Planning Scotland's Seas: 2013 - The Scottish Marine Protected Area Project – Developing the Evidence Base tor Impact Assessments and the Sustainability Appraisal Final Report

5. Distribution of Economic Costs and Consequent Social Impacts

The analysis presented in Section 3 has demonstrated that designation of the proposed MPAs, under the intermediate and/or upper scenarios, could generate potentially significant socio-economic impacts on the following sectors and/or the businesses, communities or individuals that depend on them:

• Commercial fisheries;
• Energy generation; and
• Oil and gas.

For commercial fisheries, implementation of the management measures required to protect the features of some MPAs (under the intermediate and upper scenarios), would result in a reduction or displacement of current and future output. It has been possible to quantify the potential loss of output and the associated impacts on GVA and employment for the sector and the economy as a whole. Although the GVA and employment impacts are relatively small at the Scottish economy and sectoral level, they could have potentially significant economic and, hence, social consequences depending on the specific regions/ports, individuals and communities that are affected.

The social impacts generated by the proposed NC MPAs will be strongly connected to the nature, scale and distribution of the economic impacts. This section is therefore presented in three parts:

• Sub-section 5.1 - presents a distributional analysis of the key quantified economic costs;
• Sub-section 5.2 - identifies the areas of social impact that could potentially be affected by potential designation of the proposed MPAs and assesses the significance of these impacts; and
• Sub-section 5.3 - presents the key conclusions.

Sub-section 5.1 focuses exclusively on the commercial fishing sector (and the consequent impacts on the fish processing sector) as this is the only sector where quantitative estimates of the economic costs (on output, GVA and employment) are available.

For energy generation and oil and gas, the potential increases in operating costs and some mitigation measures associated with designation have been quantified but it has not been possible to quantify the additional costs of some mitigation measures for new developments, decommissioning activities (in the case of oil and gas), or the costs associated with the potential delays or the impact of designation on future decisions. It is recognised that if the additional costs and delays potentially generated by management measures had a negative impact on investment decisions and meant that developments did not proceed (or were restricted), there would be a loss of future GVA and employment in these sectors. There would also be knock-on effects on their supply chains and the wider Scottish economy.

Sub-section 5.2, therefore, not only identifies the types of social impacts that are likely to be connected with the key quantified economic costs for the commercial fisheries sector, but also considers the social impacts likely to be associated with the non-quantified economic impacts for all three sectors. In the case of commercial fisheries, this involves identifying the social costs that are likely arise if those that own the affected vessels make some effort to offset the loss in output by fishing other grounds as well as those that can be anticipated assuming no redistribution of effort.

It should be noted that this section focuses on the potential socio-economic costs arising from designation of the proposed MPAs. It is evident that there are also potential economic and social benefits that would be generated from the environmental benefits of designating the possible MPAs. These are presented in Section 6.3 and should be considered against the socio-economic costs presented in this section.

5.1 The Distribution of Key Quantified Economic Costs: Commercial Fishing Sector and Fish Processing Sector

The designation of the entire suite of proposed NC MPAs is estimated to:

• reduce the average annual value of output landed by the commercial fisheries sector by between £0.1m and £11.5m;
• reduce average annual GVA (direct and indirect ) by £0.05m to £5.0m; and
• reduce the average (mean) number of jobs (direct, indirect and induced) by between 1 and 131 FTEs.

With the ranges reflecting the different management options assessed across the scenarios.

These are worst-case estimates based on the assumption that all economic activity is lost rather than being displaced to alternative fishing grounds. Since it is likely that some displacement of effort would occur, the economic costs are likely to be lower than those estimated. This may, however, be partly offset by other economic and social costs associated with displacement (set out in Table 29, sub-section 5.2) such as increased fuel costs and a loss of social cohesion among fleets.

In addition to the impact on the commercial fisheries sector, reductions in the quantity of seafish landed locally at Scottish landing ports, would reduce the supply of locally-landed catch to fish processing facilities and 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 distributional analysis presented in this section considers the distribution of the potential economic (and hence social) costs of designating the entire suite of MPA proposals. A distribution analysis has also been conducted for each relevant individual proposed NC MPA and is presented in the Site Reports in Appendix E.

Six different aspects are assessed as part of the distributional analysis:

• Location;
• Age groups;
• Gender groups;
• Fishing groups;
• Income group; and
• Social groups.

The key results of the distributional analysis are summarised in Tables 20 and 21. For some aspects, the distribution of costs ( e.g. across different Scottish regions and ports, categories of vessel and species type) has been assessed quantitatively. For others ( i.e. age, gender, income and social groups), the analysis indicates whether designation of the possible MPAs is likely to impact on these groups, and, if so, whether the impact is anticipated to be minimal, negative, or significantly negative.

Table 20. Distribution of quantified economi c cost s for commercial fisheries and fish processors (assuming zero displacement of fishing activity) - location, age, g e nder

Sector/Impact	Location			Age			Gender
	Regions	Port (s)	Rural, Urban, Coastal or Island	Children	Working Age	Pensionable Age	Male	Female
Commercial Fisheries Reduction in landed value, GVA and employment	Share of total costs for vessels >15 m under Intermediate and Upper Scenario: North-east: over 50% West: 20%. North-west: 12-14% North: 4% East:1%	Largest employment impacts in: Fraserburgh: 18-32 FTE job losses Peterhead: 5-9 FTE job losses Mallaig: 3-8 FTE job losses Ayr: 4-6 FTE job losses Campbeltown: 2-7 job losses Largest relative impact on total landings to port: Buckie:6- 14% of total landings affected	xx Impacts concentrated in coastal areas; urban in North-East, rural in West and North-west	xxx Potentially significant negative effect if parent loses job/becomes unemployed	xxx	xx Potential negative effect if retirees own affected vessels or live in households affected by unemployment	xxx 1–131 FTE job losses	xxx Potentially significant negative effect if member of household loses job/becomes unemployed.
Fish Processors Reduction in local landings at landing ports	x North-east and North-west regions most significantly affected	In most ports affected landings represent a very low proportion (0–3%) of total landings: x Mallaig: xx affected landings represent 2–7% of total landings to the port; Kinlochbervie: xx affected landings represent 3–5% of total landings to the port, under intermediate and upper scenarios	x Impacts concentrated in coastal areas; urban in North-East, rural in North-west	x	x	0	x 60% of processors male	x 40% of processors female

