Hebridean firms learning to adapt to life after the pandemic

MacLeod, whose Modren firm makes Harris tweed bags on Lewis, is operating in what research from development agency Highlands and Islands Enterprise (HIE) this week revealed is the part of the region suffering the most sustained ­economic hit from Covid-19.

Firms in the Outer Hebrides had the lowest level of confidence, ­researchers found, at just 45% compared with 75% in Wester Ross and an overall average of 67%.

And while almost 60% of ­businesses in the Highlands and Islands said they had returned to pre-pandemic levels or even surpassed these, ­fewer than half of those in the Outer ­Hebrides said the same. Seven in 10 companies here said they were “not confident in their future viability”.

A range of factors are cited – ­Brexit, rising costs, staff shortages, and of course Covid closures. “Among those that had been impacted by Brexit so far, views were more negative than positive,” the reports said, with the food and drink and creative sectors feeling the hit “more strongly” than others. “While most were able to access the goods and services they needed, a majority nonetheless faced issues when doing so, mainly higher costs and delays,” the report states. “Among exporters, two in five were currently experiencing issues selling outside of Great Britain.”

And there’s been a loss of disposable cash amongst the resident population too, with a doubling of Universal Credit claims during 2020.

It’s a picture MacLeod recognises. Mailing costs to the US have almost doubled, with timescales rising. The hike in charges and Brexit “now makes selling outwith the UK unviable,” she says. “At the same time, pivoting to a domestic market when folk are now tired out and worrying about income and rising costs... If you’re in discretionary purchasing territory you definitely need to taking opportunities wherever you can find them.

“I guess it’s made me be more ­creative about finding routes to ­market, like I’ll make small batches for other designers now and I do clothing repairs and refashioning. It’s a pretty Hebridean trait to turn your hand to a range of things, so I just need to hang on.”

On Berneray, Coralbox gift shop owner ­Eilidh Carr (below) is also pushing on. She’s made major changes since 2020, ­expanding her website to allow customers to shop her Hebridean, ­nautical, island-themed ranges from their homes during an extended closure of her store overlooking Bays Loch. “I shut last year to save last year,” she says. “We’ve not had a whole season yet, it’s such a strange thing.”

But she’s optimistic about the coming weeks, despite the end of the summer holiday peak. “This summer’s pushed over into September and maybe October, it’s still a bit busier,” she says, “maybe with people who couldn’t get accommodation during the school holidays.”

Carr feels the scale of her small enterprise means many of the issues raised in the HIE report don’t apply to her. Rob McKinnon of Outer Hebrides Tourism says the prevalence of microbusinesses and self-employment in the region has shaped its experience of the pandemic.

“We have lower employment levels, and I suspect things like furlough probably had lower impacts here. In tourism, the deadline for qualifying for ­furlough was in March, so quite a few tourism employees had not yet ­started and were excluded from ­furlough,” he says. “It is likely that bigger organisations have better reserves and ability to steer through the pandemic. For smaller businesses, they live more hand-to-mouth.”

With more than 400 member businesses, McKinnon’s organisation is “the voice for tourism from Barra to the Butt of Lewis”. Around 1000 jobs depend on the sector, which makes up more than 10% of the local economy. However, Comhairle Nan Eilean Siar says that rises to as much as 40% in places like Harris and Barra. Last year it predicted an accumulative loss of up to £50 million from lack of tourism, saying this would “reverberate through the local economy for many years”.

McKinnon predicts recovery will be “a long road”, taking “two to three years for many”.

READ MORE: Brexit hurting Covid recovery in Highlands and Islands, firms say

“The outlook is a mix between happiness that businesses are open and trading after a very difficult ­period, but also concern about how fragile the financial position is after 18 months of disrupted activity,” he says. “Our location and relatively short season may exacerbate these things. I do think the funding and support provided has had a huge ­impact on the sector – without it many ­businesses would have not survived – so ­government is to be applauded for its interventions.”

However, there have been missteps, he thinks, including ferry disruption he believes deterred some visitors by adding yet more uncertainty about travel and the springtime question mark over the set-up of a separate travel zone for the islands, which did not go ahead. “The decision took a month, and in this month there was an exodus of bookings of people to the mainland,” he says. “This piece of policy was both very poorly handled and very damaging.

“Tourism is quite an optimistic business,” he goes on. “People are happy to be serving people, there’s a buzz about the place. I suspect when they go home at night, that’s when they realise how much has been lost.”