Fishing vessels - economic link: business and regulatory impact assessment

4. Options

This BRIA examines the Scottish Government’s preferred option for changing and strengthening the economic link licence condition to increase the amount of high value fish landed into Scotland. The partial BRIA and consultation documents published in 2017 each explored one other option which is not analysed here: a voluntary and non-regulatory landings target. Only the preferred option, that is, to encourage increased landings of the 8 key species into Scotland through the introduction of a new economic link licence condition, is presented below due to the alternative voluntary option having been considered but ruled out following public consultation.

4.1 Preferred and Proposed Option

(a) each vessel lands at least 55% of 8 key species (by tonnage) annually into Scotland;

or

(b) gifts quota in lieu of landings that fall short of the target of 55% of the 8 key species using an updated percentage – see below.

4.2 Reasoning

Overall, this option is preferred as it will incentivise licence holders who currently land a high proportion of catch abroad to land more of it into Scotland. Even if licence holders chose to gift quota to the Scottish Government instead of meeting the landings target, the effect of the new licence condition is that it will increase the supply of the most valuable fish stocks, the stability of that supply and, it could also result in a lengthening of the landing season. This directly addresses the supply issues affecting some Scottish processors. This option also provides opportunities for local economies dependent on the fishing sector to pursue sustainable inclusive growth through a stronger local labour market.

To address concerns raised over the need to phase in change to allow businesses a period to adjust, the consultation document sought views on a staggered landings target to allow pelagic fishers and processers time to adjust. Presently, pelagic vessels tend to meet the current economic link licence condition via the crewing option. Therefore, the removal of the crewing option will impact pelagic vessels in particular. In light of responses received in respect of this aspect of the consultation, the introduction of the new economic link licence condition will be staggered as proposed so that a 30% landings target will be set for year 1 (2023), rising to 40% in year 2 (2024), before reaching the full 55% landings target in year 3 (2025).

4.3 New quota gifting formula

In line with the proposal set out in the consultation, the Scottish Government has reviewed the current quota gifting formula and will adjust it to 26% of the value of the landing gap. That being the difference between the volume landed and the volume required to be landed to be compliant with the landings target. The Scottish Government believes that this revised percentage remains an affordable alternative means of meeting the economic link licence condition but 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 spending and re-spending of wages. This represents a possible maximum quota gift as the value lost in lieu of landings. 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 than is currently the case.