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Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
Jade Botterill (Ossett and Denby Dale) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We have begun a series of roadshows, which bring overseas buyers to the UK to meet small businesses here in, for example, clean energy, advanced manufacturing, life sciences, technology, and digital, creative, financial and professional services. In addition, we are offering new online support to help small and medium-sized enterprises win new export orders to EU markets.
Kirsteen Sullivan
I know from a recent business roundtable I hosted in my constituency of Bathgate and Linlithgow, and from many meetings with industry, that a common barrier to small business exports is supply chain instability. In the past few years, we have seen massive instability, including from the impact of the pandemic and now from the announcement of tariffs. Disrupted demand forecasting, increased costs of raw materials and uncertainty are damaging fledgling businesses in growing their exports. What specific measures is the Department implementing to help small businesses navigate these challenges, and to ensure they can maintain reliable supply chains as we enter another turbulent time for international trade?
Gareth Thomas
I thank my hon. Friend for that question, and I commend her for the business roundtable that she hosted. She is absolutely right, and we recognise that supply chain instability is a critical issue for businesses. We are therefore working hard to minimise the uncertainty that businesses face, both in exporting and in purchasing from key markets. Whether through the economic deal with the US that we are seeking to negotiate, the reset of our relationship with the EU, or new opportunities with India and the Indo-Pacific, we are keen to take down barriers to business. I have to say that the evidence continues to demonstrate that free and fair trade drives down prices, offers better choices for consumers and, crucially, leads to more stable supply chains.
Jade Botterill
I recently visited Phoenox Textiles in Denby Dale, a family-run business that proudly continues our community’s heritage in the sector. It raised the concern that, while it operates a “zero to landfill” operation, low-quality, unsustainable imports from Chinese sellers such as Temu undercut its business and the local growth that it sustains. How are the Government addressing this concern, and what are they doing to support British businesses?
Gareth Thomas
First, I commend the work of Phoenox Textiles and my hon. Friend for championing its concerns. Because of the concern she has articulated, which we have heard from across the retail sector—I have certainly heard it from members of the Retail Sector Council—my right hon. Friend the Secretary of State recently met the Trade Remedies Authority to agree urgent steps to prevent the dumping of cheap goods in the UK. There will be increased support for businesses to report unfair practices, and my right hon. Friend the Chancellor is also reviewing the customs treatment of low-value imports.
Nick Timothy (West Suffolk) (Con)
Last year our trade deficit was £32 billion and, apart from during the pandemic, we have run a deficit every year since 1998. Does the Minister agree that the trade deficit brings severe economic consequences, and is it Government policy to reduce it over the course of this Parliament?
Gareth Thomas
The hon. Gentleman is right to highlight the fact that we need to increase exports to all sorts of markets. It is one of the reasons why we are taking urgent steps to agree a new deal with the US, why we are seeking to reset our relationship with the EU, and why we are keen to open up new opportunities through a free trade agreement with India, and new opportunities in the Indo-Pacific. When he served in a senior role under a previous Prime Minister, his party took decisions to cut support for exporters. We are looking at what we can do to help exporters move forward.
Saqib Bhatti (Meriden and Solihull East) (Con)
The Minister will know that Meriden and Solihull East is proud to be the home of Jaguar Land Rover. JLR, the supply chain and the small businesses in it are crucial, not just for the constituency, but in exporting. I have written to the Secretary of State asking for a meeting, and I am very willing to work with the Government on this. I recently visited Washington and spoke to Congress people about the damage that tariffs can do. What is the Minister doing to help not just JLR, but those small businesses, and how we can work together?
Gareth Thomas
I know my right hon. Friend the Secretary of State is urgently seeking to arrange the meeting with the hon. Member to discuss this issue, because we recognise that this is a key concern of the automotive sector. As I have said, we are seeking to negotiate an economic deal with the US, but we are also looking to work with the automotive industry to increase exports of cars and other things that they produce across all sorts of new markets. One of the roadshows we are organising for small businesses is about that.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Government are far from supporting small businesses to export. Businesses of every size, up and down the country, are failing at a rate not seen since the 2008 financial crash, when Labour was last in power. Confidence is slumping, family businesses are closing, millionaires are fleeing the country—and that is before tariffs hit. What representations is the Minister making to the Chancellor about reversing some of the measures that hit business in her Hallowe’en Budget?
Gareth Thomas
I had thought that one of the first contributions from the Opposition Front Benchers today would be to celebrate the £1 billion investment by IKEA in the UK. It is opening its flagship store on Oxford Street today, and committing to a range of investments in other towns and cities across the UK. When the hon. Lady was on the Treasury Committee, I do not know whether she looked at the cuts the previous Government made to help for small businesses in getting their goods into new markets. We are taking active steps to increase the opportunities for small businesses in overseas markets.
Ellie Chowns (North Herefordshire) (Green)
The Secretary of State for Business and Trade (Jonathan Reynolds)
I announced in July that we were resuming free trade agreement negotiations with the Gulf Co-operation Council, India, Israel, the Republic of Korea, Switzerland and Türkiye. We have also begun talks with the United States on an economic prosperity deal, and we support the Cabinet Office with trade aspects of the EU reset.
