Rural Economy

My Lords, it was with some trepidation that I agreed to take part in this debate because I have been a townie all my life. It is a bit like a non-lawyer speaking in a debate on home affairs in your Lordships’ House. You take your life in your own hands. I am particularly grateful to the noble Baroness, Lady Prosser, and the noble Lord, Lord Desai, who have provided a certain amount of townie support through their participation today. I also come from a part of the country where, during my lifetime, I have seen all the basic industries collapse completely. I have a certain amount of sympathy with people living in rural areas who have also seen a considerable degree of change. I hope they will accept that change—and change not always for the better—is not something that has affected only rural Britain over the past couple of generations. A number of noble Lords have stressed the need to take a balanced view of what is happening in rural Britain, and that it is not a two-dimensional picture. In his intervention the noble Lord, Lord Harrison, referred to two types of rural Britain. However, as the debate has progressed, it is clear that there are many sorts of rural Britain and that the economic picture overall is very far from bad. There are arguments over exactly what proportion of Britain is rural, but if we accept that it embraces around 25 per cent of the population, it is interesting to note that only 11 per cent of income support claimants come from rural areas. That gives us some idea of the balance of where multiple deprivation lies. I turn to the complex question of economic growth in rural areas. I hope noble Lords will not mind that my speech is peppered with statistics from Yorkshire and the Humber, but it is the region I know best. Economic growth over the coming decade for rural Yorkshire is estimated at 27 per cent compared with 31 per cent for the urban areas. One’s first response may be that of slight concern. However, those rural areas embrace the Yorkshire Dales, which are extremely sensitive environmentally and where the pressure of people, whether living in the area or visiting it, can threaten the fragile ecosystem. That demonstrates how the question of economic growth in rural areas is complex: while economic growth is necessary, it is not as straightforward as it is in urban areas suffering, say, from a major deficit of aggregate demand. However, a common theme of today’s debate is that there are rural areas in which more needs to be done in order to improve the economic infrastructure and to promote sustainability. I shall concentrate on the kind of innovation we need to see. When we refer to industry and the economy in general, we are talking about innovation. It seems to me that the only way in which rural areas will prosper is by adopting the same spirit in their approach to economic development. Inevitably one starts with agriculture, and here I agree strongly with the noble Earl, Lord Peel, and his remark that farmers and landowners, while not numerically forming the largest proportion of the economy, are responsible for maintaining what we see when we look at rural Britain. Given that, the regime within which they operate is hugely important. Both the noble Earl and the noble Lord, Lord Chorley, raised issues about the way the restructuring of the CAP is to work. There seems to be a considerable degree of confusion in this area and I look forward to the Minister’s attempt to clear it up. I also agree strongly with my noble friend Lord Livsey on the question of farm gate prices and the fact that there has been a transfer of surplus, as it were, from the farmer to the supermarkets. This is a difficult issue to resolve without over-regulation, but my noble friend’s suggestions on the role of the OFT are valid. There is a great deal of innovation in the agricultural sector. Over recent months I have read of four initiatives that demonstrate the interesting and positive ways in which the sector is developing. Given the lack of guaranteed prices, it is good to note that the financial markets, and LIFFE in particular, are offering an alternative and relatively low-cost way of ensuring prices for grain. That is a sensible, market-based approach to change. Turning to the changes in the EU sugar regime, I admire the way people are now looking at the viability of bioethanol. That too is a positive response to change and one that helps to build on the sustainability agenda in more than one way. Farmers are increasingly specialising in organic produce which they can sell into domestic markets. However, farmers are having to learn new skills in the areas of marketing and packaging. In the past, they did not need to worry about those elements. Finally, the RDA in Yorkshire, through its food processing cluster approach, is looking at how to source more food within the region to be processed locally. That is an encouraging activity and another example of positive innovation. We have heard a lot about the problems of transport and, again, there are interesting developments in this area. Some rural railways have been opened up as community enterprises and provide small examples of how innovation has worked well. The Wheels to Work programme mentioned by the noble Lord, Lord Cameron is, I believe, receiving financial support from Yorkshire Forward. It is a good, low- cost proposal. I also support my noble friend Lord Bradshaw in his remarks about minibus services versus fixed bus routes. Another innovation which I know operates in some urban areas—my mother is a beneficiary of it—and builds on the scheme described by my noble friend is a system whereby retired people run what is in effect a low-cost taxi service providing transport for other retired people when they want to visit friends, attend hospital appointments or do their shopping. That is an innovative approach to a major problem which avoids the excessive bureaucracy that often accompanies a more formal system. We have heard a lot about various new sources of employment in rural areas. It is fascinating to note that the small and medium-sized enterprise sector is so buoyant and that, as a proportion of the population, there are more self-employed people in rural areas than in urban ones. I suspect that most of us do not expect this area of the economy to be strongest in the countryside. Many noble Lords have spoken of the need to extend broadband coverage. The roll-out of broadband is growing, but much still has to be done. This is another area in which the regional development agencies are in a good position to take the lead. Further, much job development around our historic market towns should take place for reasons of sustainability and the environment. Many of our market towns have had a rough time over recent decades. I particularly congratulate Yorkshire Forward on its Renaissance Market Towns initiative, a 10-year programme addressing development in market towns in the same way that government has looked at urban redevelopment; that is, taking the long-term view and considering holistically the issues of property, skills and so forth, thus raising the whole area over the longer term. In terms of ensuring that market towns and villages are places where people want to live, this is a good approach, especially in its emphasis on making life more satisfactory for everyone. It addresses cultural life as described by the noble Baroness, Lady McIntosh, and community life as described by the noble Lord, Lord Brooke. Both are hugely important. On housing, there seems to be a consensus among those who have spoken that smaller, incremental developments in small rural communities is a way forward. On delivery, at the moment there is a muddle as to how rural policy is delivered. Looking at the plethora of initiatives that have to fit into regional agendas on rural policy, the whole thing is a mess: Defra pathfinders, local enterprise initiatives, local area agreements and city regions. The latter has not come from the regions themselves, but is an imposed response of abject failure by the Government to sell their regional agenda. All these things leave a major problem for regional development agencies, which are doing a good job on balance of attempting to grapple with rural problems. They are trying to work with a framework set by government that simply does not meet their needs. On balance, there is much positive news to have come out of today’s debate about the future of rural Britain. The Government could be making a much more positive contribution, not necessarily by spending more, but by being more efficient and competent and by giving rural areas more freedom to develop in ways that best suit them rather than Whitehall. If the Government can get these things right, I believe that the prospects for our rural economy can be better than at any time in a generation.