East Midlands Economy

Toby Perkins Excerpts

Tuesday 7th September 2021 Westminster Hall

[Ben Bradley (Mansfield) (Con)]

I beg to move,

That this House has considered the future of the East Midlands economy. 

It is a pleasure to serve under your chairmanship, Sir David, to be just on time and to bring this important debate to the House about the economy of the east midlands, which follows on from the Adjournment debate I held in July about devolution for our area. It has been a busy summer and lots of progress has been made on the proposals and on wider developments and major projects that I hope to put across to the Minister this morning.

It is clear that the east midlands has huge untapped potential and must be at the heart of the Government’s levelling-up plans in the spending review and the levelling-up White Paper this autumn. I hope to take the Minister through some of those developments this morning. As Members might imagine, as a Notts MP and the Nottinghamshire County Council leader, I will have more to say on Nottinghamshire, but I trust and hope that colleagues will chip in about the proposals and opportunities across their constituencies.

For context, the east midlands is home to over 5 million people and over 175,000 businesses. We have a diverse mix of counties and cities, with market towns, countryside, and distinct cultures and communities. It contains world-class business, innovation and manufacturing excellence, and the region’s economy of £99 billion has untapped potential for growth. Despite that critical mass and potential, the east midlands has received some of the lowest levels of Government investment and private investment over many years compared with other parts of the country.

Back in July, I met the Prime Minister and laid out four huge opportunities for the east midlands that can create jobs, unlock housing and growth, and get the region up to a level of support and investment that is in line with other parts of the country. Those major interventions are all coming together this autumn, with a number of key decisions on which the Government need to come down on the side of investment and development in our region.

First, the East Midlands Development Corporation—the devco—represents a major opportunity to regenerate and to create jobs and homes on key sites. It gives us the opportunity to masterplan our area to ensure that we are bringing forward the very best employment opportunities; that we are leading the way on green growth and environmental policy; and that we are offering investors a very attractive opportunity to simplify the planning process to get things done at pace. It currently sits over three sites, but in the future, with the right democratic oversight, it could be used to bring forward further sites across our region.

This development vehicle could be a major weapon in our armoury, with the right Government backing. If we can utilise it effectively into the future rather than continuing to adopt a piecemeal approach, with all sorts of different vehicles and delivery mechanisms popping up all over the place, we can take a long-term strategic approach to our region’s growth. Therefore, key decision No. 1 is to back the development corporation in the planning legislation this autumn, and give it the powers and guarantees it needs.

Secondly, there is the east midlands freeport. Colleagues lobbied hard last year to secure the east midlands as one of the key sites for a freeport to take advantage of our post-Brexit trading opportunities and to boost business and jobs in our region with a unique proposition: the only inland freeport in the UK, built around an airport rather than on the coast. This has the potential to act as a hub and as the heart of the wider freeport network, as well as the logistical centre of the UK, with its key geographical location and proximity to major road, rail and air connections.

The outline business case will be submitted this week. Once again, I and MPs across the region call on the Government to back us to help deliver this freeport, along with the council and business partners; to support our vision to level up the east midlands; to create jobs and opportunities for people in our region; and to maximise the potential of this package of projects I am going through today. The whole will be bigger than the sum of the parts if these actions can be taken in unison.

[Mr Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Gentleman on securing the debate. He is making a powerful case about the need for investment, but that case is fundamentally undermined by the Government’s constant dithering on the eastern leg of HS2. I have never known a Government to spend so much money on a project so unenthusiastically. Over the summer, we have again seen the suggestion that the eastern leg will be cancelled. Does the fact that the Government will not once and for all commit to the eastern leg of HS2 not fundamentally undermine the case he is making?

[Ben Bradley]

I thank the hon. Gentleman for his intervention; he has neatly predicted my next paragraph, which is about the integrated rail plan and Toton. All sorts of rumours have gone around over the summer. As the chair of the east midlands HS2 delivery board, I have had a lot of conversations with Ministers and officials about this matter and have pushed for the certainty that he asks for. HS2 is a major opportunity for the east midlands. I recognise that it is not universally popular, so I am not going to go on about the benefits of the eastern leg in full or the wider project, but this is a debate on the east midlands, so I will focus on the local part.

