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Rural Economy (Rural Economy Committee Report) - Motion to Take Note

Part of the debate – in the House of Lords at 4:50 pm on 8th October 2019.

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Photo of Lord Foster of Bath Lord Foster of Bath Chair, Rural Economy Committee 4:50 pm, 8th October 2019

My Lords, given the current political turmoil, it is tempting to confine my remarks to just one of the issues in our report that will have a huge impact on the rural economy, namely Brexit. While I can see no good news for the rural economy coming from Brexit, not least from a no-deal Brexit, I am sure your Lordships will be pleased that I shall avoid the temptation.

However, I am reminded of the story of the teenager who borrows his father’s new car. When he returns he asks his father if he wants the good news or the bad news. The father asks for only the good news, so the son replies, “Well at least the airbag on your new Volvo works perfectly”. There is certainly some good news alongside the bad in relation to the rural economy as your Lordships’ committee, which I had the privilege to chair, discovered. It was set up in May last year with the wide-ranging task to,

“consider the rural economy and to make recommendations”.

We published our report in April this year and the Government responded in July.

I am enormously grateful to the committee staff—Simon Keal, Katie Barraclough and Breda Twomey—and to our two special advisers Mark Shucksmith and Brian Wilson. I am also grateful to the Minister who throughout showed a close interest in the work of the committee. I am confident that he is as keen as the committee to get things done to support rural economies, so I hope he was pleased with our recommendation that his status in government be elevated. I am especially grateful to the talented team of Peers who served on the committee. The wealth of expertise of committee members in your Lordships’ House should surely make any Government take their recommendations very seriously. My only claim to rural fame is living in a hamlet of eight people in deepest rural Suffolk, but our committee included a number of farmers, the former chair of the commission on the future of farming and the countryside and a former Defra Minister as well as the current chair of the Woodland Trust, the current president of the Countryside Alliance and the current chair of the Prince’s Countryside Fund.

Of course our recommendations were significantly influenced by the evidence we received and by the visits we made. We took oral evidence from 60 individuals and organisations, received more than 200 written submissions and visited rural areas in Herefordshire and South Yorkshire. We quickly realised we should not talk about “the” rural economy—there are many different rural economies. Some are sites of innovation and creativity that, on some measures, outperform their urban counterparts. For example, rural businesses are more likely to report a profit and more likely to be successful exporters than their urban counterparts.

The first paragraph of our report begins:

“For many, rural England is a great place in which to live and work or to visit, with the countryside rightly regarded as one of our greatest assets. With a vast range of rural businesses and initiatives, and new sectors growing fast, rural economies are increasingly diverse, dynamic and vibrant”.

That is the good news, the airbag working well, but the paragraph continues:

“But successive governments have underrated the contribution rural economies can make to the nation’s prosperity and wellbeing. They have applied policies which were largely devised for urban and suburban economies, and which are often inappropriate for rural England. This must change. With rural England at a point of major transition, a different approach is urgently needed”.

Inevitably our deliberations were wide-ranging. After all, a thriving rural economy depends on many factors: adequate and affordable housing and work places, decent broadband speeds and mobile coverage and access to finance, business support, skills and training as well as a fair share of funding for local services such as transport, policing and healthcare. No wonder our report is somewhat weightier than is normal for such documents.

Rurality brings special challenges in all those areas but we discovered that relatively little has been done to help rural areas address them. Often the policies—or lack of policies—of successive Governments have created obstacles, hindering the success of rural economies so that rural businesses contribute less per head to the national economy than urban businesses. There is a huge disparity between rural and urban service support. Support for rural public transport is far lower per head than for urban public transport, leaving rural areas increasingly car-dependent, despite 25% of rural people having no access to a vehicle or being unable to drive.

The formula that determines health funding currently transfers at least £1.3 billion away from rural areas and does not properly account for the additional costs of rural health provision. Rural areas receive almost 25% less funding per head for policing than urban areas. Average rural housing costs are nearly £90,000 higher than those in urban areas, excluding London, while average wages are 10% lower. Furthermore, rural areas really lose out in council funding. In this year’s settlement funding assessment grant, rural councils are getting 66% less per head than urban councils, and to make up the gap rural residents are paying around 20% more in council tax. No wonder our report called for urgent action, which is covered in nearly 100 recommendations to government and, in some cases, to other bodies such as councils and LEPs.

However, the first and central recommendation stemmed from our clear belief that at present rural policy is disjointed and badly prioritised by urban-oriented policymakers without due regard for rural interests. Therefore, just as the Government saw the need for an industrial strategy, we believe that they now need a comprehensive rural strategy, and we provide details on what we think it should look like to release unfulfilled potential and enhance the contribution that rural England can make to the whole nation while, crucially, retaining its distinctive character. To achieve this, we argue that the rural strategy must be linked to re-energised rural-proofing and a place-based approach to delivery, in which rural-facing LEPs step up their game.

Despite hearing some positive examples of rural-proofing, such as in the development of the industrial strategy, we also heard of major problems, including late timing, poor consultation, inconsistency of application and lack of transparency and accountability. There is clear room for improvement and we make recommendations on how this should be done, including the requirement of an annual report to Parliament on how departments have fulfilled their rural-proofing responsibilities. In recognising the huge variety of rural economies, we stress that the rural strategy, and the policies that flow from it, must take these variations into account and ensure that local communities are fully engaged—hence our call for a place-based approach involving local people and organisations. Therefore, our three key proposals are interlinked and mutually supportive: a coherent rural strategy, re-energised rural-proofing and a place-based approach to delivery.

