Management Of The Scottish Inshore Fisheries; Assessing The Options For Change

22 THE RESULTS

22.1 Introduction

For each IFG area, and Scotland as a whole, we present separate tables of EIA and NEV results. The EIA and NEV results are presented for the 0-1 NM followed by the 0-3 NM. The commercial fishing sector embraces all forms of commercial fishing as described by the benchmark tables reported earlier. The recreational sector includes RSA and RD.

22.1.1 Presenting the EIA results

The economic impact is presented as the change in FTEs immediately, in 10 and in 20years.

22.1.2 Presenting the NEV results

The Net Economic Values are the total annual flow and discounted at 3.5%. For the commercial fishing sector, NEV approximates to profits, since the analysis of dependency in Section 7 did not justify the use of a shadow wage rate.

Five NEV estimates are provided. The total in the first NEV column excludes the general public's GPNUV and Options Values ( OV). The NEV estimates in the second column include OV but exclude GPNUV. OV is separately added because it was estimated by benefit transfer and assumptions were made about scope sensitivity. The third column includes GPNUV. There are number of reasons for separating out the GPNUV. First these values are very large and it should be understood that in some instances, it is these values which are responsible for the overall positive NEV values. Second, there are unknown, but potentially very high margins of error associated with their estimation through benefit transfer. Third, there is a displacement issue associated with some vessels continuing to use mobile gear outside the 0-1 or 0-3 NM limit. Even although their displaced activity is spread over a much larger area, this will reduce the general public values by an unknown amount. We can be certain the true value is greater than zero because it is undeniable that a significant proportion of the Scottish population is not indifferent to both the loss marine biodiversity and its enhancement. The true value could be very high since there are 2.31 million households and we are summing their GPNUV over a long time period. The greater error would be to exclude an estimate of GPNUV. Given the high margin of error and potential for environmental damage to be displaced the fourth column halves the estimate of GPNUV. The 50% reduction on GPNUV is not entirely arbitrary, since around 50% of the mobile effort is likely to be displaced and therefore impacting on the marine environment elsewhere in Scotland ^[60] .

It should be stressed that by separating out GPNUV, and reducing it by 50%, there is no implication that the general public's welfare should have a lower weighting than, say, commercial fishing interests. The authors of this study have no remit to engage in judgements about the relative merits of different stakeholder group. This study is simply presenting the results and their provenance, as well as providing guidance on how they might inform decision making.

In the first four columns, NEV is estimated by discounting over a 20 year period using the Treasury recommended rate of 3.5%. This means that policy benefits or costs arising after 20 years are ignored. Normally, a finite horizon would be appropriate for a capital investment such as buildings. Capital items do not last forever and over time the usefulness of capital items can be eroded by changes in human preferences. With respect to environmental improvement the intention is create something that is renewable and sustainable ad infinitum. Thus by imposing a 20 year horizon we are in effect biasing the results against conservation. The effect of assuming a continuous stream of benefits for ever is to increase significantly the value of the proposed restrictions.

It would not be appropriate to present all 72 permutations (36 for each for 0-1 NM and 0-3nm) that are available for each IFG area ^[61] . To indicate a range of possible values four combinations for each restriction are presented. These are a Least Favourable Outcome ( LFO), a Most Favourable Outcome ( MFO) and two examples of typical less extreme "middling" combinations.

The LFO outcome from society's perspective combines:

• A status quo scenario of stability
• A minimal environmental impact of the policy.
• A large proportion of mobile operators retire and sell licences outside Scotland
• Ecosystem recovery is very slow.

The MFO outcome combines:

• A status quo scenario of continued loss of biodiversity and decline of RSA
• A major environmental impact of the policy.
• A large proportion of mobile operators continue to fish outside of 1 NM or 3 nm
• Ecosystem recovery is very fast

The parameters for the two "Typical" scenarios together with the Least and Most Favourable to change are shown in Table 22.1.1

Table 22.2 The Alternative Scenarios.

