Grantham MP Gareth Davies is calling for more investment in the regions.

The MP, who has a background in finance, is seeking the creation of a British Development Bank, which he believes could drive an economic recovery.

He has co-written a research paper on the subject for the campaigning 'think tank' Onward.

Mr Davies argues that such a bank, similar to one which already operates in Germany, is needed to 'level up' investment in the regions. London, he says, gains relatively too much investment while the East Midlands and the North misses out.

The MP commented: "Even before the pandemic, the UK economy faced a number of long term challenges around the financing of growth-enhancing projects and dynamic businesses, especially in parts of the country which have lagged behind for a long time."

"The UK is unusual among developed countries in not having a national development bank to catalyse private sector activity where the market will not invest alone. If we are serious about levelling up, we need a British Development Bank."

In a related article on the Conservative Home website, the MP said: "We need a long-term strategy to boost infrastructure investment, stimulate regional development and leverage much greater levels of private capital in the process.

"Today (Friday) I have published a plan to restructure our investments to target the regions and help mobilise billions of new private savings and investment to reduce the burden on the Treasury and the taxpayer at a time of great challenge."

He added: "Backed by the Treasury, a Development Bank could borrow at very low rates to fund and encourage infrastructure investment the private sector would not otherwise build. The bank could also issue "guarantees" or could buy shares in infrastructure projects, taking the risks of infrastructure construction the private sector is unwilling to take.

"This Government has an opportunity to not only set out a long term plan for levelling up in the upcoming National Infrastructure Strategy, it has the chance to put in place a financial institution that will serve the needs of our regions for decades to come regardless of who holds the keys to Number 10."