Rural Development Committee, 25 Mar 2003

Meeting date: Tuesday, March 25, 2003

Official Report 220KB pdf

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Subordinate Legislation

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Rural Stewardship Scheme (Scotland) Amendment Regulations 2003 <br />(SSI 2003/177)<br />Common Agricultural Policy (Wine) (Scotland) Amendment Regulations 2003 (SSI 2003/164)

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Products of Animal Origin (Third Country Imports) (Scotland) Amendment Regulations 2003 (SSI 2003/165)<br />TSE (Scotland) Amendment Regulations 2003 (SSI 2003/198)

Agenda item 1 is on four items of subordinate legislation, which are subject to the negative procedure.

Members will recall that we heard last week from John Hood of the Scottish Executive environment and rural affairs department on the rural stewardship scheme. We were unable to complete our formal consideration of the Rural Stewardship Scheme (Scotland) Amendment Regulations 2003 (SSI 2003/177), however, because the Subordinate Legislation Committee had not reported on the regulations at that stage. The Subordinate Legislation Committee has since made a number of comments on the scheme, and an extract of its 25th report this year has been circulated. The report contains many recommendations, but I think that members will agree that they are largely of a technical and drafting nature.

The Subordinate Legislation Committee has also commented on the Common Agricultural Policy (Wine) (Scotland) Amendment Regulations 2003 (SSI 2003/164), but has made no comments on the TSE (Scotland) Amendment Regulations 2003 (SSI 2003/198), which deal with transmissible spongiform encephalopathies.

I have a comment on the rural stewardship scheme regulations and on the relevant part of the Subordinate Legislation Committee's report, which makes a significant number of points. I wonder whether the minister could comment, although I am aware that he is not here yet—if I can put it that way.

Indeed: the minister is not here to discuss the regulations. Therefore, he would be perfectly free not to answer any questions on it.

It is disappointing that the Subordinate Legislation Committee had to make so many points on the regulations. We should note that the Executive does not appear to have met the standards that we seek.

Is it mere coincidence that the common agricultural policy wine regulations come into force on 1 April?

We assume that the answer to that question is yes.

I suggest, if committee members agree, that we note the considerations brought to our attention by the Subordinate Legislation Committee and draw them to the attention of the Minister for Environment and Rural Development in a letter. On that basis, I suggest that we have no further comment to make on the four instruments.

Members indicated agreement.

It has been agreed that we make no recommendation on the instruments to the Parliament.

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Prohibition of Fishing with Multiple Trawls (No 2) (Scotland) Amendment Order 2003 (SSI 2003/166)

We move to item 2 on the agenda, which the minister has come to talk to us about. The Prohibition of Fishing with Multiple Trawls (No 2) (Scotland) Amendment Order 2003 (SSI 2003/166) is subject to the negative procedure. I am pleased to welcome Ross Finnie MSP, the Minister for Environment and Rural Development, and his officials, who are attending today to answer members' questions on yet another issue affecting the Scottish fishing industry.

Members will be aware that the Executive invited comments from interested parties on proposed changes to legislation affecting twin-rig nephrops trawling in the Scottish zone. Copies of the consultation letter and a number of responses have been circulated to members. We have also received further submissions from many fishing organisations. I apologise that some were received late in the day, but they have all been circulated to members. I hope that you have copies—spares are available.

Members will also note that some of the submissions concern the related instrument on the Sea Fish (Specified Sea Areas) (Regulation of Nets and Older Fishing Gear) (Scotland) Amendment Order 2003 (SSI 2003/167), but I point out that that order is not subject to parliamentary procedure, therefore it is not before us for formal consideration.

Having said all that, I invite the minister to introduce his officials and make an opening statement on the statutory instrument.

I am joined this afternoon by Lachlan Stuart and Ian Ferguson, both of whom are from our fisheries division. Like you, convener, I am deeply sad that this is the last meeting this session of your committee. As I left London this morning on the first flight, perhaps the only thing that encouraged me out of my bed was the knowledge that I had the excitement of coming before you this afternoon. That was a great driver at 5 o'clock this morning.

I acknowledge the tremor in your voice and the tear in your eye.

And the moving sincerity. I note it also in your own comment, convener.

To serious business. I thank the committee for the opportunity to have this discussion and to deal—perhaps more through my officials—with some of the very technical matters that have arisen as a result of these measures which, as you said convener, concern twin-rigging for nephrops in two areas of the Scottish zone. The precise co-ordinates of the two areas are given in the order, but they are roughly the waters on the west coast north of the Clyde, and on the east coast south of Peterhead. The practical impact of the measures is to change regulation of the nephrops fishery in the Minches and the Firth of Forth.

