How is Brexit affecting Scotland’s fishing industry?

Recent weeks have seen key parts of the UK’s fishing industry facing challenges arising from post-Brexit border delays with the European Union (EU), which have been affecting routes to market for fresh seafood. The issue has attracted particular controversy in Scotland, where the First Minister has accused the UK government of ‘selling out’ the industry.

What is going on? And are the challenges temporary or indicative of a longer-term challenge?

What has been agreed on post-Brexit fishing rights and exports?

Prior to Brexit, the UK’s fishing industry was managed under the EU’s Common Fisheries Policy (CFP). The CFP has several goals, including seeking to ensure the sustainability of EU fish stocks. It also enshrines equal access to EU waters for all nation states (with a single EU exclusive economic zone) and various restrictions (or quotas) on what could be caught and where.

The CFP, like its partner the Common Agriculture Policy, has been controversial and subject to criticism. Key disputes have centred over debates around quotas and whether or not they are sufficient/too much to protect both stocks, and most contentiously, access to UK waters for EU vessels.

UK waters are a major source of fish, including for non-UK fishing boats, contributing 35% of the quantity and 23% of the value of the fish landed by other member state vessels from North Atlantic waters (which includes all of the seas around the UK). The three EU countries catching the most are France, the Netherlands and Denmark. The most valuable fish caught here (for other member states) are herring, mackerel and sole (Pilkington and Wardlaw, 2018).

On 1 January 2021, the UK completed its exit from the EU, with a free trade agreement signed shortly before the deadline. A key stumbling block during the negotiations was reaching an agreement on access to UK waters for fishing by EU boats (and vice versa). Perhaps unsurprisingly therefore, the final deal of 1,200 pages includes a whole section and numerous annexes dedicated to fisheries.

Broadly speaking, there are two aspects of the new UK-EU relationship that affect the UK’s fishing industry:

• ‘Access to waters’: the issue of who has the right to fish in UK waters and to catch certain species.
• ‘Access to markets’: the issue of exporting fish caught and processed in the UK to be sold in EU markets.

Under December’s Trade and Cooperation Agreement, EU boats will continue to fish in UK waters for some years to come. But over time, this will gradually be reduced. A quarter of EU boats' fishing rights in UK waters will be transferred to the UK fishing fleet over a period of just over five years – with a 15% reduction in the first year and 2.5 percentage points each year after and specific quota allocations for different species of fish.

This is estimated to be worth approximately £140 million per year to the UK fishing industry by 2026.

After this adjustment period, there will be negotiations each year to set the amount that EU fishing boats can catch in UK waters (and vice versa). In principle, from 2026, the UK could exclude non-UK boats from UK waters, but the EU could respond with similar restrictions for UK boats and/or tariffs on UK exports to the EU (as well as undermining the entire trade deal).

In terms of ‘market access’, the trade deal that was agreed between the UK and the EU avoided costly tariffs being placed on exports of UK fish to the EU. These tariffs could have been as high as 25% on processed fish exports, such as frozen mackerel. But with the UK now outside the EU’s single market, non-tariff barriers have been established, including increased customs checks and relevant certificates required to be signed-off before fish exports can enter the EU.

The main issues appear to be around salmon, and the small fishers who need to get shellfish, including crabs, to market promptly.

How important is the fishing industry?

In 2019, there were 4,491 active fishing vessels in the UK fleet, although approximately a third (35%) have annual fishing income under £10,000.

When comparing the number of fishers in 2019 with the earliest year in official UK government time series – 1938 – the number of fishers on UK registered vessels has decreased by three-quarters: from close to 48,000 to just over 12,000.

Figure 1: Number of UK fishers since 1938

Despite only making up a small part of the UK economy, in some small coastal communities, fishing is a key source of employment, with many of them in parts of the economy – such as the west coast of Scotland and ports in Aberdeenshire – where jobs are scarce and wider challenges, such as demographic ageing, are significant.

Table 1: Number of fishers by administration port: 2019 (full- and part-time)

Source: UK sea fisheries annual statistics report, 2019

In 2019, the fishing and aquaculture industry contributed £466 million to the UK economy in terms of gross value added (about 0.02% of total economic output in the UK).

Indeed in 2018, 61% of economic output from the fishing and aquaculture industry was generated in Scotland. Landings by Scottish vessels accounted for 60% of the value and 62% of the tonnage of all landings by UK vessels in 2019.

