The 2021 Budget shows that government has no plan to create prosperity in rural areas. The Chancellor said his Budget was ‘fit for a new age of optimism’, but for those of us living in the countryside there was little new to get excited about.
All too often, when Government talks about the countryside it does so in the context of keeping it the same. There is never a focus on what the countryside could be – a vibrant part of the economy that creates jobs and encourages entrepreneurship, all the while building affordable homes and strong communities.
The rural economy is 18% less productive than the national average, largely due to poor infrastructure, poor skills provision and an outdated planning regime. Often house prices are beyond the reach of local people, many of whom up sticks and move to the city taking their talents and potential with them. As a consequence, underemployment and deprivation take root while schools, pubs, churches and shops close down to the detriment of village, and perhaps national life.
But if government brought its ‘levelling up’ agenda to the countryside and focused on reducing the productivity gap, up to £43bn could be added to the economy. In turn, hundreds of thousands of good jobs could be created, affordable homes could be built and our often-forgotten rural communities could quickly be restored.
There were some subtle causes for hope – changes to business rates and annual investment allowances will give rural business owners some room for manoeuvre. Yet, if government gave with one hand, it took away with the other. Changes to the Shared Prosperity Fund represent a massive cut to funding in deprived areas compared to previous funding mechanisms, making it difficult to see how many communities can survive at all, let alone be levelled up. Meanwhile, many tourism businesses had expected the temporary VAT cut to 12.5% to be made permanent. No such announcement was made, and now hotels and holiday sites look set to return to a 20% rate, far higher than any other major tourism economy in Europe.
The Chancellor’s announcement to build more homes on brownfield sites might make sense, but given less than 10% of available sites are in rural areas it will do nothing to ease the rural housing crisis. Nobody wants to concrete over the countryside, least of all us, but instead of treating rural communities as museums government should support small scale developments – adding small numbers of homes to a large number of villages, helping to provide good housing for local people whilst also boosting the economy.
Earlier this year Government announced its Rural Proofing plan to ensure government policies meet the needs of rural communities, but there is little evidence this plan is being enforced. While a good idea in principle, the current approach to ‘rural proofing’ does nothing to address the actual problem – that government departments don’t talk to one another.
The health of rural life is as much governed by the Treasury, Department of Levelling Up and Department for Business as it is Defra. Yet, speak to officials and Ministers across Whitehall about their plans to support rural business and they will simply assume it is someone else’s responsibility. As a result, good ideas and significant opportunities fall through the cracks. Put simply, without a cross-government rural strategy, the opportunities the Chancellor spoke of in his Budget speech will not be available to the millions of us in the countryside.
The frustration rural businesses feel is palpable – not least because so many of them buy into the belief that there is tremendous opportunity ahead.
An ambitious government strategy for the countryside would complete long promised infrastructure projects on digital and electrical connectivity. It would provide a tax and business rates system that actively supports rural businesses and encourages diversification, and would maintain an internationally competitive VAT rate that would support the development of the UK tourism sector.
But we should be able to go further still – committing to planning reforms that allow disused farm buildings to be converted quickly and easily into homes and office space, investing in electric vehicle chargepoints in rural areas and kick-starting exciting new environmental markets with seed funding and a meaningful regulatory regime.
The message to government has to be clear. The Chancellor’s optimism needs to be matched with serious and ambitious strategic thinking. Levelling up is the right concept but means nothing if it doesn’t apply to the countryside.
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