Rural Economy

Lord Bishop of St Albans Excerpts

Thursday 19th December 2024 Lords Chamber

Moved by

[The Lord Bishop of St Albans]

That this House takes note of the importance of growing the rural economy.

[The Lord Bishop of St Albans]

My Lords, I am grateful to all those who have signed up to speak in this debate on growing the rural economy, not least because of the breadth of experience and knowledge that is represented in your Lordships’ House which we will be drawing on today. In doing so, I declare my interest as president of the Rural Coalition and as a vice-president of the Local Government Association.

Many people dream of moving into the countryside because of the quality of life that it can offer. I think of the strength of rural communities, the high levels of social capital and the way that people support one another—no wonder it is attractive. We in the Church of England are glad to play our part in that: we are at the heart of many of our rural communities across the country, wanting to contribute to their flourishing and thriving.

Very often in this House, we raise problems associated with living in the countryside, such as rural crime, fly-tipping and the lack of access to services. Today, however, I hope that we can frame our debate in terms of the untapped potential of the rural economy and on the prosperity that it can deliver for our nation—that is, if we can get the right policies and support in place. I note that His Majesty’s Government have committed to making economic growth a top priority, to deliver on

“what matters most to working people in every corner of the UK”.

To start with, it is good to remember that there are many, many working people in rural communities: nearly 20% of the population of this country live in the countryside and over half a million businesses are registered in rural areas, employing 3.8 million people. The rural economy contributes over £315 billion a year to England alone. It is vital, then, that the Government’s missions not only deliver for rural communities but enable the rural economy to play its part in helping to deliver them.

Unlocking the pride and potential of every nation and region across the British Isles will not be possible if our strategies and policies are primarily focused on urban areas, on towns and cities. We need to be strategic and intentional about unlocking the potential of our rural areas too. For many people, the phrase “the rural economy” conjures up pictures of agriculture and tourism. Farming, for example, has been dominating the news lately, and the impact of the Budget on farming communities has been the subject of a great deal of controversy and debate. We need to be clear, however, that the rural economy is diverse and innovative. Farming, as important as it is—I am the son of a farmer—is not interchangeable with rural industry. There are many other aspects to the rural economy.

The recently published report Reigniting Rural Futures, commissioned by the Rural Coalition, of which I am president, shows that the biggest employer in rural authorities is the sector comprising public administration, education and health. It accounts for 30% of workers compared, incidentally, with 33% in urban areas for that same sector. It is significant that agriculture, mining, electricity, gas, water and waste as a sector employs just 2%. The Pragmatix report shows that, in the rural economy, productivity stands at just 82% of its non-rural counterpart, with a continuing downward trend in the future if we carry on with business as usual. However, if we could enable our rural economy to perform at a similar level to that of Scandinavian countries, for example, we could be looking at an additional £19 billion in tax revenue for the public purse, not to mention the associated benefits that such prosperity could bring to the communities themselves.

If we want the rural economy to grow, we need additional capacity. The Government need to recognise that there will be some additional costs associated with delivering services and projects in rural areas where sparsity of population poses so many additional challenges. There is often a lack of access to education and job opportunities, compounded by the lack of reliable and affordable public transport. When you talk to rural employers, one thing that they say is that people very often want the jobs but simply cannot get to them because of the transport difficulties. There is a desperate lack of affordable housing, exacerbated by the huge number of second homes, particularly in the south-west, driving up prices and driving out young people from their rural communities.

But there are some hugely positive aspects of our rural communities too. Over the years, I have been privileged to visit many rural businesses and farms in the diocese in which I serve, covering Hertfordshire and Bedfordshire. I think of my visit to an eco tomato-growing plant in East Hertfordshire, using an anaerobic digester that produces biofuel. The exhaust gases emitted by the engines are cleaned and then used in the greenhouses to support and enhance plant growth. I think also of the very innovative Groundswell festivals in Hertfordshire on regenerative farming systems—I know that some members of your Lordships’ House have been. We are absolutely at the forefront of horticultural and agricultural development across the world; we should celebrate and be proud of that.

