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Rural Communities (Recession)

I agree with my right hon. Friend. As I said, there is a danger of a growing digital divide—we already have a digital divide—and the challenge for the Government is how higher-speed broadband can be financed. We hope to hear more about that from the Government this week, including whether there is any potential to lever in substantial private finance to ensure wider access to high-speed broadband. Another crucial issue for the long-term potential of economic growth in rural areas in the digital age is having a decent broadband link, which many rural areas are simply lacking at the moment. This should be regarded as an infrastructure challenge, which must be discussed further, but no one should underestimate the huge sums of money that would be involved. The untapped potential of rural businesses could be key to driving the recovery of the UK economy and helping to create sustainable growth for the long term. Stuart Burgess, the Rural Advocate and chairman of the Commission for Rural Communities, said that""our rural communities have much unfulfilled potential… The challenge is to extend growth and productivity across more firms, employees and communities in rural England."" In the short term, however, we need to help rural businesses weather the downturn. As the Government have admitted,""rural economies are heavily dependent on small and medium-sized businesses and this is one of the sectors thought to be most under threat"" from the downturn. We have thus proposed a range of positive measures to get the economy moving again that will also help businesses in rural areas. We have called for a reduction in corporation tax rates on small companies from 22p to 20p by reducing complex reliefs and allowances. The majority of rural enterprises employ fewer than 10 people and many employ fewer than five. In order to help with payroll costs, so that rural businesses can keep staff on and employ new staff that are looking for work, we have argued for cuts of 1p for at least six months in national insurance contributions for businesses with fewer than five employees. We would give smaller businesses greater access to the £125 billion Government procurement budget by cutting red tape, advertising online all contracts worth more than £10,000 and simplifying the pre-qualification process. We would help thousands of small rural firms by making business rate relief automatic for eligible small businesses in England, and we would reduce the burden of regulation to give businesses more freedom and greater flexibility. The problems of steep increases in the costs of loans and overdrafts for otherwise successful businesses during seasonally quiet periods is a particular challenge for tourism and other businesses prevalent in rural areas. Of the 25 local authorities with the highest unmet demand for affordable credit, four are classified as rural and eight have significant rural populations. Our proposed £50 billion national loan guarantee scheme to get credit flowing again would also help, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) argued. As the Commission for Rural Communities has argued, businesses need more flexibility for paying VAT, so we would allow small and medium-sized enterprises to defer their VAT bills for up to six months, potentially meaning the difference between survival and failure. Those are all practical measures to help the rural economy in the current downturn.