I beg to move,
That this House
has considered productivity in rural areas.
It is a pleasure to serve under your chairmanship, Ms Ghani. I understand this is your first outing in the Chair and it feels like a lifetime ago since I led a debate in this place, so I hope this will not be our last outing together.
I begin by posing a question to the House and to the Minister. It is abundantly clear that more people are considering living and working in rural and coastal communities. Many are choosing a better life balance, weighing up where they want to raise their children and taking advantage of some improved broadband connectivity —and covid has increased that trend. As the trend accelerates, this is my question to the House: is the countryside ready for that change? I have considered the question a lot and I think it could be, but addressing the productivity gap is vital in ensuring that rural communities are safeguarded as we go about those changes.
Cornwall is recognised as having the lowest productivity rate in the UK. According to Office for National Statistics figures released in February 2019, it was 32% below the national average. I know there are colleagues here today who have similar challenges in their areas. We should be very clear that the rural productivity gap is in no way the fault of hard-working people in all our communities, but the result of a combination of geographical and historical factors. I am committed to addressing that long-standing injustice; I know my friends in the House will be as well.
First, it is worth examining some of the reasons the productivity gap exists and what we can do to address it. In terms of local government and national Government, local government officers and UK civil servants are bound to a funding formula for infrastructure projects that means they have to seek best value for money. That has led to money being funnelled into already affluent areas, and, on paper, they see a greater return on that investment. However, that compounds and further widens the productivity gap we are here to discuss today. The first step on the road to levelling up the United Kingdom would be to change that model, recognise the potential value of investment for a specific area and establish how much improved value there would be over the baseline. For example, to get a 1% improvement in London’s economy, we would have to invest tens of billions of pounds, but a 1% investment in the Cornish economy would exponentially increase productivity in the area. So, £1 million invested in Cornwall would make a greater contribution to increasing productivity across the nation than £1 million invested, for example, in the Oxford-Cambridge corridor.
On education, for far too long, young people in North Cornwall have accessed higher education outside the county. Once they have qualified, the majority never return home. Many are old school friends of mine, who sought better paid work in other places around the country. I know Tony Blair had a big push on getting 50% of young people through university. My view is that that has compounded the problem, forcing many young people on to paths that are unsuited to them or to study degrees that are often of little benefit to the economy local to where they grew up.
I am pleased the Government are offering more vocation-based skills learning and degree-level apprenticeships. I hope we can do more to improve the life chances of young people in and around the country. In North Cornwall, our offer for young people has drastically improved. Callywith College in Bodmin was recently rated outstanding in six areas by Ofsted. I look forward to working with the college and expanding its future offer.
On housing, it is a sad fact that the gap between average wages and average house prices is the highest it has ever been in England. In Cornwall, that trend is particularly acute. The problem is worsened by high levels of second-home ownership, and many homes are beyond the reach of the local population. They are generally bought by buy-to-let landlords, which drives up rents. However, we are seeing an increase and a trend in second homes being occupied for longer periods of the year. Some families are choosing to relocate already to make their second home more permanent, and I welcome those moves. However, the under-supply of housing has already damaged many lives and communities in Cornwall. An increase in the rural population will exacerbate that issue, so we cannot avoid the need to build more homes in rural communities.
On supply and construction, Cornwall is leading the way on modular housing and newer forms of building to get the speed of builds up. I hope that the changes outlined in the planning White Paper will continue that roll-out and improve innovation and the solutions that we have to find to sort out the housing crisis. The planning Bill should also support economic development, business diversification, innovation and job creation in the countryside. I firmly believe that if we do that, we can address some of those rural challenges.
Moving on to health outcomes, the physical distance that some people have to drive to visit GPs and cottage and general hospitals often means that more people live with conditions and have to undergo lengthy surgery for treatment. They often rely on family members for that travel. For example, someone living in Bude in my constituency who has an appointment in nearby Barnstaple’s hospital might have to take half a day’s holiday from work just to run their relative to an appointment. That obviously has negative impacts on workplace productivity, but also on quality of life. The covid pandemic has proved that digital appointments with GPs can work, and some consulting can work. Further digitalisation of the NHS could mean rural and coastal communities accessing some of the best medical expertise in the country over Zoom or Skype without the need to travel vast distances.
I know lots of people will talk about physical infrastructure in their own communities, and we have seen a move from the Government to improve physical infrastructure distribution around the country, but it is clear that road and rail schemes often improve connectivity, productivity, journey times and people’s life chances. I have no doubt that colleagues will cover that topic, but I have a particular scheme in North Cornwall that the Treasury has already part funded, and it exemplifies how important infrastructure can be. The Camelford bypass has been talked about for more than 100 years. At its worst, the A39 through the town is gridlocked; at its best in the winter it can be tedious and extremely polluting. Camelford has one of the highest NOx emission rates in Cornwall. A bypass will improve health outcomes and connectivity, cut journey times on routes frequented by many workmen and traders, and in many cases will also improve people’s life chances because they will be able to access good quality employment. We recently saw improvements to the A30, which have led to improved journey times and created hundreds of jobs in the county.
