A cold blow to Argyll and Bute
Spanning the rolling hills of the Western Highlands, Argyll and Bute, the largest constituency in the UK and with an economy reliant on tourism and fishing, is facing a cold blow in the aftermath of Covid-19.
The tourism industry accounts for around 15% of Argyll and Bute’s workforce (2017), the highest of all regions in Scotland and is largely dominated by small businesses with few employees. This small business structure coupled with the reliance on seasonal cash flow means these businesses are particularly at risk from the economic impacts of the lockdown.
Despite extra support for the hospitality sector from the Scottish Government in the form of several measures including a grant of up to £25,000 and a 100% rates relief alongside an additional grant of up to £10,000 for small or rural businesses, many businesses are struggling to survive with 58% of employers in Scotland’s tourism industry forced to cut staff. With a lack of seasonal profits already stifling growth, if government support does not last long enough then future staff cuts are to be expected.
The Treasuries furlough scheme has been critical to keeping many in Argyll’s tourism sector employed, although some have fallen through the gaps. Those who switch employer or are no longer an employee at their place of work from the previous season may be ineligible for furloughed wages and unable to find other work, increasing unemployment.
As the nation emerges from lockdown, the crisis in Scotland’s tourism industry will be far from over. Social distancing will reduce the capacity in many establishments to a fraction of pre – lockdown numbers and international travel restrictions may disrupt overseas tourism, accounting for £2,206 million of all Scotland’s tourism revenue (2018). However, Argyll and Bute’s geography provides the region with a strong advantage. The rural and remote landscape may attract tourists away from the more densely populated cities such as Edinburgh, Stirling and Glasgow, and the adverse effects of social distancing will not be as heavily felt compared to most areas of Scotland. This will provide Argyll and Bute with a unique opportunity to open itself up to the nation and the world in the wake of the lockdown.
Exactly how Argyll and Bute’s tourism sector will look next season is uncertain. While tourists will likely return, perhaps in larger numbers than before, significant economic damage will already have been dealt and the question of whether local businesses will survive that long remains.
Inveraray Castle
Out at sea we find another major industry in Argyll and Bute threatened by Covid-19, fishing. Agriculture, forestry, and fishing employs 8.8% of Argyll and Bute’s workforce, compared to only 3.2% of Scotland’s total workforce employed in this industry.
The UK exports up to 80% of its seafood, 80% of which is caught in Scotland (by weight), with the biggest buyers being European restaurants and hotels. The lockdown throughout the UK, Europe and large swaths of the world has forced restaurants and hotels to close, causing demand for prime fish to plummet, followed swiftly by the price. Freezing the fish and keeping them in cold stores until the crisis is over will only delay the problem. An influx of frozen fish in the market post-lockdown will only, once again, cause prices to fall. This is leaving many local fisheries little options but to shut down.
Given the sudden and urgent threat to local fisheries the Scottish Government set up an initial £5 million relief package in March and added a further £3.5 million in April. The total amount of money made available by the Scottish Government to the fishing industry from existing and new funds is £22.5 million.
There are rays of hope for Argyll and Bute’s fishing industries. Although sales to restaurants have disappeared overnight, many local fisheries have begun selling their catch directly to the public, often providing their own delivery service. This convenience and deflated prices have increased demand for seafood among the local population, creating a new market for the fishing industries to tap into. These changes could cause a more permanent shift in the market towards local consumption and provide significant opportunities to costal settlements. This would require more local infrastructure as current supply chains are long and geared towards overseas exports.
Covid-19 has exposed dangerous vulnerabilities and instability within the UKs fishing industry. The strong emphases on exporting seafoods has proved to be risky and unreliable, re-localisation of the market will provide some healthy stability to the industry. This is especially important amidst the ongoing Brexit negotiations and the uncertainty regarding our future trade arrangement with the EU.
There is little doubt Argyll and Bute’s economy will emerge weakened in the wake of the global pandemic; many local industries will not fully recover for some time. However, the crisis has brought to light a wealth of new and unique opportunities we may never have otherwise been able to explore.
