Rural areas held back by housing and infrastructure woes, report warns

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The rural economy is being held back by a lack of affordable housing, supermarket price-wars, poor public transport and broadband connections, according to a new report.

The cross-party group of MPs and peers found the rural economy was 18% less productive than the national average. If this gap was reduced it could add £43bn to the UK economy.

The government said it welcomed the report, and that it was providing £2.6bn to rural areas.

The All-Party Parliamentary Group (APPG) on the Rural Powerhouse heard evidence from over 50 rural organisations including charities, campaign groups, academics, and business leaders.

Calling it “one of the most comprehensive inquiries into the productivity of the rural economy” the co-chairman of the APPG, Lord Cameron of Dillington, said, “It is vital that government understands that rural Britain is not a museum, but instead is an important part of the national economy that deserves the chance to succeed.”

The parliamentary group heard evidence that there were “systemic failings” in the government’s rural policy development and there needed to be a more “targeted, cross-departmental, ministerial-led approach.”

Mark Tufnell, president of the Country Land and Business Association, said: “The country can no longer afford to ignore the potential of the rural economy and the prospects of the millions of people who live within it. Rural businesses are ready to expand, creating good jobs and opportunities for people from all walks of life – but a lack of interest from government is holding them back.”

The wide-ranging report highlighted many factors including the planning system, saying it was “failing those living and working in the countryside”.

With Covid leading to more people relocating from cities, the report said that prices were being pushed up and that in Cornwall, for example, houses were now nine times the average wage in England.

The definition of “affordable housing” was misleading, according to the report, with new homes often out of reach for local people and small-scale housing developments “routinely rejected”.

Ensuring housing was within the reach of local people would allow them to live where they worked, the report said, keeping money in the community.

Public transport

The report called for the National Planning Policy Framework to “refer to the need for economic growth in rural areas.” Developments with under 3,000 inhabitants should be favoured, with an emphasis placed on affordable housing.

The report said that poor public transport and urban-centric policymaking was reducing the opportunities for young people and leading to a ‘brain drain’.

It called on the government to provide focussed support, including ring-fencing funding for rural communities.

The report also said that Brexit and Covid-19 have had an impact on supply chains and access to foreign labour, and that trade deals were also putting UK farming standards at risk.

It called for the influence of major supermarkets to be limited, and the Seasonal Workers Pilot scheme to be broadened, extending the number of visas offered from 30,000 to 80,000.


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The report also highlighted the importance of improving poor digital infrastructure in rural areas. It cited a study showing that only 46% of rural areas had good 4G and said that services were harder to access, and fewer businesses were choosing to relocate to the countryside.

The report also said the tax system should be adapted to encourage regenerative development.

In response, Rural Affairs Minister, Richard Benyon, said:

“We welcome this report and its recommendations. Rural areas are at the heart of our vision for levelling up; I want businesses and people in remote areas to do as well as those in inner cities.

“We are providing funding to put in place the infrastructure that rural areas need, and the public services and opportunities that they deserve. We have already announced over £2.6 billion via the UK Shared Prosperity Fund, and we will be saying more about rural funding shortly.”

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