Many colleagues will wish to raise digital connectivity. In many rural communities, improving broadband and mobile coverage is the single biggest step needed to address rural productivity issues. In Cornwall we have seen significant investment in speed, which has increased exponentially, but we still have far to go. Cafés, farms, white-collar workers and more can have more productivity, but are limited at the moment by poor internet speeds. It is crucial for tourism in Cornwall. Visit Cornwall recently did a survey that showed that the top two searches for holiday accommodation in Cornwall were broadband and hot tubs. Although I am absolutely convinced that hot tubs are important to people, I think we can agree that broadband is a necessity. Digital infrastructure should be the most important part of the Government’s levelling-up agenda.
We have also seen a move to remote working. A shift to remote and flexible working was happening pre-covid, and that is growing exponentially. I suspect many colleagues in the Chamber today will be aware of that trend. Legacy broadband and mobile investment can grow value added and support new employment opportunities in rural communities. We should encourage people to take advantage of the fantastic rural digital connectivity and to set up businesses in rural areas, giving them better quality of life and creating more and new opportunities for employment.
There have been a lot of efficiency savings in agriculture and farming in recent years, including robotics in milking parlours. Tractors are bigger and more efficient than they used to be. We have only scratched the surface of what we can do in terms of agricultural tech and robotics in our communities.
I appreciate that many hon. Members want to speak, but it is worth making the point that the rural productivity gap is not a north-south divide, as it is sometimes reported. In my view, there are two economies in the UK: London and the south-east and the rest of us. I believe that the Government are committed to levelling up and will not lose sight of that focus, despite the challenges that we are undergoing with the covid-19 pandemic. People who live in rural communities are up for the challenge. The Cornish are entrepreneurial, hard-working and never miss an opportunity to make a few quid, so with the right support from the Treasury, I have no doubt that they can close the productivity gap.
I ask the Minister to respond on the following points. Will she continue to invest in technical colleges and degree level apprenticeships? Will she ensure that everyone in the UK has access to good-quality broadband and mobile? Will she support planning policies that are designed to promote economic growth for our rural and coastal communities? Will she continue to push for a bigger role for digital and virtual in our health service?
Will the Minister try to ensure that R&D funding is funnelled into innovation in the farming sector? Pilot schemes are often floated around the country. Will she consider the least productive areas for some of those pilot schemes and procurement things that happen in Government? I will leave it there as several hon. Members wish to speak. I am looking forward to hearing what they have to say as well.
It is a pleasure to speak in this debate. I thank my hon. Friend Scott Mann for securing it, because we need to treat the whole country in a similar way. Sometimes, we believe that the west country goes as far as Bristol and no further, so we have to make sure that we get things done.
For instance, the A303 has been talked about for far too long. In fact, I found a reference from Edward du Cann, who said in 1958 that we needed to do more with the A303. We can get going. We can deal with a tunnel under Stonehenge, but we can also deal with a road through Somerset to make sure it gets into Devon and then on to the A30 into Cornwall.
My hon. Friend spoke about broadband. We need to get that done, because again, it is very much about digital connectivity. In my constituency, there are further education colleges in Axminster, Cullompton, Honiton and Tiverton. There is a great drive towards improving those colleges and giving people a good education, so that we can get practical people into jobs that they enjoy, can do and can make a good living at.
In Tiverton, there is a school in a flood zone that we cannot repair because it would flood again. Therefore, as I have said many times, to actually level up the community, we need a new school for Tiverton. If the Minister happens to have £40 million with her today, that would be extremely useful.
To be serious, levelling up across the country is essential, because all hon. Members have great communities, great people and great businesses, but we also have areas that need levelling up. Sometimes, a great rural constituency with lovely farms and lovely countryside does not really show those pockets that need levelling up.
It is a pleasure to take part in this debate under your chairmanship, Ms Ghani. I congratulate Scott Mann on securing this important debate. Some 37% of the Northern Ireland population live in rural areas, so they contribute to a large section of our overall economy. Unfortunately, they are somewhat missed out when it comes to the delivery of public services and public transport, which is also a problem when people go to develop a business in a rural setting. People might need transport for it, but there is no connectivity.
One of our biggest bugbears in Northern Ireland is rural broadband and the difficulties with it for businesses going forward. We have bucked the trend to some degree with businesses such as Randox in my constituency. It is a large employer based in a rural area, but it has also come across the difficulties of planning policy and what I call zoning. Zoning problems do not allow businesses to expand. They are good and developing businesses, but because someone has a wee red box drawn around an area, nothing more can be done. That can reduce the opportunities for a business to expand.