The key, for us, is that Toton is a major centre for our future growth. It is a site where we have invested almost a decade of work and planning, and tens of millions in infrastructure and preparation, including direct tram connections to Nottingham city, where there is huge interest in investing in skills, research and innovation, as well as in commercial and residential development. Success for Toton could unlock plans to the north, around Chesterfield and Bolsover, for a major engineering centre built around HS2, which has the potential to create 2,500 jobs in an area of north Nottinghamshire and north Derbyshire that should be at the heart of the levelling-up agenda. Those are former coalfield, post-industrial towns—the epitome of the kind of red wall areas that need support and to which we made big promises of support at the last election.

--- Later in debate ---

[Mr Toby Perkins (Chesterfield) (Lab)]

I congratulate the hon. Member for Mansfield (Ben Bradley) for securing the debate because it is an incredibly important one. I enjoyed the case he made for the need for investment and focusing that on Toton. However, there was an elephant in the room during his speech and that is HS2. I do not believe that the plans he outlined are credible without HS2. He seemed to be making the case that the infrastructure can happen with or without HS2, and I simply do not buy it. HS2 is fundamental to that investment in our region and to the interconnectivity that he and my hon. Friend the Member for Nottingham South (Lilian Greenwood) spoke about.

I came into this place in 2010 and I have been through four elections in which the Conservative party has spoken about their commitment to HS2 and the midland main line infrastructure and electrification. Throughout those four elections, the consistency of the Government’s message on investment in the east midlands has been matched only by the consistency of their failure to deliver that spending. I have been an MP for 11 years and in every term of those four Tory Governments, we have had big promises, let-downs, dither and delay.

When the Minister gets to his feet, he has an opportunity to tell us finally that the promises made in 2010, 2015, 2017 and three months after the 2019 election that the eastern leg of HS2 would be delivered is not—as the Government are constantly briefing—about to be pulled from under our feet, but that there is actually that commitment. When people look back on this era of politics, they will find it incredible that for 11 years a Government had its biggest infrastructure project yet looked so unenthusiastic about it. I cannot think of any other Government policy in history that has been supported more by the Opposition than the Government themselves. That is the reality with HS2.

It is true that our region is taken for granted and ignored. My hon. Friend the Member for Nottingham South referred to the difference in transport spending between the east and west midlands. In the east midlands, the average transport spending per head is £287.32. Just across in the west midlands, it is £489.70 per head. Almost twice as much is spent on transport in the west midlands as in the east midlands. Why is that?

The reality is that I am a very unusual Member of Parliament. I am a Labour MP in the east midlands who is not from a city. There are 37 MPs in the east midlands who are not in Nottingham, Derby or Leicester, and 36 of them are Tories. This Government absolutely take the east midlands for granted, and why should they not when right across the east midlands they see Tory MPs elected while they fail to invest in our region? Of course they will think the voters of the east midlands will comfortably vote for them.

My party has a big responsibility to face our electoral failure over the last 11 years. I look across the hall to lots of colleagues whose constituencies were Labour for many years. They are in those seats now, and the voters of the east midlands and my party need to consider if we are going to get investment in the east midlands, it needs to be a more competitive area because this Government believe that they can take it for granted.

The hon. Member for North East Derbyshire (Lee Rowley) referred to the Staveley bypass. That is something that he and I are very committed to. I did a recent survey and know that there is huge support in my constituency for that bypass; it is something that has been spoken about over many years. Derbyshire county council needs to speed up the process of delivering the bypass, as many of the projects that were announced at the same time are now much further ahead. I would like the Minister to know that there is a real cross-party commitment to going ahead with the Staveley bypass, and I hope that we will soon have good news about it.

The east midlands region is crackling with innovation and with a desire to get on and deliver, but, as the hon. Member for Loughborough (Jane Hunt) said, it is being held back by a failure of investment in our region. We really need to see that turned around now.

[Ruth Edwards (Rushcliffe) (Con)]

It is a pleasure to serve under your chairmanship, Sir David, and I congratulate my hon. Friend the Member for Mansfield (Ben Bradley) on securing this debate.

