HL Deb 06 March 1996 vol 570 cc349-56

6.22 p.m.

Lord Lucas

My Lords, I understand that this may be a convenient moment to repeat a Statement made in another place by my right honourable friend the Minister of Agriculture, Fisheries and Food. The Statement reads as follows:

"Madam Speaker, it is helpful to have this opportunity to develop further the points that my right honourable friend the Deputy Prime Minister, my honourable friend the Minister of State and I made yesterday in immediate response to the text of the Factortame judgment.

"Let me first deal with the court's judgment. It is a stage, albeit an important one, in the action brought in the UK Divisional Court against Her Majesty's Government for damages in respect of the losses that Spanish and other owners of fishing vessels incurred as a result of their exclusion from the UK register and consequent inability to fish. The Divisional Court sought guidance from the European Court and the latter has now ruled that member states are obliged to make good damage caused to individuals by breaches of Community law attributable to the state where the national legislation was responsible for the breach in question and where the breach is sufficiently serious. Importantly, the court also ruled that it is for the national courts to decide whether such a breach has occurred and what damages are available.

"There has been speculation about the damages that might be payable. It is far too early to comment because it is for those involved—namely, the Factortame applicants—to decide whether to proceed with their action, and if so, to substantiate any claim to the full. The court's judgments in this and the earlier Factortame cases have highlighted the fact that quotas allocated to each member state do not always benefit the fishing communities of that member state. This is because the eligibility for quotas and their administration by member states has to take account of general treaty provisions, for example on the right of establishment and the freedom of movement. This has certainly undermined the benefit which the UK fishing industry has been able to secure from the fishing opportunities available to it under the common fisheries policy.

"It is clear that we should not go on as we are. That is why both the Deputy Prime Minister and I explained to the House yesterday that the Government are looking at all the options. These include pursuing treaty or other changes at the IGC. What we want to do is to achieve measures that enable member states to ensure that fishing opportunities arising from their national quotas provide real benefits to their own fishing communities and not to others".

There endeth the Statement.

6.25 p.m.

Lord Carter

My Lords, I thank the Minister for repeating the Answer that was given in the other place to a Private Notice Question put down by my honourable friend Dr. Gavin Strang. This is a sad day for British fishermen, for the British taxpayer, and, I would add, for those who support, however sceptically, the principles of the European Union. I wish to repeat a remark that I have made before; namely, that the common fisheries policy, as it begins to be worked out, is beginning to make the common agricultural policy look like a beacon of common sense and sweet reason.

We should be quite clear what this means. It means that the Spanish and other fishing vessel owners are to be compensated for loss of trade despite deliberately joining the British register to fish against the British quota and then landing their fish, unchecked, in Spain and elsewhere outside the UK. Will the Minister confirm that 103 fishing vessels with a significant Spanish interest, and 39 boats with a significant Dutch interest, are still on the British register, and they represent some 28 per cent. of the total British fleet, and, as regards some species, over 40 per cent. of the quota?

A Written Answer given in another place yesterday was referred to in today's Statement. In the Written Answer Mr. Hogg stated, There is an inconsistency underlying the quota regime of the common fisheries policy in that the quotas allocated to each member state do not always benefit the fishing communities of that member state".—[Official Report, Commons, 5/3/96; col. WA 130.] That is the understatement of the decade!

The cost of the judgment has been estimated at £30 million. I know that the Minister will say—this was mentioned in the Statement—that he is not able to comment on these estimates. However, I wish to ask him about the costs of the action. The Statement confirms that the quantum of damage is for the British courts to decide. I am not a lawyer but, as I understand it, costs usually follow the compensation. Is it possible that the final figure, including costs, could be well in excess of the various estimates that are being mentioned at the moment for the costs of the compensation for damage?

The Government say—this is a welcome conversion; this has been pressed by the Labour Party for some time—that they now intend to try to use the renegotiation of the treaty at the IGC to reform the common fisheries policy. Will the Minister confirm that any such renegotiation will have to be unanimous, and will therefore be open to veto by any single member state? We know that the Spaniards obviously have a veto. Will the Minister also confirm that whatever happens at the IGC will not affect this judgment? As I understand it, the renegotiation of the treaty cannot be retrospective. Therefore, whatever success the Government achieve at the IGC will not affect the judgment which has just been handed down.

