Productivity and Economic Growth: East Midlands

Tuesday 17th March 2026 Westminster Hall

00:00

[James Naish (Rushcliffe) (Lab) [R]]

I beg to move,

That this House has considered productivity and economic growth in the East Midlands.

It is a pleasure to serve under your chairship, Dr Huq. I want to start by telling you, as someone from London, about how great the east midlands is. Home to Derbyshire, Leicestershire, most of Lincolnshire, Northamptonshire, Nottinghamshire and Rutland, we are central to the country’s logistics network, with fantastic facilities such as Magna Park in Lutterworth, Daventry international rail freight terminal and, of course, the UK’s largest freight airport at East Midlands airport. We have deep industrial roots, with space engineering expertise in Leicester, biomedical sciences clusters in Nottingham, and nuclear and rail engineering proficiency in Derby.

We have a range of excellent universities, from Loughborough and Nottingham to Lincoln and Northampton, all of which have produced fantastic start-ups. We are home to major energy projects and developers, such as STEP Fusion, the world-leading fusion energy programme, and great British businesses such as Derby’s Rolls-Royce, which was selected as the preferred bidder to partner with Great British Energy to develop small modular reactors.

In short, our region’s potential is obvious to anybody who cares to look, yet despite our having 5.1 million people, 403,000 businesses and a fabulous location in the heart of the UK, today’s debate is likely to repeat messages that I know have been said many times in this place: that the east midlands is under-recognised, under-appreciated and still does not receive its fair share of UK Government investment.

That points to a national policy failure that the Labour Government must at long last address via a long-term commitment to four things: backing our region across all Whitehall Departments; sustained levels of public investment, to correct historical injustices; further devolution, to empower local communities across our region; and a coherent set of tailored policy interventions that will turn the page on a sustained sense of managed decline for many parts of our region for over 40 years. I hope we will hear those things from the Minister today.

Having led a local authority in Nottinghamshire before coming to this place, I know that the east midlands is often forgotten. Indeed, on three key criteria we remain on the wrong side of important UK averages: our median earnings are below the UK average, our unemployment is above the UK average, and our productivity is significantly below the UK average, at just 84.8% in 2023.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate; he is making a name for himself in the House for raising issues that affect his constituency, and I congratulate him on that. There are lessons here for all parts of the United Kingdom, so I thank him for raising this topic. Given that manufacturing alone supports almost one in 10 jobs in Northern Ireland, does the hon. Gentleman agree that strengthening regional productivity—whether in the east midlands, Northern Ireland or anywhere in the UK—depends on supporting advanced manufacturing, skills and supply chains across the whole of this great United Kingdom of Great Britain and Northern Ireland? Always better together—let that be our motto.

[James Naish]

The hon. Member is absolutely right: there are fantastic advanced manufacturing capabilities across the country, including in the east midlands, and the supply chain and the skills chain are key to making them thrive. I will come on to skills in the east midlands in a moment.

Ahead of the comprehensive spending review last year, the all-party parliamentary group for the east midlands launched an inquiry into regional priorities. We received 34 written submissions and held an oral evidence session here in Westminster, with contributions from local government, business, infrastructure, skills and other sectors. This work was about trying to distil, from the people who know our region the best, what the most serious barriers to boosting economic growth and productivity are, and about determining what practical steps the Government should take to address them.

[Dr Jeevun Sandher (Loughborough) (Lab)]

My hon. Friend is making a powerful speech about our region and the help it needs. Does he agree that for our region to do well, we need more devolution—including where I am in Leicestershire—as he has in his county? Is he pleased that the Government set out in the investment strategy that more money has to come to our region, which receives two and a half times less money for transport spending—or used to? Finally, does my hon. Friend agree that local leaders on the brilliant councils in my region, who are doing a great job, need even more powers to help to ensure that our region can grow, thrive and prosper?

[James Naish]

My hon. Friend is absolutely right, and I have already mentioned the need for greater devolution. Of course, in Nottinghamshire and Derbyshire we are seeing the dividends of that under Claire Ward, but I appreciate that Leicestershire still has some way to go to get the equivalent devolution. I absolutely support my hon. Friend’s call.

Before I share the recommendations of the APPG inquiry, I should say that I hope the Minister recognises that the inquiry’s very existence shows that we are serious about growth as a region. What is more, over the past 25 years we have delivered 35,000 more homes than our counterparts in the west midlands, even though the west midlands has a population that is about 20% larger. We are clearly taking our growth responsibilities seriously locally, yet despite that housing growth, transport spend per head in the region has fallen to just 54% of the UK average. That is not just slightly below, but 54% of the average—the lowest level of any UK region or nation. Rail funding per head is just over 40% of the UK average, and only around a third of the level seen in the west midlands.

The gaps have not emerged overnight: they are the product of choices over many years, under Governments of different colours, and they have had real consequences, shaping whether businesses grow, whether local labour markets function properly and whether people—my constituents—can access high-quality job opportunities. In short, inadequate investment has suppressed our region’s true potential. That is why the APPG inquiry was conducted. I place on the record my thanks to everyone who contributed to it. I believe its conclusions were fair and grounded, and we will make sure that the Minister receives a copy of the report.

The inquiry came to five primary conclusions. First, unsurprisingly, it suggested that the Government need actively to rebalance public investment, especially in transport, so that it better reflects housing and employment growth potential and delivery. I wholeheartedly welcome the Treasury’s Green Book being updated, but that in itself will not correct historical imbalances that must be addressed if we want places like the east midlands to maximise their potential. There is a genuine need for overcorrection.

Secondly, the APPG inquiry recommended that we pilot enhanced local employment hubs across the east midlands, devolving skills, careers and business support in a way that genuinely reflects local labour markets. One of the strongest themes in the evidence received by the inquiry was frustration with the fragmentation of the skills system. There are too many pots of money, too many separate agencies, too much inconsistency and too little flexibility, all of which hamper growth and productivity.

Thirdly, the inquiry recommended that we should expand women’s health hubs across the region, given the relatively poor life expectancy of women in too many parts of the east midlands. All genders and all age groups must contribute to closing the east midlands growth and productivity gaps, and targeted interventions will be required to realise that.

Fourthly, the inquiry recommended that the east midlands should play a central role in the country’s net zero transition, given its historical role powering millions of homes and businesses across the UK. Linked to that was the call made by more than 30 MPs to finally electrify the midland main line to Sheffield, which has sadly become a byword in our region for slow, uneven and stop-start infrastructure investment into a really important part of the country.

Fifthly, the inquiry suggested that the Government should reform how flood resilience funding is targeted so that it reflects social need and repeated risk, rather than underlying land values. Flooding can sometimes seem like a subject separate from growth and productivity, but in the east midlands, which has the greatest share of properties at risk of flooding from rivers or the sea of any English region, it is very much part of the same conversation. If we want growth, if we want to boost investor confidence, and if we want housing delivery and economic resilience, flood adaptation and mitigation are not optional extras. They must be seen as enablers for economic growth as well as for protecting food and energy security, which our region provides in abundance, especially in Nottinghamshire and Lincolnshire.

Together, the recommendations show that the east midlands is not looking for a silver bullet. Indeed, there is not one—although I will briefly put on the record the need for junction 24 of the M1 to be upgraded as a strategic priority for our road network.

