Probably the most vehement anti EU communities were those which are of course involved in fishing. Those hardy folk who brave the often forbidding seas around our coast became a cause celebre in the run up to the Brexit vote, and examples of how ridiculous and wasteful the EU was were often drawn from the Small Medium Sized Enterprise (SME) end of the industry.
The Nation’s Favourite Friday Night Dish – A Corner Stone of the Economy at Stake?
Cod and chips, in paper, with salt and vinegar and a pickle on a friday Night to save mum cooking at the end of the week. It is really a part of the British soul if you like beccause of the love of fish and chips, the summer holidays and retirals to the picturesque fishing villages dotted around the coast and the respect support which our fishermen have for their often dangerous and always regulated seafaring profession. We have a love of our national dish and a deep affection for those historic rural harbours. Fishing makes for a good news story and nice trip for the camera crew, unlike say, deriviatives in the city of London which are actually a net ‘export’ ware on a global market.
However the national salt water catch is a tiny proportion of the economy, less than one percent. There are only 11,000-14,000 employees directly involved in coastal fishing in the UK, over half of which live in Remain Scotland. Indeed the top three landing ports by tonnage are all in Scotland. Here a proportion of fishermen themselves, mainly along the Aberdeen-Banff coast, actually praise the EU for the decommissioning scheme in reducing excess capacity which was there, and their combined approach to managing stocks in the north sea.
Will in fact our fisheries show the true benefits of brexit, with soveriegn power over our ‘own’ resources, or will the economic realities of a more isolationist Britain with a partisan EU fishing lobby and pro EU centre of gravity looking to political levers and ways of making life outside the EU seem less attractive for members with fishing fleets? Will pounds sterling and euros determine more of what actually happens to the health of the UK industry ? How is it to be a neighbour to the EU today ?
Access to Waters versus Access to Markets
The biggest economic connundrum is simple- we have an equation in the balance between
1) exclusive fishing rights and a protected domestic market
2) Market Access to the EU (both ways)
Brexit to some extent places the UK in the position it found itself in 1939, in terms of suddenly having much of its supply under disruption and exclusion, as well as their exports. The fact is that the UK is not self sufficient for fish, with 70/80% imported and the majority of that is caught outside UK waters. How much is caught currently by other EU boats in UK waters and processed and sent back to the UK? How much is from outside the EU in the first place, but lost by second country seller obfusion?
The UK exports only one and a half billion pounds in fish to the EU, or 500,000 tonnes while the direct subsidies for compliance and efficiencies from the EU for those ‘touchstone’ small fisherman Farage sailed up the Thames with, are 10% of that figure. Plus many of those coastal communities have recieved infrastructure grants for harbours and roads etc from the EU even during years of ‘austerity’ in the last decade.
It is very likely that ‘no access to our waters’ will mean ‘no access to our market’ because of this huge imbalance.
The Wrong Type of Fish
Small fishermen are only a small part of the industry, but highly visible in those lovely little coves and hewn stone harbours. Much of their catch in the last 25 years has moved over to shell fish, taken by value, and special catches like monk fish which command a far higher price at market than the palageants like cod, whiting, haddock and herring. High value fish, like those monk fish, tuna, salmon, turbot, sole and halibut, are also a co-catch on some shallower water palgeant trawls and a welcome source of extra income for medium sized trawlers.
The trouble with losing the EU as a market for all fish, despite it being quite small in terms of the imbalance of trade, is that for those ‘farage touchstone’ fishermen the demand in France, Spain, Italy and Portugal for premium fresh fish and shellfish will disappear. In the UK it is currently only wealthier households and restuarants who can afford much of this catch, and also the UK average coook is not interested in somethign which isnt out the freezer, ready battered and takes 20-40 unattended minutes in the oven to make. Worse the old fish monger is by in large a thing of the past, and the supply chains of most super markets place pressure on the actual freshness of the fish / its appearance, quality and final use by date. These small fishermen quite likely face then falling prices and unpredictable demand for their premium catches.