Our rural areas also have a big part to play in the transition to net zero. There are already some outstanding examples of investment in renewable energy taking place in the countryside. In addition, some of the best examples of community ownership and co-operatives are to be found in rural communities, safeguarding a range of commercial services and with long-term survival rates. An excellent example of this is the Bathford village shop and café in Somerset, which won an award at the Plunkett’s Rural Community Business Awards. I will not describe it, but noble Lords might want to look at it, as it is an extraordinary initiative.

I welcome the Government’s commitment to doubling the size of the co-operative sector. Some village halls and even some parish churches have been opened up in rural areas, providing spaces for free wifi and offering hubs where people working from home—it sounds a great idea when you start, but after a few months it can be very isolating—can gather together perhaps once a week for half a day to network and build support and friendship. These are just some of the wonderful, innovative projects that are already going on in our rural communities. If we are to see more of these, however, there needs to be a little more early-stage capacity support for initiatives so that they can be self-supporting, robust and, in the long run, transformative. If the barriers are removed, all the signs point to rural communities being up for it—they will realise their potential.

Then there is tourism, which is a significant part of the rural economy, not least in areas such as Devon and Cornwall and in Cumbria in the north-west, which are able to compete with some of the most attractive areas across the whole of Europe. However, to attract tourists, we cannot just leave it to local tourist boards. We need a national strategy that can attract people to come.

With so many opportunities, what are the barriers that rural areas face? Let me just briefly mention three, if I may, although there are many more. The first is poor broadband. As the Pragmatix report shows, only 69% of rural premises have a 4G signal indoors, compared with 90% in urban areas. It hinders home working, home banking, the growth of online businesses, and indeed even tourism. This will probably need different solutions from the ones that work in urban areas. I have recently been involved in discussions, for example, where we are looking at installing 4G equipment in some of our remote village spires and towers in order to bounce signals up into areas that, at the moment, cannot get decent coverage.

A second barrier is access to banking services. The pandemic accelerated the movement away from cash and, with the industry keen to reduce operating costs, the way many start-up businesses and small charities use banking services no longer fits with the business drivers of today’s banking industry. The transition to online banking is happening too fast for many small charities and businesses in rural areas, with little thought or support to aid the transition. Many are now operating in areas where local bank branches have disappeared. We need the convening power of central government to bring together the Department for Business and Trade, possibly the FCA, UK banks, the Charity Commission and community sector organisations to find solutions. Power and co-ordination are the answer in this case, rather than large amounts of extra funding, to ensure equal access to financial services.

Thirdly—I am conscious that time is going on, so I will be very brief—rural public transport is obviously a huge issue for us if we want young people to be able to stay in rural areas and if we want to enable workers to come and work in them.

I will make a few comments on local government funding and access to services. Organisations representing rural communities have been calling for a long time for fair funding for rural local authorities that takes into account the additional costs of delivering key services in sparsely populated areas. I welcome the Government’s announcement that they will be reviewing local government funding next autumn, although it is concerning that the rural services delivery grant has been withdrawn. I note the Government’s commitment to repurposing the money from this grant, which will be going back out in the form of the recovery grant, although the details are unclear. I hope that the settlement will take into account the costs of service delivery in light of the withdrawal of the grant, as well as the factors of rural deprivation, which are often lost in the scale of geographical data that the Government use to calculate deprivation.

Sadly, when one turns to the national and regional level, one finds that the rural dimension of policy and funding is sometimes lost. If funding is targeted towards the largest areas of deprivation, it may well ignore the smaller pockets of rural deprivation that are often hidden in the statistics, or are in fact so small that they are not picked up at all. I remember that the previous rural advocate used to say that if you add up all the tiny pockets of rural deprivation in this country, you get a community the size of Birmingham. It is a significant issue but one that is often not identified.