[Michael Payne (Gedling) (Lab)]

I thank my hon. Friend for securing the debate. Does he agree that one way to redress the historical imbalance in transport spending is for a green light to be given to the fourth Trent crossing, which would link my constituency to his beautiful constituency of Rushcliffe? It would unlock economic growth and bring forward new jobs, crucially it would help with emergency planning in one of the biggest cities in the country, and it would be great for our region.

[James Naish]

On Friday, I was part of a conversation about the potential impact of the Trent sports quarter on Rushcliffe, and Nottingham Forest’s expanded City Ground proposal. The fact that we have only three crossings across the Trent came up several times, so I absolutely support my hon. Friend in that call for a fourth crossing.

Rather than a silver bullet, the east midlands needs a serious, joined-up approach to growth because infrastructure, skills, health, clean energy and climate resilience—the five points that I just raised—are not separate conversations. They all need serious consideration to determine whether our region can fulfil its potential in powering the national economy.

Let me be clear: the east midlands does not lack growth prospects. On the contrary, it is full of them—I know colleagues will make the case for their local areas. The question is whether our regional and national policy frameworks are agile enough and, more pertinently, fair enough to support those growth prospects. I do not believe they are. That is why we are here on our region’s behalf once again to call for a fairer settlement and a serious attempt to remove the structural blockers that are holding us back. We need the Government, who were overwhelmingly backed by voters across the region, to look at how poorly the east midlands is currently treated and to finally act to address that.

I hope the Minister will address a few points directly. First, does she accept that the east midlands has for too long received a persistently unfair share of transport and infrastructure investment? Secondly, does she accept that that acts as a material drag on our local economy? Thirdly, will she confirm what steps the Government are taking to ensure that investment decisions are better aligned with the scale of housing and employment growth that is already being delivered in our region? Fourthly, is she willing to take seriously, along with other Departments, the APPG’s recommendations on the need for tailored local employment hubs and women’s health hubs?

Finally, will the Minister give the House some reassurances that the east midlands will not be told once again that its time will come? Too many people in my constituency of Rushcliffe, and across our region, have heard that before, and have sadly formed the view that the east midlands is important, but not important enough—that it is valued in theory, but not in practice. I refuse to accept that, and I am sure that many colleagues present refuse to accept it as well.

The east midlands is a region of makers, exporters, innovators and workers. We are home to strategic industries, nationally significant infrastructure and major universities. We have delivered homes, created jobs, powered the country for generations and shown ambition. What we need now is for the Government to match our potential and ambition with commitment and action.

I will repeat the four things I mentioned earlier. The Government must commit, first, to back our region across all Whitehall Departments, working together; secondly, to sustained levels of public investment to address the historical inadequacies I have talked about; thirdly, to further devolving and empowering local communities across our region, giving them more powers; and fourthly, to creating a coherent set of tailored policy interventions, which will turn the page on 40 years of perceived managed decline. These four things cannot come a day too soon for the east midlands. I look forward to hearing colleagues’ contributions, followed by the Minister’s response.

[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. Can everyone who wants to speak stand so that we can calculate the time limit? It is going to be three-minutes, I am afraid. I call Ed Argar to set an exemplary example.

09:45

[Edward Argar (Melton and Syston) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I am grateful to my constituency neighbour the hon. Member for Rushcliffe (James Naish) for securing this important debate, and I look forward to welcoming him to my constituency later this week. I agree with much of what he said, particularly about flooding.

This is one debate in which I can argue from the Back Bench, without fear of contradiction, that the east midlands is the best region in the entire country—[Hon. Members: “Hear, hear!”] This may be the only time I get such consensus on both sides of the House. As the hon. Member set out, we have all the core ingredients. We have a central location; we have good transport links, although they need to be better; we have great universities; we have great skills. Most importantly, we have great businesses and we have great people with ambition.

The potential is clear but, as the hon. Member said, our region all too often appears to lose out. Perhaps that is because we are not demonstrative and we do not always shout about things. When it comes to funding for infrastructure or for our local authorities, the facts are clear. My local authority in Leicestershire has the lowest per-head funding in the country. Previous council leaders and councillors such as Deborah Taylor and Nick Rushton have fought hard to address that. We need fairer funding for our county.

Network North was due to bring more money to Leicestershire. Among other things, that would potentially have helped to fund the completion of the Melton Mowbray distributor road. Sadly, when the Government announced the new funding, that was taken away. One challenge we face is that when the Government direct funding to our area, they all too often favour those areas with mayoral authorities, rather than counties without one, such as Leicestershire.

Melton and Syston has a limited number of big businesses, but a lot of small and rural businesses. They are the bedrock of our local economy, but they face barriers to growing, including issues with public transport, with attracting people to work and with the ability to travel. The impact of national insurance increases and business rates in town centres, particularly for rural businesses and shops, makes it challenging for them to expand as they would wish to. A key challenge, as the hon. Member set out clearly, is in working together not only to deliver on our ambitions, but to break down the barriers to securing the additional investment bid for the A52, the A46 or even local roads and transport. We also need to break down the regulatory and taxation barriers that stop so many fantastic businesses growing and expanding.

There is huge potential in our region, in my county of Leicestershire and in my Melton and Syston constituency. We need those barriers broken down and investment put in to ensure that that potential is unleashed.

[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. One of the displays is defunct, so it may be difficult for Members to see when their three minutes have ended. I will signal 30 seconds before their time runs out.

09:49

[Catherine Atkinson (Derby North) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I congratulate my hon. Friend the Member for Rushcliffe (James Naish) on securing this important debate. I welcome a debate on productivity and economic growth in the east midlands, because it is a region with extraordinary potential, but for far too long that potential has been under-realised. Nowhere is that more evident than in Derby.

Derby is a city that helped to power the industrial revolution. The River Derwent, which runs through our city, once powered the mills that transformed Britain’s economy. Today, Derby remains at the heart of Britain’s industrial strength. We are home to globally significant engineering and manufacturing industries, from aerospace to rail, with thousands of highly skilled workers who design, build and maintain some of the most advanced technology in the world—technology that is crucial to this Government’s industrial strategy.

For years, however, under Conservative mismanagement, deindustrialisation and chronic under-investment, regional disparities have meant that our region has not fulfilled its potential. Nowhere is that clearer than in transport. The east midlands received a lower level of spending per person than any other region. If our region had received just the UK average across the five years between 2019 and 2024, we would have had an additional £10 billion. That is billions’ worth of missing rail connections and bus services that would have connected people to work, training and opportunities.

We cannot talk about economic growth without discussing investment in the skills that drive productivity. Derby is a city of makers, and we are known for our skilled workforce, but even in Derby it is clear that additional investment in our skills is essential. At the Nuclear Skills Academy, Rolls-Royce and the University of Derby are already delivering 200 apprenticeships a year, but there is so much appetite for good skills to deliver good jobs. I believe that Great British Railways, which will have its headquarters in Derby, can and should be an important vehicle for the skills that we need. We can also see that appetite at Derby’s university technical college, which has specialisms in engineering and life sciences. There were 450 applicants for just 100 places. If we are to deliver what we need and deliver what Team Derby foresees—good jobs, regeneration and skills—we need to ensure that we are investing in our future.

09:52

[Shockat Adam (Leicester South) (Ind)]

It is a pleasure to serve under your chairship, Dr Huq. I thank the hon. Member for Rushcliffe (James Naish) for securing this debate. As my colleagues have mentioned, the east midlands is an absolutely fantastic region with great cities, towns and villages, a fantastic location and the most fundamental thing: wonderful people.

