place a management authority or authorities on day 1 of Brexit that is or are well staffed and equipped with the necessary expertise. At the moment, it seems to be rather unclear what the relationship between a UK authority and the devolved Administrations will be. That must be sorted out before day 1.

I also agree with Calum Duncan’s points on sustainability.

On behalf of the committee, I thank everyone who has come this morning. It has been a productive meeting and the witnesses have left us with food for thought, so thank you for engaging with us. I am sure that, as part of the committee’s remit, we will come back to you to ask for further information.

I suspend the meeting briefly to allow the witnesses to leave and for the committee to reorganise itself for the next session.

11:57 Meeting suspended.  

12:02 On resuming—