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Nick Herbert: I agree with my hon. Friend. Despite the high quality of the one Labour Back Bencher who is present, the fact that Labour Members simply have not bothered to turn up for the debate says something about their concern for rural issues. Despite their frequent claims that several Labour Members represent rural seats, when it comes to a debate, they do not think the subject sufficiently important for them to be here.
The Minister of State, Department for Environment, Food and Rural Affairs (Jim Fitzpatrick): I bring apologies from the Secretary of State. We take exception to the accusation that he is not committed to the countryside—he is. As the hon. Gentleman knows, we have scheduled a debate on Thursday to discuss those matters.
Nick Herbert: Perhaps the Minister would like to intervene again and tell me whether the Secretary of State will lead that debate. We would welcome that. It will be the first agricultural debate in Government time under the Labour Government.
I was reporting not my view, but the widespread view in the countryside about the Government’s interest in rural people. I am afraid that the Secretary of State’s absence will serve only to reinforce it, and the Minister should take that message back to him.
Mr. Michael Ancram (Devizes) (Con): Is not part of the problem the Government’s perception in the past 12 years of rural areas and the countryside as a theme park rather than a living, breathing economic organism? That is why, when things get hard, they have not a single answer to give.
Nick Herbert: I agree with my right hon. and learned Friend. It is important to remember that rural areas are not a theme park. We cannot allow rural communities to be dormitories, where people only live, then go to work somewhere else. We must have sustainable, vibrant communities and remember the importance of farming and agriculture in those communities to manage the land. Farmers need to be allowed to get on with their businesses.
Rob Marris: Will the hon. Gentleman give way?
Nick Herbert: I will happily give way to the quality Labour Member.
Rob Marris: I am grateful to the hon. Gentleman for being so generous. I agree with him about the importance of farming and farming communities. I am a little disappointed that neither the motion nor the amendment says anything about food security, which is vital for our country as well as rural communities, for example, to ensure employment and housing so that agricultural workers can live and work in those communities. Will the hon. Gentleman say something about food security for our country?
Nick Herbert:
I agree with the hon. Gentleman about the importance of food security. He knows that we had an Opposition day debate on it last year. My right hon. Friend the Member for Witney (Mr. Cameron) spoke at the National Farmers Union conference last year, when he led the debate about the subject and I talked about it to the NFU conference this year. Conservative Members have been drawing attention to food security—indeed,
my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will consider it in the debate on farming and agricultural matters on Thursday.
The economic downturn affects every community, but the impact on rural areas can all too easily be overlooked. There is a myth that rural Britain is wholly affluent, but 1.6 million people in rural areas live in poverty. One in five households in the most rural areas live in fuel poverty—double the proportion of fuel-poor households in urban areas. Around one in six people who suffer from deprivation are found in rural areas.
It would also be a mistake to believe that a slightly more rosy scenario for some sectors in farming after real difficulties in recent years means that we do not need to worry about the countryside compared with the rest of the economy. Farming may have had a slightly easier time recently, with increased incomes and strengthened exports, but there are continuing difficulties and underlying fragility. Hon. Members of all parties will know about the recent collapse of Dairy Farmers of Britain, which highlights the serious problems that our dairy industry faces.
Mr. Ben Wallace (Lancaster and Wyre) (Con): Does my hon. Friend agree that, when an employer or business goes bust in an urban area, the Government fight tooth and nail to try to show that they are doing something, but when Dairy Farmers of Britain went into administration, threatening the livelihoods of some of my dairy farmers in Lancaster and Wyre, the silence from the Department was deafening?
Nick Herbert: My hon. Friend makes a strong point. There is enormous concern in the agricultural community about the collapse of the co-operative and the impact on producers, who may be unable to sell their milk to alternative sources. We look forward to hearing what the Government say about that on Thursday. It is particularly important that the banks should have regard to the continuing viability of many of the businesses affected while they make short-term arrangements to change their purchasers and that they should regard those businesses with sympathy. My hon. Friend raises an important issue about the distinction between how the Government responded to the banking collapse and the collapse in the car industry and how their stance does not seem to be as high profile when it comes to an important sector of the agricultural industry, and one that puts food on our tables.
Julia Goldsworthy (Falmouth and Camborne) (LD): The hon. Gentleman has just referred to the impact of the collapse of the car market on urban areas, but does he accept that it can also have an effect on the supply chain in more rural areas? One of the businesses in my constituency manufactures high-quality tools. Its business is being severely affected by the downturn in the car market, but it does not qualify for any support. Do the Government not need to ensure that the supply chain receives the same support from which larger employers in more urban areas seem to benefit?
Nick Herbert:
The hon. Lady makes an interesting point, which is a reflection of what I want to say about the potential of rural areas to foster such businesses. She mentioned a small manufacturing business. With the right policies and support, rural areas offer huge untapped potential for such businesses. We must have
regard to the fact that the countryside is home to many small manufacturing businesses, as well as farming and the more conventional rural businesses that we all tend to think of.