I think those of us here in this room are all incredibly lucky because we represent a vibrant, dynamic and creative region. As other Members have said, we are the heart of the UK’s logistics and manufacturing industries; the right hon. Member for Derby South (Margaret Beckett) talked about the industrial jaws of the United Kingdom. I was fortunate to be able to visit JCB in the constituency of my hon. Friend the Member for South Derbyshire (Mrs Wheeler), and see the amazing innovation that has been taking place at its Foston plant, where it has invented the world’s first hydrogen-fuelled combustion engine.

We are leaders in food and drink; we have some fantastic companies in my constituency of Rushcliffe—perhaps too fantastic, as I do not think they did wonders for my figure over lockdown. We have fantastic stilton producers at Cropwell Bishop and Colston Bassett that, contrary to counter claims made by my hon. Friend the Member for Rutland and Melton (Alicia Kearns), produce the best stilton in the world—whatever she may say. We also have wonderful wine producers such as Hanwell wine estate and Eglantine vineyard; we have a thriving farming sector across the region; and we are leaders in so many different types of green technology. I have mentioned hydrogen at JCB, but we also have the GeoPura headquarters in my constituency, whose hydrogen generators are powering everything from festivals to film sets. We are leaders in biodiversity restoration; we have BeadaMoss in East Leake, Rushcliffe, micro-propagating sphagnum moss to be used to restore peatlands and to create new growing mediums that will replace peat in several years. The statistics back up what I am saying. We have fantastic innovators across the region; 90% of manufacturers have innovated in the last two years; 96% plan to do so again in the next two years.

We do have our problems, and they have been set out very clearly by Members on both sides of the room today. Our productivity is below the national average; we have a polarised workforce with a lot of people in very highly skilled jobs—based around our universities and our tech companies—but we also have many people in much lower paid jobs. The average income in the east midlands is £70 a week below the national level. We also suffer from low public sector investment; we have the lowest levels of public expenditure and transport spending per head.

We have also suffered, perhaps, from a lower profile than other areas of the country. The west midlands, for example, has one focal point provided by the city of Birmingham and its Mayor. Its share of funding has reached parity with the average amongst English regions in the last few years; we in the east midlands still have only 75%. We hear a lot about levelling up and we see a lot of Government Ministers going to Teesside and the west midlands; we see their Departments following them there. If levelling up is going to spread opportunity over the whole country then it is going to have to involve more places than just Teesside and the west midlands—however wonderful they may be. One of the places that really needs that focus and support from Government is the east midlands.

[Mr Perkins]

I totally agree with what the hon. Lady is saying. Is not the point I just made the reality? Areas such as the west midlands and the north-east are politically competitive. Here, the Tory party is able to take for granted that it is going to get Tory MPs elected and that is why we have failed to get the investments of some of those other regions. Is not electing more Labour MPs the answer?

[Ruth Edwards]

No, I do not agree with that. We are in a debate today that has been called by a Conservative Member and is attended by lots more Conservative than Labour Members, so I do not agree with the hon. Gentleman.

[Mr Perkins]

We haven’t got many—that is the point.

[Ruth Edwards]

Maybe that says something about how voters in the east midlands feel the hon. Gentleman’s party has taken them for granted. As a result, they have returned Conservative colleagues, who are here today fighting for more investment in the east midlands.

If everybody in every community having a fair chance at life is what levelling up is about, if it is about people being able to benefit from strong public services such as a great education and having the opportunity for a great career, wherever they live in the country, we have to focus on areas such as the east midlands that have, historically, been underfunded and have not had the Government focus that they should.

We have some great tangible opportunities right now in the east midlands to reverse that. The one I have been most closely involved in is the east midlands freeport, which would cover three sites: one in Leicestershire, one in Derbyshire and one in Nottinghamshire in my constituency of Rushcliffe, based at the Ratcliffe-on-Soar power station site, which is being decommissioned in a few years’ time. The east midlands freeport would create more than 58,000 jobs and would see investment in skills, research and development. It would see Ratcliffe-on-Soar transformed into a centre for new energy technologies and a zero carbon academy, creating those high-skilled jobs and fantastic careers that we have been discussing this morning. It will also enhance and build on existing partnerships between academia and business across the region, which we need to capitalise on. It will be the best connected freeport in the country: it will connect East Midlands airport to global markets and, in doing so, will connect the companies at the heart of our manufacturing and logistics industries to it too. It will also connect the east midlands via road and rail to the wider network of freeports across the country and, in that way, offer us a national as well as a regional opportunity.