As everyone is aware, before the orders to which the convener referred were introduced, fishermen operating a twin-rig trawl on those fishing grounds were required to use a minimum mesh size of 100mm. Now, they may proceed with a mesh size of 95mm. I stress at the outset that I had only one, simple objective and intention in framing the measures and that was to allow Scottish fishermen their full entitlement of days at sea. That was the driving force.

On the surface, the change is relatively simple. As I say, the orders allow fishermen to operate a twin-rig trawl with a minimum mesh size of 95mm, whereas previously it was 100mm. We had to change from 100mm, because annexe XVII of the total allowable catch and quota regulations restricted vessels fishing with nets of mesh size 100mm or more to only 15 days at sea per month. The design of annexe XVII is rooted in the desire to achieve fleet segmentation by mesh size and does not allow for consideration of supplementary legislation by member states. Therefore, the twin-rig nephrops vessels fishing in the Firth of Forth and in the Minches, the mesh size of which is determined by both Scottish and European regulations, were by the combination of those regulations effectively going to be restricted to 15 days at sea. It is quite clear that that was not intentional. The 15-day restriction was intended only to curtail the effort of the white-fish fleet, not the nephrops fleet. Anyone in Europe or elsewhere who tries to argue differently is not based on solid ground.

As I have mentioned on other occasions, the drafting of annexe XVII of the regulations is clearly flawed in certain areas. This is one of those areas. At the end of December, we were faced with a situation in which a significant segment of the Scottish fleet would be unnecessarily restricted, even beyond the European Commission's intended requirements. I had the ability to loosen such a restriction.

In acting, I faced a real difficulty. We cannot secure consensus with the fishing industry on twin-rig trawling for nephrops. When the issue was raised, old differences of opinion were reopened and—as the convener will know from other representations—feelings ran quite high. The absence of any formal consultation response from either the Shetland fishermen or the Scottish Fishermen's Federation is quite telling. Opinion in the industry is more fractured than divided on how best to proceed. It does not surprise me that the many representations that the committee has received suggest that not everyone agrees with the course of action that we have chosen. As I said, we had huge difficulty in reaching a consensus on this matter. However, I assure the committee that we had no other option but to secure some form of change if we were to meet our objectives.

As a result, I have sought to minimise the burden on fishermen and have ordered a solution that allows them to keep the cod-ends that they currently use. At first sight, that might seem odd. After all, how can a mesh size of 100mm become 95mm? Of course, it cannot; however, we can take advantage of different methods for measuring mesh sizes. The most accurate way of measuring a net—the one that puts measurement beyond dispute—is recording the smallest mesh size. Such a method can reduce mesh size by about 5mm, which means that a 104mm mesh would be measured as 99mm.

We have tried to be as flexible as we can and introduce a measure that works, although we recognise that it does not have universal support. We hope that it will be only an interim measure; it is not the long-term way forward for nephrops fishing. That said, it secures the flexibility on the days-at-sea issue to which the whole of the nephrops fishery is entitled.

The difficulty that we are in now is that, if the orders are revoked, that additional choice will be removed and a substantial number of nephrops fishermen will be restricted to 15 days at sea. That will benefit not Scottish fishermen, but others, who will still have 25 days. We have been trying to create a level playing field for Scottish fishermen. I recognise the difficulties and the difference of views across the industry, as well as the technical difficulties that some see in this measure. However, we have tried to keep matters as simple as possible. Our sole objective is to ensure that nephrops fishermen get the 25 days that they were clearly intended to have as a result of annexe XVII, but which the imperfect wording of the annexe threatens to deny them.

I agree with what the minister says and thank him for finding a solution to the practical problem that was faced by the fishing industry. The order will allow prawn trawlers with twin rigs to go on fishing and will also stop the landing of a lot of small prawn tails, which would be liable to bring down the price of prawns. I thank the minister for finding this solution.

I had lunch with a major prawn fisherman about eight days ago. His main concern was the price of prawns, which he tells me is at a 20-year low.

What effect will the change in regulations have on the quantity of prawn landings, in terms of the type of landings and the volume of landings? I will accept an answer in broad terms, since the minister will be unable to tell me the figures to the last prawn.

I certainly cannot tell you to the last prawn. I think that I will defer to an expert.

The change should have no direct effect on landings. It will have an effect on white-fish landings as the move to a 95mm mesh will give an additional level of selectivity. There will be no effect on prawns because, in practice, fishermen should be able to use exactly the same net that they were using before.