Deprivation is not the only thing that places demands on services. There is a large ageing population in rural areas, which places demand on social care. Is the Minister able to commit His Majesty’s Government to producing something that we have long asked for: a comprehensive rural strategy? Will the Government undertake to rural-proof all legislation in the meantime? Will they commit to consulting rural organisations and stakeholders when renewing the indices of deprivation next autumn, so that a better interpretation of rural deprivation can be produced?

I am aware that the Minister sits on the Child Poverty Taskforce as the Defra representative. Can she give us an assurance that the forthcoming child poverty strategy will focus on the particular challenges experienced by young people growing up in poverty in rural areas, to ensure that they can thrive?

I am hugely grateful for this opportunity to set out some of the many opportunities that we need to grasp and to highlight some of the barriers that we need to overcome, which I believe are not impossible at all to overcome, as we seek to grow the rural economy. I look forward very much to hearing Members of your Lordships’ House bringing their considerable expertise and knowledge to bear, so that we can strengthen this important part of our national life.

--- Later in debate ---

[The Lord Bishop of St Albans]

I thank the Minister for her very comprehensive reply. As the noble Baroness, Lady Shephard, said, we understand the difficulties that Defra has and that, as the noble Lord, Lord Fuller, said, much of what goes on in government is run by the metropolitan elites. I have been grateful for the extraordinary breadth of contributions. I noted, for example, that the noble Lord, Lord Inglewood, helped us understand the diversity of “rural”, and it has been very good that today we have had references to Wales, Northern Ireland, Devon, Norfolk, Lancashire, Yorkshire and all different parts of our nation.

I have to say that I fear that, very often, government is rural-blind. Many of us, for many years now, have been asking for a comprehensive rural strategy and for proper rural-proofing, not because of special pleading but because we believe that this can make a huge difference to our nation.

I will not make any further comments—it is the last day of term and I suspect that we all need to go—but I thank all noble Lords for their contributions. We will be coming back with further debates as we move into 2025; we are not going to let go of this. I add my own best wishes for a very happy Christmas and new year to all Members of your Lordships’ House.

Motion agreed.

Storm Bert

Lord Bishop of St Albans Excerpts

Tuesday 26th November 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

In response to the noble Baroness’s first question, clearly, these are devolved issues, so how the allocation works is a matter for the Welsh Government, but, as I mentioned earlier, we are working very closely with the First Minister and the Welsh Government to offer any support we possibly can. I do not have the specific details of the formula, but we are working very closely with the Welsh Government to ensure that they get the support and focus that they need.

[The Lord Bishop of St Albans]

My Lords, I ask the Minister to return to our farming communities. We know that this is a complex problem and we rely on our farmers to work very collaboratively with all sorts of agencies to try to prevent the water coming down into vulnerable areas. As we have noted in the last few days, our farming community is already quite vulnerable and feeling very nervous, particularly because there are some reports that the Countryside Stewardship higher-tier scheme may not open until mid-2025. It is another thing that may affect some of our farmers. Will the Minister commit to ensuring that her department does everything it can to bring the application dates of the Countryside Stewardship higher-tier fund forward as much as possible, to help our farmers?

[Baroness Hayman of Ullock (Lab)]

The right reverend Prelate makes a very good point about higher-tier stewardship. We need to move forward with it. I know that the Farming Minister is keen to get this moving because it is clearly important to a cohort of farmers. I will relay his concerns and those of the House, because it is something we are very focused on moving forward.

Farming Families

Lord Bishop of St Albans Excerpts

Thursday 21st November 2024 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, I too congratulate the noble Baroness, Lady Northover, on securing this debate. I declare my interests as president of the Rural Coalition and a vice-president of the LGA. I am a farmer’s son, and one of the great privileges of my job serving in a diocese that covers Bedfordshire and Hertfordshire is going into some of the most wonderful, forward-looking and innovative farms in this country, which are at the forefront of farming across Europe.

