conservativerural action

Even before the country entered recession, the rural economy was underperforming, held back by low levels of investment, high taxes and restrictive planning rules. As the downturn gathers pace high levels of job losses are being reported and economic inactivity in the countryside is increasing at a much greater rate than in urban areas.

Those people who are being laid off are facing much longer journeys for retraining and support. The number of people chasing every unfilled vacancy in many peripheral rural districts is far higher than the average across Britain and in the worst cases higher than in major urban unemployment blackspots.

The Government’s decision to close almost a fifth of rural job centres last year without adequate alternative provision now looks even more irresponsible. The untapped potential from rural businesses has been estimated at up to £347 billion per annum.  Reducing the barriers to rural business growth and encouraging new ways of working in the countryside could make a real difference to the performance of England’s economy as a whole and generate jobs on a sustainable basis.

Helping small rural firms

The majority of rural enterprises employ fewer than 10 people and many less than five.  These small businesses are the backbone of the rural economy but more and more are at risk of failure. The Conservative plans to support small business will help rural entrepreneurs lead the fight back out of the recession.

• We will reduce corporation tax rates on small companies from 22p to 20p, by reducing complex reliefs and allowances.
• We will help thousands of small rural firms by making business rate relief automatic for eligible small businesses in England.
• We will give small businesses greater access to the £125 billon Government procurement budget by cutting red tape, advertising all contracts worth over £10,000 online and simplifying the prequalification process.
• We will reduce the burden of regulation to give businesses more freedom and greater flexibility.

Incentivising rural development

The average output of rural firms falls below that of the English average and 18 of the bottom 20 districts for levels of investment are rural authorities. Addressing this underperformance and stimulating sustainable business growth in rural areas is key to driving up standards of living and tackling social disadvantage. However, the current financial framework fails to provide an adequate incentive for local authorities to do this.

We need a meaningful and reliable reward scheme for local authorities that invest to strengthen their economies.  The Conservatives will introduce an easily understandable and predictable incentive that will encourage local authorities to go out and promote local economic growth as one of their prime purposes and ambitions.

• We will create a straightforward, transparent Business Increase Bonus which will allow any council whose increase in business rates in their area is above the national indexed rise to keep the difference for six years.
• We will legislate to give local authorities a new discretionary power to offer business rate discounts – of whatever form they choose – as long as they can fund them. This will allow rural authorities to apply appropriate local solutions to local problems, whether by averting the demolition of office buildings, encouraging the reuse of empty rural buildings, or preventing the closure of village shops.
• We will identify the causes of lower capital investment and access to finance by rural firms.

Planning for growth

It is not just the tax system and the constraints on credit which are holding back the rural economy. Inconsistency in the planning system is also serving to restrict economic growth in rural communities.

As identified by the Taylor Review, national policy has failed to counteract the restrictive notions of what is ‘appropriate’ rural business, focusing on agricultural and land-based industries at the expense of other types of enterprise. Farming and land management are, and will remain, crucial to the country and to the countryside, but this should not constrain the growth of other sectors of the rural economy, which accounts for the vast majority of the rural workforce.

Effort is required to ensure that sustainable development in rural areas is not undermined by inconsistent and inflexible planning policy. Re-use of redundant buildings, for example, may require flexibility in applying normal planning criteria such as access.

• We will simplify the planning system in order to strengthen local decision making, avoid confusion and make the planning system easier to understand and navigate.
• We will ensure national planning guidance is based on our priorities for the countryside as a whole and give local decision makers the power to include in their plans those types of business and enterprise which are right for their areas.
• We will extend the designation of ‘brownfield’ to land previously occupied by agricultural buildings (erected before a specified date) to facilitate the development of disused buildings for other purposes, subject to planning permission.

Homeworking

Home-based businesses have been termed ‘a hidden engine in the creation of sustainable rural communities’ due to the wide range of associated benefits they offer. We recognise the potential of homeworking not only to help revitalise rural communities but as an important component of the low carbon economy we want to create.

Improving broadband access is an important condition for business growth across the country, but nowhere more so than in rural areas, where connection speeds are slower and a much higher proportion of businesses operate from home.

• We will work to bridge the ‘digital divide’ by using money such as the unused BBC digital switchover funding to facilitate the investment required to give remote areas better broadband coverage and by supporting innovative solutions, such as community broadband schemes, which can deliver next generation connection at relatively low cost.
• We will take forward planning policy which adopts a more supportive approach to planning applications for workspace extensions to the home wherever other local residents do not object.
• We will enable Local Housing Trusts to provide long term low rent commercial accommodation for extra workspace and informal networking.

Tourism

Tourism supports hundreds of thousands of jobs and generates billions of revenue for the rural economy. We must ensure that rural areas have the ability to effectively market themselves at a time when the recession and the weakness of the pound is making holidaying in the UK even more attractive both to Britons and visitors from abroad.

• We will encourage greater coordination of local authority initiatives relating to tourism lead by an empowered Visit England.

B&Bs, farm stay accommodation and public houses are the backbone of the rural tourism industry and yet many are contemplating closure as a result of onerous regulations which make no distinction between small family-run B&Bs and large hotels. Stringent fire regulations and new laws banning dogs from entering farmhouse kitchens, for example, are making life particularly difficult.

• We will ensure that regulation of small holiday accommodation is proportionate and based on common-sense.