Why rural Britain is struggling

The Economist The Economist

FEW things are more pleasurable than a trip to the British countryside. But behind the often beautiful scenery there is a problem. Official figures suggest that in the past decade the economy of rural Britain has barely grown. Cities, meanwhile, have boomed. Suicides are up in rural areas, while falling in urban ones. Poverty has increased in the countryside, while falling in the Big Smoke. What explains the countryside’s economic stagnation?

One problem is that the countryside has been dealt a poor hand by the government. One of the chief complaints of businesspeople who work in the countryside is that the internet in rural areas is woeful. The government proudly boasts that almost everywhere in the countryside has access to basic internet speeds; but « basic » only encompasses the ability to browse news websites and the like, rather than streaming video. With poor connectivity, rural firms struggle to break into the online economy. In addition, rural areas have lost out from the British government’s austerity programme. Public-sector jobs have been lost at a faster rate than in urban areas.

Yet the impact of the government’s decisions only tells half the story. Changes to Britain’s manufacturing sector have had a big impact on rural areas. By the 2000s rural areas were fairly dependent on manufacturing employment: businesses prized the cheap, plentiful land. Recently, however, the pressure of competition from countries like China has made manufacturing production even in rural areas unviable. The growth of the service sector, which across Britain has compensated for the fall in manufacturing employment, is, unfortunately for rural areas, highly suited to urban places. Such are the benefits of close personal relationships, in industries like banking, or the rapid sharing of ideas, in industries like advertising, that no matter how good technology is, dynamic firms still want to be clustered. In the past decade the economies of Britain’s five biggest cities have grown 12 percentage points faster in real terms than the rest of the country.

The government claims that it has a plan to boost the economic fortunes of rural areas. It talks a good game on boosting internet provision and encouraging businesses to locate outside big urban areas. But since a report, launched last summer with much fanfare, not much has been done. In the popular imagination, Britain is a rural country. In reality, it is becoming irresistibly urban.