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

Table 21. Distribution of quantified economic costs for commercial fisheries and fish processors (assuming zero displacement of fishing activity) - Fishing groups, income groups and social groups

Sector/Impact	Fishing Groups		Income Group			Social Groups
	Vessel Category <15m >15m	Gear Types/Sector	10% Most Deprived	Middle 80%	10% Most Affluent	Crofters	Ethnic Minorities	With Disability or Long-Term Sick
Commercial fisheries Reduction in landed value, GVA and employment	Under lower scenario - main impact on <15m vessels Under intermediate and upper scenarios - main impact on >15m vessels	Main gear types affected for vessels <15m are nephrops trawlers Main gear types affected for vessels >15m are whitefish and nephrops trawls followed by dredges No impact on pelagic vessels	xx Possible negative impact on 10% most deprived	xx Possible negative impact on middle income group	x Information only available on average incomes, not the distribution of income. Not clear, therefore, whether this group will be affected	0	No breakdown of fisherman employment by social group	0 No employment data but unlikely to be employed in fisheries
Fish Processors Reduction in local landings at landing ports		Impacts on species type: Lower scenario - approx. 80% of affected landings are demersal and 20% shellfish Intermediate and upper scenarios - almost 60% of affected landings are shellfish and the remainder demersal Impact on different types of processing units: Shellfish & demersal fish processing units that cannot offset reductions in local landings with imported fish: xx Shellfish & demersal fish processing units that can offset reductions in local landings with imported fish: x Pelagic-only processing units: 0	x	x	0	0	No breadown of fish processing employment data available by social group	No breakdown of fish processing employment data available by social group

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

5.1.1 Commercial Fishing Sector

5.1.1.1 Distribution of economic costs by location (assuming zero displacement of fishing activity)

Table 22 presents the annual loss of landings affected by region and home port, for vessels greater than 15m. It is not possible to present the analysis for the total annual loss of landings as data on landings affected by home port are not available for smaller vessels ( i.e. less than 15m).

As indicated in Table 24, however, over 65% of the landings affected under the intermediate and upper scenarios are lost by larger vessels. The analysis presented below therefore captures a high proportion of the landings affected, although it is recognised that the distribution of impacts across ports may be different between the larger-scale and smaller-scale vessels.

It is clear from Table 22 that:

• The costs of designating the entire suite of proposed MPAs would fall disproportionately on the North-east region. It is estimated that over 50% of the total cost of the proposals for larger vessels (56% under the intermediate scenario and 53% under the upper scenario), would fall on vessels operating from ports in this region. The most significant impacts would be felt in Fraserburgh which alone accounts for 40% of total costs under the intermediate scenario and 36% under the upper scenario;
• The West and the North-west regions would also bear a relatively high proportion of the costs under the intermediate and upper scenarios - 20% and 12-14%, respectively. In the West, the costs are shared across Campbeltown, Oban and Ayr while in the North-West, the impacts fall disproportionately on Mallaig which bears 7-9% of the total costs under the intermediate and upper scenarios; and
• The North and the East bear a relatively small share of the costs - 4% and 1%, respectively.

In order to assess the significance of the potential impacts on specific Scottish districts/ports, Table 23 presents data on two key indicators for all Scottish districts/ports:

• The value of landings affected (from over-15m vessels) as a percentage of the total value of landings to ports; and
• The potential number of jobs lost as a percentage of the total number of fishermen employed at each district/port.

Table 22. Annual average value (£ million) and percentage of landings affected by region and home port, for >15m vessels, assuming zero displacement of fishing activity (costs discounted over the assessment period) 2012 prices

Region/District/Port	Scenarios
	Lower		Intermediate		Upper
	Total value of landings affected at port	As % of total value of landings affected across all ports	Total value of landings affected at port	As % of total value of landings affected across all ports	Total value of landings affected at port	As % of total value of landings affected across all ports*
NORTH EAST:
Fraserburgh	0.00	18	1.17	40	2.07	36
Buckie	0.00	0	0.15	5	0.32	6
Aberdeen	0.00	0	0.01	0	0.02	0
Peterhead	0.00	26	0.32	11	0.61	11
North East Total	0.00	44	1.65	56	3.02	53
NORTH:
Kirkwall	0.00	32	0.10	3	0.16	3
Scrabster	0.00	0	0.01	1	0.02	0
Lerwick	0.00	0	0.01	0	0.01	0
North Total	0.00	32	0.12	4	0.20	4
WEST:
Campbeltown	0.00	19	0.15	5	0.43	8
Oban	0.00	0	0.18	6	0.35	6
Ayr	0.00	0	0.26	9	0.39	7
West Total	0.00	19	0.59	20	1.16	20
NORTH WEST:
Stornoway	0.00	0	0.03	1	0.08	1
Lochinver	0.00	0	0.05	2	0.06	1
Portree	0.00	0	0.00	0	0.01	0
Mallaig	0.00	0	0.19	7	0.49	9
Ullapool	0.00	0	0.07	2	0.16	3
Kinlochbervie	0.00	0	0.01	0	0.02	0
North West Total	0.00	0	0.35	12	0.83	14
EAST
Eyemouth	0.00	0	0.01	0	0.02	0
Pittenweem	0.00	0	0.01	0	0.01	0
East Total	0.00	0	0.02	1	0.04	1
TOTAL	0.01		2.73		5.25

* The value of total landings affected ( i.e. across all ports) is different under the three scenarios. The value of landings affected at one port as a percentage of the total value of landings across all ports, therefore, can be lower under the upper scenario than it is under the intermediate scenario.

