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24 Mar 2009 : Column 19WH—continued
10.39 am
Mr. James Paice (South-East Cambridgeshire) (Con): I congratulate my hon. Friend the Member for North Wiltshire (Mr. Gray) on obtaining this debate, which, as several hon. Members have said, is perhaps long overdue. It reflects issues that concern nearly a quarter of the population of the United Kingdom. Obviously, much time is spent in this House debating issues of national importance, but usually as a generality. If we go any deeper, it is nearly always related to large-scale manufacturers or the industrial areas of the country, but rarely to the almost 25 per cent. of people who live in rural areas and the issues that affect them. I say to the hon. Member for Stroud (Mr. Drew) that, of course, countless issues affect all people regardless of where they live, who they are and what they earn, but certain aspects of living in rural communities are totally unique and have to be considered as such. He does such communities a disservice by saying that we should not even have a Ministry of rural affairs.
I want to start by referring to some good news. Last week, in the other place, the annual awards for country and rural industries were presented by the Countryside Alliance and others. We saw some wonderful examples
of village stores and farm-based businesses. All sorts of different businesses, including a carriage maker, are making a great success of life in rural areas. However, even some of them are facing very real pressures. Such pressures are particularly unique to rural areas, but, obviously, have their own reflection in the wider urban areas.
In rural areas, there are more businesses proportionate to the number of people than there are in urban areas. I would argue that that reflects a higher level of entrepreneurship. As has been said, rural businesses are more likely to be selling into the international markets, but the vast majority employ fewer than 10 people, and a very large proportion employ fewer than five. The most important statistic, which underlines so many issues, is that the average earnings of people who work in rural areas—I am not talking about those who live in a rural area and commute to an urban area—are £4,655 a year less than the national average wage; that is very significant. The Government have not done much to understand that pretty fundamental distinction. We have heard several times about the closure of jobcentres. Some 23 per cent. of the population have just 4 per cent. of the jobcentres.
On the impact of the recession, the proportion of rural households living below the poverty line has risen from 16 to 19 per cent., which is almost one in five rural households. The hon. Member for Ceredigion (Mark Williams) referred to the tough social situation facing many of his constituents. He would probably agree with me that part of the problem in rural areas is that that poverty is so often hidden because it stands cheek by jowl with affluence. For example, an elderly person could be living in a run-down cottage that they may own, and nobody realises how badly off they are because next door—on both sides, perhaps—there are people with three cars who live a very different lifestyle. Therefore, we must pay particular attention to ensure that we address the problems of the smaller groups of individuals, because they form a large proportion of the population.
There is increasing evidence of a downturn in the turnover of village shops and others. The fact is that, although some would argue that this is not directly related to the recession, over the past 12 months there has been an almost 20 per cent. increase in robbery in rural areas. Bearing it in mind that we have had senior police officers warning society that crime would rise in the recession, I do not think that we should completely ignore that fact.
Let me now touch on farming. As hon. Members know, I stand second to nobody in my respect for the British farming community, but we should not overestimate its role in the rural economy. It is very important, but accounts for less than 5 per cent. of the rural work force. However, that ignores the supply chain and food manufacturing, which is often based on our own agricultural production.
The reality is that British agriculture is facing a relatively good situation at the moment. However, it is all very well to talk about a 40 per cent. increase in income, but 40 per cent. of virtually nothing does not add up to a great deal. We must be careful about such distorted statistics. You will know from your own constituency, Mr. Atkinson, that this great improvement in the fortunes of most sectors of agriculture has been brought about as a direct result of Government
incompetence. The fact is that the currency has collapsed, and imports of red meat have become much more expensive. That means that prices for our own red meat—beef and lamb—which is already in shorter supply than it used to be, are now at a much higher level. They have drawn up pig meat with them because they are linked. The price of feed wheat is around £100 a tonne, but it would have been only £80 a tonne had it not been for the collapse of sterling, and that would have destroyed the arable sector. Even the milk sector—it is probably facing the most difficult problems, with further price cuts anticipated in the coming months—would be far worse off were it not for the astonishing weakness of sterling, which is a direct consequence of Government policy.
Even if we accept that there is a relative improvement in agricultural fortunes, the industry is still faced with the problems of pesticides, electronic ID—I hope that the Minister will tell us why we had to depend on the Hungarians to table a motion on the subject yesterday when the British Government, who keep repeating their opposition, failed to do so—nitrate-vulnerable zones and the set-aside issue. I hope that the Minister can tell us when the Government will make an announcement about what they plan to do with the section 68 proposals that were part of the health check.
Let me turn to the other general issues affecting the economy, the first of which is credit insurance. I do not know about other hon. Members, but I find that businesses keep telling me about how much more difficult it is to gain credit insurance and how impossible it is to trade if they do not have it. One of the largest animal feed manufacturers recently told me that it had been instructed by its board not to trade with anybody who has not got credit insurance. That is a perfectly reasonable business decision to make, but it means that countless farmers are desperately trying to get credit insurance at a time of financial difficulty when nobody is tempted to provide it.
