Thank you Mr Deputy Speaker and I commend my Hon. Friend for North Devon for successfully bringing this debate.
The Levelling Up White Paper contains the principal objective - Mission 1 of “boosting productivity, pay, jobs and living standards by growing the private sector, especially in those places where they are lagging” and directed at “closing the significant and persistent special disparities in productivity, wages and employment across all regions and nations of the UK”
The Government published the second report on rural proofing in England last month. This report sets an evidence-based picture of how government departments are working to support levelling up in rural areas, through targeted approaches where needed, and how Government will strengthen the rural economy, develop rural infrastructure, deliver rural services and manage the natural environment”.
There is no doubt that the Government is delivering for rural communities, including £5 billion for Project Gigabit which will bring gigabit-capable broadband to 85% of the UK by 2025; and the £1 billion Shared Rural Network deal with mobile operators which will deliver 4G coverage to 95% of the UK by the end of 2025. My constituency, beautiful Hastings and Rye, has benefitted from these investments.
But 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; and poverty is more dispersed amongst the better off, making it more difficult to identify and tackle – especially as regards fuel poverty.
Research commissioned by the Rural Services Network in 2021 shows wages are lower in the countryside, but many of the living costs are higher – fuel, travel and heating costs.
It is also more expensive for rural local authorities to provide statutory services due to geography, demographic and density of population; local authority funding formulas 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 prevents doubling or quadrupling of effort and resources, and working in silos.
Communities driving levelling up.
Rural and coastal areas have many similarities as regards levelling up. The Levelling Up White Paper follows the Inquiry into Rural Health and Care, launched on 1st February, highlighted the significant problems experienced by many rural communities in accessing health and social care services and the factors that contribute to these access problems, ranging 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 into health disparities in coastal communities highlighted very similar issues. In his report, Prof. Whitty clearly outlines that tackling the underlying drivers of poor health, including deprivation, poor educational attainment, housing, alcohol and/or substance misuse, homelessness and rough sleeping, underdeveloped transport infrastructure and lack of diversity in jobs and coastal economies will help prevent ill health in the long-term.
It is the underlying factors of poverty which need to be sorted – especially housing, education and skills, and connectivity – including rural bus transport services.
Affordable housing for residents who live and work locally is vital in rural areas, including more homes for social rent. Levelling up rural areas economically and socially will not happen without addressing the housing issue – as my Hon. Friend the Member for North Devon highlighted.
The tourism and hospitality industry plays an important role in rural communities. Tourism is vital to rural economies but does add pressure to local authority services – and sometimes police services. In beautiful Hastings and Rye, for example, we see tens of thousands arriving at Camber Sands during the summer months; the local authority, Rother District Council, needs extra resources for rubbish collection and the provision of security guards. Sussex Police also needs extra resources to deal with what is effectively a Wembley Stadium size football match for approximately 15 plus days per year.
The All Party Parliamentary Group for the South East (which I chair) recently published an inquiry report on levelling up the South East. One of the recommendations was to give local authorities the powers to local authorities to raise tourism tax – something to consider carefully to help local authorities pay for the extra services they need to deliver, as we find in Camber, so that these extra costs do not fall on local council taxpayers.
Reducing hospitality VAT would help lower prices and protect businesses especially in coastal communities like Hastings and Rye.
In the last Budget the Government reduced the VAT rate on draft beer and cider. Following discussions with many of my local hospitality businesses, I would ask the Government to consider further the impact of VAT on hospitality businesses, not only for pubs, but also restaurants. Reducing VAT back to 5% where it was during the pandemic would be amazing but back to 12.5% would be really helpful. Many of my hospitality businesses are struggling with increases in supply chain and energy costs etc. Many have increased their prices to the customer to help but cannot increase too much as customers will not be able to afford and the businesses would close; no customers, no pubs or restaurants. No jobs.
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 our natural capital, as well as farmland providing our food. Defra 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 £1,230 billion of natural capital. The rural powerhouse APPG also highlighted the potential for natural capital markets to help level up rural areas, such as payments for carbon, biodiversity and food management.
Our rural areas offer a wealth of nature-based opportunities to help combat climate change, which could also drive social and economic benefits. Natural habitats can store vast quantities of carbon. Nature-based solutions to protect our environment and mitigate against the effects of climate change are well known and can help safeguard our food security.
If wetlands, peat, trees and soil are restored, maintained and protected they can help 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 offer 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.
The Government – or taxpayer – alone cannot finance restoration and adaptation projects and needs private sector investment. Many businesses want to meet their environmental commitments and obligations. The Green Finance Institute estimates that the UK has a £56 billion financing gap over the next 10 years to meet our natural environment targets. To ensure that this investment benefits rural communities, establishing private markets for nature will enable farmers and land managers to sell biodiversity, water quality and carbon credits alongside their food production businesses. Doing so can improve the profitability and resilience of farm businesses.
To finish, Mr Deputy Speaker, the opportunities rural areas present for levelling-up should be grasped as they are integral to the U.K.’s environmental, social, and economic well-being.