	Initial Environment	Environment Policy Impact	Operators' Response	Recovery Speed
Least Favourable	Stable (2)	Minimal (3)	Convert (3)	20 yr (2)
Most Favourable	Decline (1)	Major (1)	Carry On (1)	10yr (1)
Typical 1	Stable (2)	Some (2)	Mixture of (1) and 3)	10yr (1)
Typical 2	Decline (1)	Some (2)	Mixture of (1) and 3)	20 yr (2)

22.2 Results for Scotland

Table 22.2.1a. EIA for Scotland (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-340	-103	-90
	Recreational Sector	3	53	105
	Total	-337	-51	15
Most Favourable	Fishing	-128	122	148
	Recreational Sector	21	1342	1342
	Total	-106	1464	1490
Typical A	Fishing	-227	-14	-1
	Recreational Sector	11	252	252
	Total	-216	238	251
Typical B	Fishing	-227	-106	-80
	Recreational Sector	5	545	1089
	Total	-221	438	1009

After 20 years, on the LFO there is the possibility of only gaining a total of 15 jobs. The MFO projects net gain of 1,490 jobs.

Table 22.2.1a. NEV Results (£m) for Scotland (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£60	-£60	-£60	-£60
	Recreation	£112	£142	£239	£154
	All	£52	£56	£153	£105	£466
Most Favourable	Fishing	-£56	-£56	-£56	-£56
	Recreation	£974	£979	£1,781	£1,380
	All	£918	£923	£1,725	£1,324	£5,704
Typical A	Fishing	-£57	-£57	-£57	-£57
	Recreation	£134	£138	£235	£187
	All	£77	£82	£179	£130	£543
Typical B	Fishing	-£60	-£60	-£60	-£60
	Recreation	£897	£902	£1,704	£1,303
	All	£837	£842	£1,645	£1,243	£5,520

With respect to the NEV projection, the LFO suggest a basic NPV of £52m which rises to £466m if the benefits of conservation are fully evaluated. The MFO projects and GPNUV rising to £5.7bn.

Table 22.2.2a. EIA Results for Scotland (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-340	-103	-90
	Recreational Sector	3	95	189
	Total	-337	-9	99
Most Favourable	Fishing	-128	96	109
	Recreational Sector	21	2598	2598
	Total	-106	2694	2707
Typical A	Fishing	-227	-14	-1
	Recreational Sector	11	461	461
	Total	-216	447	460
Typical B	Fishing	-227	-132	-119
	Recreational Sector	5	1068	2136
	Total	-221	936	2017

The 3 NM restriction delivers more jobs. This arises primarily because of the bigger environmental impact, greater options value with little additional retirement of mobile operators. After 20 years, on the LFO there is the possibility of gaining a total of 99 jobs and 2,707, on the MFO. These results show that even if we assume the worst possible outcomes ( LFO), there will still be employment gains. These gains will not be evenly spread across Scotland.

Table 22.2.2b. NEV Results (£m) for Scotland (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£56	-£56	-£56	-£56
	Recreation	£128	£142	£239	£190
	All	£71	£85	£182	£134	£589
Most Favourable	Fishing	-£53	-£53	-£53	-£53
	Recreation	£1,138	£1,152	£1,955	£1,553
	All	£1,085	£1,099	£1,901	£1,500	£6,443
Typical A	Fishing	-£53	-£53	-£53	-£53
	Recreation	£169	£183	£280	£231
	All	£116	£130	£227	£179	£739
Typical B	Fishing	-£57	-£57	-£57	-£57
	Recreation	£990	-£56	-£56	£0
	All	£933	£947	£1,750	£1,348	£6,101

With respect to the NEV projection, the LFO suggest a basic GPNUV of £71m rising to over half a billion if full weight is given to conservation values over an infinite time horizon. The MFO projects an accumulated a basic GPNUV of £1085m rising to £6.4bn. On the basis of these estimates society would be better off with the 0-3 NM restriction than with the 0-1 NM restriction. There is one other important feature to note. The significant difference in value between Typical A and Typical B can be traced to the status quo assumption. If it is assumed that fish stocks and the quality of the flora and fauna is in decline then there is a substantial value in preventing further decline. It should be noted though that, even with the status quo scenario of stability, the benefits from an expansion in the recreation sector, creeling, diving and line fishing still exceed the costs arising from the reduction in trawling and dredging.

22.3 South West

The South West is the area with potential for water based recreation with around 40% of the Scottish population in the adjacent areas and good transport links with the rest of Scotland and the UK.

Table 22.3.1a. EIA Results for South West (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-127	-58	-58
	Recreational Sector	2	34	68
	Total	-126	-24	10
Most Favourable	Commercial Fishing	-48	-6	-6
	Recreational Sector	13	872	872
	Total	-34	866	866
Typical A	Commercial Fishing	-85	-49	-49
	Recreational Sector	7	163	163
	Total	-78	114	114
Typical B	Commercial Fishing	-85	-49	-49
	Recreational Sector	3	355	709
	Total	-81	305	660

Even the most pessimistic scenario delivers a net gain in employment. The MFO projects net gain of 866 jobs. Given the population size it is not unsurprising to find very substantial increases in employment, with many more jobs being created in RSA and RD.

