Future of the Rural Economy in Wales 3
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DEBATE PACK Number CDP 2017/0242, 27 November 2017 By Edward Potton, Lorna Future of the rural Booth Georgina Hutton, Emma Downing, Philip Brien, economy in Wales Carl Baker, Alex Adcock Contents Summary 1. Overview 2 2. Wales economy This pack has been produced ahead of the debate on the Future of the rural statistics 2 economy in Wales, to be held in Westminster Hall on Tuesday 28 November at 3. EU funding 6 4.30pm, and led by Ben Lake MP. 4. Superfast Broadband roll-out in Wales 8 This briefing provides detail on the Welsh rural economy, EU funding, 4.1 Broadband statistics 10 broadband issues and agriculture. 5. Agriculture in Wales 13 6. Press articles 25 7. Press releases 26 8. Parliamentary questions and debate 27 8.1 PQs 27 8.2 Debates 32 9. Further reading 33 The House of Commons Library prepares a briefing in hard copy and/or online for most non-legislative debates in the Chamber and Westminster Hall other than half-hour debates. Debate Packs are produced quickly after the announcement of parliamentary business. They are intended to provide a summary or overview of the issue being debated and identify relevant briefings and useful documents, including press and parliamentary material. More detailed briefing can be prepared for Members on request to the Library. www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 Number CDP 2017/0242, 27 November 2017 1. Overview This briefing highlights issues around the rural economy in Wales that are likely to be relevant in the debate on 28 November in Westminster Hall at 4.30. Output per head in areas of rural Wales has grown over the last ten years, in line with other areas of Wales, but the level of output per head in rural areas is below the Wales average. Section 2 provides output and employment data for rural areas. An important part of the rural economy in Wales is tourism. An issue that has been raised in the past is VAT rates for tourism (see PQs in section 8). A Library note VAT on tourism provides further detail. Over the period 2014-2020, Wales is due to receive €5 billion in EU related funding. Some guarantees are in place for the period after Brexit (and beyond 2020 for agricultural payments), but uncertainty remains over the future shape of regional development and agriculture funding. Further detail is given in section 3. A programme to support the rollout of superfast broadband has been taking place across the UK. Broadband speeds in Wales are below UK averages, and rollouts can be more challenging in rural areas; section 4 of this note provides more detail on the programmes in Wales as well as maps of superfast coverage. The shape of a future agricultural policy after Brexit is an important issue for rural Wales. Section 5 of this briefing outlines issues for the rural economy around a future agricultural policy, funding, trade, the geographical protection of goods and access to labour, 2. Wales economy statistics Wales rural economy One way of measuring the rural economy is to look at how economic output varies across local authorities in Wales that are classified as Rural, OUTPUT PER PERSON IS HIGHEST IN URBAN AUTHORITIES GVA per head, by local authority classification, 2015 £22,000 £19,000 £17,000 £18,000 £14,000 Rural Valleys Urban Other Total Source: Office for National Statistics, Regional GVA(I) by local authority in the UK, March 2017 Future of the rural economy in Wales 3 Valleys, Urban and Other (note that this is not a perfect classification – there will be rural areas in non-Rural authorities and more built up areas in Rural authorities).1 In 2015, Rural authorities accounted for 30% of output, Valleys authorities for 17%, Urban authorities for 30% and Other authorities for 24%.2 Output per head of population is greatest in local authorities in Wales classified as Urban and least in those classified as Valleys. Rural local authorities sit in the middle – with average output per head at around £17,000.3 The charts below show how output has changed under these classifications in the last ten years. OUTPUT PER HEAD HAS GROWN MOST IN VALLEYS AND OTHER AREAS IN THE LAST DECADE GVA per head (current basic prices), Wales local authorities Rural local authorities Valleys local authorities £20,000 £20,000 £15,000 £15,000 £10,000 £10,000 £5,000 £5,000 £0 £0 2005 2007 2009 2011 2013 2015 2005 2007 2009 2011 2013 2015 Urban local authorities Other local authorities £20,000 £20,000 £15,000 £15,000 £10,000 £10,000 £5,000 £5,000 £0 £0 2005 2007 2009 2011 2013 2015 2005 2007 2009 2011 2013 2015 Source: Office for National Statistics, Regional GVA(I) by local authority in the UK, March 2017 Different types of areas have different industrial activity profiles – Rural authorities have more agriculture, forestry and fishing than other area types for example. 