Table 23. Landings affected (assuming zero displacement of fishing activity) as a percentage of total landings and job losses as a percentage of the total number of fishermen employed, by district/port

Scottish Region/Port	Scenarios
	Lower			Intermediate			Upper
	Affected landings as % of total landings to port	Estimated reduction in employment	In employment as % of total employed in fishing	Affected landings as % of total landings to port	Estimated reduction in employment	In employment as % of total employed in fishing	Affected landings as % of total landings to port	Estimated reduction in employment	In employment as % of total employed in fishing
Aberdeen	0	0	0.0	0.2	0	0.3	0.4	0	0.5
Buckie	0	0	0.0	6.4	2	1.4	13.6	5	2.9
Eyemouth	0	0	0.0	0.2	0	0.1	0.5	0	0.3
Fraserburgh	0	0	0.0	3.1	18	2.8	5.5	32	4.9
Peterhead	0	0	0.0	0.3	5	1.3	0.7	9	2.6
Pittenweem	0	0	0.0	0.2	0	0.1	0.4	0	0.2
Scrabster	0	0	0.0	0.1	0	0.1	0.1	0	0.2
Orkney	0	0	0.0	-	-	-	-	-	-
Shetland	0	0	0.0	-	-	-	-	-	-
Stornoway	0	0	0.0	0.4	0	0.0	1.0	0	0.0
Ayr	0	0	0.0	3.2	4	0.8	4.6	6	1.2
Campbeltown	0	0	0.0	1.5	2	0.8	4.2	7	2.5
Kinlochbervie	0	0	0.0	0.1	0	0.4	0.3	0	0.9
Lochinver	0	0	0.0	0.2	1	4.0	0.3	1	5.3
Mallaig	0	0	0.0	2.8	3	2.9	7.0	8	7.2
Oban	0	0	0.0	3.0	3	1.1	5.9	5	2.2
Portree	0	0	0.0	0.0	0	0.0	0.1	0	0.0
Ullapool	0	0	0.0	0.6	1	0.5	1.4	3	1.2

It is clear from Table 23 that the value of landings lost as a result of designating the suite of proposed MPAs represents a very small proportion of total landings for the large majority of Scotland's districts and ports. At most districts/ports, the affected landings represent less than 1% of total landings under the intermediate and upper scenarios, respectively. At some ports - Fraserburgh, Ayr, Campbeltown, Mallaig and Oban - affected landings account for a higher proportion (ranging between 1.5% and 5.5%) of the value of total landings, but are still relatively low.

The largest job losses are expected in Fraserburgh. Under the intermediate and upper scenarios, it is estimated that the proposals could put between 18 and 32 jobs at risk; this represents a 3-5% reduction in the number of fishermen employed on vessels based in Fraserburgh. Fraserburgh employs the greatest number of fishermen in Scotland and over half of the employment in the Fraserburgh TTWA is dependent on the fishing industry. Even taking account of the fact that the job losses will be lower than that estimated, therefore, the proposals could have significant economic and social impacts on some individuals in this area.

Although the scale of the job losses are smaller in Mallaig (3 to 8 jobs at risk under the intermediate and upper scenarios), they represent a more significant proportional reduction in the number of fishermen employed locally in the sector. In Mallaig, the proposals could (at worst) lead to a 7.2% reduction in the local fishing workforce.

It is worth highlighting again that the information presented in Table 23 is based on home port information for vessels greater than 15m. The distribution of affected landings and employment may be different for vessels smaller than 15m.

5.1.1.2 Distribution of Economic Costs - Age and Gender

Under the assumption that all affected activity is lost, designation has the potential to put between 1 and 131 FTE jobs at risk in the commercial fishing sector and its downstream supply chain. This could generate significant economic and social costs for the individuals concerned and for their families.

In reality, some displacement of fishing activity is likely to occur and hence the impacts on employment are likely to be lower than those estimated.

5.1.1.3 Distribution of Economic Costs - Fishing Groups (vessel category)

Table 24 presents the annual average loss of the value of landings by gear type and vessel length, by region. Under the lower scenario, the majority of impacts are on the under-15m sector, in the north region, however this is predominantly due to the impact on under-15m gears in the FSS proposed MPA, which may be an over-estimate due to the IC ES rectangle landings data 'under-15m' vessel length category including cases where vessel length and/or administrative port information was missing from landings returns.

Under the intermediate and upper scenarios the majority of value of landings affected is from over-15m vessels. Whitefish trawls and nephrops trawls are particularly affected, followed by dredges. Nephrops trawls are most affected in the North-East region, particularly across the Fladen sites ( CFL, WFL and SEF). Since these sites represent options and only one site would be put forward for designation, the actual impact on nephrops trawls in this region is likely to be less (approximately one third). Over-15m nephrops trawls are also impacted in the West and North-west inshore regions, and dredges in the West inshore region. This might lead to conflict over diminishing fishing grounds for these gear types in the West and North-west inshore regions. Over-15m whitefish trawls are affected across a wider area than nephrops trawls, but to a lesser extent in each region - impacts are greatest in the North-west offshore, North-east and North regions. In the North-west offshore region, only one of GSH and SSH proposed MPAs would be put forward for designation, therefore the actual impact in this region is likely to be less.

Under the intermediate and upper scenarios, of the under-15m vessels, nephrops trawls are the most affected, and predominantly in the West inshore region. This is likely to further compound any displacement issues and conflicts over fishing grounds identified above for the over-15m sector in this region, in particular given that the under-15m vessels have a smaller operating range. Under-15m whitefish trawls appear to be heavily impacted in the North-west offshore region, and the gear category 'all affected gears' (where it has not been possible to identify individual gear types by site, for confidentiality reasions) in the North region, however, these may be over-estimates of actual impact, due to the IC ES rectangle landings data 'under 15m' vessel length category including cases where vessel length and/or administrative port information was missing from landings returns.