Ah but the EU need these and they love them so they will make allowances for things premium? Well if you take all the little trade spats with the USA in the 1990s it was premium items like cashmere and salmon which were targetted as highly visible pawns on the chess board of negotiations. EU fishermen will delight in having higher prices for those too, if they become scarcer due to brexit.
White fish for the mass market, is by in large caught and processed by large companies in ship sized factory trawlers. The majority of quotas by tonnage in the UK are owned by just three major players, not the plethora of flag waving sub 60 foot SME fishers. . It can be the case that this will be more of these big trawlers based in the UK, and that the UK places a new demand by protectionist policy tit-for-tatt with the EU. However this is all big catch, lower value per tonne which is only profitable in scale. With UK wages and availability of labour to such ‘getting your hands dirty’ professions on the decline with young UK nationals of the YouTube generation, it may be that it becomes less economic rather than more in a partially isolated market. We have then an issue with the wrong type of fish at the wrong cost-price pay off for the UK. Or the great fish and chips will become a much more british affair, with imports falling.
Who Guts and Fillets the Great British Cod?
By 2010, it was estimated that more than one in five workers in the fish processing industry were non UK nationals, with the majority coming from the EU, and of those poland and the baltic states being most represented. Another fifth of the workforce are due for retiral or naturally seek other work as they age and cannot tackle the physical work into their late fifties and sixties.
Thus the industry complains of a skills gap, which probably is forcing wages upwards to levels where managers do not feel the margin is sustainable. Fish processeing is a labour intensive, physical work mostly done standing in cooled plant and with of course a lot of fish odour and little kudos attached to the job. The main areas domestic processors are to be found in terms of plants with significant volume and employment are Aberdeenshire, Hull and Grimsby and Shetland and the Hebrides. One employer on Lewis reported requiring 40% of its workforce from EU countries due to local difficulties in recruiting, and even provided portacabin accomodation to secure their labour.
One commentator from the industry has voiced concern that the industry in Grimsby will simply pack up and move to those EU origin countries where the workers come from. Catches from the UK once Brexited, could end up being processed in Poland and the Baltic countries which are only a two day sail from the mid north sea. This could result in a similar situation as is currently seen in high-wage Norway, where most white fish which is caught for the ordinary dinner table frozen fish market, gets processed in lower cost countries or offshore factory ships under foreign flags, and shipped back in to the domestic market. This is already the case for a proportion of even fresh Scottish and Norsk salmon which is shipped to China for filleting ( which seems incredible and probably is uneconmomic and only possible due to subsidies and currency manipulation from the Keynsian-orientated government there).
Figures showing the actual distribution of labour geographically and by employer were not found at the time of writing, and indeed there may be no accurate total figures collected. It could be that Hull, Grimsby and Fraserburgh are more reliant on foreign labour than uncovered, and that forward into 2017-19 there is an even higher number of non UK born workers to be uncovered, when employers are forced to declare them and seek work permits for them.
The trouble for UK fish processors is the cost of living in the UK, and some small coastal towns and villages in England are particularly expensive for accomodation. What was 15 years ago a relatively high wage of around £12.50 an hour (app. £25,000 p.a.) , can now be demanded by semi skilled manual workers and data literate office workers as more or less a minimum. EU migrants are often prepared to live in cramped conditions in poor qaulity (and even illegal) rented property and have a frugal lifestyle when resident in the UK. Internal migration and shifting of labour from the unemployment black spots is the great hope of Brexi, yet may render many jobs obsolete in the onshore side of the fishing industry. So the UK may end up not only with the wrong type of fish on their hands, but the wrong type of worker.
Fish Have No Boundaries, Fisherman Will Have New Hard Borders
Iceland and to some extent Norway, have a luxury of having large fish stocks which are ‘born and caught’ in their own waters, in particular north atlantic strains of Cod, and the sought after migratory ‘Skrei’ strain for example. The UK really does not have such a palegeant nursery relationship, and as we know from the 1970s cod wars, is actaully reliant on migratory or roaming (palageant) stocks from Icelandic and other waters.
