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With so much in the balance, governments must do nothing to add to businesses’ costs


By David Richardson

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Business Comment by David Richardson, Highlands and Islands development manager for the Federation of Small Businesses

The North Coast 500 has provided a major boost to the northern Highlands, says David Richardson. Picture: Alan Hendry
The North Coast 500 has provided a major boost to the northern Highlands, says David Richardson. Picture: Alan Hendry

Life has been very far from easy for the north’s business community of late, and especially for tourism-dependent businesses, and the outlook is by no means bright.

At the start of June an FSB Highlands and Islands survey found that a quarter of tourism and hospitality businesses in Caithness, Sutherland and Ross-shire were struggling to some degree, but that must be put against four in 10 for the Highlands and Islands, Moray and Argyll as a whole. The North Coast 500 has undoubtedly provided a major boost to the northern Highlands.

In early August a fresh FSB survey found that two thirds of Highland businesses were doing okay or better, but seven per cent were really struggling.

So where are we now? While trade appears to have picked up for many tourism businesses mid-season, staycations have not made up entirely for the absence of overseas visitors. Operators will now be reviewing their finances and hoping that they have sufficient reserves to undertake essential maintenance, start paying off any debts and carry them through to the spring. Others will face different concerns but, whatever the case, the road ahead is uncertain.

Government support in the form of things like furlough and self-employed income support has come to an end, and utility and wages bills have risen generally too. One local hotel business has just seen its electricity bill increase by more than £1000 a week for the next two years! Reduced income and increased costs mean increased prices for consumers, to which the VAT increase on tourism and hospitality from five per cent to 12.5 per cent must be added. The Highlands is becoming more expensive.

So, while we can hope for the return of greatly needed overseas visitors next spring, we must do everything possible to avoid a scenario where businesses are forced to introduce ever-higher prices for reduced services without having sufficient staff to make it all work. Poor value for money results, leading to serious damage to the reputations of businesses, areas and regions. With so much in the balance, it is imperative that governments – from Highland Council up – do nothing to add to businesses’ costs and woes.


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