Rural Economy: Key Statistics and Recent Developments

This Lords Library briefing provides an overview of the key economic statistics available on rural areas of the UK. It also focuses on two industries associated with rural areas—agriculture and tourism—and provides a summary of some of the recent developments affecting the rural economy.

What Do We Mean By The Rural Economy?

The rural economy is diverse and includes many different types of industry. It includes those industries traditionally associated with rural areas, such as agriculture, forestry and rural affairs. The rural economy also has much in common with other areas of the UK, with a high number of people employed in the service sector. In terms of gross value added (GVA), the largest sector in rural areas of England is public administration, education and health, which contributed 20 percent of rural England’s total GVA. Agriculture, forestry and rural affairs contributed 2 percent of rural England’s total GVA.

Classification of Rural Areas

Statistics broken down by areas identified as rural on the basis of population density and for employment by sector indicate the following characteristics of the rural economy:

• Rural areas of England contributed an estimated £229 billion to England’s total economy in terms of GVA, approximately a fifth of England’s total economic activity. Agriculture, forestry and fishing accounted for 15.6 percent of the local units of registered businesses in rural areas in England. In rural areas classified as being in a sparsely populated setting, the proportion was 32 percent.
• Of Scotland’s 32 local authority areas, 13 have a population of more than 50 percent living outside urban areas. In 2014, these local authority areas contributed 20.6 percent of total Scottish GVA.
• In 2008, the Welsh Government estimated that 85 percent of the land in Wales was used for either agriculture, forestry or was common land. In 2014, the agricultural, forestry and fishing sector was estimated to have produced £363 million, 0.7 percent of the total GVA of Wales.
• In 2015, agriculture, forestry and fishing accounted for 25 percent of all VAT and/or PAYE registered businesses in Northern Ireland. With the exception of Belfast, agriculture, forestry and fishing was the largest industry group in all local government districts.

This briefing provides an overview of the economic statistics available on rural areas of the UK. It also focuses on two industries associated with rural areas—agriculture and tourism—and provides a summary of some of the recent developments affecting the rural economy.