Countryside misses out as Chancellor unveils spending review

Plans to help level up the countryside have been ignored in the Chancellor of the Exchequer’s spending plans.

In the Budget announced by Rishi Sunak in the House of Commons, there is a lack of detail on how the government aims to help unleash the potential of the rural economy – a missed opportunity for the countryside.

Victoria Vyvyan, Vice President of the Country Land & Business Association (CLA) which represents 28,000 rural businesses, farmers and land managers across England and Wales, said:

“Today’s Budget shows government has no plan to create prosperity in rural areas. All too often, when government talks about the countryside they do so in the context of keeping it the same. But there is no ambition to show what the countryside could be – a vibrant part of the economy that creates jobs and encourages entrepreneurship, all the while building strong communities in which people can afford to live.

“The rural economy is 18% less productive than the national average, largely due to poor infrastructure, poor skills provision and an outdated planning regime. As a result, underemployment and deprivation take root. However, if government brought its ‘levelling up’ agenda to the countryside and focused on reducing the productivity gap, up to £43bn could be added to the economy with the creation of hundreds of thousands of good jobs. Today was a missed opportunity.

“The announcement to build more homes on brownfield sites might make sense, but given less than 10% of available sites are in rural areas it will do nothing to ease the rural housing crisis. Nobody wants to concrete over the countryside, least of all us, but instead of treating rural communities as museums government should support small scale developments – adding small numbers of homes to a large number of villages, helping to provide good housing for local people whilst also boosting the local economy.”

Mr Sunak also said inflation in September was 3.1 per cent and acknowledged it was likely to rise further, to an average of 4 per cent over the next year.

Other measures in the Budget included the ‘largest block grants to the devolved administrations since 1998’, with Welsh Government funding rising by an average of £2.5bn.

A plan to simplify alcohol duties, with taxes cut on English and Welsh sparkling wine and draught beer and cider, was also set out.

Business rates

The CLA welcomes the reform of business rates - something which we have campaigned for over many months as part of our Rural Powerhouse Campaign.

In its responses to several consultations on the business rates regime in the past 18 months, the CLA had repeatedly argued that rural businesses should not be penalised for installing small-scale renewable energy generation, given the urgency of the Net Zero agenda. We are delighted that the Chancellor has announced a new green technology exemption and 100% relief for eligible heat networks. The CLA will work closely to scrutinise the eligibility definitions to ensure this covers rural-scale installations. The relief on property improvements could also be of benefit to diversifying rural businesses, although the scope is as yet unclear.

Hospitality and tourism businesses

The freeze of the multiplier and temporary 50% discount for retail, leisure and hospitality businesses, which will help put these hard-hit sectors back on an even keel, is something the CLA supports. However, we urge the government to continue its reforms so that the proportionality of the whole business rate system across businesses is improved.

Annual Investment Allowance: £1 million allowance extended to 2023

The CLA welcomes this budget measure and had been campaigning for such uplift as part of its Rural Powerhouse initiative. By increasing the level of relief to £1 million, rural businesses would be incentivise to invest on enhancing their productivity, which is crucial in the post-Brexit and post-Covid era. This temporary increase will particularly benefit those who regularly invest more than £200,000 in qualifying plant and machinery.

Read the Budget in full here