Fishing - Clyde Seasonal Closure: partial business and regulatory impact assessment

Section Three: Costs, impacts and benefits

The future economic costs and benefits associated with the Clyde Seasonal Closure could change depending on the approach Ministers decide to pursue. They can be categorised, broadly, into the costs and benefits incurred by the fishing industry, the environment, and by the Marine Directorate.

Quantified costs to businesses

Option One – “do the minimum”

A like-for-like continuation of the current closure measures is considered as the minimum change option. Therefore, Option One is the baseline to which the following further options are compared to.

Given that option one is the like-for-like continuation of the current situation, in place since 2022, it is unlikely to lead to any additional costs to fishers relative to the current situation. This may also have been somewhat mitigated by fishing effort and fishing patterns likely already having adjusted to the current situation.

It is recognised that the introduction of management measures in 2022 reduced available fishing grounds, resulting in costs for fishers — particularly those using creel and lobster gear who typically operate close to their home ports and have limited flexibility in fishing location.

Option Two

There are two aspects to the costs incurred by carrying forward Option Two: the costs associated with reinstating the closure and the costs associated with the TSP. The costs associated with reinstating the closure are very similar to Option One, which are outlined above.

Additional costs may arise from efforts to strengthen the evidence base, alongside those from reinstating the closure. These costs relate to implementing the TSP, but as its details are still being considered, the associated costs are currently difficult to estimate.

The costs to businesses are likely to be in the form of relocating fishing gear to the grounds, preparing for scientific surveys, and the overheads and running costs incurred whilst carrying out surveys.

It is worth noting that the running costs of partaking in surveys are likely to replace the costs fishers would incur operating elsewhere during this time, as it is assumed that TSP surveys will replace other fishing trips during the closure period. As such, the resultant running costs incurred by vessels involved in the TSP are unlikely to be additional, but rather a re-allocation of costs from one activity (fishing trips) to another (survey work).

Some minor time and resource costs may result from administrative requirements. Although the specifics of the TSP are still to be determined, these costs are expected to be low.

There may be some minimal environmental cost associated with carrying out the TSP given that it would involve activity in, or near, the seasonal spawning closure area. Whilst not immediately tangible to businesses, these costs may impact on future fishing opportunities.

Option Three - Return to a previous iteration of the Clyde Seasonal Closure

Returning to the management measures as set out in the 2019 Order could increase the current closure area and reintroduce exemptions for creel vessels, Nephrops trawlers, and scallop dredgers, permitting them to fish within the closure. There may be some minimal short-term costs to businesses associated with relocating fishing gear to the newly accessible grounds, as well as with adjusting existing fishing patterns. This may result in a change to fuel and steaming costs incurred by vessels, but beyond the short term is more likely to result in benefits to fishing businesses than costs.

This option may carry environmental costs, as it would allow more fishing activity in areas currently closed during the spawning season. Although the impacts may not be immediately visible to businesses, they could affect the long-term sustainability of cod stocks and future fishing opportunities. Between 2022 and 2024, the affected fleet^[8] landed an average of 4,350 tonnes annually, valued at £11.9 million, with yearly variation.

Other Options

Until consultation responses are received, the specifics of any alternative or complementary approaches are unknown, and it is not possible to quantify or assess, the possible costs and benefits of such proposals.

In general, any alternative or complementary approach that permits an increase in fishing activity or lessens the protection of the closure area, is likely to incur short-term costs to businesses in the form of relocating gear and readjusting fishing patterns, but possible longer-term environmental costs associated with increased activity within the spawning area.

Alternative or complementary options that restrict fishing activity in the Clyde, or increase the protection of the seasonal closure area, are likely to incur costs to businesses associated with a lack of access to fishing grounds, although these may not be greater than costs currently incurred by fishers due to the current parameters of the closure.

Benefits to business

Option One

Like the associated costs, the benefits of reinstating the closure are likely to mirror those already seen under the current measures. Potential improvements in stock sustainability could help maintain fishing activity at levels similar to those between 2022 and 2024, when the affected fleet⁹ averaged 4,350 tonnes landed per year, worth approximately £11.9 million annually.

