Rural Economy

Thursday 3rd July 2014 Lords Chamber

Motion to Take Note

14:35

Moved by

[The Earl of Shrewsbury]

That this House takes note of the case for investment in the rural economy.

[The Earl of Shrewsbury (Con)]

My Lords, the rural economy by its very nature is substantial and widely diverse: from agriculture, horticulture and arboriculture through mineral extraction, rural crafts, tourism, hospitality and field sports—the list goes on. Our countryside is a powerhouse of business and productivity, with agriculture as its backbone. Indeed agriculture, food production and processing is the largest manufacturing sector in the United Kingdom. I declare an interest as a member of both the NFU and the Countryside Alliance, and I live on the edge of the Peak District National Park.

Tourism also plays a major part in the rural economy. Inextricably linked to agriculture, the rural tourism industry all but died during the last foot and mouth epidemic and the bluetongue crisis. Thankfully, that dire situation is well on the way to full recovery, and Great Britain’s rural areas are indeed open for business. The UK’s national parks are a major draw for tourism with many additional benefits to local businesses of all types: hotels, pubs and restaurants, B&B establishments, holiday lets and activity centres, to name but a few. These parks are some of our most iconic landscapes, archaeological and historical sites, as well as our most valuable wildlife habitats. These beautiful regions contain strong communities who care passionately about their surroundings. These areas are living landscapes in the true sense and are visited by millions of people every year.

However, all is not always well in these rural areas. Many small communities have lost their social focal points. Pubs are closing at the nationwide rate of 18 per week, many of them in rural areas. Village shops have closed in large numbers although some communities, such as the village where my noble friend Lord Geddes lives, have invested in their own community shops, which is to be applauded. Many small post offices have closed, thus denying those communities financial services. For the rural community to grow, access to services is absolutely essential. Seven out of 10 villages in England no longer have a shop and rural Britain has lost over a quarter of its bank branches since 1995. The announcement in January this year by the Post Office about making available a current account in more than 100 branches, rising to 2,000, is most welcome but it is unclear how many of these branches will be in rural areas. I commend to your Lordships the post office at Rosehall, Glen Cassley, in Sutherland. It is a real outpost. That post office and village shop was saved from total closure by the local landowner for the community. He also happened to own Harrods, so he had a bob or two to spend.

Rural crime such as metal theft, fuel theft, livestock theft and fly-grazing presents major problems, as do fly-tipping, poaching and burglary, in areas which are often remote. In 2012, rural theft cost an estimated £42.3 million. Farm Watch and rural watch schemes— similar to neighbourhood watch—can be very effective in enabling the rapid exchange of intelligence about offences and suspicious activities but do not exist in all rural areas and are not always operated as effectively as they could be. The fact is that increasing pressures on police budgets have meant that rural areas have insufficient coverage, leaving country folk often feeling isolated and fearful of crime. All these matters need to be addressed with greater vigour and along the lines of the National Farmers’ Union’s action plan.

Turning to planning matters, planning policy in rural areas does affect food production, and the availability of an affordable housing supply is crucial to the well-being of the agricultural sector, as well as all rural communities. Figures released by the National Housing Federation on 30 June 2014 to mark the start of national housing week show that rural areas have become some of the least affordable areas to live in the country. On average, house prices in rural areas are 11 times the average salary. Wages would need to rise by 150% for potential homebuyers in these areas to buy a home. The problem continues to worsen, and it is imperative that the issue of affordable rural housing be addressed as a priority. Community-led affordable housing initiatives for smaller rural communities are needed, with properties both for sale and for the rental sector. Indeed, in Ballater in Aberdeenshire, people find it extremely difficult to get on to the housing ladder because retirees from below the border think it is a wonderful place to retire and the price of properties has gone up out of the reach of locals. It is very sad when you see that happening.

The Government’s recent proposals to make it easier for empty and redundant buildings to be converted into productive use are to be welcomed, but there is a caveat here. Such conversions are considerably more expensive than new-build and fraught with structural and planning difficulties. I know; I have been there. There is a very strong case for VAT to be cut on the labour element of domestic repair, maintenance and improvement of these buildings. It would not only generate growth and jobs but would protect the countryside against unnecessary new developments while bringing empty properties back into use and cutting carbon emissions. Will my noble friend make every effort to persuade his colleagues in the Treasury to look again carefully at the VAT position?

It is impossible for me to speak in a debate which addresses the rural economy without mentioning the importance of field sports to the well-being of that economy and their substantial contribution to the environment. I declare an interest as president of the Gun Trade Association and as a lifelong devotee of country sports. With regard to the rural economy, field sports and, in particular, quarry shooting, very often provide almost the only employment in less favoured, upland parts of the United Kingdom. Currently, 480,000 people shoot live quarry, and the annual spend from shooting sports is around £2 billion. Considerable sums are spent each year by foreign visitors on high quality, high cost game shooting on many of the country’s top sporting estates, with the obvious benefits those customers bring to the rural economy. The shooting sports, which provide the equivalent of 70,000 full-time jobs, are involved in the management of two-thirds of the rural land area. Two million hectares are actively managed for conservation as a result of shooting, with £250 million per annum being spent on conservation. These are significant figures.

Finally, I shall address the issue of broadband and its vital importance to the rural economy. Without the adequate supply of superfast broadband facilities, the rural economy is stifled. More and more institutions, such as Defra, HMRC and many more, are requiring customers to send in returns and other information in electronic form. If one does not have broadband—many people do not—one is expected to use an agent at significant extra cost for rural businesses. They simply cannot afford it. While I praise the Government’s effort and commitment to improving rural broadband coverage, and I welcome strongly the funds they have put aside for councils, four years since the announcement of BDUK, people who live in areas with little or unreliable broadband and mobile phone signals have yet to see the situation improving. A vastly improved broadband and mobile telephone rollout to all rural areas is key to the future growth and well-being of the rural economy. Will my noble friend confirm the current position of the rollout of broadband and 4G to the rural areas most affected? What is his estimate of when this essential service will be available at a competitive rate?

I have managed only to scratch the surface of the rural economy, and I have endeavoured to paint a broad picture. I welcome the opportunity to discuss these issues as they are all very serious. I shall listen with great interest to the debate, and I look forward to my noble friend’s responses. I beg to move.

14:44

[Lord Plumb (Con)]

My Lords, I have the pleasure of congratulating, thanking and supporting my noble friend Lord Shrewsbury. He opened a debate of great importance to all of us about investment in rural areas. Much was said earlier about the speech made by my noble friend, Lord Bamford. Many of us will never forget his maiden speech. He started, “I am an engineer”, and went on to describe how he makes things. I am a farmer, and I grow things. The pioneering spirit of the manufacturer and the farmer are why today we can claim agriculture as a huge success.

Living in the countryside is not always the idyllic life often shown in pictures or stories. Even the most sophisticated methods of husbandry cannot remove the risk of seasonal changes, as we witnessed this year. The demand for land in rural areas increases as the population expands—and they are not making any more. Land becomes scarce and expensive. We need it to grow more food for a growing population. The scale of the challenge is enormous. More needs to be done to remove obstacles to increased production from less land, and to get greater access to new markets while protecting the environment and preserving village life. More needs to be done to understand the implications of volatility, get better value out of science and technology and drive domestic growth.

The Minister may agree that we need a policy framework to help the economy which is right for consumers and producers. The most recent reform of the CAP was unnecessarily complicated. I have been involved in reforms of the common agricultural policy since 1973, and I can honestly say that it is more complicated than before. We need subsidiarity and to retain the emphasis on protecting the environment and the countryside as a whole. Of course, we need less red tape. The Minister may like to tell me whether the reduction of red tape since the report came out has changed very much. We need greater freedom to increase production. Declaring policy is one thing; the implementation of that policy is another. It still seems that the image of rural occupation is less important than industrial employment.

Land occupation is changing as farm size increases, and it is increasing rapidly. There are 3.7 million people involved in agriculture and food. The food industry cannot exist without the farming industry. Our colleges and universities are full of young people, enthusiasts and entrepreneurs who want to get into the countryside. They want to work and to produce. Many organisations are helping, not least the Prince’s Trust. I am often asked how in this changing world I would define the small farmer. I always answer, “It’s a chap about five feet tall”. It is the size of the business and the size of the production area that matter, not the size of the farmer. Often people say, “I haven’t heard ‘The Archers’ lately”, or perhaps, “We like ‘Countryfile’ on a Sunday evening sharing with us the wonderful views of our hills and valleys, and Adam and Matt are such charmers”. So how can we educate more urban dwellers to understand rural development and country living? It is insulting to say that farmers have created a degraded, horrible landscape. The countryside is obviously a diverse place, and it is neither wild nor natural. To keep a healthy industry, we need the birds, the bees and the butterflies, the hedgerows, the tracks, the fields and the crops in a land which is often described as “Farmageddon”. They are all there under the good management of today’s generation, which is the one thing that embraces the conservation challenge encouraged by Natural England’s scheme. Agriculture can make a much larger contribution to the economy given the investment it contributes.

