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Of the 25 local authorities with the highest unmet demand for affordable credit, four are classified as rural and eight have significant rural populations. Our proposed £50 billion national loan guarantee scheme to get credit flowing again would also help, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) argued. As the Commission for Rural Communities has argued,
businesses need more flexibility for paying VAT, so we would allow small and medium-sized enterprises to defer their VAT bills for up to six months, potentially meaning the difference between survival and failure. Those are all practical measures to help the rural economy in the current downturn.
Dr. Andrew Murrison (Westbury) (Con): Does my hon. Friend agree that another practical measure that the Government could take is to ensure that food is properly labelled, so that consumers can determine what is British and what is not, and, in particular, what is produced to our extremely high standards of animal welfare and what is not? That is a simple measure that the Government could take immediately to help the rural economy.
Nick Herbert: I strongly agree with my hon. Friend. As he will know, we have been running an “honest food” campaign with the support of the farming industry and the animal welfare organisations, arguing for compulsory country-of-origin labelling so that people know where their meat and meat products come from and we do not unfairly disadvantage our own producers. Our simple proposition is that food labelled “British” should come from animals born and bred in Britain. The campaign has widespread public support. We continue to look to the Government to act on our proposals in the European Commission and, if necessary, to introduce a scheme of their own. I hope that the Minister will recognise the importance of that issue to the farming industry.
Mr. Jamie Reed: I am extremely grateful to the hon. Gentleman for giving way. He is being very generous with his time in allowing as many Members as possible to intervene. Does he agree that in many parts of this country, particularly rural areas, the recession is not a new phenomenon? Many parts of rural England have been in recession for 40 years. Might not the answer to what is often predominantly market failure be fewer market solutions and more state interventions?
Nick Herbert: There has certainly been significant rural deprivation in many parts of England for some time, and I want to refer to some of the ways in which I think that it can be addressed without state intervention. Indeed, I would argue that the form of state intervention that we have experienced has been largely ineffective.
Rob Marris: Will the hon. Gentleman give way?
Nick Herbert: I shall make some progress, if the hon. Gentleman does not mind.
In the long term, we need to ensure that rural communities are vibrant and viable. That means ensuring that there is access to local services, and providing affordable housing. The present Government’s record on rural services is lamentable. Hundreds of small rural schools have closed over the past decade, despite Labour’s promise to keep them open. As the Minister knows only too well, 1,400 rural communities have lost their post offices since 2000. Two thousand local shops are closing every year, and, according to one estimate, 42 per cent. of small English towns and villages no longer have a shop of any kind.
The beer duty increase in the Budget has further damaged a fragile sector and we are seeing rural pubs closing at the rate of two a day. The average annual wage in the most rural areas is £7,000 lower than it is in the most urban areas, but the average price of a home for first-time buyers is £16,000 more. There is clearly an urgent need for affordable rural housing, but Labour’s top-down housing targets have failed to deliver. We need to reverse the trend of centralisation and end the years of thoughtless Whitehall diktat so that the needs of rural communities are respected. We will allow towns and villages to create local housing trusts to build new housing to benefit their communities. Provided that there is strong local support, those bodies will have the power to develop new homes without the burdens of the regional planning system.
Three years ago, Members on both of the House supported the Bill that became the Sustainable Communities Act 2007, which requires central Government to make clear how much money they spend on local services in each area and gives councils and communities a far greater say in how that money is spent. The Government agreed that reports on public spending under the Act would include quangos, but Ministers are now backtracking on that pledge, which is unacceptable. The public want more influence over decision making, and that means more information.
It is time to go further and return real power and decision making to individuals and communities wherever possible, so that people have a genuine say in the matters that affect them locally. This Government have been obsessed with regional government, and a plethora of quangos are now ruling rural areas and disbursing funds without local accountability. We will allow councils to establish their own local enterprise partnerships to take over the economic development functions and funding of the regional development agencies. If power is devolved and decisions are taken as close as possible to the people they affect, the social value of rural services, as well as their economic value, will be appreciated. Above all, people in rural communities would be reconnected with decision making at a time when politics in Westminster has never been more remote from the people.
This Government have presided over a decade of disrespect for rural communities. They have ignored local concerns and imposed national policies regardless of their impact. It is time for a different approach. Of course rural areas deserve fair treatment, but it is not just a question of fairness. All parts of the country are suffering in the recession, and the rural economy could be a great national resource for the future. It could help to deliver jobs from growth in small businesses and new sustainable forms of working, but making that happen will require a Government who understand rural areas and are willing to listen, and a Government who respect rural communities and are ready to trust and empower them. As I am afraid the Secretary of State has demonstrated by his absence from this debate today, that leadership will not come from this tired and discredited Government.
