Businesses in Rural Areas

Angus MacDonald Excerpts

Wednesday 18th June 2025 Westminster Hall

[Steff Aquarone]

I totally agree. We are developing a bit of a wine theme here, but let me return to a subject that Members might have heard Liberal Democrats talk about a lot, which is care. We are proud to have the oldest demographic in the country in North Norfolk. We should not be afraid of the fact that we have a care industry, which we should celebrate and encourage, and in which we should create career paths and provide training opportunities. Workforce development is key to tackling rural economic development.

I am delighted that some innovative, locally led programmes have been delivered by Lib Dem-led North Norfolk district council. Business owners have told me of the positive experiences they have had with the support and training that is available, and many more will benefit from the recently launched Invest North Norfolk hub. Local leaders, however, need to break the mould and provide innovative, far-reaching support and strategy to supercharge every rural economy. The rural economy is far from immune to the general business challenges that many face across the country; in fact, many of those struggles are only made greater by the nature of rural areas. Rural businesses struggle more with access to funding for investment and seed capital, and they struggle more to meet the cost of decarbonisation.

At the same time, in North Norfolk we have seen large community benefit funds from energy giants that host renewable infrastructure in our area, but the restrictions on those funds are incredibly onerous and they eventually run short of projects to fund. There are only so many bus stops in North Norfolk that they can attempt to gold plate. If access to the funds were liberalised, allowing businesses to secure the important support that they need to grow, adapt and improve, they could have a greater and wider-reaching economic impact, and they could support wider aims to secure environmental benefits and benefits for the communities that their infrastructure affects.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I wonder whether I can make the case for real support from the Government for community benefit from renewable energy. It is being proposed at a fairly modest level by the Department for Energy Security and Net Zero, but it is one of the biggest opportunities for rural Britain to transform its economy.

--- Later in debate ---

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I want to make the case for a review of the VAT system. VAT starts at £90,000 and above, and I think that that level should be increased to £250,000. The UK has 3.1 million sole traders. Many of them do not want to grow above £90,000 because they do not think they are in the business of administration, and quite a lot do cash business in March just to get past that. If we lift the limit to £250,000, many of them would employ an apprentice or two. Some might become quite major. We would enable a junior level of people who were not particularly good at school to join the trades sector, in plumbing, for example. This is a fantastic opportunity if we want to take the foot off the neck of micro-businesses and would allow us to grow a worthwhile SME sector.

--- Later in debate ---

[Mr Angus MacDonald]

Will the Minister acknowledge the disparity in energy price between rural areas and urban areas? Businesses in urban areas can access mains gas and pay 6p per kilowatt for their energy, whereas businesses in rural areas pay 24p per kilowatt for their energy. What a disadvantage that is for rural areas.

[Gareth Thomas]

The hon. Gentleman underlines the need for significant investment in green energy. Other hon. Members referred to the need to support renewable energy, particularly community renewable energy schemes, as part of the solution to issues around rural prosperity and to tackle the energy challenges that we are all familiar with.

We are investing directly in rural areas through schemes such as the rural England prosperity fund, which is worth £33 million this year. That funding will provide capital grants for new business facilities for product development and community infrastructure improvements that benefit local economies.

We are committed to sustaining vital services and amenities in rural areas. Our £2.7 billion a year for sustainable farming ensures continued investment in environmental land management and nature recovery, underpinning the agriculture sector. We are also working to enhance access to banking, particularly in rural areas, including through the roll-out of banking hubs across the UK by the end of this Parliament.

Rural businesses can also look forward to benefiting from measures such as reforms to the apprenticeship levy, helping them to invest in skills—a key concern that was raised in this debate. I know that rural businesses, as well as businesses in urban areas, are really concerned about that.

We also heard a couple of contributions from hon. Members about the significance of post offices in their communities. Again, I recognise the critical role that post offices play in rural communities, and indeed, the potential for the Post Office to do more. As some hon. Members will know, we are bringing forward a Green Paper on the future of the Post Office shortly, which I hope will give further confidence about the potential for the Post Office to do more in rural areas, as well as more generally.