Call to support self-employed and keep local economies in Highlands 'alive and vibrant' during Covid recovery
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New protection will be needed to help the self-employed and keep local economies “alive and vibrant” during the recovery from the pandemic, Highland business leader David Richardson has said.
Mr Richardson, the Highlands and Islands development manager for the Federation of Small Businesses (FSB), called on the next Scottish Government to introduce a range of measures that will “re-establish self-employment as a first-choice career option”.
The FSB is warning that the number of people working for themselves in the area has tumbled in recent years. Between 2016 and 2019 the number of self-employed fell by 13.8 per cent, from 18,800 to 16,200, according to the federation.
It says it is not yet known how many businesses have failed over the past year, or how many will do so in the year to come.
Research conducted by Diffley Partnership for the FSB found that three-fifths of its sample of almost 700 business owners said the pandemic had made self-employment less attractive, and only a fifth that the last Scottish Government valued their contributions.
Mr Richardson said: “The vital importance of small businesses to the economies of Caithness and Sutherland and the wider Highlands has been demonstrated time and time again over the past year, which makes the current situation all the more worrying.
“Smaller businesses already face many challenges on many fronts, not least adapting to the new trading conditions of our post-Brexit world and complying with climate change legislation.
“Add the pandemic and it becomes all the more essential that we do everything in our power to keep our local economies alive and vibrant, especially given the underlying ageing and declining populations that affect much of this region.
“Sadly, however, over three-fifths of Scottish businesses believe that Covid has made working for themselves less attractive, and the number of self-employed in the Highlands is falling.
“At a time when everything possible should be being done to nurture entrepreneurialism and business growth, it is also very concerning that only one in five businesses believes that the Scottish Government values the achievements of the self-employed. Addressing these issues and bolstering morale through the introduction of some important new measures should be the number one priority for the new Scottish Government.”
Mr Richardson added: “Having listened to our members and analysed all they have told us, we have distilled the results down to produce this new report, The State of Small Business, which sits alongside our Scottish election manifesto, From Recovery to Prosperity. In short, we highlight a number of distinct, positive actions that the new Scottish Government can introduce to reinvigorate financially and emotionally stretched small business owners, boost the all-important recovery, locally and nationally, and re-establish self-employment as a first-choice career option for all.”
Recommendations are wide-raging and, taken together, they will make a significant difference to the prospects of smaller Highland businesses, according to the FSB. The provision of broadband and outstanding digital infrastructure everywhere, and access to the skills and training required to make best use of it, were listed as top issues by businesses in the research.
The FSB is calling for a new Small Business Recovery Act that would introduce binding targets on the amount of public contracts that must go to small businesses, and for new measures to be introduced to reduce the cost of doing business to give firms time to recover from the pandemic. This would include retaining the “vitally important” Small Business Bonus, and ensuring that the proposed new tourist bed tax, or transient visitor levy, “is not introduced any time soon”.
The federation is also asking for more assistance to be given to town and village centres, and for job creation initiatives such as Highland Council’s HERO (Highland Employment Recruitment Offer) scheme to be made much more widely available.
One new idea is the call for a new collective insurance approach for self-employed individuals, something that the FSB says would help make self-employment much more popular.
Winifred Sutherland, owner of FreKel handbags in Dunbeath, explained: “The past year has really brought home to me just how vulnerable small-business owners in Scotland are to illness. If I become sick and have to take time off for any length of time, I am entitled to little or no financial support from the state – and, as I have no-one to cover for me, my business suffers too.
“The government supports employees with sick pay, and it keeps saying how important the self-employed are to local economies, so why doesn’t it give us the protection that sick pay brings too? The lack of it is one more reason why people think twice before going into business for themselves, and the sooner the new Scottish Government finds a solution the better.”
Mr Richardson said: “Our study found that almost nine in 10 small business owners say that their health and wellbeing are top priorities for them, demonstrating the pandemic’s dramatic impact on mental health, and fewer than one in 10 believe that they have the same rights and benefits as employees when it comes to things like sick pay.
“It is vitally important that we remove unnecessary or unfair barriers, and we want the new Scottish Government to create a new collective insurance scheme. Based on the successful Dutch model, this ‘bread fund’ would cover the sick pay for all who contribute, removing the worry and pressure experienced by many small-business entrepreneurs.
“However, it doesn’t stop there. We argue that the government should also provide maternity, paternity and adoption payments to the self-employed via Social Security Scotland.”
