Shellfish WatProtected area designations - amending proposals: partial business and regulatory impact assessment

8. Quantification of impacts

8.1 High-level impacts matrix

Following consultation we intend to develop a more detailed analysis of costs; however, a summary of the impacts described above is in Table 1 as an indication of the magnitude of potential impacts. The current situation is considered the baseline.

8.2 Wider business benefits and impacts

8.2.1 Benefits to business

The greatest benefit of these proposals is likely to be to producers of Mussels and Oysters within new SWPAs, with the greatest benefits realised through option 2.

There is likely to be some benefit to Scottish Water from the de-designation of some SWPAs, although this could be offset by the need for additional actions in new SWPAs. Further work to analyse costs following public consultation will provide greater clarity on this balance. Nonetheless, the greatest benefits to Scottish Water would likely arise from Option 3.

8.2.2 Small business impacts

There is unlikely to be any differential impacts for small businesses.

8.2.3 Scottish firms’ international competitiveness

We understand most Scottish shellfish are sold on the domestic market. It is unlikely these policy proposals will have a significant impact on international competitiveness, although any impact is likely to be positive.

8.2.4 Investment

The proposed changes to designations are unlikely to have a material impact on how attractive investment in Scotland is to a global market. However, any impact is likely to be positive, with the intention to better protect economically significant shellfish production by adjusting SWPAs to better match current areas of production and better support the sustainable growth of the industry.

8.2.5 Workforce and fair work

It is unlikely that the policy would have a material impact on fair work or the workforce. That said, designating new SWPAs will support the shellfish industry and, therefore, any impacts on workforce. are likely to be positive and sustain or increase jobs. These benefits are likely to be concentrated in Shetland, Strathclyde and Highland regions^[7].

8.2.6 Climate change/ circular economy

Scottish Water applies additional treatment to some assets that discharge close to SWPAs. While this has benefits for the industry there is also an energy and therefore climate change impact from this treatment. Both Option 2 and Option 3 are likely to reduce unnecessary or disproportionate climate change impacts from this additional treatment, this is because the proposals remove some SWPA designations where there is currently no production activity and therefore no benefits for the shellfish industry from the additional treatment measures.

8.2.7 Competition assessment

Consideration of the five Competition and Markets Authority (CMA) competition assessment questions below were used as an initial assessment of competition.

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

It is unlikely that changes to SWPA designations will have any impact on the number of range of suppliers given the increase in number of producers outwith SWPAs over recent years.

Will the measure limit the ability of suppliers to compete?

It seems unlikely that these proposals will have a significant impact on the ability of shellfish producers to compete. That said, de-designation of some sites may reduce the areas for producers to operate in by reducing the number of sites with SWPA protections. That said, there has been no relevant production in the sites proposed for de-designation over the past 4 years and there has been an increase in producers outwith SWPAs. This reflects that Scotland’s waters are of sufficiently good quality for shellfish producers to operate in a range of sites.

Will the measure limit suppliers’ incentives to compete?

No. Competition incentives will not be affected.

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

No. consumer engagement and choices will not be affected.

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

No. SWPA designations are unlikely to have any impact on suppliers’ abilities or incentives to introduce new technologies or business models.

8.2.8 Consumer duty

In considering the potential impacts on consumers, we took a very broad definition of consumers and public services in Scotland. Consumers were considered to be shellfish production businesses and public service the additional actions that couple be undertaken by public bodies or authorities to protect and improve the water quality in SWPAs.

Even under this definition it is unlikely that there would be material impacts on consumers. Where de-designations are proposed there is no shellfish production. That said, we are aware that some areas may be used for spat collection. SWPAs have not considered spat collection activities in the past, but we are seeking to understand more broadly if there may be in-direct impacts from de-designation.

The proposed policies are most likely to be of benefits to consumers since the result of options 2 and 3 would be to increase the proportion of economically significant shellfish production that is within an SWPA.