Ellie Chowns
Given the utter unreliability and, frankly, economic illiteracy of President Trump, and given that the EU is by far our largest trading partner, it is clear that the best interests of the UK are served by our having a deal that allows the closest possible co-ordination with the EU. Does the Minister agree with me that that should cover youth mobility, and improved energy and climate co-operation? Specifically, will he work with his colleagues to ensure that we ease burdens for British business by linking the UK and EU emissions trading schemes, and by aligning on chemicals regulation, to boost British productivity and prosperity?
Jonathan Reynolds
I think that was a few questions, but we seem to have time for them today, so I welcome all of them. First of all, I recognise exactly what the hon. Lady says. When it comes to the importance of the EU as a principal trading partner for this country, the figures speak for themselves. I disagree with her about us having to choose between the US and the EU, or any other markets. I believe that the UK can be well positioned for all markets. There will be strong political views in this place about political leaders in a range of countries, but I would just say to her that when it comes to the United States, there are potentially thousands of jobs at stake. That is why we are pursuing a trade and economic prosperity deal with the US, and I think we cannot get away from that.
On the questions relating to the EU, a successful negotiation takes two parties. I want to see greater co-operation. I would not talk about the specifics of any part of the negotiations, but I would not want the kind of barrier that she identified to be in place. I want the UK to have the best and most frictionless trade possible with the EU, in a way that is consistent with our aspirations and obligations with the rest of the world, but she has made her point very well, and I recognise it.
Carolyn Harris (Neath and Swansea East) (Lab)
I declare an interest as the trade envoy to New Zealand. What conversations has the Secretary of State had recently with his New Zealand counterparts on the implementation of the UK-New Zealand free trade agreement?
Jonathan Reynolds
First, let me thank my hon. Friend for all her work as our trade envoy to New Zealand. She knows, because she was present, that on his visit to the UK, New Zealand Prime Minister Luxon spent the day with the Prime Minister, and I was able to spend considerable time with him in the afternoon. We discussed the implementation of the UK-New Zealand FTA, as well as the comprehensive and progressive agreement for trans-Pacific partnership, and the importance of working together to support free trade and to protect a rules-based trading system. We are working to ensure that businesses are using the FTA to support the Government’s growth agenda and the plan for change. Later this month, we will host the UK-New Zealand FTA joint committee, which will discuss continuing to grow UK and New Zealand trade.
Dame Harriett Baldwin (West Worcestershire) (Con)
It is good to hear that the trade negotiations with India, which began when we were in government, are progressing well. There must surely now be an opportunity to reopen talks with Canada, so it can buy more wonderful cheese from the UK. With the tariff clock ticking, I am sure the Secretary of State recognises that the US deal is the most urgent; many UK jobs are at risk. However, we heard recently from the Chancellor, when she was in the States, that her bigger priority is discussions with the EU, where we already have zero tariffs and zero quotas. Does the Secretary of State share the Chancellor’s priorities, or does he think the US is more urgent?
Jonathan Reynolds
I thank the hon. Lady for the earlier part of her comments. She is right that we wanted the previous Government to secure the India FTA, and we were willing to support them fully in doing that, but they were unable to get it across the line. With Canada, there are issues, particularly around agriculture, that are similar to those involving the US, so that may be more of a challenging negotiation.
The entirety of this Government, however, have been clear that we are not seeking to pick between one market and another—both are absolutely fundamental. The Chancellor’s comments specifically relate to the simple truth that there is a much greater quantum of UK-EU trade than UK-US trade. Equally, though, in all these negotiations, we have to focus on not just what can be done quickly, but what can be done right and in the national interest. There is no point securing an agreement that does not deliver on our objectives, no matter whom that agreement is with.
We will welcome any support from the Conservatives for the work we are trying to do. I do believe it is easier politically for this Government to do some trade agreements that are available to the UK; some may not have been politically available to the Conservative Government. We will continue to do that work, and we welcome all support for it, from across the House.
Clive Jones (Wokingham) (LD)
Yesterday, I asked the Prime Minister whether Parliament will get a final vote on any trade deal negotiated with the United States, and the Prime Minister stated that it would go through the known process. That process does not include a vote for MPs on the ratification of any trade deal. Will the Secretary of State therefore make it explicitly clear, with a yes or no, whether MPs will get a final vote on the deal with the United States? The PM’s answer yesterday implied that we would not.
Jonathan Reynolds
The answer, as the hon. Gentleman knows, is no; we are not, in this Government, seeking to change the ratification process for any treaty. He knows the process and how it works. The Constitutional Reform and Governance Act 2010 sets out that process. It allows MPs to scrutinise any treaty agreed with a country and presented to the House. The implementation of any aspect of any treaty still has to come to Parliament, of course; it is not the case that any agreement on any kind of international treaty can supersede what we agree in this place. In that process, all Members of Parliament get the same rights and privileges, quite rightly, but no—we are not proposing changes to the process by which we agree treaties with other countries.
Graeme Downie (Dunfermline and Dollar) (Lab)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
As we have just been discussing, increasing trade with European countries is and has been a focus of discussion between Ministers in the Department for Business and Trade and their EU counterparts. I recently met Ministers from Spain, France, Denmark, Poland and Germany, and work is under way on the first UK-EU summit, scheduled to take place on 19 May; trade and the economy will form one element of a broader agenda about our strategic partnership. Across wider Europe, we are negotiating an enhanced free trade agreement with Switzerland, which we hope will strengthen our trading relationship there.
