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

Part of the debate – in the House of Lords at 7:07 pm on 8th October 2019.

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Photo of Lord Grantchester Lord Grantchester Shadow Spokesperson (Energy and Climate Change), Shadow Minister (Environment, Food and Rural Affairs), Shadow Spokesperson (Business, Energy and Industrial Strategy) 7:07 pm, 8th October 2019

My Lords, this is an excellent report and a credit to your Lordships’ House. I welcome this debate and am grateful for all the contributions on the wide-ranging issues generated by the report. I too thank the noble Lord, Lord Foster, for chairing the Select Committee and for his excellent introduction to the debate. He gave a very good synopsis and I agree with his conclusions. I also thank all members of the committee for their contributions, drawing attention to the rural economy. I declare my interest as a farmer in receipt of EU funds and, in previous times, as a director of the Cheshire & Warrington Economic Alliance—a sub-regional body under the North-West Development Agency—and other organisations.

Rural England faces significant and wide-ranging challenges, as demonstrated by the sheer size and breadth of the committee’s report. The committee is to be congratulated further in that the report brings with it reflections of the long tailback of different approaches and attempts by different Governments over many years to deal comprehensively once again with the challenges of the rural economy. I concur with the report’s conclusion that current government policy does not take enough account of the contribution that rural economies can make to the nation’s prosperity and well-being, or the specific needs of rural economies and the challenges facing them.

For too long, these issues have been sidelined and not considered in the context of wider policy-making, which has resulted in the application of policies devised largely for urban and suburban economies, which are often inappropriate for rural Britain. The report is timely and urgently needs to be responded to more adequately by the Government and by Defra in particular, as the UK has to regenerate from the misguided policies of austerity as it stands on the cusp of a decision on its future place in the world. There needs to be a concerted focus on putting the rural economy at the heart of policy-making. We have heard several proposals recently concerning whether this policy area should be separated from the current Defra brief. The Government and Defra need to consider carefully the language and names they give to policy initiatives if they are to embrace the right culture. This tends to have the bureaucratic straitjacket of the machinery of government and how that interacts with businesses and communities at all levels, whether central, regional or local. To talk universally about an industrial strategy is immediately to paint all areas with one brush. The word “industry” is not one that resonates with rurality or diversity. While there may be different interpretations of demarcations and structures, there is a need for a different tone and use of language to reflect the rural perspective with titles such as “rural enterprise strategies” or even “local enterprise strategies” rather than using the word “industrial”.

Some 72% of people in rural areas are employed in SME companies, compared with 42% in urban areas. There can be little embedding of new approaches and outcomes are unlikely to change if there is a lack of recognition in the Government’s approach, as characterised by their general complacency in their response, emphasising local authorities when they are highly constrained by central government financial statutory straitjackets and where public-private partnerships struggle with bureaucratic interpretations of what their areas need most. The report concludes correctly that there is a huge disparity and inconsistency between delivery in different areas. Devolution, regional authorities, city-based structures, development agencies and LEPs all face challenges in engagement, effectiveness and relevance. The restructuring tends to lead to tarnishing changes with a political hue. The report underlines the target of successful evidence-based outcomes in individual areas that work best for them.

Perhaps Defra as a whole should be the champion of the rural economy given that the nomenclature of “rural affairs” carries with it the downplay of the rural economy into an odd mixture of miscellaneous activities on the periphery. Being the champion of the rural economy does not mean that the department must be diminished by hiving off parts to the DCLG, the Cabinet Office or DCMS. A key undercurrent of the report is the emphasis it places on rural-proofing as a vital ingredient to embed the interests of the rural economy into government. This is fundamental and cannot be emphasised enough. I welcome the recommendations made in the report in this respect. It draws attention to the inclusion of a rural impact assessment in all legislation and providing an annual report to Parliament to include non-departmental public bodies, local authorities and all spending bodies.

Our rural towns and villages are home to 9 million people and the vital role of genuinely affordable housing in thriving rural communities must not be underestimated. An understanding of this, together with the report’s recommendation for adequate rural-proofing of our housing and planning policies is critical to the very survival of rural communities. They are feeling the pressure of the broken housing market as much as towns and cities are. A quality affordable home feels out of reach to so many, given that most such homes cost 8.8 times the average lower wages in rural areas as compared with 7.5 times in predominantly urban areas excluding London. I thank my noble friend Lady Warwick for her remarks on housing and its central role in rural communities.