If it will have no effect on landings, why need we make the change?

Because we are being measured by regulation, not landings.

I accept that. I am asking a genuine, open question. If we are being restricted to 15 days at sea and the change in regulation is designed to bring us more or less back to where we were previously, by increasing that to 25 days at sea, does that not increase the effort and therefore increase the landings? In other words, if the changes do not deliver the benefit of allowing the prawn fishermen to exercise extra effort, there is no point in having them. I might not understand the situation, of course.

I accept that this is entirely a technical exercise. At the moment, if we do not change our domestic regulation, the prawn fishermen will technically be in breach. As I said earlier, no one has argued that the intention behind annexe XVII was to catch—that is a terrible pun—or to impose a limitation on the white-fish fishery. It was never intended to restrict the days, apart from the 25-day restriction, that were allowed for the nephrops fishery. That is now broadly agreed by those who are reviewing the regulation in Europe. However, our problem was that the technical definitions in our domestic regulation meant that, technically, the fishermen were in breach. By being technically in breach and by being brought within the mischief of annexe XVII, they would be restricted to 15 days at sea. The sole purpose of rewriting the domestic regulation is to take the nephrops fishermen out of annexe XVII's restrictive definition and allow them to have 25 days at sea.

So the question is purely to do with covering what might have happened in the first 10 days of March, since the operating date is 11 March, and the practical effect is not to make any change to the expected prawn landings, even though an examination of the regulations would lead you to believe otherwise. Is that correct?

We hope that that will be the effect. I know that there is a lot of disputation in the industry, but it seemed to us to be the simplest way of rectifying a technical breach.

We all welcome the fact that this loophole is being addressed by the minister, but this matter sums up the dog's dinner that is the days-at-sea legislation. The fact that we have to reduce the mesh size in order to get more days at sea demonstrates why the regulations must be replaced as soon as possible.

The minister says that the change that we are discussing is an interim change and industry representatives have told me that Europe might introduce an amendment to the days-at-sea regulations that would mean that the change that we are discussing would need to be in place for only a short while, after which it could be withdrawn and we could return to square 1. Is that your understanding of the case, minister?

I am not sure if that is the case, but I hope that it is. The anomaly appeared at an early stage and I will not go back over it, but the fact is that we had to deal with the matter technically within our domestic regulation.

My nervousness is due to the fact that I have not seen a piece of paper stating precisely what changes are to be made. We have had many discussions on many areas and I think that many of the changes that have been suggested would be helpful, but I have seen nothing in black and white. Until I have, I am reluctant to say that we will be able to reverse the change at some point.

However, I hope that a European official, reading the committee's proceedings and seeing that we have been forced to produce a technical change to reduce mesh sizes from 100mm to 95mm will sit back and think, "How stupid is this!" and see that it needs to be looked at carefully so that we can find a way out of it. This is not a progressive way to manage a fishery. I agree with you, Richard, but I cannot give you any firm undertaking because we have not seen the extent and nature of the changes in black and white.

The minister says that he has not seen the bit of paper from the Commission. Does he include in that the other changes that were discussed in previous meetings?

The Commission has extensively discussed matters that we think are entirely sensible, and we are encouraged by some of the movements. However, I am becoming slightly sceptical about the Commission—I think that you might share that scepticism. I will be more comfortable with commenting on the Commission's firm and final proposal of how it will amend the legislation, instead of the vague proposals on which my officials exchange views and comment.

Some fishing organisations have said that you would not have had to make that change at all if the 75 boats had qualified for transitional aid. However, you did not want to allow them to qualify for that aid, therefore it was easier to change the legislation to give them more time back at sea. Will the minister clarify why he would not include those boats in transitional aid? Will he also speak in broader terms about transitional aid, given that fishermen have waited for many months for it to appear? The rest of the white-fish fishery is also very concerned, not just the prawn boats.

I also understand that there is confusion about state aid rules. Will we have transitional aid, and if so, when? There are many skippers who are unable to be with their crews and who are facing bankruptcy; they are extremely concerned.

We all know that, which is why we acted. I do not control state aid, and the transitional aid is subject to state aid regulations—I made that absolutely clear. Any form of assistance of that nature, which is at a greater level than would be permitted under the standard financial instrument for fisheries guidance—FIFG—regulation, is within the ambit of state aid. We have made it clear to the Commission that we take a dim view of its regarding this as a cause célèbre in state aid terms. After all, the prime thrust of state aid is to look at cases in which someone is getting an unfair competitive advantage.

