Fisheries Management Measures within Scottish Offshore Marine Protected Areas (MPAs) - Socio-Economic Impact Assessment

6. Distribution of Economic Costs and Consequent Social Impacts

Overview

The estimated impact of implementation of the proposed management measures is assessed across both management options. The lower end of Option 1 is estimated to have no significant quantified economic and social impacts on commercial fisheries, although there may be additional non-quantified impacts. Option 1 and Option 2 are estimated to:

• Reduce the average annual value of output landed by the UK commercial fisheries sector by between £0.7–2.7 million and £4.8–8.0 million;
• Reduce GVA (direct and indirect) of the UK commercial fisheries sector over the 20-year period by £6.5–22.4 million to £40–66 million (present value); and
• Reduce the average employment (mean number of jobs, direct, indirect and induced) of the UK commercial fisheries sector by between 10–35 and 64–106 full time equivalents (FTEs).

The range for each option reflects the assumptions assessed across the estimates.

Option 1 represents restrictions in line with management measures developed with stakeholders. Option 2 represents management options that restrict affected fishing gears across the entire site boundaries. The lower end of the range in each case assumes that where the fishing activity affected passes the displacement test, that it can be displaced to nearby fishing grounds and compensatory landings taken and the effect on output is reduced. The higher end of the range assumes the worst-case assumption that all economic activity is lost. If the reduction in activity results in a business becoming unviable and ceasing all activity (in addition to the activity affected by the management options), the impact may be greater.

In addition to the impact on the commercial fisheries sector, reductions in the quantity of sea fish landed at Scottish landing ports, would reduce the supply of locally-landed catch to fish processing facilities, and to the hotel/restaurant, retail and wholesale trades. The distributional analysis therefore considers how the impacts on both sectors (commercial fisheries and fish processing) are likely to be distributed across different areas of Scotland and specific groups of people, and assesses the likely significance of these impacts.

The fishing industry generated £329 million GVA, accounting for 0.22% of the overall Scottish economy and 6.5% of the marine economy GVA, and provided employment for 4,886 people (headcount) in 2019⁶⁸. Vessels registered in Aberdeenshire and Shetland Islands local authority areas were responsible for over 60% of the value of landings. Employment was attributed particularly to vessels registered in Aberdeenshire, Highland, Shetland Islands, Argyll and Bute, Na h-Eileanan Siar and Orkney Islands (each over 5% of employment headcount).

Together with aquaculture production and imported fish, commercial fisheries provide inputs to the processing industry. The fish processing industry is important in Scotland, contributing £390 million (GVA) and employing 6,800 people (headcount) in 2019⁶⁸. Whilst the majority of landings and fish processing occur in the Grampian region, the fishing and processing industries provide an important contribution to local economies in rural and island communities, particularly in Orkney, Shetland and the Western Isles.

The distributional analysis presented in this section considers the distribution of the potential economic (and hence social) costs of all the proposed management options. Impacts have been calculated by applying national multipliers^[74] at the site level and regional/ port level to estimate the economic impacts of management options at sites and by region/port. Local and regional multipliers are not available and hence the application of national multipliers may overestimate or underestimate the size and geographical distribution of impacts. A distributional analysis has also been conducted for each site and is presented in the Site Reports in Appendix C.

The different aspects assessed as part of the social impact analysis for each site are:

• The area of social impact associated with the economic impacts identified and the overall significance of social impacts (all in Table 4a in Appendix C);
• For the fishing sector, Table 4b in Appendix C considers the main vessel sizes, gear types, regions, home ports and ports of landings, and whether ports are rural/urban and mainland or island;
• In Table 4c in Appendix C, the distribution of social impacts is considered by age, income, social group and gender.

The key results of the distributional analysis are summarised in Table 14 and Table 15. For some aspects, the distribution of costs (e.g. across different Scottish regions and ports, and categories of vessel) has been assessed quantitatively. For other aspects (i.e. age, gender, income and social groups), the analysis indicates whether management options are likely to impact on these groups, and if so, whether the impact is anticipated to be minimal, negative, or significantly negative.