I will give a quick anecdote. Ten years ago, my team, Leicester City, stood at the top of the premiership. We were about to be crowned the champions of England. It was a fairytale. Ten years later, we sit at the bottom of the championship, about to go into league one. That is what happens when we take our eye off the ball: lack of investment, lack of strategy, and taking things for granted.

Much has already been said about the region, and others will say more, but in my short time today I will focus on two things. The first is the manufacturing industry. Leicester was once known for clothing the world, and even today it supports 11,000 jobs in garment manufacturing and retains the rare ability to produce garments end to end in a single city. The capability and skills are there, but unfortunately the investment is not. Businesses face growing skills shortages, particularly in the manufacturing and digital sectors, with vacancies rising by over 150% in recent years.

I ask the Minister three simple questions. First, when will the Government address the clear imbalance in infrastructure and transport funding in the east midlands? Considerably less is spent on transport there than in the west midlands; in fact, compared with Birmingham, it is less than half. Secondly, what more will be done to close the skills gap, particularly through vocational training and apprenticeships aligned to local industry? Thirdly, will the Government use public procurement more strategically, particularly in the defence and NHS supply chains, to support British manufacturing in regions such as Leicester?

The east midlands does not lack potential. What it lacks is parity and equity. With fair investment and targeted support, it can once again be a driving force for UK growth.

09:54

[Amanda Hack (North West Leicestershire) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend and neighbour the Member for Rushcliffe (James Naish) for securing this incredibly important debate.

My colleagues will all agree that the east midlands is a region with so much to offer. We have two local mayoral authorities, which are fantastic for their areas, but we do not have one for Leicestershire. We do not have the strategic single voice or the powers that devolution brings. The only way to ensure that our constituents thrive in the long term is to ensure that the east midlands thrives together.

Historically, the region had some formal structures such as the regional development agency and regional assemblies. Those have long gone, but we need to consider where we go from here to get a single organisation that focuses on growth for the east midlands. Today we have a much more fragmented approach, and I cannot help worrying that that is a barrier to long-term productivity and growth.

My North West Leicestershire constituency alone employs 20,000 people in the logistics sector, partly because we have the second-largest freight airport in the UK: East Midlands airport, which operates like a 24/7 logistics hub. I am proud to say that exports through the airport, predominantly in sectors such as advanced manufacturing and aerospace, are nearly double the UK airport average.

Alongside that hub, we have the only inland freeport, with a freeport site across Leicestershire, Derbyshire and Nottinghamshire. The plan for freeports was to have high-quality advanced manufacturing, which is key to building new jobs in the growth sectors identified in the industrial strategy, aligning with the demand for export growth. However, what has been proposed for the Leicestershire site has created considerable concern for my community. To maximise growth and opportunity, we have to take our communities with us.

One of the barriers to growth in the east midlands, as has been mentioned, is transport. Spending per head is 54% of the UK average. What does that mean for my constituency? It means that our bus provision is unreliable, and we do not have passenger rail anywhere. In January, I led a debate on the Ivanhoe line, a disused passenger rail line that is completely intact from Burton to Coalville, and would connect two of the largest towns in the country to the rail network of Coalville and Castle Gresley on the edge of Swadlincote. Just imagine what that could do.

It feels as though North West Leicestershire, in the centre of the east midlands, is sitting on a bundle of incredible possibility. My constituency is the heart of the national forest, which is today celebrating the planting of its 10-millionth tree. This year also marks the 30th year of the National Forest Company, which has been working with North West Leicestershire district council to transform the industrial landscape for nature, people and enterprise.

North West Leicestershire and the east midlands are not short of ambition or opportunity. We would greatly appreciate the opportunity to work with the Minister to ensure that the east midlands is talked about not simply as a place for opportunity, but as a powerhouse for growth.

09:57

[Martin Vickers (Brigg and Immingham) (Con)]

It is a pleasure to see you in the Chair, Dr Huq. I congratulate the hon. Member for Rushcliffe (James Naish) on securing this important debate. He referred to most of Lincolnshire in his opening remarks, but I represent the bit of Leicestershire that is not, in official government terms, part of the east midlands, even though we have the East Midlands ambulance service. We are in no man’s land. We have the Northern Lincolnshire and Goole hospital trust; we are under Humberside police; and the integrated care board—well, that wanders all over the place. My question to the Minister is “Should that continue?”

We now have the Greater Lincolnshire Mayor and a combined authority, which play an important part in developing economic strategies and so on. Equally, I recognise that the Humber estuary plays an important part, particularly in energy. I am sure that there are ways to combine that with playing our part in the east midlands.

Reference has already been made to the A46. I remind Members that that road continues to Cleethorpes and is important to access to the south Humber industrial sector. We have the Humber freeports; I remind Members that Immingham is the largest port in the country, measured by tonnage. I have 10 railway stations in my constituency, but I do not have a direct train service to London. I have been campaigning for one ever since I arrived in this place in 2010. We have an international airport at Humberside that could play a much more important part in developing the economy of the area. As for railways, mention has been made of Sheffield and the slow services down the midland main line and so on. The first railway to reach my constituency was the MSLR—the Manchester, Sheffield and Lincolnshire railway—which was referred to at the time as “mucky, slow and late”, so this is nothing new.

My plea to the Minister is that she give a commitment in her response to looking at our place in government terms. Should we be part of the east midlands? I think perhaps we should. Equally, I recognise the importance of the Humber estuary and the links to the north bank of the Humber.

10:00

[Baggy Shanker (Derby South) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this important debate. I refer the House to my entry in the Register of Members’ Financial Interests with respect to Rolls-Royce.

I have said it before, and I will say it again: in Derby we are a proud city of makers. We have more Elizabeth line trains on the production line at Alstom. We have Rolls-Royce aerospace and nuclear powering today, and our next generation, in the skies and at sea. We have a brilliant community of over 6,000 small and medium-sized enterprises such as Huub and Mercian Cycles, which I joined yesterday in supporting Greg James as he passed through Derby on Radio 1’s “Longest Ride”.

Our local economy is full steam ahead, powering our region, our nation and, indeed, the world. With Derbyshire having more than double the national average number of people employed in advanced manufacturing, the talent in our city and region keeps our country moving and safeguards our national security. In recent years, the Government have committed to backing the city’s capabilities. Last year, the Ministry of Defence confirmed £9 billion of funding for Rolls-Royce through the Unity contract to deliver the next generation of AUKUS nuclear submarines, creating up to 1,000 jobs and safeguarding 4,000 more.

Recently, I welcomed the Railways Bill, which will let us crack on with making Derby the home of Great British Railways and setting up its headquarters in the heart of our city centre. Whether it is trains, planes or reactors for advanced nuclear submarines, we are proud of what we make in Derby, but for far too long our residents have not felt that benefit in the home of UK manufacturing. Our city is powering advanced manufacturing, but at the same time the majority of kids in Arboretum—where I was born—are growing up in poverty.

We build the trains that keep our country moving, but our region has consistently had the lowest transport investment of any nation or region. When industry in our city grows, residents rightly expect to share the benefits of that growth. That is why, backed by this Government and our brilliant mayor, Claire Ward, we are cracking on with setting up Team Derby. That is also thanks to the enormous help of the Minister here today. Through Team Derby, we will ensure that every single pound of investment flowing into our city works as hard as possible to deliver for the people of our city.

10:03

[Michelle Welsh (Sherwood Forest) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate my fellow Nottinghamshire MP, my hon. Friend the Member for Rushcliffe (James Naish), for securing the debate.

