Government failures have created cost-of-living 'rural premium', MPs find

The All Party Parliamentary Group (APPG) for Rural Business and the Rural Powerhouse has released a detailed report exploring the cost-of-living crisis in rural areas and investigating the extent of the 'rural premium'
APPG title page.png

Government neglect of the rural economy has created a cost-of-living ‘rural premium’, according to a new report by the All-Party Parliamentary Group (APPG) on Rural Business and the Rural Powerhouse. Evidence from more than 25 industry bodies, charities, campaign groups, companies, academics, and businesses reveal rural communities spend 10-20% more on everyday items like fuel, despite wages being 7.5% lower than their urban counterparts.

Inadequate power infrastructure in rural communities leaves 76% of countryside houses off the energy grid, which until recently, left them at the mercy of uncapped fuel prices with little government support.

Energy bills are also threatening the social fabric of rural communities, with 14% of village halls facing closure due to heating costs alone in the next six months. Evidence found that village hubs have helped keep people warm during the cost-of-living crisis, and provided easy access to vulnerable people.

The government’s failure to increase affordable housing and reform planning laws has rendered rural communities more vulnerable to rising housing costs. The Citizens Advice Rural Issues Group saw requests for help with housing costs double, whilst urban figures remained unchanged.

Poor connectivity has also hindered rural businesses from rebounding during the crisis. In the face of decreased footfall, and with only 46% of businesses receiving serviceable 4G coverage, the report highlights how rural businesses have been unable to access new customers or support groups online.

The report outlines a series of recommendations to slash the rural premium, including an economic blueprint to support countryside businesses, an ambitious housing plan to boost the supply of affordable housing, funding for warm community centres to prevent closures of village halls, and an extension of the Rural Fuel Duty Relief scheme.

Mark Tufnell, President of the Country Land and Business Association, commented:

“The depth of hardship we’ve seen across the countryside could have been mitigated. Successive governments have turned a blind eye to the vulnerability of the rural economy - while outdated policies have damaged the financial resilience of individuals, families and businesses."

We desperately need a robust and ambitious plan for the rural economy; not only to protect these communities from economic shocks, but to unlock their enormous potential. Unless we stop treating the countryside like an afterthought, people will continue to suffer, and so will our economy

He added: "This report builds on the work of last year’s APPG inquiry into rural productivity which found connectivity issues, unaffordable housing, and a lack of ministerial direction contributed to a 19% productivity gap between the rural economy and national average – a gap which if closed could add £43bn to the UK economy."

Co-chair of the inquiry, York Outer MP Julian Sturdy said:

"This report shows without question that those living and working in rural areas have been left at a serious disadvantage.  This advantage worsens still in difficult economic circumstances.

Government needs to now show it is ambitious for the rural economy, and work across departments to develop a serious set of policies that will grow the economy, create good jobs and stronger communities in all parts of the country."

Co-chair of the inquiry, crossbench peer Lord Cameron of Dillington, said:

Let this report act as a wake-up call. By ignoring the potential of the rural economy, successive governments have left our communities vulnerable to the extremes of global economic shocks.

He added: “As we approach a general election, all parties should get their heads down and develop policies that will give the rural economy and its communities what they need to succeed – so that we can take advantage of the talents of rural people, as well as defend them from financial crises.”

APPG report - The Rural Premium

Read the report - exploring the impact of the cost-of-living crisis in rural areas