There has also been mention that alongside the renegotiation through the IGC, some use might be made—or attempt to be made—either of the European regulations, or of a protocol to the treaty which would achieve much the same effect. Could the Minister confirm that this is in the Government's mind as an approach and, if so, is it correct that this would be the subject of the qualified majority voting and not of the unanimity which is required for a fundamental reform of the treaty? Is it also a fact that the Factortame case has much wider implications because it enables an individual, including employees, to claim damages against a member state in that state's courts, if damages have been suffered, providing the member state has broken a Community law? As I understand it, that is the nub of the Factortame judgment and it has now been upheld by the European Court. This could have substantial effects outside the fishing industry.

As a final point, much has been made of the effects of the Merchant Shipping Act 1988 and the Merchant Shipping Regulations Act 1993 on this matter. I am not merely seeking here to make a party point. My own party in the other place and here has supported the principles of the Merchant Shipping Act. It is a fact, I believe, that there was legal advice at that time which suggested that the Act as amended by the Government would lead to this outcome. It is a point, I understand, that was raised in Committee in the other place at the time but the Government rejected the argument. It now seems, and this is not hindsight because others were saying it at the time, that the licensing route might have been a much safer way to deal with this matter rather than the course that the Government adopted for the Merchant Shipping Act 1988. May I remind the Minister of what he said when we debated the common fisheries policy on the 14th February, Hansard column 667, when he said, On the other hand, Factortame was concerned with provisions in the Merchant Shipping Act 1988, which were designed to achieve much the same end, but in the context of special registration rather than licensing, by requiring that vessels should be mainly British owned and controlled. I understand that warnings were given at the time that the route the Government were following for special registration had a chance of leading to this outcome, and it seems that those who supported the idea of achieving the effect that the Government wanted through the licensing route in fact were correct. We will certainly support the Government in their efforts to renegotiate the treaty so far as the CFP is concerned, but I have to say that they might find that somewhat easier to do if they did not have the semi-detached attitude to the European Union which is their current stance.

Lord Mackie of Benshie

My Lords, the noble Lord who has just spoken, the noble Lord, Lord Carter, has gone into the whole matter very thoroughly. This is a tremendous smack in the face for the Government. Their method of trying to control what is in fact a cheating device in order to get protection has failed and it looks as though they will have to pay in addition massive compensation.

In the Statement the Minister has just read it says that we must reform the CFP as an urgent matter, but it will take a lot of time. It is, however, absolutely vital. What the noble Lord, Lord Carter, said about the CAP and the CFP was a crack I was going to make and I can only applaud it as perfectly true. The CAP looks like a simple and successful piece of legislation alongside the total failure of the common fisheries policy. I can only reiterate that negotiations should be undertaken urgently; that the Government should bend themselves to it and try to get some sense into it.

In the meantime, I wonder whether the Government could look at our own regulations. At the present time, as I understand it, and the Minister might confirm this, these registered boats have to call four times in six months at a British port but they land their catches wherever they wish, particularly in Spain where the registration and collation of data are very suspect indeed.

What would happen if the Government laid down regulations that, not only had they to call four times a year, but in addition they had to use the other alternative and land at least half their catches at a British port? This at least would give us some idea of the size of the problem and the amount of fish they are catching and would make it, I hope, uneconomic for them to adopt this cheating device.

However, I agree that the main priority is to renegotiate the whole business and then to police it properly. The CFP in theory should work but outside a few countries you cannot trust the figures. Certainly on the high seas there is very little chance of stopping everybody who is breaking the rules. It needs a determined attack and it needs money spent on control before we get a policy which the fishermen themselves will believe in. The Government have a tremendous task in hand and we on these Benches would back any effort to improve it and get some justice into the situation for our own fishermen.

Lord Lucas

My Lords, I am very grateful for the support that we have received today from the noble Lord, Lord Carter, and the noble Lord, Lord Mackie of Benshie, for the action which we are proposing to take. It is a very sad day, not for the common fisheries policy, because it is not the common fisheries policy which is at fault in this instance, but for our understanding of the way the common fisheries policy operates within the Treaty of Rome.

