CENTRAL Devon MP Mel Stride last week used the job losses in Okehampton and a business in North Tawton to highlight the pressures being put on Devon-based rural companies in the House of Commons.

Mr Stride welcomed announcements in the Budget that aimed to stabilise the economy, including those regarding business taxes.

But he warned that rural businesses were just as vulnerable to high costs as those in urban areas — a fact he felt was often neglected or misunderstood in Westminster.

High fuel prices, VAT on tourism businesses and an increase in national insurance contributions and general costs were mentioned as key challenges to economic recovery in the region.

He said: 'In my constituency, like in many rural constituences, small and medium-sized enterprises are particularly important.

'Honourable members might be aware of a town called Okehampton in my constituency, which, because three small and medium enterprises have recently closed their plants, has seen unemployment rocket from about two percent to in excess of ten percent.

'That town and its community are having a difficult time at the moment.'

'In general, I welcome what the Government have done to support local businesses. It is bearing down on the tax burden on business, but I have serious concerns about the level of national insurance taxation.'

Increasing fuel costs were also raised: 'Very little happens in Central Devon in a business sense that is not affected by the price of fuel.,' said Mr Stride.

'For example, Gregory, a large haulage company in North Tawton, which transports milk in particular, operates across the South West and beyond.

'To the extent that fuel prices go up, the company's prices go up too, and at the end of the day farmer's margins are squeezed even harder.'

The MP said VAT rates on tourism accommodation were the same as other items that have VAT in the UK —only 4 other countries in the European Union applied the same rates.

Mel said: 'That is a mistake. We should look seriously at lowering the rate.'

David Heath, deputy leader of the House of Commons and MP for Somerton and Frome, concurred with Mr Stride's statements, saying: 'It is very important that we recognise the economic needs and potential of areas such as Somerset and Devon.'