The Fishing Industry: Lies, Codfathers and Brexit: Questions voters should ask

Published by Anonymous (not verified) on Tue, 03/12/2019 - 4:35am in

In a typically flamboyant gimmick in a campaign speech, Boris
Johnson waved a smoked kipper and an icepack, claiming that the EU imposed
bureaucratic regulations that required such packaging, and that Brexit would
enable Britain to do away with such nonsense.    

It was a lie. Packaging rules are solely a matter for
national governments, and the Conservatives, which he had supported
consistently, had done nothing over nine years in government to change them. It
is far from the only lie that has been told about fishery policy by those
supporting Brexit.    

It is well known that fishing communities voted
overwhelmingly for Brexit, and that the Conservatives won seats in fishing
areas of Scotland in 2017 because they were seen as the party of Brexit. The
Conservatives are pitching the same line again. In response to a planted
question in the House of Commons just before the General Election was called, asking
for a ‘categorical assurance’ that the UK ‘will not use our fish
stocks as a bargaining chip in future negotiations’,
Boris Johnson
asserted, ‘I can confirm that we will take back 100% control of the
spectacular marine wealth of this country.’

In the Conservative Party
manifesto for the General Election it is repeated:

leaving the EU, we will leave the Common Fisheries Policy becoming an
independent coastal state and taking back control of our waters;

You cannot take back
control of something you have always controlled.  

Leaders of the fishery industry, who mainly represent the big
trawlers not the small-scale fisheries, have long condemned the EU’s Common
Fisheries Policy (CFP) for the industry’s woes, which include the collapse of
cod and haddock stocks and depletion of many other species. Fishing and fish
are emotive subjects in Britain, and even though those involved in fisheries
comprise a tiny share of the labour force, they figure high in people’s
imagination. So, the facts should matter.

The first fact is that the crisis has little to do with the
CFP. Catches in UK waters have declined by over 94% in the past 130 years, and
the decline long predated Britain joining the CFP. The CFP has at least slowed
down the depletion of stocks, through its ‘total allowable catch’ rule. The
UK’s fishing industry as a whole has been making big profits (a gross profit of
over 30% in some years). The trouble is that only a few large-scale fishers
have been making most of that, for reasons that will become clear later in this

Second, Britain has done well out of the CFP’s system. Of the six million tonnes of fish landed by EU countries, Britain is the second largest, with 700,000 tonnes from UK waters, with a further 52,000 tonnes from other EU waters. Brexiteers complain that the UK has received too little of the TAC. But the industry suffers from overfishing. If Brexit occurs, no sensible government would increase the TAC. If they did, they would be indicating they are in the thrall of the large-scale fisheries that gain from overfishing, through higher prices and consolidation of control, as marginal fisheries are driven into bankruptcy or decommissioning of boats.

So, the question voters should ask candidates is:

Would they impose more restrictions on EU fishing in UK
waters, bearing in mind that this would lead to retaliation and the likelihood
of rising tariffs that would hit the UK shellfish sector particularly hard?

Third, Britain imports from the EU almost as much fish as it
exports to it, and relies on the EU market. Many observers present an image of
British fisheries as based on cod and haddock. This is not the case; most of
these iconic fish consumed in the UK are imported, and are classified as having
unsustainable stocks in the North Sea. Meanwhile, the mainstay of UK’s
fisheries is shellfish, which comprise the main source of exports, most going to
the EU.

Fourth, Britain receives considerable subsidies from the CFP,
and provides its fisheries with more than most other EU countries; it could
have handed out even more, although that would be unwise. The point is that it
is Westminster that determines the amount and type of subsidies. Blaming the
CFP is invalid.

The EU’s CFP has allocated the UK £243 million in fishing
subsidies between 2014 and 2020. One would like to know from the parties
whether that money will be replaced after Brexit. This economist, for one,
predicts the fishing communities will not receive anything like that.

So, the questions voters should ask the politicians are as

Would they implement a ‘total allowable catch’ policy?

