We know what the challenges facing rural areas are; Labour can seize them and provide solutions, argues Jim Knight

The most powerful voices in the Labour party are frequently its MPs. Their constituents give a direct line into what is going on. But in opposition that means the party does not hear as loudly from the areas we need to win back: the non-urban rural, market town and coastal communities. We need answers on a whole set of challenges facing people in these areas – not least on housing.

The Countryside Alliance are not my usual bedfellows, but their research earlier this year on the massive shortfall in the delivery of affordable housing in rural areas was striking. Their finding, that local councils have failed to meet targets on average by over 76 per cent in the past year, highlights a growing problem for poorer and middle-income families in rural and semi-rural areas.

The consequences of failing to tackle this problem are severe. As the Alliance’s chief executive, Alice Barnard, rightly says: ‘If the rural need for affordable housing is not addressed, and urgently, many of those communities upon which our countryside depends will shrivel and die.’ The sequence is clear: average rural house prices are 5.4 times average wages, so working families move to the towns with the consequence that village schools, post offices and pubs all close down. In the market towns we see increasing pressure on social housing, private rented homes rising out of reach, and housing benefit ‘reformed’ to become an irrelevance.

This has been a problem for years. In 2005, as rural affairs minister I fulfilled a manifesto commitment to set up a commission to look at affordable housing. Channel Four journalist Elinor Goodman’s report proposed an annual target of 11,000 affordable rural homes, a new tax on second homes and more restrictions on the right to buy council houses in rural areas. Nothing much was done with these conclusions but then Matthew Taylor, at the time a Liberal Democrat MP from Cornwall, was asked to have another look at the issue in 2008. He stimulated a more sympathetic response but it remains true that in government we could have done more.

Part of the problem is cost. The high cost of housing is a result of limited supply. Nimbyism on council planning committees means too many are paralysed by the politics of ‘concreting over the countryside’ to grant planning permission for rural sites. The attractiveness of some areas to second home owners lessens supply further. Where planning obstacles can be overcome money does not seem to go very far because houses are expensive to build.

Of course, these problems are being made worse by the toxic combination of Eric Pickles and Grant Shapps and their changes in the localism bill. The removal of the regional tier in planning, plus the simplification of national planning policy into a weakened policy framework, means affordable housing development will now be solely down to the political will of local councils. Such unpredictability is causing off putting uncertainty for developers.

What should Labour’s response be? Some of the old answers remain sound. Using the planning system to encourage councils to deliver affordable development, to require a change of use for second homes, and to raise a levy on market housing development for affordable housing are all credible. Community Land Trusts should be encouraged by developing a source of mortgage finance for buying new homes at building cost that excludes land values as an asset.

These ideas have been around for a while but, on their own, they will not make enough of a difference quickly enough. Increasing the supply of affordable housing should not just be about building new homes. We also need to look at existing homes and how they could be released.

This needs new thinking. In many rural areas there are enough houses to meet demand, but many are hugely under-occupied. Some villages that I represented in South Dorset were virtually deserted in the winter as the owners remained in their main homes in the city. Other three bedroom properties are half empty and lived in by single pensioners.

My view is that we should look at how we use the tax system to incentivise owners to reduce this under-occupancy. We need to examine various options. Could we offer a capital gains tax exemption for the period that second home owners assign their rural property to registered social landlords to rent out to people from the local housing waiting list? It may take away their holiday home but it creates an attractive investment vehicle, and a rental income when times are hard.

More interesting is the possibility of joining up with the debate on the future of social care. When homes are vacated because their owners have to go into residential nursing care, we have to look at whether we can make it worthwhile for the family to ‘lend’ the property to a housing association to rent out to meet local housing need. Doing so could generate a rental income that would help make a contribution towards the cost of residential care. We need a debate about whether we need a further incentive to allow the property to be rented by a social landlord; for example, by giving some inheritance tax discount, we could liberate significant numbers of homes to meet social housing need.

Housing is key if Labour wants to win back the south. We need 175,000 rural housing units to meet demand. We cannot afford to build that many, however much we generate from repeating the tax on bankers’ bonuses. We should spend what money we can afford on incentivising developers and existing home owners to increase the supply of houses in rural areas. Delivering affordable rural housing needs us to be tough on planning and imaginative on tax.

This is just one of a series of key issues outside of our urban comfort zone. Some are familiar: the fundamental economic need for rural broadband, reduced council tax through unitary local government, and enhanced bus services. Others are less familiar in our policy discussion.

We need a better answer to jobs growth in the peripheral areas than trickle-down city-region policies. In the absence of regional development agencies, how do we give these areas hope?

Public service reform under the last government was dominated by discussion of choice as the driver to a more consumer-oriented set of services. This is an urban agenda that has been turbo-charged by the Tories. It offers nothing to their rural heartland or the next electoral battleground where there is often just one hospital, if you are lucky, and one or two secondary schools.

For these areas we need less choice-based reform and more voice. People need to be better informed about the performance of their child’s school, their GP, their hospital. Combine this with easier ways of interacting with teachers, doctors, headteachers and commissioners so that they are asking the right questions and we can get a more responsive, personalised service. Technology makes this very possible as smartphone apps and Facebook pages from our local public services facilitate interaction and amplify citizens’ voices to force the shift in culture to improve local services. Add in to that a culture that aggressively designs services from the point of view of the user, and a powerful consumer voice can really drive improvement.

Communities outside urban areas have different challenges but are also suffering under this government. The Tories have alienated many, as the dependency on public sector employment in regions like the south-west hit home, and as issues like forest privatisation horrify millions. These areas need an alternative and the Liberal Democrats are no longer the answer. Labour should now develop a network of councillors, activists and parliamentarians who are close to these issues and can help answer the challenges on housing, jobs and public services in these electorally critical areas.

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Jim Knight is shadow minister for the environment, food and rural affairs in the House of Lords

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Photo: Ewan Rayment