Myth Busting Rural is the Key to Levelling Up
Successive failures to understand the rural economy have inevitably led to ineffective policies; if the government is to level up rural, future strategies must mirror reality not outmoded perceptions of the countryside
With another parliamentary year just closed and a new one soon to open, rumours abound about the government’s priorities in the upcoming Queen’s speech. Levelling up, it is hoped, will be front and centre of the announced programme. It was, of course, the other flagship policy of Boris Johnson’s government aside from ‘getting Brexit done’; yet the two-year pandemic, scandals surrounding Partygate, and the Russian invasion of Ukraine, have slowed this radical programme to a snail’s pace.
Whilst Partygate allegations continue to stalk the Prime Minister, it is still hoped that this programme for rejuvenation can now move forward rapidly.
The roadmap for the programme was laid down in February 2022 with the publication of the Levelling Up White Paper. Many of us think it is a good idea, yet like many government policies it has committed the mistake of adopting an urban centric approach. In fact, there was no mention of delivering prosperity or growth to rural communities anywhere in the White Paper.
Was this by design? Perhaps but not necessarily deliberately, after all, the commonly utilised official metrics for identifying deprivation often fail to capture pockets of rural poverty. This use of inappropriate metrics for rural communities, whether in identifying poverty or allocating funding, was a major problem identified within the All Party Parliamentary Group for Rural Health and Social Care’s Parliamentary Inquiry, and forms part of a larger systemic failure by the government to properly understand and develop specific policies in accordance with rural issues.
At the heart of this systemic failure are a host of misconceptions embedded within Whitehall that negatively skew approaches to rural revitalisation. Rectifying these falsehoods will produce a pathway to long-term sustainable rural growth. What is needed is to identify the problems and deliver tailored solutions; yet this piece of common sense seems to have evaded successive governments.
Thankfully, government is more than the sum of its parts and parliament at least, or more precisely, the All-Party Parliamentary Group (APPG) for Rural Business and the Rural Powerhouse has risen to the task of dissecting the problems and misconceptions plaguing the rural economy in their recently published report Levelling Up the Rural Economy.
The opening foreword states the problem boldly, “Rural Britain is not a museum”, a message that needs to be heard loud and clear in Whitehall. Yes, our countryside is a place of outstanding natural beauty, something we all want to preserve, but at the same time those living in rural areas want a dynamic and sustainable rural economy not the existing settlement offered by the idyllic green prejudices of city dwellers.
Seeing the countryside through the prism of either agriculture or tourism is damaging to the rural economy. As the APPG report highlights, there is a real urgency to level up the countryside. Productivity within the rural economy is 18% less than the national average, a total lost monetary value of £43 billion. Not only are incomes lower in rural areas, but England is the only OECD country where it is more expensive to live in a rural area compared to an urban one. Rural connectivity continues to trail behind coverage in urban areas, a major barrier to reversing the current rural brain drain and attracting new businesses.
The report laid out by the APPG is wide-ranging in identifying the problems and offering solutions, and for anyone with a serious interest in revitalising the rural economy it is certainly worth a read. Nevertheless, I do want to draw out some of the problems and solutions regarding housing and employment and why the government needs to update its perception of the rural economy.
Many people still think agriculture and tourism are the bedrock of the rural economy. Important though they are, this is incorrect. Collectively, they make up only 15% of the rural economy. Manufacturing alone takes up 23%, more than the two combined. In fact, nearly a quarter of all businesses in the UK are located in the countryside with a total estimated value of £508 billion. To quote the report, “The perception of rural areas as teashop economies undermines their economic contribution, which has an impact on productivity”.
Any pro-growth model for the rural economy will have to overcome this anti-development mentality that seeks to lock rural areas within a time capsule. At the heart of delivering for rural areas and closing this productivity gap is the question of housing, particularly affordable housing, and the development of rural business hubs. This statement may set off alarm bells in the minds of those worried about concreting over the countryside, a concern I share, but these goals can be achieved with a smart, and rurally-centred strategy that promotes appropriate small-scale developments in multiple locations within a given rural area.
A clear example of this is that local plans categorise developments in villages with fewer that 3,000 inhabitants as unsustainable, preventing any prospect of new affordable housing. Whilst no one wants to fundamentally change the character of these settlements, the idea that a small number of appropriate affordable village homes should be discouraged acts as a barrier to revitalising the labour force of rural communities. Changing the National Planning Policy Framework (NPFF) to promote organic, incremental growth in these settlements, as recommended by the APPG report, could help increase the supply of affordable housing in a manner consistent with the values of rural communities. The emphasis, however, must be on affordable homes and explicitly ban these new builds falling into the hands of second homeowners looking for a holiday retreat, another barrier to a vibrant rural economy.
The promotion of affordable homes to attract talent will ultimately be redundant without an effective strategy to facilitate a creative business environment. In our digitally driven age, any strategy must place great emphasis on rural connectivity. As the APPG report states, “high quality connectivity…would give businesses the freedom to choose where to locate”. Five billion pounds was promised to enable a nationwide gigabit broadband rollout by 2025, but only £1.5 billion of this has been released alongside a scaled back target to cover 85% of the country by 2025, a big blow for rural businesses and communities. Whilst it is hoped that a road map to reach the remaining 15% by 2030 will soon be published, businesses still require effective premises or hubs once this target is reached. The report’s suggestion to convert old agricultural buildings, barns and derelict houses into business hubs is one niche solution to sustainably reuse infrastructure and enhance the local community. Conversions also use less carbon than new builds making it the more environmentally friendly option as well. It would be a simple win-win way to contribute to levelling up the rural economy if only the government offered the requisite incentives. Ironically, despite the obvious benefits, the government explicitly disincentivises these conversions by offering zero-rated VAT on newbuilds whilst subjecting conversions and repairs to VAT. With the ability to control VAT back in Westminster’s hands following our departure from the EU, equalising VAT for different developments is a small change that could make a big difference to promoting sustainability and the creation of new rural business hubs.
These are just a few recommendations selected from an array of excellent proposals contained within the APPG report. The point was to highlight that a pro-growth model for rural does not require radical change or the desecration of our natural heritage but modest changes in policy. As small as these changes may be, they require a mentality change in government that breaks the myth of rural as an idyllic agricultural community and instead sees rural communities as the economically diversified areas that they already are.
The key to levelling up is in the government’s hands; they only need to unlock that potential, and this Queen’s speech is the time to get started.