If so, would it be larger or smaller than the existing TAC
under EU rules, and would they insist on having a social manager (government
appointee) to enforce the rules, someone independent of fishery owners?[i]

So far, only the Green Party has a clear stance on fishing
subsidies. As in the 2017 General Election, they are resolutely opposed to them.
Evidence from around the world indicates that is roughly correct, if the
collapse of fish stocks is to be avoided. The main exceptions are ‘research’
and ‘General Service and Management’ subsidies, which have beneficial effects
if proper management rules are applied with adequate resources.

The Labour Party manifesto includes a mildly promising

We will set maximum sustainable yields for all shared fish
stocks, redistribute fish quotas along social and environmental criteria and,
if people vote to leave the EU, require the majority of fish caught under a UK
quota to be landed in UK ports.

The Conservative Party manifesto includes a similar statement
on maximum sustainable yields:

There will be a legal commitment to fish sustainably and a legal requirement for a plan to achieve maximum sustainable yield for each stock.

It also states:

will maintain funding for fisheries across the UK’s nations throughout the
Parliament and support the regeneration of our coastal communities;

The Conservatives say nothing about the level of funding, and fail to mention the need to cover for the lost income from the CFP subsidies. If they were intending to continue the £243 million gained through the CFP, that should have been in their Manifesto’s Costing document. But there is no mention of anything. There is no need for a statement in the Labour, Green or Liberal Democrat manifestos, since none of them plan on a certain Brexit. But any party promising Brexit should be required to say whether they would replace CFP subsidies fully or partially.

Then we come to the policy on which the most lies have been
perpetrated. The CFP operates what is called a fixed quota system. Guided
by scientific advice, ministers in charge of fishery policy of member states
meet each year to decide on the ‘total allowable catch’ of major fish species,
and then agree on quotas for each member state on a formula based on past
practices and catches of those species.

One lie told by Brexiteers is that the CFP allocates the quotas. But the distribution is left entirely to national governments. Here is where the scandal begins. Under the Conservatives, over two-thirds of quotas have been given to just 25 companies, dubbed the ‘codfathers’ by Greenpeace, while under 2% has gone to small-scale fishers, even though they make up 79% of the fishing fleet. Worse, over a quarter (29%) have been quietly handed to just five families on the Sunday Times Rich List.

Even worse, 13 of the 25 companies that were given most of
the quotas had directors or vessel partners convicted in an over-fishing scam
in 2011-12 in Scotland. This is known as the ‘black fish’ scam. The companies
clandestinely landed 170,000 tonnes of undeclared herring and mackerel, worth
£63 million. Leaders in the fishing industry who claim that it can
self-regulate should be reminded of that scam. Sadly, it did not stop the
perpetrators continuing to receive the Government’s very large quotas.

The Conservatives and Liberal Democrats after 2010 and the
Conservatives since 2015, have compounded the disastrous policy by continuing
to allow quotas to be tradeable, as commodities, in spite of predictable and
long-established consequences. The big companies have been buying quotas from
smaller firms, and foreign firms have bought ‘British’ quotas by registering
their boats in the UK, a trend dubbed ‘quota hoppng’. If you believe in the
supremacy of private property rights and turn quotas into private property, do
not be surprised at this outcome. There has been increasing monopolisation,
associated with more intensive rentier capitalism in the industry, and
self-induced colonisation.

The latter has been dramatic. One Dutch multinational, with a
British subsidiary North Atlantic Fishing Company, owning a 114-metre long
flagship fishing trawler, now possesses about a quarter of all the UK quota. With
other ‘quota hoppers’ coming from Spain, Iceland and The Netherlands, foreign-owned
boats now hold about half the UK’s quotas. 