The second opportunity is HS2. I appreciate that it is not the responsibility of the Minister’s Department, but I hope he takes away the message of frustration from colleagues on both sides of the House at the length of time it is taking to get a decision about the eastern leg. We have seen a vaccine created and rolled out across the United Kingdom in less time than it has taken to make a decision about the form in which HS2 is going to come to the east midlands, if it comes at all. I hope the rumours that it is going to be axed are not true.

HS2 has great potential. It would add £28 billion to the region’s economy every year. It would increase east-west—a well as north-south—connectivity, which is vital. Today, we talked about how connectivity and trains are important, but it is about more than trains. It is about massive redevelopment at Toton. It is about improving local transport connectivity across the region. It would send a clear signal from Government that we are investing in the east midlands, that the east midlands is not the poor cousin of the west midlands, that it will not be left behind and that we are committed to making sure that the east midlands shares in the levelling-up agenda. I hope the Minister can give us some assurance that that will be the case. I certainly hope that he will take the message back from the debate to his colleagues in the Department for Transport and I also hope that we can hear something about his support for the east midlands freeport, which is something that he knows Members on both sides have been working hard to support. We have an excellent bid now—one that capitalises on our net zero potential, our connectivity and creating highly skilled jobs and training across the region, which is much needed.

--- Later in debate ---

[Jeff Smith (Manchester, Withington) (Lab)]

It is a pleasure to see you in the Chair, Sir David, and I thank you for the opportunity to reply to the debate on behalf of the Opposition. I congratulate the hon. Member for Mansfield (Ben Bradley) on securing the debate. I agree with him that the Government need to come down on the side of investment and innovation in the region.

I also thank the other speakers, who made important contributions. My right hon. Friend the Member for Derby South (Margaret Beckett) gave us an important reality check on the Government’s actions and made the vital point that, in order for the economy to flourish, work needs to be properly paid. We need stability and skills, without which businesses and the economy cannot thrive. My hon. Friend the Member for Nottingham South (Lilian Greenwood) made an important point about the cut to universal credit, which is taking money out of local economies. She also exposed the lack of transport investment in the region over a long period of time.

My hon. Friend the Member for Chesterfield (Mr Perkins) talked about the importance of HS2 and focused on the inequality of transport spending in the region—not just on rail, but on things such as the Staveley bypass. Road transport is important as well. My hon. Friend the Member for Nottingham East (Nadia Whittome) talked about the impact of Government policy and cuts, the vital importance for the future of green jobs, and transparent devolution deals.

We have heard lots of good words about the future of the east midlands economy. The east midlands does not operate as a single entity, with a regional centre, like my own in Greater Manchester, which is why so many Members from different parties have spoken about how vital transport links are, which I will return to shortly. It is instructive to compare the east midlands with other regions. Compared with the rest of the country, east midlands GVA growth figures are lower and there are lower levels of investment, especially Government investment. Productivity is lower, more people than average are in insecure work, a higher number on zero-hours contracts and median gross pay is lower. Of the 446,000 key workers across the east midlands, 40% are paid less than £10 an hour. There is work to do to fulfil the great potential of the region.

People in the east midlands are significantly more likely to be employed in manufacturing than in the rest of the UK. That is a distinctive, important and good feature of the region, although a number of those jobs are in lower-value manufacturing, which is more susceptible to economic shocks. With traditional manufacturing in decline, it is important to consider alternative options for the future. We have heard from several Members about good work already underway, seeking to boost jobs and prosperity in the east midlands, and release the potential of the region that we have heard about so often.

The importance of East Midlands airport, along with the rail freight terminal, is key. A number of Members talked about that and the work of the East Midlands Development Corporation in aiming to link the HS2 station at Toton with the airport. We also heard about the development at the Ratcliffe-on-Soar power station site, which is another important growth opportunity for the region. There is good partnership work going on, driven by groups such as the midlands engine partnership and Midlands Connect. We also heard about the plans for the east midlands freeport. Many might question the overall strategy of freeports creating growth across the country, but it is undoubtedly a good opportunity with potential for the east midlands region.

