Island economy “scarred” by Covid-19 restrictions

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image captionSocial distancing has limited capacity to about 20% on some ferry services to and from Arran

The loss of visitors and reduced ferry capacity to Arran during the Covid pandemic could have “long-term scarring effects” on the island’s labour market.

A new study has highlighted a third of Arran’s economy is reliant on the tourism and hospitality sector.

It also suggested the ferry service is worth £170,000 a day to the island.

The report, by the the Fraser of Allander Institute, said island communities had been hit “disproportionately hard”.

In June, community leaders on Arran suggested that

day trips to the island should be banned while Scotland was tackling the coronavirus.

The Arran Recovery Group (ARG) said it wanted only tourists staying multiple nights to be allowed on the ferry.

Social distancing has limited capacity to about 20% on some services.

Local councillor Alex Gallagher described the new report as a “wake-up call” and pushed for support from the Scottish and UK governments.

He said: “Nowhere has escaped the economic impact of Covid-19, but some areas have felt it far more sharply than others – areas such as Arran.

“The report highlights that Arran’s labour market has been more severely affected than surrounding areas and Scotland as a whole.

“Even as restrictions have eased, the report shows Arran is still struggling to recover and that there will be longer-term impacts on Arran’s businesses and communities.”

‘Unique challenges’

Arran’s Gross Value Added (GVA) – the measure of the value of goods and services produced on the island – was estimated to be more than £77m in 2018.

In the first half of 2020, GVA fell by 33% as a result of a lower number of ferry passengers.

image copyrightLynsey McBurnie
image captionThe view from Goatfell on Arran

Mairi Spowage, deputy director of the Fraser of Allander Institute, said there were “challenging times ahead” for island communities.

She added: “Arran’s dominant hospitality sector has made it particularly exposed to the initial lockdown restrictions and the ensuing capacity and social distancing regulations as the economy began to open back up.

“Like most island economies, Arran is constrained by its infrastructure and is reliant on its ferries to transport commuters and tourists.

“National policy must recognise the unique challenges that island economies are facing in the months and years ahead as we recover from this economic crisis.”

‘Quality jobs’

The Scottish government said it had recently announced a £2m programme of “locally-led green projects” designed to help support island communities.

It said it would “help businesses recover from the impacts of the pandemic and create new, quality jobs”.

A spokesman added: “We are also doing everything we can with the limited powers available to us to support the tourism sector.”

The UK government said schemes introduced by the chancellor had “protected jobs and businesses across Scotland”.

A spokeswoman said: “The new package of measures will continue to protect jobs in Scotland, and help businesses through the uncertain months ahead, as we continue to tackle the spread of the virus.”

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