Now a Northern Ireland Executive is in place, we hope for access to the apprenticeship fund. Businesses in Northern Ireland contribute to it, but need to be able to access it to bring forward rural apprenticeships. In my constituency, the Greenmount agricultural college is a leading college for agriculture not only in Northern Ireland but throughout the UK, and we want to support it to bring diversification for farms and those involved in our agrifood industry, which is a major player in rural productivity.
It is a pleasure to serve under your chairmanship, Ms Ghani.
I pay tribute to my hon. Friend Scott Mann for raising this critical issue. For me, there is an answer to the productivity gap, and it is technology and infrastructure, as we have heard. Even before lockdown, a quarter of the rural population worked from home. With small and medium-sized enterprises being the engine of the rural economy, digital connectivity is vital, but Somerset is sprinkled with areas that have unreliable and intermittent connectivity.
New investment in broadband in those dead zones is of course great news, and the shared rural network agreement is another step forward, but there is still a lingering belief that the rural economy is purely focused on agriculture. Of course, we have a thriving industry that is based on agriculture—in my constituency, the fabulous cheese makers of Wyke Farms, Montgomery Cheese, Godminster and Barber’s, and innumerable cider manufacturers—and they are all vital to the local economy, but it is equally important to stoke the fire of businesses such as the logistics and supply chain company Vallis Commodities in Frome, the operations of which depend on Somerset’s physical and digital infrastructure.
Investment in road—I dare not mention the A303 again —in rail and in digital infrastructure will pay dividends for decades to come. Just stick in the money and sit back and watch as the resourceful and dynamic people of the west country beaver away in effect to give it all back with interest. If the shared prosperity fund is to achieve its purpose of smoothing inequalities between different communities, let us do that within a framework that balances protecting the bucolic glory of our small towns and villages while equipping them with the tools that they need to flourish.
It is a real pleasure to serve under your chairmanship, Ms Ghani.
Anyone who could make a living among the lakes and dales of south Cumbria, just would—the problem, of course, is the ability to make that living. One in four of my constituents in work works for themselves, and they are entrepreneurs. We want to encourage that strongly, and the fact that we have 95% officially superfast broadband in my constituency is hugely welcome.
That 95%, however, does not ring many bells for the chief executive officer of a trading and development company in our big town of Kendal, which has a 0.05 megabits per second upload speed. The reality, and the figure that matters, is not the 95% superfast broadband, but the 9.7% of my constituents who have fibre to their home. That compares with the 27% nationally, and even that figure is a disgrace. That is what matters the most, that 90% of my constituents rely on copper wires, a 20th-century solution to a 21st-century problem.
Given the time available, I simply want to make this case to the Minister: if the Government want Britain to be levelled up with the rest of Europe and the rest of the developed world, that is where we need to start. We need to aim for 95% fibre to the home or the premises right across the country, starting in rural areas, because that is where it will do the most good.
I said that one in four of my constituents works for themselves, and that they are entrepreneurs and creative. Even more could be if they were given the ability to be better connected. I look at our community at the moment, struggling from covid and doing their best to work from home, in circumstances that were utterly unthinkable just six months ago. I am sure we will not go back to how things were before. When we go back to work more generally, post-covid, we need to be able to compete, and we will do that only if we decide that we will adopt that 21st-century solution, and build fibre to the home.
I am very proud that in Clwyd South, my constituency on the Welsh borders, we have achieved the first universal service obligation in Wales, but it has been hard work and, as other hon. Members have mentioned, there is much more to be done. There are real problems with BT Openreach. We must make sure that the £5 billion investment that has been promised by the UK Government gets into the system, and that we can untangle a lot of the problems. Yes, we have made progress, but there is more work to be done.
The second area where we can improve rural productivity is by devolving as many powers as possible locally. I was a county councillor, a town councillor and mayor of my rural town before I became an MP, so I have had practical experience of trying to improve rural areas. In Clwyd South, Wrexham County Borough Council and Denbighshire County Council made many of the key decisions affecting rural life, from roads and housing to schools and local facilities. Sometimes we forget that many of the levers to achieve what we want to achieve lie at the local level.
Finally, I emphasise that in rural areas the proportion of small and medium-sized businesses is much higher than in urban areas. Therefore, policies that bolster those businesses are extremely important, particularly the availability of office and workshop space. That is a major problem in many rural areas and we need to create the planning conditions that allow for that, combined, as other hon. Members have mentioned, with improved provision of skills, training and apprenticeships.
I congratulate you, Ms Ghani, on getting to the position that you are in. It is lovely to see you there and I wish you well. I thank Scott Mann for setting the scene. I will talk about Brexit and the opportunities, because that is where I feel that we have those chances.
