Rural white paper

�100m for primary health care centres �270m to turn post offices into one-stop shops Mandatory rate relief to more village shops, pubs and garages Reform planning rules to help farmers diversify �15m community service fund to support local enterprise

The measures in the white paper include the creation of affordable homes for rural residents, financial help for communities setting up initiatives to link buses and trains and extra funds for public transport.

Currently, second homes owners get a 50% discount on second properties which often tend to be located in rural localities forcing up house prices for local people.

Now local authorities will be able to charge the full rate with the extra revenue to be ringfenced for rural housing.

The move could cost a quarter of a million second home owners an average of about �350 a year.

The proposal was welcomed by the Liberal Democrats' housing spokesman Adrian Sanders.

Much of rural Britain is thriving but there are real problems and many of them have got worse over the last 20 years

John Prescott

He said a discretionary power to abolish the 50% council tax was "good news for rural communities" but warned the announcement must be followed by legislation.

Mr Prescott also proposed town and parish councils would get �7m to become "quality" councils, with 1,000 of them producing town and village plans and all of them being linked up to the internet.

But Nigel Waterson MP, the Conservative's local government spokesman, said the proposals proved Labour's "lack of knowledge about the countryside".

Pilot scheme

Turning to the wider problems faced in the countryside, Mr Prescott said difficulties in rural areas could not be looked at in isolation from those in urban areas.

He announced a pilot scheme in 280 Leicestershire post offices to provide a range of services including one-stop shops and cashpoints.

The closure of rural post offices, often seen as the heart of rural communities, has been a contentious issue in recent years.

Mr Prescott said �100m would be put towards mobile health units in rural areas.

Under the life of this government some 50,000 farmers will in all probability lose their livelihoods for good

Archie Norman

The white paper comes two weeks after the government announced measures to regenerate inner-city areas.

It may have a crucial effect on the fortunes of the many Labour MPs elected in 1997 who hold marginal rural or semi-rural seats.

High suicide rate

Tory environment spokesman Archie Norman said the government had presided over "unprecedented crisis in farming" which might see 50,000 farmers lose their livings during the parliament.

He said: "Under the life of this government some 50,000 farmers will in all probability lose their livelihoods for good. The suicide rate among farmers is the highest on record."

He questioned whether the white paper would do anything to "address the guts of that crisis" and accused Mr Prescott of not caring about the countryside.

Liberal Democrat leader Charles Kennedy said earlier the countryside should be represented in Cabinet by a secretary of state for rural affairs.

In the Commons, the party's environment spokesman, Don Foster, said the Lib Dems "unequivocally welcomed the broad thrust" of the white paper.