5.1 pm
The Minister of State, Department for Environment, Food and Rural Affairs (Jim Fitzpatrick): I beg to move an amendment, to leave out from “House” to the end of the Question and add:
“recognises the serious impact that the economic downturn is having across the country and the support the Government is providing to people, communities and businesses to come out stronger and build Britain’s future; notes that the Government has introduced new measures to increase financial aid for rural businesses through the Rural Development Programme for England as a response to the economic downturn; welcomes the Taylor Report’s work on making sure rural communities have affordable housing and sustainable economic opportunities; commends the work of the Homes and Communities Agency to build 10,300 rural affordable homes between 2008 and 2011; applauds the Government’s commitment to connect communities and support local businesses with a minimum guarantee of 2MB broadband for virtually everyone in the country; notes that unemployment levels in rural areas remain below those in urban areas and is committed to helping maintain high levels of employment in rural areas; expresses serious concern about the impact on rural communities of the Opposition’s promised 10 per cent. cut to the budgets of most Government departments that assist people in rural areas; and supports the Government’s commitment to continue to work with the Commission for Rural Communities, Regional Development Agencies and local communities and businesses to help people through these difficult economic times.”
First, I would like to take this opportunity to say how pleased I am to be taking up my new post at the Department for Environment, Food and Rural Affairs—and I am grateful to the hon. Member for Arundel and South Downs (Nick Herbert) for his words of welcome. I pay tribute to my predecessor, my right hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy). She is held in great affection by the agriculture industry, and I will have a difficult job in following her.
I greatly welcome this opportunity to focus on the challenges faced by people who live and work in rural areas.
Mr. Cash: Will the Minister give way?
Jim Fitzpatrick: I have not said anything yet, but I am very happy to give way to the hon. Gentleman.
Mr. Cash: With respect, the Minister has already said something about his predecessor, and I rise to make a simple point. I wrote to DEFRA on 1 April with a detailed request for certain pieces of information that are highly relevant to this debate. I still have not received a reply, and on behalf of my farmers, who have been having a very difficult time, I ask the Minister to make sure that I receive one as soon as possible.
Jim Fitzpatrick: I am only too pleased to apologise to the hon. Gentleman on behalf of the Department, and I will endeavour to look up his correspondence and respond at my earliest opportunity.
The rural White Paper in 2000 set out for the first time a full rural affairs agenda. DEFRA, the first Department with an explicit remit for rural affairs, was created in 2001. Having reviewed the White Paper in early 2004, we followed up with the rural strategy later that year. It was far-reaching, and aimed to build on the economic success of the majority of rural areas, while tackling those that were felt to be at either economic or social disadvantage. That strategy still underpins the Government’s approach to rural affairs; it is one of equity and fairness.
As we now know, one in five people in England live in a settlement of fewer than 10,000 inhabitants—that is about 10 million people in all. Our rural communities are home to about 1 million businesses, providing more than 5.5 million jobs. There are more businesses for every 10,000 people in rural areas than there are in urban areas.
Mr. Wallace: I am grateful to the Minister for making the point about fairness and justice for all. Does he therefore think it is fair that a ghillie or shepherd who checks their sheep in a 4x4 up in the hills has to pay the same amount of punitive vehicle excise duty as someone driving a Range Rover in Chelsea?
Jim Fitzpatrick: I acknowledge the issue raised by the hon. Gentleman. These are choices that individuals make. I recognise the need for 4x4s in rural areas. We try to make sure that tax arrangements are as equitable as possible, but there are inequalities all around the system.
As I have said, there are more businesses for every 10,000 people in rural areas than there are in urban areas. They have a combined turnover of more than £300 billion per year. Of course, rural England is not a single, homogenous entity; it takes many forms. Going by a wide range of social and economic indicators, rural areas are performing well; their performance is usually on a par with, or better than, urban areas, and that may surprise many. The evidence suggests that most of rural England is well connected, with strong links to nearby towns and cities and good access to local markets and job opportunities. That is why our rural areas have been performing well in both social and economic terms.
Mr. Bellingham: The Minister mentioned employment prospects and getting advice on employment. Does he share my concern that the Department for Work and Pensions—I know it is not his Department—has closed two jobcentres in west Norfolk? That basically breaks the link involving advisers and those in jobcentres who can give immediate input to people who are trying to find or move jobs. Such people now have to travel a great deal further to get that advice, and if someone does not have a car in a place such as Norfolk, they very often do not have a job, and vice versa.
Jim Fitzpatrick: I understand that the DWP has suspended any further closures, particularly in these difficult economic times, but I recognise that there has been a rationalisation of jobcentres and benefits agencies, the creation of Jobcentre Plus and an attempt to ensure that appropriate and necessary assistance is provided as efficiently as possible.
Economic development in a rural context needs to be based on a 21st-century understanding of businesses in rural areas—one that is not constrained by a nostalgia but that recognises the dynamism, diversity, interconnectedness and value of our rural businesses and communities. In many respects, rural communities are no different from any other; people there want not only well-paid and secure employment and somewhere decent to live, but long and healthy lives and a good education for their children. It is therefore perhaps no surprise that the impacts of the current recession on rural areas are very similar to those in urban areas. More specifically, when the comparison is made with urban areas the emerging picture in rural England is one of lower risk, higher resilience and higher recovery prospects. So it is worth pausing for a minute to examine what is really happening in rural areas.
