Highlands & Islands Face Economic Double Whammy of Covid & Brexit

“Analysis based on furloughed workers showed that Argyll and Bute, Highland and Orkney (along with Perth and Kinross) had the highest proportions of their workforces in at risk jobs” HIE The Impact of Covid

A report from Highlands and Islands Enterprise has produced extremely concerning statistics on the impact of Covid19 on the economy of the whole region.

You can access the report here: The Impact of Covid19 on the Highlands and Islands

It warns that the economy of the Highlands and Islands could decrease by as much as £2.6bn this year due to the impact of Covid-19 on businesses and jobs.

And the figures presented in the document also suggest that unemployment increased faster in the region than the rest of Scotland.

Commenting on the report, Labour MSP Rhoda Grant said:

“This report makes grim reading and should make both the Scottish and U.K. Government’s sit up and pay attention to the serious impact that Covid-19 has and is having on the Highlands and Islands, one of the worst hit areas in the country economically.  

“With increased and rapidly growing unemployment due to the nature of the region’s economy which relies heavily on tourism and outdoor recreation, it’s clear that the economy of the Highlands and Islands will need a shot in the arm if we are to turn around the worrying trend of job losses and economic downturn.

“The Scottish and U.K. Government’s must work together to invest in the Highlands and Islands to protect jobs , livelihoods and businesses and the future economic prosperity of the region. If we want to see the region survive and thrive after Covid-19, we need to ensure the right support is in place to allow us to build back better and support an economy that works for everyone.”

A higher number of people in the region are self employed than in Scotland as a whole:

“11% of Scotland’s self-employed people are in the Highlands and Islands, compared to 9% of all of Scotland’s employees”

The report adds that self employed women are more at risk of being negatively impacted due having caring duties. It in particular highlights the issues for those who are childminders.

Orkney MSP, LibDem Liam McArthur, raised the problems faced by childminders of being excluded from the Transitional Support Fund for the child care sector, in the Scottish Parliament last week.

Liam McArthur said:

” While Ministers have guaranteed necessary support to large parts of the childcare sector to cover similar additional costs, childminders have largely missed out.  The Childminding Workforce Support Fund is offering grants of up to £350 for childminders, but this falls far short of the £1500 available to other providers through the Transitional Support Fund, from which childminders are excluded.”

In response to the MSP, the FM, Nicola Sturgeon, agreed to look into this.

The HIE report includes forecasts for the economic future.

Across the world the restrictions placed on movement to try to reduce the spread of the deadly virus, Covid19, has resulted in all countries facing downturns on their economies as trade and employment staggers under the limitations.

HIE suggest that due to the nature of the economy of the region that it will take longer to recover with full recovery not till 2023.

The region also benefited from membership of the EU and Brexit will have an additional negative impact on the area. The UK will be out of the transition phase on 1st of January 2021 and it may be without a trade deal leaving export products with hefty tariffs to deal with.

The Highlands and Islands not only has become reliant on tourism but has actively promoted that sector at the expense of others. The Covid19 pandemic has left many places, especially islands who had placed so much emphasis on the tourist trade, in an extremely vulnerable position. Visitors also spend money in local shops and accommodation providers. This in turn has a knock on to suppliers and other providers in the area.

There is a possible late boost to tourism with Scots holidaying at home but as the positive cases of Covid continue to rise that is becoming a risk many will not take.

The HIE report calls for increased support for the tourism and creative sectors in the region. Included in its recommendations are:

  • job retention/ modern apprenticeships to encourage young people to remain in the area
  • attracting new residents/ workers to the area
  • increasing digital skills for online trading

The outlook is a gloomy one given:

The COVID-19 impact is compounded by the region’s vulnerability to Brexit – five of the six most vulnerable local authority areas to Brexit are in the Highlands and Islands

Reporter: Fiona Grahame

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