However, we have also made many recommendations on service delivery. For example, rural areas currently receive vital support from various EU schemes. If we leave the EU, similar help must be continued with, for example, the planned shared prosperity fund, including a dedicated funding stream to support rural economies. We argue for a fair funding review that ensures that local government and other service providers have enough funds to deal with rural challenges and the additional costs of rural service provision. We point out that connectivity is a major key to unlocking the potential of the rural economy. However, rural digital infrastructure has lagged behind in the past, so, while welcoming some of the recent very positive moves, we propose further measures to ensure that that is not the case in the future.

We also argue that affordable housing must be a priority. Only last week Sky News reported that the number of social homes being built in rural England has fallen by more than 80% in the last six years. Our report suggests that that is partly to do with government policies that too often disregard rural interests. For example, in most cases the NPPF prevents local authorities requiring affordable housing on developments of fewer than 10 homes, which are common in rural areas, so we propose a rural exemption. Moreover, knowing that since 2012 under the right-to-buy scheme, of every eight rural houses sold only one is replaced, we suggest that the right to buy in rural areas should be suspended or made voluntary. I am sure that noble Lords will refer to many other recommendations made in the report, from a review of rural rates relief to measures to maximise the benefits that the creative industries can bring to rural economies.

When our report was published, we were extremely heartened by the response to it. Organisations such as the Rural Services Network, CLA, ACRE, CPRE, the Rural Coalition, the Rural Housing Alliance and the National Rural Crime Network, were all extremely positive. Our key recommendation for the introduction of a rural strategy was especially well received. But, sadly, the Government’s response takes us back to the story of the new car and its functioning airbag. There are some positives and some good news. Perhaps the best is in relation to rural-proofing where the Government acknowledge that more can be done. The response talks of helping departments to develop a greater understanding, of publishing an evidence-based report on rural-proofing each year, and of establishing a rural affairs board to steer work on rural-proofing. We welcome all of this, but the response clearly illustrates that there is a long way to go. For example, we are told:

“DfE and DfT are currently preparing a joint proposal for discounted public transport for apprentices”.

I wonder whether the DfE and DfT yet realise that there is little or no public transport in many rural areas, so that is of no real help to rural apprentices and hardly evidence of good rural-proofing.

Even so, there is other good news. On tackling rural crime, we were encouraged that in the Prime Minister’s proposals to increase police numbers by 20,000 he said specifically that the increase will focus in particular on underresourced rural areas, while the fair funding review appears to be moving in the right direction. There is support for our proposed community capacity fund to support local leadership and voluntary action but not, as we suggested, any government funding for it. In the area of boosting digital skills in rural SMEs, the trailblazer digital skills partnerships may well point the way forward. Even while our report was at the printers, we read that our desire to see re-established and re-invigorated Wheels to Work schemes may well be realised by the launch of a new national charity, W2W UK, to do just that.

We have heard warm words. Recently, the new DCMS Secretary of State, Nicky Morgan, said:

“Rural communities are a thriving hotbed of industry and technology and for them resilient digital connectivity is vital. They must not be forgotten as we continue to improve Britain’s digital infrastructure”.

There is some good news and some warm words, but not much.

Two years ago, the then Business Secretary, Greg Clark, said

“Some of the biggest economic opportunities are in the rural parts of the United Kingdom”. [Official Report, Commons, 12/9/17; col. 631.]

We anticipated a very positive response from the Government to many of our key proposals, but much of it was disappointing. It acknowledges the importance of tackling challenges such as connectivity, housing, business support and transport, but largely just restates existing policies rather than committing to new ones. In some cases, such as the committee’s call for landowners not to be held liable for the costs of clearing up fly-tipping, the Government simply dismiss our recommendations.

Most regrettable is the response to our proposal for a comprehensive rural strategy. While stating that the Government will,

“expand on its strategic vision”,

for rural areas, they go on to reject the idea of a strategy. They claim that rural priorities can be delivered through local industrial strategies, thus avoiding the risk of,

“rural areas being placed in a silo through having a single rural strategy”.

Several rural organisations wrote to the Times stating they were “deeply disappointed” by this decision. The Rural Services Network added:

“It shows not only a lack of government ambition for rural communities, but also a lack of appreciation of how strongly rural communities feel disconnected from government policy-making”.

It says that the response is,

“missing the point and misrepresenting the purpose of a rural strategy”.

Can the Minister explain why the Government claim that a rural strategy will create a silo for rural areas while at the same time agreeing to beef up rural-proofing?

I am clear that the scale of the challenges we identified cannot be remedied with sticking plasters, nor are commitments to promoting rural proofing meaningful without a clear strategic framework in which rural policy is made. I believe that the Government's response fails to engage with our key premise—that rural areas are distinctive and require a distinctive approach from policymakers.

All too often, the policies highlighted by the Government in their response are not rurally specific. This confirms our criticism that successive Governments have seen rural areas as an adjunct to urban areas, rather than as areas that need to be treated as separate and distinct, with specific challenges and priorities. As the letter to the Times says,

“overall the failure to put in place a robust and properly funded rural strategy constitutes a worrying missed opportunity and risks a continuation of the status quo … Yet again the Government's attitude towards rural communities has left people feeling frustrated and ignored”.

For too long, successive Governments have had a blind spot for rural economies. We now need more than an enthusiastic and supportive Minister. Whatever the outcome of the current political turmoil, we need all relevant departments and the Government as a whole to heed the words from the Countryside Alliance in its briefing for today's debate:

“It is now time for the Government to move away from one size policy fits all and sit up and listen to the voice of rural Britain.”

I beg to move.