We have not focused so much today on the hard work carried out by local authorities, which have been at the frontline fighting the covid pandemic, and will now play a crucial role in their communities’ recovery. They need to be funded properly, so that they can play their full role as place-makers, driving growth for the region. Having imposed £15 billion cuts on local authorities over the past 10 years, unfortunately the Government recently broke their promise to compensate local authorities fully for their costs in tackling covid-19, leaving some of them with very big funding gaps and putting local services at risk.

The piecemeal funding pots that we have heard about, such as the levelling-up fund, which pit regions and nations against each other for vital funding, do not make up for a decade of cuts to local communities. We need support for people who live in the region, as we heard from my hon. Friend the Member for Nottingham East. The universal credit change will hit almost 390,000 families in the east midlands, pushing many into hardship. Cutting the budgets of those families who need it most is not only wrong, but bad economics. That £1,000 a year is money that could be spent on local high streets in the east midlands. Instead, it will be taken out of the economy just as we are trying to recover.

It is clear that East Midlands airport is key for jobs in the region and future economic ambitions but, like other regional airports, it has suffered through the lack of an adequate sectoral support package from the Government. The Labour party has advocated a sectoral deal for aviation that protects jobs and the wider supply chain, safeguards the environment, and ensures that companies benefitting from the aviation sector rebase their tax affairs in the UK. If regional airports such as East Midlands airport are not given adequate help through the challenges of covid, the local economies that depend on them will be undermined.

We have heard a number of times that a key priority for the region should be improving connectivity. The eastern leg of HS2 is vital for economic growth in the east midlands. The potential indefinite postponement would be a massive blow to the economies of the cities and counties of the region. I look forward to assurances from the Minister that the leg will go ahead as promised, as requested by many Members this morning. If this is another broken promise from the Government, it will be a betrayal of the communities in the east midlands.

[Mr Perkins]

My hon. Friend is right about the uniformity of view that the east midlands has had a poor deal from this Government. We expect, during such debates, for Labour MPs to be critical of the Government; that is the role of the Opposition. However, were we to put together a Facebook video of the criticism of the Government in the debate, it would include excellent speeches from the hon. Members for Loughborough (Jane Hunt), for Rushcliffe (Ruth Edwards) and for Broxtowe (Darren Henry) about the east midlands being left behind under a Conservative Government. Those, too, would be compelling pieces of evidence.

[Jeff Smith]

My hon. Friend makes an important point. I hope that the Minister is listening to his own side, not just to Labour. We have been making this case for a long time, but it has been made strongly, as my hon. Friend says, on both sides of the Chamber.

There is a strong view that the biggest single thing that the Government could do for the east midlands economy would be to improve transport and connectivity, including the full electrification of the midland main line—a continuation through Leicester up to Sheffield. Apart from the environmental benefits, that would reduce journey times north and south. There is the Robin Hood line and the restoration of direct trains from Leicester to Coventry: the only significant cities anywhere in the UK that do not have a direct rail connection. A Government commitment to those kinds of transport investment would be real evidence of levelling up for the east midlands, which has, as we have heard a number of times, the lowest transport investment in the UK.

The final issue that I will mention, though certainly not the least of them, is the emergence of new green industries, which has, again, been mentioned by those on both sides of the Chamber. Labour believes that it should be a priority of the Government to bring forward a green new deal and an ambitious package. We are proposing £30 billion of capital investment to support the creation of up to 400,000 new low-carbon jobs. There is engineering and manufacturing expertise in the east midlands that should be well placed to make the most of those new opportunities, and the east midlands should get its share of the jobs of the future.

Labour wants to see the east midlands thrive, along with our regions up and down the country. We need to address regional imbalance. The UK economy was already highly regionally imbalanced—perhaps the most regionally imbalanced major economy in Europe—well before covid hit. The pandemic restrictions have made existing inequalities worse. The uneven impact of lockdown on different sectors means that some areas have been much more affected than others, and the Government’s ill-defined levelling-up concept needs to address those inequalities. It must mean good-quality, secure work and job creation that helps us meet our climate ambitions. It has to mean a fair social security system for anyone who cannot work, whether due to economic shocks or illness.

Future economic success must mean the Government giving local areas the investment that they need to recover from the covid pandemic and rebuild strongly, with opportunities on everybody’s doorstep. We cannot afford any more broken promises from this Government. That is our challenge to the Minister.