Rural Economy

Baroness McIntosh of Pickering Excerpts

Wednesday 27th April 2016 Grand Committee

Asked by

[Baroness McIntosh of Pickering]

To ask Her Majesty’s Government what is their assessment of the state of the rural economy.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to have secured this debate on the rural economy and look forward to hearing contributions from your Lordships, the Minister’s assessment of the state of the rural economy and what measures might be taken to improve it.

I grew up in Teesdale, one of the wildest and most beautiful parts of the country, and one with among the lowest farming incomes in the country. As a GP’s daughter, I saw every aspect of rural life. I declare an interest as owner and director of a consultancy company which provides strategic advice on food, farming and the environment, and that one of the clients is the board of the Dispensing Doctors’ Association, which I advise on rural policy matters. I also sit on the Rural Affairs Committee of the Church Of England Synod. It was an honour to represent, initially, the Vale of York and then Thirsk, Malton and Filey for 18 years in another place, culminating in my being elected to chair the Environment, Food and Rural Affairs Committee for five years.

We have to eat, and those living and working in the countryside ensure that we have food on our tables. Today’s debate is a celebration of the countryside, those who live and work there and how departments such as Defra and DECC interact with them in England. More than 20% of the population live in rural areas, contributing a fifth of England’s total economic activity. The agrifood sector is worth £103 billion—6.8% of the gross value added of the national economy. The role of the EU impacts greatly on the rural economy and possibly nowhere else is gold-plating more evident. One example I was involved in as an MEP some 20 to 30 years ago, the abattoirs directive, forced the closure of some small abattoirs in England. At the time of the BSE and foot and mouth crisis this meant that livestock had to be transported further to slaughter, raising issues of animal welfare, as well as animal health.

The rural economy in England is frequently overlooked in government policy initiatives. We hear a lot about city regions, devolution and the northern powerhouse, yet the countryside is crying out for policies specifically aimed at the rural economy, such as more affordable housing, lower rural crime, better rural transport, with more frequent rural bus services, faster broadband—or even just a stable broadband connection—and better mobile phone coverage. Improved access to banks and post offices is also needed.

The key things I would like to explore this afternoon are the importance of farming to the countryside and the rural economy; the importance of food security and the role farmers play; and how Britain is currently only 62% self-sufficient in food production. The Government are rightly seeking to add value through exports and, wherever possible, substitute imports, such as Shepherds Purse Cheeses, from near Thirsk, which competes with Roquefort cheese from France. The Government should enthusiastically support public procurement of British products and we should all be proud to buy and eat British food. Opening up new markets, such as China, to products such as pigs’ trotters and other pigs’ parts that we may not eat in this country, as well as dairy foods, would add multimillion pounds of exports to companies in North Yorkshire and across England.

The impact of late farm payments under the new CAP is great on farming and the wider countryside and rural economy. Given the delayed payments from 2015 and the problems that the Rural Payments Agency has experienced with the new system, the recent announcement of partial payments is particularly welcome. We must not lose sight of the fact that 88,000 applications are due, mostly by paper, since rural areas are simply not yet digitally enabled, or that some farmers have still not been paid from 2015. Farmers are seeking an extension to the deadline for the 2016 application of 17 May, on which I hope the Government and the Minister will look favourably. There is a particular problem for tenant farmers through basic farm payments. Upland farming makes a unique contribution to rural areas in producing livestock, tending the countryside and often providing accommodation for visitors. Basic farm payments should go to the active farmers, in this case the graziers on common land tending sheep, rather than the landowner who earns money elsewhere through shooting rights. We must recognise problems with registration and mapping of common land, with the particular issue in North Yorkshire of a review being undertaken this year, whereby rights not registered this year may be lost, not to be revived. Looking ahead, I welcome and recognise the need for reforms promised by the EU Commissioner, Phil Hogan, in 2017 of a CAP that is simply too complicated.

The six-day rule impacts on farmers. It is a standstill rule imposed after the 2001 foot and mouth disease outbreak. Restricting the movement of livestock, it disrupts trade and affects price. It has been in place since 2003. When will it be lifted? The role of auction marts in rural areas should be recognised, setting prices and having an economic and social role by allowing vital interaction among farmers who often live in isolation. The Groceries Code Adjudicator is doing valuable work but needs greater powers and the ability to investigate of her own initiative malpractice within the supply chain. Of particular concern are low prices in the dairy sector, where currently the adjudicator cannot intervene because this is an indirect supply chain.

Severe flooding of land threatens food security, as well as causing huge economic loss when houses flood. Some £5 billion is the estimated cost nationally of the December 2015 floods. Spending on flood defences is being hampered by not having a total expenditure budget through the merging of maintenance and capital spend into one operational budget. Maintenance spending should match the six-year spend the Government have announced on capital spending. Regular and effective maintenance, where appropriate, by way of dredging, desilting and clearing water channels of weeds reduces the risk of flooding. A whole catchment area approach, retaining water upstream, prevents flooding downstream, as we saw so successfully in the Pickering slow the flow project, demonstrating the effectiveness of more natural flood defences. The Government should encourage the use of greening money under the CAP to reward framers for retaining flood waters temporarily on farm land by reimbursing them for the loss of income in return for the public good they do. Abstraction policy reform will pose challenges for competing users: farmers, industry, rural businesses and other users, such as anglers.

The impact of rural crime on farming and the rural community is huge. There is theft on a grand scale of quadbikes and livestock, poaching and lamping. The cost of rural crime is estimated to be £800 million, which is equivalent to £200 for every household in the countryside. Fly-tipping costs farmers and rural firms up to £150 million a year in removing waste. A more visible police presence and speedier response times are called for.

We must see a greater supply of housing and affordable homes in rural areas. The planning issue, which is very vexatious, must be addressed while respecting the rights of those already living there.

The impact of Brexit on the rural economy, the potential loss of access to the single market, the subsequent imposition of tariffs, depending on what negotiations are in place, and the potential loss of support are causing great concern among farmers. The impact of the CAP on the rural economy has been considerable. The new greening provisions and the impact of graziers on common land must be addressed.

The cost of delivering public services is much higher in rural areas and the per capita funding for patients and pupils is often substantially lower.

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[Baroness McIntosh of Pickering]

In conclusion, I hope the Minister will realise that we need to spend more to deliver public services in rural areas to ensure that we have GPs who can act as community hubs; that we keep all the community hospitals we have; that farming, tourism and other rural businesses continue to have their roles to play; and that those living in rural areas will not be left behind and will have the same per capita spend on health, education and broadband services as those living in urban communities.