The quota system has produced several ironies. In an
orchestrated event that may have tipped the balance in favour of Brexit, in
2016 a flotilla of fishing boats went up the Thames. Nigel Farage was on the
flagship, i.e., a foreign owned boat flying the UK flag. It belonged to one of
the ten largest quota holders. The motto of the campaign was ‘Bring back control.’
One could be confident in thinking that the flagship would be a primary

Second, the Government’s White Paper on fishery policies post-Brexit,
published in 2019, stated that there would be no change in the quota
distribution after Brexit. That surely reflects the power structure in the
fishing industry and the ideology of private property rights. Put bluntly, if
the Conservatives are elected they have committed to channelling more rights
and money to the codfathers and quota-hoppers, and practically nothing to
small-scale fisheries, the latter should not complain if they vote Conservative
and that is what happens. In the circumstances, every voter concerned with
fisheries should ask all candidates the following:

Do you agree with the Conservatives’ White Paper statement,
‘We do not intend to change the method for allocating existing quota.’

In a related policy, the government has claimed it wishes to
support ‘discard-free fisheries’. This is significant because of the quota
system. It has been common for fishers worried about exceeding their quotas to
discard fish caught that are less valuable, notably juveniles and species not
valued much in the UK. This has been a cause of declining fish stocks.

If there is a market for species not valued by UK consumers
but valued in the EU, the tendency to discard good edible fish is held in
check. But if the UK is cut off from the EU market, discarding will grow. The
government and industry representatives may huff and puff and say that will be
controlled. The reality is that, whereas with the CFP there is an EU-level
inspection system, the UK has only 12 vessels for monitoring fishing practices
for all UK waters up to 200 nautical miles from its coasts. Research has shown
that without strong regulation through diligent monitoring, a quota system, as
operating in the UK, will lead to rapid fish stock depletion.

So, voters in fishing communities should ask candidates what
policy would they favour to minimise discard practice and whether that would be
as good as exists in the EU today.

Confusion in the Conservative leadership has been intensified
by the statement of Minister in charge of fishery policy, Michael Gove, that
the UK would also leave the London Fisheries Convention of 1964, which predates
the EU, and which allows vessels from the UK, France, Belgium, Germany, Ireland
and the Netherlands to fish within six and twelve miles of each other’s
coastline. He then admitted that British fisheries did not have the capacity to
take over and so EU nations would continue to have access to UK waters. To talk
grandiosely about ‘regaining sovereignty’ in such circumstances is ludicrous.

Voters in fishing communities should demand that Conservative
candidates explain how claims of 100% sovereignty can be credible in view of
those statements by their responsible minister.

There is one devastating point. International research has shown that the full privatisation of fisheries, as wanted by the Conservatives and the Brexit Party, can drive fish stocks down to extinction. Welcome to full sovereignty.

Finally, if Brexit occurs, the part of the UK that would benefit most in terms of fisheries is Scotland, but only if it had jurisdiction over its fisheries. Thus, post-Brexit fishery policy may push Scotland to want to leave the UK, something many Brexiteers may not have factored into account.

Photo credit: Flickr/Chris Bentley.

[i] International research has shown that private
self-regulation leads to fishing to a level below recovery, even if there are
barriers to entry by ‘foreigners’.

The post The Fishing Industry: Lies, Codfathers and Brexit: Questions voters should ask appeared first on The Progressive Economy Forum.

Leaked US Trade Talks Show How Trump Is Dictating Johnson’s Approach to a Hard Brexit

Published by Anonymous (not verified) on Thu, 28/11/2019 - 9:00pm in

Far from Brexit letting the UK takw back control, it has entered into a relationship where it holds none of the cards.

Sir Ivan Rogers Plays Cassandra Again, Warns of Likely 2020 Brexit Trade Negotiations Train Wreck

Published by Anonymous (not verified) on Tue, 26/11/2019 - 10:45pm in

Another incisive Brexit reading by Sir Ivan.

Austerity Is Not the Only Way: Portugal!

Published by Anonymous (not verified) on Sat, 16/11/2019 - 6:21am in

After the 2008 financial mess, austerity was touted as an economic cure-all. Deep budget cuts were forced upon nations and their citizens as a prerequisite for bailout loans. Now, we’re seeing the fallout. Anti-austerity protests have gripped countries around the world, from Chile to Ecuador to Lebanon to Zimbabwe. We should have seen this coming—austerity isn’t the only option, or even the best one, for countries in fiscal distress. In fact, one country has proven that rejecting austerity is not only a way to survive, but to flourish. That country is Portugal.

