How is Britain coping with the recession?- Builth Wells, Powys

Valley of the (Steps) dolls

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The five members of the former pop supergroup Steps stand beneath the vaulted ceiling of the former Builth Wells Baptist Church, a little askew on the shelf of an old Welsh dresser. The plucky pop stars stare blankly through the cellophane windows of their pristine boxes and out into the cluttered hall of a deconsecrated church.

“It's easier to start a business now," says Rob Clement, who opened his antiques centre in the church building a few months ago. "People are buying all sorts," he says, as a steady stream of customers ambles along the bustling aisles of furniture, glass and ceramics.

Home to 2,352 people, numerous independent businesses and major organisations such as the Royal Welsh Agricultural Society and the National Farmers' Union of Wales, Builth Wells lies at the heart of the Welsh countryside. Set in the rolling landscape of the county of Powys, it is the country's agricultural hub and a barometer for the recession's impact on life in rural Wales.

Whereas English dairy and cereal farmers are finding conditions difficult in 2009, the Welsh Assembly government has forecast that average farm income in Wales will rise by 22 per cent in 2008-2009. The weak pound has helped Wales's livestock farmers, at home and abroad. Prices for lamb exports, which account for a third of Welsh lamb, have risen substantially over the past year, while a local butcher tells me that cattle farmers can expect to get about £1,000 per animal today, compared to £500-£600 a year ago.

Builth Wells's agricultural heart is the Royal Welsh Showground. Hosting 400 events annually, the arena generates roughly £40m each year and sustains 167 jobs. More than 220,000 visitors attended this year's Royal Welsh Show, bucking expectations that the recession would keep visitors and exhibitors away. Meanwhile, its English counterpart, the Royal Show in Warwickshire, closed its doors for the last time this summer.

Away from the showground, the local authority is the area's largest employer. It is facing severe budget restrictions this year, but Sharon Hazelwood, clerk to Builth Wells Town Council, says it has not had to implement, as she puts it, "major headcount reduction strategies, as have been seen elsewhere in the UK". But trading conditions for Builth's independent retailers have become tougher over the past few months. "The balloon went up in the cities in November," says Arwyn Morgans, a local butcher, "but it only started rising in Builth four months ago."

It is a sentiment echoed elsewhere. Although several local businesses report steady trade over the past few months, Sharon Dixon, who opened the Breadstix bakery in November 2008, says, "We do miss the builders coming in for breakfast." Tavis Harvey, a pub landlord, also laments the erosion of the local construction industry.

“A few months ago, the construction workers would come in for a pint after work," he says, "but nobody comes to the pub to socialise any more." Incremental rises in the minimum wage, council rates and VAT hikes on alcohol are also taking their toll on the pub's turnover.

The sense of unease among some locals is less a response to the tangible effects of the recession and more a mild crisis of confidence about what might lie ahead. However, says Philip Bicknell, senior economic adviser at the National Farmers' Union, while the progress of rural enterprise may be hindered by weak transport links and broadband connections, rural communities are often well placed to weather recession. Customer loyalty in small communities keeps trade flowing, and personal relationships often make employers less likely to push through redundancies - a contributing factor, perhaps, to Mid Wales's low unemployment rate. "Losing a couple of staff would certainly help me financially," says one local retailer, "but I just can't do it."

Tavis Harvey agrees. He feels the winter will be a struggle, but points to features of rural community life that ensure relative stability. "Things like the local dominoes league, which starts in September, will guarantee at least 15 people in the pub once a week."

Several local business owners explain that their continued success during the recession is in part thanks to a well-defined distance from banking. "I'm very lucky," says Gary Rollinson of Noah's Ark Pet Supplies. "I have a good relationship with my landlord, who keeps the rent steady, and sales are OK, so I haven't had to do much with the bank."

A survey published in August by the Universities of Manchester and Sheffield named Powys the happiest place to live in the UK. And although the people of Builth Wells are far from complacent about what the financial future holds, there is a definite spring in Builth's step today. The five Steps dolls, however, remain unsold.

This article appears in the 14 September 2009 issue of the New Statesman, Where next?