My Sherwood Forest constituency is proudly rural, consisting of market towns, villages, farms, small businesses, local pubs and visitor attractions. Those communities are full of talent, ambition and hard-working people, but for far too long they have been neglected. Fourteen years of Conservative Governments did little to support the productivity and economic growth of rural communities like mine.

Nowhere is the neglect clearer than in public transport. For many rural villages bus services are inconsistent at best, with some having just a single bus to serve their community. Others require residents to take multiple buses to simply travel across the constituency. In many other areas, it is a bus desert. At a coffee morning I held in Farnsfield at the weekend, I met Oliver Asher, a young man in my constituency who has mapped the bus provision in Nottinghamshire. There is a stark difference between 2014 and now. There is no clearer evidence of the under-investment in and neglect of such areas of the east midlands.

Public transport is not a luxury in rural communities, but a lifeline. A young person who cannot reliably reach a college place, an apprenticeship or a first job risks being lost. Weak connections limit the ambitions of our young people and the productivity of our communities, but when people can travel easily, affordably and reliably, we unlock opportunity.

Currently, there are more than 4,000 children living in poverty in Sherwood Forest. Parts of the constituency, a former coalfield community, are some of the most deprived areas of the country. Those people have never recovered from the decimation of their livelihoods, and that loss of potential continues a cycle of poverty and deprivation.

It is vital that we connect rural communities to towns and cities such as Mansfield, Newark and Nottingham city, where many educational institutions and employment opportunities are based. As Oliver, the young person from Farnsfield, told me, people in our villages need bus routes that actually work for them.

If we are serious about removing barriers to opportunity and unlocking the potential of the east midlands, we must invest in reliable public transport. Of course, that must go hand in hand with protecting our green belt and embracing our future in a way that respects biodiversity and ensures that every one of my constituents can access the outdoors and the natural spaces that define our communities. Where a person grows up should not determine how far they can go. We have a duty to build connections that make that real. No young person’s future and wellbeing should be limited by a failing transport network.

10:06

[Linsey Farnsworth (Amber Valley) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate.

Many in Amber Valley—including me—are proud descendants of coalminers, textile makers and engineers. That heritage still shapes our economy: 20% of the workforce are in manufacturing, mining and utilities. Amber Valley’s industrial history, national significance and visitor offer are currently underdeveloped, but I am working hard to change that through my visitor economy strategy.

A thriving visitor economy will boost footfall, inject money into hospitality and support local businesses and high streets. I am therefore delighted that my three towns of Alfreton, Heanor and Ripley have come together to submit a joint bid to the UK town of culture competition in recognition of their remarkable shared story. My visitor economy work complements that of East Midlands Mayor Claire Ward, whose vision for growth projects an additional £960 million in direct gross value added for the region and £730 million indirectly through the visitor economy.

No discussion of Amber Valley’s heritage and economy is complete without mentioning the Denby Pottery Company. Founded in 1809, it has made stoneware in Derbyshire since the industrial revolution. It is the constituency’s largest employer: about 350 of its 500 staff are local, and many have worked there for decades. As a tourist attraction, Denby Pottery Village brings in more than 250,000 visitors a year.

However, as Members know, the company has filed a notice of intention to appoint administrators, which is devastating news for staff facing uncertainty about their livelihoods. I have spoken to the GMB union, and I encourage colleagues to support any affected constituents. I have also met Denby’s leadership and ensured engagement with the Department for Business and Trade, and I remain in contact with the Treasury and the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Stockton North (Chris McDonald).

Although the news may feel sudden, the truth is that the UK ceramics industry has been hit by sharp and unpredictable swings in energy prices, and the impact of new trading arrangements and global tariff pressures have hampered competitiveness. We hope that an investor will come forward to secure a future for the business, as it is hugely important to save the company. I urge Ministers to expand the British industry supercharger scheme, as very few ceramics companies currently qualify.

Amber Valley contains some of the most deprived areas in Derbyshire. People know that they have been overlooked and left behind for years, and a much-loved employer going into administration, putting 500 jobs at risk, compounds that belief. Bringing pride in place back to communities such as mine is absolutely essential, so will the Minister outline what more can be done for Amber Valley and how she will work with colleagues across Government to support Denby Pottery?

10:09

[Steve Yemm (Mansfield) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq.

We must confront honestly the challenge of productivity in the east midlands remaining well below the UK average, currently at around 85% of it. Our constituents’ wages reflect that gap entirely, and if we are serious about raising living standards in the region, we have to close it. Investment drives productivity, enabling businesses to purchase better equipment, adopt new technologies and expand production. Such investment is not an abstract concept for my constituents and their wages.

Transport is a clear example. For too long, the east midlands has been under-invested in compared with other regions. Transport spending per head is shockingly now only around 54% of the UK average, which is the lowest of any region in the nation. That matters. Transport is not a luxury, but the infrastructure that allows firms to move goods, people to reach jobs and businesses to operate efficiently. Investment in skills is also critical, and my constituency is fortunate to have great educational institutions. On a broader structural point, public investment in the UK follows behind private investment, in great contrast to other European countries, particularly Germany.

We must recognise that economic growth should be spread across the country. Our national conversation too often focuses on a small number of already prosperous areas, such as Oxford, London and Cambridge. Those places are important, but economic growth has to go further. If we get this right, by combining public sector ambition with strategic private investment in infrastructure, transport and skills, places like my constituency of Mansfield, as well as other communities in north Nottinghamshire and right across the region, can play a central role in driving our future economic growth.

10:12

[Adam Thompson (Erewash) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate, and colleagues across the House for their contributions. For too long, the east midlands was left behind: abandoned by a post-1980s, neoliberal, globalisation-driven economic consensus and forgotten by a conservative, austere Treasury logic that struggled to bring itself to invest in London, let alone in medium-sized towns in the east midlands. I am glad that that paradigm is finally changing.

The first blast furnace at the former Stanton ironworks in my constituency was lit at the dawn of the industrial revolution, but in 2007 it went out for the final time. Hundreds of jobs were lost, and Ilkeston became a post-industrial town. However, New Stanton Park now grows every day, and Italian manufacturer Fassa Bortolo recently chose Ilkeston as the location for their first factory in Britain. Jobs are returning and investment is coming, which is welcome.

However, it is important to note that new developments spark anxiety. Derbyshire was recently ranked as having the worst roads in England: the local road network was not designed to handle so much pressure, and failures at junction 25 of the M1 bring traffic to a standstill for miles. The old ironworks was linked to the railway by a rail spur, and although that infrastructure still exists, it will take a lot more time and money to bring it back into use. Getting the freight from New Stanton Park on to the railway would be an enormous win for local people in my constituency, for our roads and for the environment.

Alongside work on that, I have been campaigning for a junction 25a on the M1, designed to service Stanton. I have met Ministers and Highways England, and even sat down and found complete common ground with my local council’s Conservative group leader, Councillor Wayne Major. Ultimately, it would take a minimum of several years and tens of millions of pounds for that project to happen, but it is really important to get it working for our local community. For that, we need the Government, and I am grateful for the changes to the Treasury Green Book to make infrastructure upgrades outside London more acceptable. I am also extremely excited about the £2 billion that the Chancellor committed to transport in the east midlands, and to see how Claire, our brilliant mayor, will spend that money.