The judgment reached by the European Court is that the Treaty of Rome takes precedence over the provisions of the common fisheries policy, whereas we, and I believe all other member states, have been operating on the basis that the common fisheries policy was a reasonable exception in some ways to the provisions of the treaty. Indeed, that raises major questions as to the future of the common fisheries policy and whether it is operable and acceptable to member states. We believe that those concerns will be widely shared and that the impetus to put the common fisheries policy back where it should be, which is in terms of a national right to an agreed share of the common fish resource, is something which will be pursued at the IGC and will be pursued vigorously by us. We believe that we shall receive a great deal of sympathy from other member states because nobody believed that the way the European Court has interpreted this situation is the way in which the common fisheries policy was envisaged when we all set out together to make it.

So far as the statistics are concerned which the noble Lord, Lord Carter, asked for, we estimate that there are about 150 vessels on the UK register which are currently foreign owned or have significant foreign interest in them. Of these, about 100 have a Spanish interest and the remainder mainly have a Dutch interest. In numbers quota hoppers represent some 5 per cent. of the UK's offshore fishing fleet but account for more than 20 per cent. of its tonnage. Indeed, in some species such as plaice they take 44 per cent. of the quota. Overall they take about 10 per cent. of our white fish quota, but there are obviously some species where they are much higher than that. So far as the costs of any judgments which may be given in time by the UK courts against the Government are concerned, we will have to wait and see what they are. We do not know any more about them than we do about the damages.

So far as the question the noble Lord, Lord Carter, asked about the IGC, I reiterate that it is not the reform of the CFP we are looking at: it is the reform of the treaty. That has to be unanimous and any such reform would not affect the judgment in the Factortame case or its consequences. However, we will look at all ways of achieving our end. I do not think we are stuck on any one particular formula. What we are looking to is putting back the relationship between the common fisheries policy and the treaty that we and others always thought was there, and putting back the status of UK fishermen versus UK quotas that we always thought was there and always believe should be there.

So far as the wider implications of Factortame, yes, the noble Lord, Lord Carter, is again right. This is a judgment which may well affect other situations, such as the denial by Spain of rights of transit for ferries from Gibraltar and the rights of British beef exporters when it comes to selling in Germany and other such areas. It is something which seems to us to be in that limited sense a very reasonable judgment and may as a result have a lot of good consequences for intra-community trade.

The noble Lord, Lord Carter, asked about the Merchant Shipping Act 1988 and the legal advice that we received at the time. I do not have that information with me, but I shall write to the noble Lord to cover that point and the question of the licensing route. My understanding is that the licensing route would not work. Indeed, we cannot see anything that will work without an amendment to the treaty or some close equivalent. We have looked at a great many options, and spent a great deal of time with our own and outside legal advisers, and have not come to any conclusion which would suggest to us any other way of dealing with the problem, either now or in the past.

The noble Lord, Lord Mackie, covered many of the same points but suggested that we might change our present regulations so that half the boats' catch should be landed in the UK. That would seem quite a sensible regulation to put in place, but it is not something that we could succeed in doing under current treaty interpretation by the European Court. We are quite clear that we could not. Nor could we impose residence requirements on the people operating the boats, or nationality requirements or any other means by which the boats might be made British. They are all areas we shall be looking at, but as far as we understand, and according to all the advice we have, they would all require treaty amendment.

6.40 p.m.

Lord Campbell of Croy

My Lords, while the European Court's task is simply to interpret laws—and unfortunately the judgment that has just been made has been what I was expecting—does this not make a nonsense of a system of quotas allocated by nationality?

I have raised the subject many times in your Lordships' House, and I spoke when the Merchant Shipping Act passed through this House in 1988, when I supported the revised register requirements included in it. As regards the queries of the noble Lord, Lord Carter, in our debate on 14th February I gave the percentages of quota taken by boats from Spain and Holland, which were as much as 40 per cent. in some cases. Those figures were confirmed by my noble friend Lord Lucas.

The European Union has been trying to pursue two policies at the same time which are totally at variance with each other. One policy attempts to merge nationalities and enable any EU citizen to set up and do business in any member country. The other regulates fisheries by a system of quotas based entirely upon nationality. They are incompatible and conflicting policies.