Table 22.3.1b. NEV Results (£m) for South West (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least	Fishing	-£23	-£23	-£23	-£23
Favourable	Recreation	£49	£142	£239	£154
	All	£26	£28	£71	£50	£219
Most	Fishing	-£6	-£6	-£6	-£6
Favourable	Recreation	£420	£423	£781	£602
	All	£415	£417	£775	£596	£2,565
Typical A	Fishing	-£49	-£49	-£49	-£49
	Recreation	£84	£87	£130	£108
	All	£36	£38	£81	£60	£249
Typical B	Fishing	-£49	-£49	-£49	-£49
	Recreation	£428	£430	£788	£609
	All	£379	£382	£740	£561	£2,492

With respect to the NEV projection, the LFO suggest a total NPV worth of £26 m rising to £219 m when the full value of conservation is included. The MFO projects a basic NEV of £415 m. The large population delivers very high recreational benefits. The high population also generates large GPNUV values. The MFO estimates an NEV of £2.56 billion. As can be seen below, the 0-3 NM restriction delivers even more net jobs and NEV.

Table 22.3.2a. EIA Results for South West IFG (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-127	-58	-58
	Recreational Sector	2	61	122
	Total	-126	3	64
Most Favourable	Commercial Fishing	-48	-7	-7
	Recreational Sector	13	1692	1692
	Total	-34	1685	1686
Typical A	Commercial Fishing	-85	-49	-49
	Recreational Sector	7	299	299
	Total	-78	250	251
Typical B	Commercial Fishing	-85	-50	-49
	Recreational Sector	3	696	1392
	Total	-81	646	1343

The 0-3 NM restriction delivers 64 additional jobs under the LFO and 1,686 under the MFO

Table 22.3.2b. NEV Results (£m) for South West IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£23	-£23	-£23	-£23
	Recreation	£57	£64	£107	£85
	All	£34	£41	£84	£63	£273
Most Favourable	Fishing	-£7	-£7	-£7	-£7
	Recreation	£504	£511	£869	£690
	All	£497	£504	£862	£683	£2,934
Typical A	Fishing	-£49	-£49	-£49	-£49
	Recreation	£103	£110	£153	£131
	All	£54	£61	£104	£82	£339
Typical B	Fishing	-£49	-£49	-£49	-£49
	Recreation	£111	-£23	-£23	£0
	All	£62	£69	£427	£248	£2,783

It is clear that even under the most restrictive assumptions about conservation value the benefits from restricting mobile gear in the South West IFG will exceed the costs.

22.4 North West

Table 22.4.1a EIA Results for North West IFG (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-64	-59	-56
	Recreational Sector	0	3	5
	Total	-64	-56	-51
Most Favourable	Commercial Fishing	-25	-36	-31
	Recreational Sector	1	66	66
	Total	-24	29	34
Typical A	Commercial Fishing	-43	-44	-42
	Recreational Sector	1	13	13
	Total	-43	-32	-29
Typical B	Commercial Fishing	-43	-48	-43
	Recreational Sector	0	26	53
	Total	-43	-21	10

After 20 years, on the LFO there is the possibility of losing a total of 51 jobs. The MFO projects net gain of 34 jobs. Compared with the adjacent South West IFG, the restrictions on mobile gear will not generate as many jobs in the area. This is because the population of only 40,000 will not support many more jobs in the recreational sector.

Table 22.4.1b NEV Results (£m) for North West IFG (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£10	-£10	-£10	-£10
	Recreation	£1	£2	£2	£2
	All	-£8	-£8	-£7	-£8	-£34
Most Favourable	Fishing	-£10	-£10	-£10	-£10
	Recreation	£14	£15	£21	£18
	All	£5	£5	£11	£8	£31
Typical A	Fishing	-£42	-£42	-£42	-£42
	Recreation	£34	£34	£35	£35
	All	-£7	-£7	-£6	-£7	-£33
Typical B	Fishing	-£43	-£43	-£43	-£43
	Recreation	£43	£44	£50	£47
	All	£1	£1	£8	£4	£24

On the basis of these NEV results it would appear that a 0-1 NM restriction the benefits do not exceed the costs.