Table 24. Annual average loss of landings (assuming zero displacement of fishing activity) by gear type and vessel length, by region, £ million

	Lower Scenario							Intermediate Scenario							Upper Scenario
	Total by Region						Sum	Total by Region						Sum	Total by Region						Sum
	W(in)	NW (in)	NW (off)	N	NE	E	All MPAs	W(in)	NW (in)	NW (off)	N	NE	E	All MPAs	W(in)	NW (in)	NW (off)	N	NE	E	All MPAs
Over-15m vessels
Whitefish Trawls	0.00	0.00	0.00	0.01	0.00	0.00	0.01	0.00	0.07	0.43	0.21	0.36	0.00	1.08	0.00	0.21	0.60	0.43	0.77	0.00	2.00
Whitefish Seines	-	-	-	-	-	-	-	0.00	0.00	0.00	0.00	0.02	0.00	0.02	0.00	0.00	0.00	0.00	0.03	0.00	0.03
Nephrops Trawls	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.22	0.31	0.00	0.00	1.11	0.00	1.65	0.63	0.78	0.00	0.00	2.29	0.00	3.70
Other Trawls	-	-	-	-	-	-	-	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Dredges	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.25	0.04	0.00	0.00	0.01	0.41	0.72	0.52	0.12	0.00	0.00	0.03	0.41	1.08
Other Gears	-	-	-	-	-	-	-	0.01	0.00	0.20	0.00	0.00	0.04	0.24	0.01	0.00	0.20	0.00	0.00	0.07	0.29
'Other Affected Gears'	-	-	-	-	-	-	-	0.00	0.00	0.00	0.02	0.00	0.00	0.03	0.00	0.00	0.00	0.10	0.01	0.00	0.11
'All Affected Gears'	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.11	0.14	0.00	0.00	0.26	0.00	0.00	0.16	0.34	0.00	0.00	0.50
TOTAL >15m	0.00	0.00	0.00	0.01	0.00	0.00	0.01	0.49	0.43	0.75	0.38	1.51	0.45	3.99	1.17	1.11	0.96	0.87	3.12	0.48	7.71
Under-15m vessels
Whitefish Trawls	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.93	0.00	0.00	0.00	0.93	0.00	0.00	1.28	0.00	0.00	0.00	1.28
Nephrops Trawls	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.20	0.07	0.00	0.00	0.04	0.00	0.31	0.51	0.14	0.00	0.00	0.09	0.00	0.73
Other Trawl	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Dredge	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.04	0.00	0.00	0.00	0.00	0.00	0.04	0.07	0.02	0.00	0.00	0.00	0.00	0.09
Nets	-	-	-	-	-	-	-	-	-	-	-	-	-	-	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Pots	-	-	-	-	-	-	-	-	-	-	-	-	-	-	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Whitefish & Nephrops Trawls	-	-	-	-	-	-	-	0.00	0.05	0.00	0.00	0.00	0.00	0.05	0.00	0.28	0.00	0.00	0.00	0.00	0.28
'Other Affected Gears'	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.01	0.00	0.00	0.00	0.01	0.00	0.00	0.01	0.01	0.01	0.00	0.03
'All Affected Gears'	0.00	0.00	0.02	0.06	0.00	0.00	0.08	0.00	0.00	0.44	0.22	0.00	0.07	0.73	0.00	0.00	0.71	0.57	0.00	0.14	1.41
TOTAL <15m	0.00	0.00	0.02	0.06	0.00	0.00	0.08	0.25	0.12	1.38	0.22	0.05	0.07	2.09	0.58	0.44	2.00	0.58	0.09	0.14	3.82
TOTAL	0.00	0.00	0.02	0.07	0.00	0.00	0.09	0.73	0.55	2.13	0.59	1.55	0.52	6.08	1.75	1.55	2.96	1.44	3.22	0.62	11.53

W(in) = West, inshore: ARR, CSS, LSW, LFG, LCR, LSU, SJU; NW(in) = North-west, inshore: DLA, MOI, NWS, SMI; NW(off) = North-west, offshore: BHT, GSH, HRB, RBS, SSH; N = North (inshore & offshore): WSS, NOW, WYR, PWY, MTB, FSS, FTH, NEF; NE = North-East (inshore &offshore): CFL, CFL (core), WFL, NOH, ECC, SEF, NSP, TBB, EGM; E = East (inshore & offshore): FOF

5.1.1.4 Distribution of economic costs - income group

In 2010/11, the median gross annual full time earnings in Scotland were £25,205 and the lowest-paid 10% of workers received an average of £15,565 a year.

Table 25 presents information on the gross wages and salaries of employees in the Scottish fishing sector.

Table 25. Gross wages and salaries per employee in the Scottish fishing industry, 2008-2010

Scottish Fishing ( SIC 03.1)	2008	2009	2010
Gross Wages & Salaries per employee (£)	18,167	33,716	16,716

(Source: Scottish Annual Business Statistics, 2010)

Table 25 shows that the gross earnings of those employed in the Scottish fishing industry, varies considerably from year to year. In 2007, for example, the gross salary was £18,167 which was below average earnings in Scotland in 2008. In 2009, however, average earnings increased to £33,716 and hence were well above average earnings in the rest of Scotland that year.

While the gross wages and salaries of fisherman are, on average, above those earnt by the lowest-paid 10%, it is likely that there will considerable variation in gross earnings across fleets. It is possible, therefore, that designation of the possible MPAs could impact on income groups falling into lowest paid 10% and the middle 80% of workers.

5.1.1.5 Distribution of economic costs by social group - crofters, ethnic minorities and long-term sick

In addition to regular and part-time fishermen, Scotland has a small number of crofters that engage in commercial fishing. A crofter is a person who occupies and works a small land-holding known as a croft and operates a system of small-scale subsistence farming. There were 52 crofters engaged in commercial fishing in Scotland in 2011; that represents no change compared to 2010. In 2011, 33 of these crofters were employed at Portree, 17 at Stornoway, 1 at Kinlochbervie and 1 at Lochinver. Given that the value of affected landings at Portree, Kinlochbervie and Lochiver as a percentage of total landings, is less than 1% and in the case of Stornoway less 2%, designation of the entire suite of possible MPAs is not anticipated to have any noticeable impact on crofters.