There are three things I wish to mention briefly: education, the Arthur Rank Centre and rural crime. Many noble Lords have mentioned the importance of skills, which is second to none. Education starts with schools. There is an organisation called FACE—Farming & Countryside Education, which helps in schools. It is not very big. The organisation visited 362 schools last year, representing more than 18,000 pupils and worked with a further 12,000 pupils in 137 schools.

The Rank centre combines a lot of the organisations that support farmers in one form or another. It was started by that great entrepreneur himself. The centre pulls together many bodies and organisations by identifying the needs of local communities. It is a progressive organisation which recognises the many risks of living and working in the countryside. Its leader often reminds us, talking of risks, that Jesus never said, “Blessed are the cautious”.

Rural crime has already been covered by the noble Earl but I hope the Minister can agree that we need an adequate police protection system in rural areas. In many areas lengths of cable have gone off the electric poles, taken overnight. It is quite unbelievable. As the noble Earl so rightly said, £42 million was the cost of that crime last year. Rural theft is an issue of great concern to us and 38% of farmers have been the victims of crime, including arson, criminal damage, poaching and illegal fly-grazing. The insurance company NFU Mutual conducts an annual survey of rural crime. As the insurer covers around 70% of the rural market it provides a useful snapshot of rural crime patterns. Rural theft and its cost is of great significance in country areas. The link between rural crime and serious organised crime should not be underestimated.

14:52

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I thank my noble friend Lord Shrewsbury for providing the opportunity to debate this extremely important topic. It will be difficult to cover everything I would like to say in my allotted time. There is much to celebrate and many projects in the pipeline, but there are also some worrying trends.

Turning first to the positive, the counties of Devon and Somerset have been successful in securing government investment for the rollout of superfast broadband. This is a long-term project running until 2017 and also covers the unitary authorities of Bath and North East Somerset and North Somerset. Connectivity is vital if we are to attract new businesses and ensure that those already located in rural areas remain competitive. Even when this project is completed, it is likely that some deep rural areas will still not be connected, with large areas where more than 2 megabytes per second will be unachievable. Somerset County Council has this week committed a further £2 million, on top of the £10 million already invested, to this project to ensure it is successful. It is to be congratulated on this.

Another major investment project bringing jobs to rural Somerset is the proposed new nuclear reactor at Hinkley Point. Based on a travel-to-work time of 90 minutes, this will bring huge opportunities for employment over a large area, but the FE providers must invest in the skills that will be needed to meet this demand.

A significant plank of the rural economy is tourism. This is especially true in South Somerset. We have many historic and beautiful villages but recent publicity has dented our image and is deterring visitors. I refer, of course, to the terrible flooding during the winter. This occurred at the very time when people plan and book their holidays and the media images suggesting that Somerset was “closed for business” did not help. While many flood-affected businesses are now thankfully recovering, there is evidence that bookings and visitors are down in Somerset compared to last year, which was also a bad year for floods. Many small businesses are linked to the tourism supply chain. I fear a similar effect on the rural economy to that suffered during the foot and mouth outbreak in 2001, when the countryside was shut down for months on end and many in the farming community, as well as businesses, went under and did not recover.

As has already been said, rural communities are suffering the loss of services and facilities. People have lost the habit of supporting local businesses. This is partly related to prices and the desire to use cheaper supermarkets, but also to shopping online. The phrase “Knowing the cost of everything and the value of nothing” springs to mind. The past 10 years have seen large numbers of village shops, small garages and filling stations, post offices and rural services generally, become unviable and close. My own council finds it difficult to resist a change of use on premises in rural areas when it knows that domestic dwellings have far more monetary value than redundant shops and pubs. Once a local facility is lost there is little chance of reversing the process. The loss of these facilities causes a real sense of isolation for the elderly who would have used these outlets to keep up with the latest gossip. It would also have been a means for ensuring that those who were frail and needed assistance were known about and looked out for.

Lastly I would like to comment on the plight of young people and young families in rural areas. The lack of affordable housing in rural areas means many young people can no longer live and work in their local communities. South Somerset has a low-wage economy but house prices are relatively high. In one market town the average wage is around £17,000 but the average house price is around £170,000. Many noble Lords will think that this is cheap, especially if they live in London, However, there is a huge affordability gap and many young people will just never get on the housing ladder. Wages in remoter rural areas will be even lower, while house prices have been pushed sky-high because our villages have often become the target of second-home owners, who visit on the odd weekend.

Current youth unemployment statistics indicate that 2.46 million young people in England and Wales are out of work or trapped in underemployment. This is 40% of the youth population, compared to 28% of adults aged 25 to 64. Many of these will be in urban areas, but rural communities also have problems with finding jobs for their young people. There is a lack of apprenticeships to meet their needs. Young people often suffer a double whammy. While those in rural areas are transported to and from school by bus during their education, as soon as they need transport to begin their road to independence, there is nothing for them. If their village has a bus, it will only be during the working week and perhaps just one or two a day. There will be nothing in the evenings when they wish to hang out with their friends, or go to the cinema in the nearest town, which might be some 15 miles away.

It is not just the young who suffer from the lack of transport. This also affects the elderly. A trip to the doctor’s surgery, the library or just into town for a cup of coffee and a change of scenery becomes a major expedition which may require a costly taxi trip. Having recently broken my leg and having had recourse to taxis both at home and here in London, I can bear witness to just how much more expensive a taxi journey is in the countryside compared with London; it can be as much as one-third more.

There are many other areas that I could cover, including the loss of employment land, the reluctance of some communities to welcome housing development, the viability of our market towns and the skills agenda, but I am sure that others will cover these areas during the debate. Sadly, there is no magic wand to be waved here, but I look forward to the Minister’s comments at the end of this interesting debate.

15:00

[Lord Cavendish of Furness (Con)]

My Lords, I thank my noble friend for securing this debate and congratulate him on its introduction.

I need to declare my interest rather comprehensively today, since much of what I want to say relates to what I do and have done for these past 40 years and more. I have a beneficial interest in a landed estate based mainly in south Lakeland. The estate’s activities include farming, forestry, leisure, minerals and housebuilding. We own and run a racecourse and have a full-time payroll of 250 people, 150 of whom are engaged in extracting, processing and selling slate, more than half of which is exported.

I have intervened on various occasions in debates on this subject. Almost two years ago to the day, there was a debate introduced by my noble friend Lord Jenkin, with his usual authority and command. I joined others on that day in highlighting the role of SMEs and their potential to lead us out of those dark days of recession. Some harsh truths were explored that dealt with the obstacles that lay in the way of recovery. Today, while everyone can agree that a huge amount remains to be done, it is fair to say that the performance of the British economy is not just better; it is better by magnitudes more than any of us had reason to expect on that July morning two years ago. Credit must go to enterprises large and small in rural areas for the significant part that they have played in turning the economy around.

However, since in the past I have been critical of things done or not done by this coalition Government, I feel entitled to offer them sincere congratulations on their contribution to the national recovery that we are witnessing today, and for what they continue to do. Only recently we saw the introduction of the small business Bill, which represents a serious effort to relieve the burden of regulation on small enterprises and provide better access to public procurement opportunities. Two days ago saw the Second Reading of the Consumer Rights Bill, which goes further than the title suggests and, I believe, will be good for business and growth. The Government have helped, and they seem on track to do more for small business and the rural economy. It is in that spirit that I draw attention to those things that still need to be resolved. Some of them, I am bound to say, are defects in our national approach to business and are largely outside the responsibility of government.

There remain some seemingly intractable long-standing problems. Others are probably better qualified to speak about this, but every survey suggests that there is still a long way to go in providing better broadband coverage in the countryside, and there is compelling evidence that this is harming rural enterprise. Some 80% of adults polled last summer said that nothing would have a greater impact on their enterprises than improved broadband provision.

The same could be said about mobile coverage. Visitors that I have spoken to from Africa, India, Australia and America find it beyond belief that they cannot use a mobile telephone when they are in Cumbria, a place that, after all, seeks to attract tourism. I hope that the Minister will respond to those anxieties. When he does, will he tell the House whether he feels that there is enough competition in the provision of these services?

I hope that the Minister will also tell us whether there are discussions with planning authorities—a matter brought up by the noble Earl in his opening remarks—given that planning delays are an obstacle to economic growth in rural areas. It is clear to me that these barriers to rural growth go beyond the well understood and largely quantifiable harm that they inflict. What none of us can say for certain is what effect these barriers have on people who are thinking of investing and are deterred by these structural weaknesses.

