Rural Economy

My Lords, I agree with what the noble Baroness has just said: it has been an excellent debate. It probably could not take place anywhere else within Parliament in such an able way. There is a huge amount of expertise in your Lordships’ House and we have heard a great deal of it today. If I have a criticism, I would say there was a degree of negativity in the debate, though not from the noble Baroness, Lady Miller. There was a little too much on the negative side and not enough about the positive, and I regret that. It is easy to be negative and to talk down the good things that are happening in the countryside and in farming. Sometimes the talking down becomes self-fulfilling. I have no chance of answering all the questions that were asked of me during this debate. If I were to do so we would be here at the weekend. I hope to touch on some of the issues in what I have to say, and if there are any outstanding matters of great importance to noble Lords, I will write. We have been reminded today of some of the great challenges that face people and businesses in our rural communities. These challenges should not be underestimated, but, as I have just said, we must not paint a picture of doom and gloom, because the facts simply do not bear that out. The economy of rural areas is in many ways in a strong position, in absolute terms and compared to urban areas. I want to mention a few facts to demonstrate this. Unemployment is down across England, and stands at less than 3 per cent in rural areas compared to around 4 per cent in urban areas. My next fact is one that the noble Baroness may contradict: average earnings in rural areas are higher than those in urban areas. The figures I have from the Commission for Rural Communities report State of the Countryside 2005 suggest that the average income in urban areas is £29,189 and some pence, and in rural areas between £30,630 and £36,787. In other words, it may be close, but rural areas clearly have the advantage. In some rural areas, particularly those close to our major cities, average earnings are at the very highest end of the spectrum. On the whole the rural workforce is more highly skilled, with an above-average number of graduates too. The noble Lord, Lord Newby, asked about broadband, as did my noble friend Lady McIntosh. The figure for broadband availability in rural areas is now 99.3 per cent. It is important, though, to keep the story of success in mind when we come to focus on what are genuinely difficult issues and problem areas. What are the challenges? In some areas there continues to be a preponderance of low-paid jobs; areas such as south Shropshire, where more than 60 per cent of employees earned below two-thirds of the median English wage rate in 2004—that is, less than £6.23 an hour. While one cannot draw a simple causal link, it is interesting to note that south Shropshire also has the highest proportion of employees working in farming, more than 50 per cent of those in employment. I can see the noble Lord, Lord Biffen, nodding his head. Other areas are sparsely populated—the noble Baroness, Lady Maddock, spoke about a sparsely populated part of the country—or are far from urban areas and their markets, and have to overcome the barriers posed by distance. We will continue to ensure that Government policy does not exclude these areas from enjoying the fruits of economic growth. Many noble Lords raised the issues facing our farming community, which is such an essential part of our countryside. It does not have much to do with the proportion of people who work in farming; anyone who goes to our countryside knows that it is a farm-made countryside. In approaching these challenges, sustainable development must be at the heart of our strategy. That is simple common sense in rural communities. Economic, social and environmental issues are inseparable. Many rural businesses, whether farming, tourism or lifestyle businesses, depend directly on the quality of the natural environment. Equally, access to services and community cohesion underpin the development of new and existing businesses. That is why the Rural Strategy 2004 sets out our three linked priorities for rural policy: first, economic and social regeneration; secondly, social justice, fair access to services and affordable housing; and thirdly, valuing the countryside as rural England’s and, dare I say it, rural Wales’s greatest asset. Perhaps farming illustrates more than any other industry the importance of an approach to the rural economy based on sustainable development. Although farming is no longer the dominant economic activity in the countryside—the noble Lord, Lord Cameron, described it as no longer the backbone of the countryside—it remains at the heart of many rural communities, and its activity impacts on a vast area of our countryside. I firmly believe that there is a bright future for farming in this country. Farming’s future will be different from its past, but a bright future exists. Through our Strategy for Sustainable Farming and Food—I was slightly surprised that the noble Baroness, Lady Byford, said that we had no long-term strategy for farming—we will continue to provide the support that farming needs through the dramatic current period of change. The strategy identifies how the Government will work with the whole of the food chain—and that means producers too—to secure a sustainable future for English farming and food as viable industries contributing to a better environment and healthy and prosperous communities. Part of that approach comprises the whole farm approach that has been referred to and the farm advisory service— both of which were mentioned by my noble friend Lord Harrison. The implementation of CAP reform and the single payment scheme in particular are integral to our vision of sustainable farming. Subsidy payments have been decoupled from production so that farmers are now free to produce in response to the market rather than what subsidies dictate. That should have happened years ago. I well understand that a successful and timely start to payments under the single payment scheme is the major preoccupation in the farming industry at the present time. Noble Lords will not be surprised to hear that it is for me as well. The announcement I made on Tuesday that full payments will start before the end of February, with the bulk made in March, will, I hope, provide some reassurance on the issue. The noble Baroness knows that I cannot answer her question accurately on how many payments will be made by the end of February or by the end of March. I cannot do that because we are still in the process of making sure that those payments are made. All this is designed for a purpose—to lead to an industry in which farmers are rewarded for enterprise and are able to farm with the grain of the market. But economic success in this day and age must, of course, go hand in hand with environmental quality. The countryside that we see today, and which we all value so highly, has, as I said, been shaped by farming practices over generations. That is why I believe that public money should reward farmers for the landscape and environmental benefits which they can provide. Alongside the reformed CAP, the new environmental stewardship scheme further rewards the delivery of additional environmental benefits beyond cross-compliance through higher standards of environmental management. Through such measures we are supporting the crucial role that the farming community plays not only in producing safe, nutritious food—I put on record that it is our view that the farming industry plays a vital part in producing a large amount of the food that we eat—but also in protecting and enhancing our landscape, wildlife, soils, water and other natural resources. In that way we can look to a more secure future for the farming industry and a better environment for all of us to enjoy. We have had mention of the uplands. The noble Lord, Lord Chorley, and others mentioned the problems that those farming areas have. I am happy to tell the noble Lord that there will be a public consultation—as he wished—on how we should progress with regard to the uplands. The present scheme ends at the end of 2006. We look forward to hearing what he has to say. We understand the important role that that part of the country plays in England. Looking beyond farming for a moment—