Even though there are many successful, go-ahead farmers, there is nevertheless a huge level of mental stress among them. That has been true for many years. Sadly, there is an extraordinarily high number of suicides among the farming community. As one elderly farmer put it, “Many of us are feeling so depressed because these announcements suggest that we are not wanted and are worth more dead than alive”. He pointed out that if he manages to die before April 2026, his assets will be passed on; if he does not, the farm will probably not survive.

This cost on the mental health of so many of our farmers should not be underestimated. They are performing a fundamental service to our nation. The responsibility of government is defence of the realm, of course, but also to guarantee that we can feed the realm. If we cannot feed it, we will not have anybody here to defend within a very short time indeed, and that is why I pay tribute to organisations such as the Farming Community Network for their marvellous support for our farmers.

We understand that the Government are facing challenges and the need to raise revenue. We also know that APR has been used by some as a means of tax avoidance and treated as a loophole. We have some extraordinarily complex tax arrangements in various areas of life; is it not possible to find some way of defining those who really use their land and produce food to make a living? Can we not define that in some way, to address the loophole of those who are causing huge hikes in the value of land and sometimes taking it out of production because they have bought it as an investment? Can the Minister give us any clues as to whether some work is being urgently done on this? Will she commit to responding to the modelling done by the CLA and the NFU, so that we can really try to understand this huge disparity between the Government’s analysis and what the people on the land believe is happening? It would help us as we try to find a way through this impasse.

Budget: Implications for Farming Communities

Lord Bishop of St Albans Excerpts

Tuesday 5th November 2024 Lords Chamber

[Baroness Hayman of Ullock (Lab)]

Clearly, I cannot comment on the detail of a meeting that I did not attend. However, the Government’s commitment to supporting farmers and rural communities is unwavering and we have demonstrated this by committing £5 billion in the agricultural budget over the next two years. That is the biggest ever budget for sustainable food production and nature’s recovery.

[The Lord Bishop of St Albans]

My Lords, can the Minister help us a little? The Treasury figures state that fewer than 25% of farm businesses will be affected by the changes to APR on inheritance tax. However, the NFU estimates that up to half of all working farms could be impacted by the new tax rules. Why is there such a large discrepancy? Can she help us to understand what is going on?

[Baroness Hayman of Ullock (Lab)]

There are two things here. People are looking just at the first £1 million and not at the opportunity for individuals to pass further tax reliefs on, of up to £2 million for one individual and £3 million for a couple. Also, there has been confusion around the data given out by Defra and the Treasury. The Treasury data shows that around 500 estates a year across the UK would be impacted to some extent and about 25% of the total number of estates currently making use of APR. What the Defra data shows is the asset value of farms in England so, by looking at that data, people have assumed that more farms would be impacted. But you cannot draw a straight line between asset value and what it means for inheritance tax, because the number of claims—how many people would be impacted by the change—is affected by many things, such as who owns the business, the nature of the ownership, how many owners there are, how they plan their affairs, and so on; this is where you have some of the confusion.

Rural Communities

Lord Bishop of St Albans Excerpts

Tuesday 15th October 2024 Lords Chamber

[The Lord Bishop of St Albans]

My Lords, I thank the noble Baroness, Lady McIntosh, for getting this debate and I congratulate the noble Lord, Lord Elliott, on his excellent speech. I declare my interest as president of the Rural Coalition.

Rural communities make up nearly 20% of the population. That is similar to the number of people living in London, yet our biggest metropolis, among others, often feels far more integral to our policy and governance than our rural communities do. Rural communities are not just the responsibility of Defra; they are a significant proportion of our population, businesses, services and economy, and they cut across every government department. The specific impacts and challenges of policy rollout in rural areas need to be baked into the decision-making process of every single government department—not an afterthought but integral to the development of policy from the very beginning. Rural concerns are so often given to Defra which, while it has the lead on rural affairs, has very few of the levers necessary to bring about change. The sustainability of our rural communities should be of critical concern to us all, regardless of where we live.