Graeme Downie
The UK’s economic relationship with Sweden is among the most important of our economic relationships with our European partners, particularly with Sweden having recently joined NATO. As the Minister will know, Babcock is pursuing a partnership with Saab to build four Luleå-class corvettes for Sweden. That would involve significant work at Rosyth dockyard and secure thousands of jobs in my constituency. This would be a joint export product, bringing considerable further value to the UK. Given the significance of this deal to my constituency and shipbuilding in the UK, will the Minister confirm its importance to our relationship with Sweden, and do all that he can to support and champion this vital defence industrial partnership?
Mr Alexander
Having worked so closely with former Prime Minister Gordon Brown over a number of years, I am probably the last person in this Chamber who needs to be convinced of the economic significance of the Rosyth dockyard. As my hon. Friend knows, I have recently had meetings with Babcock’s executive team, both in London and abroad. Due to commercial sensitivities, I cannot discuss details of the deal to which he has referred. I am grateful for his recent letter to the Secretary of State on this matter; a response was issued yesterday. He can be fully assured that the Government value the defence relationship with Sweden and fully recognise the importance of defence industrial partnerships between the United Kingdom and Swedish companies. They contribute greatly to our defence and growth objectives.
Chris Law (Dundee Central) (SNP)
Food and drink is one of Scotland’s most successful industries, and it is worth £15 billion to the economy. Over the coming months, the UK Government face a choice in their trade talks with the EU and US: do we align our food and farming standards with those in the EU, or reduce our quality standards at the behest of the United States? Will the Secretary of State guarantee that Scotland’s food and drink industry will not be jeopardised through desperation to satisfy the demands of, and secure a deal with, Donald Trump?
Mr Alexander
At exactly this point tomorrow morning, I will be visiting a farm in East Lothian, so I can assure the hon. Gentleman that I am fully aware of the importance of food and agriculture to the Scottish economy and, more broadly, to the UK economy. I also respectfully refer him to the Labour manifesto at the last general election, which made very clear our commitment to maintaining important standards.
Dame Harriett Baldwin (West Worcestershire) (Con)
The Product Regulation and Metrology Bill, which is about to start its Committee stage in the House, may sound a little dry, but it would give the Secretary of State unfettered power to sign up to dynamic alignment with the European Union at the 19th summit. Given that voters are going to the polls today, will the Minister take the opportunity at the Dispatch Box to rule out the UK becoming an EU rule-taker?
Mr Alexander
I am slightly worried that the question adds two and two and gets about 97. The Bill recognises that we have to find a way forward on standards with the European Union, but to try to overlay what is, as the shadow Minister says, a necessary and somewhat dry technical piece of legislation with the policy agenda that she alludes to is simply wrong.
Kanishka Narayan (Vale of Glamorgan) (Lab)
The Minister for Industry (Sarah Jones)
The industrial strategy has identified eight key growth-driving sectors that will be the arrowhead of our economic success, but of course they cannot succeed without the critical supply chains and foundational industries that underpin them. We are looking at all those foundational industries, including the chemicals industry, to see what the barriers to growth are, what challenges they face, and how can we overcome them through our strategy.
Kanishka Narayan
I very much welcome the Minister’s recognition of the chemicals sector’s contribution as a foundational sector and an anchor employer in constituencies such as mine; we have the Dow site there. What can we do to support the deeply integrated supply chains across the UK and Europe that the chemicals sector, and Dow in particular, relies on?
Sarah Jones
I do not want to underestimate the challenges that the chemical sector faces. Between 2021 and 2024, UK chemicals manufacturing fell in real terms by about a third. We are working to improve the UK’s trade and investment relationship with the EU. We want to build exports and investment opportunities and reduce barriers to trade. Conversations are at an early stage, so I will not go into specifics, but we are certainly working to help the chemicals industry.
Jim Shannon (Strangford) (DUP)
What assessment has the Minister made of the benefits that inclusion of the chemicals sector among the eight sectors could bring for our national security and our pharmaceutical sector? How can all regions of the United Kingdom of Great Britain and Northern Ireland benefit from this sector?
Sarah Jones
When we look at the eight sectors that we are trying to turbocharge through the industrial strategy, we see that the chemicals sector underpins so many other sectors. We need to make sure that we protect it. As I have just said, chemicals manufacturing has fallen by nearly a third over the past three years; we need to turn that around. We are looking at what we can do to break down barriers and make improvements—for example, on the cost of energy. That is part of the mix when it comes to making sure that we are secure in the future.
Gregory Stafford (Farnham and Bordon) (Con)
Charlie Dewhirst (Bridlington and The Wolds) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Hospitality businesses are vital to our communities and to economic growth in the UK, which is why we plan to introduce permanently lower tax rates for retail, hospitality and leisure properties with rateable values of less than £500,000. In addition, we recently held our first licensing taskforce meeting, which aims to reduce red tape for the sector. Next Thursday, on VE Day, pubs and bars across the country will be able to stay open until late to enable everyone to celebrate all those who served during the second world war.
Gregory Stafford
Pubs and the hospitality industry are by their very nature seasonal businesses and rely heavily on flexible working patterns. I saw this at first hand when being served by many younger staff on my recent pub tour of the constituency. Why is the Minister, through the powers in the Employment Rights Bill, seeking to end the flexible contracts that benefit these young people, which will end up causing pubs to have to close?
