Rural Economy

Lord Bishop of St Albans Excerpts

Thursday 19th December 2024 Lords Chamber

Moved by

[The Lord Bishop of St Albans]

That this House takes note of the importance of growing the rural economy.

[The Lord Bishop of St Albans]

My Lords, I am grateful to all those who have signed up to speak in this debate on growing the rural economy, not least because of the breadth of experience and knowledge that is represented in your Lordships’ House which we will be drawing on today. In doing so, I declare my interest as president of the Rural Coalition and as a vice-president of the Local Government Association.

Many people dream of moving into the countryside because of the quality of life that it can offer. I think of the strength of rural communities, the high levels of social capital and the way that people support one another—no wonder it is attractive. We in the Church of England are glad to play our part in that: we are at the heart of many of our rural communities across the country, wanting to contribute to their flourishing and thriving.

Very often in this House, we raise problems associated with living in the countryside, such as rural crime, fly-tipping and the lack of access to services. Today, however, I hope that we can frame our debate in terms of the untapped potential of the rural economy and on the prosperity that it can deliver for our nation—that is, if we can get the right policies and support in place. I note that His Majesty’s Government have committed to making economic growth a top priority, to deliver on

“what matters most to working people in every corner of the UK”.

To start with, it is good to remember that there are many, many working people in rural communities: nearly 20% of the population of this country live in the countryside and over half a million businesses are registered in rural areas, employing 3.8 million people. The rural economy contributes over £315 billion a year to England alone. It is vital, then, that the Government’s missions not only deliver for rural communities but enable the rural economy to play its part in helping to deliver them.

Unlocking the pride and potential of every nation and region across the British Isles will not be possible if our strategies and policies are primarily focused on urban areas, on towns and cities. We need to be strategic and intentional about unlocking the potential of our rural areas too. For many people, the phrase “the rural economy” conjures up pictures of agriculture and tourism. Farming, for example, has been dominating the news lately, and the impact of the Budget on farming communities has been the subject of a great deal of controversy and debate. We need to be clear, however, that the rural economy is diverse and innovative. Farming, as important as it is—I am the son of a farmer—is not interchangeable with rural industry. There are many other aspects to the rural economy.

The recently published report Reigniting Rural Futures, commissioned by the Rural Coalition, of which I am president, shows that the biggest employer in rural authorities is the sector comprising public administration, education and health. It accounts for 30% of workers compared, incidentally, with 33% in urban areas for that same sector. It is significant that agriculture, mining, electricity, gas, water and waste as a sector employs just 2%. The Pragmatix report shows that, in the rural economy, productivity stands at just 82% of its non-rural counterpart, with a continuing downward trend in the future if we carry on with business as usual. However, if we could enable our rural economy to perform at a similar level to that of Scandinavian countries, for example, we could be looking at an additional £19 billion in tax revenue for the public purse, not to mention the associated benefits that such prosperity could bring to the communities themselves.

If we want the rural economy to grow, we need additional capacity. The Government need to recognise that there will be some additional costs associated with delivering services and projects in rural areas where sparsity of population poses so many additional challenges. There is often a lack of access to education and job opportunities, compounded by the lack of reliable and affordable public transport. When you talk to rural employers, one thing that they say is that people very often want the jobs but simply cannot get to them because of the transport difficulties. There is a desperate lack of affordable housing, exacerbated by the huge number of second homes, particularly in the south-west, driving up prices and driving out young people from their rural communities.

But there are some hugely positive aspects of our rural communities too. Over the years, I have been privileged to visit many rural businesses and farms in the diocese in which I serve, covering Hertfordshire and Bedfordshire. I think of my visit to an eco tomato-growing plant in East Hertfordshire, using an anaerobic digester that produces biofuel. The exhaust gases emitted by the engines are cleaned and then used in the greenhouses to support and enhance plant growth. I think also of the very innovative Groundswell festivals in Hertfordshire on regenerative farming systems—I know that some members of your Lordships’ House have been. We are absolutely at the forefront of horticultural and agricultural development across the world; we should celebrate and be proud of that.

Our rural areas also have a big part to play in the transition to net zero. There are already some outstanding examples of investment in renewable energy taking place in the countryside. In addition, some of the best examples of community ownership and co-operatives are to be found in rural communities, safeguarding a range of commercial services and with long-term survival rates. An excellent example of this is the Bathford village shop and café in Somerset, which won an award at the Plunkett’s Rural Community Business Awards. I will not describe it, but noble Lords might want to look at it, as it is an extraordinary initiative.

I welcome the Government’s commitment to doubling the size of the co-operative sector. Some village halls and even some parish churches have been opened up in rural areas, providing spaces for free wifi and offering hubs where people working from home—it sounds a great idea when you start, but after a few months it can be very isolating—can gather together perhaps once a week for half a day to network and build support and friendship. These are just some of the wonderful, innovative projects that are already going on in our rural communities. If we are to see more of these, however, there needs to be a little more early-stage capacity support for initiatives so that they can be self-supporting, robust and, in the long run, transformative. If the barriers are removed, all the signs point to rural communities being up for it—they will realise their potential.