Compare Portugal today with Britain. One could argue that the Cameron administration’s austerity policies created the anger and frustration than eventually led to Brexit. Austerity in Italy and Greece, too, seems to have fostered a surge in far-right politics. What’s worse, austerity hasn’t even done what it was supposed to: save faltering economies. A paper issued by the IMF’s chief economist five years after the financial crisis concluded that every dollar cut from government budgets actually reduced economic output by $1.50.

Protesters rally against proposed austerity measures outside the capitol building in Lisbon on February 9, 2010. Credit: Global Panorama/Flickr

Portugal took a different tack, rejecting the austerity approach, and the country is now paying off its debt, restoring confidence and seeing an upswing in economic growth and prosperity.  

In other words, the story we were told by many economists and governments—that extreme belt tightening is the only way out—was wrong. There was and is another way.

A tiny bit of background

After the banking and credit mess of 2008, austerity—government measures taken to reduce spending, usually in response to a debt crisis and often combined with privatization—was frequently touted by politicians and economists as the ONLY way out of the debt hole dug by the bankers. In nation after nation, public services like health care, arts and culture, education and social security were cut, wages and pensions were frozen, and funding for many programs deemed inessential was reduced. Public assets were often sold to private corporations to quickly raise money.

As a result, health, infrastructure and education (among much else) suffered. Life expectancy actually dropped in the U.K., and the British Journal of Medicine estimated 100 additional deaths per day could be attributed to the policy. As a result, there were massive anti-austerity demonstrations in Spain, Greece, the U.K., Ireland, Canada, Germany and Nigeria. Folks felt left behind. Not just felt—they WERE left behind. 

What happened in Portugal?

As with many countries, after 2008 Portugal found itself deep in debt. So, in 2011 it took out a $92 billion loan from the IMF. In return, the government agreed to drastic spending cuts: pensions were reduced, wages frozen, public utility companies privatized and the national airline sold off. Sales taxes on cars and tobacco rose, and unemployment benefits were cut from three years to 18 months.

Quickly, pain and resentment grew. Youth unemployment neared 40 percent, and former professionals were reduced to selling goods out of their homes to keep food on the table. During the first year of austerity, the Portuguese economy contracted by 3.2 percent. “It is indeed to be feared that austerity is paving the way for an authoritarian turn,” concluded a 2012 analysis.

It felt to many people as if the bankers got a bailout and citizens paid the price. From the Guardian

In a two-year period, education spending suffered a devastating 23 percent cutUnemployment peaked at 17.5 percent in 2013; in 2012, there was a 41 percent jump in company bankruptcies; and poverty increased. All this was necessary to cure the overspending disease, went the logic.

Austerity had similar effects elsewhere. A few years after severe cutbacks were instituted in Spain, unemployment jumped to 27 percent, the highest since recordkeeping began. In Britain, a U.N. official compared austerity’s effects to a Victorian workhouse, saying that its “punitive, mean-spirited and often callous” implementation had spawned “a great misery.” All of this is not actually news. In Germany in 1932, the Social Democrats gave in to austerity programs, which drove unemployment up to over 40 percent. We all know what came next. 

This is not the place to go into the pressures that were used to justify austerity policies. Rather, in the spirit of Reasons to be Cheerful, I’d prefer to look at a successful alternative.

Rejecting austerity

In 2015, fed up with four years of cutbacks, leftist Portuguese political groups united to mount a campaign that promised to curtail austerity measures. They won the election, and began making good on this promise on multiple fronts. 

