Productivity and Economic Growth: East Midlands

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.

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.

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.

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?

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.

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.

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?

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.

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.

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.

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.

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?