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The intention, of course, is to avoid any systematic disadvantage based on geography, but in effect the measures taken by Government more generally to stimulate the economy and to get us all out of recession are just as important to rural communities and businesses as elsewhere. Given the many similarities between rural and urban economies, we believe that that is the right approach, rather than establishing a number of separate smaller rural schemes that would only add to the costs of administration.
Dr. Murrison: The Minister is trying to conflate the experience of the recession in urban and rural areas. Does he agree with me, however, that the thing that defines rural areas is the fact that people are poor and have appalling access to services? What precisely have his Government been doing since 1997 to improve transport in rural areas?
Jim Fitzpatrick: We have given a commitment that there will be no further rail closures until 2013 and we have been subsidising rural bus routes to the tune of some £400 million to try to ensure that the rural community can keep going via public transport as well as via other means.
As I said, the Government are delivering support for people and businesses in all communities. We are cutting taxes, with a cut in VAT worth more than £20 a month on average for households for the whole of 2009. A range of tax cuts and increases for tax credits and benefits introduced on 6 April are already putting money in people’s pockets.
For businesses, we are keeping lending flowing by securing billions of pounds of additional finance with legally binding agreements with banks to increase lending for business on commercial terms—£11 billion from Lloyds TSB and £16 billion from RBS. We are freeing up capital by signing £1 billion-worth of guarantees through the working capital scheme and backing bank lending to viable businesses that cannot get commercial loans with the enterprise finance guarantee. More than £400 million-worth of eligible applications from over 3,600 small businesses have been assessed and are being processed or have been granted. More than 2,500 businesses have been offered loans totalling more than £231 million. We are supporting cash flow by agreeing deferred payment of more than £2.5 billion in tax by 145,000-plus businesses since November, as well as enabling companies to spread the increases in business rates over the next three years. A business paying a rates bill on a typical property that will see a £600 rise in its rates liability in 2009-10 will be able to defer £360 of that increase to future years.
We are also providing real help to keep people in work and delivering support, as I have just described, for thousands of businesses. We are investing in the future so that the economy is well placed to benefit from the recovery. For example, we are bringing forward £3 billion-worth of capital projects and providing a £600 million fund to kick-start house building.
Rob Marris:
The Homes and Communities Agency plans to build 10,300 rural homes in three years, and that is a woefully low figure. I wish it were far higher. I urge my hon. Friend not to accept the nonsense from the Opposition, who will not properly address market failure in terms of affordable rural housing, as was
highlighted by my hon. Friend the Member for Copeland (Mr. Reed). They then come forward with this nonsense about letting local people decide, and we on the Government Benches all know what happens then: Conservative councillors in rural areas oppose all new housing. The Opposition Front Benchers in the House say, “Let’s have affordable housing in rural areas.” What do Conservatives do on the ground? They oppose it all. It is nonsense. Let us have much more affordable housing in rural areas.
Jim Fitzpatrick: Again, my hon. Friend makes a telling point and observes the weaknesses of the Opposition’s policies. I acknowledge his suggestion that we should go further with affordable housing. That is a debate that we have been having and the Prime Minister has pushed the policy further forward than it has been for many years. Clearly, it will continue to move in that direction.
In addition, the Government have developed policies that recognise local authorities as “leaders of place”, responsible for identifying and responding to the needs of their communities. That approach is appropriate to all communities, including those in rural areas. Local area agreements are also part of that approach. At local council level—that is, in town and parish councils—new powers are available to those councils that meet certain quality standards. That will enable those local bodies to do more for their communities, and the policy has been widely welcomed by the sector.
Mr. Bellingham: The Minister is incredibly generous in giving way. I agree that local councils should spearhead the recovery from recessions. However, does he agree that this is not the time for the Government to push ahead with a review of local government? Does he accept that it would be a great mistake to push through unitary proposals for Norfolk, given the almost universal opposition in the county? Does he agree that district and borough councils have a very important role to play in ensuring that businesses have a chance to survive into the future?
Jim Fitzpatrick: The Government are trying to provide the best local government framework that we can. We have consulted widely, and that consultation process began when I was in the Office of the Deputy Prime Minister. The hon. Gentleman and local councils will have their own views as to whether we have got the policy right.