Gareth Thomas
I gently remind the hon. Gentleman of the dismal record of the Conservatives when it came to support for the hospitality sector; 10,000 pubs closed between 2010 and 2024. The Employment Rights Bill will not have the effect that he describes. The Bill will help to put money into people’s pockets, which is exactly what we need to do to help the hospitality industry going forward.
Charlie Dewhirst
In my constituency, 115 pubs and five breweries contribute £40 million to the local economy and support 1,500 jobs. As highlighted by the British Beer and Pub Association, the sector faces a disproportionate business rates burden, with pubs paying a higher share relative to their turnover, so will the Government commit to increasing the upper threshold of small business rate relief in order that these iconic British institutions continue to thrive?
Gareth Thomas
I certainly take the hon. Member’s broader point about the significance of business rates to the hospitality sector, particularly pubs. I have heard strong representations from the industry about the need for business rates reform. The hon. Member will be delighted that this Government have instigated significant business rates reform, which previous Governments over the last 14 years did not do, including a permanently lower rate for retail, hospitality and leisure.
Chris Kane (Stirling and Strathallan) (Lab)
Residents in Buchlyvie in my constituency are losing their only pub, which is being turned into holiday lets. This comes despite the objections of local residents and Stirling council’s planning panel refusing the change-of-use application. The Scottish Government’s planning reporter has stepped in and made what many local people think is a short-sighted decision. Does the Minister agree that local village pubs, like libraries and community centres, are vital to local wellbeing and cohesion and that we should do all we can to help them thrive as key parts of our local economies and social infrastructure?
Gareth Thomas
I completely agree with my hon. Friend about the significance of pubs across the UK, particularly in rural communities such as those he represents. It is one reason why we are in the final throes of agreeing extra funding for the great organisation Pub is the Hub, which supports pubs in rural areas to adapt to changing needs and enables them to continue to be the vital social hubs that they are in communities. I hope that the Scottish Government will have heard my hon. Friend’s comments and will recognise the need to follow the UK Government’s line and instigate significant business rates reform. Certainly, they need to look at provision on business rates relief, which is not as generous in Scotland, thanks to their decisions, as here in the UK, thanks to the generosity of our Chancellor.
Andrew Griffith (Arundel and South Downs) (Con)
In a grave and exceptionally rare step, five major business groups, including the Confederation of British Industry, Make UK, the Institute of Directors, and the Federation of Small Businesses, have all written to condemn the Employment Rights Bill, and their views are shared by UKHospitality and many others. They say that the Bill will damage growth and employment. I know that, and the Minister knows that. This Bill will hurt business. Every business tells me this, and they are telling him exactly the same. Does the Secretary of State think that is why so many of his Ministers are unable to name a single business that supports the Bill and his Government’s jobs tax?
Gareth Thomas
I wondered whether the shadow Secretary of State might finally use this set of questions to take the opportunity to apologise for helping to write the Liz Truss Budget, which drove interest rates up fourteen times and did more damage to business than any other single measure in recent times. We had to take difficult decisions to sort out the fiscal inheritance we got, and we recognised that to tackle the cost of living crisis that the Conservatives bequeathed us, we needed to ensure that there is more money in people’s pockets. The Employment Rights Bill will help to do just that.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Jonathan Reynolds
I regularly engage with my Cabinet colleagues on a wide range of issues, and in particular the UK’s ongoing trade discussions with partner countries, given the cross-cutting nature of those matters. The Secretary of State for Environment, Food and Rural Affairs is a key partner in that process, including with the US.
As colleagues know, we have had constructive discussions with the US on an economic deal, and we remain committed to those talks, but we have made it clear that we will only ever sign trade agreements that align with the UK’s national interests. Our manifesto was also clear that we will always uphold our high food standards.
Mr Carmichael
The Secretary of State in DEFRA recently appointed Baroness Batters to lead a profitability review in farming and has set up a farm profitability unit in the Department. Those are welcome and necessary steps, but it is not entirely unknown for the efforts of one Government Department to undermine those of another, so before the Secretary of State signs any trade deal with America, will he check in with DEFRA and run the rule over what it is doing on farm incomes so that he does not undermine its efforts?
Jonathan Reynolds
We will all struggle to believe that at times different Departments could be better co-ordinated —I cannot recognise that at all!
I absolutely agree with the right hon. Gentleman. The moves to look at the business models around farming and profitability are welcome, and I think colleagues on both sides of the House would support that. On matters of trade, DEFRA and its Secretary of State are closely involved with those conversations.
Perhaps in the past the community has not always felt this, but in some of the ongoing trade negotiations that we are progressing there are real export opportunities for UK agriculture. Its quality and the premium and brand associated with that is a market that is growing around the world. Part of our discussions in a range of different trade negotiations is about ensuring that there are more opportunities in future, but I promise the right hon. Gentleman that the overall efforts of Government in the sector are co-ordinated, and that is ongoing.
James MacCleary (Lewes) (LD)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
Three of our five largest trading partners are in the European Union. Indeed, 46% of UK trade is with our friends, neighbours and partners in the EU. The Department for Business and Trade, along with other Departments across Government— I hope in a co-ordinated way—have been contributing to the resetting of our relationship with the EU, and is fully engaged ahead of the first UK-EU summit scheduled to take place on 19 May. Among the broad spectrum of policy areas, we aim to make progress on tackling barriers to trade and securing outcomes that will help more businesses across the UK export to our European neighbours.