Table 22.4.2a EIA Results for North West IFG (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-64	-59	-56
	Recreational Sector	0	5	9
	Total	-64	-54	-47
Most Favourable	Commercial Fishing	-25	-20	-17
	Recreational Sector	1	127	127
	Total	-24	107	109
Typical A	Commercial Fishing	-43	-44	-42
	Recreational Sector	1	23	23
	Total	-43	-21	-19
Typical B	Commercial Fishing	-43	-53	-50
	Recreational Sector	0	52	103
	Total	-43	-1	53

The 0-3 NM restriction costs the area 47 jobs on the LFO and a gain of 109 on the MFO.

Table 22.4.2a NEV Results (£m) for North West IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£7	-£7	-£7	-£7
	Recreation	£2	£3	£4	£3
	All	-£5	-£4	-£4	-£4	-£15
Most Favourable	Fishing	-£17	-£17	-£17	-£17
	Recreation	£32	£32	£39	£35
	All	£14	£15	£21	£18	£75
Typical A	Fishing	-£42	-£42	-£42	-£42
	Recreation	£38	£39	£40	£39
	All	-£3	-£3	-£2	-£2	-£11
Typical B	Fishing	-£50	-£50	-£50	-£50
	Recreation	£57	-£10	-£10	£0
	All	£7	£8	£14	£11	£61

The NEVs are positive for both the MFO, and the second "typical" scenario but negative for the LFO and Typical A. The low population and remoteness mean that recreational and general public values are low, whilst there are a large number of mobile operators who would be disadvantaged. Even for the 3 NM restriction the excess of benefits over costs is marginal.

22.5 Outer Hebrides

Table 22.5.1a EIA Results for Outer Hebrides IFG (0-1 NM)

		YR 1	YR 10	YR 20
Least Favourable	Fishing	-34	-30	-30
	Recreation	0	4	7
	All	-34	-26	-22
Most Favourable	Fishing	-13	-11	-10
	Recreation	1	93	93
	All	-12	82	82
Typical A	Fishing	-23	-23	-23
	Recreation	1	17	17
	All	-22	-6	-6
Typical B	Fishing	-23	-26	-26
	Recreation	0	38	75
	All	-23	12	50

There are similarities between the Outer Hebrides and the adjacent North West IFG area. The Outer Hebrides have an even smaller population (26,450) and the recreational sector cannot be relied upon to support employment.

Table 22.5.1b NEV Results (£m) for Outer Hebrides IFG (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£6	-£6	-£6	-£6
	Recreation	£1	£2	£2	£2
	All	-£5	-£5	-£4	-£4	-£20
Most Favourable	Fishing	-£10	-£10	-£10	-£10
	Recreation	£18	£19	£23	£21
	All	£8	£8	£12	£10	£40
Typical A	Fishing	-£23	-£23	-£23	-£23
	Recreation	£20	£20	£21	£20
	All	-£3	-£3	-£3	-£3	-£16
Typical B	Fishing	-£26	-£26	-£26	-£26
	Recreation	£29	£29	£34	£31
	All	£3	£4	£8	£6	£29

The excess of benefits over costs is marginal

Table 22.5.2a EIA Results for Outer Hebrides IFG (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-34	-30	-30
	Recreational Sector	0	7	13
	Total	-34	-23	-16
Most Favourable	Commercial Fishing	-13	-11	-11
	Recreational Sector	1	181	181
	Total	-12	170	170
Typical A	Commercial Fishing	-23	-23	-23
	Recreational Sector	1	32	32
	Total	-22	8	8
Typical B	Commercial Fishing	-23	-26	-26
	Recreational Sector	0	74	148
	Total	-23	48	122

With the 0-3 NM restriction there is a greater prospect of job creation. The LFO generates a net loss of 16 jobs whilst the MFO produces a net gain of 170, which is significant relative to the population of the area.

Table 22.5.2a NEV Results (£m) for Outer Hebrides IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£6	-£6	-£6	-£6
	Recreation	£2	£3	£4	£3
	All	-£4	-£3	-£3	-£3	-£14
Most Favourable	Fishing	-£11	-£11	-£11	-£11
	Recreation	£28	£28	£32	£30
	All	£17	£18	£22	£20	£79
Typical A	Fishing	-£23	-£23	-£23	-£23
	Recreation	£22	£23	£23	£23
	All	-£1	-£1	£0	£0	-£7
Typical B	Fishing	-£26	-£26	-£26	-£26
	Recreation	£34	-£6	-£6	£0
	All	£8	£9	£13	£11	£60

Again the case for a 3 NM restriction is stronger than for 1nm, but unlike the populous areas the benefits only marginally exceed the costs.

