Understanding the Rural Economy
7. The CRE told us that poor understanding of
rural economies was one of the most significant barriers to realising
their potential. Anyone
for whom "the rural economy" is synonymous with agriculture,
for example, will be surprised to discover that farming constitutes
just 2.6% of rural employment.
The CRE commented that the employment and business profiles of
rural economies were increasingly similar to those of cities.
It noted that more than 80% of employment in rural districts was
in four key sectors: distribution and retailing; business and
financial services; public administration, education, training
and health; and manufacturing.
Arguably, these similarities could make the distinction between
urban and rural seem slightly redundant, as one of our witnessesMr
David Marlow, the Chief Executive of the East of England Development
However, people running businesses in rural areas still encounter
problems that are unlikely to be experienced by their urban counterparts.
For example, the director of one expanding company that we visited
wanted to stay in the area, but was concerned that there were
no buildings of a suitable size to which he could relocatea
difficulty that he would not experience were he located in a larger
town or city.
8. While we recognise that businesses in rural
areas face different challenges from those in urban areas, it
is unhelpful to talk about "the rural economy" as if
it were homogenous and hermetically sealed. Professor Neil Ward
of the CRE stated that "when people use the term rural economy
it often implies a unified, single and rather bounded entity,
something that is similar in all rural areas and separate from
urban economies, and of course it is not that at all."
Even within particular rural areas, there is clearly huge variety.
One of the things that struck us most when we were in North Yorkshire
was the diversity of its rural economy. We visited a business
park set within a 3,000-acre country estate, which was home to
51 businesses, employing more than 600 people; a manufacturing
and tourist business in the Yorkshire Dales National Park that
employed more than 200 people; a family-run farm in a remote location
that had diversified into producing preserves; a craft centre,
with workshops and retail facilities; a technology company that
worked with investment banks in London; a recently converted Victorian
station that was home to a conference centre, a cinema, a restaurant,
an art gallery and several small businesses; and a business start-up
centre on the edge of a town that provided office space for new
9. These different businesses had different concerns.
This may seem obvious, but, as we shall see later, it is a point
that Defra's new rural affairs target fails to take into account.
Many of the issues were location specific. For example, the businesses
we visited within the Yorkshire Dales National Park had particular
concernsmany of them related to planningthat were
linked to their locale. Councillor John Blackie, who represents
the ward of Hawes and High Abbotside, referred to an extension
to a business in Hawes that cost £40,000 more to build than
it would have done 25 miles down the road, in an area that was
not in a national park. This was because of the quality of the
materialsfor example, a slate roofrequired in a
national park. He pointed out that, although some people were
prepared to pay, many others would decide to go elsewhere. He
commented that the National Park Authority "should bear in
mind that the aim of the game is to keep the communities sustainable
and prosperous." Mrs Ruth Annison,
who ran the business concerneda rope-making companysaid:
"Nobody wants this area to stay beautiful more than those of
us who live and work here," but added that the National Park
Authority "must be more familiar with what we are doing and
why." Under the Environment
Act 1995, the statutory purpose of national parks is to conserve
and enhance the natural beauty, wildlife and cultural heritage of
the area, but National Park Authorities also have a statutory duty
to foster the economic and social well-being of local communities.
Under the Act, this duty is given less weight than the conservation
element. Based on the concerns put to the committee, we
recommend that defra carry out a review of whether planning decisions
by national park authorities reflect the correct balance between
protecting the natural environment and ensuring that communities
located within national parks are sustainable and will survive.
10. More generally, population sparsity and proximity
to large settlements were key factors that determined the nature
of the concerns among the businesses we visited. We saw a marked
distinction between the problems cited by businesses located in
or on the edges of market towns and those cited by businesses
in more remote areas. For example, the people working in the business
start-up centre that was situated four miles from Richmond in
Yorkshire and 15 miles from Darlington regarded their broadband
internet connection as crucial and were keen to stress that high
bandwidth broadband should be considered a utility in the same
way as electricity and gas. In broad terms, the residents of Upper
Swaledale in the Yorkshire Dales National Park could be said to
have a similar concern: communications. However, their main worry
is definitely not the speed of their broadband connection, as
Councillor Blackie made clear:
If you go to Upper Swaledale [
] there is still
no mobile phone contact and party lines are still in use, if you
can remember the time when someone said. "Are you on the
phone, love? Can I use it, please?" In Upper Swaledale there
are still only six telephones lines and they have been patched
so many times now that they do not even know where the connections
11. The significance of isolation and population
sparsity were recurring themes among our witnesses. Professor
Ward of the CRE told us that "the population sparsity factor
imposing some constraints on service delivery and on economic
development is a crucial distinctive feature of the development
prospects for rural areas."
The Local Government Association told us that it would divide
rural areas into three main categories:
- places that were relatively
proximate to a large settlement;
- places that were not near a
large settlement, but that were attractive and that people would
go to notwithstanding the challenges of accessibility; and
- places that were isolated.
It suggested that isolated rural areas might need
separate policy approaches. The
differences between running a business in a market town and a smaller
rural community seem to us at least as significant as the differences
between running a business in a market town and a city. Defra should
ensure that its rural affairs targets take this into account and
that its data enables it to distinguish between different types
of rural areas, so that its policies can be tailored accordingly.
We return to this point in more detail in paragraph 31.