Lisbon has experienced a construction boom since the government ended austerity policies and introduced economic stimulus. Credit: Egor Kunovsky/Unsplash

First, they offered incentives to foreigners—both individuals and businesses—to come to Portugal. Lured by tax incentives, Google and Mercedes-Benz expanded their presence and hired thousands of local employees. So did technology giant Bosch, which grew its workforce at a single campus in the city of Braga to 3,000 workers. The government also began offering five-year resident visas to foreigners who invested at least 250,000 euros in Portugal, a scheme that has brought over $5 billion into the country.

In addition, the government raised minimum wage and pension payouts, giving people more disposable income to pump back into the economy. It also returned public sector wages to their pre-crisis levels, some of which had fallen by 30 percent. Nearly five years later, Portugal’s economy is humming along, growing at 3.5 percent in 2017 and 2.4 percent in 2018, its fastest expansions in years. 

From the New York Times:

The government’s U-turn, and willingness to spend, had a powerful effect. Creditors railed against the move, but the gloom that had gripped the nation through years of belt-tightening began to lift. Business confidence rebounded. Production and exports began to take off.

At a time of mounting uncertainty in Europe, Portugal has defied critics who have insisted on austerity as the answer to the Continent’s economic and financial crisis. While countries from Greece to Ireland—and for a stretch, Portugal itself—toed the line, Lisbon resisted, helping to stoke a revival that drove economic growth [in 2017] to its highest level in a decade.

The new government’s policies also led to a more ephemeral change: a shift in attitude. Today, the Portuguese are feeling better about their country. A 2011 Eurobarometer survey found that 44 percent of respondents felt that the country would be worse off one year in the future. By 2018, that number had fallen by half


This isn’t just feel-good stuff—when people and businesses are confident in a country’s future, they invest accordingly. For instance, the Times spoke with an olive oil producer who decided to purchase new harvesting technology after austerity measures were rolled back. “The actual stimulus spending was very small,” one economics professor told the paper. “But the country’s mindset became completely different, and from an economic perspective, that’s more impactful than the actual change in policy.” 

It also encourages those who have left to return home. As NPR reports, Portuguese youth who left are coming back to the country and investing in new businesses:

“My friends, people I know, who were leaving the country more or less at the same time I did, in 2011 and 2012, a lot of them came back already or want to come back,” Mouraz says. “They come full of motivation, with knowledge from other countries and a different mindset.”

They are also finding jobs. Wages are up, and Portugal’s unemployment rate has dropped to around 10 percent from a high of nearly 18 percent in 2013.

Portugal’s economic stability has held fast. In 2017, the country exited the EU’s excessive deficit procedure, and recently posted its biggest budget surplus since adopting the euro 20 years ago. No surprise, then, that the European Commission recently concluded that Portugal’s serious macroeconomic imbalances had been resolved.

Other factors at play

By rejecting austerity, Portugal has gone against conventional economics, and in the process, earned its share of critics, some of whom have raised legitimate questions about the government’s methods. For instance, the increased spending on pensions and wages was offset by cuts to public works, like railroads and hospitals, which by some measures have deteriorated since being defunded.

Luring foreigners has also made the country more expensive for locals. The aforementioned five-year visa scheme seems to be contributing to affordability problems in Lisbon. So is a boom in tourism, which, while good for the economy in general, has led some landlords to rent to foreigners instead of locals, at inflated prices. Between 2013 and 2017, the number of visitors to Portugal rose from 8.3 million to 12.7 million, and Lisbon surpassed Barcelona and Paris as the European city with the most Airbnb rentals per capita. 

Tourists have flocked to Portugal, a boon for the economy but also a factor in rising housing prices. Credit: Phil King/Flickr

I was in Lisbon during my world tour last year, and things did appear to be booming. That feeling is purely subjective, but we got a view of Rust Belt towns in the U.S., U.K., Poland and Slovakia, so there is a comparison. Construction, busy shops and restaurants, folks out and about, socializing — we could see for ourselves that folks are moving to Portugal…word is out that it’s a good place to live. My bandmates told me that an increasing number of important musicians are leaving Brazil, which is going through a rough economic and political patch, and moving to Portugal. So the mood in Portugal is generally upbeat, as anti-austerity policies have led to prosperity. But it’s important to acknowledge the growing pains that have accompanied the recovery.