I want to stress that in Erewash, we have not just a strong industrial history but a growing industrial present. People want jobs; they want investment; they want economic growth—but that needs to come with proper, long-term, serious infrastructure commitments. Growth leads to work for local people, not just around them. They need to know that it benefits them, not just the mega-rich chief executive officers. Part of that is making sure that we have proper investment in infrastructure to make people’s lives better and more productive.

10:15

[Jonathan Davies (Mid Derbyshire) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq.

The east midlands has been a driver of Britain’s economic growth since at least the earliest days of the industrial revolution. Belper in my constituency was the world’s first factory town; it spun cotton for textiles at a previously unimaginable rate, and that model was exported around the world. Now, our region hosts advanced manufacturing, cutting-edge technology and world-class research. Colleagues have touched on that and, as time is short, I will not go into it any further.

However, our region faces significant challenges. Housing costs and low wages mean that many young people are stuck renting or living with their parents well beyond the time when they would have liked to move out. That is why I am very pleased to lend my support to the regeneration of the Belper mills, a significant series of historical buildings integral to the Derwent valley UNESCO world heritage site. Bringing heritage buildings like that back online—with 130 homes, in this case—and making them work for the community is essential. When such assets are also used to grow the visitor economy, as we are seeking to do in Belper, the economic returns are multiplied.

To deliver that, we must ensure that we have the craftspeople to bring the buildings back into use. The technical excellence colleges for construction that are being established, including in Derby, must ensure that there is training in heritage building techniques and planning so that we have the skills to revive these valuable assets. Doing so not only benefits the economy and the people that it serves, but helps people understand our shared national story. It brings people together in engaging with the past and celebrating beautiful architecture that truly builds pride in place at a time when society feels increasingly fractured.

A second challenge for the region is the under-investment it has suffered in its public transport. The east midlands has consistently been the least funded region, but helping people to get around, whether for work or leisure or to access public services or education, is key to economic growth. The Labour Government have made a good start on that through initiatives such as the £2 billion for public transport that they have allocated to Mayor Claire Ward. I want to see a good chunk of that money spent in rural and semi-rural communities, of which there are many in Derbyshire, where bus services are insufficient. The issue of public transport in rural and semi-rural areas is highlighted in the Labour rural research group’s latest report, “Rural Poverty in Britain”, and I strongly recommend that Ministers take the time to look at that publication.

I am also keen to see the Government bring forward plans to electrify the remaining section of the midland main line, which was first mooted in the 1970s but has been kicked into the long grass numerous times. That would reduce carbon emissions and costs over the long term while delivering improved reliability and shorter travel times. It might also enable more services to stop in Belper, Duffield and Spondon. Given that Derby is the home of the railways, it is not acceptable that no electric trains run through the city.

The east midlands is not just about Britain’s past; it is integral to its future, and when it succeeds, Britain succeeds. I hope the Minister has gathered plenty of insights to take forward with colleagues so that our region can truly achieve all that it has the potential to do.

10:18

[John Whitby (Derbyshire Dales) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate.

In Derbyshire Dales, we quarry the stone used to build new homes, produce the cement that keeps our buildings standing and have the outstanding natural landscapes that support a vibrant visitor economy. Derbyshire produces 85% of the UK’s limestone, and that raw material is essential for construction, infrastructure and manufacturing industries across the UK. However, as my hon. Friends have said, the east midlands’ economic growth has been held back by decades of under-investment. I therefore strongly welcome the £2 billion of transport funding for the East Midlands combined county authority, which should, in Derbyshire and Nottinghamshire at least, start to redress the balance.

Two transport-related projects in particular highlight the need for additional investment. Today, there is no direct train line from Derby, Nottingham or Leicester to Manchester. The map of the rail network has a Matlock-to-Buxton-sized hole in it, meaning that people from the cities of the east midlands have to travel via Stoke or Sheffield to get to Manchester. Reinstating that line would act as a catalyst for economic growth and increase productivity across our region. It would deliver major economic gains, connect tourism hotspots such as Bakewell to the rail network, and connect places such as Matlock and Matlock Bath to Manchester. It would bring major benefits for young people looking for work or education, for the transportation of freight from our quarries, for the millions of tourists coming to the area for its hospitality offer, for regional connectivity, and for small businesses that would warmly welcome commuting employees. We wait in anticipation of the Manchester and East Midlands Rail Action Partnership’s feasibility study, which we expect by the end of this month.

Aside from transport, there are other projects that would deliver major economic benefits. Peak Cluster based in the Hope valley is the world’s largest cement decarbonisation project and has the potential to decarbonise 40% of the UK’s cement and lime production. The project would safeguard our cement industry for generations to come, support over 13,000 jobs and attract £5 billion of private investment. I urge the Government to provide a clear route to market for carbon capture and storage projects beyond track 1 and track 2 clusters.

If we do secure the future of our cement and lime industry through carbon capture, which in turn will help to build the 1.5 million homes, there will be even more freight, much of it coming through the town of Ashbourne. The lack of a relief road has been a problem for decades. Already, around 700 heavy goods vehicles a day pass through the town, which causes major road safety issues and results in levels of air pollution above the legal limit. The Government have set ambitious housing targets. To deliver them, we need to support our industries and provide them with the infrastructure they need to thrive, but we also need to protect our residents. All we ask is for the playing field to be levelled.

10:21

[Samantha Niblett (South Derbyshire) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. It is bitterly disappointing that Reform could not be bothered to field a single MP to come and stand up for the east midlands in this debate about productivity and economic growth in the region. People need to be careful what they vote for if they want people who will stand up for them.

The east midlands is my home, and I am proud to say that there are Members of Parliament present who represent places that my family and friends live, which is wonderful. We have always been a region of makers, builders and innovators. Our communities were forged in the industrial revolution, and in South Derbyshire they were built on coal and clay. In fact, it is still possible to buy the iconic TG Green blue-and-white-striped Cornishware. I think almost every grandparent had one of the famous mixing bowls, which are brown on the outside and white on the inside.

Across the constituency, we have businesses innovating, creating jobs and driving growth for the wider regional economy. At the heart of that is advanced manufacturing, and Toyota Motor Manufacturing UK in Burnaston remains one of the most significant automotive plants in the country, supporting more than 3,000 jobs and anchoring a wider supply chain across the region. South Derbyshire is also well placed to benefit from the opportunities created by the east midlands freeport, which aims to attract high-value industries and businesses that are focused on science, technology, engineering and maths.

A strong skills pipeline will be essential to that success. We need our two new schools—New House Farm and Spencer academy—and I hope that my letter to the Department for Education, which contains data and evidence demonstrating why it must ensure backing for the schools, is taken heed of. We await a decision. I was delighted to attend the opening of the green skills academy of Burton and South Derbyshire college, which is driving sustainability in construction and retrofit and teaching people how to install heat pumps and solar panels. That brings me to the fact that we have more than our fair share of planning applications for battery energy storage systems and solar farms, which helps us make the case for the importance of having a local area energy plan.

Our economy is driven not just by large global employers; small and medium-sized enterprises across South Derbyshire are also innovating and creating opportunity, and I am forever grateful to our farmers for feeding us. South Derbyshire contributes strongly to the region’s visitor economy too: National Trust’s Calke abbey attracts visitors from across the country and Mercia marina is the largest inland marina in Europe. Our district is one of the fastest growing in England, with significant house building and population growth but without the infrastructure to support it. I am supporting local councillor David Shepherd to try to secure a GP in Stenson Fields.

Transport remains a connectivity challenge for us. Our largest town, Swadlincote, has not been served by a railway station for quite some time. The reopening of the Ivanhoe line, as championed by my hon. Friend the Member for North West Leicestershire (Amanda Hack), would reconnect our communities, support local businesses and help people access jobs and education.

