Southern discomfort

Few of the swells barrelling down the A303 in Porsche 4x4s to wealthy enclaves such as Rock or Fowey

Decadent westerners have long enjoyed the frisson of holidaying among the very poor. But the latest deprived must-visit tourist destination is in our own country: Cornwall.

Few of the swells barrelling down the A303 in Porsche 4x4s to wealthy enclaves such as Rock or Fowey will realise that Cornwall is the last corner of the country sufficiently impoverished to receive EU structural grants. Typical Cornish wages are 25 per cent below the national average, yet because it attracts second-home owners and the retired, property prices are 17 per cent higher: up to 16 times average annual incomes. But because this deprivation is on the country's rural fringe, it is ignored.

Cornish poverty is grinding. Statistics obscure its true extent because they are boosted artificially by incomers. And unlike urban areas, Cornwall boasts few facilities. In south-east Cornwall the last jobcentres are closing, so the unemployed must travel to Plymouth - but in large areas of the county public transport is non-existent. How are the unemployed to get there?

Underpinning the problems is a democracy deficit, with decisions about Cornwall made by a tentacle of central government in far-off Bristol. But change is coming. From next April, Cornwall will have its first unitary authority. The consequences could be profound. Initially, One Cornwall will simply assume powers previously enjoyed by six local councils, but if the new authority works, Cornwall might acquire the same autonomy as Wales.

One Cornwall presents a major test for the Liberal Democrats, who dominate the county's politics. By championing the rural poor, the party commands huge loyalty. How it performs locally will test its national fitness.

Reviving Cornwall will be tough. The priority will be the housing crisis. The Lib Dem MP for Truro and St Austell, Matthew Taylor, will call for communities to be given autonomy to build affordable housing without the usual planning rigmarole, funded by shared equity schemes. He has also endorsed plans to restrict second homes.

Underpinning the housing crisis are fundamental problems with the Cornish economy. This partly comes down to funding: why, for instance, is Cornwall one of the last corners of the UK without a university? But while Scotland has gone for tax and spend, some Lib Dems wonder about a bolder alternative such as tax-reducing powers. Might Cornwall attract investment by offering the country's lowest council tax? This could be financed by a windfall tax on water utilities. For if Cornwall didn't have enough problems, it also pays the highest water rates in the UK because of its huge coastline; when water services were privatised in the 1980s, other sea-bound areas such as Northern Ireland received environmental grants; Cornwall didn't.

There are solutions, but first ministers and visitors alike must grasp the problems. Only then can Cornwall be helped to help itself.

This article first appeared in the 14 July 2008 issue of the New Statesman, ‘I’ll leave when I finish the job’