Then there is tourism, which is a significant part of the rural economy, not least in areas such as Devon and Cornwall and in Cumbria in the north-west, which are able to compete with some of the most attractive areas across the whole of Europe. However, to attract tourists, we cannot just leave it to local tourist boards. We need a national strategy that can attract people to come.

With so many opportunities, what are the barriers that rural areas face? Let me just briefly mention three, if I may, although there are many more. The first is poor broadband. As the Pragmatix report shows, only 69% of rural premises have a 4G signal indoors, compared with 90% in urban areas. It hinders home working, home banking, the growth of online businesses, and indeed even tourism. This will probably need different solutions from the ones that work in urban areas. I have recently been involved in discussions, for example, where we are looking at installing 4G equipment in some of our remote village spires and towers in order to bounce signals up into areas that, at the moment, cannot get decent coverage.

A second barrier is access to banking services. The pandemic accelerated the movement away from cash and, with the industry keen to reduce operating costs, the way many start-up businesses and small charities use banking services no longer fits with the business drivers of today’s banking industry. The transition to online banking is happening too fast for many small charities and businesses in rural areas, with little thought or support to aid the transition. Many are now operating in areas where local bank branches have disappeared. We need the convening power of central government to bring together the Department for Business and Trade, possibly the FCA, UK banks, the Charity Commission and community sector organisations to find solutions. Power and co-ordination are the answer in this case, rather than large amounts of extra funding, to ensure equal access to financial services.

Thirdly—I am conscious that time is going on, so I will be very brief—rural public transport is obviously a huge issue for us if we want young people to be able to stay in rural areas and if we want to enable workers to come and work in them.

I will make a few comments on local government funding and access to services. Organisations representing rural communities have been calling for a long time for fair funding for rural local authorities that takes into account the additional costs of delivering key services in sparsely populated areas. I welcome the Government’s announcement that they will be reviewing local government funding next autumn, although it is concerning that the rural services delivery grant has been withdrawn. I note the Government’s commitment to repurposing the money from this grant, which will be going back out in the form of the recovery grant, although the details are unclear. I hope that the settlement will take into account the costs of service delivery in light of the withdrawal of the grant, as well as the factors of rural deprivation, which are often lost in the scale of geographical data that the Government use to calculate deprivation.

Sadly, when one turns to the national and regional level, one finds that the rural dimension of policy and funding is sometimes lost. If funding is targeted towards the largest areas of deprivation, it may well ignore the smaller pockets of rural deprivation that are often hidden in the statistics, or are in fact so small that they are not picked up at all. I remember that the previous rural advocate used to say that if you add up all the tiny pockets of rural deprivation in this country, you get a community the size of Birmingham. It is a significant issue but one that is often not identified.

Deprivation is not the only thing that places demands on services. There is a large ageing population in rural areas, which places demand on social care. Is the Minister able to commit His Majesty’s Government to producing something that we have long asked for: a comprehensive rural strategy? Will the Government undertake to rural-proof all legislation in the meantime? Will they commit to consulting rural organisations and stakeholders when renewing the indices of deprivation next autumn, so that a better interpretation of rural deprivation can be produced?

I am aware that the Minister sits on the Child Poverty Taskforce as the Defra representative. Can she give us an assurance that the forthcoming child poverty strategy will focus on the particular challenges experienced by young people growing up in poverty in rural areas, to ensure that they can thrive?

I am hugely grateful for this opportunity to set out some of the many opportunities that we need to grasp and to highlight some of the barriers that we need to overcome, which I believe are not impossible at all to overcome, as we seek to grow the rural economy. I look forward very much to hearing Members of your Lordships’ House bringing their considerable expertise and knowledge to bear, so that we can strengthen this important part of our national life.

--- Later in debate ---

[The Lord Bishop of St Albans]

I thank the Minister for her very comprehensive reply. As the noble Baroness, Lady Shephard, said, we understand the difficulties that Defra has and that, as the noble Lord, Lord Fuller, said, much of what goes on in government is run by the metropolitan elites. I have been grateful for the extraordinary breadth of contributions. I noted, for example, that the noble Lord, Lord Inglewood, helped us understand the diversity of “rural”, and it has been very good that today we have had references to Wales, Northern Ireland, Devon, Norfolk, Lancashire, Yorkshire and all different parts of our nation.

I have to say that I fear that, very often, government is rural-blind. Many of us, for many years now, have been asking for a comprehensive rural strategy and for proper rural-proofing, not because of special pleading but because we believe that this can make a huge difference to our nation.

I will not make any further comments—it is the last day of term and I suspect that we all need to go—but I thank all noble Lords for their contributions. We will be coming back with further debates as we move into 2025; we are not going to let go of this. I add my own best wishes for a very happy Christmas and new year to all Members of your Lordships’ House.

Motion agreed.