As it is vital that conservation of fish stocks be achieved, will the Government urgently press for a major change of the present basis of the quota system, namely nationality, or for its replacement?

Lord Lucas

My Lords, I agree completely with what my noble friend said. The judgment throws up a major deficiency in the common fisheries arrangements as they are at the moment and as they relate to the treaty. It is a matter that we must do something about as quickly as we can. However, since it requires treaty amendment, the IGC is the place for that. I do not believe that there is anything that we can do faster, but we shall work very hard when it comes to the IGC.

Lord Stoddart of Swindon

My Lords, to mix my metaphors, it seems that the stinking fish are coming home to roost. Is the Minister aware that there is outrage in the country as a whole, and particularly among the fishing community, at what has happened? The noble Lord was in the other place with me this afternoon. Does he agree that there was all-party condemnation of the situation which has been brought about by the judgment of the European Court of Justice and of the route by which we got there? Unfortunately, the situation goes back a long time. Does the Minister agree that, after the Factortame judgment, not only the Government but this House and another place agreed far too easily to set aside the Merchant Shipping Act 1988, which was designed to protect the livelihood of our fishermen and to conserve our fish? Have the Government not learnt from that that they ought not to do the bidding of the European Court with quite such alacrity and in such a short period of time?

What will the Government do if, as is most likely, the other countries of the European Community will not agree to a treaty revision? They will be faced with an almost impossible position, unless they are prepared to re-establish the sovereignty of Parliament over not only fishing but also other rights. If they are faced with the implacable opposition of our competitors in the other member states of the European Union, will they be prepared to come to Parliament and repeal Section 2 of the European Communities Act 1972 in order to give back to Parliament the powers which it so wilfully and foolishly gave up at that time?

Lord Lucas

My Lords, the noble Lord takes a rather bizarre and extreme view of our partners in the European Union. I do not think that it is shared widely in this House, and it is certainly not shared by the Government. We believe that the dismay that we feel at the interpretation of the relationship between the common fisheries policy and the Treaty of Rome is shared, even if the immediate pain is not so heavily shared by other member states. We believe that with our negotiating skill—which I am sure the noble Lord appreciates—and the good will of our partners, which we experience every day in our dealings with the European Union, we will achieve a satisfactory outcome, and we see no need to speculate on improbable, extreme and uncomfortable results.

As regards the 1988 Act, we believe that we took the right action at the time in bringing it forward, as did all sides of the House. We believe that we took the necessary action when the European Court of Justice expressed its opinion. Indeed, given the final resolution of its judgment, that has turned out to be right. We recognise that the Treaty of Rome is quite properly policed by a court to which all national governments should pay respect.

Lord Boyd-Carpenter

My Lords, will my noble friend indicate that the Government's patience with the European Court is beginning to wear out, as this is not the only example of gross interference by the court in matters which should be dealt with in this Parliament? Will they make it clear that unless a quick concession is made over this issue we take very seriously the suggestion made by the noble Lord opposite that we should pull out of the jurisdiction of the European Court?

Lord Lucas

My Lords, I am sorry to say that I do not agree with my noble friend at all. This seems to me entirely a case in which the European Court of Justice is the proper court. It has decided between two aspects of European policy—the Treaty of Rome and the common fisheries policy. It is the right body to do so. We think that it has come to the wrong judgment. We believe that of our own courts from time to time, but nonetheless we give them the respect that is due to them.

Lord Lester of Herne Hill

My Lords, is the Minister aware that there will be strong support on all sides of the House, and beyond this House throughout the country, for the tone in which he has dealt with this difficult problem in his answers? In particular, he has made clear that the people of this country can benefit from this defeat. The important principle established by the European Court that liability to pay compensation for damage suffered as a direct result of a serious breach of Community law is an entitlement of the individual citizen can be used by the people of this country when the public authorities of other states violate the Treaty of Rome against their interests. Is the Minister aware that that important principle is one from which we can benefit greatly, however sad it is in the context of this particular case that we have suffered this defeat, with deplorable effects on our own fishing industry?

Lord Lucas

My Lords, I am surprised and delighted to find myself agreeing with everything the noble Lord has just said.