I shall touch on some other problems that need to be resolved and fall mostly, but not entirely, outside the scope of the Westminster Government; they are cultural in character. For all my time living and working in Cumbria, both as an individual and as a local councillor, virtually every visitor attraction and every business offering hospitality was underinvested. At intervals you could maybe attribute this to the fiscal climate, but even when credit was plentiful and the national economy was expanding there persisted a culture of low expectations. With any business, but especially with the visitor service and hospitality industries, it has always been self-evident, I would have thought, that even small and regular improvements pay rich dividends. It is gratifying to see at last this is being recognised, albeit slowly.

However, I believe that, as has been mentioned, there is a link between the tax regime, both direct and indirect, and the willingness and ability of small businesses to invest and reinvest. Indeed, the tax regime deserves more study as it applies to the rural economy. As a matter of equity, it may be worth pointing out that under the current local government financial settlement, rural residents will pay council tax that is on average £88.36 higher per capita than will urban residents, but the urban residents will receive £169 more in government funding. I wonder whether the Government might reflect in the next round whether it is fair for the settlement to be driven purely by population density, when you consider the additional costs of essential services that arise as a consequence of rural remoteness.

Low personal taxation is also a great spur to partnership and collaborative endeavour. I well remember that in the punitive days of high taxation it was impossible to work with other partners, as we were all striving to get different outcomes from our business. It is an excellent feature of the new age that we can all work together. My local village, called Cartmel, where we stage our national hunt racing, is also home to the village’s famous sticky toffee pudding, a world-class Michelin starred restaurant, a cheese maker, a meringue maker and a microbrewery. At the heart of all this is the glorious Cartmel Priory, whose vicar is also chaplain to the racecourse. Most of us, including the church, have subscribed to what is called a pop-up village, a collapsible edifice that goes on tour showcasing our various enterprises. I wonder if it is a coincidence that—rather bizarrely, I admit—the New York Times listed Cartmel as one of the 52 must-see destinations of the world. I make the serious point that local partnerships spawned through a communality of interests promote prosperity, and there is much pleasure to be had from taking part in them.

Many of the solutions for a healthy rural economy should remain in the hands of us, the local people. However, there is no escaping the truth that leadership in the countryside is at a premium. Whether it is attracting people to run the local institutions that we enjoy and benefit from, or whether it is drawing people into local government, it gets harder and harder. What is the reason for this? Well, why should they participate? Successive Westminster Governments have reduced local government to a shadow of what it used to be. They bully and harass what is left and send in power-crazed, unelected and unaccountable quangocrats to boss us about and, on a bad day, wreak havoc with our environment. If there is to be sustainable rural prosperity, local autonomy must be established; that would probably take a generation but it would be worth starting.

I also think that Whitehall and the Government should be a little more careful who they listen to. There is a breed of mostly men whom the BBC would describe as business leaders. More recently, these people are describing themselves rather condescendingly as “we business leaders”. They make statements on behalf of business that are certainly unrepresentative of many of my local SME friends and colleagues. There are people speaking on behalf of the CBI who have never made anything, done anything or taken a risk. Many large companies are not just indifferent to smaller ones; they are hostile to them and ruthless in their dealings with them.

I see that my time is up. I am not blind to the risks that lie ahead but I cannot remember a time when I felt so optimistic or exhilarated by my local economy; there is a buzz about the place. I see a bright future for farming. The Minister has dealt with the problems of the CAP, and he does not need telling that farming is a long-term business.

Lastly, Cumbria has the great good fortune to be attracting very significant investment in the near future. Many billions of pounds are coming its way. In short order, solutions must be found to cater for increased demand in all sorts of areas. It occurs to me that there is no precedent for such a combination of events on this scale. I ask my noble friend if it would be worth considering the possibility of inviting these major players to join forces in bringing about some front-end infrastructure investment in their own self-interest. If so, could the Government have a role in brokering such an arrangement?

15:10

[Lord Curry of Kirkharle (CB)]

My Lords, I very much welcome the opportunity to debate this important issue. I am very grateful to the noble Earl, Lord Shrewsbury, for stimulating this debate. I need also to declare a number of interests. I farm in Northumberland; I am a trustee of Clinton Devon Estates in Devon; I am chair of the Waitrose farm on Leckford Estate; and I am a member of the NFU and the CLA, along with other various interests.

I will not try to duplicate the comments already made by noble Lords, which I fully endorse. I particularly endorse the comments made by the noble Lord, Lord Plumb, on the importance of education and the role of FACE—Farming & Countryside Education—and how important it is to ensure that young people have a good understanding of farming, food and the countryside.

I want to comment on three specific issues regarding the rural economy. First, it is difficult to define. The rural economy does not have a ring-fenced border: it merges into urban and city economies. For rural businesses and enterprises to succeed there needs to be a recognition that rural, urban and city are interdependent. Too often in the past—and it is still a serious risk today—government policy, and therefore government spending, has been focused on cities and urban areas without appreciating that an inclusive policy that embraced the hinterland would be more effective.

City deals are a current vehicle for stimulating economic growth and I understand why. However, there are very few parts of England that are more than 15 miles from a city in this densely populated country of ours—although that is not quite so true of Scotland and Wales. Rural areas have suffered in the past through urban-centric policies. The rural development agencies, with few exceptions, struggle to embrace the rural economy. Having been established initially to deliver urban regeneration, they remain committed to that cause. I worked closely with them on the sustainable farming and food strategy during the 2000s.

The local enterprise partnerships are now crucial to this issue. They, too, in the main, are primarily focused on urban and city areas, so we need, with the help of Defra and the Minister, to ensure that they firmly embrace rural issues and the rural economy within their remit. With their expanded role to help and administer rural development funding they need knowledge on their boards of the rural areas they cover. They need appropriate consultation mechanisms to ensure that they are spending funds wisely. The LEPs need to develop strategic plans that see the integration of rural and urban within a single plan, as I said at the beginning. To present the option to businesses looking to locate into an area with either a rural or an urban location would be a step forward.

The rural areas of Britain have so much to offer in terms of quality of life, the working environment, parking and so on. I ask that the Minister satisfies himself that the LEPs have strategic plans that they implement and that recognise the importance of rural areas.

My second point is one that has already been made and will be repeated, I am sure, a number of times this afternoon—that is, the importance of agriculture within the rural economy. I continue to hear lots of comment about: the relative value of energy generation and how that could dwarf the value of agricultural output; the importance of tourism and how that could put farming into the shade; and that diversification away from agriculture and other business activities contributes far more to the rural economy than agriculture does. All these things could be true; we definitely need a diverse rural economy. As the noble Earl, Lord Shrewsbury, said at the beginning, the more diverse the better. We need to create employment and wealth to sustain rural communities and maintain rural services. We need affordable rural housing, as has been mentioned already. We urgently need high-speed broadband in every hamlet.

I want to give an example of what is possible. In the farm from which I took my title, Kirkharle, which is where we started farming in 1971, I employed two young men. Latterly it was farmed by contract and no one was employed directly. Through the development of rural business help and a retail visitor centre, 13 businesses are now established on that holding, employing about 30 people; so it can be done. The legislative framework within which rural businesses operate is also important; the noble Lord, Lord Plumb, referred to that. I congratulate the Minister on departmental progress in that area. There is still much more to be done.

I stress that agriculture is the platform on which to build our diverse rural economy. Mention has been made already of the dreadful experience in 2001 of foot and mouth disease, when the whole rural economy was shut down. Farmers have buildings; they have housing plots, with planning permission; they live near to villages. They can be the engines for enterprise and innovation through diversification as well as contributing to the nation’s food security through efficient food production.

My final point is to stress the importance of the work my noble friend Lord Cameron is engaged in in seeking to rural-proof government policies. We need to go further than has been the case to date, to ensure that impact assessments undertaken for new legislation include not just the impact on business, as they do now, but specifically the impact on rural business. That is very important.

I have already apologised to the noble Earl, Lord Shrewsbury, for the fact that I need to leave to go to a long-standing engagement. I apologise that I will not be able to hear the rest of the debate, but I will read Hansard with keen interest.

15:16

[The Earl of Caithness (Con)]

My Lords, I, too, am grateful to my noble friend Lord Shrewsbury for introducing this debate. It is an important topic for us to be covering at present.

