Businesses in Rural Areas

Caroline Voaden Excerpts

Wednesday 18th June 2025 Westminster Hall

[Caroline Voaden (South Devon) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western. As we know, rural businesses are the backbone of our communities, but they are being asked to compete with one hand tied behind their back. Across South Devon, local entrepreneurs—farmers, shopkeepers, tradespeople, producers and publicans—are working tirelessly to keep their communities vibrant, providing jobs, supporting local supply chains and bringing people together, but the odds are stacked against them.

One of the most urgent and unacceptable barriers that rural businesses face is poor broadband and mobile phone coverage. In some parts of my constituency, people cannot send an email without it crashing halfway, and taking card payments is a gamble. How can a small rural business compete in a digital economy if it cannot get online? Poor coverage is not just an inconvenience; it is a direct threat to livelihoods.

I will also address the way in which the Government are implementing the extended producer responsibility scheme, which is hitting local hospitality businesses hard. I welcome the Government’s efforts to make manufacturing more sustainable, but that must not come at the cost of adding further financial uncertainty for small businesses that are already under pressure.

The New Inn, a historical pub in the small village of Moreleigh in my constituency, has been informed by the brewery that supplies it that prices will increase by 7p per bottle of beer and cider and up to 21p per bottle of wine. The brewery will not deal with the bottles afterwards, however, so the pub also has to pay for the disposal of the glassware. The proprietor said:

“in effect we are paying twice…The hospitality trade is being unfairly targeted by this government. Trading is becoming increasingly difficult. After our business just surviving Covid—we are still paying the bounce back loan—then being hit with the Employer’s NI hike and now this, I am beginning to wonder if after 14 years it’s really worth it any more.”

These pubs are not major polluters; they are local employers and community hubs. They are vital to the social and economic life of our villages and towns. More than just pubs, they are third spaces and social hubs that are vital to community life. Yet under this scheme they are treated the same as massive supermarket chains. That is unfair, out of touch and economically harmful.

--- Later in debate ---

[Sarah Olney]

My hon. Friend is absolutely right. There is always the danger that we get into a vicious circle of declining transport provision leading to declining demand for services, which then lose viability and are withdrawn. The point about investment in public transport that my hon. Friend the Member for North Norfolk made so eloquently at the start of this debate would go a long way to managing some of those issues.

Bus route reductions leave some villages with little to no public transport, which worsens isolation. Bus services are the backbone of economic activity in communities across our country, but they are particularly crucial in rural areas, where accessible local amenities and services are greater distances apart.

[Caroline Voaden]

In fact, in the spending review, the whole of rural England was given a seventh of the money for transport plans that was given to urban areas. Does my hon. Friend agree that that is not sufficient to sustain and improve the rural bus transport network as much as we need?

[Sarah Olney]

My hon. Friend is absolutely right. The way that some of the infrastructure and transport investment moneys have been distributed in the recent spending review has raised some eyebrows. Investing in rural bus services would certainly boost our struggling town centres and high streets, which would lead to economic growth.

The increase in the fare cap to £3 is a bus tax that will hit working people, rural communities and people on low incomes the most. Although the Government have made their red lines on taxation clear, a 50% increase to the bus cap is just taxation by other means. The Government have been left to make difficult choices, but they cannot allow the burden of fixing the Conservatives’ mess to fall on working people and small businesses. Neither Labour nor the Conservatives before seems to understand that for rural communities, having a reliable bus service is critical to enable daily tasks and commutes to be completed. I was also reflecting on the point made by my hon. Friend the Member for North Norfolk about the impact of a lack of suitable transport infrastructure on training and the workforce.

Last week, the Liberal Democrats welcomed many of the Government’s public infrastructure and public transport investment announcements. However, we are concerned by the lack of provision allocated to rural bus services. Many communities without combined authority mayors—from Cumbria to Cornwall, and Norfolk to Newton Abbot—seem to have been left without new support for their transport networks. The Liberal Democrats continue to call on the Government to make sure that these areas see the investment that they so desperately need.

As the Government start implementing the new public infrastructure announcements, they must put the construction sector on a sustainable footing by introducing, in tandem, an industrial strategy to actually implement the projects. The general secretary of the Prospect trade union warned that the UK lacks the skilled workers required for new defence and nuclear infrastructure projects. Similarly, Make UK and the Federation of Small Businesses have highlighted a shortage of skilled works as a critical stumbling block for growth. Workforce shortages often disproportionately affect rural areas, with limited local training opportunities and housing affordability issues exacerbating the problem, making it harder for businesses to expand.

As we await the much-anticipated industrial strategy, I ask the Minister to ensure that it will include a strategic framework to effectively address the needs of businesses in rural areas, by collaborating with local, regional and devolved authorities in England, Scotland, Wales and Northern Ireland to establish how the strategy will support and facilitate industrial regeneration and innovation across all UK nations and regions. My Liberal Democrat colleagues and I look forward to scrutinising the details of the proposals as they are brought forward.

Businesses and rural areas of the UK face a distinct set of challenges compared with their urban counterparts. Although Government support exists through various grants, loans and initiatives, several issues, including infrastructure challenges, the phasing out of EU funding and higher costs related to transport, energy and supply chains, can disadvantage rural businesses more severely. I thank my hon. Friend the Member for North Norfolk for securing this debate, and I look forward to hearing from the Minister about the steps the Government are taking to ensure that businesses in rural areas receive the additional support they so desperately need.