Industry and Exports (Financial Assistance) Bill
(Limited Text - Ministerial Extracts only)
Read Full debateMonday 15th December 2025
(1 day, 19 hours ago)
Commons ChamberIndustry and Exports (Financial Assistance) Bill 2024-26 View all Industry and Exports (Financial Assistance) Bill 2024-26 Debates Read Hansard Text Watch Debate
The Minister of State, Department for Business and Trade (Chris Bryant)
I beg to move, That the Bill be now read a Second time.
We want businesses to grow, innovate, expand, invest, find new markets here and overseas, develop new products and new services, and bring them successfully to market. That often requires two forms of financial support from Government: grants and loans. That is why the Bill builds on two different Acts of Parliament: the Industrial Development Act 1982, which provides grants to industry in the UK, and the Export and Investment Guarantees Act 1991, which enables financial support by means of investment finance.
Of course, as Trade Minister, I am ambitious about trying to get more UK companies to export. It is a shame that only one in 10 British businesses exports, compared with three out of 10 French businesses and four out of 10 German businesses. If we could match the ambition of other countries, that would be a significant boost to the UK economy.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
Will the Minister give way?
Gareth Snell
It’s nice to be loved, isn’t it, Madam Deputy Speaker? I congratulate the Minister on bringing forward the Bill. On exports, the world-leading ceramics industry in Stoke-on-Trent tells me that there used to be a fund that allowed companies to get help with the cost of going to trade expositions or being part of trade delegations, and that meant they could take their wares around the world to try to get those all-important exports. That fund no longer exists. If that fund could be brought back, I know that ceramics companies in Stoke would appreciate the opportunity to export, as this country is trying to do. Will the Minister look at that?
Chris Bryant
There are funds. Especially when there is a new free trade agreement, as in relation to India at the moment, we help lots of businesses. Businesses in the beauty industry, which I know my hon. Friend knows a lot about, have gone to a recent exhibition in India, because under the FTA, India will be taking the tariff down from, I think, 20% or so to zero. That is a big opportunity for British businesses. There are sometimes funds available.
I will look at how the ceramics industry in particular is treated. As my hon. Friend knows, I would like to establish stronger support for the ceramics industry in general, because we should be proud of it. As he also knows, I am looking at the presents that we as Government Ministers give to other Government Ministers; we could be a bit more ambitious about ensuring that they are things that people really want, and perhaps they could come from one of our creative industries, such as ceramics.
Free trade agreements can get rid of tariffs, and that is a very important way of enabling more exports, but we can also often do a great deal by getting rid of the non-tariff barriers that exist in many countries. Export ambition, even from companies that would like to export, often needs financial assistance. That is precisely what UK Export Finance is there for.
Chris Bryant
The hon. Member for Strangford (Jim Shannon) was there first, and then I will take an intervention from the hon. and learned Member for North Antrim (Jim Allister).
Jim Shannon
I welcome what the Minister has said; he has clearly underlined that all parts of the United Kingdom can benefit. As the Minister will know, we are very fortunate in Northern Ireland to have a very strong agrifood sector, which promotes itself wherever it can across Europe, across the mainland and further afield. The defence sector is also active, and the Government help to create extra procurement and extra apprenticeships is very welcome. However, there are also small and medium-sized enterprises, which are mostly involved in engineering, and this group of businesses could do more. I ask the Minister, very kindly, whether he could give us an idea of what can be done for them. We want to encourage them to be involved and to export.
Chris Bryant
The hon. Member is absolutely right that the vast majority of the companies we will be talking about are SMEs—88% of the companies that benefit from UK Export Finance are SMEs. We are bringing forward this Bill because we are getting to the limit of what is allowed under current legislation and we need to expand that. I have specifically spoken to UK Export Finance about looking at new ways to support SMEs. The retail banking sector in the UK also sometimes needs to understand better how it can support small and medium-sized enterprises to export around the world. One of the things that I have been trying in my own small way is to do a supermarket sweep when I have been abroad for trade missions: to see whether Rose’s lime marmalade, Walker’s biscuits, Marmite, Irn-Bru or Penderyn whisky—or whatever it may be—is available around the world. The more we can encourage businesses to export, the more likely they are to prosper.