Given that fishing is entirely regulated by the quota and that no one else has access to the quota, it is extraordinarily difficult to argue that the proposal meets the test of assisting external competition. However, the other part of the state aid regulation states that the Commission must be satisfied that the level and rate of compensation cannot be construed as overcompensation. Again, people attending the committee would find that hard to imagine. Nevertheless, that is the hoop that the Commission asks us to go through. My officials did not sit over here waiting for this to happen; we went out there and made it clear that we expect the Commission to expedite matters. However, we have not had a formal response.

Those who work with state aid deal with initial applications themselves, and the final approval is done through the collegiate of the various Commission departments. We are pressing the Commission hard to get ahead, and I regard it as extremely unhelpful, given that the Commissioner himself was saying, "What's your problem? You can assist your fishermen". We have proposed a perfectly plausible, sensible and rational scheme, and we are subject to state aid—as we knew we would be—and we still do not have approval for that scheme.

Does the minister have any indication of a possible time scale? The skippers are tearing their hair out.

I understand that; I get letters from skippers. We have been pressing the Commission for a time scale, but it is extremely reluctant to furnish us with one.

Is the minister confident that the transitional aid will come through?

We meet the criteria, and I would not have proposed the scheme if I did not think that we did. We can demonstrably show that there is no question of overcompensation. The other criteria do not apply. We are not giving people a competitive advantage; we are dealing with a regulated market. I cannot see how that applies. I find that extremely frustrating, but never mind my frustration—the fishermen and fishing communities who are now entitled to that aid are even more frustrated. It is a very unsatisfactory position.

Richard Lochhead can ask one more question, then I will bring in Jamie McGrigor.

Thank you for giving me a bit more time, convener. This is a very serious issue.

I understand that the transitional aid is only until the end of August. We are already two months into the days-at-sea scheme and it is more than three months since the deal was signed in December. A very serious financial situation faces crew and skippers. Some crew members I know cannot afford to pay their mortgages because of this. Could the minister outline what will happen about paying the cash? How soon can he pay the cash when he gets the green light? Will it be retrospective from that point back to 1 February? Will he consider extending the transitional aid from the end of August onwards if the days-at-sea regulations stay in place? Otherwise, the fleet will go to the wall.

There are two points. We have indicated, in announcing the rate at which the compensation would be paid, that for practical purposes it would effectively start from 1 March and would therefore be paid back to that date. We spoke to the industry. For administrative reasons, we did not want to push it any further. It will be retrospectively paid back to that date and it will run for six months from that date. When we get the green light, we will have used the intervening period to try to ensure that we have established both the form of application and the nature of the application so that we are in a position to process the applications very quickly. I do not expect there to be much delay between the granting of state aid approval and the payment of that aid.

Beyond that it is a matter—unless the dates in Richard Lochhead's calendar are different from those in mine—that another Administration might have to address.

It certainly will.

I will add a supplementary to Richard Lochhead's question. It is obviously a matter of concern if people are now in financial difficulty. I remember that during the foot-and-mouth outbreak Ross Finnie met banks and financial institutions to ask them to deal sensitively with people who were in difficulties. Is that a possible course of action until we get approval from the European Union for the package?

I have already done that. I have had meetings with representatives from all the joint stock banks in Scotland to discuss with them both the nature of the assistance that the Executive is providing and the difficulties over timing. I have appealed to their best judgment. In our opinion, the scheme meets the criteria and will be paid. I have allowed them sufficient information about both the decommissioning scheme and the transitional aid scheme to enable them to form a judgment and, I hope, take a sensible view in relation to their clients.

That is excellent.

I welcome what the minister said about this being a short-term solution. We have received an awful lot of comments that indicate that people have concerns about the order. The concerns come back to matters such as displacement. Stewart Stevenson talked about low prices for nephrops and the like. What steps can you take to stop displacement? Obviously, if the prawn fishery is affected it will devastate many more communities that currently have problems with the white-fish industry.

A limited number of instruments are available to us. One of the instruments is that those who get a preponderance of their income from the white-fish fishery, and apply for transitional aid, will render themselves liable to be disqualified from being paid in that sector if they are found to have switched a substantial part of their effort into the nephrops fishery.

I am sorry, but I cannot remember the other measure that we were trying to promote to discourage people from going into the nephrops fishery.

How will that be monitored? I have heard anecdotal reports that part of the white-fish fleet is appearing on the west coast and in west coast harbours; there is a great deal of concern in the area about that. People on the west coast are not unsympathetic to the white-fish fleet, but they are concerned about the west coast fishery and the knock-on effect of the appearance of the white-fish fleet.