There is no information to our knowledge that provides information on the ethnic origin of fishermen employed on Scottish-based vessels. It is not anticipated, however, that there would be any significant impacts on this group.

Likewise, we are not aware of any information on people employed in the industry with disabilities. Given the nature of the work, however, it is considered unlikely that people with disabilities or the long-term sick would be employed in fisheries and hence the proposals are not anticipated to have any noticeable effects on this social group.

5.1.2 Fish Processing Industry

In the Scottish fish processing industry there are 119 businesses processing sea fish ^[17] (SeaFish, 2013a). It is clear from Table 26 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). Over 50% of processing units are located in Grampian and together they account for over 70% of total employment in the fish processing industry in Scotland.

Table 26. Number of sea fish processing units in Scotland and industry employment, 2012

Location	Sea Fish Processing Units	Industry FTE Employment
North East (Grampian)	63	3,448
Other Scotland	37	1,088
Highland and Islands	19	373
Total	119	4,909

Source: SeaFish, 2013a.

There are also 39 salmon processing units in Scotland which in 2012 accounted for 2,859 FTE jobs. No management measures are anticipated for wild salmon and sea trout fisheries as a result of the establishment of proposed MPAs in Scottish waters, and these processing units would predominantly be processing farmed salmon. No impacts are expected, therefore, on the Scottish salmon processing industry.

Management measures are, however, anticipated to restrict commercial fishing activity, and have the potential to reduce the quantity of seafish landed locally at Scottish landing ports and hence reduce the supply of locally-landed catch to fish processing facilities and the hotel/restaurant, retail and wholesale trades.

The fish processing industry has already been badly affected by a reduction in landings. Since 1995, for example, Grampian has experienced a 10% decline in the number of units, principally in companies with 25 or fewer employees. The decline in landings has had a particular impact on primary processors where there has been a shift away from primary processing towards secondary or mixed processing units. Landings of pelagic and demersal species have continued to decrease over the last decade, therefore, there is a lower volume of these species available to the processing industry (Brown, 2009). By contrast there is a larger volume of shellfish available to processors.

Further reductions in landings, therefore, would impact on 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 imported fish.

5.1.2.1 Distribution of economic cost assuming zero displacement of fishing activity - across target species groups

An analysis of the value of landings (for vessels over 15m) that would affected by the designation of the suite of proposed MPAs, by species type, shows that under the lower scenario, almost 80% of the landings affected are in the demersal sector and approximately 20% in the shellfish sector. Under the intermediate and upper scenarios, it is the shellfish sector that is predominantly affected, accounting for almost 60% of the total reduction in the value in landings.

The pelagic sector is not expected to be affected by management measures in possible MPAs. This is significant because:

• landings of pelagic species have been decreasing over the last decade,
• pelagic landings, which in Scotland are dominated by mackerel, saw a 40% increase in value in real terms in 2011. This has resulted in record value of landings in 2011 despite a record low in the total volume of fish landed.

The potential economic impact of designating the suite of proposed MPAs (both on the commercial fisheries sector and the fish processing sector), therefore, is lower than it would have been if the management measures affected landings from the pelagic sector.

Information on the different species groups processed by fish processing facilities is not available for Scotland. However, the latest survey by the UK Seafood Processing Industry (SeaFish, 2013a) shows that units processing mixed species (mix of demersal, shellfish and pelagic) account for the majority (52%) of processing units in the UK. Units processing only demersal, shellfish or pelagic species, account for 21%, 20% and 8% of processing units, respectively.

This analysis suggests that designation of possible MPAs that impose restrictions on commercial fisheries vessels would:

• have no impact on fish processing units that only process pelagic species;
• have the largest impacts on fish processors that only process either demersal or shellfish (and particularly the latter under the intermediate and upper scenarios); and
• impact on mixed fish processing units with the scale of the impact depending on the relative shares of pelagic, demersal and shellfish processing to total processing.

5.1.2.2 Distribution of economic costs assuming zero displacement of fishing activity - across regions/ports

Table 27 shows the expected distribution of total affected landings across landing ports in Scotland. Figures are presented showing the total value of landings potentially affected at each port, and the total value of affected landings as a percentage of total landings at each port, under each scenario. The former provides an indication of the potential scale of the impact and the latter provides an indication of likely significance of the estimated reduction in local landings for each port. As explained above, the analysis is limited by the fact that data on the value of affected landings at ports are only available for vessels greater than 15m in length.

Table 27 suggests that the reduction in local landings would be distributed unevenly across the landing ports. The North-east region would bear the brunt of the costs with Fraserburgh alone accounting for 24%-25% of the total value of landings lost under the intermediate and upper scenarios, and Peterhead bearing over 20% of the total value of landings lost under the intermediate and upper scenarios.

However, as a proportion of total landings at each port, however, the loss is relatively small (typically 0-3%). This is within the range of normal inter-annual vaiability in landings and therefore it is considered unlikely that designating the suite of proposed MPAs would have a significant impact on the fish processing sector. The largest impacts under the intermediate scenario are felt by Aberdeen (North-east), where affected landings represent 4% of total landings to the port. Under the upper scenario, 7% of landings are affected at Mallaig (North-west), and 5% at Kinlochbervie (North-West) and Aberdeen (North-east).

