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Threats unforeseen: COVID-19 and Scotland's rural economy

Threats unforeseen: COVID-19 and Scotland's rural economy

It had not yet reached the end of January and Fergus Ewing, the Cabinet Secretary for Rural Affairs, already sounded pessimistic about what 2020 might bring.  

“I could fill - and I’d quite like to have filled, because I am a positive kind of person - your columns with stories of positivity, creativity and success,” he told Holyrood at that time, during an interview about Scottish food and drink.

“But unfortunately, at the moment,” he said, “we have an unnerving array of negatives all lined up right in front of us.”

Ewing was speaking just days before 31 January, when the UK would leave the European Union. At that time he was preoccupied with what he described as the number of “threats” and “dangers” posed to the rural economy by Brexit.

Chief among them was the potential for food and animal welfare standards to be undercut or lowered as part of the UK Government’s approach to securing trade deals. Others included the labour implications of a fall in migration, the crippling effect of tariffs imposed by the United States on key Scottish exports and the future of agricultural subsidies.

But little did Ewing or anyone else know that January 2020 would so quickly come to feel like the last days of a different era. Over the course of the eight weeks that followed, COVID-19 went from a worrying but distant seeming news item to the crisis we all live with today.

Brexit is a virus”

The challenges Ewing worried about then have not gone away, though. In fact they’ve become more acute. It turns out even a global pandemic hasn’t been an occasion to pause or extend the Brexit transition period, a decision confirmed as final by Cabinet Office minister Michael Gove in June. 

And with the July publication of the UK Government’s white paper on the so-called ‘internal market’ - the framework for how goods and standards will be regulated after the UK leaves the EU’s Common Market - food, drink and agriculture has suddenly become the most explosive battleground in constitutional politics.

Farmers appear to share in the general pessimism, with an NFU Scotland survey published in June showing only 25 per cent of Scottish farmers felt optimistic about leaving the EU.

The union has welcomed the establishment of a UK Trade and Agriculture Commission to advise on food and animal welfare standards. But while the UK Government insists standards won’t be lowered, it has refused to enshrine current standards in law, something dozens of organisations including NFUS, Scottish Land and Estates, the Sustainable Food Trust, WWF, RSBP and RSPCA have called for.

“Brexit is a virus,” Ewing said in 2019, “which has steadily grown and infected all other areas of government activity”.

We’re now seeing what happens when the rural economy is struck by the real thing.

Ewing took on responsibility for the tourism sector in February, as part of the cabinet reshuffle that saw Kate Forbes replace Derek Mackay as Finance Minister. 

At that time the tourism industry was gearing up for another exceedingly busy summer season. The latest Scottish Government statistics, from 2018, show that Scotland annually attracts 16 million overnight visitors, generating £5bn in visitor expenditure. A further £5.5bn was spent by the domestic tourists who took 153 million day trips around Scotland. 

All this movement of people helped generate 5 per cent of Scotland’s GDP and created around 218,000 jobs, which is hugely significant. But spending by tourists actually fell far short of targets set out in the Tourism Scotland 2020 strategy, which came to an end this year. 

Lockdown, as accommodation providers in the Isle of Skye had come to put it, presented the possibility of ‘three winters'

Scotland Outlook 2030, the new tourism strategy, was published at the beginning of March and shifts away from visitor spend as the preeminent metric, instead focussing on themes of “responsible” and “sustainable” tourism.

The strategy was developed with input from dozens of organisations and claims to have been formulated with the climate emergency, over-tourism and challenges posed by infrastructure and connectivity in mind. 

Whereas over-tourism was a prominent concern in hotspots before, the early phases of the pandemic brought on the opposite worry. Lockdown, as accommodation providers in the Isle of Skye had come to put it, presented the possibility of ‘three winters’.

‘Staying Home,’ while essential to suppress the spread of coronavirus, has exposed the vulnerabilities of the rural economy and raised questions about the need to diversify.  

Tourism “moved to a stand still within days of the outbreak of COVID-19 in the UK,” the Scottish Tourism Alliance (STA) said in its submission to the Scottish Parliament’s culture, Europe and external affairs committee inquiry into the impact of the pandemic on tourism and culture. 

Already, the STA wrote in May, the sector was in a period of the “perfect storm of rising costs” associated with tightening margins, compounded by Brexit. 

“This is now our ‘we have no more reserves’ period,” it said of COVID-19. 

UK Government support has been vital to the sector, particularly the furlough and self-employment income support schemes, as well as the cut in VAT to 5 per cent. 

Giving some scale of the rural economy’s reliance on state intervention, David Oxley, director of business growth at Highlands and Islands Enterprise, told Holyrood’s tourism committee in June that up to 25 per cent of the entire workforce in the Highlands region had been furloughed — roughly 60,000 jobs.

The Scottish Government’s Scottish Tourism Emergency Response Group and Scottish Tourism Recovery Taskforce brought industry and government together to spearhead a response. Over £2bn in support has been pledged in the forms of rates relief, grants and hardship funds, it claims. 

The biggest relief, however, came when Ewing announced that the tourism industry could reopen on 15 July. Initially met with some anxiety from rural communities, Scotland’s surprising progress on suppressing the virus has seen a surge in ‘staycation’ tourism, although the extent of its impact on the economy - and on public health - remains unclear.

Meanwhile the sector, the Scottish Government and the SNP group at Westminster continue to press for the extension of the furlough scheme for tourism and hospirality beyond October, when chancellor Rishi Sunak plans it to end.

The pandemic has also exposed insecurities in the food system, campaigners say. From the early collapse of international supply chains, the surge in foodbank use and the need for a replacement system for families eligible for free school meals, organisations like the Scottish Food Coalition argue that it is even more urgent to overhaul a “broken food system”. 

But the Good Food Nation bill, already shrouded in uncertainty, was part of a raft of legislation the government took off the table for the remainder of this parliament as a result, it said, of COVID-19. 

The updated climate change plan update was similarly delayed, but will be reworked to focus on a ‘green recovery’ from COVID. Transport and agriculture, as the nation’s top carbon emitters, will have to play a serious role.

“I hope and expect that we’ll make substantial progress over the year about devising a plan to become carbon neutral,” Ewing said back in January. 

But right now there doesn’t appear to be any time to worry about the biggest threat of all. 

Read the most recent article written by Ailean Beaton - Nicola Sturgeon calls for stronger UK COVID-19 restrictions

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