The Highlands and Islands are a huge part of what Scotland means. These parts of Scotland cover a third of the country, with six areas recognised by UNESCO as globally important, including the dramatic scenery of the geoparks, the Flow Country, neolithic Orkney and the Machair grasslands.
Gaelic is central to many crofting communities on which 30,000 jobs still depend. A distinctive Norse culture thrives in the Northern Isles.
But a darker history during the Famine and the Clearances led to a long decline. From the mid-nineteenth century until 1951, the region lost 28% of its population, with the scars of abandoned crofts still visible. Many Scots know people who had to leave the region in search of work. Of my father’s siblings, four left Orkney and only one returned.
Recently, there has been an impressive turnaround, highlighted by Professor James Hunter in his evidence to Parliament. The population is up by 22% since the 1960s, a real success story transforming the Inverness region into one of the fastest-growing parts of the country.
But there is a shadow over the more remote parts of the region. The population of most Islands as well as the North and West Highlands has only recovered very little, if at all, and is still 35% below its peak in 1841.
We don’t need to accept that the story of the more remote parts of the Highlands and Islands has to be one of decline. The future can be brighter.
How do we get there and what do local people think?
The three main priorities expressed in a 2022 Highland and Island Enterprise (HIE) survey are:
- affordable housing for local families.
- job opportunities.
- the health of local businesses.
People are particularly concerned about the cost of living. It costs 15-30% more to live and work in the region than in other UK towns, especially regarding energy and transport.
Another issue is the shortages of teachers, police, and doctors. Emergency medical care is only provided in the busy seasons. Fire services are often run by volunteers and public transport has been cut. Half of all young people are considering leaving – how many will return?
Two main solutions can address these concerns:
- a package to cut the costs of living and support local businesses.
- investment in affordable housing and public services.
Cutting the cost of living and running a business
The most direct way to cut living and working costs is to cut national insurance (NI). To have an impact, make it a large cut – for example 90% – focused solely on the more remote regions where the need is greatest.
What is the cost? If we target the Island regions, and the HIE areas of Caithness and Sutherland, Wester Ross, Skye and Lochaber and Argyll the total cost is 0.7% of all taxation in Scotland.
This policy has worked successfully in Northern Norway for decades, with a study finding a significant increase in local employment. Large companies are excluded from the tax cut to avoid distorting competition.
To cut transport and energy costs:
- use the consultation underway to simplify the patchwork of concessionary ferry fares and design a comprehensive scheme to cut costs further for residents and local businesses.
- accept the deal on customs checks to help cut the extra costs of transporting to Europe since Brexit – after an initial UK rejection, this is reportedly being reconsidered.
- use the consultation on the UK electricity market to design specific solutions for Scotland to reduce the gap between the 4p per KWh it costs to produce onshore wind energy and the 30p consumers pay.
Affordable housing and stronger public services
Shortages of housing are a constraint on job creation, with a lack of funding for social housing. This can be tackled by:
- an affordable housing bond which could form part of the prospective Scottish Government bond issues.
- reforms to the mortgage market to help first-time buyers secure more stable long-term rates.
Public services:
- aside from incentives to attract skilled people, offer help with training and housing for local people to work in health and education, especially to address the pressing need for public services in Gaelic.
- engage station coastguard patrol vessels in the island regions as part of the response to emerging threats to undersea cables and offshore energy in Northern waters.
Trust and invest in local people!
From the Clearances onward, ideas for developing the Highlands have often come from the outside. Some initiatives have been described as “chucking buns across the fence” to keep the region quiet.
A programme to cut National Insurance taxes and reduce transport and energy costs in the region reverses this by putting resources in the hands of local people.
The Nordic countries rely on truly local authorities to deliver basic services: 29 in Northern Sweden, 87 in Northern Norway, 62 in Iceland. This compares with one single Highland region, the three island councils and Argyll in Scotland. Community councils cover smaller areas and provide a space for local views to be aired, but they are only consultative.
This matters because the quality of decision-making improves the closer it is to the people it impacts. Would a visitor levy, for example, not be more effective if it examined local conditions rather than being uniform across the region? What about local charges on cruise ships or motorhomes? Second homes in some areas –where they represent up to a quarter of the housing stock – might need to be taxed at a rate higher than the current maximum rate.
The Scottish Government is consulting whether to grant local authorities a general power of competence. Maybe the question should start from the opposite principle – deal with things locally as much as possible and only devolve upwards when it makes sense to do so. Local authorities in Scandinavia, for example, are responsible for 35-40% of all public spending, compared to 20% in Scotland.
The government should reintroduce local councils in the Highland region, in consultation with local communities, and gradually extend their powers to bring decisions closer to people.
None of this can happen without the freedom to act
As things stand, no single government exists which can put together such a programme.
The Scottish Government does not have the freedom to act on national insurance, the energy market, mortgage regulation, defence, nor conditions for exporting to the EU.
The region is naturally less of a priority in the UK Parliament, with the Highlands and Islands raised only 10 times in debates over the last 25 years.
Given the national importance of the Highlands and Islands for Scotland, it’s difficult to see anything other than a Scottish Government equipped with a full set of powers taking the steps to deliver the brighter future which people in the region deserve.
More in Scotland.