The distributional analysis is based on UK fishing vessels only and their affected landings, as no information on the value or location of landings from non-UK vessels was available. If the affected non-UK vessels would normally land to ports in Scotland, there may be knock-on effects on those ports and down-stream supply chains. This may be important for ports which usually receive substantial non-UK landings, such as Kinlochbervie.

Impacts: xxx: significant negative effect; xx: possible negative effects; x: minimal negative effect, if any; 0: no noticeable effect expected.

*Seafish (2022) Processing Enquiry Tool. Updated Jan 2022. https://public.tableau.com/app/profile/seafish/viz/ProcessingEnquiryTool/2021Overview.

Impacts: xxx: significant negative effect; xx: possible negative effects; x: minimal negative effect, if any; 0: no noticeable effect expected

Distribution of Economic Costs – Location

The following section assesses where the impacts on land are likely to be felt, based on the registered home port district of the vessels affected. Impacts are presented for the range of Option 1, and for the higher end of Option 2 (assuming all landings are lost as a worst-case estimate). Table 16 presents the annual loss of landings affected by region and home port of the vessels affected, providing an indication of where employment impacts may fall. It covers all sizes of vessels - those greater than 12 metres and less than 12 metres in length. The majority of the impacts are on over-12 m vessels under both management options. Impacts on under-12 m vessels are only estimated for Firth of Forth Banks MPA, as the other sites either do not have any landings from under-12 m vessels recorded from the respective ICES rectangles, or where there are landings they are assessed to occur from the inshore portion of the ICES rectangle, not overlapping the site.

Table 17 puts the impacts in the context of the home port districts, indicating the percentage of landings by vessels registered in each home port district that are affected.

Table 16 and Table 17 show that:

• At the higher end of Option 1, the expected costs of the proposed management options are predominantly on Scottish ports. It is estimated that over 76% of the total affected landings would be from vessels registered to Scottish ports. Landings from vessels registered at Fraserburgh are about 27% of the landings affected under the estimate. Note these totals are not the percentage of landings lost at the respective ports, which are described in Table 22.
• Under Option 2, the majority of impacts are felt in Scotland (72%), with most losses from vessels registered at Fraserburgh (29% of total losses), followed by Peterhead (10%), Ayr and Orkney (both 8%). Outside of Scotland, the majority of losses arise to vessels registered in the North East of England (15%); unknown home port registration (11%) account for the remainder.

While these ports may bear the greater proportion of the total effects, the significance of impacts depend on their scale relative to the size of the affected home port district. The impacts per port district are calculated as relative to total landings per home district, provided by Scottish Government. The impact on landings is small across all Scottish ports under the higher end of the Option 1 estimate (see Table 18). The highest is Orkney which has 2.5% of total landings potentially affected.

The employment impacts vary across ports, although they are generally low as a percentage of total employment. At the higher end of the Option 1 estimate, the value of landings potentially lost as a result of the proposed management options represents a very small proportion of total landings by home port for all of Scotland’s districts and ports affected. The majority of the impacts on employment under the higher end of the Option 1 estimate are at Fraserburgh and Orkney (based on landings affected by registered home port of the vessels). An estimated 16 jobs would be affected in total at these ports, which is 3% of the local fishing workforce in Orkney (6.5 jobs), and 1.2% (9.2 jobs) in Fraserburgh. Note that this overestimates percentage impacts, as it compares direct and indirect jobs affected, with the total regularly employed in fishing (i.e., direct jobs only).

N.D. = Value cannot be disclosed, as it relates to the operations of fewer than five vessels.

N.D. = Value cannot be disclosed, as it relates to the operations of fewer than five vessels.

1 As reported in Scottish Sea Fisheries Statistics 2019

* Employment data for these districts were not available

No impact is shown as 0%

N/A: Unable to calculate affected landings as a percentage of total landings for vessels where home district registration is unknown.