The dairy industry and connected agrifood industry is a massive rural key. One dairy corporate in my constituency in Northern Ireland has 2,500 farming families depending on it. We look forward to moving forward to continue trade and to enhance that. When it comes to productivity, Brexit will give us that opportunity. Mash Direct, Rich Sauces and Lakeland Dairies in my constituency have shown that global trade is possible, exporting as far away as China. That is something that the former Minister for International Development enabled us to develop.
To move forward, we need the Government centrally and the Minister to work with the Northern Ireland Assembly. They need to work alongside each other, to negotiate the choppy tides of leaving the EU, to hit the wide-open seas of free trade and commerce, and to reach the global potential that exists. In my farming constituency, it reaches down from the big companies, which between the three of them employ some 2,500 people, plus the farmers who live off them. Glastry Farm produces excellent ice cream. I said last night that Portavogie prawns are the best prawns in the country; well, Glastry Farm ice cream is the best ice cream that there is. It is a local farm that has diversified and done what it can to increase rural productivity.
I quickly underline the importance of post offices and banks, because of the wellbeing they provide. Dave Doogan is a member of a party—the Scots Nats—whose Members have spoken out in the House about bank closures many times. I have been in every debate; I want to make sure that is on the record.
I want to ensure that we address the issue of broadband, to reach out to isolated rural areas and to help small and medium-sized businesses, because if we can do that, we can raise productivity and we can all do better across the great United Kingdom of Great Britain and Northern Ireland.
I congratulate my hon. Friend Scott Mann on securing the debate and the excellent case he made for the importance of infrastructure in reducing the rural productivity gap.
A good example of how to do that is the Hope Valley railway line that serves New Mills, Chinley, Edale, Hope and Bamford in my constituency. It is a popular service and arguably one of the most beautiful railway journeys in the world, but in the period running up to December 2019 it scored only 52% on the public performance measure for train punctuality, making it one of the worst services in the country. One does not need to be a genius to realise the negative impact that has on our economic productivity.
I am pleased that we are making progress, with the modern class 195 trains recently starting service and phasing out the ancient Pacers. I am campaigning for an upgrade to the capacity on the line so that we can get more frequent services, which would make a huge difference to a huge number of residents in my constituency.
While on the subject of transport, it would be remiss of me not to mention the communities that are cut off entirely from the railway network and have extremely limited bus services. A good example is Gamesley, which by some measures is in the top 1% of the most deprived places in the country, yet many local residents are forced to pay for a taxi to get home, because the last bus finishes at 5 pm. We need a new railway station for Gamesley. I look forward eagerly to the Government’s national bus strategy, and I welcome the new X57 bus, which will provide a new service between Manchester and Sheffield. That will be a big boost for people who, like me, live in Glossop, and for those in Ashopton and Bamford.
I want to talk about poor broadband and mobile phone coverage, which holds back lots of areas. That is why roll-out of gigabit-capable broadband is so important. It is encouraging that we are finally starting to see full-fibre getting out to some of the hardest-to-reach places in High Peak, but we have to get it to the homes, not just to the cabinet, which makes a big difference to speed. Openreach has recently announced that it will be extending full-fibre to 11 Derbyshire market towns and villages, including Buxton, Glossop and Chapel-en-le-Frith, which I wholeheartedly welcome.
Finally, I want to acknowledge that improving rural productivity is a big challenge. There is no single silver bullet or single Act of Parliament, but if we work together, we can deliver for our constituents.
I congratulate my Cornish colleague, my hon. Friend Scott Mann, on securing the debate. I endorse everything that he said, and I will not repeat too much. However, I particularly want to endorse the Camelford bypass, which I know he has been working tirelessly on since he has been in this place.
To live in Cornwall is to have to diversify—there is no doubt about it. When someone moves to Cornwall, there is no walking into a well-paid job in a bank or anything like that. One has to think about how one will learn a living. Most people who live and work in Cornwall have one job and one or two businesses, or even more. That is how one earns a living.
Last night in the Chamber, we spoke extensively in the debate on the Fisheries Bill. One point that I wanted to make—we were cut short on time—was about how we get more fisherman into their boats. As part of a rural injection of money, I would like to see, if possible, an apprenticeship scheme for fisherman, so that young guys and girls coming out of college who are not particularly academic, but who have good watercraft and have lived by the sea all their lives, are attracted to the industry. We could help them get their own boats, so that we start to see a resurgence of the inshore fleet, rather than such young people having to leave and go elsewhere.
We have a fantastic college in Truro—the Truro and Penwith College—which is doing a fantastic job at trying to match courses to skills. It has taken on the T-levels, and I know that is the college’s move going forward. It is doing a brilliant job at it. We also have the University of Exeter and the University of Falmouth, which are doing a fantastic job on the academic side of things.