Although a vital industry, farming accounts for only a small part of the rural economy. As the House will have an opportunity to debate agricultural issues on Thursday, I want to focus today on the wider rural economy and the effect of the recession on it. Although rural areas have lower rates of unemployment overall, in the year to April, the average annual increase in jobseeker’s allowance claimants across rural districts was 131 per cent. Some of the steepest rises in the unemployment rate have been in sparsely populated and peripheral rural districts. The number of people chasing every unfilled vacancy in many peripheral rural districts is far higher than the average across Britain, and in the worst cases—Restormel in Cornwall and Staffordshire Moorlands, for instance—it is actually higher than in major urban unemployment blackspots.
Mr. William Cash (Stone) (Con): My hon. Friend just said that farming forms a relatively small part of the rural economy, but with respect to the part of my constituency that lies in Staffordshire Moorlands, as well as the rest of the rural area of my constituency, does he acknowledge that some of us would disagree? Dairy farmers in Staffordshire are having an extremely difficult time, which is very much to do with how the legislation and regulations from the European Community and elsewhere operate against them.
Nick Herbert: I urge my hon. Friend not to misunderstand what I said about farming. I said that farming was a vital industry. It is factually correct that it accounts for only a relatively small part of the economy; nevertheless, it is a primary industry and a significant employer. It also manages the land, and it is vital that we should have a viable, successful and competitive farming industry. The Conservative party has been robust in making that case, and that applies as much to Staffordshire, as an important farming county, as it does to other parts of the country.
Stewart Hosie (Dundee, East) (SNP): The hon. Gentleman spoke about the rise in unemployment in rural areas. He will be aware that many small rural towns have already lost staffed jobcentre offices. Does he see the loss of such offices in those communities as creating a problem in offering jobs to people in rural areas when the upturn comes?
Nick Herbert: The hon. Gentleman must have extraordinary prescience, because I was about to come to that very point. Support for jobless people in remote areas is crucial, yet nearly one fifth of rural jobcentres were closed in the past two years, when the number nationally has been increasing. I wonder whether the Minister would like to say something about that or about its impact on people in the countryside who have lost their jobs and are now seeking work.
Citizens Advice reports that the increase in debt cases among people living in rural areas in the second half of last year was more than twice the increase in urban areas, with a 20 per cent. rise in cases among people in sparsely populated rural villages. In the final quarter of
last year, insolvencies and bankruptcies were higher in regions with predominantly rural populations. The Country Land and Business Association’s latest rural economy index survey has found that confidence is improving, but half of the respondents still lacked confidence in the outlook for the rural economy.
In the Secretary of State’s response to the Rural Advocate’s report on the economic potential of the rural economy, he said that there was
“no such thing as a separate ‘rural economy’”.
Of course I understand his point, and there are links between the urban and rural economies, but the danger of such remarks is that they suggest that Ministers do not appreciate the realities of rural life. The simple fact is that, in a rural area, people’s work and services are often further away from where they live. Government measures such as increasing fuel duty and the tax on 4x4 vehicles can therefore hit rural workers, particularly the low-paid, disproportionately hard. The Commission for Rural Communities has noted that fewer than half the residents in villages and hamlets live within 13 minutes of a bus stop with a service at least once an hour, compared with 95 per cent. of urban residents.
For rural small businesses and people working from home, access to the internet is crucial. We are told that the vast majority of the population can get some form of broadband, with 97.9 per cent. of households currently getting a speed of at least 1 megabyte a second. That sounds good, but the truth is that half a million households cannot obtain those speeds, and more than half of those get no acceptable level of internet connection at all, as I know from my rural constituency and I am sure many of my hon. Friends will know from theirs.
Only last week, at the South of England show, one of my constituents in the south downs area—which is less than 50 miles from London—told me that he had been paying £11,000 a year for a 2 megabyte connection to his converted farm buildings. Such costs for a poor connection, which would be cheaply available in an urban area, are undermining farm diversification and the potential for rural development. For businesses in the future, broadband speed will really matter, so the Government’s commitment to making 2 megabyte broadband available to “virtually everyone” is welcome. However, we will await Lord Carter’s final report later this week to find out what “virtually everyone” really means. There is a risk that the digital divide between cities and rural areas will grow wider still, when super-fast fibre-optic broadband is rolled out to cities and large towns, but not to rural areas.
Mr. Jamie Reed (Copeland) (Lab): I am grateful to the hon. Gentleman for giving way, and I apologise to all Opposition Members who have been waiting with bated breath for my contribution to the debate; I have been making my way here from a rural constituency. The hon. Gentleman is making some very good points, but before he goes too much further, will he proffer a definition of “rural community” and “rural people”? I genuinely think that we could work together on trying to understand that, for the benefit of everyone. Does he also agree that, in addition to a rural-urban divide, there is also a divide between rural areas in the north and the south of England?
