OPINION: Business message to Holyrood hopefuls over self-employment has far-reaching impact for fragile Highland economy
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Self-employment is becoming less popular as a career option in the Highlands.
In 2016 there were 18,800 self-employed here; by 2019 it was 16,200; in 2020 and 2021 given the pandemic...who knows?
Moreover, research contained in a new report from the Federation of Small Businesses found three in five business owners in Scotland believe self-employment has become a less attractive proposition as a result of the pandemic, and only one in five that the Scottish Government values their contribution. This is all very depressing, and it matters.
The Highlands’ vast size, small, highly dispersed population and fragile local economies means large and medium-sized businesses are scarce. The overwhelming majority are independently owned and small, most being micros with fewer than 10 employees. These are the businesses that provide services we all need and enjoy, and almost all the private sector jobs in remoter parts too. If we are going to reverse population decline it is to these businesses, and the people who run them, that we must turn.
This is why our new State of Small Business Report, produced for us by the Diffley Partnership, is so important. It constitutes the first in-depth analysis of the impact of the pandemic on small Scottish businesses. More important still, it supports our manifesto for the Scottish elections, From Recovery to Prosperity, which makes some compelling recommendations the new Scottish Government could and should adopt to reinstate self-employment as a first-choice career option. Both documents can be found via Google searches on our website, www.fsb.org.uk
So, what sort of things do we want to see? Recommendations are wide ranging and, taken together, would make a significant difference to the prospects of smaller businesses across the country. For example, it will come as no surprise that universal broadband coverage, together with access to the skills and training required to make best use of it, was listed as a top priority by businesses. We are also calling for a new Small Business Recovery Act that would introduce binding targets on the amount of public contracts that must go to small firms, and we also want every effort to be made to reduce the cost of doing business to give smaller businesses time to recover, more assistance to be given to town and village centres, and for job creation schemes to be made much more widely available.
One new idea thrown up by the pandemic is for a collective insurance scheme – a “bread fund” – for self-employed individuals, as exists in the Netherlands today. Employees get sick pay but the self-employed don’t, and it is high time that this was addressed.
Reversing population decline and retaining and attracting more young people and families through the creation of truly vibrant local economies has to be the number one long-term ambition for Ross-shire and the Highlands.
Self-employment and the formation of more small businesses is the answer, but this can only be achieved through robust, targeted government support.
We have written to Scottish parliamentary election candidates from all parties. Let’s hope that they, and those from among them who will form the next Scottish Government, are listening and committed.
David Richardson is Highlands and islands development manager for the Federation of Small Businesses.