Some fish do ‘know’ boundaries, even within the same species. The north sea has seen more than just a decimation in its alleged ‘home grown’ cod and haddock where it is argued that the nursery ecology has been largely destroyed by variuos factors, mostly over fishing in years before and after EEC access. The same is true of coastal varieties and specialities which fisherman either complain the EU boats suck the seas dry for, or like monk fish and lemon sole, they have to throw back into the sea because their EU quota is met. Local stocks are of course both managed on the one side, and on the other they are subject to other environmental cycles and pressures.
Also to some extent quotas help maintain reasonable gross margins for fishermen such that their catches are valued in the supply chain and they vocer more than their costs of fishing. Those costs are not just fixed in their boats and nets, but quite a high proportion are in fuel, labour and especially repairs. Fuel goes up with tonnage and if they need to catch more to cover costs it can become a viscious cycle for small and medium sized boats, where also they expose themselves to riskier weather conditions. There is a balance between market price, availability of fish, conserving breeding stocks and an economically sustainable industry which is often not actually struck no matter the market or waters if we consider the history of fishing and historical failures in catches such as herring.
However our national catch can be managed nationally! Local fish for local people. This will put the fishermen against the scientists, although in Scotland there is a well accepted peace between them now as many fishermen have taken education or training in fish ecology and relate it to their own experience and often family historical legacy from bad cathces in years before the EEC access. We will have fishermen vs science again arond the south coast of England and NE, where these coastal, shallow water varieties will have ebbs and flows of populations and market prices over the years just as the tidal waters they live in switches twice daily over their heads. There may well be less subsidy forthcoming and a more free market approach to allowing the industry to ‘right size’ its mechanisms.
Another fact for the deeper water trawlers from family businesses to corporate catchers is that suddenly over night, they will no longer be able to chase shoals over the borders. They will have to up nets and turn around or face the undoubted wrath of the Irish, French, Dutch, Danish and possible Spanish fisheries protectiion ships. Things as with the Cod War, could get ugly. It could mean many domestic trawlers will have to diverisify their target catches, say mackrell in addition to large white fish, and thus need new nets and associated gear to be able to switch catch as it is available in soveriegn waters.
Where will these borders lie? We have an established border effectively mostly UK administered to Norway and Iceland, which is 200 miles for the UK. However we are not going to be extending very much right to a 200 mile border, and where we do it will be in the poorer fishing of the central and southern north sea. Further south we come up against a midway point or international waters demands laid out by the EU. So our plucky essex, kent and cornish fisher could find they have a lot less water to fish in.
As we see in Norway’s border with Russian waters, their massive factory fleets concentrate on sailing along the migratory path of cod and haddock up and down the border line, catching them also on their return and expanding a virtual thousand kilometer net towards the arctic ice front which was previoulsy not subject to quotas. International cooperation has addressed the issue and cross border cheekiness has been reduced, but the russian fleet in the barings sea still dwarves the Northern Norwegian fleet.
Norway Shows That Borders Outside the EU are Irrelevant
Brexiters often liked to compare the UK’s predicament to the luxury of soveriegnty that Norway enjoys, and the prominence of the deep water fishery when oil is removed from the economic big picture. It is very much not like with like though, because Norway has a straight line coast line which is the same as from John o Groats to Genoa or Bilbao. This massive soveriegn sea has both important nurseries, some palageant stocks being largely resident within it, and also large migratory stocks of white fish, mackerell and even now some Tuna. There is a suggestion that fish have actually evolved behaviour to avoid the EU waters to thrive better in the traditionally tougher Easter North Sea, Norwegian Sea, Arctic Sea and Bearings Sea north of that. So Norway is just so much bigger and can enjoy economies of scale while quotas keep an easy check on even the hint of catch availability reducing.