Distribution of Economic Costs – Fishing Groups

This section considers the distribution of impacts by fishing groups, based on the vessel length group and gear type of the vessels affected. Impacts are presented for the range at Option 1, and for the higher end of the Option 2 (assuming all landings are lost as a worst-case estimate).

Table 19 presents the annual average loss of the value of landings by gear type and vessel length, by broad region (North Western Waters or Northern North Sea). Under Option 1, the majority of impacts are on over-12 m vessels on demersal trawls (81% of Option 1 total), primarily in the North Western Waters.

In Option 2 the same gear types and regions are affected, arising predominantly for over-12 vessels (99.8% of the Option 2 total). This stems mostly from demersal trawls (79% of Option 2 total), primarily in the Northern North Sea region.

Fish Processing Industry

This section considers the distribution of impacts on the fish processing industry, based on the port of landings of the vessels affected. Impacts are presented for the range of Option 1, and for the higher end of the estimates for Option 2 (assuming all landings are lost as a worst-case estimate).

In the Scottish fish processing industry, there were 127 businesses processing sea fish in 2020^[77]. It is clear from Table 20 that processing activity is concentrated in the north-east of Scotland (Grampian) with more modest levels of processing activity in “Other Scotland” and in the Highlands and Islands (where processing is on a smaller scale). 40% of processing units are located in Grampian and together they account for over 46% of total employment in the fish processing industry in Scotland.

Source: SeaFish, 2021 ^[78]

No management measures are anticipated for wild salmon and sea trout fisheries, and these processing units would predominantly be processing farmed salmon. No impacts are expected, therefore, on the Scottish salmon processing industry.

Management options are, however, anticipated to restrict commercial fishing activity, and have the potential to reduce the quantity and quality of seafish landed locally at Scottish landing ports. This could reduce the supply of locally-landed catch to fish processing facilities and the hotel/restaurant, retail and wholesale trades, and/or reduce confidence and hence investment in these sectors, in particular, the fish processing industry. The significance of the economic impact will depend upon various factors, including:

• The extent to which the landings of different species are affected (i.e. pelagic, demersal, shellfish) and the dependency of different processing units on these species;
• The distribution of affected landings across landing ports/regions and the dependency of landing ports on the affected landings; and
• The dependency of fish processing units in these regions/ports on processing locally landed catch, and their ability to offset reductions in local landings with landings that would have gone to ports where impacts are lower, and/or with imported fish.

The MPA socio-economic monitoring report^[79] found little evidence of these effects from existing Phase 1 management measures in designated inshore sites. Further monitoring in 2019^[80] identified a number of localised positive and negative impacts on coastal communities and industries, often due to a combination of factors, one of which was MPA management measures. Specific changes identified included:

• Decreases in landings of trawled nephrops and dredged scallops from some ICES rectangles containing MPAs, and increases in creel-caught nephrops and hand-dived scallops.
• Displacement of fishing activity – there were catch reductions of 25-30% for trawl vessels from affected ICES rectangles, with vessels found to compensate for this by fishing more heavily in rectangles without MPA designations (i.e. displacement of activity). For most vessels, total landings remained the same or higher, although vessels that were particularly heavy users of the affected fishing grounds suffered a 12% reduction in landings, on average.
• There was an increase in employment on static gear vessels, and a decrease on trawl and dredge vessels, in port districts near MPAs on the west coast of Scotland, although this change was not consistent across all areas.
• Seafood processors reported a reduction in landings, attributed to reduced access to sheltered fishing grounds within MPA boundaries. This is particularly relevant for inshore areas where the inshore fleet’s activity is restricted by weather conditions.
• Adaptations to fishing practices included fishing in other grounds, buying bigger boats to enable them to travel further and withstand harsher weather, diversification to creel fishing, downgrading to smaller boats or selling up. Through their adaptations, most fishers managed to tolerate the challenges and continued to operate viable businesses, although it should be noted that this may have been at some personal cost and inconvenience.

