Inquiry into The Future of the Scottish Fishing Industry March 2004 Financial support for the RSE Inquiry into The Future of the Scottish Fishing Industry Aberdeenshire Council Scottish Enterprise Grampian Aberdeen City Council Shell U.K. Exploration and Production Clydesdale Bank Shetland Islands Council J Sainsbury plc Western Isles Council Highlands and Islands Enterprise Our visits were also facilitated by local authorities and other bodies in the fishing areas where we held meetings. The Royal Society of Edinburgh (RSE) is Scotland’s National Academy. Born out of the intellectual ferment of the Scottish Enlightenment, the RSE was founded in 1783 by Royal Charter for the “advancement of learning and useful knowledge”. As a wholly independent, non-party-political body with charitable status, the RSE is a forum for informed debate on issues of national and international importance and draws upon the expertise of its multidisciplinary Fellowship of men and women of international standing, to provide independent, expert advice to key decision-making bodies, including Government and Parliament. The multidisciplinary membership of the RSE makes it distinct amongst learned Societies in Great Britain and its peer-elected Fellowship encompasses excellence in the Sciences, Arts, Humanities, the Professions, Industry and Commerce. The Royal Society of Edinburgh is committed to the future of Scotland’s social, economic and cultural well-being. RSE Inquiry into The Future of the Scottish Fishing Industry i Foreword The fishing industry is of much greater social, economic and cultural importance to Scotland than to the rest of the UK. Scotland has just under 8.6 percent of the UK population but lands at its ports over 60 percent of the total UK catch of fish. Many of these are ports with relatively remote communities scattered along an extensive coastline and which, for centuries, have looked to fishing as the main source of employment. Restrictions imposed under the Common Fisheries Policy (CFP) affect all European fishing fleets, but they have proved particularly severe for the demersal or whitefish sector of the Scottish fishing industry – with the potential to inflict lasting damage on the communities concerned. There have been a number of recent or ongoing inquiries into the UK fishing industry, but none has specifically focused on the particular problems for Scotland. The Royal Society of Edinburgh (RSE) believed there was an urgent need for such an inquiry. Given the differing views and disagreements amongst the various groups involved in the fishing crisis (including fishermen, fishery scientists, regional and government authorities and the European Commission) the RSE also believed such an inquiry should be independent. As Scotland’s National Academy, it has access to a range of high quality scientific and non-scientific expertise appropriate for such an independent inquiry. Further, while recent inquiries have been directed to analysing the causes of the crisis, few have attempted to outline the realistic options for developing fisheries which are genuinely sustainable and economically viable in the long term. As with previous inquiries, it would have been impossible to carry out our task without the generous financial support and help of those organisations listed on the opposite page. The RSE is most grateful to them. The response to the Committee’s request for evidence met with an equally generous response with written evidence forthcoming from a very wide range of bodies and individuals. This input was absolutely essential to the work of the Committee and we are again most grateful to all who made this contribution. The Committee worked extremely hard to accommodate the widespread views put to it. A particular debt of gratitude is owed for the efforts of Dr Marc Rands as the Secretary to the Committee. Sir David Smith Chairman of the Inquiry ii RSE Inquiry into The Future of the Scottish Fishing Industry Executive Summary Introduction 1. The Scottish fishing industry has been managed under the Common Fisheries Policy (CFP) of the European Union for the last thirty years. The policy has failed to achieve adequate conservation of certain key fish stocks, so that an important part of the industry and the livelihoods of many in Scotland’s fishing communities are now under threat. 