Fishing vessels - economic link: business and regulatory impact assessment

22. Appendix C – Quota Gifting

22.1 The current quota gift formula:

Value of catch in £ ÷ 2 (50%) = UK link arrangement (a)

÷ (a) 10 (assume 10% profit) = b

(b) ÷ 65 x 100 (65%) = sum due to FA for economic link in £.

Take value in £ of sum due and divide by average price of species per tonne required.

The quota gifting formula above is equivalent in value to just over 15% of the gap between the fish landed in the UK and the level of landings that would have been necessary to meet the present 50% landings threshold. Therefore, it does not replace all the economic benefits lost. For example, a vessel landing fish to the value of £1 million, of which only £400,000 is landed in the UK will be expected to provide quota gifts with an estimated landed (not leased, if relevant) value of £15,400.

22.2 The proposed quota gift:

In line with the proposal set out in the consultation, the Scottish Government has reviewed the current quota gifting formula and in line with the consultation will adjust it to 26%. The Scottish Government believes the revised percentage better captures the missed economic value resulting from landings outside of Scotland.

Based on the available evidence at the time of consultation, which mirrors the current figures, from the Scottish Input-Output tables, it was estimated that each £1 of outputs from the fish processing sector in Scotland supports an extra £0.65 in the supply chain and as a result of re-spending wages. This represents a possible maximum quota gift as the value lost in lieu of landing. However, 26% was chosen as a reasonable and proportionate figure for fishers to pay whilst also providing more of the missed economic value to Scotland.