I am particularly grateful to be following the noble Lord, Lord Curry, for two reasons. First, he started with a point that I wanted to raise; that is, how difficult it is to define the rural economy. I have different figures regarding the benefit of the rural economy and there is a difference between those figures of well over 50%—so it depends what basis the figures are on. One must of course remember that the rural areas cover not just those lovely little green fields outside towns in Sussex and south-east London where people could be walking today, but the wild moors of Scotland, which in six months’ time will doubtless be under four or five feet of snow. People have to live, work and earn their living in both those circumstances, with whatever variety of weather nature throws at us.

The noble Lord, Lord Curry, also mentioned Kirkharle. I mentioned Kirkharle in the tourism debate in your Lordships’ House on 12 June. I am glad to see my noble friend Lord Gardiner of Kimble on the Front Bench. He answered that debate; he knows the points that I raised, so I will not go through them again. No doubt he will bring them to the attention of my noble friend the Minister who is going to reply.

The noble Lord, Lord Curry, mentioned what happened at Kirkharle and I want once again to mention what has happened at the Castle of Mey, of which I am a trustee. That now employs 50 people during the summer months, six on a full-time basis. That is what is keeping the rural economy in these remote rural areas going.

The question of broadband has been raised, so there is no need to reiterate that. My noble friend Lady Bakewell mentioned the date of 2017, but that covers only 95% of the UK. The remaining 5% will be in rural areas and they are going to be hugely discriminated against unless further action is taken. I ask my noble friend the Minister when the Government’s response is expected to the Law Commission review on the Electronic Communications Code. This will be an important step forward, because the present position is unclear and inaccessible.

I will move now to an old pet subject of mine—that is, housing. I used to be a land agent and was also consultant to an estate agency, so housing has been in my life since I became qualified many years ago. There is a balance to be struck between new housing and agricultural land, as my noble friend Lord Plumb said. Indeed, we discussed this many times in the agriculture committee of your Lordships’ House. But, undoubtedly, agricultural land will have to be surrendered, and quickly. The present situation with regard to affordable homes in the countryside is getting much more difficult. I remember how difficult it was to resolve when I was a Housing Minister more than 25 years ago, and it is much more acute now. It is a very difficult problem to resolve but when one flies over our green and pleasant land, as I do on a fairly regular basis, one sees many areas that could be developed reasonably, without causing long-term damage to the countryside or affecting necessary agricultural production.

My noble friend Lord Shrewsbury mentioned house prices. If we get more development in rural areas, there must be a greater chance of keeping open the post offices, shops and pubs which are closing at present. My noble friend Lord Shrewsbury also mentioned country sports. These are immensely important, particularly in the more remote rural areas. In Scotland, they are a vital part of how the countryside and local villages operate. Surveys carried out in the rest of the UK and in Scotland show how much country sports are welcomed because they bring in extra tourism and extra finance and people who spend money. That is what is crucial. It is very nice to have our pretty rural areas but, unless people are active there and tourists and visitors bring in money, those pretty little areas will remain just that and will not be places in which people can earn their living.

I conclude by referring to the importance of investment. There are two types of investment: government investment and the more important private investment. The key to encouraging private investment is stability, whichever Government are in power in this country. Unless one has a consistent policy, people will not invest in the countryside in the way that they should. Therefore, stability is hugely important. There are enough problems given the whole question of the economy and the incidence of diseases that are unique to the countryside as opposed to urban areas.

I urge the Scottish Government to be very careful how they tread with regard to country sports, the countryside and its ownership because a delicate balance has to be struck. When it works well, it is very good and beneficial for all and for the economy as a whole. However, if one tinkers with it and tries to amend it, it will very easily collapse like a pack of cards.

15:22

[The Lord Bishop of Oxford]

My Lords, I, too, am grateful to the noble Earl, Lord Shrewsbury, for giving us this opportunity to debate this matter. We all approach this important subject from different angles. I want to emphasise one that is economic and the other that is personal in the sense of our own personal investment and commitment. I serve a diocese which is largely rural although it has large centres of population such as Oxford, Reading, Milton Keynes and Slough. However, the rural expanses of Oxfordshire, Buckinghamshire and Berkshire are considerable, with 815 churches and 650 clergy, all of whom are strongly connected to the all-round flourishing of our diverse communities.

The economic vulnerability of many rural areas is well known and has already been rehearsed this afternoon in different ways. I simply wish to highlight one particular element of that vulnerability, which is the plight of micro-businesses, which I come across a lot. Businesses with fewer than 10 employees make up half the employment in rural areas, yet it is these businesses that find it most difficult to access the appropriate advice, training and relatively small-scale grants and funding which they need to develop and expand. It appears that there is limited practical help for micro-businesses and business start-ups, with advisers tending to be professionals rather than entrepreneurs, which means that their advice is not always appropriate. However, the Centre for Entrepreneurs says that micro-businesses have been the largest contributors to new jobs in the United Kingdom over the past five years.

It is very good that the rural growth network programme has operated pilots in five areas to reduce barriers to economic growth in the countryside such as shortage of work premises, the slow internet connections we have talked about and business communities being spread out over wide areas. The churches’ contribution in this connection is through the Germinate! programme at the Arthur Rank Centre, which seeks to encourage micro-businesses. This is a highly practical six-session rural business start-up course, the pilots of which were very well received. It will be rolled out into a national programme to be delivered locally through community groups and churches. This programme is being delivered and developed alongside something with the rather evocative title of beer mat mentoring. This initiative has been established for some years and comprises monthly meetings in pubs of new entrepreneurs and old hands who offer practical mentoring accompanied by liquid refreshment—orange juice, I assume.

I said that I wanted to emphasise two angles—one economic and the other personal. By personal, I mean the investment that comes from people of good will investing their time and talent in the future of the countryside and the communities in which they live. That is where our churches and schools come into their own. So often the church and the school are the focus of community life, particularly when, as we have said, the village shop and pub have vanished. The school is often the hub of the community and needs our investment of time and talent. Sixty per cent of village schools are church schools and in the new educational landscape that we have not all of them are safe. However, they can group together in voluntary clusters or multiacademy trusts, and in that way they can gain the advantages of economies of scale and so on. For all sorts of reasons, we need to protect these schools. I very much hope that the Department for Education will not resort to a philosophy of “the weakest to the wall” with these small schools because small rural schools are so often worth their weight in gold, as the heart and hub of our rural communities. The Church of England will publish a report very soon on how to support our rural schools effectively.

A practical appeal that I often make is for capable people to volunteer to be school governors. Such people are key to ensuring success in this uncertain environment. I think that the Church of England already has 22,000 foundation governors in its schools but obviously community schools need high-quality governors just as much.

Our rural areas need both kinds of intentional support: economic—I have just highlighted micro-businesses—and personal—people who will make that personal investment in schools and communities. There is much more to be done.

15:28

[The Earl of Arran (Con)]

My Lords, as we move towards the 2015 general election, clear policy direction is emerging from each party regarding their manifestos. The Chancellor, for example, fired an opening shot last week in Manchester proposing the building of HS3 and the development of a northern city linking Manchester and Leeds to rival the unstoppable growth of London. This suggests that the next election seems to be urban-blinkered and will focus on the growth of cities, where more than 50% of our population already live.

What, however, does this mean for the rural economy? Where does it feature as a national priority? Should the rural economy be taken more seriously if we are to avoid creating a two-speed economy? Nationally, this sector contributes £211 billion every year—nearly 20% of national wealth creation. There are more than half a million rural businesses and 3 million employees. Although rural areas have 20% of the national population, they have 30% of the total number of businesses, and that is growing. There is clear evidence, supported by the Commission for Rural Communities, that this sector could be worth an extra £347 billion if policy encouraged rural business growth.

Where I live, in the south-west of England—no finer place—the rural areas are home to more than 50% of the population and its success is vital to our future. It has quietly battled through the recession and not only sustained its position but continued to add jobs and produce wealth. Without clear support and direct qualities, however, this growth will not continue and a huge opportunity will be lost. What could also be achieved from a concerted campaign is new hope for those who live with the day-to-day problems of poverty.

An alarming new survey has revealed that one-third of households—750,000 homes across the south-west—are so deprived that they are going without three or more of the basic necessities of life. Many of these things we should take for granted, such as eating a balanced diet, heating or maintaining our homes, taking part in leisure activities, and even the ability to celebrate our birthday. All are, however included in this devastating report. What is also clear is how these problems are masked in the rural economy where declining village services, lack of access to public transport and, crucially, access to work opportunities represent a growing problem for support services and the welfare system. Should we be surprised that food and clothes banks have become an accepted normality in 21st-century Britain?

So what is holding back growth and what should be done? Again the evidence is clear. The barriers include affordable housing, transport infrastructure, communications infrastructure, access to finance and investment in the agritechnology sector. All of these have been mentioned to some extent this afternoon, but they are particularly important.