Table 27. Landings affected (assuming zero displacement of fishing activity) as a percentage of total affected landings and as a percentage of total landings at each landing port

Landing Port	Lower		Intermediate		Upper
	% total affected landings	% of total landings to port	% total affected landings	% of total landings to port	% total affected landings	% of total landings to port
Fraserburgh			24%	2%	25%	4%
Peterhead	9%	0%	22%	1%	21%	1%
Mallaig			6%	2%	9%	7%
Kinlochbervie	15%	0%	9%	3%	8%	5%
Campbeltown	15%	0%	4%	1%	6%	3%
Scrabster	36%	0%	5%	1%	5%	1%
Aberdeen			8%	4%	4%	5%
Ullapool	17%	0%	4%	1%	3%	2%
Lochinver			4%	0%	3%	1%
Oban	0%	0%	3%	1%	3%	3%
Troon and Saltcoats			1%		1%
Montrose			1%		1%
Crinan			1%		1%
Troon			1%		1%
Carradale					1%
Tarbert			0%		1%
Lerwick			1%		1%
West Loch Tarbert	3%
Wick	2%
Tayvallich	1%
Tayinloan	1%

The significance of the impact for individual fish processing units will depend on various factors, including the extent to which they can offset the reduction in locally-landed fish with imported fish. It is expected that the reductions in landings caused by designation would have little impact on the larger fish processing facilities and those that are engaged in secondary processes that already use a significant proportion of imported fish ( e.g. processors in the North-East such as Peterhead and Fraserburgh which are expected to bear the brunt of the costs associated with designation of proposed MPAs) as they are already geared up for obtaining supplies via direct routes and from overseas. It can be assumed that these processors will be able to counterbalance a reduction in local landings with increased use of imported raw material and hence that designation would have a minimal negative impact, if any, on the processors.

The impacts could be greater:

• for smaller-scale fish processors which are more reliant on processing catch from Scottish waters. Designation could have a potentially negative impact on these processors though the impact is not expected to be significant given the scale of affected landings; and
• for those supplying hotels/restaurants and retail and wholesale trade where the demand is specifically for fish caught locally from Scottish waters. Again, however, the impact is not expected to be significant given the scale of affected landings.

It is important to note that as the information presented in Table 28 is based on landing port information for vessels greater than 15m, the distribution of affected landings may be different for vessels smaller than 15m.

5.1.2.3 Distribution of economic costs - age and gender

Designation of proposed MPAs has the potential to have a negative impact on some fish processing units that cannot easily offset the reduction in locally caught fish with imported fish. The impact, however, is not expected to be significant given the scale of the landings affected. The impact on employment is expected to be minimal if any.

Although there is no male/female split of employment information for the Scottish fish processing sector, the gender split at the UK level is approximately 60:40 men to women. Any job losses in the fish processing sector that did occur as a result of MPA designation could therefore impact on the male and female labour markets of the coastal communities affected.

If job losses did occur then the impacts of designation would be felt on the working age population and their families.

5.1.2.4 Distribution of economic costs - income group

In 2010/11, median gross annual full time earnings in Scotland were £25,205 and the lowest-paid 10% of workers received an average of £15,565 a year.

Table 28 presents information on the gross wages and salaries of employees in Scotland for processing and preserving fish, crustaceans and molluscs.

Table 28 shows that the gross earnings of those employed in the fish processing and preserving industry are around £16,000 -18,000 a year. This is well below median annual earnings in Scotland (£ 25,205) and fairly close to the average annual earnings of the lowest paid workers (£15,565). It is likely that beneath the averages, there will be variations in earnings across different types of processing units and across regions.

If designation did result in job losses in the fish processing sector, therefore, impacts could be felt by the lowest paid 10% and the middle 80% of workers.

Table 28. Gross wages and salaries per employee for the processing and preserving of fish, crustaceans and molluscs, 2008-2010

Scotland: Processing and Preserving Fish, Crustaceans and Molluscs ( SIC 10.2)	2008	2009	2010
Gross Wages & Salaries per employee (£)	16,507	18,384	18,332

(Source: Scottish Annual Business Statistics, 2010).

5.1.3 Distribution of Economic Costs by Social Group - Crofters, Ethnic minorities and Long-term sick

Designation of the entire suite of possible MPAs is not anticipated to have any noticeable impact on crofters (see Section 5.1.1.5).

There is no information to our knowledge that provides information on the ethnic origin of people employed in fish processing units (either in Scotland or the UK). Likewise, we are not aware of any information on people employed in the industry with disabilities or long-term sick. It is not anticipated, however, that the designation of possible MPAs would have any significant impacts on these social groups.

5.2 Social Impacts

The social impacts generated by the designation of MPAs will be strongly connected to the nature, scale and distribution of the economic impacts. Table 29 identifies the areas of social impact that are likely to be affected by the quantified and non-quantified economic costs identified for the commercial fisheries, energy generation, and oil and gas, sectors in Section 3 and assesses their potential significance.

Table 29. Social impacts associated with quantified and non-quantified economic impacts