[Leigh Ingham (Stafford) (Lab)]

I want to out myself: I am a west midlands MP, not an east midlands MP. But what my hon. Friend is speaking about is a structural failure of transport across the east and west midlands. The east midlands receives 54% of the UK’s average transport spend per head, which is the lowest of any region or nation in the country, but for rail that figure is 40%. As I often say, I can get from Stafford to London in about an hour and 10 minutes, but if I want to get across to one of the other east midlands cities—Derby, Leicester or Nottingham—the picture is completely different. We have built excellent lines up and down the country, but the lack of lines across the country is really holding back the development of the wider region. Does she agree that to maximise growth in both our regions, we have to invest in rail from east to west?

[Samantha Niblett]

I could not agree more. Reopening the Ivanhoe line would not only give us access to Burton, Coalville and eventually Leicester, but enable onward journeys to bigger cities including Birmingham and London. I support the case that my hon. Friend the Member for Derbyshire Dales (John Whitby) made for a direct line to Manchester, too.

Through the work of Mayor Claire Ward, we have a real opportunity to unlock the potential of some of our region. South Derbyshire already has the ingredients for success: world-class manufacturers, innovative engineers, ambitious entrepreneurs and strong communities. What we now need is investment that matches that potential. Let this debate be a rallying cry that when we invest in South Derbyshire and the east midlands, we invest in one of the most dynamic and productive parts of the country, with communities ready to grow, ready to innovate and ready to help drive the region’s and the country’s future prosperity.

10:25

[Steve Darling (Torbay) (LD)]

It is a pleasure to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for Rushcliffe (James Naish) on his incredibly powerful speech and other colleagues from across the east midlands and nearby on the love they have shown for this part of the United Kingdom. We could almost say that we are under the moon of love—in fact, that reminds me that nobody has mentioned a great cultural export from Leicester: Showaddywaddy. I have fond memories of them from my childhood in the 1970s.

It is important that we reflect on where we have come from economically and the challenges that we face. The Tories crashed the economy—colleagues have covered that well—and the fact that we are having to pay so much interest on debt holds back our economy. The Liz Truss crash put some of the challenges that we face on steroids. The lack of investment over many years has affected the whole country, including the east midlands. The challenges we face in the south-west of England, as a part of the country that feels left behind, are not dissimilar from those that the east midlands faces. I represent the most deprived constituency that has a Liberal Democrat MP.

I would like to reflect on some of the positives. In my patch, we have an outstanding fishing industry, alongside the hospitality, electronics and photonics industries. That chimes with what colleagues have said about the manufacturing tour de force in the east midlands: whether it is Siemens, Rolls-Royce or Toyota, there are large companies powering the east midlands economy, and there are SMEs doing the same.

With so many Labour MPs here, I am afraid to tread on toes, but I will anyway. The national insurance hike has, sadly, had an impact on our economic growth and has led to uncertainty, speculation and delays to budgets. We desperately needed a firm hand on the tiller after the Tories, and it has not been there. I hope for the sake of the economy that we will see one soon. The Employment Rights Act 2025 is not a massive issue for companies like Toyota or Rolls-Royce, which have the capacity, but for SMEs and microbusinesses it is more of a challenge. I implore the Minister to reflect on that.

[Jonathan Davies]

The hon. Member mentions the national insurance hike. I am disappointed about that, but would he be content to see public services—education, healthcare and public transport—continue to fail people? We needed that investment to get the country back on its feet.

[Steve Darling]

Sadly, the investment that I had hoped to see in my hospital in Torbay has been kicked into the long grass. We still have hundreds of sewage leaks across the hospital, 85% of which is not fit for purpose. However, let me go back to discussing the east midlands, which is what we are really here to do.

As I was saying, SMEs will be challenged the most. I implore the Minister to consider that, as the Employment Rights Act is rolled out. Even HR reps acknowledge that this is important. Introducing it at the same time as the national insurance hike has resulted, effectively, in a double hit to the economy.

[Amanda Hack]

One of the things that is problematic about the hon. Gentleman’s line of questioning is that one in 10 people in Leicestershire are on an NHS waiting list. In order to increase economic productivity, we need to make sure that people of working age are well enough to work. Does he agree that investment in health is also key to economic productivity?

[Steve Darling]

Yes. Let me reflect on the three areas that we need to be driving in particular. The first is our green energy approach, which the Government have made significant steps on. I am disappointed that the previous Government had a policy that did not prioritise the new schemes. A number of zombie schemes were sticking in the system. We need only look at the shock to our economy.

[Jo White (Bassetlaw) (Lab)]

The hon. Gentleman talks about green carbon-neutral schemes coming forward. I welcome yesterday’s announcement of a construction partner for the STEP Fusion plant at West Burton in Nottinghamshire: the consortium known as ILIOS, which is led by a joint venture between Kier and Nuvia, supported by AECOM, A_AL Architects, and Turner & Townsend. This will see the creation of thousands of jobs right across the region. We should welcome that initiative by our Government.

[Steve Darling]

I am delighted to welcome that, but we need to drive harder. We need only look at the massive impact on our economy of the incredibly foolish war that has been launched by Donald Trump. Uncoupling ourselves from the oil and gas industry will be a good way of protecting ourselves from such impacts in the future.

The second area I will reflect on is our young people. The fact that 16.1% of young people are unemployed is a real challenge. In my constituency of Torbay, there is a description of a “bay mentality”. A barrister came to speak at the school of one of my sons. He talked about using one’s connections ruthlessly. In a working-class setting, that is not so easy. People do not have such connections. My challenge to the Minister is, beyond the scheme announced by the Government yesterday, how are we looking at opportunities for working-class youngsters in particular to gain enrichment and experience, to get them to a better place?

Finally, given how many progressive Labour Members are present, I am shocked that so far we have not talked about rejoining the customs union. I look forward to the Minister sharing a date for when she is planning to complete the negotiations to rejoin the customs union, which will grow our economy significantly.

10:33

[James Wild (North West Norfolk) (Con)]

I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate, and welcome the opportunity to speak on behalf of His Majesty’s Opposition about what is not only an important region but a great one, as he put it.

As we have heard, the east midlands is home to world-leading manufacturers, a thriving logistics sector, pioneering aerospace firms and hundreds of thousands of small and medium-sized businesses. There is huge potential, as every Member who has spoken has attested to. These businesses, workers and entrepreneurs deserve a Government who are pursuing policies to help them to realise that potential and drive growth in the area. Concerningly, however, growth has been consistently downgraded; we need only look at the spring forecasts a couple of weeks ago to see that growth has been once again downgraded for the coming year, and that is before any impact is felt from the operations happening in the middle east.

Today we have heard lots of ideas from Members across the parties on how to realise growth in the east midlands. That can be achieved, but will require the Government to change course. The region has many internationally renowned businesses. Members have rightly spoken proudly about Rolls-Royce, Toyota, Alstom and other businesses. The East Midlands Hydrogen zone is positioning the region at the forefront of clean energy transitions, and of course there is a strong university sector. It is a region with key strengths, and the last Government recognised that. Several Members referred to the East Midlands freeport, which was given the green light in 2023. The only inland freeport in England was backed by Government seed funding at the time and underpinned a projected 28,000 jobs coming to the area.