One of the advantages in Northern Ireland in particular is that, because of the Windsor framework, it has an opportunity to enter into an EU market much more readily than elsewhere. One of the sadnesses of Brexit is that 16,000 fewer businesses in the UK now export, and that is largely because they have given up on Europe. That is one of the things I radically want to change.
Chris Bryant
I can see the hon. and learned Gentleman is practically pregnant with a question.
Jim Allister
It is always good to hear about a rise in the availability of financial assistance to industry. In the context of Northern Ireland, the Minister has referred to the Windsor framework. One of its drawbacks is that Northern Ireland is subject to EU state aid rules. In my constituency, I have a large bus manufacturer that sells buses to Germany. Can I seek an assurance from the Minister that that company, for example, will not be disadvantaged by the cap in state aid rules in comparison with a competitor bus manufacturer in another part of the United Kingdom where there is not a state aid limitation?
Chris Bryant
This is one of the problems with Brexit, isn’t it? It has provided a variety of different sets of rules for different parts of the United Kingdom, and that was always one of its inherent problems. Northern Ireland voted against Brexit, and we are now trying to make it work as best we can. The hon. and learned Gentleman is absolutely right. Of course there are going to be problems under state aid rules for some businesses in Northern Ireland. That is why we are trying to do two things at the same time: to ensure that the Windsor framework is adhered to, but also ensure that we have a single UK internal market.
The Bill is short—it just manages to get on to a second page—but it does some important things. First, it increases the Industrial Development Act limit on financial assistance from £12 billion to £20 billion. Secondly, it raises the amount that the Secretary of State may increase the limit by from £1 billion to £1.5 billion. That is something he can do four times under the 1982 Act. Thirdly, the Bill amends the Export and Investment Guarantees Act 1991 to increase the commitment level from roughly £84 billion to £160 billion. Fourthly, the Bill allows the limit to be increased by increments of up to £15 billion by secondary legislation. Finally—this is perhaps the single most important and most useful thing to the ordinary punter out there—it changes the 1991 Act so that the limit is expressed in pounds sterling. In other words, it will be in common parlance, rather than referring to special drawing rights, which I think has confused an awful lot of people for a long time.
I will give just a few examples of why all of this matters. Some £14.5 billion of UK Export Finance support last year was used to support 70,000 jobs, adding £5.4 billion to GDP in the UK, including across several key industrial sectors such as clean energy, advanced manufacturing, life sciences and automotive.
Rosie Wrighting (Kettering) (Lab)
I am pleased to hear the Minister explaining what the Bill will do and how it will contribute to business, but in the creative industries and particularly in fashion, young designers struggle to access international markets and export finance. What are we going to do to support creative industries such as fashion so that we do not lose them in the UK?
Chris Bryant
That is an extremely good point. The creative industries are, of course, one of the eight key industrial sectors that we are keen to promote. The music export growth scheme is specifically intended to ensure that a wide variety of acts are able to tour around the world. We need to sort out with the European Union the issue of British acts being able to tour effectively and cost-effectively around Europe, but bands from Scotland, Wales and every part of England have been able to access that finance, and it is a key part of what we do.
As for fashion, I know that you try to do your bit, Madam Deputy Speaker—as, I am sure, do all Members who want to promote British fashion—but it is important to note that the Department for Culture, Media and Sport provides support for NewGen. A fair amount of London Fashion Week is supported by either the Department for Business and Trade or the DCMS, and many NewGen designers have gone on to achieve great success in the market. We also try to ensure that we have a presence in other fashion weeks, such as those in Paris and New York, and we provide other finance as well. There is a wide variety of measures, some of which are covered by the Bill, but I can assure my hon. Friend that the creative industries are very much part of what we are considering. I was struck by, in some—oh, I am not allowed to refer to those matters until tomorrow.
Chris Bryant
I am very grateful to the right hon. Gentleman for shutting me up.