It should be noted that further effects may become evident over a longer time period, and that the effects on inshore vessels and communities from inshore MPA management measures are likely to differ from the effects from offshore measures which predominantly affect larger-scale vessels with a greater operating range.

Table 21 shows the distribution of all the lost landings at UK and non-UK ports from the MPAs. Under Option 1, the port with the largest proportion of the affected landings is Peterhead (up to 24.7% of the total impacts across Scotland). This is followed by Scrabster (19.2%), , Kinlochbervie (13.3%) Ullapool (11.2%) and Lerwick (10.5%). Under Option 1, the most significantly impacted ports are the same, with Peterhead accounting for 36.0% of the total impacts. Note that impacts at Ullapool and Lerwick as a percentage of total impacts decrease under Option 2 (11.2% to 7.1% and 10.5% to 6.1% respectively), and impacts at Fraserburgh increase from up to 6.5% in Option 1 to 11.6% in Option 2.

However, the high percentage of landings affected can be a reflection of the very small size of the port, as well as the absolute size of the impact. The size of the impact on these ports depends on the relative importance of the landings affected within the total landings to the port. The impacts as a percentage of the total landings at each port are shown in Table 22. Under Option 1, the most significant impacts on Scottish ports are at Aberdeen (3.6%), Cullivoe (2.8%) and Kinlochbervie (2.4%).

Under Option 2, impacts at Londonderry (Northern Ireland) are 9.5% of total landings at the port, while impacts at Aberdeen show a substantial increase (to 13.8%). For other Scottish ports affected (Cullivoe, Kinlochbervie), the landings affected as a percentage of total landings to the port all increase in percentage terms, and in actual value.

At several of these locations identified under each option, the impacts could potentially affect local fish processing businesses, due to the scale of the landings affected. This could have social consequences, as identified in Table 15. This is particularly the case where a large proportion of landings, as shown in Table 22, are potentially affected (particularly Aberdeen, where 13.8% of total landings are affected under Option 2), and where there are fish processing businesses within remote communities.

N.D.: Value cannot be disclosed

>10%: Ports cannot be disclosed but impact threshold (i.e., 10%) has been reached

N/A: Unable to calculate affected landings as a percentage of total landings for vessels where home district registration is unknown.

No impact is shown as 0%

Impact on Incomes

The average wages for employees in fish processing and fishing are shown in Table 23 and Table 24. They show the lower wages per employee in the fishing industry, and therefore the potential for management options to have a greater impact on lower income groups, as identified in Table 15.

Source: Scottish Government, 2022 ^[81]

Source: Scottish Government, 2022⁷⁹

Economic Importance of the Commercial Fishing Sector to the Scottish Economy and Sustainable Economic Growth

Scotland’s sea-fishing industry is estimated to contribute approximately 0.22% to total Scottish GVA (i.e., overall economy) ^[82]. Total employment (headcount) in the sea-fishing industry was 4,886 in 2019 (of which 3,941 were regularly employed in fishing), which is 0.2% of the labour force in Scotland⁸⁰.

The total effect on employment (taking account of direct and indirect effects) is 9–34 full time equivalent (FTE) jobs under Option 1, which is 0.2-0.9% of sea-fishing industry regular employment in Scotland. Under Option 2, total effect on employment (taking account of direct and indirect effects) is 61–101 full time equivalent (FTE) jobs, which is 1.5–2.6% of sea-fishing industry regular employment in Scotland

It should be noted that some of those employed may work part-time, so 34 to 101 FTE may translate into more than 34 to 101 people, and therefore a higher % of the industry headcount. Conversely, the comparison overestimates percentage impacts, as it compares direct and indirect jobs affected, with the total regularly employed in fishing (i.e., direct jobs only). The fact that most of the fish catching industry in Scotland is concentrated in coastal areas and islands means it has an important role to play in ensuring that these parts of Scotland contribute to, and share in, future economic growth.