If we look at the wider picture, the current Government have talked a lot about economic growth, but sadly growth has underperformed. As the Liberal Democrat spokesman—the hon. Member for Torbay (Steve Darling)—said, we cannot ignore the impact of the higher national insurance charges. We cannot ignore the higher business rates that many companies are about to be hit with, as well as higher wage and other costs. The Bank of England has pointed out the impact that these have had.

[Michael Payne]

Does the shadow Minister also regret the fact that between 2010-11 and 2019-20 local authority spending in the east midlands dropped by 22.6%, on the previous Government’s watch?

[James Wild]

We can trade statistics, but the context for that was the 2009 financial crash, which led to a deficit of 12% to 15%. [Interruption.] The Government who came in were the coalition Government, including our Liberal Democrat colleagues, and it was Danny Alexander, Chief Secretary to the Treasury, who drove those savings in spending, particularly in local government but also in other areas. We had to get the books to balance. That was the context that we had to deal with. People can deny the reality, but that was the situation at the time.

The number of people who are unemployed is forecast to hit 2 million by the end of the year. I expect other Members are particularly worried, as I am, about the impact on young people. Youth unemployment has already moved above 16%, which is higher than the EU average. We are now in the bizarre position in which the Government are having to pay companies to take on young people whom the Government’s own policies have priced out of having jobs. As my right hon. Friend the Member for Melton and Syston (Edward Argar) highlighted, SMEs across—[Interruption.]

[Dr Rupa Huq (in the Chair)]

Order. Let us not have chuntering from a sedentary position.

[James Wild]

If hon. Members want to intervene, they are welcome to do so. As my right hon. Friend said, small and medium-sized businesses across the east midlands and beyond are having to cope with those costs, making it harder for them to invest and grow. The Government should listen to them.

Fundamentally, the problems that the east midlands and the UK face in relation to growth are around productivity. Investment has been too low. The UK has trailed the G7 average over the last 30 years, not just the last 14 years. Our infrastructure ambitions are often buried under red tape and excessive costs. Colleagues have spoken about energy costs. The hon. Member for Amber Valley (Linsey Farnsworth) spoke about Denby and the ceramics sector, and we hope that a solution is found for that workforce. But by linking us to the EU emissions trading scheme, the Government will be driving up costs for our industry.

The sparks of business dynamism have dimmed. Office for National Statistics data shows that firm entry and exit rates have reduced, particularly compared with the United States. That leads to a less competitive, dynamic and innovative economy. The east midlands has consistently been ranked among the least productive regions in the UK, but that is not inevitable and nor should it be, because if it stays like that, living standards will not increase.

[Steve Yemm]

Does the hon. Member recognise the fact that, in 2010, productivity in the east midlands was at 92% of the national average, but by the time the previous Government left office it was at 85%? Actually, the region went steadily backwards under the Conservative Government. Does he recognise that?

[James Wild]

I am looking at the House of Commons Library brief on the average productivity level. I cannot quite see the hon. Member’s point reflected in the chart that I am looking at, but I will look at it again afterwards, when there is more time, and see whether that is the reality.

As I said, it is not inevitable that the productivity level is lower, and it cannot be accepted if we want living standards to rise. The Productivity Institute did a study looking particularly at the region, which identified some of the challenges around skills shortages, infrastructure and under-investment in research and development. Many Members have spoken about transport spending in particular. The briefing note for the debate from East Midlands Councils talks about a period of 20 years in which there has been a lack of investment. I understand the importance of improving investment; if I was speaking in an east of England debate, I and other colleagues would be pointing out that we also do not get our fair share.

The east midlands is a region of makers, and manufacturing makes up a greater part of the economy there than in any part of the UK other than Wales. In terms of productivity, the 2023 output was 14.7% below the recent UK average. Boston Consulting Group has just published a report on productivity, which I commend to Members, that looks at the underlying factors for this national challenge. The sectors that historically have driven productivity—manufacturing, information and communication technology, and financial services—accounted for 84% of the positive increase in the pre-crisis decade, but since then, that figure has fallen to just 34%. While those are still key sectors that are important for the economy, they are performing less well than previously.

What do we do to change that? We need to look at policies that boost productivity, including focusing on incentivising R&D spending in advanced manufacturing, reducing the barriers to commercialising innovation, and building on the full expensing introduced by the last Conservative Government to boost investment. Sadly, in the Finance (No. 2) Bill, which I have just gone through in Committee, some of the incentives on capital allowances have been reduced. We also need to promote a culture of enterprise, not one that is focused on regulatory compliance. We certainly need cheaper energy in order to compete. We need to scrap some of the bureaucracy around planning, and boost competition and skills.

The east midlands is a region with assets, and it is a strong driver of national growth. It has the companies, the geographic position, the people, and the small and medium-sized businesses to make a change. By pursuing reforms—the hon. Member for Rushcliffe outlined a number of recommendations in the APPG report that seemed sensible and well worth considering—the east midlands can be helped to maximise its potential.

10:42

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Miatta Fahnbulleh)]

I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing the debate, and I thank Members who have spoken for their insight, passion for their area, and fantastic contributions. Let me start with my hon. Friend’s insightful analysis of both the challenges and opportunities in the area. I look forward to reading the APPG report, and to drawing insights on how we can continue to work with the area to advance its economic potential.

We all agree that economic growth is paramount, and it is one of the Government’s top priorities. Economic growth is central to raising living standards, which we absolutely must do, funding improvements in public services after a decade and a half of under-investment by the Conservatives, and rebuilding the country. That is why the Government are determined to not only drive growth from the centre but empower local leaders with the tools they need to drive growth in their area—local leaders such as Mayor Claire Ward, a fantastic Labour mayor whom I have had the privilege of working with, and who has been an important champion for the region before and since her election.

Productivity, as my hon. Friend the Member for Mansfield (Steve Yemm) pointed out so eloquently, is one of the key drivers of growth. While we can debate the causes, we all recognise that productivity has been weaker in the years following the 2008 financial crisis. Improved productivity will require relentless work and a focus at every level of government—from national Government, through to our regional government and our local authorities—in partnership with the business community and industry.

That work is essential to everything that my Department and others are doing to make progress—and we are making progress. Analysis by the Resolution Foundation last month showed that UK productivity grew more in the last year than in the previous seven combined. But we acknowledge that there is more that we need to do. My hon. Friend the Member for Rushcliffe was right to point out that productivity varies across the country. Indeed, the gap between our cities, where we would expect some of the highest productivity, and the UK average stands in contrast to the performance of many comparable cities across the OECD. Cities such as Lyon, Frankfurt, Turin and Bilbao have productivity higher than the UK average, while many of our own cities have productivity lower than our UK average. As my hon. Friends the Members for Rushcliffe and for Loughborough (Dr Sandher) pointed out, devolution is key to unpacking, unlocking and dealing with the challenge.

We know the impact that devolution can have on growth and in improvements for local people. The parts of the country with the longest and deepest devolution of powers and funding are the ones where growth is taking off. That is why we are giving more areas, including the East Midlands combined authority, the tools and funding that they need to address the challenges in their areas and to realise the opportunities for growth. Devolution is fundamental to achieving the change that the public expect and, frankly, deserve: growth, more joined-up delivery of public services, and politics being done with communities, not to them.

I am conscious, however, that the debate is not just about the East Midlands combined authority; it is about the whole of the east midlands. Local leaders have an important role to play in growing the economy. We want more collaboration, not less, and we are supporting places to access devolution so that they can work together to drive outcomes locally. We have therefore issued a call for areas without devolution, including parts of the east midlands not within the combined authority, to come together with their neighbours to form strategic authorities so that they can benefit from devolution.