The Rural Coalition of which I am president—a coalition of 12 national rural organisations—has commissioned and recently published a report, Reigniting Rural Futures. It highlights the impact that years of underinvestment have had on the rural economy and the massive potential there is if we simply have the will and imagination to grasp it. I am not sure whether the Minister has read this report, but I would be very happy to leave her a copy at the end of this debate. It shows that, in the rural economy, productivity stands at just 82% of its non-rural counterpart and will decrease to 79% by 2040 if this trend continues. Those of us who champion rural communities have long been calling for fairer funding for rural, but I want to make the case as to why this is not just yet one more demand on already-tight government purse strings but an opportunity for growth.

The noble Lord, Lord Cameron of Dillington, helpfully referred to research that shows that, with the right policy framework, the rural economy could increase productivity significantly, leading to an additional income of something like £9 billion to £19 billion annually in tax revenues. The Treasury stands to gain from an invigorated rural economy; it is an opportunity that should not be ignored.

Historical underfunding in rural areas has resulted in fewer and poorer services, along with underinvestment in essential infrastructure and connectivity. There is a lack of access to suitable educational and job opportunities, along with a desperate lack of affordable housing, which often drives the part of the population that is economically active out of rural areas, making the problem ever worse.

I will make a few short points about rural affordable housing, as I know that His Majesty’s Government have made affordable housing for all a priority, on which I congratulate them. It is part of the plan to boost economic prosperity, but I hope that this mission will take account of the particular pressures around rural affordable housing. How will the Government ensure that the benefits of these policies reach rural areas?

In 2022 the most affordable homes were 8.8 times more expensive than average lower-quartile earnings in rural areas, compared with 7.7 times more expensive in urban areas excluding London. Housing waiting lists in rural areas grew by 20% between 2020 and 2023, compared with a growth of just 14% in urban areas. Rural homelessness has increased by 25% since 2021-22. It is clear that the lack of affordable housing in rural communities is a significant barrier to rural prosperity.

There is much more we could discuss around the premiums of rural service delivery caused by challenges, including sparsity, facing rural business. Remember that 23% of our businesses in this country are in rural areas. There is the problem of digital connectivity, and there are mental health and well-being challenges, with a higher suicide rate in rural areas. I hope that other noble colleagues will pick up these issues.

Finally, I emphasise once more the desperate need for a cross-governmental strategic approach to rural affairs. The consideration of rural communities must be addressed at the very beginning of the development of policies and right through the delivery process. With the proper investment, our rural communities can not only continue to be a vital economic asset to this nation but contribute significantly to its growth.

Flood Prevention: Farmers

Lord Bishop of St Albans Excerpts

Thursday 10th October 2024 Lords Chamber

Asked by

[The Lord Bishop of St Albans]

To ask His Majesty’s Government what plans they have to ensure farmers are supported and recompensed for their role in flood prevention.

[The Lord Bishop of St Albans]

My Lords, I am grateful to all Members of your Lordships’ House who have signed up for this topical debate, giving us a few minutes to explore the extraordinary challenges that flooding is causing for our farming community.

We had an extremely wet September, with dozens of flood warnings issued by the Environment Agency. Indeed, in my diocese in Bedfordshire, large areas flooded—fortunately not for long periods. In fact, England had 95% more rainfall than its September average, and 10 counties in England experienced their wettest September on record.

Floods and heavy rainfall can affect everyone, but the devastation they can cause to farmers is unique. When farmland is flooded and the ground saturated, it can be impossible to plant crops; harvests are poor and may be lost completely. So many of our farmers have not yet recovered from the intense flooding they faced last winter. Defra-commissioned research finds that winter floods cost farmers an average of £480 per hectare. That is a staggering loss.

The Government need urgently to roll out the expanded offer of the farming recovery fund, as businesses and livelihoods are under threat. The time pressures here are critical. The fund is designed to support farmers to restore their land to the condition it was in prior to flooding in order to secure food supply, which this Government have repeatedly assured us is a key priority. I note that the Defra Secretary of State, Steve Reed, has said that no confirmation on the rollout of the farming recovery fund can be given until the spending review is complete. I regret that it should be delayed for so long and stress that every week it is delayed, farmers and their businesses are suffering. Can the Minister confirm that the expanded offer will be launched as soon as possible following completion of the spending review?

