Businesses in Rural Areas

Greg Smith Excerpts

Wednesday 18th June 2025 Westminster Hall

[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Western. I congratulate the hon. Member for North Norfolk (Steff Aquarone). We have had many great contributions from across the Chamber. Given the number, I will not seek to name all the Members who spoke; I will just pick three at random who I thought were particularly good: my hon. Friend the Member for South Northamptonshire (Sarah Bool), my right hon. Friend the Member for East Hampshire (Damian Hinds) and my hon. Friend the Member for Bridgwater (Sir Ashley Fox).

It is a privilege to speak on a subject that is close to the hearts and livelihoods of so many of my own constituents in my rural constituency of Mid Buckinghamshire. I pay tribute to the immense contribution that rural businesses make to the United Kingdom. Whether they be in farming, tourism, food production, forestry, hospitality or manufacturing, or our rural innovators, these enterprises are not simply economic units; they are custodians of heritage, engines of local employment and lifelines for communities that could otherwise be left behind.

Some of the challenges have been picked up through the course of the debate. We will start with communications. It was a Conservative Government who introduced the shared rural network in 2020, which was a £1 billion joint programme, at that point, with mobile operators to attempt to eliminate the so-called notspots in rural coverage. Many of those spots were found in my constituency and some still are, such in as the village of Cuddington. The initiative is transforming how farmers, tourism operators and remote workers do business, but it is clear from the debate, and indeed my own experience, that there is still some way to go. As others have said, if we cannot solve the communications challenges in the digital age, that will hold everyone back.

A thriving rural economy also depends on a fair tax system, which is why successive Conservative Chancellors took steps to freeze fuel duty—a vital measure for those who live miles from the nearest market, school or supplier. It is why we increased the VAT threshold for small businesses and championed business rates relief for village shops and pubs, demonstrating their community value as well as their commercial one. We also froze alcohol duty, offering a crucial boost to rural pubs, breweries, cider producers and vineyards, which are often vital employers and social hubs in rural areas. These measures reflect a Conservative belief in letting enterprise breathe, rather than smothering it under tax and bureaucracy.

We also need to combat rural crime far more harshly—another area in which I speak with some experience from this place. What began as my private Member’s Bill grew into the Equipment Theft (Prevention) Act 2023. Once the Government finally introduce the secondary legislation required for it, it will protect farming businesses from agricultural machinery thefts.

[Suella Braverman (Fareham and Waterlooville) (Con)]

On that point, I recollect a visit I made in 2023 to one of the fantastic farms in my hon. Friend’s constituency. I pay tribute to his doughty and indefatigable campaigning to create that new offence, which protects farmers from rural theft and is an important change to the law.

Does my hon. Friend agree that illegal encampments are also blighting our rural communities? In Denmead and parts of Southwick and Fareham, we have had real challenges with illegal encampments. The last Conservative Administration introduced more police powers to move on some of the groups that cause a nuisance, destruction and intimidation, and sometimes engage in illegal activity. Of course, we respect the rights of minorities, but does he agree that a lot more awareness needs to be raised among the police and communities so that we can combat the scourge of illegal encampments more successfully?

[Greg Smith]

I remember my right hon. Friend visiting the farm. It was in my constituency at the time, but the boundary changes actually took it away from me. Preventing the theft of machinery from not just farms but all rural businesses, which suffer so badly when equipment theft takes place, is a critical measure that we have to get right.

I take the important point that my right hon. Friend makes around illegal encampments. Any illegal development needs to be clamped down on in whatever form it takes. I pay tribute to Thames Valley police’s rural crime taskforce for some of its work on that. It would be good if the Minister could work with Home Office colleagues to extend that work across the whole country, and push the Minister for Policing, the right hon. Member for Kingston upon Hull North and Cottingham (Dame Diana Johnson), to introduce the statutory instruments that would bring the Equipment Theft (Prevention) Act into full force.

Let us turn to the direction of travel on rural business under this Government, which gives me real concern. First, as others have mentioned, the increase in national insurance contributions and changes to the NICs thresholds place a disproportionate burden on rural employers, many of whom already operate on the tightest of margins. For a rural farm employing five seasonal workers, or a family-run dairy business with a handful of long-serving staff, these extra costs are not abstract; they are the difference between hiring and firing.

The sharp rise in the national living wage is hitting rural sectors, with seasonal and low-margin employment—especially farming, food processing and rural tourism—hit particularly hard. These sectors do not have the luxury of passing on costs to consumers in the same way that some of the big urban retail or tech companies do. They face fixed contracts and price pressures from supermarkets, and this change risks hollowing out jobs that were previously viable.

Compounding that is the change to business property relief, which will strip tax protections from many family-run rural enterprises such as holiday accommodation and equestrian centres, undermining succession planning and deterring future investment in those rural businesses. Labour has targeted the very dynamism that it claims to support.

Labour’s Planning and Infrastructure Bill poses a serious threat to rural enterprise. By relaxing environmental safeguards and expanding compulsory purchase powers—removing hope value protections from prime farmland—the Bill risks allowing developers and central authorities to override local rural businesses and agricultural land. The removal of green belt-like protections from the mythical grey belt areas also paves the way for large-scale development in what were previously safe rural areas. Rural entrepreneurs now face heightened uncertainty over their long-term investments and succession plans. Farmers, holiday let providers and small rural manufacturers alike may wake up to find their economic foundations undermined by top-down planning interventions.

The Employment Rights Bill threatens significant administrative, legal and recruitment costs for rural businesses, which are estimated at up to £5 billion across the economy and are disproportionately heavier for small rural businesses, jeopardising their ability to hire flexibly or offer seasonal work.

But perhaps the most damaging of all is Labour’s recent change to agricultural property relief: the family farm tax. This is not simply a tweak to inheritance policy; it is a direct assault on the ability of farming families to pass on their land and their livelihoods from one generation to the next. An estimated 40,000 farming jobs will be lost under Labour’s plans to force all farmers to stop farming on up to 20% of their land.

The Government’s estimate of 27% of farms being impacted is based on outdated APR claims data from 2021-22 that does not reflect rising land values or the full economic picture of commercial family farms. Nearly 40% of farms rely on a combination of APR and BPR to mitigate inheritance tax liabilities. The £1 million threshold applies to both combined, making it far more restrictive than the Government’s modelling suggests. In my constituency, this is already causing disinvestment. I have spoken with farmers who are now deferring expansion, shelving plans for tourism ventures and, in some cases, considering breaking up long-held estates that have supported jobs and communities for generations.

Farm shops have, after years of successful trading, made the difficult decision to close. On rural high streets, costs have risen 15%. At Rumsey’s Handmade Chocolates in Wendover in my constituency, this is already leading to job losses and reduced hours for the staff they have been able to retain. The Pink and Lily pub in Lacey Green shut in February, just seven years after it first opened.

Rural Britain does not ask for favours, but it does demand fairness. It wants policies that reflect the unique challenges of doing business across distances, in smaller labour markets and with greater exposure to the weather, the global economy and regulatory interference. That is why the Opposition will continue to champion low tax, light-touch regulation and a level playing field for rural enterprise. The future of the rural economy cannot be sustained on sentiment alone; it must be underpinned by policy that understands the realities of rural life. On that test, thus far, Labour is failing.

[Matt Western (in the Chair)]

Before I call the Minister, I gently remind him to allow a couple of minutes for the mover of the motion at the end.