A potential minor benefit to business may be a reduction in the need to change their fishing patterns to adapt to new legislation, or changes to the closure area. As this option represents the continuation of the status quo and is in line with the previous four years of closures, vessels are likely to have adapted to the current parameters of the seasonal closure. Continuing with the same approach will likely not incur any costs associated with the need to adapt to any changes introduced.

The primary benefits incurred by this option are likely to be environmental, and less immediately tangible to fishers and businesses. Pursuing an option that attempts to protect Clyde cod may increase the likelihood of fishers’ ability to catch such a species in the future (though cod is not the target species for fishers who work within the Firth of Clyde). West of Scotland cod was worth £2.9 million in 2023 and is typically caught by offshore trawlers as opposed to the smaller Nephrops trawlers that typically operate in the Firth of Clyde. This is explained in greater detail in the ‘Environmental Impacts’ section below.

Option Two

The primary benefits associated with Option Two arise from the TSP and improving the evidence base, which are less immediately tangible to vessels and businesses. The TSP is expected to generate scientific knowledge which will aid future fishery-related decision making. This is with the intention of supporting the Clyde cod stock and safeguarding future cod fishing opportunities in the West of Scotland. Whilst there may be little benefit immediately realised to businesses, efforts to protect the stock may help safeguard an economically valuable stock to Scottish fishers, as well as generating environmental benefits as a result of the sustained and improved health of the Clyde cod stock.

As Option Two involves reinstating the closure in its current form, fishing levels are likely to remain the same as levels seen since 2022, as outlined under the benefits of Option Two above. There may be some additional benefit to fishers involved in the TSP who will be permitted to sell catches retained during the survey work.

Option Three

Option Three would return the exemption for creel vessels, scallop dredgers and Nephrops trawlers, allowing them to fish in grounds that were off-limits in recent years. As a result, fishing activity may return to levels seen prior to 2022, which is when these exemptions were removed. Between 2018 and 2021^[9], when exemptions for fishing were in place, an average of 5,800 tonnes with a value of around £13.5 million, was landed annually by the affected fleet. 2022 to 2024, saw an average of 4,350 tonnes, with a value of £11.9 million per year landed by the affected fleet, with annual fluctuations.

Some benefit may arise from the ability of exempt vessels to fish in the specific area all year, improving potential cash-flow, and avoiding costs associated with gear relocation, that might arise due to the closure. However, the return to higher tonnage and value seen between 2018 and 2021 will be depended on many factors, rather than just accessibility of the ground during the closure period.

There may be some environmental benefit of this option as it offers some level of protection to spawning cod and increases the closure area. This environmental benefit is, however, likely to be less than in Options One and Two in wake of the additional disturbance and fishing activity of exempt vessels.

Other Options

Until consultation responses are received, the specifics of any alternative or complementary approaches are unknown, and it is not possible to quantify, or accurately assess, the possible costs and benefits of such proposals. Any option that increases access to fishing grounds may result in benefits of additional landings to vessels, although the extent to which this benefit materialises may vary. Options that maintain, or enhance, environmental protections will likely induce environmental benefits associated with the protection of the Clyde cod species.

Summary of Costs and Benefits

Option

One

• Costs
• No additional costs as fishers have adapted to closure already
• Continued closure of fishing grounds
• Benefits
• Continued protection for spawning cod (environmental benefit)
• Consistent with approach since 2022
• Fishing activity within the affected fleet likely remain at levels seen since 2022: an average 4,350 tonnes and £11.9 million a year

Two

• Costs
• Running costs related to the TSP
• Administrative costs related to the TSP
• Slight environmental cost of TSP activity
• Benefits
• Continued protection for spawning cod (environmental benefit)
• Increased scientific knowledge base for future decision making
• Fishing activity likely to remain at levels seen since 2022

Three

• Costs
• Short-term changes to fishing patterns and requirement to adapt
• Some environmental cost of increased fishing activity
• Benefits
• Fishing activity within the affected fleet may return to levels seen pre-2022: an average of 5,800 tonnes and £13.5 million a year
• Some protection for spawning cod (environmental benefit)

Others

• Costs
• Costs depend on alternatives proposed
• Benefits
• Benefits depend on alternatives proposed

Other impacts

Environmental impacts

There are potential environmental costs, and benefits, associated with interventions regarding the seasonal closure in the Firth of Clyde. Although not a direct impact on businesses, any option that has a lasting, long-term impact on cod populations is likely to impact on future businesses’ viability.