2. The catching industry is divided into three principal sectors. The pelagic sector for fish living in the upper layers of the sea, such as herring and mackerel; the shellfish sector for prawns, shrimps, lobster, crabs and molluscs; and the demersal sector for fish living near the sea bottom, such as cod and haddock. The pelagic and shellfish sectors are currently profitable and stable. It is the demersal (or whitefish) sector that is in deep trouble; several of its stocks are below safe levels and in risk of collapse, with cod stocks, in particular, seriously depleted. Common Fisheries Policy (CFP) 3. The development of the CFP is described in the main report. This clarifies some common misunderstandings about the original negotiations in forming the CFP and highlights in particular the agreement to give member states exclusive coastal zones. The agreement on this was revised in 1983 to give protected 12 mile limits around the coasts of all member states and this gave Scotland one of the most extensive areas of inshore fishing in the European Union. However this agreement is subject to renewal every ten years. While we do not anticipate any change, because of the importance of its coastline to Scotland, we recommend Ministers endeavour to have the existing 12 mile limits made permanent instead of being subject to renewal every ten years. (para. 2.10). 4. Total Allowable Catches (TACs) and quotas were introduced in 1983, both to conserve fish stocks and as a basis for their allocation between nations. These were based on each country’s historical share of the total catch but this principle of ‘relative stability’ also aimed to give preference (‘The Hague Preferences’) to coastal communities dependent on fishing, such as those in Scotland. The North Sea is by far the most important fishing area for Scotland, and although there are other nations with a North Sea coastline to share this resource, the UK has much the largest share, with Scotland having the preponderant part. 5. A potential threat to coastal communities and the principle of ‘relative stability’ arises if the quotas on which they depend are sold to fishermen and/or fishing enterprises from other countries. This has not so far been a problem for Scotland and anyone purchasing quota from a Scottish skipper would have to acquire a UK licence, register their vessel in a UK port, base their operation there and be subject to UK rules on inspection, employment and social security regulations. Nevertheless worries about this remain in Scotland’s fishing communities and there have been cases of quota purchase in England by fishing interests from other member states. 6. European Union (EU) Structural Funds, in particular the Financial Instrument for Fisheries Guidance (FIFG), can assist the fishing industry by helping to fund training, de-commissioning and infrastructure (such as harbours and marketing facilities). But FIFG is also able to provide resettlement grants for fishermen leaving the industry and to fund early retirement; the European Regional Development Fund can be used to support new business ventures. Little has so far been used for these latter purposes and, given the current crisis, we recommend that Ministers review the arrangements for use of the Structural Funds in order to make maximum use of FIFG and the other Funds for the economic diversification of fisheries dependent areas. (para. 2.31). 7. Unlike almost all other activities, the conservation of marine biological resources is an ‘exclusive competence’ of the EU so that most important decisions about the CFP lie exclusively with the Council of Ministers. A major shortcoming of the CFP is that it is far too centralised, and too remote from those that are affected by it. With the imminent enlargement of the EU to 25 members, the problems of overcentralisation and the difficulty of reaching rapid and satisfactory decisions are likely to get worse. We therefore recommend that Ministers reconsider their position over the EU’s exclusive competence for conservation of marine biological resources, with a view to getting this deleted from the proposed EU constitution so that the principle of subsidiarity may apply to fisheries, as it does to other matters. (para. 2.44). RSE Inquiry into The Future of the Scottish Fishing Industry iii 8. Many Scottish fishermen have told us they would like the UK to withdraw from the CFP. We see no prospect of this without the UK trying to renegotiate the terms of its Treaty of Accession. It is unlikely that new terms for remaining in the EU could be negotiated or that they would allow withdrawal from a policy that all other member states accept. Withdrawal altogether from the EU would have major and damaging consequences for the Scottish economy (e.g., it would impact on the 60% of Scotland’s manufactured exports that go to the EU, it would deter inward investment. and the substantial aid that Scotland receives from the EU Structural Funds would no longer be available). Withdrawal would have to be followed by negotiations with the EU on behalf of the member states with whom Scotland has traditionally shared fisheries as well as with countries outside the EU such as Norway, Iceland and the Faroe Islands. Even for fishermen, it is doubtful this would lead to any better situation than currently exists under the CFP. Economic and Social Impact 9. Scotland has 8.6% of the UK population, but landed 62% by value of the total fish catch in 2002. Fishing is of much greater importance to Scotland than to the UK as a whole.