Simmer haddock in milk for 4 minutes until cooked, then set aside to cool.
Discard milk, remove haddock skin, and flake the fish flesh into a bowl.
Boil potatoes for 15 minutes, drain, and mash before mixing with the fish.
Add capers, gherkins, shallots, and parsley to the potato mixture and season.
Shape into 8 cakes, coat in flour, egg, and panko, then chill for 1 hour.
Fry cakes in batches in 180°C oil for 4 minutes until golden, then drain.
Melt caster sugar in a pan until it forms a golden caramel.
Purée chilli jam ingredients, except crème fraîche, in a food processor.
Simmer the purée with the caramel for 5 minutes, then cool and stir in crème fraîche.
Whisk rapeseed oil, vinegar, and mustard together and toss with the watercress.
Serve fish cakes alongside the chilli jam and watercress salad.