James MacCleary
This is a moment for Britain to show that it is serious about forging a renewed and reinvigorated relationship with the EU, which is still our largest trading partner. If the forthcoming summit ends up as another in a long line of missed opportunities, there is a real danger that Brussels will just move on to other priorities. What concrete measures can businesses expect to come out of the summit to cut red tape and the barriers holding back British growth and prosperity?
Mr Alexander
I would be inclined to wait for the summit before declaiming it as a disaster—I think, in the trade, that is called prebuttal. However, the hon. Gentleman’s point about the seriousness of the summit is a fair one, and I recognise it. When I saw those images of the Prime Minister sitting with President Trump in the Oval Office, or indeed with President Macron or President von der Leyen of the European Commission, I felt a genuine sense of relief that we have a serious Prime Minister for these serious times. That serious Prime Minister is intent on, first, rebuilding personal relationships across Europe and, secondly, looking to identify the areas that are transparently win-win between ourselves and our friends, neighbours and partners in the European Union. I assure the hon. Gentleman that there is an ambitious agenda for the summit on the 19th.
Clive Jones (Wokingham) (LD)
The Government need to deliver measures that will cut red tape for businesses in Wokingham and across the country who want to sell their goods to our largest trading partner, the European Union. Since Brexit, over 2 billion pieces of paperwork have been added to UK exporters—enough paper to wrap around the world nearly 15 times. Does the Minister recognise the scale of that figure? How will he ensure that Conservative-imposed red tape for business with Europe is cut down?
Mr Alexander
We are consciously pursuing a trade agenda based on data, not on post-imperial delusion. Regrettably, the data is pretty devastating on the damage done by how Brexit was implemented by our predecessors. If one wants to look at academic research, the latest publications from Aston University indicate that a number of small and medium-sized businesses, about which we have heard a lot today from Opposition Members, were buried under red tape. It is not only those businesses that have been buried under red tape; we have seen an increase in the number of civil servants across the United Kingdom by more than 100,000 in recent years. That is partly why the Chancellor of the Duchy of Lancaster in the Cabinet Office is leading our work on rethinking the size and shape of the British state. The hon. Gentleman is absolutely right in recognising that we have a responsibility to try and clean up the mess. That is what we are doing.
James Wild (North West Norfolk) (Con)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
We are reforming business rates, rolling out banking hubs, stamping out late payments, empowering communities to bring vacant properties on the high street back into use and beginning to tackle the antisocial behaviour and crime that has bedevilled the high street over the last decade. Last month, we also announced a licensing taskforce that will recommend ways to improve our licensing regime to foster vibrant hospitality, the night-time economy and cultural industries on the high street.
James Wild
A British Retail Consortium survey this week of major retailers employing half a million people found that 70% say that the £5 billion a year Employment Rights Bill will have a negative impact on their business and half said that it would lead to job cuts. How does the Minister expect our high streets to cope with that extra cost, coming on top of higher business rates and higher national insurance? When will the Government actually listen to businesses and to the people creating jobs in this country?
Gareth Thomas
The Conservative party has a rather dismal record on support to workers. I gently say to the hon. Gentleman that most businesses that do the right thing by their employees support the Employment Rights Bill. One reason the Bill is so important is that it will help put more money into people’s pockets, and that will have a knock-on benefit for high street businesses.
Alison Bennett (Mid Sussex) (LD)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
Rural areas offer significant potential for growth and are central to our economy, so we are working closely with other Government Departments, including the Department for Environment, Food and Rural Affairs, to improve the quality of life for people living and working in rural areas. Later this year, we will launch the business growth service, which, in partnership with the growth hub network in England, will make it easier for businesses, including those in rural areas, to get the information and support that they need to thrive.
Alison Bennett
I thank the Minister for his answer. I am encouraged that his Department is working with other Departments.
There are brilliant vineyards in Mid Sussex, such as Bolney wine estate, which produce high-quality English wine. They form a vital part of the rural economy and they also entice domestic and international tourism. With the end of the wine duty easement on 1 February causing significant concerns across the sector, what steps is the Minister taking to ensure that the English wine industry is not damaged by that and instead can continue to grow and go from strength to strength?
Gareth Thomas
We recognise that the English wine industry, which has gone from strength to strength in recent years, is a crucial part of the rural economy and of the food and drink offer that the UK can rightly be proud of. It is one reason that we are seeking to increase exports of food and drink, including helping English vineyards to export English wine to a range of markets overseas, and we will certainly continue to do that.
Blake Stephenson (Mid Bedfordshire) (Con)
The Secretary of State for Business and Trade (Jonathan Reynolds)
As we have heard, the US is our largest single country trading partner, with total trade worth £315 billion in 2024, representing 18% of total UK trade. More than a million Americans work for UK-owned businesses and vice versa. We have regular and ongoing constructive negotiations with our US counterparts, including some this week, on securing a wider economic deal to benefit UK businesses and our economy. In those talks, we continually push the case for free and open trade. Nobody wants to see a trade war, so our focus is on keeping calm and continuing to negotiate in the interest of UK businesses and consumers.
Blake Stephenson
As the UK’s top export country, the US is a vital partner to many UK businesses, but with Trump now reported to have made the UK a second-order priority to Asia and with the UK possibly on the verge of giving up its Brexit freedoms in favour of EU alignment, how confident is the Secretary of State of achieving a comprehensive free trade deal with the US, in both goods and services?
