Rural Economy and UK Agriculture: Issues for the New Parliament
Published Friday, January 24, 2020
This House of Lords Library briefing provides key statistics on the rural economy and a summary of recent developments.
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- Rural areas of England contributed an estimated £261 billion to England’s total economy in terms of gross value added (GVA), 15.9% of England’s total economic activity. Agriculture, forestry and fishing accounted for 15.2% of the local units of registered businesses in rural areas in England.
- The rural economy is diverse and includes many different types of industry. In terms of GVA, two sectors contribute the joint largest based GVA in predominantly rural areas: distribution, transport, accommodation and food; and public administration, education and health. Agriculture, forestry and rural affairs contributed 2 percent of rural England’s total GVA.
- Of Scotland’s 32 local authority areas, 13 have a population of more than 50% living outside urban areas. In 2018, these local authority areas contributed 7% of total Scottish GVA.
- In 2018, the Welsh Government estimated that 78% of land in Wales was used for agriculture. In 2017, the agricultural, forestry and fishing sector was estimated to have produced £510 million, 8% of the total GVA of Wales.
- In 2019, agriculture, forestry and fishing accounted for 25% of all VAT and/or PAYE registered businesses in Northern Ireland. The second largest was construction at 14%.
- In April 2019, the House of Lords Rural Economy Committee recommended the Government introduce a new rural strategy to ensure policies affecting rural areas of England better meet rural needs. It identified areas holding back the rural economy, including: affordable housing: broadband connectivity; and local transport.
- Conservative governments since 2017 have stated they would establish a new system of financial support for farms following the UK’s departure from the EU. This would replace the common agricultural policy (CAP). For example, in its 2019 manifesto, the Conservative Party said it would provide support to farmers to improve the environment and increase biodiversity. However, in April 2019, the House of Lords Rural Economy Committee criticised the then Conservative Government for a lack of clarity on how aspects of this system would work in practice.
- Following the 2019 general election, the re-elected Conservative Government introduced the Direct Payments to Farmers (Legislative Continuity) Bill, a bill to enable direct payments to continue following Brexit. It also introduced a new Agriculture Bill, which would establish this new system of financial support for UK farmers to eventually replace direct payments.
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