15 December 2008
Federation Urges Wholesale Review of Regulation Costs
The NFFO has written to Defra urging the Department to maintain the momentum established this summer during the oil price crisis, in reducing the industry’s regulatory costs. Securing the end of light dues and a commitment that the industry would not have to pay for electronic logbooks was important progress for the Federation but the weight of regulation on the industry in purely cost terms is immense and growing. It is vital that more is done to reduce the industry’s costs:
The text of the NFFO letter to Defra reads as follows:
Although the most extreme pressures caused by the spike in fuel costs earlier this year have abated at least for the present, we consider that it is essential to maintain momentum in reducing the fishing industry’s cost base wherever possible.
The full impact of the current recession has yet to be felt in fishing but the signs that these will be severe are quite evident. Most informed commentators believe that high fuel costs will remain a periodic feature of the economy for the foreseeable future. It is also worth recalling that the Net Benefits report made clear that the policy aim in fisheries should be a vibrant, fully compliant fishing industry, operating at a level of profitability that provides for fleet renewal without subsidy and allows the industry to withstand external shocks such as the fuel price spikes. Cost reduction is an important part of achieving equilibrium at that level of profitability.
Furthermore, the revised cod recovery plan agreed at the November Council of Ministers will impose very severe constraints on fishing mortality that will translate into draconian reductions in permitted days at sea and in the case of the Irish Sea and West of Scotland, TAC reductions. These in turn will have a major impact on many fleets’ ability to maintain economic viability over the duration of the plan.
Against this background and also the series of discussions between the NFFO and Defra held earlier in the year, we write to urge that Defra does not lose momentum in cutting the fishing industry’s costs where this lies within the gift of the Department and Government generally.
Light Dues
We, of course, welcome the Government’s commitment to remove the obligation on the fishing industry to pay light dues. This discriminatory tax, paid only by British fishermen, has been a running sore since the 1980s and its removal at this Federation’s request rectifies an historic injustice. Hopefully, our members in Northern Ireland will shortly enjoy the same relief as we have requested.Electronic Logbooks.
Likewise, Defra’s accession to our request that the cost of installing electronic logbooks (whose benefits lie primarily with fisheries managers, rather than with the industry), is met by Government and not by individual fishing vessels is a welcome and fair outcome.
However, in addition to these two commitments we discussed a range of other supportive measures which the Government had at its disposal but so far has not actioned.
Vessel Monitoring Systems
The annual cost of operating a satellite monitoring system is considerable and yet the benefits (including substantial cost reductions in enforcement) lies exclusively with Government. Here is a further opportunity for Defra to reduce industry costs in a way that other devolved administrations have already adopted.Duty on Fuel
Although the fishing industry is largely exempt from fuel duty, the arrangements for this exemption are cumbersome and require in many cases first payment and then reclaim of the duty. This places a very substantial cash flow pressure on the industry which it is in Government’s power to remove. We urge you to continue your discussions with other government departments to secure this outcome.Mandatory Safety Equipment
Fishing is an inherently dangerous occupation and it is right that in securing this valuable food source for the nation that statutory safety requirements are applied. We have worked hard through the medium of the Fishing Industry Safety Group to ensure that these measures are reasonable, practical and well thought through. They do however place very substantial costs on the fishing industry and in a spirit of partnership towards increasing the safety of fishing vessels it would be quite right for Government to help the industry meet at least some of these costs. These include the cost of lifeboat maintenance, meeting the costs of annual life-raft surveys, service costs for epirbs, pyrotechnics, radio survey costs and cyclical fishing vessel survey costs. Although these are not all within Defra’s sphere of responsibility, they do represent costs imposed by Government on the fishing industry and that Government could remove or reduce if it was minded. We would welcome a broad cross-government initiative to support the fishing industry by removing or reducing these costsRules Review
Any person with a reasonable understanding of the fishing industry appreciates that it is massively over-regulated through a body of rules that is not always coherent and often ineffective in securing its objectives. The amount of regulation and the regulatory costs associated with this body of EU and national legislation increases both incrementally and annually. There are in fact, many instances in which the rules serve little purpose but to increase the industry’s costs. Catch composition estimates at sea, and days at sea restrictions are two sets of rules that seem to us to fall into this category but there are many others.
At the very least the Government should not commit to any additional rules that add to this cost burden unless an overwhelming case can be made for them or an equivalent reduction in regulatory costs elsewhere in the system can be made.
We also consider that a root and branch review of the cost burden arising from existing fisheries legislation should also be undertaken. The alternative is to consent to an incremental creep in regulatory costs that if not checked will suffocate the industry.
European Fisheries Fund
The main instrument for the provision of financial support for the fishing industry is of course the EFF. We appreciate that accommodating the EC rescue and restructure package within the UK Operational Programme late in the day complicated implementation. In discussions with Defra and MFA officials we came to the conclusion that although there remains a strong case for addressing fleet overcapacity in some sections of the fleet, in requiring each Fleet Adaptation Scheme to include a 30% reduction in capacity, the Commission set the bar too high. Without additional budget it is clear that the new Regulation will not deliver its objectives. We therefore take the view that EFF funding would be most equitably and effectively distributed if directed at ways of reducing fuel dependency outside fleet adaptation schemes.
To this end it would be useful to receive clearer and more specific guidance on the eligibility criteria in relation to projects, such as the use of heavy fuel. We will copy this letter to the MFA so that they can consider this point.
I hope that the above provides a timely reminder that the Government’s proactive approach to reducing the fishing industry’s costs should not be restricted to moments of extreme crisis but should be part of an ongoing and integrated approach as a quid pro quo for the heavy regulatory burden that appears to be an inevitable facet of the current fisheries management regime.