The most recent sea fisheries statistics^[83] show that the value of fish landed by Scottish vessels decreased by 21% in real terms from 2019 to 2020, this is attributed to the fall in value of shellfish and demersal species, influenced by the Covid-19 pandemic. In 2020, 398,600 tonnes of fish and shellfish were landed by Scottish vessels with a value of £488 million.

The commercial fishing sector contributes to Scotland’s economic growth, and makes an important contribution in terms of ensuring that all parts of Scotland share in that growth. In 2020, although Scotland had only 8.1% of the UK population^[84], it landed 59% of the total value of fish landed at UK ports^[85]. The industry is therefore of much greater economic (and social and cultural) importance to Scotland than to the rest of the UK.

The impact which the management options could have on the GVA generated by the fishing sector in Scotland and GVA generated by the fishing sector and its supply chain is presented in Table 10. Table 25 presents these figures as a percentage of the total GVA impacts, showing the distribution of the impacts across the sites.

Over the study period, the potential direct impact is a reduction in GVA of between £4.9–17.3 million (Option 1) and £30.7–50.7 million (Option 2). The potential direct and indirect impact on GVA is a reduction between £6.4–22.4 million (Option 1) and £40.0–66.0 million (Option 2) over the study period. The annual direct GVA impacts represent approximately 0.1–0.4 to 0.6–1.0% of the sector’s annual GVA^[86].

The impacts on employment are shown in Table 12, showing the number of direct, indirect and induced jobs affected, per site where management measures are proposed. The impacts of the management options are estimated to lead to between 10-35 and 64-106 full-time equivalent jobs respectively being lost directly and indirectly throughout the Scottish Economy. This represents between 0.2–0.9% to 1.6–2.7% of total regular employment in the Scottish fishing industry^[87].

Under the higher end of Option 1, Central Fladen MPA and Solan Bank Reef SAC account for the largest employment impacts (nearly 40% combined). This changes under Option 2, where Central Fladen MPA accounts for 32% of the employment impacts, whilst Firth of Forth MPA and Solan Bank Reef SAC account for a combined total of 22% of employment impacts.

N.D. = Value cannot be disclosed, as it relates to the operations of fewer than five vessels. As a result the value for the Anton Dohrn Seamount SAC also cannot be disclosed.

N.I. = No impact.

Notes: The total impact on employment has been estimated as the average (mean) number of jobs affected (rather than the sum of jobs affected), over the 20 year period. This is because it is likely that it would be the same jobs that are affected, year-on-year and hence summing the jobs would provide a misleading total.

N.D. = Value cannot be disclosed.

An important consideration is whether ports will be affected by a combination of impacts on commercial fishing (assessed by impact on landings by vessels’ home district in Table 18) and on fish processing (assessed by impact on landings by port of landing in Table 22). Under Option 1, when taking into account potential for displacement to provide compensatory landings, only the Shetland District is impacted in both senses, however these impacts are small and are not considered likely to result in noticeable social or economic impacts. If all affected landings are assumed to be lost, under Option 1, Fraserburgh (up to 9 direct and indirect jobs, and 0.5% of total landings to the port) and Shetland (up to 7 jobs and 4% of total landings) are significantly affected in both senses. Under Option 2, Fraserburgh (30 FTEs and 2.4% of total landings) and Shetland (6 FTEs and 5% of total landings) are still significantly impacted, along with Peterhead (10 FTEs and 2% of total landings) and Ullapool (2 FTEs and 3% of total landings).

Under Option 1, the estimated loss of GVA (direct and indirect) represents up to 0.6% of the sector’s GVA and 0.9% of the sector’s employment (indirect and direct). Under Option 2, the impact is higher, with GVA impacts representing 1.7% of the sector and 2.4% of employment in the Scottish sea-fishing industry, so impacts at the Scottish economy and sectoral level are relatively small. However, these estimates are considered to overestimate the likely impacts as they assume that all fishing effort and associated landings is lost rather than being displaced (even though some displacement is likely), and direct and indirect employment impacts are compared with direct employment numbers in the sector, so that actual percentage impacts are likely to be lower.