22.6 Moray Firth and the North Coast

Table 22.6.1a EIA Results for MF& NC IFG (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-46	-28	-27
	Recreational Sector	0	6	11
	Total	-46	-23	-16
Most Favourable	Commercial Fishing	-18	-6	-4
	Recreational Sector	3	140	140
	Total	-15	133	136
Typical A	Commercial Fishing	-31	-14	-13
	Recreational Sector	1	27	27
	Total	-29	13	14
Typical B	Commercial Fishing	-31	-58	-56
	Recreational Sector	1	56	113
	Total	-30	-2	57

From the table above, the 0-1 NM restriction results in job losses under the LFO. Given the remoteness of the North Coast there is less growth in recreation based activities, compared to, for example, the South West. However, with Inverness and the towns on the Moray Firth and a population of 298 thousand the model predicts employment gains except under the pessimistic assumptions.

Table 22.6.1b NEV Results (£m) for MF& NC IFG (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£9	-£9	-£9	-£9
	Recreation	£7	£8	£13	£10
	All	-£2	-£1	£4	£1	£5
Most Favourable	Fishing	£5	£5	£5	£5
	Recreation	£51	£51	£98	£75
	All	£56	£56	£103	£80	£340
Typical A	Fishing	-£13	-£13	-£13	-£13
	Recreation	£14	£14	£20	£17
	All	£1	£1	£7	£4	£12
Typical B	Fishing	-£27	-£27	-£27	-£27
	Recreation	£75	£75	£122	£99
	All	£48	£48	£95	£72	£321

Even under the LFO assumptions, the benefits exceed the costs.

Table 22.6.2a EIA Results for MF& NC IFG (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-46	-28	-27
	Recreational Sector	0	10	20
	Total	-46	-18	-7
Most Favourable	Commercial Fishing	-18	0	1
	Recreational Sector	3	268	268
	Total	-15	268	269
Typical A	Commercial Fishing	-31	-14	-13
	Recreational Sector	1	48	48
	Total	-29	34	35
Typical B	Commercial Fishing	-31	-32	-31
	Recreational Sector	1	110	220
	Total	-30	78	189

The 0-3 NM restriction could generate 269 jobs under the MFO or lose 7 under LFO.

Table 22.6.2b NEV Results (£m) for MF& NC IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£9	-£9	-£9	-£9
	Recreation	£9	£10	£16	£13
	All	£0	£2	£7	£4	£18
Most Favourable	Fishing	£1	£1	£1	£1
	Recreation	£72	£73	£120	£97
	All	£73	£74	£121	£98	£416
Typical A	Fishing	-£13	-£13	-£13	-£13
	Recreation	£18	£19	£25	£22
	All	£5	£6	£12	£9	£32
Typical B	Fishing	-£31	-£31	-£31	-£31
	Recreation	£88	-£9	-£9	£0
	All	£57	£59	£106	£82	£381

The NEV points in the same direction; even under some negative assumptions the benefits form the 3 NM restriction exceed the costs.

22.7 Orkney

Table 22.7.1a EIA Results for Orkney IFG (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-4	5	5
	Recreational Sector	0	2	4
	Total	-3	7	9
Most Favourable	Commercial Fishing	-1	5	5
	Recreational Sector	2	41	41
	Total	0	45	45
Typical A	Commercial Fishing	-2	4	4
	Recreational Sector	1	9	9
	Total	-2	13	13
Typical B	Commercial Fishing	-2	3	3
	Recreational Sector	0	16	32
	Total	-2	19	35

Unlike the North West and the Outer Hebrides, the 0-1 NM restriction in Orkney would initially lead to a fall in fishing based jobs but become positive in the fishing sector in later years as creeling expands. There is also an increase in tourist based jobs, even under a combination of the most pessimistic assumptions.