By looking at a number of examples, the reasons why growth is being stifled are clear. First—and again this has been stressed so clearly—there is the issue of affordable housing: the latest figures show a shocking state of affairs. Housebuilding has stalled so much in the south-west that the homes shortfall has grown by 36,000 properties since the last election. Around 60,000 homes have been built across our six counties in four years, but we need 96,000 to meet estimated annual demand. In Devon, Somerset and Cornwall, the housing crisis is arguably the worst outside London with house prices in places more than 10 times local wages. This means that just 6% of homes are within reach of a typical working family on an average income. In some areas this reduces to 1%. This has a disproportionate impact in rural areas and is forcing too many younger people to abandon rural life and often the south-west altogether. Government and planners must both shoulder the blame for this crisis.

Secondly—and I make no apology for mentioning this once again—there is rural broadband, arguably the single most pressing issue for the rural economy. Who would start a business today without superfast broadband? Despite numerous initiatives and some recent new investment in rollout programmes in the south-west, there is a damning Public Accounts Committee report on rural broadband delivery. Even after the investment is completed, more than 50% of the rural population will have to accept broadband at less than a tenth of the speed of urban areas, as my noble friend Lady Bakewell has already mentioned

Thirdly, I come to agritechnology: George Eustice, the Agriculture Minister, is the first to admit that we have spectacularly failed to invest in agricultural technology and science. Product development has stalled and many rural environmental schemes are creating unintended consequences in terms of pest controls. The sad story of bovine TB and clear evidence of growing tick-related infections are part of this evidence base. We need to set new horizons for a 21st-century farming industry with leading-edge products and land management together with the necessary skills to sustain delivery.

I am very grateful to my noble friend for introducing this debate. For as concrete steals across the western world, rural affairs take an increasingly second place. That is wrong and very stupid. Let it be clearly understood: the rural economy is a unique asset for this country. We are squandering it and thereby wasting a huge potential for the future. As much as I dislike them, the establishment of a royal commission on the state of the rural economy would be a minimum action if we are to avoid becoming even more urbanised.

15:34

[Lord Trees (CB)]

My Lords, I add my thanks to the noble Earl, Lord Shrewsbury, for initiating this debate. I suggest that the rural economy is not just important but crucial to the well-being of the nation. A vibrant rural economy sustains our countryside, which in turn nourishes us spiritually—as an outdoorsman, a mountaineer and naturalist I value that hugely—and nourishes us literally. It is food, livestock production in particular, that I want to concentrate on today. After all, the production value of the livestock industry in the UK in 2013 was more than £12 billion.

We take food too much for granted. That is hardly surprising when one walks into a supermarket and sees the shelves groaning under the weight of food. But it was not, of course, always thus. Like many in this Chamber, I grew up, for the first few years of my life, with food rationing. Yet by the 1990s, the political view was that feeding the nation was not an issue. We lived in a settled world with global free trade and in a wealthy country, so we could buy whatever we wanted. If Polish milk could be bought cheaper than British milk, so be it. That was a complacent view then and is certainly a complacent view now. Thankfully, there has been a welcome political change and it was perhaps Hilary Benn who first signalled this at the Oxford Farming Conference in 2009, when he said:

“I want British agriculture to produce as much food as possible. No ifs. No buts”.

The current Secretary of State has said similar things.

What has happened to cause this change? Globally, we realise that this is not quite such a settled and peaceful world. Currently, when we think of Ukraine and Russia, we think of gas, but we should also think of wheat. If Ukraine implodes and Russia restricts wheat exports, as indeed it did in 2010, we will still be able to get wheat but the price will rise considerably. Political unrest means shortages, price increases and the potential for food to be used as a weapon.

Globally, more land is being used to produce biofuels. In fact, more than half the sugar cane in Brazil is now grown to produce ethanol. Climate change affects our global ability to produce food and rightly causes us to question the carbon costs of international freight. On top of all these factors looms the sword of Damocles of population growth—set to reach more than 9 billion by 2050. That is compounded by the rapid and dramatic change in the dietary habits of the fastest-growing populations, namely those in Asia. In 2000, the World Bank estimated that world demand for meat would rise by 85% by 2030.

All these factors amount to increasing competition for food resources, so food security has become an important issue. It is not the same as self-sufficiency, but a reasonable degree of self-sufficiency provides political and economic security, control over our animal welfare standards and a measure of biosecurity in that the less we import the less likely it is that we will import something undesirable. However, what has happened in the UK in the past two decades is that self-sufficiency—meaning food products that we can produce here—has declined from approximately 87% in 1995 to around 76% now. I suggest that this is dropping to an undesirable level. With increasing competition for land use in the UK, we need to maximise our food production at the same time as minimising pollution and greenhouse gas emissions. That in turn requires investment in farming technology and livestock health. The recent government agri-tech strategy is a welcome initiative but the first-round bids amounted to more than six times the funding on offer.

Investment in livestock health can not only increase productivity but also markedly reduce greenhouse gas emissions. For example, one particular condition of dairy cows causes up to a 24% increase in greenhouse gas emissions per unit of milk produced. The greenhouse gas emissions produced by lambs growing to market weight can be reduced by 10% if gastroenteric worms are properly controlled. As well as primary research, we need translational research to deliver to farmers the benefits of more basic research.

Finally, as others have said, these measures need to be supported by investment in rural communications, both digital and physical. Coupled with this, we need to ensure investment in the rural provision of veterinary services and surveillance. Rural veterinary practices face a challenging economic environment. They are significant rural SMEs and deliver vital healthcare to improve livestock productivity, ensure animal welfare and provide front-line surveillance for highly infectious and perhaps exotic disease. The government veterinary surveillance system is currently undergoing major restructuring and serious concerns about this have been raised with respect to animal and public health by the Royal College of Pathologists among others. It is essential that any changes ensure that we maintain and strengthen our disease surveillance capacity.

I remain optimistic, however. We have a resilient farming community and a dynamic and entrepreneurial veterinary profession. However, the ability to continue to contribute substantially to the provision of nutritious and affordable—that is an important word—food to the nation will crucially depend on a recognition of the importance of this national industry with concomitant private and public investment and, I suggest, some co-ordinated, long-term and strategic planning of land use.

15:42

[The Earl of Courtown (Con)]

My Lords, I join other noble Lords in thanking my noble friend for instigating this important debate on this subject, which, if anything, we should have the opportunity to debate more frequently.

I realise that there is no intention, but sometimes those in the countryside feel let down by the urban majority. If we had had this debate 20 or 30 years ago, it would have concentrated largely on forestry and agriculture. Now, for example, where I live in a rural area of Gloucestershire, we have tourism, manufacturing, IT service industries, mineral extraction and even, in one of our old air bases, the breaking up and recycling of old airliners. This raises the question of whether the rural economy is any different from more urban or traditional manufacturing industrial areas. I would argue that, apart from the environmental capital and the stewardship of agricultural land by the farming community, there is very little difference.

Much has been covered by other noble Lords, so I will try not to repeat too much of what has already been said. We have spoken at some length about broadband. In the past, when we have debates on the economy or the rural economy, I always have asked local businesses what is at the top of their shopping list of what they require for a correct environment in which to make money. In the past 10 years, they have found borrowing difficult or unavailable. Finance has been the big problem. This has prevented investment in SMEs, the backbone of our economy. My right honourable friend the Chancellor’s economic plan is helping these SMEs to thrive. However, the difficulties with access to broadband cannot be underestimated. This morning, I read about a business in Somerset that sells cut flowers and uploads its photos on to the internet. The lady in question was up at 5 am today because it was the only time when she could upload these pictures. I know that supplying faster broadband is a priority for the Government, but where the infrastructure is outdated it will be some years before we gain from faster broadband. This is the key to many of the problems in rural areas. I do not think that there are any plans to renew our local telephone exchange, but I gather that that is one of the reasons why we have very poor broadband at home.

Also mentioned has been the factor of mobile phone coverage. Businesses operating anywhere these days must have mobile phone coverage. Why on earth can I get perfect mobile phone reception at the top of an Alp in Switzerland but if I am on the road between Cirencester and Lechlade, there is no coverage whatever?

The other important thing is logistics, and I have been looking at the transport situation. Where I live we are served well by two motorways and a pretty good train service but, in addition, there is a trans-European road network that stretches from the south of Spain to Ross-on-Wye. Apparently, there is only one two-mile stretch on the whole of that journey that does not have a dual carriageway, between a place called Nettleton Bottom and Birdlip. Here there are daily delays in traffic and, sadly, crashes and fatalities on many occasions. Can my noble friend the Minister update me on any plans for the building and construction of what is known locally as the “missing link”?

Another aspect that has been touched on is tourism and how important it is. It came to my attention earlier today that a family of wild beavers can now be found in Devon. I gather there are plans to move those beavers to an animal park. Surely it would be better to leave them to be examined and used for research in the wild, and to aid tourism in future.