The employment impacts also assume that reductions in GVA will automatically translate into job losses. In reality, vessels are likely to be able to absorb some small reductions in turnover and hence profit without that having any impact on employment. Further, even where the reductions in GVA are significant enough to affect employment, vessel owners have a number of alternative options before having to make fishermen redundant (e.g. reduction in wages, reduction in hours).

The point at which reductions in profits start to impact on employment issues will be different for the owners of different vessels. Rather than apply an arbitrary estimate of the threshold below which businesses would be able to absorb costs, it has been assumed that all losses in GVA translate directly into lost employment. Some vessels may not be able to absorb the costs, and continued operation may become unviable, resulting in loss of additional landings and higher employment impacts. The estimates presented above, therefore may over- or under-estimate the economic impacts generated by the proposals.

Although the GVA and employment impacts are relatively small at the Scottish economy level, they could have more significant economic and social consequences for the specific locations, individuals and communities that are affected. The scale and significance of impacts will depend on who bears the costs and the relative vulnerability of the local economies, fishing sectors and social groups upon which they fall. A distributional analysis has therefore been undertaken and is presented in Section 6.6.

Distribution of Economic Costs – Groups

The following sections relate to overall activity connected to fishing – the commercial fishing sector, upstream supply chain and downstream supply chain, including fish processing.

Overall significance of Impacts

For the majority of the proposed sites the socio-economic costs of the measures are either low, or have a large range. This range is caused by the range of management measures, and uncertainty over impacts (e.g. whether fishing activity would be displaced to other grounds without adverse impacts). For these sites, either minimal or possible negative effects are identified.

For three sites, potential for significant negative effects is identified: Central Fladen MPA, Firth of Forth Banks Complex MPA and Solan Bank Reef MPA. For these sites, there is also a range of potential effects, but Option 2 in particular may result in significant effects.

Age and Gender

The proposed management options have the potential to put between 9 and 101 FTE jobs at risk in the commercial fishing sector and its supply chain. These impacts are most likely to fall on those of working age, and on men who make up the vast majority of those employed in commercial sea fishing. There could be further employment impacts in downstream activities like fish processing, which are likely to be more evenly distributed between men and women.

These impacts could generate economic and social costs for the individuals concerned and for their families (including children) at the higher levels. However, some displacement of fishing activity is likely to occur and hence the impacts on employment are likely to be lower than the maximum estimate.

Income

The gross wages and salaries of fishermen are likely to have considerable variation across fleets and roles in the sector, and include individuals in the lowest-paid 10% of the Scottish economy’s workforce (see Table 24). It is likely, therefore, that the proposed management options at the sites could mainly impact on income groups falling into the lowest paid 10% and the middle 80% of workers.

Social Groups

Approximately a third of employment on Scottish fishing vessels is of non-UK nationals (mostly from outside of the EU)^[88]. There is no information to our knowledge that provides information on the ethnic origin of Scottish fishermen employed on Scottish-based vessels. The majority (51%) of employees in fish processing are EU nationals^[89]. To the extent that overseas workers make up employees and fish processing, there is a risk of a disproportionate effect on ethnic minorities. It is not anticipated, however, that there would be any significant impacts on crofters, people with disabilities or other social groups. This is due to their relatively low participation in the offshore sector.

Consequential Social Impacts

Further potential social impacts in the local communities affected, such as on culture, heritage, crime, health, education, access to services, or changes to the local environment are not considered likely to occur in the majority of affected locations.

In general, the scale of consequential negative social impacts will be in proportion to the significance of the economic and employment impacts identified above. For the three sites identified with potential significant negative effects, the impacts under Option 2 would be large enough to have negative social impacts, for example through loss of employment affecting crime and social cohesion.

Conclusions

For the management options assessed, the estimated economic impacts on ports likely to have their fishing fleets or landings affected, are negligible under the higher end of Option 1 estimate. There are exceptions to this for Option 2 for the three sites (Central Fladen, Firth of Forth Banks and West Shetland Shelf), and to some ports - these impacts are discussed further in Section 8.