Sector	Potential Economic Impacts	Economic Costs	Area of Social Impact Affected	Mitigation	Significance of Social Impact
Commercial Fishing	Loss of traditional fishing grounds with consequent loss in landings, value of landings and hence GVA	Annual average loss in value of landings, assuming zero displacement of fishing activity: £0.1m–£10.1m Annual average reduction in GVA (direct plus indirect) assuming zero displacement of fishing activity: £0.05 – £5.0m	Culture and heritage – impact on traditions from loss of fishing grounds.		xx
	If the loss in GVA significant enough, risk of job losses (direct plus indirect)	Job losses, assuming zero displacement of fishing activity: Direct and indirect: 1–131 FTE jobs	A reduction in employment can generate a wide range of social impacts: Health (increase in illness, mental stress, loss of self esteemand risk of depression); Increase in crime; Reduction in f uture employment prospects/future earnings. Which, in turn, can generate a range of short and long term costs for wider society and the public purse.	Support to retrain those affected and for the promotion of new small businesses in fisheries dependent areas	xxx
	Displacement Effects	Not quantified	Quantified impact on jobs assume worst case scenario (i.e. no redistribution of effort). In reality displacement effects likely to occur with socio-economic consequences: Employment – reduced employment due to changes in costs and earnings profile of vessels (e.g. increased fuel costs, geardevelopment and adaption costs, additional quota costs). Conflict/Loss of social cohesion – diminishing fishing grounds may increase conflict with other vessels/gear types, increase social tensions within fishing communities and lead to a loss of social cohesion among fleets. Could also lead to increased operating costs as a result of lost or damaged gear. Equally, gear conflict could reduce where gears are restricted/prohibited. Health - increased risks to the safety of fishers and vessels and increased stress due to moving to lesser known areas. Environmental – increased impact in targeting new areas, longer streaming times and increased fuel consumption. Culture and heritage – change in traditional fishing patterns/ activities.		xx
Energy Generation	Additional mitigation measures for new developments to support achievement of site conservation objectives Costs associated with delays during the consenting process. Loss of investor confidence (developments do not proceed).	Quantified Cost Impact: Total PV cost: £0m – £47m Not quantified	Future employment opportunities – if increased operational costs associated with management measures render projects unviable or restrict project size there will be a negative impact on economic activity and job creation in this sector. Future employment opportunities – if the delays deter investments there will be a negative impact on economic activity and future job creation in this sector. Environment – possible negative impact in relation to climate change and the ability of the Scottish Government to meet its 2020 renewables targets, decarbonisation targets and climate change targets. There would also be consequent financial implications of climate change impacts.		xxx (under upper scenarios) xxx (under upper scenarios)
Oil and Gas	Additional mitigation measures for new developments or decommissioning activities to support achievement of site conservation objectives	Total PV cost: £0m - £120m	Future employment opportunities – reduced future employment opportunities if costs significant and render development projects unviable.		xxx (under upper scenarios)
	Costs associated with delays during the licensing and permitting process. Loss of investor confidence (developments do not proceed).	Not Quantified	Employment – reduced future employment opportunities if delays deter investments		xxx (under upper scenarios)

Notes: The likely areas of social impact are based on the key areas identified by the GES/GSR Social Impacts Taskforce

Ratings: x x x : significant negative effect;
x x : possible negative effect;
x: minimal negative effect, if any;
0: no noticeable effect expected

5.2.1 Commercial Fishing Sector - Social Impacts if Fishing Activity is Lost

If the value of fishing activity is lost ( i.e. not replaced by fishing alternative grounds) and jobs are lost as a result, this could generate a wide range of social impacts. The nature and scale of the social impacts, however, depends on what happens to those who lose their jobs. If those affected can find alternative employment then this may result in a change in, for example:

• the type, quantity or quality of employment;
• working patterns;
• household income;
• working conditions; and
• location - if those affected have to move to find employment.

These changes could be negative or positive.

If, however, those affected cannot find alternative employment, the 'lost' jobs could go into unemployment, or, in some cases, (early) retirement. Each scenario will set in train an array of further economic and social impacts, not only for the individuals concerned, but also for their families and dependents, for fishing communities, wider society and the public purse.

The social impacts of employment are well documented. There is a vast literature, for example, looking at the link between unemployment and ill health and the psychological, social and biological pathways by which this happens ( e.g. the role of relative poverty, social isolation, loss of self-esteem, including that associated with losing access/membership of certain types of sub-culture which is likely to be particularly important in fishing communities). A significant amount of analysis has also been conducted on the impact of unemployment on families. The emotional distress arising from jobs losses and the financial hardship affects both the job loser and other family members and directly affects family relationships. A significant body of research also shows that unemployment induces increases in crime and that a period of unemployment (particularly youth unemployment) can reduce future employment prospects and hence future earnings.

The extent to which the designation of proposed MPAs will trigger any of these social impacts depends on whether and how quickly those who lose their jobs find alternative employment and the quality of that employment. This, in turn, will depend on: where the job losses occur, the number of jobs affected in each area and the prospects for alternative employment. A particularly important feature highlighted by the distribution analysis in sub-section 5.1 above is that the potential employment impacts of designating the suite of MPAs will be concentrated in coastal areas in the North-east, North-west and West. The communities in these areas are highly dependent on the fishing industry and have few prospects of alternative employment.The economic and social impacts of job losses in these areas, therefore, can be expected to be greater than job losses generated in areas which offer more diverse employment opportunities.

5.2.2 Commercial Fishing Sector - Social Impacts if Fishing Activity is Displaced to Other Grounds

In reality, it is likely that some commercial fishing activity will be displaced to other grounds. The extent to which revenues could be replaced from fishing elsewhere in the short term and the longer term, is difficult to estimate, even qualitatively, as that will depend on an array of different factors, for example:

• the availability of alternative fishing grounds;
• whether vessels change gear type and target species;
• the relative catch rates and associated profitability of the new fishing grounds; and
• the effect on other vessels fishing in these grounds.

There may be less scope for smaller vessels to offset affected landings as they have a more restricted range and hence there may be fewer alternative fishing grounds available. If so, this group would experience a greater impact from the designation of proposed MPAs. Given that costs will be incurred in displacing fishing effort to other grounds and/or switching gear types, and that vessels are constrained by spatial restrictions on quota and limits on days at sea, it is considered unlikely that the total amount of revenues lost due to MPAs could be fully replaced by fishing elsewhere.

Table 29 identifies and describes a range of social consequences that could arise from displacement, including negative impacts on:

• employment - from increased costs ( e.g. fuel costs) and hence reduced profits;
• health ( e.g. increased stress) and safety (of fisherman and vessels) - from fishing in unfamiliar grounds;
• social cohesion - from increased tensions among fleets from competing ports having to share grounds thus breaking the bonds that normally bring individual fleets together;
• the environment - from increased emissions if vessels are forced to move further afield and impact to benthic habitats that may have been previously unaffected by fishing; and
• culture and heritage - from a change in traditional fishing patterns.

The scale and significance of these impacts will depend on a number of inter-related factors, for example:

• the extent of displacement that occurs;
• the impact on revenues (employment, social cohesion);
• the size/quality of stock and additional pressures on existing grounds that remain open and which will inevitably be fished harder (social cohesion);
• whether there is a need to ban gears that have fished the area in question for decades (cultural and heritage).