I will finish now, but I look forward to hearing the responses of my noble friend the Minister.

15:47

[Lord Cameron of Dillington (CB)]

My Lords, I must first declare an interest as a farmer and a landowner. I must also congratulate the noble Earl on introducing this debate to the House.

Why is the rural economy important for the UK? Well, it is worth £348 billion. As was said by the noble Earl, Lord Caithness, there are various figures, but that is the highest I have seen. It is a huge amount. The countryside also hosts more than half a million businesses. There are actually more manufacturing businesses in the countryside than there are in the towns, so perhaps we should have combined the two debates we had in the Chamber this afternoon. Rural tourism adds £29 billion to the economy, and food and farming contribute approximately £84.7 billion. Our rural economy is vital for UK Inc, and it also provides the wherewithal to maintain and manage our most cherished national asset, our countryside, as mentioned a moment ago by the noble Lord, Lord Trees. England—not Britain—is, I believe, the fifth most densely populated country in the world, yet it still has some amazing countryside, which continues to be a vital factor in the health and well-being of our nation.

What are the Government doing about cherishing this incredibly important asset, our rural economy? Actually, they are doing quite a lot, to give credit where credit is due. For instance, the RDPE provides £60 million-worth of grants for micro and SME rural businesses. There is £20 million there for farmers and foresters, and another £20 million for skills and knowledge transfer. Skills and training used to be the major problem for rural businesses, which had difficulty accessing courses and facilities, but with the internet this is now getting better, or should be.

Talking of which, and to continue to praise the Government, the Government are putting £530 million into the rollout of high-speed broadband, which is another huge amount of money. Another £20 million is being put into rural community broadband. At this point I have to say that all the messages I have heard say that this rollout is going much more slowly than originally intended. As we have heard already this afternoon, it is causing a lot of problems. There definitely needs to be a big push to drive the actual implementation, but—bearing in mind that online shopping in the UK is greater per head of population than in any other country in the world—I believe that the rewards for doing so will be huge, if we can deliver.

Meanwhile, just to complete the picture, VisitEngland is investing £12 million in promoting rural tourism and Defra has allocated £10 million for local tourist initiatives. There are six pilot rural growth networks with funding of £15 million and a £2 million fund especially for women-led enterprises. Anyone in this House who, like me, has addressed the WIRE conference—where WIRE stands for women in the rural economy—will know that it is a pretty formidable force in our rural economy.

It would appear that the dead hand of the Treasury has been resuscitated as far as the rural economy is concerned. Even the planning system—often accused of being the real dead hand—is being loosened by a series of reforms, started under the Labour Government and continued under this Government, which should, in theory, make life easier for rural entrepreneurs, even if these reforms all too often run into the barrier of local resistance to change.

What is missing? On planning, one of the gaps is a lack of long-term vision of what makes a sustainable village, and how a good mix of young families, ample workspace and housing that is affordable for ordinary employees, or suitable for their retired parents, can be accommodated. The process for drawing up village and neighbourhood plans needs to be simplified and encouraged. However, central government must also share some of the blame for not rural-proofing all of its policies. For instance, the bedroom tax is disastrous for rural workers because there is virtually no small accommodation available in rural areas. The proposal to do away with the need for affordable homes on sites with fewer than 10 houses could be devastating for the rural workforce and the rural economy if it is implemented. Virtually all village sites have fewer than 10 houses and such an exemption could wreck the balance and likely future of a sustainable community.

Apart from good positive planning and ample affordable housing, my next ask would be for better transport, as has already been mentioned by several noble Lords. Transport is the life-blood of rural living. For the economy, we need better trunk roads to get our goods out to market and pull tourists in. I hope that the Infrastructure Bill, which I should probably be debating right this very minute in the Moses Room, will help in this respect, especially in the south-west. However, we also need better local public transport links for access to work. Big buses are hopeless, but more help for combined business and community transport would be beneficial.

There is also Wheels 2 Work. How does a young person, looking for their first job, find a job in the countryside? Unfortunately, they need their own transport to get to it. They cannot get their own transport because they have not got a job that pays the money to buy the transport. It is a Catch-22 situation. The only answer is to lend them a moped for six months. This is a brilliant scheme that costs less than jobseeker’s allowance and probably means that these kids will never be a burden on the state again. However, there is still reluctance by BIS and the DWP to save the state money by investing in these schemes.

Lastly, I make a plea for more interdepartmental rural-proofing. For instance, the Wheels 2 Work scheme, which I have just mentioned, is relevant to the Department for Transport, BIS and the DWP. They should all be thinking about it and gathering the evidence. Affordable housing is relevant to the DCLG, BIS and the DWP. Again, they need to work together to realise what needs to be done. Rural-proofing and rural understanding need to be embedded in the early stages of every department’s work.

Let us take, for instance, BIS, which is probably the most relevant department to today’s debate. The first thing to understand is that good evidence is vital to good rural-proofing. “Rural” should be a constant feature in government employment or manufacturing surveys and so on, so that rural economic needs can be assessed. Then, of course, they should respond to those needs. BIS’s agencies, UKTI, the TSB, LEPs and so on should all be asked annually to show how they have designed or will deliver new programmes and measures so that they are accessible to rural firms in all sectors. To have effective rural-proofing, you need constant vigilance.

As I think has been made very clear this afternoon, our rural economies are a crucial part of UK Inc. However, their specific problems need focus, care and attention. Only by giving that detailed attention will they be able to play their part in enriching our lives.

15:55

[Baroness Royall of Blaisdon (Lab)]

My Lords, I, too, am delighted to speak in this debate, and I am grateful to the noble Earl for enabling us to discuss and focus on these important issues.

Too often, when it comes to developing economic growth strategies, rural Britain is overlooked in favour of cities and conurbations, and I recognise that at times my own party has been guilty of that. However, harnessing the talents and skills of rural Britain is absolutely key to the future success of our nation. The noble Earl mentioned national parks and areas of outstanding natural beauty. I should be grateful if the Minister would agree to meet me to discuss a long-standing application from the Forest of Dean to become an area of outstanding natural beauty. We do not have a pop-up village but we do have cheese-makers, micro breweries, the excellent Three Choirs Vineyards and so much else.

As we have heard, people who work on the land make a huge contribution to the rural economy through farming and food production, and horticulture and forestry, protecting and conserving our environment for future generations and managing the impact of climate change. Yet many of those who work on the land, rather than own the land, work very long hours and are still too often poorly paid. I still lament the abolition of the agricultural workers board, which, based on the Government’s own impact assessment, will remove nearly a quarter of a billion pounds from the rural economy. As the noble Earl, Lord Arran, said, rural poverty is still a huge problem and, sadly, food banks are flourishing. Apparently 4,000 people in the Stroud district alone have had to resort to going to a food bank in the past year.

Many of the back-breaking and poorly paid jobs are now filled with people from eastern Europe and further east. It is not just in urban areas that we depend on immigrants to undertake those tasks which we no longer wish or choose to fulfil. However, the countryside today is about much more than farming and the growing tourist industry; it needs a sustainable third sector and successful businesses to thrive, as well as good public services. We need to invest in the infrastructure and businesses that drive rural economic growth, and we also need to invest in the people who live and work there.

In rural areas there is an ageing population and a high rate of youth migration. That presents a unique set of challenges and places pressures on local goods and services different from those experienced in urban areas. We want our young people to flourish, to have a good education which enables them to choose either a vocational or an academic path, and to have the skills and confidence to take advantage of opportunities in the wider world, but we also want to provide opportunities in rural areas for those who wish to stay or those who wish to return. To my shame, I do not know FACE, mentioned by the noble Lord, Lord Plumb, but I will seek to find out more about it.

We have much talent in our country and coastal towns, as well as in more rural areas. Young people should not have to leave because of a lack of jobs or because of housing costs. We have extraordinary people, including many volunteers, who are doing much to sustain and bolster our rural communities, but there is a role for an active state to support them, be it broadband or buses, affordable housing or accessible healthcare.

I am delighted that so many noble Lords focused on the crisis in affordable housing in rural areas. New homes are desperately needed and their construction drives local economic growth. On average, households need to earn £66,000 a year—more than three times the average rural salary—to be granted a mortgage to purchase a rural property. In Gloucestershire, for example, the average house price is 11 times the average wage and it would take a private rental tenant 15 years to save for a deposit in order to get a mortgage for a home. I am very proud of Two Rivers Housing in the Forest of Dean. It sustains a well maintained housing stock and builds eco-friendly homes, but many more are needed. Recently it received 360 applications for just 12 homes built in my neighbouring village of Littledean on a rural exceptions site. This is clear evidence that people desperately want to stay in their local communities.