I was saying that we have taken specific actions to address some of the challenges in rural areas. For example, to tackle the housing challenge in rural areas we have set the Homes and Communities Agency a target to deliver 10,300 affordable homes between 2008 and 2011 in settlements of fewer than 3,000.
As I mentioned a moment ago, and in respect of the distances involved in getting to major centres, we made a commitment that no rural railway lines would be closed before 2013. Moreover, special rural bus grants of more than £400 million form part of the more general bus services operators grants, and there is a presumption against the closure of village schools, especially primary schools. However, such decisions are very much in the hands of local authorities, which will be best placed to consider the implications.
Mr. Jamie Reed: My hon. Friend mentioned delivering 10,300 more affordable rural homes, but that will not be enough. I hope that he will meet me and other Back Benchers to pursue an increase in that number. However, he spoke about market failure in rural areas and the policy initiatives taken to combat it. Does he agree that many rural economies are kept alive by public spending? A cut of 10 per cent. across the board would do more to hurt rural communities than it would to help them.
Jim Fitzpatrick: My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) paid me a compliment and gave me an opportunity to ask questions of the Opposition, but my hon. Friend the Member for Copeland (Mr. Reed) gives me a slap and says that we are not doing enough in terms of affordable housing. I hear what Labour Back Benchers say, and I hear the silence from the Opposition Benches. This issue is not going away, as it will continue to be pressed by many honourable colleagues.
I said that rural communities are very much like any other, but there is one very important aspect that we cannot ignore: the extent to which they are engaged in land-based activities that remain vital for environmental protection and enhancement. DEFRA is putting £3.9 billion into the rural economy between 2007 and 2013 via the rural development programme for England. More than double the size of its predecessor, the RDPE will both help farmers and support other rural businesses. Around £550 million of the total sum will go to support small businesses, including farmers, and improve the quality of life for rural communities.
At a regional level, the RDAs have been delivering packages of measures tailored to the needs of the individual regions. For example, Advantage West Midlands is investing an extra £3 million to help community development finance institutions and other alternative finance providers to meet additional demand from new and existing business and social enterprises. In addition, the East of England Development Agency is running a three-year campaign, offering free business IT support and advice. I am sure that the work done through Business Link East to put together an “open for business” package for rural pubs will receive the wide support of the House.
Earlier, Opposition Members raised the question of Dairy Farmers of Britain, and asked whether the Government were doing enough to support that organisation. The appointment on 3 June of PricewaterhouseCoopers as receivers and managers of Dairy Farmers of Britain, a farmer-owned dairy co-operative with a turnover of approximately £500 million a year, was disappointing to all those interested in the dairy industry, and distressing to employees, the farmer members, dependent businesses and customers.
A written statement, laid before the House on 9 June, set out the position. Since then, more farmer members of Dairy Farmers of Britain have found alternative buyers for their milk, and while we do not yet have firm figures, we estimate that about 90 per cent. of milk by volume of the Dairy Farmers of Britain’s original farm supplies has now found a buyer. In such a short space of time, that is a tremendous achievement by the industry as a whole, and on behalf of the Department for Environment, Food and Rural Affairs I pay tribute to the hard work of the Dairy Farmers of Britain’s employees,
its members council, which assisted in the process, the receiver and other dairy processors, all of whom have worked together to ensure that the impact of Dairy Farmers of Britain’s financial collapse are minimised.
The receiver stated on Friday 12 June that on their appointment 400 farmer members, from a total of about 1,800 farmer suppliers, had yet to find alternative buyers. I understand from contacts made over the weekend that the number has fallen further, and DEFRA officials will meet the receiver on 17 June to review progress.
Rob Marris: My hon. Friend has dealt with milk; may I congratulate him on honey, too? With colony collapse disorder among honey bees, the Government have rightly increased fivefold their spending on research on honey bees, which are vital pollinators in rural areas. The Government have matched that with funding from, I think, the Wellcome Trust, so the annual research budget in the next five years will go up from £200,000 a year to £2 million a year, and I congratulate the Government on that.
Jim Fitzpatrick: On behalf of the Department, I am grateful for the appreciation expressed by my hon. Friend. If my memory serves me correctly, the number of inspectors has also increased to help the industry.
