Rural Businesses

Andrew Bingham Excerpts

Friday 18th October 2013 Commons Chamber

[Andrew Bingham (High Peak) (Con)]

When this debate was selected, I received a telephone call asking whether it would be more appropriate for the Department for Environment, Food and Rural Affairs or the Department for Culture, Media and Sport to respond. It is all too easy to consider rural businesses as either agricultural or tourism-based and the main issue facing them as access to fast broadband. For High Peak, which is one of the most beautiful constituencies in the country, tourism is without doubt a very important industry. As the Federation of Small Businesses survey found recently, 60% of rural businesses reported that the problem of access to good quality broadband is potentially holding them back, so I do not seek to minimise those issues. But concentrating the debate on just two stereotypical industries and one, albeit important, problem misses the point that the rural economy operates in a diverse range of sectors, as I hope to demonstrate throughout my remarks.

The value of England’s rural economy is about one fifth of the national total. It can therefore make a substantial contribution to restoring the economic strength of the whole nation and is as deserving of support from the Department for Business, Innovation and Skills as any other area, so I am pleased to see the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon) here and I thank him.

Let me make a few points about the rural economy in general. It is worth £211 billion a year. Although rural areas are home to just one fifth of the English population, they support nearly a third of England’s businesses—around half a million businesses. Small and micro-businesses, of which I am very supportive, employ about 70% of employees in rural areas. So it is clear that we need to get the conditions right for all these businesses to thrive. The Government have been quick to recognise that there are real challenges facing our rural communities and businesses. I wholeheartedly welcomed the publication of the national rural proofing guidelines in July, which sought to ensure that rural areas get a fair deal from all Government Departments. They state:

“For people living and working in rural areas there can be challenges and barriers for their businesses, the services they receive and their quality of life.”

That is a massive step towards acknowledging that rural areas matter.

All UK businesses have been through tough times, as we know, but the situation is beginning to turn, largely as a result of the Government’s efforts. Rural businesses, however, face additional problems beyond those faced by others seeking to grow their businesses and provide employment in metropolitan centres. For many years now—for too long, some might say—the effort has been in assisting the redevelopment of our inner cities. I admit that those areas had been overlooked and deserved help, but not at the complete exclusion of rural areas, which face similar issues and where it costs more to deliver or access services.

I am pleased that the Government are taking action to restore the balance, but the gap between rural and urban areas has remained at a similar level since 2006. There have been indications of improvements since the peak of the recession a few years ago, including fewer redundancies and insolvencies in both rural and urban areas, but rural businesses are still facing drops in confidence and investment.

The most recent quarterly rural economic bulletin sets out that the economy appears to be turning a corner, with employment rising and claimant counts falling, which is good news. What makes for slightly more depressing reading, however, is the fact that the figures are not moving in the right direction as quickly in rural areas. In the manufacturing, construction, finance and transport industries, rural communities suffered more redundancies than their urban counterparts.

I regularly speak with small and medium-sized enterprises in my constituency. My background is in small business, so it is close to my heart. I always make myself available to visit as many businesses as I can when they ask me. I am a regular speaker at the business breakfasts organised by the Derbyshire and Nottinghamshire chamber of commerce. In the town of Glossop, a lady called Kathy Ford runs the Glossop Business Network, another organisation that pulls small businesses together to discuss common issues. I visit GBN regularly to speak and, more importantly, to listen to the concerns of small businesses. Having listened to them and to other companies from metropolitan areas, there is no doubt in my mind that there are differences in how businesses operate depending on their location.

I will talk briefly about broadband, although this subject is about more than that. Broadband has become an essential business tool. Without it, or with a slow and unreliable connection, rural micro-businesses are at a competitive disadvantage compared with urban businesses. I welcome the Government’s investment in broadband, but for some in High Peak it cannot come soon enough. As my constituent Mr Steve Otty, who runs his business, Hindlow Technical, from just outside Buxton, has said:

“Here’s hoping that the 21st century arrives for all of us, not just the urbanites”.

I think that he makes a very good point. As I often say, broadband is now the fourth utility for businesses. It is crucial in so many ways to their futures.

Simple geography in rural areas can make hiring staff more challenging. Lack of affordable housing means that many young people cannot remain in the area where they grew up, which starves businesses of young employees to train in their own way. Fewer than half of rural areas have access to a bus service. With limited and scarce public transport, those same young people who cannot drive or afford to run a car—many of us will know how expensive that is for young people nowadays—cannot access available work and employers cannot get the staff they need.

Those planning difficulties and the lack of affordable housing can also affect the ability of businesses to expand. Swizzels Matlow is a world-famous brand—many of us will know it—that makes such sweet childhood memories as refreshers, drumsticks and love hearts. Those of a certain age, like me, will remember having them in their youth. They are loved the world over. Swizzels has been based in New Mills in High Peak since 1928 and is very much part of the fabric of the town. It is a fantastic brand and it is looking to build and expand, but suitable additional premises are hard to come by in rural areas. It would be so easy for companies such as Swizzels to move into urban areas, which I am sure would welcome it. It is to be commended for its loyalty both to High Peak and to the people of New Mills, where it has been based for over 80 years and where it wishes to stay.

I do not want to paint a picture that is completely one of doom and gloom. Nestlé, which markets the famous Buxton water, which I am sure many of us have taken, has recently opened a new bottling and warehousing facility at Waterswallows in Buxton. It implements the latest thinking and best practice in environmentally friendly buildings. It is a fantastic thing to behold. Some £35 million has been invested to minimise the building’s environmental impact, the operation’s running costs and the site’s infrastructure and ecology. However, no matter how much investment firms are able to make in their premises, poor roads, difficult transport links, inadequate signposting and higher delivery costs add to the geographical challenge faced by the businesses who provide these dearly needed jobs in our rural communities.