I visited a business in my constituency that produces electron microscopes. Although it operates from a small industrial base, it is the only such British manufacturer. It wants to double production this year, but it will require huge investment and that money is not forthcoming. I also spoke to a training business that is facing a drop in work as firms cut back on their spending.
Moreover, there are issues related to rurality and the distances that one has to travel to get to a jobcentre, to attend further training, to upgrade or gain new skills, or to go for another job. Those are specific issues relating to rural businesses. In addition, the fall in house prices is nowhere near sufficient to rejuvenate the opportunities for first-time buyers in rural areas. The multiples that I last saw were that the average rural home is about seven-and-a-half times the national average wage, and the average urban home is six times the national average wage. Such figures come at a time when we are trying to persuade people not to borrow massive multiples of their wage.
I support the idea of people getting together to run the village shop, the village pub or whatever. I have some good examples in my own constituency—I suspect that we all have—of communities working together. I am not aware of anyone having stepped in to save a post
office because that decision was made from on high, rather than by the Post Office. Nevertheless, it is well worth doing.
As my hon. Friend the Member for North Wiltshire rightly said, steps need to be taken. This party did not support the Government’s policy of putting public money into banks just for the sake of propping up the balance sheet or in the interests of shareholders; we supported it in order to enable money to keep flowing into perfectly viable, good businesses so that they can go on operating. We advocated a national loan guarantee scheme over and over. The Government, having criticised it for weeks, eventually announced the introduction of a pale pink imitation, but it does not yet exist. We are told that it may be introduced next week, but businesses are struggling now. To understand what is going on in rural areas, people must understand the unique nature of rural businesses, rural employment and rural communities.
Mr. Peter Atkinson (in the Chair): I call the Minister.
10.50 am
The Minister of State, Department for Environment, Food and Rural Affairs (Jane Kennedy): It is a pleasure to be here under your chairmanship, Mr. Atkinson. I know that the constituency that you represent gives you a keen interest in this debate. The hon. Member for North Wiltshire (Mr. Gray) is to be congratulated on securing the debate. Normally, the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), would have responded to this debate in detail, but he could not be here this morning as he is on Government business. However, I hope to be able to respond to the genuine concerns that have been expressed.
It is true that the recession is making life hard for many communities and businesses. As we have heard this morning, that is just as true of rural communities as it is of our towns and cities. It is important that we do not treat the two separately. I heard the comment that the hon. Member for North Wiltshire made from a sedentary position about my urban constituency of Liverpool, Wavertree, and I thought that it was somewhat ungenerous.
My hon. Friend the Member for Middlesbrough, South and East Cleveland (Dr. Kumar) has been urging me to respond robustly to some of the more ridiculous suggestions that the Labour party is unaware of the concerns of rural and farming communities. After all, more than 120 Labour Members represent rural constituencies. However, I will not respond to those suggestions, because I should take time to respond to other, more serious points, not the least of which concerns what happened yesterday at the Agriculture Council in Brussels.
In many ways, the economies of rural areas mirror those of urban areas, but rural areas boast businesses of all shapes and sizes, as hon. Members have said. They provide all sorts of goods and services, and change in rural communities continues apace. That can be seen particularly in the growth of high-tech and high-skill businesses. The Commission for Rural Communities tells us that in the past 10 years, the number of people
working in businesses in rural areas has risen by nearly 300,000, which is more than twice the increase in urban areas. As the hon. Member for South-East Cambridgeshire (Mr. Paice) said, rural areas are home to about 1 million businesses—a quarter of England’s total—providing just over 5.5 million jobs. Together, they have a turnover of more than £300 billion a year. In fact, there are more businesses for every 10,000 people in rural areas than in urban areas.
The evidence to date suggests that the impact of the current economic situation on rural areas is similar to its impact in urban areas. Not a single Member who has spoken has failed to mention concerns about rising unemployment and job losses. Many have listed the impacts on their constituency. The hon. Member for Westbury (Dr. Murrison), who is not in the Chamber just now, and other hon. Members drew attention to, and criticised, Government decisions to move Government work, as they described it, from rural communities into more urban settings. However, in my previous roles, I have spent many hours debating such issues, particularly how we collect taxes in this country. We need to modernise our tax collection systems, and that involves employing fewer people. In this economic climate, it would not be right for the public sector to be less efficient than it could and should be simply to provide employment. I know that hon. Members who have participated in this debate would not urge that of any Government.
The employment rate in rural and urban areas is similar, but there are proportionately more retired people and fewer unemployed people in rural areas. The proportion of people claiming unemployment-related benefits is rising at a similar rate in rural and urban areas. The number of redundancies is lower in rural areas in both absolute and proportional terms, but not by a great deal.
I am not complacent. As someone who represents a Liverpool constituency, I have particular reason to know the threat of serious unemployment, although I will not waste time drawing attention to the previous Government’s attitude to dealing with unemployment. We need a better understanding of risk if we are to enable rural communities and businesses to survive the economic downturn. It may be that we should discuss those risks and how they should be managed on another occasion when we have more time.