Local leaders will have greater control over economic development levers, transport and skills, as well as having revenue-raising powers, to ensure that they invest in the economic prosperity of their area. In the meantime, we encourage local leaders to work together and to set a vision for their area. Many local authorities already have an economic strategy, and we encourage them to set out a vision for growth in their area and to work across administrative boundaries for the benefit of their region. Industrial strategy zones are a perfect example—industry, innovators and government coming together, and local leaders equipped with a powerful set of tools to drive growth in each of the sectors.

My hon. Friend the Member for Rushcliffe rightly pointed out under-investment in these areas, and Members across the House reiterated that point. I would say that that is, in fact, a double whammy, because we have had under-investment across the piece under previous Governments for 15 years, in every key part of the economy and in the infrastructure that we need to unlock economic development. In addition, investment was skewed to some areas, to the disadvantage of others, and we are absolutely determined to turn that around and put that right.

That is why we as a Labour Government are putting in record investment across all key sectors of the economy. On the key point of transport, where Members have pointed out a range of transport investment schemes and key pinch points to economic growth, the Department for Transport has unlocked a record £2 billion of support for transport in the east midlands. That is an important first step to deal with some of the critical transport connectivity issues, combined with investment in the green economy—which we see across the east midlands —in advanced manufacturing and in defence, with £180 million of local growth funding next year alone, to ensure that we put the money in to unlock the potential that we can see and that my hon. Friend the Member for Rushcliffe so eloquently pointed out.

My hon. Friend the Member for Derby South (Baggy Shanker) made the point that when we put investment in, it does not always touch our communities or lift the lives of people in those communities. We need to be intentional about it, which is why what my hon. Friend the Member for Derby North (Catherine Atkinson) and other Members said about skills is absolutely critical. We have to combine the investment with intentional work to ensure that we develop a workforce strategy for the area and the skills, and ensure that we have the employment support to get people into jobs. That is the approach that we will take with the combined authority and that we intend to take with Team Derby. Our absolute commitment is to do our bit to work alongside leaders to unlock potential.

My hon. Friend the Member for Amber Valley (Linsey Farnsworth) talked about the critical role of the visitor economy, which we absolutely recognise. One of the key requests of our mayors was for a visitor levy so that they can raise revenue that can then be invested in the enabling infrastructure and the support we need to boost the visitor economy. We are now consulting on that, and we will legislate on it.

My hon. Friend the Member for Erewash (Adam Thompson) talked about how this cannot be just a short-term blip; we need a long-term commitment and long-term plans. In the mayor, Claire Ward, we see a long-term plan for the area, but that long-term commitment from local leaders must be matched by a long-term commitment from this Government. That is why we are moving to multi-year funding that is looking at the long-term horizon in our places, and standing with our local leaders to invest and unlock that potential over the next decade.

As my hon. Friends the Members for Sherwood Forest (Michelle Welsh) and for Mid Derbyshire (Jonathan Davies) made clear, however, the plan cannot just be for our urban centres, as critical as they are as engines of growth in the region. It must also speak to our rural areas to make sure that we unlock opportunities, not just in our towns and cities, but across the agricultural sector and our rural economy. We must also ensure that we deal with those pockets of deprivation.

Pride in Place is targeted at that very question: how, alongside the big work that we are doing regionally or in a local area, do we get investment into some of our deprived communities so that they can invest in the things that will lift up their area and restore pride in place? That goes hand in hand with the work that we know needs to be done regionally.

Finally, the hon. Member for Torbay (Steve Darling) made the important point about SMEs, which make up 99% of businesses in the economy. Under the last Government, however, we saw a huge neglect of the SME economy. Our job is to make sure that we support the backbone of our economy, which is why we have an SME strategy that looks at everything from late payments to procurement and how we provide the support to ensure that SMEs continue to be the key engine for growth.

I will end by referring to the comments of the shadow Minister, the hon. Member for North West Norfolk (James Wild), who spent a long time bemoaning the Government’s growth record. I would gently point out, as has been acknowledged by Members across the House, that the legacy that we are trying to turn around is a function of the fact that we had a decade and a half of Governments who did not have an economic strategy, who chose to under-invest in key services, and who deliberately took money away from regions across the country, such as the east midlands, to make sure that they did not meet their economic potential. We are turning that around; that is the job and we are getting on with it.

The underlying fundamentals are there. We have been in power for 18 months; it will take time to repair the damage that was done over a decade and a half, but we are getting on with that job. Today, the Chancellor will set out our economic plan and the sectors that we will be boosting. Part of that will be a critical step around how we devolve to areas, such as the east midlands and across the country, to ensure that they work alongside us in partnership to unlock their potential.

To sum up, it is clear that we all agree on the need to boost productivity and support economic growth across the east midlands. I hope Members can see the Government’s commitment, passion and determination to work alongside leaders in the east midlands to ensure that we do that. Devolution is a critical part of that, and my job is to ensure that, whether through mayoral strategic authorities or foundation strategic authorities, we equip our local leaders with the skills, tools and capabilities they need to do their job.

But that is just one part of the answer: from day one, the Government have been clear that while local leadership in all its forms and at all levels is vital, it sits alongside the work that we are determined to do at the national level to boost the economic potential of the east midlands and every region across the country. I again thank my hon. Friend the Member for Rushcliffe for being such an amazing champion for the area. I look forward to working with him and Members across the House to make sure that we do right by the region.

10:53

[James Naish]

I thank you, Dr Huq, and all Members for their contributions. It came as no surprise to me that this was effectively a debate of two halves. On the one hand, we heard about the positives. The hon. Member for Brigg and Immingham (Martin Vickers) talked about the east midlands having the largest port in the country. The hon. Member for Leicester South (Shockat Adam) reminded us of that fantastic football result in 2015-16, which is probably still the east midlands’ greatest achievement. My hon. Friend the Member for Derby South (Baggy Shanker) talked about the Government’s commitment to nuclear and engineering capability. My hon. Friend the Member for Erewash (Adam Thompson) talked about an industrial presence, and it was good to hear about jobs returning to his area.

The truth is, however, that the east midlands is building back from years of under-investment. My constituency neighbour, the right hon. Member for Melton and Syston (Edward Argar), mentioned the need for flooding investment and better local government funding. My hon. Friend the Member for North West Leicestershire (Amanda Hack) talked about the fragmentation of strategic and industrial leadership.

Many Members mentioned the lack of rail connections, which are so important for boosting our economy, and my hon. Friend the Member for Sherwood Forest (Michelle Welsh) talked about the need for reliable public transport. I know she, and all of us here, will be seeking to work closely with our relevant local authorities and strategic leadership to make sure that is delivered for our constituents. My hon. Friend the Member for Mansfield (Steve Yemm) was absolutely right to talk about the importance of leading with public sector investment—not relying on the private sector, but moving forward with the public sector. That is what I hope our Government will be doing, and I believe they are seeking to do that, but we must put our foot on the accelerator when it comes to the east midlands because we are starting a long way behind other regions of the country.

I am sure we will continue to work across the House to promote the east midlands. With that in mind, I will invite all Members to room W2 at 11 o’clock so that we can quickly reconstitute the APPG for the east midlands and continue this work over the next 12 months.

Question put and agreed to.

Resolved,

That this House has considered productivity and economic growth in the East Midlands.

10:54

Sitting suspended.