Rural Economy

Lord Gardiner of Kimble Excerpts

Wednesday 27th April 2016 Grand Committee

[Lord Gardiner of Kimble (Con)]

My Lords, I am more than grateful to my noble friend Lady McIntosh for securing the debate. A strong and vibrant rural economy is vital for the health and wealth of our national economy. At the outset I declare my farming interests and my rural background, which are in the register.

What is the current position? Rural areas contribute more than £200 billion to the English economy each year—around 17% of the total. They are home to nearly a quarter of all registered businesses in England and employ almost 20% of the country’s workforce. Some 76% of residents in rural areas are in work. There are more registered businesses per head of population in rural areas than in our urban areas, excluding London. I have to say to the noble Baroness, Lady Jones, that my politest words are that I dispute her accusation that the relationship between small businesses, rural businesses and the Government is poor. It is completely the contrary. My experience of having met many rural businesspeople around the country is that the environment which the Government seek to create for the economy is one that they identify with. Business start-up rates remain strong at 47 per 10,000 people. The rural economy is extremely diverse. Manufacturing represents 13% of gross value added from rural areas and the service sector is significant. Business services now represent 10% of rural output.

But this Government and this department agree that much more needs to be done. We want to help the rural economy achieve its full potential. Indeed, an increase in annual growth of just 0.1 percentage point would add around £500 million per year to rural gross value added. So the Government set out in the rural productivity plan, published last August, a range of measures. This relates to what my noble friend Lady McIntosh said in her wide-ranging speech, because so many of the features of rural life are so wide-ranging and they interconnect. Many areas of rural England are seeing improved broadband, mobile and transport connections. Wearing my former hat as DMCS spokesman, I very much agreed with what my noble friend Lord Arran said about Cornwall and the extraordinary impact that the enhanced connectivity in Cornwall, including the Isles of Scilly, has made. It has made a dramatic difference. Everyone can now access basic broadband speeds of 2 megabits per second—fast enough for online access to every government service, including CAP payments. Some 90% of UK premises now have access to superfast broadband and we are on track to reach 95% by 2017.

A number of your Lordships, my noble friend Lord Arran in particular, referred to the broadband universal service obligation. We and Ofcom are consulting on the introduction of that USO so that we have it in place for everyone by 2020. A broadband USO aims to provide a safety net for those without access to superfast broadband. Our ambition is to set the USO at 10 megabits per second. I am conscious—I declare an interest as I await a better service in my part of rural Suffolk—that we need to extend the mobile phone 2G coverage, allowing access to basic voice and text services to 90% of the UK land mass by 2017. I was reminded by what the right reverend Prelate and my noble friend Lady Redfern said of the use of church spires. The department entirely recognises the appropriateness of using church buildings; it wishes to use them and I hope that we might have a discussion. It might be a topic for one of the rural bishops’ meetings that we have in Defra. That would be extremely helpful.

We are also very conscious—the noble Baroness, Lady Jones of Whitchurch, was teasing this out, and rightly so—of the question of how we deal with the remaining 5% of premises that are in hard-to-meet and difficult areas. That is why we have deployed pilot projects in Wales, Northern Ireland, Scotland, Hampshire, Northumberland, North Lincolnshire, North Yorkshire, Devon and Somerset. These are to test the options of expanding to that final 5% of premises where the commercial case for investment is at its weakest. We all recognise the importance of this service, which is essential for all communities, whether urban, rural or suburban. This is something that we all need to have. Indeed, as entrepreneurship has been mentioned, it is essential for small businesses that rural areas can be part of that.

The Government are also seeking to improve the availability of skills in rural areas through better schools and more apprenticeships. Clearly, ensuring a skilled workforce in rural areas is vital to their future economic success. That is why the Government will increase apprenticeships in rural areas, including tripling apprenticeships in food and farming. The right reverend Prelate spoke of the need to expand the number of businesses in rural areas. In fact, as part of the productivity plan, 15 new enterprise zones in smaller towns and rural areas will give businesses the space to grow and the opportunity to take advantage of tax and planning benefits.