Nick Herbert: The Commission for Rural Communities mentions two definitions of rural communities. The standard one, the DEFRA definition, relates to communities of fewer than 10,000 people. In my constituency, for example, all the villages and small towns have fewer than 10,000 people, so it amounts to a genuinely rural constituency. There is another definition, which relates to the rural nature of local authorities. The hon. Gentleman mentioned discrepancies between the north and the south, but it is possible to find rural deprivation in the rural south as well—certainly in the south-west. The discrepancies between the rural deprived and the more affluent are more important than a north-south geographical divide, in my view.
Such disparities are not only about fairness. If rural businesses are disadvantaged, we waste huge potential. Rural areas are home to a quarter of all England’s businesses, employing 5.5 million people and with a total turnover of £300 billion. There are higher rates of self-employment and new business start-ups in rural areas, and more businesses per capita than in urban areas.
Mr. Henry Bellingham (North-West Norfolk) (Con): My hon. Friend is making an excellent speech, and I am sorry to interrupt him. He mentioned small businesses and farm diversification. Does he agree that such businesses are often critically dependent on banking finance and credit, which, at the moment, are becoming more and more difficult for them to obtain? That should be an absolute priority for the Government. There are many things over which they have no control, and many things that are going to cost money, but using their influence over, and shareholding in, the major banks would help to solve that problem.
Nick Herbert: I am always happy to give way to my hon. Friend, and I strongly agree with him. Access to credit is vital for the small businesses that are the lifeblood of rural areas. I will deal directly with that point shortly.
Mr. Ellwood: Will my hon. Friend join me in paying tribute to an important part of rural business—the tourism industry? It is our fifth biggest industry and it does well in this country in spite of, not because of, Government. Tourism has been pushed out to the RDAs, which do not provide the level of support that our businesses need. One example is the £35 million put through by DEFRA, which has not reached the farms that want to diversify into tourism during these difficult times; instead, it has gone to the regional development agencies and got sucked into the bureaucratic system, never to be seen on the front line of tourism.
Nick Herbert: I agree with my hon. Friend about the importance of tourism as a major rural industry. It is particularly susceptible to regulation, so we should have regard to the regulatory burden on, for example, farm businesses that want to diversify into tourism. I shall come to the role of the RDAs, and particularly the question of whether that role is right for rural businesses.
Mr. Greg Knight (East Yorkshire) (Con):
May I take my hon. Friend back to what he said a few moments ago? Does he not accept that it is of the greatest importance that rural areas have access to high-speed
broadband? We must not see a two-tier system in this country, with communities that are already geographically isolated now becoming digitally isolated.
Nick Herbert: I agree with my right hon. Friend. As I said, there is a danger of a growing digital divide—we already have a digital divide—and the challenge for the Government is how higher-speed broadband can be financed. We hope to hear more about that from the Government this week, including whether there is any potential to lever in substantial private finance to ensure wider access to high-speed broadband. Another crucial issue for the long-term potential of economic growth in rural areas in the digital age is having a decent broadband link, which many rural areas are simply lacking at the moment. This should be regarded as an infrastructure challenge, which must be discussed further, but no one should underestimate the huge sums of money that would be involved.
The untapped potential of rural businesses could be key to driving the recovery of the UK economy and helping to create sustainable growth for the long term. Stuart Burgess, the Rural Advocate and chairman of the Commission for Rural Communities, said that
“our rural communities have much unfulfilled potential...The challenge is to extend growth and productivity across more firms, employees and communities in rural England.”
In the short term, however, we need to help rural businesses weather the downturn. As the Government have admitted,
“rural economies are heavily dependent on small and medium-sized businesses and this is one of the sectors thought to be most under threat”
from the downturn. We have thus proposed a range of positive measures to get the economy moving again that will also help businesses in rural areas.
We have called for a reduction in corporation tax rates on small companies from 22p to 20p by reducing complex reliefs and allowances. The majority of rural enterprises employ fewer than 10 people and many employ fewer than five. In order to help with payroll costs, so that rural businesses can keep staff on and employ new staff that are looking for work, we have argued for cuts of 1p for at least six months in national insurance contributions for businesses with fewer than five employees. We would give smaller businesses greater access to the £125 billion Government procurement budget by cutting red tape, advertising online all contracts worth more than £10,000 and simplifying the pre-qualification process.
We would help thousands of small rural firms by making business rate relief automatic for eligible small businesses in England, and we would reduce the burden of regulation to give businesses more freedom and greater flexibility. The problems of steep increases in the costs of loans and overdrafts for otherwise successful businesses during seasonally quiet periods is a particular challenge for tourism and other businesses prevalent in rural areas.
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