I see that Cornwall is moving towards the green recovery. We have lithium and green hydrogen. We have plans for floating offshore wind. This morning I was talking to Starbucks, which is now making its reusable cups in Cornwall. It is happening, and all it needs is just a bit of imagination and initiative from the Government to see how we can spend the shared prosperity fund and tailor it to what our areas actually need.
I congratulate my hon. Friend Scott Mann on securing the debate.
Rural productivity is an issue of great importance to my constituents in Penistone and Stocksbridge. I recently visited a dairy farm in the constituency where farmers are working hard to improve productivity by introducing new technologies that will increase milk yields. Such technologies require the collection and processing of real-time data from cattle, and this in turn requires reliable, high-speed and affordable broadband. All businesses are becoming more reliant on broadband, and there is now a direct relationship between internet speed and how much productive work can be done. In the rural broadband survey that I am currently conducting in my constituency, however, nearly 60% of respondents tell me that their broadband is slow or very slow, so it is hardly surprising that rural productivity is falling behind.
Businesses and people working from home do not require broadband just for sending emails or online shopping. The nature of work has changed, and high-tech solutions and high-quality virtual meetings require a high-quality connection. There are no easy answers to these problems, and we need community power as well as support from central Government in order to seek innovative local solutions.
Of course, broadband speeds are not the only factor limiting rural connectivity. Poor bus and train services restrict opportunities to travel to well-paid work in the local area, in stark contrast with vastly better services in urban areas. Again, I believe there is an opportunity for community power to improve transport connectivity. South Pennine Community Transport, a fantastic local community interest company near my constituency, is trialling a new regular bus service between rural villages and Stocksbridge town. The service will connect people to jobs and leisure services and could be financially self-sustaining in under two years. Many millions of people live in rural communities in this country, and it is not just for economic reasons that we need to level up. Rural life, culture, tradition and values are a valuable part of this country’s history and our future, and we need to make sure that young people are able to stay in those communities and have productive jobs.
Thank, you, Ms Ghani. It is kind of you to call me in the debate, and I congratulate my hon. Friend Scott Mann on securing it.
My constituency is heavily rural. We have seven livestock markets and only four supermarkets. We have no district general hospital, no motorway and limited train and bus services, but the digital divide, as has come up in the debate, is the most significant factor holding back the vast capacity for rural productivity that exists across the UK. Specifically, the lack of high-speed broadband that plagues a large proportion of my constituency limits businesses’ and households’ capability to get connected. In the age of e-commerce and online learning, not being able to get online can mean not being able to reach full potential either as a business or as an individual. It certainly holds back the many tourism businesses in my constituency.
In Sennybridge, in my patch, only 50% of households have superfast availability, which is well below the 95% average across the United Kingdom. Sadly, we in Wales have a Welsh Labour Administration, propped up by the Liberal Democrats, who do not value rural areas. Investment in superfast broadband has been concentrated in the urban south Wales valleys, and sadly it does not reach up into my constituency in mid-Wales. I was therefore overjoyed in March when the Chancellor reaffirmed the Government’s plan to invest £5 billion to help to build gigabit-capable networks throughout the UK by the end of 2025. I encourage the Government to ensure that that capacity is built without delay. I support the comments of my hon. Friend Simon Baynes about BT and Openreach, but I urge the Government also to do what they can to support small and medium-sized enterprises in that space, so that there is real competition in the broadband roll-out sector.
Our levelling-up agenda depends on ensuring that households across the UK, even in the most rural areas, have access to superfast broadband, so that we can close the digital divide and take full advantage of rural productivity capacity.
The issue has been looked at in considerable detail by the Council of Europe, across the wider Europe that it is responsible for. One of the things that has come out of that is that, while we may want to see rural areas as one block, they are actually quite diverse. Many rural areas are some of the most prosperous in this country. In many there is a shift to a new rural economy with reduced dependency on land-based activities and a more diversified economy. What we need to do in those areas is support entrepreneurship and innovation. In my constituency, at Culham, which is the UK’s centre for fusion activities, we are bringing in many exciting new international companies and setting up a centre for apprenticeships that can operate across the whole area and carry on quite significant scientific activities. That all depends on access to technology and connectivity. A number of hon. Members have already mentioned the issue of broadband, and I completely agree about that.
There is a demographic issue that we all, I think, are concerned with—that rural areas should be the home not just of retired people but of young people who are innovative and out there, and who are getting on with making the areas where they live prosperous and quite strong. If I had time I would quote from the OECD, which has also looked at the area in question. That would reinforce what I have said about the need to value innovation and entrepreneurship in taking forward the prosperity we want in rural areas.
It is a pleasure to be called by you, Ms Ghani. I thank my hon. Friend Scott Mann for introducing this great debate on our countryside. I have two minutes, so it has to be a list, for which I apologise to the Minister. I suspect that the Government have heard a lot of it before.
