Parliamentary group launches major report into rural economy

The All-Party Parliamentary Group (APPG) on the Rural Powerhouse has published a new report on how to level up the rural economy.

It follows one of the most comprehensive inquiries ever to be conducted by a parliamentary body into the health of the rural economy. The APPG took evidence from over 50 industry bodies, charities, campaign groups, companies, academics, and business leaders. The report concluded that no government in recent memory has had a program to unlock the economic and social potential of the countryside.

This has resulted in the fact that the rural economy is 18% less productive than the national average. A gap that, if reduced, could add £43bn to the UK economy.

Findings from the report included noticing a broken planning system which has failed those who live and work in rural areas. Defra also lacks the policy levers necessary to make a significant change to the rural economy. A lack of skills provision is causing rapid ‘brain drain’ in rural areas, and urgent action is required to address labour shortages and supermarkets’ price-setting powers. In addition to this, the government is also backing away from commitments to provide everyone with full-fibre and 4G, plus the current tax system is disincentivising business investment and diversification.

Co-Chair of the APPG on Rural Business and the Rural Powerhouse and MP for York Outer, Julian Sturdy, stated that, “This report sets out a comprehensive growth plan, one that will create jobs, spread opportunity and strengthen small towns and villages across the country. We recognise the unique set of challenges that the Government is facing at the moment, but this makes the need to grow and strengthen the rural economy more, not less important.”

Julian's Co-Chair, Lord Cameron of Dillington added, “It is vital that government understands that rural Britain is not a museum, but instead is an important part of the national economy that deserves the chance to succeed. The report provides an economic blueprint that will help any Government seize the capabilities of the countryside and create the long-term economic growth necessary to boost/enrich/enhance our rural communities – in a cost-effective and timely manner.”

Commenting on lack of affordability in the countryside, CLA President, Mark Tufnell outlines, “The country can no longer afford to ignore the potential of the rural economy and the prospects of the millions of people who live within it. Rural businesses are ready to expand, creating good jobs and opportunities for people from all walks of life – but a lack of interest from government is holding them back. Homes are often unaffordable for local families. Well-paid jobs can be scarce. And broadband can be painfully slow. All this means leads to an exodus of talented people who are too often forced to move to more urban areas.”

Rural England and Wales contain over 550,000 businesses and it's crucial that their needs are met in order to prosper in the future. Tina McKenzie is the Policy and Advocacy Chair at the Federation of Small Businesses, and says, “Rural small businesses play a critical role in sustaining local economic development, creating jobs and offering a range of different products and services. This report represents a much-needed blueprint for how rural businesses can prosper if the right policies are put in place. Improving broadband connectivity in hard-to-reach areas, prioritising smaller scale housing development, with small house builders at the forefront, and identifying and closing skills gaps, are particularly crucial for small businesses based in the countryside. Rural businesses span a vast range of sectors and industries. During lockdown we also saw a new wave of home-based start-ups that have now taken off, many of which began life as a hobby. All of these flourishing businesses based in rural areas are a vital part of the economy that must be nurtured.”

The report findings were further compounded by the launch of the Government’s Levelling Up white paper, which made no mention of creating prosperity and economic growth in rural communities and did not include any specific policies to create it.

The lack of ambition from the UK Government is leaving them facing political consequences. A recent poll of the UK’s five most rural counties commissioned by the CLA highlighted changing political voting patterns in rural areas. In the previous general election, 46% of correspondents voted Conservative. Voter intention is now 36% Labour and 38% Conservative, representing a 7.5% swing. The two parties are now neck and neck ahead of the local elections.

The poll also found that 66% of people did not believe that the government was doing enough to create prosperity in rural communities. 80% said that a lack of affordable housing was driving young people out of the countryside, with almost half (42%) agreeing that their community was worse off economically, compared to five years ago. With no concrete plan to support rural communities, the APPG report is intended to serve as an economic blueprint for the countryside.

Recognising the impact of the pandemic on the nation’s finances, most of the recommendations are low-cost, requiring only a change in policy – and, in many cases, a change in how the government thinks about the countryside. Rural Britain is not a museum. It is an important part of the national economy that deserves the chance to succeed.

The results of the inquiry produced seven key calls to action for legislators to act upon. For Planning, the National Planning Policy Framework (NPPF) must prioritise small-scale, incremental development in rural areas, particularly those with populations under 3,000, with a focus on affordable housing.

For those in Whitehall, a ministerial-led, cross-departmental working group with the specific mission of developing and implementing measures to boost rural productivity must be established, the rural proofing policy must be reformed and strengthened, and Defra's objectives must be re-examined, with rural productivity now included in its remit.

Solutions for farming focus on alleviating labour shortages, extending the Seasonal Workers Pilot and the number of visas available increased from 30,000 to 80,000. Also to address low pricing in supply chains by implementing the Agriculture Act 2020's regulations to limit the influence of major supermarkets

Simplifying the tax system for diversified businesses through the Rural Business Unit (RBU), which would allow rural businesses to make their own decisions, reduce bureaucracy, increase tax collection for the Exchequer, and would remove hurdles to the growth of new business ventures are another key recommendation.

On connectivity, DCMS and the industry must produce an accessible roadmap for the 15% hardest-to-reach houses, with tangible targets for those left behind. Regarding skills, the government must provide vouchers for rural enterprises to stimulate demand for business, technical, and environmental training, and build a natural capital skills strategy to identify skills shortages and how to close them.

On average rural jobs pay less than urban jobs, rural homes are less affordable than urban homes, and poverty is more dispersed in rural areas. While the depth of rural fuel poverty is more extreme than those facing similar circumstances in towns and cities. Skills training and public services are harder to access – as is good internet connectivity.