Jonathan Reynolds
First, let me assuage the hon. Gentleman’s concerns: that is a misreading of how the US is approaching these negotiations. The US has perhaps more complex issues with some countries that will take more bandwidth on its side. As I have always said, the existing relationship between the UK and the US is incredibly strong, reciprocal and mutually beneficial. I see far fewer issues to negotiate to get to that outcome.
Again, I would push back on anyone attempting to put the case that the decisions we make must be based on either the EU, the US or any other partner being our principal partner. The role for the UK is to position ourselves in this challenging world with a genuine strategic advantage because we do things that improve our trading relationship with the EU; we secure this US deal; and we secure the deals with India, the Gulf and other key markets. I am pragmatic about where the UK’s national interest lies and am absolutely confident that it is possible and desirable.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
Today the Select Committee writes to the Secretary of State to supply our response to his consultation on how we should respond to American tariffs. We have heard widespread consensus that there should not be retaliatory tariffs and that the approach the Government are pursuing is right, but we have also heard real concerns especially in the automotive industry among those big exporters to America and, crucially, their supply chains. Can the Secretary of State reassure the House that he is readying support packages across Government to ensure that our automotive sector does not run into serious trouble if we cannot get a deal with America soon?
Jonathan Reynolds
As my right hon. Friend knows, I always welcome communications from the Select Committee and the constructive and helpful role it plays in all these important matters. He is right to say that the business community in the UK strongly backs the Government’s calm and level-headed approach to these difficult issues. The automotive sector is one of our major priorities. It is the sector that has the most exports because of the brilliant success we have with automotive exports to the US. It remains an absolute priority for us in any negotiation to secure what we need, which is the continuation of access to US markets in a way that is complementary to the US and that meets the ambitions of US consumers. Frankly, I do not see any argument for making that relationship more difficult through the long-term imposition of tariffs. We are closely engaged in a number of important meetings this week with senior automotive leaders, and we will continue to prepare that, working to keep the Select Committee involved.
Gregory Stafford (Farnham and Bordon) (Con)
The Secretary of State for Business and Trade (Jonathan Reynolds)
When we took office, years of Conservative neglect had left our steel industry on the brink, but while others were willing to let the heart of British industry go cold, we were not. I welcome the recent conversion of Opposition colleagues to an active industrial policy, but make no mistake: while others may talk tough, only Labour can be trusted to act in the interests of British workers.
When the future of British Steel was on the line, we took immediate action. I can report to the House that thanks to our intervention we have secured the raw materials to keep Scunthorpe’s blast furnaces lit, and British Steel has cancelled the redundancy consultation, which put 2,700 jobs at risk. It was an honour to visit Scunthorpe and Immingham port recently to meet British Steel workers, and I am enormously grateful to them for their resilience, determination and hard work during a turbulent time.
There is still much to be done to protect and rebuild our steel industry as a whole after a decade of failure, and that is why we are committed to a £2.5 billion clean steel fund and to work with industry on our steel strategy. We have always said that steel has a bright future in this country, and our actions over the past month have shown that we meant it.
Gregory Stafford
To bring the Secretary of State to Hampshire and Surrey, there are major regeneration schemes under way in my constituency at Farnham, in Brightwells, and the new town centre in Bordon. Both will ultimately depend on attracting physical businesses, be it retail, hospitality or otherwise, for their long-term success. Does the Secretary of State agree that the Government should actively support prospective businesses in those areas, and does he not recognise that new taxes such as the national insurance contribution increases that his Government have imposed on businesses will cause businesses in my constituency to falter before they have even taken off?
Jonathan Reynolds
I welcome the progress being made in the hon. Gentleman’s constituency—I thought he was about to invite me there, which is often the case at topical questions, but I sadly did not manage to secure an invitation. I have been absolutely clear: I genuinely wish the inheritance of this Government was a better one in economic terms than the one we received. I genuinely wish the Conservative Government had not left that black hole and that we had not had to make difficult decisions, but life is sometimes about difficult decisions, and Government and business certainly are as well. Without investment in infrastructure, without a serious approach to the fiscal rules, which was absent for much of the last Government, and without investment in the health service, we would struggle. I welcome the success he is talking about; I am always keen to work with him on that.
Paul Davies (Colne Valley) (Lab)
The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)
The hon. Member for Farnham and Bordon (Gregory Stafford) might not invite Ministers to his constituency, but I am grateful for my hon. Friend’s invitation—diary permitting, I would be delighted to come along. Last year, my right hon. Friend the Secretary of State announced our plans for a business growth service, which should make it easier for UK businesses to get Government advice and support in order to grow. I hope that will make a real difference. In addition, we are considering what else we can do to unlock better access to finance for small businesses such as those in my hon. Friend’s constituency.
Andrew Griffith (Arundel and South Downs) (Con)
The Secretary of State says that all the funding required for the nationalisation of British Steel will come out of existing budgets. We have seen his Department’s budget—we had an estimates day debate in the House not long ago—and there was no unallocated pot. Could he be a little more specific about exactly which budget the money is coming from?
Jonathan Reynolds
The shadow Secretary of State points to the statement in which I said that in the previous budget there was a £2.5 billion allocation for the green steel fund. Of course, that came in addition to the £500 million for the Port Talbot transformation, which was agreed under the previous Government but was not in the Departmental accounts—as he knows, it was in a heavily oversubscribed Treasury reserve. Yes, the green steel fund will be there to support what we have had to do at Scunthorpe. Again, as I said when Parliament was recalled, the question there was whether we would pay a significant amount of money for the total loss of the business; give a large amount of money to Jingye, but without the certainty that it would be able to deliver on that plan; or step in and take the action that we did, which I am confident was the right option for value for money and for Scunthorpe.