Sir Edward Leigh
Believe it or not, more than 30 years ago I was a Minister for fashion and regional policy. These things go round in a circle, and I warn the Minister —with some experience of this—that many companies were caught in a sort of Catch-22: if they were too successful, the Department of Trade and Industry would not let them be helped, and if they were not successful enough, there was always a risk that they might go bust. How is the Minister going to hit the sweet spot and make sure that we direct the money to where it is most needed?
Chris Bryant
Well, I hope that I can find the right hon. Gentleman’s sweet spot, as he is such a dedicated follower of fashion. He has made a very fair point. This is the classic problem for Governments when it comes to any industrial support, whether it is a loan or a grant: if the business is so successful, why does it need additional financial support? That is why, because of the structure that we have created through those two Acts, UK Export Finance actually makes money for the British Government. It is based on loans being made at normal rates, and sometimes it manages to lever in retail finance as well, which is a particularly important part of its work. However, when we provide a grant we have to ensure that it is intended to achieve a set series of aims. For instance, the £128 million—I think—that has been given to BioNTech is specifically designed to develop two new R&D hubs producing 400 new highly paid jobs in the life sciences sector, and also, incidentally, to tackle skin conditions and melanoma, which are among the subjects on which it is working.
The right hon. Gentleman is right to say that a difficult moment often arises, but one of the complaints I have received from quite a few sectors is that the UK can be a bit slow about deciding when we are going to support someone, and I want to be able to speed up that process as much as possible. As I said to the hon. Member for Strangford (Jim Shannon) and the hon. and learned Member for North Antrim (Jim Allister), I think the key to much of what we are trying to do involves supporting SMEs. Of course there will be massive contracts, such as the $3.5 billion expression of interest that we have allowed for the building of the new Dubai airport so that British businesses will be able to put in for some of the ensuing tenders—perhaps for hangar doors, the building of additional facilities, maintenance services or architectural designs. However, 88% of what we are talking about in respect of UK Export Finance is for SMEs.
I will make two more points, and then I will come to a close. Through existing provisions in the Industrial Development Act, the British Business Bank’s northern powerhouse investment fund II has directly invested £115 million in more than 300 small businesses. Similarly, in the midlands, the midlands engine investment fund II has launched a £400 million fund to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.
I am getting a feeling from the Chamber that everyone will be supporting the Bill. I think that, broadly speaking, it has cross-party support, and I think it important that we get it on the statute book soon enough to be able to provide that support for the businesses in the UK in the next financial year, so that we can prosper, grow the economy and protect jobs.
Chris Bryant
I thank colleagues for everything that they have had to say. I am not sure whether it was Reagan or Bush, but one of them went to France and said that the trouble with the French economy was that there was no French word for “entrepreneur”. It was repeated by a Conservative Secretary of State for Wales, who went to Wales and said that there is no word in Welsh for “entrepreneur”—that was a bit ironic.
I will try to do something extraordinary, Madam Deputy Speaker, by answering the questions that have been put to the Government. [Hon. Members: “Hear, hear!”] I don’t think it will catch on. I will start with the questions put by the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin). Her first question was about whether I can guarantee that no commercial finance will ever be used where UKEF finance is involved. The strict answer to that is no. However, UKEF’s mission is
“to ensure that no viable UK export should fail for lack of finance or insurance from the private sector.”
My hon. Friend the Member for Leyton and Wanstead (Mr Bailey) made the key point about cohering power. That is precisely what UKEF is able to provide. Sometimes, particularly under export development guarantees, UKEF funding can help to extend capacity or terms—that is an important part of what it does. It is not that there will never, ever be commercial finance and UKEF funding, but obviously we are not trying to supplant commercial funding. We are also aware, of course, that financial services are one of the key things that we do around the world. We are trying to shift our FTAs towards dealing not just with goods but with services, because that is where some of the added value is for the UK.
Several hon. Members have asked about regional disparities. Those are one of the key things we have charged UKEF with, and I know that it is keen to address them. I have a long list in my briefing notes of different parts of the country in which UKEF funding has been supportive or where there have been grants, but I will not lay them all out now.
The shadow Minister asked about new markets. That is often precisely what we are looking for: new markets for individual exporters and new markets for the UK in general. One area in which we have set aside money was specifically in relation to Ukraine, where the reconstruction will be one of the most important things for UK businesses to be involved in over future years. It will be difficult to get the insurance necessary to be able to provide that simply on the open market, which is why UKEF funding is particularly important.