I have two seaside resorts in my constituency: Swanage and Weymouth—and the Isle of Portland; I must never forget that. We are heavily resort-based, and we need some love and investment. We have large pockets of deprivation in my seat of South Dorset. Although we are extremely grateful for the huge sums of money we have received for the Weymouth Pavilion, Swanage railway and the Tank Museum, adding up to about £1.25 million from various sources, I am afraid that we need more.
I initiated a business panel, because I think business people are better at promoting what we need than politicians, because a lot of my constituents do not agree with what I say, understandably. This panel is now looking at what we will need for the next 30 to 50 years, in which I would include—I will push the Government hard on this—a road north. We cannot get out of Dorset and Hampshire; we have to go to the A34. This is utter madness. We need a relief road in Weymouth, so that the port can expand, which it is already doing, creating huge numbers of jobs.
As colleagues have said, we need better connectivity with broadband and mobile, which is currently appalling. Weymouth College is the only place where young people in my seat can aspire to move on to better careers, university and all the things that are so important for the young. We need more money to bring this college, which is doing a fantastic job, up to the standard that is required to deliver that opportunity to the young.
Finally, a forgotten element is the outdoor education centres. I know that is not the Minister’s responsibility. Schools are not sending children there. They should be allowed to because they are safe and bubbled, and children should be able to enjoy a day out in the countryside.
I guarantee I will. It is a pleasure to serve under your chairmanship, Ms Ghani. I am grateful to Scott Mann for bringing this debate.
Rural communities’ needs must have greater prominence in Government policy. We would do well to ensure that this debate provides traction for that ambition. Across the UK—especially in England and Northern Ireland, where the topography is literally more accommodating—rural populations and their needs as taxpayers and citizens, together with their economic contribution are too easily and routinely overlooked. That is an opportunity lost.
The City of London and North sea oil and gas were the powerhouses of the UK economy for nearly 30 years or so. From Caithness to Cornwall, if we removed the net economic output from rural communities across these isles, we would see one heck of a dent in the UK’s economy. Rural communities and economies need a far greater slice of the investment cake if they are to increase productivity. Resources are the end result; the means to that is a shift in perspective and central Government policy. Centralised institutions and Whitehall must react to this.
We need our great regional cities—whether Aberdeen, Belfast, Cardiff or Durham—to be reborn as regional hubs. This base must exploit their existing and manifest competitive advantages. These can then act as economic nodes for regional opportunity in a far more targeted way, supporting start-ups and peer support between businesses, and generating and cultivating the multiplier effect, which can spread growth, opportunity and prosperity out to landward areas.
In Scotland, great strides have been made to enable decentralised power much closer to the people, under devolution in Edinburgh. This has been replicated in Wales, Northern Ireland, London and the other mayoral assemblies in England. In an independent Scotland, it would be unforgivable to repeat the difficult-to-unwind centralisation mistakes of the UK. That sounds like a political point, but I would contend that it is a political science point. By any stretch of the imagination and by any international comparator, the UK is chronically over-centralised in London. That comes at a significant cost to the rest of these islands.
There is great concern regarding physical and digital connectivity. Both are extremely important. As the hon. Member for North Cornwall highlighted, without superfast broadband, the nicest hotel in the village would find it difficult to get custom and impossible to get repeat custom, and customer reviews would reflect that. I am afraid that superfast broadband is no longer a luxury add-on; it is absolutely essential for the hospitality industry. Without that, individual businesses are working with one hand tied behind their back, because there is nothing they can do about it. That requires significant public investment. Following that investment, there is a need to build a more sustainable model where economic activity and output creates the demand for a more market-led support for services and infrastructure.
The Scottish Government, where we have the powers, have in the “Programme for Government” put the rural economy at the heart of the agenda. We recognise the importance of diversity in the rural economy and we are committed to a range of measures to support that growth. The rural economy is a major source of growth in Scotland, with its economic contribution worth about £35 billion in gross value added. Figures from 2015 show it was 27% of Scotland’s economy. There are 67,000 jobs in Scotland in farming alone. The Scottish agriculture sector, which is no different to that in great swathes of England—not least Cornwall—is worth about £1.3 billion to our economy. Farming is at the heart of Scotland’s economy and has the potential to contribute to our national recovery from covid, as it does elsewhere.
It needs to be accepted that different challenges are faced by rural businesses. The Scottish Government are addressing those, including through a new place-based approach to integrate business support for rural micro-enterprises. As other hon. Members have said, it is really important to look at the aggregate effect. There are not massive companies in rural settings—that is not what characterises rural entrepreneurship. There are many different economic enterprises—often, as has been pointed out, in the same household—all contributing to a significant economic output.
I am grateful to have had an opportunity to contribute to the debate. I wish the hon. Member for North Cornwall every success in taking this issue forward with his colleagues in Government.