1 Using the classification in Statistics for Wales, A Statistical Focus on Rural Wales 2008 Edition Rural Authorities: Isle of Anglesey, Gwynedd, Conwy, Denbighshire, Powys, Ceredigion, Pembrokeshire, Carmarthenshire, and Monmouthshire, Valleys authorities: Rhondda Cynon Taff, Merthyr Tydfil, Caerphilly, Blaenau Gwent, and Torfaen, Urban authorities: Swansea, Cardiff and Newport, Other authorities: Flintshire, Wrexham, Neath Port Talbot, Bridgend, and Vale of Glamorgan. 2 To measure how large an economy is, we look at its total output – the total value of new goods produced and services provided in a given time period, using a measure called Gross Value Added or GVA. 3 Office for National Statistics, Regional GVA(I) by local authority in the UK, March 2017 4 Number CDP 2017/0242, 27 November 2017 INDUSTRIES VARY BY AREA TYPE Employment by (self-reported) industry and local authority classification, 2016, Wales 100% 90% Other services 80% Public admin. education and 70% health Banking, finance and insurance 60% Transport and communications 50% Distribution, hotels and restaurants 40% Construction 30% Manufacturing 20% Energy and water Agriculture, forestry and 10% fishing 0% Rural Valleys Urban Other Source: Office for National Statistics, Annual Population Survey Unemployment has been falling in all types of authority over the past few years. In 2016, unemployment in rural authorities was 4% – similar to that in other types of area in Wales. UNEMPLOYMENT RATE IS NOW AT SIMILAR LEVELS ACROSS ALL KINDS OF AREAS Unemployment rate (% of economically active population), Wales Rural local authorities Valleys local authorities 15% 15% 10% 10% 4% 5% 5% 5% 0% 0% 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 Urban local authorities Other local authorities 15% 15% 10% 10% 5% 5% 5% 4% 0% 0% 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 Source: Office for National Statistics, Annual Population Survey via NOMIS Future of the rural economy in Wales 5 Wales tourism Tourism is important to the rural economy in Wales. Data on international tourism in Wales is shown below. WALES VISITOR STATISTICS - 2016 HIGHLIGHTS Based on inbound tourism to Britain, for visitors who spend at least one night in the UK Number of visits 1.07 m Total spending £443.86 m Total nights spent 7.17 m Average length of stay (nights) 6.67 Average spend per visit £413 Source: Visit Britain, Inbound nation, region & county data International visitors to Wales are particularly likely to go to the coast or beaches, visit national parks, walk in the countryside or walk along the coast. 4 Further statistics on tourism in Wales, including domestic tourism, are available from the Welsh Government website. An issue that has been raised in the past is VAT rates for tourism (see PQs in section 8). A Library note VAT on tourism provides further detail. 4 Source: International Passenger Survey 2006-2011 at Visit Britain, Inbound countryside & coast research 6 Number CDP 2017/0242, 27 November 2017 3. EU funding Wales has been allocated around €5 billion of funding from the EU for the period 2014 – 2020, of which: • €3.1 billion – provided from the European Structural and Investment Funds – is to grow economic activity and employment, and increase the living standards of EU citizens. Of this, €0.7 billion is to come from the European Agricultural Fund for Rural Development (EAFRD), which contributes to the structural reform of the agricultural sector and to the development of rural areas. • €1.9 billion is for providing direct support for farmers under the Common Agricultural Policy (CAP). This support is often referred to as Pillar 1 of CAP. EAFRD funding In 2016, the Welsh Government administered a total of £58 million in payments from the EAFRD to 5,500 beneficiaries. The average payment was just over £10,600; the largest was £1.5 million to the Welsh Government itself to cover basic services to the economy and rural population, technical assistance and vocational training. CAP Pillar 1 The €1.9 billion allocated for Pillar 1 of CAP provides direct payments to support farmers’ incomes. The Welsh Government is responsible for managing these payments in Wales. There is more on the operation of CAP in the Section on Agriculture below and in the Library briefing EU Referendum: Impact on UK agriculture policy. EU funding once the UK exits the EU The UK’s, and consequently Wales’, access to EU funding programmes will be subject to negotiations during the withdrawal process. Even once outside the EU it is possible that the UK might contribute to the EU budget and receive funding from it. Not all EU funding programmes are exclusive to EU member states.