As I was saying, the farmers affected will have lost their investment in Dairy Farmers of Britain and their May milk cheques. We have worked closely with the regional development agencies, the National Farmers Union and the receiver to ensure that farmers facing cash-flow difficulties are aware of business advice and support services available through Business Link, and so have access to relevant Government schemes, such as the enterprise finance guarantee scheme and the business payment support service run by Her Majesty’s Revenue and Customs. That goes some way in rebutting the allegation made earlier that we are not doing anything for dairy farmers.
Mr. Peter Atkinson (Hexham) (Con): On the subject of Dairy Farmers of Britain, it is good news that most of the suppliers, particularly in north-east England, are finding new contracts, but could the Minister say anything about the future of the processing plant in Blaydon, near Newcastle? That is the only processing plant in the north-east region, and if it closes, dairy farmers in the region will face very high transport costs to move their milk to areas where it can be processed.
Jim Fitzpatrick: My apologies to the hon. Gentleman, but I am not in a position to respond to that point directly. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Wansdyke (Dan Norris), may be able to do so when winding up the debate. If he is not in a position to do so, I will certainly write to the hon. Gentleman tomorrow with the latest position regarding the plant that he mentions.
The issue of broadband was raised. The Government are aware that in many rural areas there are significant barriers, in terms of access, speed, cost and quality, to broadband provision that still need to be overcome. We want to ensure that rural areas are not left behind as next generation networks and other digital platforms develop. The European economic recovery package,
agreed in March, allocated €1.02 billion to the rural development programme at EU level. The UK’s share of that is approximately £12 million. Final decisions on how funding should be allocated are being taken now, and rural broadband is one of the issues being considered. In addition, Lord Stephen Carter in the other place has asked the Commission for Rural Communities to produce a report examining the impact of digital technology on rural economies, and the potential barriers.
Mr. David Heath (Somerton and Frome) (LD): The hon. Gentleman must realise that the Carter review’s interim report is hopelessly inadequate on providing the level of internet connection that we need. The matter is absolutely crucial to the future economy of areas such as that which I represent. If we cannot attract the high-value industries to areas where they have the chance to grow because those areas cannot make those connections, the future for our economy is bleak. He must do better; the Government must do better.
Jim Fitzpatrick: I hear what the hon. Gentleman says. As I mentioned, Lord Carter has asked the Commission for Rural Communities to produce a report, so there will be more information coming forward. The spend from the euro budget will be determined shortly. We understand that there is an awful lot more to do and we will continue to try to do that, and I am sure the hon. Gentleman will do all he can to press us, to make sure that we keep improving.
Food labelling was raised earlier in the debate; the hon. Member for Arundel and South Downs responded to an intervention from one of his colleagues. We recognise the significance of food labelling. As an example of the fact that the Department is very engaged, I chaired the pigmeat taskforce last week. It was clear that progress was being made, with the sub-groups looking into the issue engaging with retailers and with animal welfare groups. There is probably consensus across the House that more can be done to support the industry.
In conclusion, there is no doubt that there is a recession in rural areas, as there is in our towns and cities, but I have been impressed by the resilience shown by rural communities and I look forward to working with and for them in the months ahead. For many years the Government have taken a considerable interest in the well-being of rural communities, and will continue to do so in a way that is effective and allows for the maximum input into the decision-making process from those who are most affected. I look forward to listening to right hon. and hon. Members during the debate.
5.31 pm
Tim Farron (Westmorland and Lonsdale) (LD): I, too, would like to express my disappointment at the absence from the debate of the Secretary of State. That reflects rather poorly, perhaps, on the Government’s commitment to these issues. However, I would not want that to detract from my warm welcome to the Minister to his new job. I look forward to being able to nobble him on hill farm allowance, dairy farming and rural housing issues in the lift in Norman Shaw, to which I am sure he equally looks forward.
I spent—profitably, I hope—much of the recent recess calling on businesses in my constituency unannounced. I am sure they were exceptionally grateful. I spoke to
400 businesses in a dozen towns and villages around my very rural constituency, and I got a range of messages. There is a mixed picture out there. Clearly, there were some good news stories and some exceptionally bad news stories, but the modal response was something like, “Things are about where they were a year ago, but we have had to work twice as hard and think twice as hard to make sure that they stayed that way.”