It is a pleasure to be here for your debut in the Chair, Ms Ghani. I congratulate Scott Mann on securing this very good debate. I also congratulate all those Members who were elected for the first time at the most recent general election—not for the election victory, I hasten to add; we would rather that had not happened—on having already learned the fine parliamentary art form of squeezing a five-minute speech into two minutes. As a result, we heard a wide range of important points.
When I read the room, I was not sure about whether I should have more trepidation about addressing this gathering as a Labour MP or as a London MP. I want to explain why both of those things are complementary to what we have just heard. First, the regional imbalance in the UK economy is not working for London and the south-east, either. This city—one where I am a suburban MP—is overheating and overcrowded. It is in the interests of London and the south-east that we are rebalancing the economy across England and the rest of the UK. The concentration of power, wealth and opportunity in London and the south-east does not work for London, for the rest of England or for the rest of the UK. I hope we can achieve genuine consensus about how we redistribute power, wealth and opportunity from London and the south-east to the rest of the UK to create a genuinely balanced economy that benefits everyone and strengthens our country as a whole.
The Opposition not only not disagree with so much of what we heard in the debate but strongly support it. We understand the diversity of the rural economy in this country. Jobs and businesses in farming, forestry and fishing are important for the people who work in them, the communities who benefit from them and, of course, the consumers who enjoy them too. However, they are not the grand total of rural businesses; in fact, 85% of rural businesses are unrelated to farming, forestry and fishing. It is really important that public policy makers, whether in Government or around the Westminster village, understand that point and think about the diversity of the rural economy and how we support those businesses to succeed.
It is also a really important point that, in the context of the productivity challenge we have in the economy as a whole, rural economies in the UK are less productive. The hon. Member for North Cornwall made the point well that that reflects not on the workforce but on the conditions in which those businesses operate. It is also true that employment is generally higher in rural areas but pay is lower. We heard some illustrations of why that was, with people holding down a number of jobs—in fact, running a number of businesses—to make ends meet. That point was made powerfully during the debate.
What are the conditions in the wider environment that are causing some of these challenges? Of course, some challenges arise out of business size and density, and there are not the same conglomeration effects as in urban areas.
We have heard contributions on the challenges of accessing finance and the closure of bank branches. We ought to think, in the context of the connectivity that we have had to create during the course of covid, about how to better connect rural businesses with each other. We need to make sure that we are investing in our people, which is about access to skills and making sure that people do not need to leave the places where they grew up in order to have a successful career or to build a successful business. It is important that we invest in infrastructure, whether that is buses, rail or other forms of public transport. There are also ongoing issues of digital connectivity—this country is a digital laggard. We only have to look at the report of the Environment, Food and Rural Affairs Committee to see that we are so far behind other European countries on digital connectivity.
Notwithstanding all the other challenges that our country faces at the moment, I really hope that, as we think about how to break the back of this covid crisis, we think about how we build a better, stronger, more resilient economy beyond the crisis, making sure that we invest in rural communities and their people, businesses and infrastructure. I hope we can build a cross-party consensus in this area to generate good ideas for the next Labour Government to take forward.
It is a delight to be with you on your debut chairing of a Westminster Hall debate, Ms Ghani. I join others in congratulating my hon. Friend Scott Mann on securing this important debate. As the Member of Parliament for Saffron Walden, a beautiful rural constituency in north Essex, I share many of the concerns raised today. In fact, if I was not a Treasury Minister, I would no doubt be here talking about the same things. I thank hon. Members for their many insightful and constructive contributions.
As recently as last week, the Prime Minister expressed his view that the only way to ensure true resilience and long-term prosperity is to raise the overall productivity of the country. In saying that, he was not talking only about our cities, as Wes Streeting referenced. When this Government talk about boosting productivity, levelling up and building back better, we are talking about the entire country—north and south, east and west, urban and rural.
Rural areas do not just make up most of this country by land area. They are integral to the commerce and culture of every nation and region of the UK. As my hon. Friend John Howell noted, our rural communities are diverse. In England alone, more than 9 million people live in rural towns, villages and hamlets, each a unique settlement with its own distinctive history and identity. These communities produce much of the food we eat and preserve the green spaces that we love to visit and that our wildlife relies on.
The Government are proud of the contribution that rural businesses make to our national economy, and we are determined to help rural areas harness their full economic potential. Rural areas typically have higher rates of employment and lower rates of unemployment and economic inactivity. The historic backbone of economies in rural areas has been British farms and their world-class produce, which is why the Government are committed to protecting farm budgets for the duration of this Parliament. In the years ahead, we will take advantage of leaving the common agricultural policy to transition away from area-based direct payments, which do little for the environment or productivity, and towards a new system based on giving public money for public goods, which will help our farmers to become more productive, more efficient and more environmentally sustainable.