The situation is extraordinarily difficult for us. If I am to be absolutely honest, I will say that our resources are stretched by the monitoring of the basic regulation. It is unfortunate that people are not even reading the economic signals that should be guiding them. As Stewart Stevenson or Richard Lochhead indicated, the white-fish fishermen are simply driving the price down by increasing the supply. I appreciate that it is difficult to appeal to individual fishermen, but the producer organisations and the rest have to indicate clearly and precisely what will be the impact of increasing the supply. People have to understand that everyone becomes the all-time loser when supply is increased and prices are driven down.

Why is the transition aid not being dated as of 1 February?

We have extended the aid for a further month. A technical problem arose in that the timing of the regulations could have resulted in a number of fishermen discounting themselves by operating in a way that excluded them, which would have been unfair.

We discussed the matter with the industry. Some industry members were trying to advocate that I should go forward on the date, but the clear view was that we should have a sensible regime in which everyone knew roughly what the criteria for qualification were, how they would be assessed and how to get the information.

It was a difficult call, but we felt that we could get most of the people who were genuinely eligible into the scheme on 1 March. My feeling, which was shared by others, was that the scheme should date back to February. However, we were not getting a clear signal that we could get everybody who was operating properly and not discounting themselves. The situation is quite difficult to police.

Are you implying that there was a difference of opinion on the matter between the representatives of different organisations?

Yes, that is probably the case in respect of the timing and the nature of the regulation. As members know, this is not a simple matter.

This is the minister's last appearance before the committee on the subject of fishing before the dissolution of the Parliament and the election. Given that the Council of Ministers meets in two weeks or so and that that meeting will be the crunch meeting in respect of replacing the days-at-sea legislation, will you tell us whether you are confident that the days-at-sea legislation will be replaced by a more sensible and manageable regime that will not disadvantage the Scottish fleet? If you think that that will not happen, how will the legislation be replaced in a way that will not disadvantage the fleet and what will you support?

When did you think that the matter would arise?

You are to attend the fisheries council meeting in April.

Although quite a lot of work has been done in that regard, I regret to say that I am not confident that it will be complete in April. I have seen some movement in respect of an acceptance and acknowledgement of the kind of argument that we have put forward about the need for a wider range of fishing management instruments. There is also a wider recognition that a days-at-sea scheme has to be operated on the basis of kilowatt days.

Although we have seen some movement, in common with the amendment to the regulation, we have not seen a piece of paper. That may emerge toward the end of April, but I do not think that it will be complete in time for the April fisheries council meeting. I have to say that the April meeting, which is scheduled for 7 and 8 April, is taking place extraordinarily early. It might be possible to issue something by the end of April or early in May.

We are only two weeks away from the meeting and we would normally start to see drafts of the papers that will be tabled at the next meeting. When the end of April was mentioned, I think that officials overlooked the fact that the April fisheries council meeting is to be held at the beginning and not the end of the month. It is only two weeks since the last council meeting.

If the measures continue beyond July, as may be the case, does the minister agree that it might be more sensible to have a transitional aid scheme and days-at-sea scheme covering all the boats in the fleet? I am thinking of the damage that might be caused to prawn stocks as a result of a diversion from white fish to prawns.

I am not going to anticipate what that damage is. You speak of an immediate reaction, which is understandable from an individual fisherman's point of view. However, we must hope that that situation does not continue. As I said in response to either Stewart Stevenson or Richard Lochhead, everyone must understand that, if all the fishermen do is radically increase the supply and drive down the price, they are doing nobody any good at all.

It is interesting that questions have been asked by other member states. One or two people have reflected on the outcome of the meeting in December. The meeting that was convened by fishermen from all areas was another helpful development that moved us in a different direction because we had input from fishermen. I regard all that as helpful. If proposals are published by the end of April or the beginning of May, it might be possible to have some serious discussion before the Commission disappears in August.

That brings us to the conclusion of that wide-ranging discussion. I thank the minister for answering the questions so well. I also thank his officials.

We have to agree our report to the Parliament on the order. The Subordinate Legislation Committee has made a number of comments on the drafting in its report, an extract of which has been circulated to members. Are members content with the instrument and happy to make no recommendation to Parliament?

Members indicated agreement.

I thank the two officials for coming—Mr Stuart and Mr Ferguson. Nice name, sorry about the spelling of it, Mr Ferguson, but that cannot be helped.