I commend my hon. Friend the Member for North Devon (Selaine Saxby) on successfully bringing the debate and her excellent speech. There is no doubt that the Government are delivering for rural communities, including £5 billion for Project Gigabit and the £1 billion shared rural network deal with mobile operators, and my constituency —beautiful Hastings and Rye—has benefited from those investments. However, there is more to do.
The productivity rate in rural areas has fallen behind the England average. Digital connectivity remains worse than in urban areas. Rural public transport is bitty and
expensive to run, impacting on residents’ access to education or work—and even GP and NHS services. Median earnings are lower for those working in rural areas, and house prices tend to be more expensive than their urban counterparts relative to local earnings. Poverty is also more dispersed—it is hidden among the better off—making it more difficult to identify and tackle, especially as regards fuel poverty.
Research commissioned in 2021 by the Rural Services Network showed that wages are lower in the countryside, but that many living costs—fuel, travel and heating costs—are higher. It is also more expensive for local authorities to provide statutory services due to geography, demographics and density of population. Local authority funding formulas do need to be reconsidered.
It is not just about targeting more money to rural communities. Financial constraints are an issue globally, so we need to be much cannier about how taxpayers’ money is spent. Less must go further. Much more can be achieved if local authorities work with local enterprise partnerships, the voluntary or civic sector, local businesses and local colleges and schools. Partnership working across our social infrastructure rather than working in silos prevents the doubling or quadrupling of efforts and resources. Communities can drive levelling up.
Rural and coastal areas have many similarities as regards levelling up. The “Levelling Up” White Paper followed the inquiry into rural health and care, which launched on 1 February and highlighted the significant problems experienced by many rural communities in accessing health and social care services and the factors that contribute to them, which range from poor digital connectivity to a lack of public transport services and lack of affordable rural housing. In the same way, the chief medical officer’s report on health disparities in coastal communities highlighted similar underlying issues. It is the underlying factors of poverty and deprivation that need to be sorted out, especially housing, education, skills and connectivity, including transport. I echo hon. Members’ calls on bus services.
Affordable housing for residents who live and work locally is vital in rural areas, including more homes for social rent. The levelling up of rural areas economically and socially will not happen without addressing the housing issues, as my hon. Friend the Member for North Devon highlighted.
The tourism and hospitality sector plays an important role in rural communities. Tourism is vital, but it adds to pressure on local authorities and police services. For example, in beautiful Hastings and Rye, we see thousands of people arrive at Camber Sands in the summer months and Rother District Council needs extra resources to deal with the extra rubbish collections and security guards needed. Sussex police also need extra resources to deal with what is in effect a Wembley-sized football match about 15 times a year in the summer months. The all-party parliamentary group for the south-east recently produced a report on levelling up the south-east, with one recommendation being that local authorities should be able to raise, for example, a local tourism tax. We should consider that carefully to help local authorities to pay for those extra services so that the cost does not fall on local council tax payers.
Reducing hospitality VAT would help lower prices and protect businesses, especially in coastal communities such as Hastings and Rye. In the last Budget, the Government reduced VAT on draught beer and cider. Following discussions with many of my local hospitality businesses, I ask the Government to consider further the impact of VAT not only on pubs but on restaurants. Reducing VAT back to 5% or even 12.5%, as they did during the pandemic, would be really helpful. Many businesses are struggling with increases in energy costs and supply chains, and they cannot pass the costs on to their customers. If they do not have customers, there will be no pubs or restaurants and jobs will be lost. But levelling up is not just about solving problems. It is about finding solutions and opportunities, and rural Britain has so much potential to unleash if given the opportunity to do so. Rural levelling up is an economic, environmental and social opportunity which will benefit the whole of the UK. Our rural areas possess a wealth of natural capital which can underpin rural levelling up. Nature-based solutions to climate change can make the most of this, as well as farmland providing our food.
The Department for Environment, Food and Rural Affairs recognised the huge potential for environmental services to drive rural levelling up, noting that rural areas account for the majority—74%—of the UK’s £1.2 billion natural capital. The rural business and the rural powerhouse all-party parliamentary group highlighted the potential for natural capital markets to help level up rural areas, such as payments for carbon, biodiversity and food projects. If wetlands, peat, trees and soil are restored, maintained and protected, they can help to boost our rural economies by providing jobs, food, eco-tourism, leisure and health benefits, as well as protection against flooding. Investing in restoration and adaptation projects offers opportunities for low-income rural communities that yield financial returns on investments, create jobs, stimulate local economies, and regenerate and revitalise the health of ecosystems.
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