Thomas Jefferson was once accused by a rival of being lucky. His response to that charge was, “It’s interesting. The harder I work, the luckier I get.” Speaking for my communities, I would say that although the downturn is a reality, there is also a strong sense of defiance and of being determined to make their own luck. The problem remains that the rural community is nevertheless in a vulnerable position, largely because of Government failure over the past three decades to support our communities.
That is reflected by the closure of 8,000 post offices under the Conservatives first and now under Labour, with the biggest impact falling upon the countryside; the reckless and irresponsible selling-off most of the rural affordable housing under the Conservatives, followed by the Labour Government’s abject failure to address the crisis that that created; the loss of community, owing to the unsustainable growth in second home ownership in many villages in rural Britain; the loss of hospital services under Labour; the increased exploitation of our farmers by the supermarkets and the processors; and the way in which decisions that affect us in rural Britain appear to be taken by Labour Ministers cloistered in Whitehall, with little or no regard for the impact of those decisions on the communities that they affect.
The Conservative motion contains nothing with which I would disagree, but it is laced with irony. I wonder who sold off all the affordable rural housing. I wonder who encouraged the unsustainable growth in second home ownership. I wonder who were the high priests of the free market fundamentalism that led to the banking collapse and the recession in the first place. Given that Members have become rather adept at contrition recently, I wonder whether anyone on the Conservative Benches might consider disarming those of us who are a tiny bit sceptical by saying sorry. There is nothing wrong with irony so long as one understands that it is irony, and as such we support the motion. We are concerned about the lack of any solutions presented within, however, and that is why we tabled an amendment in an attempt to provide some substance and to strengthen the hand of farmers and growers, who are so often forced to take poverty rates for their produce by much more powerful operators in the food market—chiefly, those on the retail side.
Following the tragic collapse of Dairy Farmers of Britain, to which many Members have already referred, many stricken farmers have been exploited by buyers offering, in some cases, as little as 10p a litre—14p below the cost price—for their milk. Almost 1 billion litres of milk production capacity has been lost over the past three years, and it is immoral and counter-productive to treat dairy farmers in that way. A food market regulator would give farmers a champion who would intervene and ensure that they were not exploited.
Is it not ironic also that so many people wander down one aisle in the supermarket and buy fair trade coffee, but wander down the next aisle and buy to put in that
coffee milk that was taken from an exploited local dairy farmer at below cost price? Our amendment sought to ensure fair trade for farmers and growers in Colombia and Cumbria. The loss of production capacity in many areas of British farming is a clear example, as other Members have noted, of the failure of the unfettered and unfair market.
Mr. Jamie Reed: Will the hon. Gentleman give way?
Tim Farron: Yes, I shall give way.
Mr. Reed: I am very grateful to the hon. Gentleman for giving way. We share the fantastic county of Cumbria, and, on the issues that he is discussing today, he is without doubt one of the best advocates in the House. That is beyond question and recognised as such in our county. Does he agree that we need to do an awful lot more in this country to ensure that supermarkets exercise a much greater duty of care towards our farmers?
Tim Farron: I agree very much with the hon. Gentleman, who is my constituency neighbour. My great concern is that, although we do not want to burden the industry with excessive regulation, we have very powerful players on the retailing and processing sides, but a range of relatively powerless people—farmers and growers—who by and large do the real work. They need protecting, and we need to ensure that markets are fair more than free.
Julia Goldsworthy: Do we not also need to ensure that consumers are properly educated about what happens, and are not misled? Often, they are told that they have the opportunity to, for example, buy cabbage locally, without knowing that, although it has been cut locally, it has been sent hundreds of miles away to be wrapped in plastic and then sent back to their area. People need to be fully aware of the situation’s true carbon impact.
Tim Farron: I could not agree more with my hon. Friend. Honesty in presentation, packaging and labelling of foodstuffs is absolutely crucial in terms of both educating people to allow them to make choices so that we do not incur excessive and unnecessary food miles, and recognising that, in this country, we have the highest environmental and animal welfare standards in the world. Those standards cost, and it is wrong that our farmers should be at a disadvantage compared with competitors who can sometimes claim that their produce is British just because it is processed here, and sell it more cheaply.
Returning to John Maynard Keynes, if I could, I should say that he—a great Liberal, of course—was unfashionable for many years but has now been proved comprehensively right. He once said, among many other words of wisdom, that
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