A model for others

Following the Reasons to be Cheerful rulebook, I wondered if the types of policies Portugal has implemented have worked elsewhere. As it turns out, they have. 

Graffiti on a wall in Italy. Credit: Clayton Shonkwiler/Flickr

President Obama’s stimulus package, as modest as it was, kept the U.S. economy from collapsing during the banking crisis. And just as in Portugal, a chorus of conservatives warned against it: “Stimulus couldn’t work because of some weird debt trigger condition, or because it would cause hyperinflation, or because unemployment was ‘structural,’ or because of a ‘skills gap,’ or because of adverse demographic trends,” writes Ryan Cooper in The Week. “Yet it’s been six to eight years since their arguments and there’s hardly been a glimmer of the kind of inflation they warned about… In fact, not only has there been no hyperinflation, inflation has consistently come in under the Fed’s supposed target value of two percent.”

Quite a few Latin American countries have taken a stand against austerity, too. In recession-plagued Argentina, the previous government was ousted last month when voters roundly rejected its cutbacks. Chile has been rocked for weeks by protests that began with a subway fare hike and have since morphed into a broader fight against cuts to health care, education and other public services. There have been demonstrations against cuts to fuel subsidies in Ecuador and health care in Honduras.

Anti-austerity protesters in London in 2015. Credit: Rowan Gillette-Fussell/Flickr

In many cases, the austerity measures being rejected began with IMF loans.

Michael Cohen (NOT Trump’s former fixer!) writes for the Journal of Social Research:

This decision [to roll back austerity measures] has largely been successful. Latin American experience of more than 60 years strongly suggests that policies restricting spending [on public services] can have major negative impacts on national economic growth and social welfare. Those promoting spending, on the other hand, have a greater likelihood of maintaining aggregate demand at the macroeconomic level while providing key services and infrastructure needed for minimal levels of well-being.

They’re not out of the woods yet…

In Portugal there is still a LOT of debt to be paid off—the country’s debt is about 120 percent of its GDP, the highest in the eurozone after Italy and Greece. Plus, as Brazilian professor Nuno Teles points out, tourism is a dicey foundation on which to build a recovery. And some of Portugal’s success is due to pure luck

But overall, the case of Portugal is hugely encouraging. It’s proof that austerity bromides and policies are not necessarily the only solutions to economic problems. Given these examples, economists and financial advisors around the world might begin to revise their recommendations—resulting in less pain, less suffering and healthier economies worldwide.

The post Austerity Is Not the Only Way: Portugal! appeared first on Reasons to be Cheerful.

From British tragedy to Danish comedy

Published by Anonymous (not verified) on Wed, 13/11/2019 - 6:54pm in



This is the Christmas Panto in the Tivoli in Copenhagen:

As they say:

You could not make it up.

Except we did.....

Hat tip: Len Seabrooke

Ilargi: Vindman, the Expert

Published by Anonymous (not verified) on Wed, 13/11/2019 - 6:18pm in

A close reading of NSC director Alexander Vindman's deposition in the impeachment investigation.

The Economics of Neutrality in World War II

Published by Anonymous (not verified) on Wed, 13/11/2019 - 1:55am in

Neutrality in World War II meant appeasing the belligerents.

Brexit: Farage Capitulates…or Does He?

Published by Anonymous (not verified) on Tue, 12/11/2019 - 8:29pm in


brexit, Europe, Politics, UK

NIgel Farage does Boris a solid. But the Tories want more concessions. Are they forthcoming?

30 Years After the Berlin Wall Came Down, East and West Germany Are Still Divided

Published by Anonymous (not verified) on Mon, 11/11/2019 - 6:31pm in

Why Eastern Germany is still a place apart.

The Stormy Birth of “Europe”

Published by Anonymous (not verified) on Fri, 08/11/2019 - 1:55am in

A review of major institutional and political developments that created modern Europe.