Rural areas worse off in recession

The recession is taking a stronger grip on rural areas and the outlook is bleak for the next six months, according to the head of the Commission for Rural Communities (CRC).

Stuart Burgess made the claims following a visit to the West Midlands to examine the consequences of the recession.

He said: "The effects of the economic downturn are taking a stronger hold on rural areas and we are seeing job losses across all sectors, businesses closing down and retail casualties on the streets of market towns and villages.

"While the scale of the problems might be small in comparison to larger urban towns, the ripple effect is just as powerful and, crucially, local people are missing out on important access to services which is leaving many isolated and vulnerable."

Dr Burgess added: "I don't think the rural areas have seen the worst of things yet either and the next six months could be even more difficult.

"With this in mind, we need to make sure the Government directs similar levels of assistance to these villages and towns as it is doing in the urban economy."

His comments, released yesterday after the trip last Friday, came as a report predicting house prices could fall by up to 55% was made public.

Financial analyst Numis Securities told its clients that while property prices have already fallen 21% from their peak, they remain between 17% and 39% above a fair value.

If the "correction" in the market is as bad as in the 1990s prices could drop by 40% to 55%, the report, written in February, said.

Dr Burgess visited Alcester in Warwickshire with British Chambers of Commerce director general David Frost to examine the effects of the credit crunch.

The CRC chairman stressed that the Government must help people who are living on the interest from their savings and have been hit hard by falling rates.

Fuel poverty payments should be increased and good access to broadband must be ensured in remote areas to boost businesses, Dr Burgess said.