Businesses in Rural Areas

Matt Western Excerpts

Wednesday 18th June 2025 Westminster Hall

[Matt Western (in the Chair)]

I am pleased to see so many Members here. It is a warm afternoon, so if you wish to remove your jackets, you may do so. I do not necessarily expect a hot debate on this subject; however, a great many of you are expecting to speak, so we will start with a time limit of two minutes—and I am already anticipating that it could be reduced—and you may wish to prepare your speeches accordingly. I remind you all to speak through the Chair.

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[Matt Western (in the Chair)]

It is good to see so many Members bobbing; I remind Members that they should bob throughout if they wish to be called in the debate. I am going to set a two-minute time limit, but we may have to reduce that at some point, given the amount of interventions that have been taken—I am not criticising that but, when speaking, please bear in mind that should you take an intervention you will prevent others from speaking later.

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[Elaine Stewart (Ayr, Carrick and Cumnock) (Lab)]

It is an honour to serve under your chairship, Mr Western. It has taken until 2025, but Barr, a rural south Ayrshire village, is finally able to enjoy a mobile phone signal. I was pleased for the community; I had my photograph taken with residents, and the local papers covered the story. It should have been a non-event—this is 2025, after all—but rural communities are too often left behind when it comes to digital connectivity, which is why it was an important moment for Barr. That is the first of three points that I want to make about businesses in rural communities such as Ayr, Carrick and Cumnock.

My second point is that businesses employ local people, and people buy houses and spend their money in the local community. Sometimes the issue is finding local talent, and that is made more difficult by a skills mismatch. Take green energy: many rural communities are hosting new wind farm projects, but vacancies for local engineers and maintenance staff for wind farms are not always easy to find. I am sure that that is also common in many other areas. We have talent in Ayrshire, but we do not have the right skills. We need to train our young people with the right skillsets for local jobs for the future. I want growth deals, such as the Ayrshire growth deal, to invest in skills for the future, and I made that case to the Scotland Office yesterday.

My final point is about broader infrastructure such as transport. Poor road connectivity and limited public transport options hinder people’s access to work. The A77 in Ayrshire is in desperate need of an upgrade. It is plagued by congestion and shocking road surfaces, which make travel difficult for residents and businesses alike. Last week, the Government announced £15.6 billion for transport in the spending review. The spending review shows that the Government are backing the devolved Administrations. Those funds should be used directly to ensure that Scotland’s transport network is efficient and accessible. I have again written to the Scottish Cabinet Secretary for Transport, Fiona Hyslop, about the state of the A77.

I want to finish on a broader point—

[Matt Western (in the Chair)]

Order. I am afraid you are out of time.

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[Victoria Collins (Harpenden and Berkhamsted) (LD)]

It is a pleasure to serve under your chairmanship, Mr Western. I congratulate my hon. Friend the Member for North Norfolk (Steff Aquarone) on securing this excellent debate. In preparation, I surveyed local businesses to hear from them directly. What came through loud and clear is that rural businesses face the same mounting pressures as many others. As one business in Tring said:

“The cost of business is the highest it has ever been.”

Another told me:

“Currently, there is no incentive for small businesses to employ staff or even start up.”

I grew up helping my mum on the shop floor in a rural market town, so that breaks my heart. Such businesses are the backbone of our community.

Practically all the businesses who responded cited the combined impact of Government Budget measures, from the employment costs faced by Claire in Wheathampstead, who runs 2by2 Holidays, to Tring Martial Arts Academy and DJ’s Play Zone, which are reducing operating hours and workforce, and shelving expansion plans. How does that support the growth of our economy?

Accountants are often the canary in the coal mine when it comes to business health. AngloDutch accountants in Tring confirms that numerous clients, especially in hospitality, are struggling with employer’s national insurance increases alongside rising business rates. There are also the rising costs of day-to-day operations, from energy bills to products, as highlighted by Savage’s and Tabure in Berkhamsted. The cost of living has an impact on customers too. Chantal from Wheathampstead tells me that people simply are not buying like they used to, a concern also raised by businesses such as iQuilt.