I have been asked a couple of specific questions, and I shall respond to the question about e-ID, as I know that there is a lot of interest in it. It was discussed yesterday at the Agriculture Council, and a large number of countries—13 or 14, I think—took part in the debate. I
would not say that I was overly encouraged by other member states’ responses, but it was encouraging, at least, that many countries spoke in favour of the Hungarian motion to introduce e-ID on a voluntary basis. The Commission also responded relatively positively to my suggestion that it should consider further our proposals that would reduce even further the burdens of that otherwise costly regulation. Although I accept that not all rural businesses involve farming, businesses such as upland farmers and sheep farmers are critical to some of the most beautiful areas of the British countryside, and I accept the points made about such farmers’ income.
We need to ensure that any regulation that we make is proportionate to the policy problem that we are trying to fix. There is unanimity not only among parties in the UK, but in the Welsh Assembly and Scottish Parliament, that the e-ID proposals, as they stand, are disproportionate and that the Commission’s assessment of the impact is inadequate and should be revisited and renewed so that we can get a better understanding at Commission level of the proposals’ potentially damaging impact. I am hopeful that we can make further progress with the Commission. The commissioner indicated that she was prepared to consider further details, including locating reading equipment at centres where sheep are brought in the normal course of business, whether in marketplaces or in abattoirs or processing plants.
As always happens in such debates, time is running away. My hon. Friend the Member for Stroud (Mr. Drew), who made a good and thoughtful contribution, referred to ways in which we could help rural communities through the recession. He promoted the idea of social enterprise—I agree. If anything, other parties demonstrated their lack of understanding of the potential benefits of such ideas in their responses to his proposals. The social enterprise model has strengths and could be adopted in a rural setting.
There are great pressures on the housing market at the moment, which is why the Government are taking steps to help home owners and first-time buyers in urban and rural areas, expanding the availability of shared equity, and working closely with lenders to keep people in their homes. For example, we are extending income support for mortgage interest payments to help people when they fall on hard times.
Finally, as I have only a few moments left, let me say that I agree with the comments of the hon. Member for North Wiltshire about broadband. We are working hard to ensure that funding is available through the regional development agencies to encourage and help farmers and other rural businesses to adopt and adapt to broadband.
Sri Lanka and the Commonwealth
11 am
Siobhain McDonagh (Mitcham and Morden) (Lab): I am grateful for the chance to debate an important matter. What is happening at the moment in Sri Lanka is an international humanitarian crisis, and the International Red Cross says that
“the humanitarian situation is deteriorating by the day.”
Sri Lanka is, in many ways, a forgotten crisis. More than 3,000 people have been killed in Tamil areas of Sri Lanka since the end of January, and that is many more than the number who died in Gaza last autumn. Every day, 150,000 people are being shelled in the Sri Lankan Government’s designated no-fire zone, and tens of thousands more are trapped in a thin strip of land—just 13 square miles—where the battles are taking place.
Despite those huge numbers, we must not forget that this is also a deeply personal tragedy. Every Friday, I hold an advice surgery for about five hours. As is the case for many MPs, barely a week goes by without me meeting constituents who have family members back home in the Tamil region of Sri Lanka. More than 70,000 people have been killed in the conflict; the numbers are so big that the crisis is almost impossible to comprehend. Each week, I meet constituents face to face who tell me their stories and fears for their families, which makes a complex international crisis very personal.
Tom Brake (Carshalton and Wallington) (LD): I would like to draw the hon. Lady’s attention to a meeting that was held in my constituency a couple of weeks ago that was attended by nearly 600 Tamils. The meeting made clear the extent to which every person in that room had been affected by the conflict, either directly or through close families and friends.
Siobhain McDonagh: I agree with the hon. Gentleman, as would all hon. Members in the Chamber—their constituents have brought them here. The work of the Tamil community in Britain has tried to force this issue up the list of things that the Government are considering.
I have been trying to trace a number of constituents’ relatives who are caught up in the conflict. Last week, I was told by the International Committee of the Red Cross that it is
“unfortunately, not able to carry out tracing in this area.”
Throughout the debate, I hope that hon. Members will put themselves in the position of my constituents who have been told by the organisation that is most likely to be able to locate their families, “Sorry, we can’t.”
Britain’s Tamil community is large and vibrant. It adds enormously to the economy and well-being of our country. There are approximately 250,000 Tamils within the M25. In my constituency, as I am sure in those of all hon. Members, they are hard-working, small business people; they are doctors or they are the people on whom we rely for the continuation and running of our cities.
Mr. Lee Scott (Ilford, North) (Con): Does the hon. Lady agree that the efforts of the Tamil community in Britain to raise humanitarian aid during the past two weeks should be commended, and that the Sri Lankan Government should be pressured to ensure that desperately needed humanitarian aid gets through when it is delivered?
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