Table 22.7.1b NEV Results (£m) for Orkney IFG (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£1	-£1	-£1	-£1
	Recreation	£1	£1	£2	£2
	All	£1	£1	£1	£1	£5
Most Favourable	Fishing	£5	£5	£5	£5
	Recreation	£4	£4	£8	£6
	All	£9	£9	£12	£11	£46
Typical A	Fishing	£4	£4	£4	£4
	Recreation	-£2	-£2	-£2	-£2
	All	£2	£2	£2	£2	£10
Typical B	Fishing	£3	£3	£3	£3
	Recreation	£2	£3	£6	£4
	All	£6	£6	£9	£8	£35

The NEV is small reflecting the overall size of the fishing economy. However it is positive under all combinations of assumptions.

Table 22.7.2a EIA Results for Orkney IFG (0-3 NM )

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-4	5	5
	Recreational Sector	0	3	7
	Total	-3	8	11
Most Favourable	Commercial Fishing	-1	5	5
	Recreational Sector	2	75	75
	Total	0	80	80
Typical A	Commercial Fishing	-2	4	4
	Recreational Sector	1	15	15
	Total	-2	19	19
Typical B	Commercial Fishing	-2	3	3
	Recreational Sector	0	31	61
	Total	-2	34	64

The 0-3 NM restriction generates more employment than the 0-1 NM, though under the LFO the increase is marginal

Table 22.7.2b NEV Results (£m) for Orkney IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£1	-£1	-£1	-£1
	Recreation	£2	£2	£2	£2
	All	£1	£1	£2	£1	£7
Most Favourable	Fishing	£5	£5	£5	£5
	Recreation	£8	£9	£12	£10
	All	£13	£13	£16	£15	£63
Typical A	Fishing	£4	£4	£4	£4
	Recreation	-£1	-£1	-£1	-£1
	All	£3	£3	£4	£3	£14
Typical B	Fishing	£3	£3	£3	£3
	Recreation	£5	-£1	-£1	£0
	All	£8	£8	£11	£10	£49

The move from 0-1 to 0-3 NM does generate higher NEV estimates but the increase is not a as pronounced compared with other IFG areas.

22.8 East Coast

Table 22.8.1a EIA Results for East Coast IFG (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-51	-15	3
	Recreational Sector	1	17	34
	Total	-50	2	38
Most Favourable	Commercial Fishing	-20	52	89
	Recreational Sector	7	439	439
	Total	-13	491	528
Typical A	Commercial Fishing	-34	-3	15
	Recreational Sector	3	82	82
	Total	-31	79	98
Typical B	Commercial Fishing	-34	24	61
	Recreational Sector	2	178	356
	Total	-32	202	417

The East is a huge IFG that includes the cities of Aberdeen and Dundee to the North and the industrialised areas along both sides of the Forth to the South. Like the South West there is substantial potential for serious expansion of water based recreation. In most scenarios that potential more than compensates for any losses in the fishing sector.

The most pessimistic scenario delivers a net gain in employment and the MFO projects net gain of 528 jobs.

Table 22.8.1b NEV Results (£m) for East Coast IFG (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£7	-£7	-£7	-£7
	Recreation	£49	£50	£96	£73
	All	£42	£43	£89	£66	£293
Most Favourable	Fishing	£89	£89	£89	£89
	Recreation	£326	£327	£707	£517
	All	£415	£416	£796	£606	£2,638
Typical A	Fishing	£15	£15	£15	£15
	Recreation	£31	£32	£78	£55
	All	£46	£48	£94	£71	£309
Typical B	Fishing	£61	£61	£61	£61
	Recreation	£336	£337	£717	£527
	All	£397	£398	£778	£588	£2,599

With respect to the NEV projection, the LFO suggests a basic GPNUV of £42m rising to £293m if options and GPNUVs are included along with an infinite time horizon. The MFO projects an £2,6bn excess of discounted benefits over discounted costs.

As can be seen below, the 0-3 NM restriction delivers even more net jobs and NEV.

Table 22.8.2a EIA Results for East Coast IFG (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-51	-15	3
	Recreational Sector	1	31	62
	Total	-50	16	65
Most Favourable	Commercial Fishing	-20	15	34
	Recreational Sector	7	850	850
	Total	-13	865	883
Typical A	Commercial Fishing	-34	-3	15
	Recreational Sector	3	151	151
	Total	-31	148	166
Typical B	Commercial Fishing	-34	-13	6
	Recreational Sector	2	349	699
	Total	-32	337	705