No matter the size thouugh, their waters are soveriegn and their fisherman free to compete. Well yes, their fisherman have to pay for the pleasure of having a q1uota. And very often these days, larger quotas are just bought up by locally listed Ltd or PLC “AS” firms which are actually in the hands of large portugeuse fishing conglomerates. On the other hand, shore based jobs are being willfully eroded by a goverment who want to see ‘effectivisation’ in the industry, and the larger owners who want to make more profit on their catches by using foriegn landing and processing to reduce costs. This is to the expense of other, smaller and independent owners who end up with a landing site and processor in far flung Troms, Sogne or Finnmark which is no longer economic to run because the big catches are going to Russian factory ship transfers from Norwegian trawlers, or even to mainland China for processing.
One very positive policy that Norway by in large has, is that in striking contrast to the EU, it is illegal to throw catches away in order to come under quota upon landing. There are various quota bargaining tools which help this, but the main one is simply buying forward your next period of quota. The boats still remain idle when their qouta is finally made. Then the government steps in with special allowances for employees, ‘permittering’ which would be politically anathematic to the UK right right centre of gravity. This keeps skilled hands on up to 40% of their basic income they had when out trawling for the period of quota stoppage, or in prelonged bad weather or stock collapses. With the NHS to ‘save’ and tax cuts ‘needed to stimulate the economy’, this would be an unacceptable appraoch to putting folk on the social back in the UK. The pragmatic Norwegians use ‘permittering’ to lay off skilled workers who then have the legal right to their job asap things turn up, very much the case in the oil business since the collapse in prices there too.
Reversing the throw back of catches may mean that fisherman face over supply at the market once again, thus having a lower margin while they are fishing, and more down time, making employment more seasonal, unprediuctable and less attractive for crews over time. Alternatively fish species they protested were plentiful and won bigger ‘as caught’ quota extensions on ( or where the science was wrong in outset ) collapse under over fishing on a local or whole coast basis. Norway realistically only faces real pressure on Stocks along its border from greedy Russia, while the UK will face all those competing nations, who may well create a virtual vaccuum clean of the spring palegeants as they funnel up the approaches to the english and North Channels.Fishing of those shared catches could become more intensive as foreign fisheries concentrate on along the natural funnels at the border lines, perhaps catching a higher proportion of stocks (with perhaps the UKs quota now being dished out to all without regard to stocks)
Economics in Uk Fisheries, will be Ahem, Interesting
The real economics of this will be interesting, but we have seen a Tory party willing to support industry by non market mechanisms so far. There is no doubt that politicians in the EU know fine well that fishing for the UK spirit is a cause celebre, and a major ball in the game of negotiations, where they can be seen aas being strong by denying the UK access to markets and waters, while improving the price of fish and income for those supply chains in the EU.
On balance from this essay it could be concluded that there are long term economic threats to the industry given a hard border, which could out weigh the percieved benefits of Brexit for fish. A tough stance will be a tough two way street. There will be many uncertainties, but the first blow will be when the EU failry inevitably block the import of UK luxury fish in that trifling 1.5 billion. When the UK faces shortages of some stocks, and seeks to cooperate on quotas and overall extraction, the EU may do nothing to stop their catching them in their EU waters en route to the UK and north sea, thus depleting Uk catches further.
In the short terms the UK consumer stands to loose out if there is a hard brexit trade war or simple end of business as usual, with prices on all that 70% imported, mostly frozen white fish, going perhaps up. In the loinger term the reverse is quite possibly true if UK waters sustain large catches and the supply chain becomes more efficiently. Certainly the well healed will probably see their luxuries like Turbot coming down in price as the EU blocks their import from the UK and prices collapse. In the longer term, food pressure could even lead to the EU doing the reverse and securing more stocks and global fish for their own consumers, by using collective buying power, and squeezxing the UK out or legislating them out of their own supply. Food security could be disrupted with this imbalance in trade. The type of fish the UK household buys and the price is seemingly wrong from the domestic catch.
Trump-Win and Brexit are two fingers up to Globalisation as much as anything else, but unfortunately no country is truly an island and things therefore, are going to be both different and erm, interesting for UK salt water fisheries.