A number of your Lordships raised the issue of rural housing, and I was very conscious of my noble friend Lady Redfern, who is such a great champion of North Lincolnshire. We are committed to increasing the availability of housing in rural areas, allowing rural towns and villages to thrive, while promoting the greenbelt and the countryside. I can express my personal commitment to this. I should perhaps declare that I facilitated a rural housing scheme on the farm at Kimble. I am very much committed to this as a way in which we can assist villages to prosper so that the school roll remains vibrant and the hubs in the village community can continue. Thousands of families will also benefit from the 30 hours of free childcare that will be rolled out from September this year. Three of the eight early-adopter local authorities are in rural areas.

We also wish to devolve more decision-making to local areas, including devolution deals. My noble friend Lady McIntosh mentioned the northern powerhouse and other areas where the Government have been working. We are also seeking to ensure this in the west of England, greater Lincolnshire and the east of England. The Government also recognise the strong part that tourism plays in rural areas, and that is why we have set out measures to support tourism in our five-point plan. The noble Earl, Lord Kinnoull, spoke of the English coastal path. It is clearly very important for our well-being, but it is also important as a catalyst for tourism and all the knock-on positivity for economic growth.

My noble friend Lord Shrewsbury mentioned the contribution country sports make to the rural economy. Shooting alone annually contributes £2 billion and 74,000 jobs. I know my noble friend has experience of it. You only have to go to those very remote areas to see that shooting is one of the major economic contributors, if not the only one. Anyone who does not understand this ought to go to see it before they make observations. It is essential to those remote rural areas. I know many noble Lords would be very pleased to facilitate a visit from any of your Lordships who would like to take the opportunity.

Tourism relies on a beautiful and varied countryside—landscape—and trees play a pivotal role in it. I can confirm that the comments about the grey squirrel made by the noble Earl, Lord Kinnoull, chime with what Defra is seeking to do. There is no doubt that the grey squirrel is the greatest destroyer of trees. The arrival of this species has been a great disaster for our treescape, and we need to do something about it.

I am very conscious of the importance of a vibrant agricultural sector. It is at the core of the rural economy, generating £100 billion and supporting one in eight jobs. I have two minutes and a lot more to say.

It is our ambition to make the industry ever more a world leader. We are very determined to ensure that we have better procurement policies and that we enhance exports. The Secretary of State has just returned from the United States, promoting British food and products. I particularly want to take on board what my noble friend Lady Byford said about beer and hops. The whole basis on which the department works on pests is to receive the best scientific advice available: that is the basis on which we make decisions. We are in the year of great British food. Where there is a contribution that we need to make, including opening up beef exports to America and Japan, there is a lot going on in the department across the ministerial team.

The noble Lord, Lord Grantchester, mentioned the dairy sector in particular. Given the time, I can say only that we are certainly not complacent. I am very glad that the noble Lord raised this, because dairy farming is at the heart of farming in many rural areas, particularly on the west side of the country. We need to work as hard as we can to support the dairy industry. I do not have time to go into Brexit and so forth, but I say to the noble Baronesses, Lady Miller of Chilthorne Domer and Lady Smith of Newnham, that the package received from the European Commission —£26.3 million of aid to the dairy farmers, which was paid out in November and December—is an indication of the sort of community support we receive. Indeed, the new system of tax averaging introduced this month will help farmers. I am very conscious of the need to help the farming industry.

Unfortunately, there is more to say but I will take away all that was said on rural-proofing, which the review by the noble Lord, Lord Cameron of Dillington, was all about. Having once achieved a two and a half hour debate on the countryside, I will take away what my noble friend Lord Caithness and others have said about the need for a debate. The countryside is very important to us. It is in the national interest that we have a vibrant rural economy. We should respect its traditions and its way of life, but surely our objective is to unlock the enormous opportunities that there still are for the rural economy. I am most grateful to noble Lords and I will take back all that has been said and write to them.

Committee adjourned at 7.02 pm.