Figure 2: Share of UK gross value added in fishing and aquaculture by UK country, 2018

Source: Office for National Statistics

Alongside the fishing industry itself, the fish processing industry, which is the food manufacturing industry preparing and preserving fish for consumption, is a major employer (and actually employs more people than the fishing industry itself). In 2018, fish processing sites accounted for 19,179 full-time equivalent jobs in the UK. Again, Scotland is disproportionately represented in the industry, with over 4,000 jobs concentrated around Fraserburgh and Peterhead alone.

Like other industries, the UK fishing industry is highly diverse. The industry includes large multi-million pound trawlers that operate in deep seas and have the flexibility to land catch in the UK or other European ports. In contrast, many smaller fishing vessels, particularly in the west coast of Scotland, tend to fish for shellfish, and are often operated as self-employed operations and requiring quick access to market (including relying on a distributor to provide that access).

Why have there been problems so far?

Some have argued that the UK did not secure the access to its own fishing waters that it should have done in the negotiations. But a trade-off was always likely to be required in order to secure concessions in wider areas. These debates are likely to run for some time yet.

But problems reported at the new UK-EU border have been the most controversial aspect of the post-trade deal period. According to data from HM Revenue and Customs, from 2016 to 2019, on average, three-quarters of all seafood exports from Scotland went to the EU each year – worth around £700 million per year in sales.

In recent weeks, attention has focused on the challenges that some in the industry – particularly many small-scale operations – have faced in securing swift passage for their products through UK-EU borders.

This has been a particularly challenging issue for those that export shellfish and fresh fish into EU markets. Lobsters, prawns and crabs quickly perish, so time to market is crucial. But there have been reports of delays of up to 30 hours, costing many businesses thousands of pounds in lost sales and discarded stock.

There are a variety of reasons for the delays. With the UK now outside the EU’s customs union, checks have increased on lorries entering the EU with whole trailers needing to be checked.

In addition, businesses have reported challenges in completing the documentation required for export, including export health certificates, catch certificates and customs declarations. These have been particularly challenging where a consignment includes several different species, caught by different vessels and which has been landed at different ports (known as ‘groupage’).

This has led to many fishing boats being tied up in local ports until the situation is resolved. Key distributors also suspended exports temporarily.

The Scottish government has strongly criticised the UK government, claiming that a lack of planning has harmed Scotland’s fishing industry. Sector representatives have also criticised the UK government, arguing that the guidance that they have received has not been fit for purpose. All of this culminated in a number of Scottish producers protesting by driving their lorries through Westminster.

The UK government has responded suggesting that there have been ‘teething issues’, with a £23 million compensation scheme announced to help support businesses affected by this disruption. This is in addition to previously announced support to help the fishing industry to modernise.

What will be the long-term economic effects?

While current problems may be ironed out and export processes become more efficient, there will be no return to the frictionless trade the UK previously had with EU markets.

Given the scale of the change represented by the UK’s exit from the EU, some disruption was inevitable. Recent events for some in the fishing industry may be the forerunner of similar issues emerging over the course of 2021.

Unfortunately, this could be the ‘new normal’. Even with ‘free trade’ in goods between the UK and the EU, the need to produce evidence of product standards and compliance with ‘rules of origin’ means that exports will be subject to greater barriers than they were before.

The long-term economic effects on the UK fishing industry of Brexit are hard to predict. In recent days, exports have restarted for small-scale businesses and the coming weeks will tell whether or not this will be sustained.

There are many who hope that, in time, Brexit will provide an opportunity to grow the UK fishing industry and to help support wider investment in coastal communities as part of the ‘levelling-up’ agenda. This is likely to require investment in wider infrastructure, and not just support for the fishing industry.

One thing that is certain is that debates over the benefits and costs for the UK fishing industry will continue to rage for some time yet.

Where can I find out more?

• What does the trade deal mean for fisheries: ‘UK in a Changing Europe’ commentary by Bryce Stewart.
• UK Fisheries Statistics: House of Commons Library, Research Briefing, 23 November 2020.
• Economics of the UK Fishing Fleet 2019: Sea Fish.

Who are the experts on this question?

• Graeme Roy, Fraser of Allander Institute
• Stuart McIntyre, Fraser of Allander Institute

Authors: Graeme Roy and Stuart McIntyre, University of Strathclyde

Photo by James Wei on Unsplash