Covid-19 (Impact on Highlands and Islands Businesses)

– in the Scottish Parliament on 28th October 2020.

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Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

5. To ask the Scottish Government what analysis it has carried out of the impact of Covid-19 on businesses across the Highlands and Islands. (S5O-04693)

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

We are liaising with local authorities and enterprise agencies so that we may better understand the impact of Covid-19 and the wider actions that are required to enable recovery in local communities and wider regions.

A recent report published by Highlands and Islands Enterprise found that the impact of Covid-19 on the regional economy will be significant. The report emphasised the importance of tourism and visitor spend in the local economy. I will continue to examine the regional impacts to ensure that the specific needs of Scotland’s regions are supported.

Photo of Jamie Halcro Johnston Jamie Halcro Johnston Conservative

The cabinet secretary will be aware that there are many parts of the region where the loss of even one business or a small number of jobs can have a disproportionate impact on the local economy and community. Building on the work that the cabinet secretary has said Highlands and Islands Enterprise is already doing, how are Business Gateway offices being utilised in identifying areas where businesses or jobs are at risk, and how are they being tasked and resourced to target interventions and support accordingly?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

Business Gateway can provide support and will be the first point of contact for many businesses. The online support that is available across Scotland is helpful for all businesses.

Jamie Halcro Johnston raises an important point about resilience in particular communities. At the discussions that took place at the convention of the Highlands and Islands on Monday, in which I took part, the leader of Highland Council raised that concern in relation to resilience over the winter period. We are acutely aware of the point. Part of the consideration during Monday’s discussions at the convention sought to identify what could be done in different areas. It was clear that resilience and opportunities in different communities vary from one part of the Highlands and Islands to another, so support must be particularly responsive to the needs of individuals.

Jamie Halcro Johnston mentioned the impact that just one or two businesses can have: we are very much alert to that, and I thank him for drawing that point to everyone’s attention.

Photo of Rhoda Grant Rhoda Grant Labour

The cabinet secretary will be aware that businesses in the Highlands and Islands have faced restrictions while having to work hard to serve those who were encouraged to take staycations this year. I have been asked by businesses whether, in the future, rather than locking them down together with the whole of Scotland or a wider area, it is worth allowing them to stay open and serve their local community. In that way, they can provide a service to their local community and save jobs in remote rural communities.

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

That is an important point. The adoption of more localised, local-authority-based levels for restrictions brings with it some consequences—some intended and some unintended—and issues around travel potentially represent one of those. What is expected has pretty much been set out, but I absolutely agree that people’s ability to serve their local community will be important for the resilience of those communities in the future.

The discussions that have been taking place with the hospitality and tourism sectors, which have involved my colleague Fergus Ewing and others, have been addressing some of those issues. Things may develop, and we will see what the final document looks like and what it says.

Rhoda Grant makes a point about how we can continue to provide opportunities, particularly in relation to businesses serving local communities, depending on their size. The situation can be variable—the Highlands and Islands is an enormous area—but that can be part of the continuing considerations.

Photo of Willie Rennie Willie Rennie Liberal Democrat

I am concerned that the current grant scheme is no longer fit for purpose. Yesterday’s changes will reduce the number of businesses that are compelled to close, particularly in hospitality, even though those businesses will in reality remain closed, because the restrictions that are still in place are so tight that they will not make it worth opening. The changes could result in a reduction of a third in the grant that would be available to them.

Will the cabinet secretary reconsider the grant scheme as well as the balance of support between hardship and compulsion to close, to ensure that we get that right and support the businesses that need it?

Photo of Fiona Hyslop Fiona Hyslop Scottish National Party

We are open to continuing to discuss and consider the issues around access to different types of support, depending the position of a business. If businesses are required to close, they have the opportunity to benefit from the £3,000 grant. However, they can also benefit from the job support scheme. That scheme is set at a rate of 60 per cent. If businesses that are impacted can access the job support scheme, they can be financed and supported in relation to employees that work only one day a week. That is at a different level.

I hear what the member is saying and the point has been raised in the discussions that we have had. We have had to develop schemes rapidly: we announced our funding for the current closures on the same day as we heard the latest job support scheme changes, so it is a moveable feast, as the member can see.

Businesses want to know what they can access and we have to incentivise their being able to open and trade when that is possible, rather than having people see closure as a better option. If the member is saying that, by allowing, through the levels, more businesses to stay open, we might penalise them in terms of grants, I hear him and we will reflect on the point.