5.2.3 Energy Generation - Potential Future Socio-Economic Impacts

In light of the considerable uncertainties that exist, it is not possible to determine whether designation of the proposed MPAs would reduce the potential level of future economic activity generated by this sector. It is recognised, however, that if the additional operating costs or delays associated with management measures restricted or deterred investment in offshore renewables projects, there could be potentially significant socio-economic impacts, in terms of a loss of future economic activity and job creation opportunities under the upper scenarios. However, it should be noted that SNH and JNCC's current advice is that the intermediate scenario represents their best view on potential management requirements.

In addition, there would be potential indirect impacts on this industry's supply chains and the wider Scottish economy. The successful future development of a strong supply chain requires a critical mass of projects in Scottish waters and development beyond current projects. If the management measures associated with the proposed MPAs restricted current or future developments this could have potentially significant socio-economic consequences by restricting the supply chain opportunities.

The potential value of this sector and its supply chain is fully acknowledged in the Scottish Government's Economic Strategy, the government's overarching Strategy for delivering long-term sustainable economic growth. The Strategy identifies Energy (including renewables) as one of six sectors in Scotland which have the potential to be international successful in areas of global demand and to which priority is being given to ensure these sectors grow, maximise added value and create high quality and sustainable jobs.

5.2.4 Oil and Gas - Social Impacts

In the absence of information on the location of future developments within individual proposed MPAs, it has not been possible to estimate the costs associated with possible mitigation measures. These costs are potentially very significant under the upper scenarios and, as with the Energy sector, if they rendered development projects unviable, there would be potentially significant socio-economic impacts, in terms of a loss of future economic activity and job creation opportunities, not only in the sector and its supply chains but in the wider Scottish economy. However, it should be noted that JNCC's current advice is that the intermediate scenario represents their best view on potential management requirements.

5.3 Conclusions

This section, together with Section 3, has assessed the scale and significance of the potential socio-economic impacts that could be generated by the proposed designation of MPAs on the commercial fishing sector, the energy sector and the oil and gas sector.

The analysis has shown that there is a significant level of variation in the scale of potential socio-economic costs that are likely to be generated by designation of alternative proposed MPAs under alternative management scenarios. In other words, some of the possible MPAs are currently or potentially significantly more valuable in economic terms than others. Given the Scottish Government's policy to deliver habitat protection based on specific objectives while minimising the resulting economic and social impacts, this has important implications for the possible MPAs that are included in the designation and the management scenarios that are adopted.

5.3.1 Commercial Fishing Sector and Fish Processing Sector

It is difficult to assess the potential socio-economic consequences of designation of possible MPAs on the commercial fishing sector (and hence the fish processing sector) as, ultimately, this will depend on the extent to which the fleet can source alternative fishing grounds, and that is unknown. The quantitative estimates presented for this sector, therefore, assume there is no redistribution of fishing effort and hence represent worst-case estimates.

The analysis suggests:

• designation of ten of the possible MPAs would not require any restrictions on fishing activities and hence would not generate any economic or social costs;
• under the lower scenario, the economic and social impacts of designation would be minimal;
• while designation of the suite of MPAs would have negative impacts on GVA and employment, the impact at the Scottish economy level would not be significant;
• while designation of the suite of MPAs would have negative impacts on the sector's GVA and employment under the intermediate and upper scenarios, these impacts would be relatively small. Under the worst-case scenario, there would be a 2% reduction in the sector's GVA and employment;
• the North-east, North-west and West regions, however, would bear a disproportionate share of these costs with the most significant employment impacts being felt in Fraseburgh, Peterhead, Mallaig and Ayr. Designation of the suite of MPAs could put jobs at risk in these and other areas (under the intermediate and upper scenarios) and this could generate significant economic and social costs for the individuals affected (and their families) if they do not find alternative employment;
• it is anticipated that designation of the suite of proposed MPAs would have a negative, but fairly minimal impact, on the Scottish fish processing sector as a whole. Affected landings account for a relatively low proportion of total landings at landing ports (typically 0-3% and 7% worst case at Mallaig) and it is likely that fish processors will react to reductions in local supplies of fish by importing greater quantities of raw material. The impacts could be more significant for smaller-scale processors which are heavily reliant on locally-caught demersal species and shellfish. Designation is not expected to have any impact on the pelagic sector; and
• if the impact of designation on the Scottish fleet was a displacement of fishing activity, the economic and social costs would be smaller than those estimated. These may, however, be partly offset by other economic and social costs associated with displacement such as increased fuel costs and a loss of social cohesion among fleets, as a result of increased tensions among vessels from having to share fishing grounds.

5.3.2 Energy Generation

The analysis for the energy generation sector indicates:

• ten of the possible MPAs have existing, planned or potential future offshore renewable development within the relevant boundaries;
• potentially very high cost impacts have been identified for the Firth of Forth Banks complex and South Arran under the upper scenario and for North-west Sea Lochs and Summer Isles under the intermediate and upper scenarios;
• it has not been possible to quantify the costs associated with potential delays or the impact of designation on investment decisions. If designation restricted or deterred investment in existing, planned or future offshore renewables projects, there could be potentially significant socio-economic impacts, in terms of a loss of future economic activity and job creation opportunities;
• the successful future development of a strong supply chain requires a critical mass of projects in Scottish waters and development beyond current projects. If the management measures associated with the possible MPAs restricted current or future developments this could have potentially significant socio-economic consequences by restricting the supply chain opportunities.

5.3.3 Oil and Gas

The analysis for the oil and gas sector indicates:

• Eleven of the proposed MPAs have existing or planned exploration and/or development activity;
• It has not been possible to quantify the costs associated with possible mitigation measures but these are potentially very significant and may render projects unviable;
• If designation renders projects unviable or deters investment, this could have significant socio-economic consequences in terms of reduced levels of future economic activity and job creation in the sector, with knock-on effects for its supply chain and the wider Scottish economy.

This section has focused on the socio-economic costs of designation of the proposed MPAs; these need to be set against the benefits (environmental, economic and social) that would potentially be generated by their designation.