Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what fiscal steps he is taking to close the labour productivity gap in the East Midlands.

The Government's ambition is to support good growth across all parts of the United Kingdom. As set out in the Prime Minister's recent Machinery of Government Statement, No10 North will be responsible for driving good growth through devolution and working in close partnership with local leaders, businesses, and communities to strengthen place-based growth.

We are also committed to fundamentally rewiring the way our country works, transferring greater powers, funding and accountability to the local leaders who know what it takes to drive growth and productivity in their areas.

The government has invested £10m into Team Derby – a city wide partnership between business and regional government designed to turn major national investments into local jobs, skills and regeneration opportunities. The wider East Midlands is receiving £2bn via the Transport for City Regions fund which will enable design of a new mass transit system to connect Derby and Nottingham and drive growth and productivity by better integrating transport networks.

The Chancellor has announced that the Green Book discount rate will be reduced from 3.5% to 3.0%, in line with recommendations from independent academics. This will place greater value on the long-term benefits of investment and strengthen the case for transformational projects that drive growth – wherever they take place.

At Budget, the government will publish a fiscal devolution roadmap which will set out a path to replacing grants from central government with a share of local income tax for every mayor beginning in 2028, such that where a region grows its tax base, it benefits from the increased receipts. This will sit alongside greater retention of the revenue from business rates for local councils and strategic authorities. The long-term certainty of funding via taxation will provide more flexibility and enable greater investment to fund interventions that will deliver a return.