In April 2009, 2.5 per cent. of the working-age population in rural England were claiming unemployment-related benefits, compared with a figure of 4.6 per cent. in
urban areas. The labour force survey for the first quarter of 2009 showed that 18.5 per cent. of the 254,000 people made redundant in the previous three months came from rural areas—the percentage roughly corresponds to the 19.3 per cent. of the population who live in rural areas. The agriculture industry is specifically helped by the stability of demand for its produce, compared with other sectors of the economy. New tractor registrations—not a statistic that I have cited much in my political past, but one that I shall be looking at in future—which are traditionally regarded as a bell-wether of the industry’s confidence, increased by more than 6 per cent. in the first four months of 2009 compared with the same period in 2008.
Rob Marris: On that point, is my hon. Friend aware that in detailing the litany of wonderful policies that they have rolled out today the Tory Front-Bench team fail to mention that their policy is to cut capital allowances? That would cut the number of tractor registrations and harm rural areas.
Jim Fitzpatrick: My hon. Friend makes a very interesting point about what was omitted from the speech made by the hon. Member for Arundel and South Downs from the Front Bench. I also noted that some of the Conservative commitments contained heavy qualifications about whether they would be affordable, were the Opposition ever to form a Government.
Our analysis of a range of indicators associated with downturn risks, resilience and potential for recovery—that is still at an early stage—indicates that rural areas are faring well when compared with urban areas. That is not to say that there are not challenges, especially in relation to falling vacancies, earnings, house prices and negative equity, but rural areas score well against recovery indicators: they have good employment opportunities, good enterprise and business prospects, high skills and good quality of life.
Mr. James Paice (South-East Cambridgeshire) (Con): I congratulate the Minister on his appointment. Before he finishes his catalogue of what he thinks is going right in rural areas, will he address the issue of poverty, and the fact that it is higher in rural areas than in urban areas? Indeed, according to the Commission for Rural Communities, it is rising faster in rural areas.
Jim Fitzpatrick: I am not ignoring the issue of poverty in rural areas and, of course, I acknowledge that it exists. I look to the CRC for advice and I am only too happy to look at the information and research that it provides to the Department. I am grateful to the hon. Gentleman for his kind remarks of welcome, and I look forward to working with him and the hon. Member for Arundel and South Downs in the months ahead.
Julia Goldsworthy: The causes of poverty in rural areas may vary from place to place. In the south-west, water poverty is a real issue, but it is not being appropriately addressed. Will the Minister undertake to look into that area to ensure that households do not spend a disproportionate amount of their income just on paying their water bills?
Jim Fitzpatrick:
The hon. Lady says that water poverty is not being appropriately addressed, and I am sure that she is more familiar with the issue than I am, as she
represents the south-west. I will ensure that she gets a copy of the information that the Department receives from the research that it is undertaking.
As I was saying, this is all being kept under regular review by the National Economic Council, with reports from the Commission for Rural Communities—as mentioned by the hon. Member for South-East Cambridgeshire (Mr. Paice)—and the regional development agencies, as other hon. Members have mentioned. In case I am accused of being in denial, I should say that none of this says that rural areas or rural communities are immune from the effects of recession, and no one would claim that—especially me. It is easy to talk about averages, because that is what we can measure and compare, but the simple fact is that for an individual who has lost his or her job, and who fears losing a home as well, the effects are devastating.
Much of the action that the Government have been taking is intended to prevent those job losses in the first place, to put the right conditions in place for recovery, and to help prevent homes from being lost. Nevertheless, the available indicators appear to show that rural areas are holding up well so far, and in most cases have not suffered as much as urban areas. Across the UK, there have been some encouraging signs that confidence is improving, although we remain cautious. There is no reason to be complacent and it is legitimate to ask what we are doing to tackle the recession in rural areas.
Mr. Ellwood: I also welcome the Minister to his post. I invite him to seek out an organisation called Farm Stay UK, which helps farms to diversify into tourism. I attended its annual general meeting last year and listened to its frustration that it is not getting the necessary support from the Government. I mentioned to my hon. Friend the Member for Arundel and South Downs (Nick Herbert) that the £35 million is getting lost in the regional development agencies. Perhaps the Minister could look at that to ensure that the money gets to the front line, where it is so needed.
Jim Fitzpatrick: I took note of the hon. Gentleman’s comment about rural businesses looking to diversify, especially farming, and the assistance that has been given to the RDAs. I will look into the matter and, if appropriate, I will write to him. I am not saying that that will be necessary, but I am sure that we will have a discussion in due course on the interesting point that he raises.
Mr. Robert Walter (North Dorset) (Con): The Minister said that he thought that rural areas were holding up well. How does that translate into the 212 per cent. increase in male unemployment in North Dorset in the past 12 months, or does the Minister think that all those people are registering new tractors?
Jim Fitzpatrick: No, I would not for a second question the statistics that the hon. Gentleman cites about his constituency, any more than he would question mine. He has much greater familiarity with the area. I said earlier that the rural community was not homogenous, and that there were differences in many areas. I hope that that qualifies my comments about the rural community doing well. It was a qualified observation, as the hon. Gentleman will be able to read in due course.
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