Productivity and Economic Growth: East Midlands

Steve Darling Excerpts

Tuesday 17th March 2026 Westminster Hall

[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.