Table 22.8.2b NEV Results (£m) for East Coast IFG (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£7	-£7	-£7	-£7
	Recreation	£53	£57	£103	£80
	All	£46	£50	£96	£73	£321
Most Favourable	Fishing	£34	£34	£34	£34
	Recreation	£420	£424	£804	£614
	All	£454	£458	£838	£648	£2,801
Typical A	Fishing	£15	£15	£15	£15
	Recreation	£40	£44	£90	£67
	All	£56	£59	£105	£82	£355
Typical B	Fishing	£6	£6	£6	£6
	Recreation	£412	-£5	-£5	£0
	All	£418	£422	£802	£612	£2,723

The magnitudes of the estimates are similar magnitude to those of the South West IFG. Under the least favourable conditions both restrictions generate more jobs generate a flow of discounted benefits which greatly exceeds the costs imposed on the commercial sector. The Table below shows that these two areas are responsible for most of Scotland's NEV. Because of the greater opportunities, under the most favourable conditions, the South West contributes the larger benefit.

Table 22.8.3 Comparative NEV Results (0-3 NM)

	LFO (£m)	%	MFO (£m)	%
South West	£273	46.4%	£2,934	45.5%
East	£321	54.6%	£2,801	43.5%
All Other	-£6	-1.0%	£708	11.0%
Scotland	£589	100.0%	£6,443	100.0%

22.9 Shetland

As discussed earlier Shetland fishing is already subject to a Regulating Order which controls inter alia inshore trawling and dredging. As an example the large nomadic dredgers are not allowed to fish the inshore waters around Shetland. Thus any restriction would only hit the small Shetland-based dredgers.

Table 22.9.1a EIA Results for Shetland (0-1 NM)

0-1 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-14	69	72
	Recreational Sector	0	1	3
	Total	-14	70	74
Most Favourable	Commercial Fishing	-4	49	54
	Recreational Sector	0	38	38
	Total	-4	87	92
Typical A	Commercial Fishing	-8	62	65
	Recreational Sector	0	6	6
	Total	-8	69	71
Typical B	Commercial Fishing	-8	52	57
	Recreational Sector	0	16	32
	Total	-8	67	88

Despite the small population and therefore less scope for developing employment in the recreational sector, the most pessimistic combination of assumptions suggests that a 0-1 NM restriction would generate more employment.

Table 22.9.1b NEV Results (£m) for Shetland (0-1 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£2	-£2	-£2	-£2
	Recreation	£1	£1	£2	£2
	All	£0	£0	£0	£0	£16
Most Favourable	Fishing	£1	£1	£1	£1
	Recreation	£11	£11	£14	£13
	All	£11	£12	£15	£13	£76
Typical A	Fishing	£1	£1	£1	£1
	Recreation	£3	£3	£3	£3
	All	£3	£4	£4	£4	£35
Typical B	Fishing	-£2	-£2	-£2	-£2
	Recreation	£7	£7	£11	£9
	All	£5	£6	£9	£7	£44

The NEV estimates are relatively low compared with the employment gains. The small population constrains the flow of benefits to sea anglers, divers and the general public.

Table 22.9.2a EIA Results for Shetland (0-3 NM)

0-3 Nautical Mile		Economic Impact ( FTE's)
		YR 1	YR 10	YR 20
Least Favourable	Commercial Fishing	-14	69	72
	Recreational Sector	0	3	5
	Total	-14	72	77
Most Favourable	Commercial Fishing	-4	63	65
	Recreational Sector	0	75	75
	Total	-4	138	140
Typical A	Commercial Fishing	-8	62	65
	Recreational Sector	0	13	13
	Total	-8	75	77
Typical B	Commercial Fishing	-8	62	64
	Recreational Sector	0	32	63
	Total	-8	93	128

As with all IFG areas, the 0-3 NM restriction generates more employment

Table 22.9.2b NEV Results (£m) for Shetland (0-3 NM)

		Basic	+Option Values	+Options & GPNUVs	+Options & 0.5 of GPNUVs	+Options & GPNUVs; Infinite Time Horizon
Least Favourable	Fishing	-£2	-£2	-£2	-£2
	Recreation	£2	£2	£3	£2
	All	£0	£0	£1	£1	£19
Most Favourable	Fishing	£0	£0	£0	£0
	Recreation	£15	£15	£19	£17
	All	£15	£16	£19	£17	£93
Typical A	Fishing	£1	£1	£1	£1
	Recreation	£4	£4	£4	£4
	All	£4	£5	£5	£5	£40
Typical B	Fishing	-£2	-£2	-£2	-£2
	Recreation	£10	£1	£1	£0
	All	£7	£8	£11	£10	£56

22.10 Summary and Conclusions

The above results suggest that under the specific scenarios and using the illustrative assumptions as described throughout the report Scotland could create more jobs and generate an excess of economic benefits over costs by imposing a 0-3 NM restriction on the use of mobile gear.