Andrew Griffith
I thank the Secretary of State for his answer. I think it is widely agreed that the cost of nationalising British Steel could run into the billions. Is he really saying that he plans to raid the previously allocated £2.5 billion green steel fund from the national wealth fund, and how is he doing that given that the national wealth fund is operationally independent? Is not the truth that, sooner or later, this will have to come from his department’s budget at the expense of financial support for the automotive sector, exporters and hard-working trade negotiators?
Jonathan Reynolds
I recognise the shadow Secretary of State’s concern, but let me reassure him on that point. The options available to the Government were: first, the total collapse of British Steel, which would have had an incredible cost to the Exchequer of well over £1 billion; secondly, the request from Jingye for £1.2 billion, which the Leader of the Opposition said she did or did not agree to in some way with it going to Teesside, at very significant cost; or thirdly, as we have done so far, the provision of working capital to British Steel in order to pay wages and continue the purchase of raw materials and the operation of the business. Of course, those costs will be incurred by the company, because they will enable it to produce and sell steel. I will write to him with the details if he is not confident in the decision that we have made, but it was the right decision not just for the steel industry but for the taxpayer.
Gareth Snell (Stoke-on-Trent Central) (Lab/ Co-op)
Jonathan Reynolds
I am always keen to support my hon. Friend, and I will certainly consider that legislation. We are not a protectionist Government—we welcome open and free trade—but we believe British goods can compete on quality, and his area is a fine example of that. Where British goods are being undercut, not by price and fair competition but by misrepresentation and fraudulent practices, we take that seriously and have taken more powers to deal with it. I am sure that he will raise this shortly during the urgent question. We will ensure that we give him the support he needs to pursue it.
Olly Glover (Didcot and Wantage) (LD)
The Minister for Trade Policy and Economic Security (Mr Douglas Alexander)
I am unfamiliar with the particular case but concerned by that description. We inherited the export licensing system, and we are reviewing it as part of our ongoing work looking at all aspects of the Government’s work. If the hon. Member writes to me, I will certainly take a personal interest in the matter and write back to him.
Tony Vaughan (Folkestone and Hythe) (Lab)
Gareth Thomas
I know from personal experience that there are some great hospitality and tourism businesses in Kent, and we want to see them do even better in the coming months and years. That is why we are seeking to support the sector through initiatives such as business rates reform and the licensing taskforce, which has just started work. It is also why the Government will launch a national visitor economy strategy this autumn, as we seek to welcome 50 million international visitors annually by 2030—and many of them, I suspect, will visit Kent.
Sir Jeremy Hunt (Godalming and Ash) (Con)
If the Secretary of State is not going to visit Farnham, can I tempt him to visit Fountain Beauty Therapy in Hurtmore, a much-loved business in my constituency? The owner, Clare Porter, talks about the extreme pressure caused by the Employment Rights Bill, the hike in employers’ national insurance and the withdrawal of business rates relief, leading to a crisis in the hair and beauty sector. What measures is the Secretary of State planning to alleviate pressure on this very important sector?
Jonathan Reynolds
I am grateful to finally get an invitation to somewhere. We understand that there are significant pressures for many businesses, and the global situation certainly will not provide reassurance in the short term. The measures in the Employment Rights Bill are not in effect yet and will take some time to come in. Since the election, nearly 200,000 jobs have been created, so the labour market is holding up particularly strongly. There are particular issues such as making sure we get probationary periods right and that zero-hours contracts are monitored in the right way, and we are working with business on that.
Peter Swallow (Bracknell) (Lab)
Gareth Thomas
I commend my hon. Friend for meeting with Berkshire Growth Hub. Growth hubs play a crucial role in local economies. We want to supplement their work with our business growth service, which is set to launch later this year, and we are working with Skills England to identify the skills shortages in particular areas. I am happy to ensure that Skills England talks to Berkshire Growth Hub through my hon. Friend, so that the particular skills challenges in Berkshire are understood by Skills England.
Sir Desmond Swayne (New Forest West) (Con)
Arrangements at the border are disadvantaging companies on both sides of the channel, so there are mutual advantages to be had in negotiations without feeling the need to make any major concessions, aren’t there?
Mr Alexander
I am not entirely convinced that the previous Government are a compass by which to navigate the next set of negotiations with the European Union. The right hon. Gentleman is entirely right that there is a whole series of unnecessary barriers to trade between ourselves and the European Union that were put in place as a direct consequence of the failure of the negotiations led by the previous Government. He is right to recognise that that is affecting directly a whole number of businesses on both sides of the channel. As the Secretary of State said, there is politics on both sides of the channel, but we are working very hard for British business in that context.
Carolyn Harris (Neath and Swansea East) (Lab)
The Minister for Industry (Sarah Jones)
My hon. Friend and several other Welsh colleagues have been talking to me about this. We renegotiated the deal with Port Talbot and the £500 million that goes alongside that. I had a good meeting this week with Blastr, which is looking to build an iron pellet plant at the Port Talbot site if possible, and we are trying to support that. Of course, our focus in recent weeks has been on Scunthorpe and British Steel, but the steel fund remains. The steel plan is still being worked on, which is very broad and hopes to lift the entire UK steel industry.