As has been mentioned, our rural businesses face additional structural burdens. Connecting people to businesses in person or online is hindered by terrible internet and inadequate transport services. Flamstead, Markyate, Gaddesden and parts of Wheathampstead are in the worst 10% for connectivity nationwide. What is more, under the Conservatives, Hertfordshire saw the biggest cut—56.5%—in vehicle mileage on bus services from 2016 to 2021. I call on the Minister to take action for our rural businesses.

[Matt Western (in the Chair)]

Order. I remind Members to keep an eye on the clock. The time limit is two minutes.

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[Gideon Amos (Taunton and Wellington) (LD)]

I congratulate my hon. Friend the Member for North Norfolk (Steff Aquarone) on the welcome focus on our vital rural businesses. When we talk about rural business, we are talking about the lifeblood of our countryside. In Taunton and Wellington, and across Somerset, businesses are not just economic units but the backbone of our communities. Family farms are not taxation units for inheritance purposes; they put food on our tables. The Government should think hard about their family farm tax, and should do so urgently.

Rural entrepreneurs face rising costs across the board, unreliable infrastructure and a postcode lottery in support. Constituents in villages such as West Hatch, Staple Fitzpaine and West Buckland, as well as those around Wellington, simply cannot get reliable broadband or mobile signals. Transport is another key concern, which is why the Liberal Democrats proposed an amendment to the Planning and Infrastructure Bill that would have provided compensation for rural firms, such as Apple Campers, Western Recovery Services and TLC, that are losing business due to the closure of junction 26 on the M5 for three whole months under National Highways requirements.

Public transport is also essential. It is about connecting the parts of our UK economy to make a stronger whole. Banking and postal access are also vital to our rural businesses. Although I welcome the introduction of the banking hub model in Wellington, as I know the Minister does, it is somewhat bizarre for residents to see, in a town that has no post office, a building with the Post Office logo above the door and window that is not a post office and does not provide post office services. That craziness is straight out of “Yes, Minister” and needs to change urgently.

Rural businesses do not ask for special favours. All they ask for is fairness and for a level playing field for infrastructure, support and services.

[Matt Western (in the Chair)]

I call Llinos Medi.

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[Adam Dance (Yeovil) (LD)]

There are over 3,400 fantastic businesses in Yeovil that provide amazing services for our communities, from big employers such as Screwfix and Leonardo to local businesses such as Ben Russell’s hairdressers or the Somerset Cheesecakery in Ilminster. Thanks to terrible Government Budgets, unfair trade deals and soaring energy prices, many businesses in Yeovil do not feel supported by central Government. This Government can change that.

I am sorry if this sounds like a list of local demands but, well, it basically is. The Government changes to national insurance are an unfair jobs tax. Let us get rid of that, and instead, reverse Conservative tax cuts for big banks, increase the digital services tax to 6% on social media giants and raise the remote gambling duty for online gambling companies.

Next is our family farms. Farmers deserve some actual support, because in Yeovil they have lost trust in this Government. To start, the family farm tax has to go, or at least be delayed until April ’27 as the Environment, Food and Rural Affairs Committee suggests. We also need to strengthen the grocery code so it has some actual teeth to support farmers.

Finally, our high street businesses need banking hubs. I was happy to have secured a banking hub for Crewkerne, but, despite having the same needs, Chard and Ilminster were denied one because they had cash machines. They are not alone. Will the Government expand the criteria for approving banking hubs and commit to rolling out a few more than 350 banking hubs?

I could go on about funding for vital bus services, such as the No. 11 bus in Yeovil, and the need for better broadband, greater investment in apprenticeships, greater defence spending to support jobs in Yeovil and so on, but time is short, so I will just say that I hope the Government take on board my asks and those from hon. Members today, because then we might finally start to get a Government who help rural businesses thrive rather than getting in the way.

[Matt Western (in the Chair)]

Last, but certainly not least, I call Jim Shannon.

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[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.