The Results for the IFG's and Shetland

In practise the benefits and costs, and jobs created (or lost) are not evenly spread across Scotland. In IFG areas, such as the South West IFG area and the East Coast IFG areas, mobile gear restrictions will have highly beneficial impacts on jobs and NEV. In other areas the case for introducing mobile gear restrictions would be harder to argue.

The Table below extracts the year 20 employment estimates for the six IFGs and Shetland. The sensitivity of the results to changes in assumptions is very evident.

From the Table below, the South West, East Coast, Orkney and Shetland IFG areas would experience an increase in employment, even if the conditions described by the LFO prevailed. The South West IFG and the East Coast IFG offer the greatest potential in terms of job creation. This is because these two areas account for 44.6% and 47.4% respectively of the Scottish population ^[62] . The expansion of the marine recreational sector would thus create large numbers of jobs in these areas. The Moray Firth and North Coast IFG accounts for (5.8% of the population), and whilst its commercial fishery would probably lose jobs, there is the possibility of job creation in the marine recreation sector

Areas with small populations such as Outer Hebrides (0.5% of Scottish population), and the North West (0.8%) suffer from loss of employment in commercial fishing but would not attract large numbers of anglers and divers. The structure of Orkney's and Shetland commercial fishing mean their commercial fisheries do not suffer a net loss of employment but in the case of Shetland the gains in the recreational sector are modest. Orkney gains recreational employment from RD.

Table 20.10.1 Economic Impact All IFGs

0-3 Nautical Miles		Economic Impact ( FTE's, YR 20)
		South West	North West	Outer Hebrides	MF& NC	Orkney	East Coast	Shetland
Least Favourable	Commercial Fishing	-58	-56	-30	-27	5	3	72
	Recreational Sector	122	9	13	20	7	62	5
	Total	64	-47	-16	-7	11	65	77
Most Favourable	Commercial Fishing	-7	-17	-11	1	5	34	65
	Recreational Sector	1692	127	181	268	75	850	75
	Total	1686	109	170	269	80	883	140
Typical A	Commercial Fishing	-49	-42	-23	-13	4	15	65
	Recreational Sector	299	23	32	48	15	151	13
	Total	251	-19	8	35	19	166	77
Typical B	Commercial Fishing	-49	-50	-26	-31	3	6	64
	Recreational Sector	1392	103	148	220	61	699	63
	Total	1343	53	122	189	64	705	128

The Table below presents the comparative NEV results for each of the IFGs and Shetland. It has been compiled by focussing on column 3 of the 0-3 NM Table above. It therefore includes OV and GPNUV which probably have high margins of error, but it does not include any policy benefits or costs that arise after 20 years.

Table 20.10.2 NEV Including OV & GPNUV for all IFGs

0-3 Nautical Miles		Options & GPNUVs (£m)
		South West	North West	Outer Hebrides	MF& NC	Orkney	East Coast	Shetland
Least Favourable	Fishing	-£23	-£7	-£6	-£9	-£1	-£7	-£2
	Recreation	£107	£4	£4	£16	£2	£103	£3
	All	£84	-£4	-£3	£7	£2	£96	£1
Most Favourable	Fishing	-£7	-£17	-£11	£1	£5	£34	£0
	Recreation	£869	£39	£32	£120	£12	£804	£19
	All	£862	£21	£22	£121	£16	£838	£19
Typical A	Fishing	-£49	-£42	-£23	-£13	£4	£15	£1
	Recreation	£153	£40	£23	£25	-£1	£90	£4
	All	£104	-£2	£0	£12	£4	£105	£5
Typical B	Fishing	-£49	-£50	-£26	-£31	£3	£6	-£2
	Recreation	-£23	-£10	-£6	-£9	-£1	-£5	£1
	All	£427	£14	£13	£106	£11	£802	£11

From the Table above all areas apart from the North West and Outer Hebrides generate an excess of benefits over costs, even under the LFO scenario. In the case of the South West, and East there is a substantial excess of benefits over costs and to a lesser extent in the MF& NC IFG. In the case of Orkney and Shetland the excess of benefits over costs are relatively modest.

The implications of different IFGs following different approaches to the management of mobile fishing gear are considered in more detail in section 23.3.