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New protection will be needed to help the self-employed in the Highlands’ recovery from the Covid crisis, according to the Federation of Small Businesses (FSB).
The group also warns 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. 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 FSB, in what is the first major in-depth study of Covid’s impact on businesses in Scotland since the pandemic began, has found that three fifths of their sample of almost 700 business owners said that the Covid crisis has made self-employment less attractive.
David Richardson, FSB Highlands and Islands Development Manager, said: ‘The vital importance of small businesses to both Lochaber’s and the wider Highland economy 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 aging and declining populations that affect much of this region.’
FSB Scotland is 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 businesses, and for new measures to be introduced to reduce the cost of doing business to give firms time to recover from the pandemic.
One new idea is the call for a new collective insurance approach for self-employed individuals, something that would help make self-employment much more popular.
Wai Yan Tsang, owner of Clear Brew Highlands in Fort William, said: ‘The past year has made me realise 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 if I have no one that can deputise for me, my business suffers too.
‘The government supports employees with sick pay, so why doesn’t it support the dedicated, hard-working people who employ them too? This 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.’
The FSB study found that almost nine in 10 small business owners said that their health and wellbeing are top priorities for them, 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 re-establish self-employment as a first-choice career option by removing unnecessary or unfair barriers,’ added Mr Richardson.