Options One, Two and Three all involve some measures to protect cod in the Clyde, which is likely to help safeguard the ability to fish such stocks in the future. Whilst difficult to quantify the exact value of this benefit, cod caught in the West of Scotland was worth £2.9 million in 2023. As discussed, this value is attributable to trawlers working offshore, as opposed to the smaller Nephrops trawlers that typify the Firth of Clyde.

Option One is likely to have the most environmental benefit given it completely restricts fishing within the seasonal closure area. This will benefit all species present in the closure area who might otherwise be disturbed by fishing activity. Option Two also has the additional benefit of increasing the scientific knowledge base surrounding the Clyde cod stock through collaboration with the fishing industry. This may result in more accurate, relevant data that will enable better decision-making in the future. However, there may be some environmental costs associated with carrying out the TSP given that it involves activity in, or near, the Clyde Seasonal Closure. Such costs are unavoidable in carrying out survey work, although every step should be taken to mitigate these impacts. It is generally considered that the scientific knowledge that would be gathered through survey work outweigh any disturbance that they may cause.

Option Three is likely to incur more environmental cost than Options One and Two given it facilitates increased fishing activity within the seasonal closure area. The environmental impact of Other Options depends on the nature of the alternative and complementary approaches brought forward.

Cost of compliance & science

There is likely to be a cost incurred by the Scottish Government’s Marine Directorate in the form staffing costs resulting from checking and enforcing compliance (specific details of which are outlined in greater detail in Section four below). Option One would involve the costs associated with specifically enforcing compliance with the closure area and period, above and beyond the costs incurred by enforcing routine compliance in Scottish waters. Option Two would involve further staffing costs stemming from the oversight of the TSP. Option Three is likely to involve compliance costs associated with ensuring that only exempt vessels are fishing within the closure area. Option Three also increases the size of the closure area, which will increase the area monitored for compliance, which may further increase the cost. The compliance costs for Other Options depend on the alternative and complementary approaches brought forward.

It should be noted that, in general, compliance in previous years has been good with minimal infractions occurring. In addition, the cost of compliance could be mitigated to some degree with the future implementation of vessel tracking and inshore REM. Use of this technology will support Marine Directorate in ensuring compliance with this policy. The requirement for vessels to have REM is something that could potentially be mandatory for vessels involved with the TSP.

Scottish firms’ international competitiveness

Given the localised nature of the Clyde spawning closure, any policy brought forward is not expected to have a significant impact on the Scottish businesses ability to compete internationally, nor will it affect Scotland’s attractiveness as a destination for global capital investment.

Small business impacts

All fishing vessels affected will be considered small businesses. These businesses will be consulted in the development of the proposed legislation via their fisheries associations and through public consultation. In particular The Clyde Fishermen’s Association, whose fishermen predominantly work in and around the area affected, will be consulted.

The SSI will not directly affect quota and should not prevent fishermen catching their full quota over the course of the year, although there may be some short-term effect on cash flow during the closure. Nearby areas, such as the North Channel and the remainder of the Firth of Clyde will remain open, with the aim of enabling fishermen to work elsewhere. However, Option One and Two will continue to have an impact on fishing vessels, particularly small creel vessels who may struggle to access alternate grounds, due to increased fuel costs and competition for space.

Investment

We consider that the proposal will have no measurable effect on making Scotland a more, or less, attractive place for global investment.

Workforce and Fair Work

Since the removal of exemptions for the Clyde Seasonal Closure in 2022, stakeholders have told us that there has been a negative impact on recruitment, retention and satisfaction for the fishing industry. Options Two and Three will result in a continuation of these effects, whereas options one and four could go some way to redressing them.

The policy itself will not have any direct impact on Fair Work First principles.

Climate change / Circular Economy

The options considered for consultation are unlikely to have a measurable impact on contribution to climate and circular economy targets.