Because of poor roads and increasing demand for travel, every day in my constituency thousands of commuting cars meet heavy lorries, creating severe traffic jams and pollution, particularly around the A57 and A628 trunk roads. They are ruining some stunning local landscapes and shaking parts of the village of Tintwistle to their foundations. There is also a knock-on effect whereby traffic is being sent through small villages such as Charlesworth, creating further congestion and traffic dangers. Any business man knows that delays cost money and impact on the viability of any business. I have great concerns about this road issue, as the Secretary of State for Transport is well aware. These horrendous traffic problems will choke off the local economy if we do not address them. I have first-hand evidence of a company in Glossop that tries to meet its clients at Manchester airport because it does not want them being delayed in trying to get into Glossop for important business meetings. I am further concerned that such infrastructure issues will deter other businesses from moving to High Peak and Glossop.

On the subject of transport and access, we alight on fuel prices, which have been discussed in this Chamber many times. I am pleased and proud that the Chancellor has taken the steps that he has to cancel the various duty rises that led to my constituency having higher fuel bills. One of the main industries in High Peak is quarrying, and the stone has to be transported. Quarries cannot be built next to the point of use; they have to be where the stone is. Consequently, there is a huge road haulage industry in High Peak which carries tonnes of high-quality limestone around the country. As we know, that industry is facing ever higher fuel bills.

Businesses that are not transport-related also suffer from high fuel costs. For example, while I welcome the recommitment to the universal postal service in all areas, businesses and residents in parts of my constituency can face a 14-mile round trip to a post office, and people may have to go 10 miles for a doctor or dentist. All those journeys have to be made using their own transport. As I have said before, in rural areas a car is not a luxury but a necessity. Rural businesses have to pay for more travel and pay higher prices for their fuel because it is sold at a premium because of the cost of getting it to remote areas. Petrol is always dearer in High Peak than it is here in London. The Government have recognised this problem and, as we heard on the news today, they are acting in certain areas, but regrettably not in High Peak. I understand the difficulties to do with the European Union and fuel derogation. There is also the problem of other fuel costs. Electricity prices are rising. We heard the news about British Gas this morning. On some occasions in High Peak we cannot even get gas, and further costs are incurred as a result.

I mentioned the quarrying operations in High Peak. I would not describe a big quarrying company as an SME, but I know from experience that such a company involves a huge supply chain in its area. From my own business experience, I know how that supply chain works. It supports a variety of small businesses, micro-businesses and even sole traders, many of which would like to be near that customer, because it may not be their only customer but is certainly their most important. It is vital that rural areas can get these big companies so that the benefit of their presence can be felt across the rural economy. Their buying power goes down through the economy through money spent in local retail areas and the creation of jobs and, as I said, the supply chain. We are lucky in High Peak—our limestone means that the quarries have to be there—but like other areas we need to get other businesses that are not as tied to natural features as the quarries.

I would like to return to the point I made earlier. This is not all about agriculture and tourism. In High Peak we have a bewildering range of businesses. I recently visited Selden Research, the UK’s largest independent manufacturer of professional cleaning, maintenance and hygiene chemicals. Based in Buxton, it has invested £250,000 in solar energy to help power the factory. That investment follows a £1 million investment in bulk raw-ingredient storage tanks to minimise levels of in-bound raw material transportation and packaging costs. We have high-tech and manufacturing businesses such as Pressure Tech in Hadfield, which makes high-pressure regulators. It is the highest-quality manufacturing that can be seen: precision stuff. Peakdale Molecular in Chapel-en-le-Frith is a leading company in pharmaceutical, biotechnical and diagnostic sciences. Next week I will be visiting Glossop Cartons, which has invested thousands of pounds in the world’s first production order for the Highcon Euclid digital cutting and creasing machine, no less. I will not go into how that machine works, Mr Deputy Speaker, but I am sure that if the Minister would like to know I could explain it to him afterwards. This investment and this breadth of business is being carried out in High Peak, which is a rural constituency. We should not dismiss it as a farming and tourist area.

I welcome the establishment of the five rural growth network pilots, which focus on small businesses, and understand that they are progressing well. I look forward to them being rolled out and hope High Peak will benefit from them.

Many funds are now available to enable business to access finance, which is a huge problem and not restricted to just rural areas. The Government-sponsored business growth fund of £2.5 billion offers investments of between £2 million and £10 million in return for an equity stake. To qualify, companies must be UK-established, with sales of more than £5 million per annum. That will not help many businesses in High Peak.

On a smaller scale, the Growing Places fund for Derbyshire is a fantastic £17.8 million fund that aims to make funding approvals of between £500,000 and £2.5 million. We need smaller pots, because some of the businesses need just a few thousand pounds here and there to help them expand and thrive.

I want to give the Minister plenty of time to respond. I thank him for attending and am glad that such a high-ranking BIS Minister is going to respond to the debate. As a Government, I think we value the rural economy much more than our predecessors and I welcome that.

In summary, the rural economy relies on businesses and it can be diverse, dynamic and proactive. It can play a huge part in the national economic benefit of our nation. We at our peril dismiss it as based purely on agriculture and tourism. It is a force to be reckoned with and one that we can harness. We are doing well in High Peak: we are punching well above our weight, despite all the challenges I have outlined today. Imagine what more we could achieve if we helped to address some of the difficulties I have highlighted. We should and must provide support in every way possible.