Sarah Olney (Richmond Park) (LD)
Sheen Uncovered is a clothing business in my constituency that the Secretary of State is welcome to visit any time. It has been significantly affected by the need to pay import duty up front, thanks to the Conservatives’ terrible Brexit deal, and that duty ranges between 6% and 12% and greatly impacts its cash flow. What are the Government doing to support businesses such as Sheen Uncovered to reduce the challenge of import costs?
Mr Alexander
I assure the hon. Lady that we are looking at how we can improve that relationship, and she is right to recognise that a whole number of barriers were created as a consequence of choices made previously, which are causing significant challenges to businesses small, medium and large. As the Secretary of State made clear, we cannot give a running commentary on discussions that are under way, but I assure her that the needs and concerns of British business are uppermost in our minds in those discussions.
Euan Stainbank (Falkirk) (Lab)
On the day of the Government’s necessary action to save British Steel, I sent the Secretary of State a letter requesting a meeting to discuss what further we need to do for Grangemouth, where hundreds of jobs have been lost this week when Petroineos decided to cease refining operations, and where thousands of further jobs are at risk. Will he commit to meeting me to discuss the urgent actions that we need to take to secure accelerated investment in Grangemouth’s industrial future?
Jonathan Reynolds
I can absolutely give that assurance. I have had meetings about this issue just this week. We are ambitious for the just transition for Grangemouth and recognise the issues not just with the refinery but with the polyethylene cracker. We will get to work and set that meeting up.
Harriet Cross (Gordon and Buchan) (Con)
Many rural businesses rely on farms for their trade. Since the Government announced the family farm tax in the Budget, CBI Economics has spoken to over 4,000 businesses and farms across the country—49% said that they have either cancelled or deferred investment, and 34% said that they have reduced or paused it altogether. How can the Government say that they are supporting local businesses, and what will the Department do to support farms and rural businesses that are suffering because of the Government’s policies?
Jonathan Reynolds
I feel that is a question for either the Treasury or the Department for Environment, Food and Rural Affairs, but the hon. Lady made it well. Agriculture features prominently in trade and business, and I will ensure that she gets the right opportunity to put questions about taxation to the Chancellor.
Ben Obese-Jecty (Huntingdon) (Con)
Across my constituency in recent weeks we have experienced severe delays to post in those areas served by the Huntingdon delivery office. That follows a recent restructuring of the workforce and changes to delivery routes. Rural communities and businesses, in particular, have been impacted, with missed hospital appointments and several businesses telling me that it is affecting their ability to receive and therefore pay invoices. Will the Minister urgently investigate those ongoing and worsening delays in Huntingdon, and write to me with the outcome of his findings?
The Parliamentary Under-Secretary of State for Business and Trade (Justin Madders)
I had to wait 50 minutes for a question, Mr Speaker, but this is an important one and I share the hon. Member’s concerns. We regularly meet Ofcom to discuss the performance of Royal Mail, and I will certainly write to him about the discussions we have in respect of his constituency.
Jim Shannon (Strangford) (DUP)
What discussions has the Minister had with his counterpart in Northern Ireland about encouraging young people into casual hospitality employment, to teach them about the benefits of work and the importance of managing money?
Jonathan Reynolds
I am always grateful to the hon. Gentleman for his questions. We always seek to keep colleagues in Northern Ireland well briefed on a range of issues, particularly some of the complexities around trade that have come out of the Windsor agreement and need to be managed carefully. I do not think I have had a specific conversation about the matter he raises, but this is a good opportunity to say that I think I should, and I will. I am grateful to him for getting that on the record.
James Wild (North West Norfolk) (Con)
Will the Secretary of State be straightforward with the House today about how much taxpayers’ money has been spent so far on British Steel?
Jonathan Reynolds
The amount of working capital provided to British Steel to date stands at £94 million, which is considerably less than if we had given a large amount of money to Jingye, or if we had had to deal with the complete loss of the entire British Steel site and business.
Chris Law (Dundee Central) (SNP)
Modelling by the Scottish Government has shown that Brexit-made barriers are likely to have reduced Scottish exports by £3 billion, compared with continued EU membership. Greater co-operation and a closer relationship with the EU will always be encouraged by SNP Members, but does the Secretary of State recognise that anything short of full single market and customs union membership continues to damage Scotland’s economy?
Mr Alexander
In substantive terms, the hon. Gentleman’s point is important: we should be looking to reduce unnecessary barriers to trade between the United Kingdom and our friends, neighbours and partners in the European Union. However, on a political level, it is worth recognising that, had Scotland voted in 2014 to leave the United Kingdom, it would also have left the European Union. There is a certain irony in being told that a politics of flags, borders and manufactured grievances are wrong in one context, when his party continues to argue for them in another.
Nick Timothy (West Suffolk) (Con)
According to reports in The Guardian, Government sources have said that issues around visas have been resolved as part of the Government’s free trade agreement negotiations with India. Will the Secretary of State rule out visa liberalisation as part of those negotiations?
Jonathan Reynolds
We should always be careful about what we read in some newspapers. [Laughter.] The hon. Gentleman knows that we cannot give a running commentary on trade negotiations, but the UK-India talks have been fruitful this week. I am optimistic and excited for the future of what is a key relationship bilaterally and for the signal it can send to the rest of the world.