The rural housing crisis has been exacerbated by government policies. Indeed, the report highlights that since 2012, of every eight homes sold under right-to-buy schemes, only one is replaced in the rural community. Unless action is taken now to replace the affordable homes that have been lost to right to buy and rocketing house prices, there is a real danger that living in the countryside will become the reserve of the wealthy and that the diversity of rural communities will be undermined. Access to affordable homes can enable generations to stay in close proximity, keeping families together and tackling the other scourges of rural living—loneliness and social isolation—as highlighted in the report. Affordable homes provide critical support for the rural economy, including the labour force needed for the farming and food businesses that contribute so much to the rural economy. The National Housing Federation and housing associations believe that genuinely affordable homes are the key to equipping rural communities to thrive.

Successful rural economies depend on a wide range of services and support to help individual businesses grow and attract people to work and prosper in our countryside. However, as local people struggle to remain in their communities due to the housing crisis, we are seeing the loss of vital services. Education and colleges were mentioned by the noble Baroness, Lady Humphreys. Schools in rural areas have made up 40% of school closures over the past decade, up from 20% in the decade before, while we are losing rural post offices at an average of three per month. Travelling to appointments further afield is made even harder due to the cuts in bus services in rural areas. This, together with cuts to rural post offices, banks and enterprise through the Plunkett Foundation mentioned by the right reverend Prelate, the Bishop of London, the noble Lord, Lord Cameron, my noble friend Lord Carter and the noble Baroness, Lady McIntosh, has made life for people in rural Britain extremely difficult, hitting the hardest those most in need of public services.

Any consideration of the rural economy and its needs is answered by the number one priority, that of digital connectivity. It is the cornerstone that shapes the transformation of all areas of rural life and success is dependent on it. All the contributions to this debate have mentioned it. The nature of the rural economy means that it is much more diverse, with challenges around costs and scarcity. This needs to be recognised in the targets for the delivery of broadband and mobile phone signals. Some 95% of premises in the UK have access to broadband, but this covers only 75% of rural businesses.

Figure 3 in the report gives the percentages of registered business units in rural England and portrays that the largest of them are, first, agriculture, forestry and fishing, and, secondly, professional and technical services at 15% each, with the accompanying food and tourism sectors at 5%. It also reveals that more than 35% of enterprises are SMEs. Development can only proceed in step with the digital economy. The revolution of computerisation and data management in agriculture is needed both at the cow side, as I can vouch for in dairying, and in the tractor cab, where precision farming is necessary for minimum tilling and the avoidance of soil compaction. It is not clear from figure 3 where transport and integrated supply chains for goods come in this appraisal, but necessarily professional and technical services provide vital support across all enterprises. Tourism, mentioned by the noble Lord, Lord Greaves, is crying out for a rural sector deal and is characterised by establishments all needing connectivity for their customers.

However, in the digital world, the government targets are too slow. Currently, 4G coverage is at only 67% of geographical UK coverage even though this may be at 98% in urban areas. For rural areas to benefit from the expansion of 4G, 2026 is too slow: 95% coverage is needed by 2024. Focusing on 5G fails to recognise that the basic infrastructure of 4G has to be in place for areas to be able to benefit from 5G. Treasury spectrum auctions need to recognise the payoff between price and a more ambitious, quicker coverage, with more capacity throughout rural areas. No modern business—certainly not a rural-based one—can exist without 100% coverage of fibre to the home.

In conclusion, I thank noble Lords for their contributions to this thorough and well-considered report, as well as all those who have participated in this excellent debate. While many of the challenges identified and discussed are not new, it would be remiss of me not to highlight the challenge Brexit presents to the rural economy. Indeed, the report acknowledges that rural economies and the farming sector in particular are significantly affected by the CAP, including its rural development pillar. Some rural areas have also received considerable support from other EU structural funds. The UK will lose access to such funding after its departure. Although the Government have committed to replacing these funds with a domestic shared prosperity fund, it is not yet clear how such a fund will be administered or how it will be delivered in rural areas, or even if the same total funding will be available.

With just three weeks until the Prime Minister insists that we will leave the EU—“do or die”—businesses remain very concerned about the prospect of a no-deal Brexit, which will have a catastrophic impact on the rural economy. I make no apology to the Minister for drawing attention once again—building on the remarks made by the noble Earl, Lord Devon—to the fact that farmers are particularly vulnerable to a no-deal Brexit. I hope that the Minister will take the opportunity to address these concerns and additional challenges in his response. I note that nearly every speaker today has expressed disappointment in the Government’s reply.