The National Housing Federation is surely right when it says:

“Local people on modest incomes—who sustain our rural communities—are being priced out of the market, out of their communities and into towns and cities where there is cheaper housing and higher paid work”.

What are the Government doing to identify land in rural areas which can be used specifically for affordable homes? As the noble Lord, Lord Cameron, said, rural housing associations have been hit very hard by the bedroom tax. Lack of smaller homes means that even when people are willing and able to move they cannot be rehoused, so they are now in arrears and struggling with debt.

Beyond housing, the rural population—particularly young people—need to know that they will be able to find jobs which they can develop into a career. However, recent developments will not give them much confidence. Rural workers’ wages have risen slower than those in the rest of England, and rural families are already spending £2,700 more on everyday goods compared with those in urban areas.

Many noble Lords have rightly focused on the Government’s broadband rollout, which is so crucial to skill development. It is, however, delayed, and so much so that in Chew Valley in north-east Somerset—as the noble Baroness will know—they are having to turn to the independent supplier, Wansdyke Telecom, for broadband rather than BT. Infrastructure is critical to ensuring that all our regions prosper and deliver the growth and jobs necessary for our country’s success. Today my right honourable friend Ed Miliband has accepted the recommendation of a report by Sir John Armitt to establish an independent national infrastructure commission to identify the UK’s long-term infrastructure needs and hold government to account. I very much hope that the Minister will join my party in accepting this recommendation. We believe that these things are too important to be left to short-term political decisions taken in each Parliament.

As has been said, transport is a huge issue. Rural households annually pay nearly £1,000 more for transport than those in urban areas and this figure is rising. The noble Baroness spoke graphically about the problems and isolation caused by lack of transport. In Somer Valley, for instance, commuters face a 23% increase in their bus fares, with some tickets costing more than the hourly minimum wage. Yesterday I was with the Guide Dogs for the Blind Association which made me aware that the limited availability and continuing decline of bus services impacts particularly on blind and visually impaired people who are reliant on those services. The lack of audio-visual final destination and next stop announcements, particularly on buses in rural areas, is a barrier to independence and work. What are the Government doing to ensure that all new buses are fitted with this technology?

A healthy economy needs a healthy population and healthcare in rural areas faces specific challenges which are very different from those in the urban environment. Last year, the Environment, Food and Rural Affairs Select Committee reported that,

“rural authorities receive lower grant allocations, spend less on social care, charge more for home care and allocate lower personal budgets than those local authorities serving urban populations”.

In February, the BMA warned that nearly 100 GP practices could be forced to close and that large areas of rural England could be left with no GP practice because of national funding cuts. I was interested to learn of the launch of an initiative in Cumbria, headed by the University of Cumbria, to help improve health services in rural communities. The Cumbria Rural Health Forum will focus on how best to address challenges, including the distance people travel to healthcare, managing services for the older population and poor-quality broadband and mobile services. Will the Minister support such an interesting and important initiative and, perhaps, see if it could be rolled out in other areas?

I understand that the Government do not store national statistics on the NHS, but is the Minister aware of the impact of the cuts that have been made in rural GP services? Surely he must acknowledge that, because of the ageing rural population, having a reliable and accessible GP is absolutely critical and that any loss in the service could be potentially disastrous. Of course, social care has its own problems in rural areas, especially where there are long distances for people to travel to provide the necessary care.

This week my noble friend Lord Adonis published an excellent report on how we can mend Britain’s fractured economy and put devolution at its core, ensuring that prosperity is shared throughout the whole country. For too long we have had a centralised system, which is not only unsustainable but wastes talents and skills. In counties such as Devon and Cornwall, Cheshire and Lancashire, and Derbyshire and Northumberland, the economic potential is clear but waiting to be unlocked. This means working with businesses and industry. The RDAs were making inroads but these were abolished for ideological reasons without real thought about the future. We now have LEPs and we must build on their important partnerships. One of their important tasks is to nurture and help our entrepreneurs to grow. The right reverend Prelate mentioned the plight of micro-business.

Many people in our rural areas are bursting with ideas but lack the confidence or support to grow to the next level which would enable them to employ more people and develop their market, be it local, national or international. I have met many inspirational people who have succeeded. For example, Neill Ricketts of Versarien, which is based in Mitcheldean, is working with our major universities and developing innovative technology and products, such as graphene, which will provide engineering solutions for the future. We need to celebrate their success. It is a role model for others and can inspire our young people, who can then maintain their lives in our rural areas. Too often, success is hidden. I have to confess that I was unaware until recently that I live two miles away from the only British-owned manufacturer of road sweepers, Stocks Sweepers. Great things are happening, but too often these are hidden exceptions and are not the norm.

The case for rural investment is clear and has been well made this afternoon. Labour would devolve £30 billion of central funds to regional councils, enabling them to have the power they need to shape their own communities. Building on the knowledge they have about what works best in local areas, councils would be able to invest in the skills and networks that they need. We need strong economies around the country to share the wealth of the recovery and counterbalance the dominance of London and the south-east. By harnessing the individual contributions that people in rural areas make, we can create an economic recovery which works for everyone in the country.

16:07

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con)]

My Lords, I thank my noble friend Lord Shrewsbury for bringing forward this important debate and all noble Lords who have spoken for their contributions. I start by declaring my interests. I have a farm and forestry interests. I benefit from the common agricultural policy and I have a minority interest in a commercially operated lake.

Rural growth and investment is hugely important and it is an area on which we place a strong emphasis. Helping rural businesses to unlock their potential to thrive and grow sustainably is one of my department’s four strategic priorities. Almost all noble Lords who have contributed to this debate have spoken about broadband. The rollout of broadband to rural communities is a challenge and it is one of our most important tasks. It has the potential to transform rural areas, bridging the age-old gap between rural and urban areas.

We are currently investing £790 million across the country with a key focus on rural areas. Government allocations must be matched locally, so the total available should be double that figure. Under the current £530 million rollout programme, more than 20,000 homes and businesses per week are gaining access, which will rise to 40,000 per week over the summer. Projections suggest that we will reach 90% superfast coverage in early 2016 and £250 million of funding will extend superfast broadband coverage to 95% of the United Kingdom by 2017. Meanwhile, we are continuing to explore with the industry how to reach 99% superfast coverage by 2018—whether fixed, wireless or 4G. Continuing on the communication theme, we are investing up to £150 million through BDUK’s mobile infrastructure project to build new masts for areas where there is currently no coverage. I hope that my noble friend Lord Courtown, with his particular point on the road between Cirencester and Lechlade, will benefit from that. Competition between operators is also driving what is expected to be the fastest rollout of 4G networks in Europe, following the successful auction by Ofcom of 4G radio spectrum last year.

Promoting strong rural economic growth is something we can and will prioritise through the Rural Development Programme for England. Our objectives will be building knowledge and skills, about which several noble Lords have spoken; funding new and developing micro, small and medium-sized rural businesses, to which several noble Lords referred; and funding small-scale renewables and, of course, broadband. The growth programme, working with the grain of the investment strategies developed by local enterprise partnerships, is expected to generate about 8,500 jobs across England. I thank the right reverend Prelate the Bishop of Oxford, in whose diocese I live, for drawing our attention to the pilot rural growth networks in five rural locations across England. We are looking carefully at the challenges to rural businesses, such as a shortage of work premises, slow internet connectivity, fragmented business networks, competitiveness, skills, and support for micro-enterprises.

[Baroness Royall of Blaisdon]

Before the Minister moves away from broadband, may I ask him what speed broadband will be throughout rural England?

[Lord De Mauley]

The noble Baroness may ask, but I will have to write to her with the details. These pilots are expected to create up to 3,000 new jobs and support up to 700 new businesses. We will share what the RGNs learn with other local enterprise partnerships and local authorities. Moving to another of the points raised by the right reverend Prelate, as we move into the new LEADER approach, we have looked to ensure that 70% of projects directly support the rural economy and indeed all of them must make a positive contribution to the rural economy.

Another hugely important investment area is farming and food. In answer to my noble friend Lord Plumb, we aim to remove 350 regulations and improve 428 others as part of our Red Tape Challenge. Of course, the Government cannot and should not do everything, but they can and should set the conditions for growth. We are making Defra’s and its agencies’ guidance simpler, quicker and clearer, with an ambition to reduce the volume by more than 80% by March 2015.

It is so important that we support British farmers by freeing them up and investing carefully in their future. The UK has a world-class research base, to which my noble friend Lord Arran and the noble Lord, Lord Trees, referred, with an impressive track record. My noble friend is right that we have not paid it enough attention. We are investing £160 million in our agritech strategy to improve the United Kingdom’s global competitiveness. We have great research and great farmers, but we have not been so good at moving the results of the research on to farms, and that is what this is about. It is about improving yields and competitiveness, tackling pests, diseases and climate change, and improving our environment.