The devastating impacts of flooding on farmers are clear, but what about the public goods they provide through their role in flood prevention, and the costs they bear to protect us from flooding? Rural landowners and farmers provide a critical service in the form of natural flood management when their lands flood, and they do this by storing water. Farmers need to be properly compensated for providing this public service—not just for the cost of restoring this land to use for food production but for the cost of lost income.

This is complicated, as illustrated by a specific example brought to my attention by a hill farmer in the Naddle valley just outside Keswick, an area that suffers from flooding. A flood management pilot, part funded by government and called the Resilient Glenderamackin project, is aimed at trying to tackle the risks to Keswick of increased flooding through natural flood management. This farmer is facing the challenge of trying to work out whether to join that flood management scheme. If he enters his bottom valley fields into the flood management scheme, he will no longer have suitable grazing or haymaking land. Fodder would need to be brought in, which raises concerns about availability, price and quality. It can be extremely challenging to put a price on this for a year, let alone longer term, which is a challenge both for the West Cumbria Rivers Trust, as it tries to set payment rates for farmers, and for the farmers themselves when it comes to making these decisions. I raise this example just to highlight the complexities of the issues. This is what people are actually facing: the day-by-day reality of how they are going to make their farms viable.

We need a long-term, mutually agreed strategy to allow farmers to plan and prepare for flood storage. We need to ensure that our farming businesses are able to thrive and that we can guarantee our food security. As many of us have noted, in recent global conflicts it has become even clearer just how urgent it is that we are able to produce the majority of the food that we need here in this country.

I welcome His Majesty’s Government’s new Floods Resilience Taskforce and Secretary of State Steve Reed’s pledge to speed up the construction of flood defences, drainage systems and natural flood schemes. However, I hope too that the department recognises the importance of maintaining existing assets and systems. Data from the Environment Agency shows that maintaining existing assets in good repair is more than twice as cost effective as building new defences to protect property from flooding. Yet in some places, existing flood defences are falling into disrepair as the Environment Agency’s revenue budget, which is used for asset maintenance, has not been increased in real terms for nearly 20 years and has suffered cuts of nearly a third since 2020. As is true in so many cases, the lack of a multiyear financial settlement is preventing long-term planning and investment.

We on these Benches appreciate the work of Ministers and civil servants in Defra on these issues. I know that Farming Minister Daniel Zeichner recently reassured the farming community that he is “fighting tooth and nail” on their behalf when it comes to the upcoming Budget. Secretary of State Steve Reed said this week that he is

“making the strongest case for that funding”—[Official Report, Commons, 8/10/24; col. 240.]

for the agricultural budget and various other schemes. We want to put our weight behind them, and I hope the Minister will pass this on and note our appreciation for all that Defra is working on.

I also want to highlight, as we so often do when we say that something is going well, that some measures in the SFI and Countryside Stewardship schemes work well for both flood management and farmers, although these need time to mature. Hedgerows along the contours of fells, for example, give farmers clear field boundaries and slow down water. They are good for wildlife and for carbon sequestration. We need to work together to try to find win-win solutions that work for all the parties involved in this significant area.

Farmers play a vital role in the flourishing of our country, producing the food we need, sustaining and protecting our environment and wildlife, and preventing flooding. They are an essential part of the solution to many of the challenges that we face. I ask that we keep that in mind in a world where there are lots of issues. I am acutely aware that the Treasury is always being asked for more money for everything we do, and that special pleas and special cases are being made.

We need to remember where the food on our tables comes from. Who is on the ground doing so much of the work to restore our natural habitats and move towards net zero and, of course, playing a central role in protecting our homes from flooding as extreme weather events become more common in the face of climate change? We need to give strong, practical long-term support to our farmers in the face of flooding. They are the bedrock of our nation.