Fishing, too, is crucial. It is the mainstay of many UK coastal communities, providing jobs and valued produce here at home and sending lucrative exports abroad. The Government have committed to maintaining funding for fisheries across the UK nations throughout this Parliament. My hon. Friend Cherilyn Mackrory asked me about apprenticeships for fishing. I can tell her that the Institute for Apprenticeships and Technical Education is working with employers to develop a range of courses for that.
I have already made the point about rural communities generating crucial economic capital. They are also home to much of our natural capital, which has not been mentioned so much in this debate. We want more private investment in that natural capital, which will in turn create jobs and support our world-leading target of reaching net zero by 2050.
Stronger transport links were raised by many Members. They play a particularly critical role in rural economies. We are spending more than £27 billion on strategic and local roads through the road investment strategy 2 from 2020 to 2025—the largest ever investment in England’s strategic roads. That includes the £2 billion committed at Budget to building the A303 tunnel, which I know several Members are interested in. We also confirmed at Budget the development funding for the A39 Camelford bypass, as part of the major roads programme.
Transport links must be levelled up across the country. That is why, earlier this year, the Prime Minister announced a £5 billion investment to transform bus and cycle links in every region of England, supported by the ambitious cycling and walking plan that was published in July and, as my hon. Friend Simon Baynes mentioned, by a national bus strategy, which will be delivered in the coming months. In the Budget, the Chancellor also announced a £2.5 billion potholes fund over this Parliament, to address the local road maintenance backlog.
We heard from many hon. Members, including the hon. Members for South Antrim (Paul Girvan) and for Angus (Dave Doogan), and my hon. Friends the Members for Penistone and Stocksbridge (Miriam Cates) and for Somerton and Frome (David Warburton), about further education and degree-level apprenticeships. Higher and degree-level apprenticeships form an important part of our skills and education system, providing people of all backgrounds with a choice of high-value vocational training, alongside traditional academic routes. As part of our plan for jobs, the Government have introduced new payments to employers in England from
Many hon. Members mentioned digital infrastructure, including my hon. Friends the Members for Tiverton and Honiton (Neil Parish) and for Truro and Falmouth, and the hon. Member for South Antrim. It is the information superhighway that we need to support our rural economy. As my hon. Friend for Somerton and Frome said, it is not just about farming and infrastructure. We have announced landmark investments in digital connectivity, including £5 billion to support the roll-out of gigabit-capable broadband in the hardest-to-reach areas, which I know will please my hon. Friend Fay Jones, and £500 million to extend 4G coverage to 95% of the UK’s landmass. As Tim Farron mentioned, that will keep people and businesses connected.
As we fulfil our manifesto commitment to boost productivity and level up the whole country, we will not forget that rural communities have their own needs and challenges, some the same as, and some different from, those faced by people in large towns and cities. For instance, second-home owners can leave a shortage of affordable housing, particularly for local workers. For that reason, nearly 165,000 affordable homes have been provided in rural local authorities since 2010, but the Government recognise the need for more. As my hon. Friend the Member for Henley said, that is the only way that we will keep young people in our communities, which is why at least 10% of the new affordable homes programme will be delivered in rural locations, and why those homes will be exempt from the new right to shared ownership. Restrictions on shared-ownership homes are in place in rural protection areas to keep affordable home ownership options available.
The national planning policy framework allows entry-level exception sites in rural areas to be used in perpetuity for affordable housing where sites would not normally be used for housing. In the Government’s recent consultation on changes to the current planning system, we set out our intention to protect the important role that rural exception sites play in delivering affordable homes—I have seen for myself the difference that that is making. Local planning authorities are encouraged to support opportunities to bring forward such sites, but we recognise that that delivery mechanism is underused and we intent to update the planning guidance in due course.
Our rural economy was once dominated by the trade in natural commodities, but in 2020, it is much more than just farms, fish and fir trees. It is about the businesses and entrepreneurship that my hon. Friend Richard Drax quite rightly mentioned in his speech. Today, our rural communities are often as vibrant and economically diverse as our cities. My hon. Friend the Member for North Cornwall asked if the countryside was ready for a new post-covid economy. I believe so, and the Government will do all they can to support that. The Government are committed to helping those communities to thrive over the long term, as we level up every region and nation of the UK, boosting productivity and spreading opportunity.
It has been an absolute pleasure to lead the debate. We have had a tour de force from around the country—Scotland, Cumbria, Yorkshire, Wales, Northern Ireland, Dorset, Somerset and, of course, Cornwall—and it was a pleasure to hear from the Minister. I know that she understands the issue well, and I hope that, in the light of what she has heard today, she will consider the countryside to be a living, breathing workplace, as we all do.
I know that we all in this Chamber stand ready to support making the countryside more productive. I thank hon. Members for participating in the debate, which was a pleasure to lead, and I look forward to working with the Government to deliver on what we have discussed.
Question put and agreed to.
That this House
has considered productivity in rural areas.