There will be no significant impact on recycling of resources although further restrictions to the area and duration of the Clyde Seasonal Closure could result in an increase on consumption of fuel by fishers, displaced to areas further afield during the closed period.

Competition Assessment

Will the measure directly or indirectly limit the number or range of suppliers?

Restrictions on fishing activity in the Clyde (particularly since the 2022 removal of exemptions) have had a socio-economic impact on the approximately 52 vessels who have been present in the area since 2022. However anecdotal evidence from associations who represent the fishing industry state that the Clyde Seasonal Closure (along with other restrictions such as Scotland’s MPA network) are causing fishers to leave the industry.

Will the measure affect competition by suppliers?

There is not expected to be an overall negative impact on competition arising from this regulation. Fishing that was previously exempt from the closures would have that exemption removed, accounted for around 1% of the total value and tonnage of Nephrops in Scotland and represented around 5% of the affected fleet’s value between 2017-2021.

The policy of maintaining the closure can be expected to displace fishers to other nearby grounds as the quota available would remain the same. While some of this affected tonnage may be displaced, there is expected to be increased competition in the Firth of Clyde for fishing space which could result in losses in revenue and productivity for fishing vessels.

Will the measure affect consumers’ ability to engage with the market and make choices that align with their preferences?

There is a risk that the closure may result in some fishers landing less or leaving the market due to the increased cost of transit to alternate fishing grounds, the inability to utilise alternate fishing grounds due to weather, or the lower productivity of alternate fishing grounds which could result in a reduced range of suppliers. However, if this occurs it should only impact a small number of suppliers and should not change incentives or prevent the remaining fishers from competing.

The regulation will not lead to a differentiation in costs between new and existing fishermen. The regulation is unlikely to affect the market structure. The measures will apply to all British vessels in the specified areas of Scottish waters. In effect the closure will apply to all vessels because the area falls within territorial waters.

Will the measure affect suppliers’ ability and/or incentive to introduce new technologies, products or business models?

Fishers’ are already subject to a wide variety of temporal, spatial and technical restrictions and the Firth of Clyde exemplifies this. Fishers by their nature, have to regularly alter their business model(s) in response to government policy. Since 2022 in the Firth of Clyde this has included displacement causes by removal of exemptions from the Clyde Seasonal Closure and a new prohibition on landing of berried female lobster. All these changes have a material impact on their business model and the technologies they use.

The domestic Nephrops trawl fleet in particular have been active in developing their own approaches to gear technology to minimise unwanted bycatches of fish.

The Scottish Government are currently working towards roll-out of vessel tracking to all vessels under 12 metres and we expect the desire by our fishers to demonstrate best practice to incentivise uptake of this technology.

Consumer Duty

What is the proposal trying to achieve?

The proposal is trying to apply protections to, and encourage recovery of, spawning cod in the Firth of Clyde.

What are the impacts on consumers?

While there may be marginal impacts on consumer access to fresh fish as a healthy and nutritious food source, fishers tend to alter their business practices to accommodate fisheries management measures. Therefore, the Clyde closure is not expected to have a significant impact on the price of Nephrops to the market nor on the availability of Nephrops.

The option to maintain no exemptions would continue to affect around 1% of the total value and tonnage of Nephrops landed in Scotland pre-closure change and around 5% of the value caught by the affected fleet in the Clyde area pre-closure change between 2017-2021. Given the size of the impact, the large international market for Nephrops and the national supply chain for food products this is not expected to have a significant impact.

However, there could be local price and availability issues where local businesses purchase directly from fishers. While this is a risk it is expected that this could be mitigated in large part by fishing being displaced to nearby areas, with the landings of Nephrops from these alternative sites remaining below pre-covid levels (as is most Nephrops fishing in Scotland) suggesting that there is supply available to meet demand.

In the Long-term, restrictive measures that cause further decline in Scotland’s fishing industry have the potential to cause these kinds of impacts.

What alternative proposals are there than can improve outcomes for consumers and/or reduce harm to consumers?

Consulting on options that best balance Scotland’s environment and socio-economic obligations best minimises potential harm to consumers.

How do these alternative proposals compare to the original proposal?