Self-employment less attractive due to COVID, FSB study finds

The research, conducted by Diffley Partnership for the Federation of Small Businesses (FSB), also found that only a fifth of their sample of almost 700 business owners thought that the last Scottish government valued their contribution.

The study of Scotland’s small business community also looked at firms’ attitudes to expansion and recovery. Asked to identify the biggest barriers to growth, 52 per cent of Scottish businesses highlighted the state of the economy, 50 per cent pointed to the pandemic, and 30 per cent said Brexit.

While more than half of Scottish business owners are very or fairly optimistic about their own enterprise (57 per cent), a larger proportion are pessimistic about the overall prospects for the Scottish economy (62 per cent).

Around half of the respondents (51 per cent) said that policymakers should keep overheads (e.g. rent and rates) as low as possible to boost the recovery. Other priorities for business owners include action to support jobs (36 per cent), moves to tackle empty units on high streets (32 per cent), and policies to improve digital skills and infrastructure (26 per cent).

Andrew McRae, FSB Scotland policy chair, said the coronavirus crisis “has hit Scotland’s self-employed and small business community for six”.

“While governments in Edinburgh and London argue they’ve done everything in their power to mitigate the impact of this crisis, there’s no doubt the pandemic will have an enduring impact on this group who will be vital to the recovery,” Mr McRae said.

“There are twice as many self-employed people in Scotland than NHS workers. But our representatives at Holyrood haven’t spent enough time discussing how to support and protect these 330,000 workers.”

As a result of the study, the FSB said it wants the next administration at Holyrood to pilot so-called bread funds which offer a collective insurance approach for self-employed individuals who could not otherwise access sick pay.

In addition, it wants policymakers in Edinburgh to provide maternity, paternity and adoption payments to the self-employed via Social Security Scotland.

The FSB also said it wants the next Scottish government to deliver a Small Business Recovery Act designed to ensure smaller firms win a fair share of public contracts, as well as establish a new small business team at the heart of government.