As my right honourable friend the Secretary of State demonstrated this week during his visit to the United States, being a prominent G7 member does not stop us taking every opportunity to promote fantastic UK produce, such as haggis, and of course the huge range of other products which we have also been promoting in places such as China and across the Far East. I mention haggis because it is a terrific example of why we are better together.

The increasing demand of UK consumers for British food and drink is a huge opportunity for us. We are working with farmers, manufacturers and retailers to capitalise on this. My noble friend Lord Plumb raised the common agricultural policy, with some criticism of its complication. We are implementing the new CAP in England in a way that seeks to minimise the burdens on farmers and the risks of fines from the EU, while delivering value for taxpayers and improving our natural environment. We have made the greening rules as flexible and simple as we can for farmers to meet so that they can concentrate on producing food and helping to grow the economy. We have also cut the number of cross-compliance measures that they have to meet to reduce the burden on them while still maintaining important environmental protections. Our decisions follow extensive engagement with stakeholders on our approach to implementation and a major public consultation.

We are delivering a new IT service to support delivery of the new CAP, and from 2015 applicants for CAP funding will use a single system that is being developed with input from them and is key in our drive to ease the burdens on them. We are also providing regular information and updates on how the new CAP schemes will work in England so that claimants and stakeholders know what they need to do to make claims.

My noble friend Lord Shrewsbury and the noble Baroness, Lady Royall, referred to protected landscapes, which benefit the wider economy by providing attractive places to live, visit and enjoy, and by delivering essential ecosystem services on which the wider economy depends. There are 90 million visitors to national parks and their surrounding areas each year, who spend more than £4 billion—a third of the total rural tourism spend—which supports 68,000 jobs. In order to help our rural communities grow and prosper, we expect national parks and other planning authorities to take a positive and proactive approach to sustainable development, balancing the protection of the landscape with the social and economic well-being of the area. Tourism has been a key driver of the economic recovery. My noble friend Lady Bakewell is right but I think she would agree that the sector displays strong growth potential, with this trend set to continue.

Last week, I was in the Isle of Wight and saw a project similar to those referred to by my noble friend Lord Cavendish. In the Isle of Wight, the Wight Marque has been launched, which local businesses are enthusiastic about and which reflects a trend around the country where businesses are capitalising on an increasing appetite for local produce.

My noble friend Lord Shrewsbury referred to post offices. The network transformation programme is not suitable for about 3,000 of them. They predominately serve small, often remote rural communities. Many are the last shop in the village: he is right. The updated network transformation programme provides for the first time a £20 million investment fund allocated specifically to this part of the network. He and my noble friend Lord Plumb raised the issue of rural crime. Both police recorded crime statistics and the results of the Crime Survey for England and Wales show that the crime rate in rural areas is lower than that in urban areas for all crime types captured. But we must not be complacent. The noble Lord, Lord Cameron, held a meeting with my noble friend Lord Taylor on 24 June. It was a positive meeting bringing together the Home Office and Defra, and both; our departments committed to work together on, for example, the police allocation formula, which is currently being reviewed.

Several noble Lords referred to the important issue of affordable housing. It is a complex problem to which we are devoting close attention. It is an extremely important point. We have ensured that rural communities benefit from the affordable homes programme. In 2011-12 half the affordable homes built outside London were in rural areas. The Government have delivered more than 5,000 affordable homes in the smallest rural communities in the first two years of the current programme to ensure that affordable homes can be provided in these smaller rural settlements. We support rural exception sites, which are small sites used for affordable housing in perpetuity where sites would not normally be used for housing. Since April, the rules on permitted development have given farmers more flexibility regarding development of redundant farm buildings.

The noble Lord, Lord Cameron, and the noble Baroness, Lady Royall, referred to the spare room subsidy. As a result of Defra’s RCPU rural proofing, the Department for Work and Pensions has reviewed the discretionary housing fund and announced a package of £35 million of additional in-year funding for local authorities, including additional support to those affected in the 21 least densely populated areas of the United Kingdom.

Several noble Lords spoke about skills. While farming is not the only rural employer, it is an example of one. The future agricultural workforce is a vital part of meeting the challenge of global food security. We want to ensure that agriculture attracts entrepreneurial, talented new entrants who can rise to the challenges and the exciting opportunities that will occur in the sector in the coming years. I welcome the work that the farming industry does to attract new entrants and to promote farming as a rewarding career. We are currently addressing a number of the findings of the Future of Farming review, on which industry and government worked together, to look strategically at the opportunities and barriers encountered by those making a career in farming.

My noble friends Lady Bakewell and Lord Courtown and the noble Lord, Lord Cameron, referred to transport in rural areas. The Government recognise the importance of public transport for both the sustainability of rural communities and the lives of those who live there. Affordable and reliable transport enables people in rural areas to access services, to be economically active, and to avoid isolation. My department works closely with the Department for Transport to understand the specific problems and impacts of its policies on rural communities. If we can resolve the broadband problems, that will also make a major contribution to communication more generally.

My noble friend Lady Bakewell referred to the results of the recent flooding in the south-west. On 1 March, the Department for Culture, Media and Sport announced a package of support for tourism businesses in flood-affected areas. Some 755 tourism businesses received support—such as in business advice, drop-in clinics and local workshops. My department has made a £10 million fund available to help farm businesses affected by recent flooding across England.

My noble friends Lord Shrewsbury and Lord Cavendish referred to tax. This area is kept under constant review. Noble Lords will accept that HM Treasury’s key focus has to be on deficit reduction and any requests for reliefs and reductions need to be compellingly argued. I shall pass on the comments of my noble friends.

My noble friend Lord Shrewsbury spoke about the rural economic benefits of shooting. I saw a remarkable project this week on the Arundel estate of the noble Duke, the Duke of Norfolk, where the biodiversity benefits of what they are doing there are very clear.

The noble Baroness, Lady Royall, spoke about food banks. We know that some of the poorest families are really struggling to afford to feed themselves. While it is not the role of the Government to control the price of food, the impact of food price inflation is a real concern. Through Healthy Start, the Government provide a nutritional safety net, in a way that encourages healthy eating, to more than half a million pregnant women and to children under four years of age in very low-income and disadvantaged families throughout the UK.

Noble Lords know that we are reforming the welfare system. We recognise the important contribution organisations such as FareShare, FoodCycle and many other food charities and food banks are making by working locally to provide good food to those who need it most. It is worth saying that year-on-year food prices have fallen for the first time since 2006. In fact, prices went down by 0.6% in the year to May 2014.

The right reverend Prelate the Bishop of Oxford made some important points about small rural schools. The Department for Education has reformed the school funding system so that it is fairer, more consistent and transparent and so that the funding intended for education reaches the schools and the pupils that need it most. That department recognises that small rural schools have specific needs and has incorporated measures to address these, including adopting new measurements to capture pockets of rural deprivation and to introduce a sparsity factor within the funding formula.

The noble Lords, Lord Curry and Lord Cameron, spoke of rural-proofing government policy. I thank the noble Lord, Lord Cameron, and his review team, including the noble Lord, Lord Curry, for their ongoing support for the rural-proofing implementation review. We are committed to ensuring that all policies take proper account of rural needs and interests. We will be open and transparent about our record on rural-proofing. That is why we set out in the rural statement a commitment to an independent review of our rural-proofing activity. I am grateful to the noble Lord, Lord Cameron, and his team, who have held ministerial-level review meetings with DWP, DECC, DfT, DCMS, DCLG, BIS, the Home Office and the Department of Health to explore what actions they have taken to rural-proof their policies and programmes. That review will report to Defra Ministers in the autumn.

I hope that that will leave your Lordships under no illusion: rural-proofing is an area that we champion strongly across government. Of course, there is much to be done, but I believe that we are making genuine progress.

16:25

[The Earl of Shrewsbury]

My Lords, this has been a fascinating debate; we really ought to do this more often. The countryside is a very special place. The debate has covered a wide variety of issues, not least broadband. Although I appreciate that Her Majesty’s Government are doing as much as they can to widen the scope of broadband in rural areas, it is not just the fact that a lot of the country has not been covered by it, it is the fact that it is so blooming slow. That is a real bugbear throughout the rural community, where people really rely on it, and increasingly need to.

I am extremely grateful to all noble Lords who have taken part in the debate, and I thank the Minister for his courtesy, as always, in his responses. I finish by saying that the countryside is indeed a magical and most special place, but it is also a place of serious work and investment, not simply a green and pleasant land.

Motion agreed.