Rural Communities
Debate between Simon Hoare and Sarah Dyke(2 weeks, 4 days ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Sarah Dyke
As my hon. Friend would expect, I totally agree with him.
The Liberal Democrats want to ensure that British farmers operate on a level playing field and can succeed. That is why last year I introduced the Dairy Products and Dairy Farming Bill. Farm-gate milk prices have plummeted over the past few months; now, cereal prices are also under serious pressure. The Liberal Democrats are clear: we need fairness in the supply chain. When farming businesses fail, there is a knock-on impact on local hospitality—pubs, cafés, restaurants and hotels.
Somerset is a tourism region. It supports nearly 10% of all jobs and contributes more than £1 billion to the regional economy. Many of the fantastic hospitality businesses in Glastonbury and Somerton are under immense pressure as they face huge rates increases from April. Miranda contacted me today. She manages the White Hart pub in Castle Cary, and faces her rateable value going from around £19,000 a year to over £30,000 a year. Meanwhile, the British Institute of Innkeeping states that only one in three pubs are profitable, and warns that that could drop to one in 10 by April.
The hospitality sector already faces £4.5 billion in additional taxes due to increased national insurance contributions in the 2024 Budget. The Liberal Democrats have been calling for an emergency 5% VAT cut for hospitality, accommodation and attraction businesses until April 2027, funded by a new windfall tax on big banks. Combined with our policy to reduce people’s energy bills by removing the main renewables levy, we could put £270 back into people’s pockets, making it more affordable for them to heat their home, and allowing them to spend more on occasional extras. That would help to drive economic growth in rural areas, restore our high streets, and give the country a much-needed morale boost. It would also help rural areas to grow the economy.
Simon Hoare
I am grateful to my neighbour for giving way. I share her support for a reduction in VAT for our rural hospitality sector, but does she get the irony that such a reduction would be illegal if we were still a member of the European Union?
Sarah Dyke
There are many ironies, but the benefit of being in the European Union far outweighs that cost.
Moving on to homes, to help grow the economy we must ensure that rural areas have places for people to live in. In Somerset, newly built homes make up just 3% of all properties recently sold, with an average price 20% more expensive than the UK average. Rural house prices have increased by 57% since 2013, while wages simply stagnate, creating an affordability gap and contributing to a higher need for affordable housing in rural areas than in urban settings. As a result, many first-time buyers and key workers simply cannot afford to live in rural areas, making it increasingly difficult for rural local businesses to retain staff, reducing local spending power, and threatening the viability of our rural communities.
The Liberal Democrats are clear that both the private and social housing markets are too expensive and insecure, with current provision simply not sufficient to meet demand. People in holiday destinations should not have to face higher rents and housing shortages, especially when they are among the hardest hit by the cost of living crisis. The Tories would offer tax cuts on second homes, making it harder for people who want to live in an area where they work, or where their family is from, to own their own home. That evidences their failure to understand what life is really like in rural areas. As part of a fairer housing system, the Liberal Democrats would allow councils to increase council tax on second homes by up to 500% if there are housing shortages in their area.
The Liberal Democrats believe that the Government must recognise the pressure that they have put on rural communities over the past 18 months, whether it is through the family farm tax, the broken agri-environmental schemes, the lack of support for hospitality or the failure to provide affordable rural homes. We must remember, however, that these are not new problems. The Conservatives failed to make improvements for rural communities, and that is why they were kicked out of huge swathes of the rural south-west.