The shadow Minister said that we should not export to companies that could do us harm. She is absolutely right about the side-stepping of sanctions on Russia. We have frequent discussions about that, and UKEF is particularly keen on carrying out due diligence on it. It is why we must constantly revise how we implement our sanctions regime, to ensure that it is doing damage to the Russian Federation’s economic advances.
Chris Bryant
Yes, but I am not sure that the hon. Gentleman was here for the rest of the debate. [Interruption.] Oh, he was sitting on the Front Bench—I do apologise.
David Reed
I thank the Minister. Just on a point of clarification—I am sure that this will be hammered out in Committee—we have heard about the assistance that the Government have given over the past 15 months to UK Steel, Jaguar Land Rover and others, but it is important to talk about the significant cyber element. Jaguar Land Rover was hit by a big cyber-attack, and we saw a step change when the Government stepped in and essentially made British taxpayers the insurance company. Does the Minister see any risk in the Bill, and what message does it send to adversaries such as Russia, which he just mentioned?
Chris Bryant
On cyber, financing and JLR, I might have to correct myself in writing to the hon. Gentleman if I get what I say wrong, but as far as I am aware, I am not sure that JLR has drawn down any of the finances from UKEF that we made available. We thought it was important to ensure that the guarantee was there so that the company was able to proceed. That would be of assistance not only to JLR, but to the extended supply chain, much of which needed to deliver precisely on time, because of the way the automative industry now works, and they did not have large stocks of things that they were keeping against the day when they might be called up by JLR.
We certainly do not want to be the insurer of last resort for everybody who gets into a cyber-security problem. That is why the Government have a cyber-strategy, and we are keen to ensure that businesses take that part of their responsibility seriously. We have seen the dramatic effects that it can have on the UK economy when that goes wrong; this is a serious point. I have seen no evidence that what happened at JLR was specifically related to Russia, but we must maintain vigilance on all these matters.
The shadow Minister’s final question—I am not leaving any of them out—was about how we make sure that posts know about UKEF. We have heard already from two of our trade envoys that posts are extremely well aware of the existence of UKEF, and of how completely transformative that can be when a business is seeking to expand into a particular market. I would say that the problem is that sometimes not enough businesses in the UK are aware of UKEF, which is one of the things I have been talking through with UKEF senior management.
I know that my hon. Friend the Member for Chelsea and Fulham (Ben Coleman) has been doing a magnificent job, because I have seen video footage of him on the “News at 10” in Togo, speaking in French. We are glad that we have such a linguist in our team, and he is right to raise some of the issues in relation to the EU. We want frictionless trade. That is what we were promised, and we are going to try to achieve it as far as we possibly can. Sometimes that will mean that we align as much as possible with the European Union, rather than diverge for the sake of divergence. Of course it means that we need to get more mutual recognition agreements in place. There is a series of industries where I would like to achieve that, not least architecture.
The hon. Member for Maidenhead (Mr Reynolds) gave the traditional single transferable EU speech from the Liberal Democrats. I agree with large chunks of what he was saying, but not with his final premise. As I say, within the parameters of what we have, we want to deliver frictionless trade as much as possible. Everybody in my Department laughs at me, but I often refer to floristry. There are florists in every constituency in this land, and if it costs more to bring flowers in from Europe than it did in the past, that is a problem for lots of small family businesses up and down the land. That is why sorting out sanitary and phytosanitary measures over the next few months is an important priority for the Government. He asked whether the target of 1,000 SMEs is ours or that of the previous Government—it is our target as well. We want to be ambitious about that.
The hon. Gentleman asked about spending decisions and accountability. If only he knew somebody on the Business and Trade Committee to whom he could talk about questions of UKEF. Oh no, he’s on it—I’d completely forgotten, Madam Deputy Speaker! I am sure there are plenty of means for him, but I gently say to him that in my experience, the whole system of accountability of expenditure in the House is pretty shabby. It is not my job to write how we should change that in the future, but he might come up with some suggestions and put them to others.
My hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer) said that I had not aged a day since I was last a Minister under Queen Victoria, but I think he inadvertently misled the House; I hope at some time that he will be able to correct the record. He is absolutely right about arbitrary figures. There are arbitrary figures, and previous Acts of Parliament did not allow us to amend them to update them sufficiently in line with inflation—we need this primary legislation to do that.
My hon. Friend is also right about the steel industry. I assure him that our steel strategy will come out in the new year. It will be very clear about how important we think the steel industry is to the UK, and about having a sovereign capacity in the UK for a variety of different forms of steel manufacture. As I told the House last Thursday, I was in Brussels last Wednesday to meet Commissioner Šefčovič to talk about the EU steel safeguards, and to make sure it is understood that we are not the problem for the EU and the EU is not the problem for us, so we ought to be able to come to some agreement in that space. We know that our steel safeguard runs out at the end of June. We need to make sure that we have adequate measures in place thereafter, and we will do so.
My hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland) talked about the importance of exports, in particular for businesses in his own region. To give cite just one statistic, UKEF provided a £590 million loan for SeAH Wind UK, which is building an offshore wind factory in Teesside. It will create 750 jobs by 2027 and will assist the UK steel industry, so my hon. Friend is absolutely right and I agree with him.
My hon. Friend the Member for Leyton and Wanstead, who is another of our magnificent trade envoys, asked more questions than the shadow Minister—I am not sure whether he is auditioning for some other post. He is absolutely right about the importance of our critical minerals strategy. Our relationship with Africa will be essential to deliver on that; other countries are seeking to make inroads there, and we cannot leave that be. He asked how the updated UKEF strategy fitted with what we are doing today. Well, the new strategy simply cannot exist without the extension of the financial provisions that we are introducing through the Bill.
My hon. Friend also talked about the cohering power, which is very important. He said that I could read his views—I know can, because he gave me a letter only 10 days ago, which I have read and officials in the Department are reading as well. I am enormously grateful to our trade envoys, in particular those who provide clear reports when they come back from visits about the things that we have achieved. They are achieving those things as part of the UK team. In the new year, I want to vitalise the whole House so that all Members, who often know the businesses in their communities better than anybody else—certainly better than any Government Department—bring people to us who might be thinking about exporting in the future, so that we can strengthen that opportunity.
This Bill is about enabling Scottish indie acts like corto.alto and Young Fathers, and Wales’s the Bug Club, to tour the world. It is about funding low-carbon hydrogen production. It is about helping Superior Wellness to sell hot tubs and spas around the world. It is about enabling 3TOP Aviation to expand its sustainable aircraft services into new markets. It is about helping SRT Marine Systems to sell its maritime surveillance in Indonesia and Kuwait. It is about enabling UK businesses to get contracts to help build the new Dubai airport. It is about enabling BioNTech to open two new research and development hubs. It is about helping Kindeva in Loughborough and Clitheroe to develop new respiratory inhalers. It is about enabling a new multibillion-pound car battery factory, creating 4,000 jobs. It is about Scotch whisky and salmon, and Welsh whisky; aircraft engines and wings; life sciences and advanced manufacturing. It is about jobs and our prosperity, so I hope that all right hon. and hon. Members will support the Bill tonight.
Question put and agreed to.
Bill accordingly read a Second time.
Industry and Exports (Financial Assistance) Bill (Programme)
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the Industry and Exports (Financial Assistance) Bill:
Committal
(1) The Bill shall be committed to a Committee of the whole House.
Proceedings in Committee, on Consideration and on Third Reading
(2) Proceedings in Committee shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement.
(3) Any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings in Committee of the whole House.
(4) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee of the whole House, to any proceedings on Consideration or to proceedings on Third Reading.
Other proceedings
(5) Any other proceedings on the Bill may be programmed.—(Jake Richards.)
Question put and agreed to.
Industry and Exports (Financial Assistance) Bill (Money)
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the Industry and Exports (Financial Assistance) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase attributable to the Act in the sums payable under or by virtue of the Industrial Development Act 1982 or the Export and Investment Guarantees Act 1991 out of money so provided.—(Jake Richards.)
Question put and agreed to.