Oral Answers to Questions

Chris McDonald Excerpts

Thursday 11th December 2025 Commons Chamber

[Ruth Jones (Newport West and Islwyn) (Lab)]

2. What assessment he has made of the potential impact of the industrial strategy on advanced manufacturing in south Wales.

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

Our 10-year industrial strategy and sector plans will boost economic growth nationwide. South Wales is set to gain a new investment zone in Cardiff and Newport, targeting semiconductors and advanced manufacturing. Across Wales, manufacturers can benefit from a range of other industrial strategy measures that target lower energy costs, faster grid connections, and billions in new capital investments for small and medium-sized enterprises, making it easier to innovate, expand and thrive.

[Ruth Jones]

I welcome the Minister’s response and the additional support for the compound semiconductor cluster in my constituency. What conversations has he had with Welsh Government colleagues on delivering the joint objectives of the Welsh manufacturing action plan and the UK industrial strategy to attract additional investment and jobs to the Welsh semiconductor cluster?

[Chris McDonald]

I thank my hon. Friend for the work that she is doing to champion the Welsh semi- conductor cluster, which is so important for our entire advanced manufacturing sector. The Minister for artificial intelligence and online safety—the Under-Secretary of State for Science, Innovation and Technology, my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan)—was in Wales last week, meeting industry leaders and co-chairing the semiconductor advisory panel, and my right hon. Friend the Secretary of State for Business and Trade was recently at the Wales investment summit. We hope to attract many more investors to the compound semiconductor cluster in south Wales.

[Mrs Elsie Blundell (Heywood and Middleton North) (Lab)]

3. What discussions he has had with Royal Mail on improving service levels in the north-west.

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[Bill Esterson (Sefton Central) (Lab)]

5. What steps his Department is taking to support businesses with energy costs.

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

My hon. Friend, through his chairmanship of the Energy Security and Net Zero Committee, is working very hard to highlight the issues of business competitiveness and energy costs to businesses. I would draw his attention to the British industrial competitiveness scheme consultation, which I launched a couple of weeks ago, which is our commitment through the industrial strategy to reduce energy costs for over 7,000 manufacturing businesses by around £40 per megawatt-hour from 2027. I encourage all Members to ensure that manufacturing businesses in their constituencies respond to that consultation.

[Bill Esterson]

Reducing costs by £40 per megawatt-hour for 7,000 manufacturing businesses is welcome, as is the news in the Budget of changes to the British industry supercharger scheme. However, there are tens—if not hundreds—of thousands of other manufacturing businesses facing some of the highest electricity prices in Europe, which has been the case for many years. What is the plan to help the businesses facing very high bills right now while we wait for lower electricity bills in the longer term through Government plans for clean power?

[Chris McDonald]

My hon. Friend is right. Alongside the British industrial competitiveness scheme, we have also committed to increasing network charges compensation from 60% to 90% under the network charging compensation scheme. We are also reviewing our energy intensive industries compensation scheme. He is right to recognise the lack of competitiveness on energy prices between the UK and the rest of Europe—a terrible situation that was bequeathed to us by the previous Conservative Government and their ideological adherence to relying on foreign dictators such as Putin for Britain’s energy needs. We are investing in our future energy needs to ensure that they are clean, cheap and secure.

[Lincoln Jopp (Spelthorne) (Con)]

National Grid is going to spend about £30 billion by the end of the decade building pylons, but only 2% of the steel used to build those pylons will be British; similarly, in the offshore wind projects, only 2% of the steel will be British. That is because of carbon taxes and energy costs. Does the Minister recognise that rather than promoting the opportunity of the great, green revolution that they were espousing earlier, the Government are actually killing British business with high energy costs?

[Chris McDonald]

I do not believe the hon. Gentleman is correct to attribute that cause to carbon taxes or energy costs, but I share his concern about the lack of British steel and other British materials being used in construction projects funded by the taxpayer. I believe that the taxpayer expects materials for such projects to largely be sourced from the UK. That is why I had cause over the last couple of weeks to speak to British Petroleum about its use of Chinese steel in energy projects. I will continue to call in the chief executives of companies and discuss with them how we will increase British content in British projects.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

The UK ceramics sector is one of the most gas and electricity-intensive industries in the UK, so I make my usual plea to the Minister to consider changes to the supercharger scheme ahead of the British industrial competitiveness scheme coming online. Will he also give some thought to the electrification process? There are parts of the ceramics sector that would like to electrify, but the industrial grid capacity simply does not exist yet. What will the Government do to allow those companies to move forward with electrification, which ultimately will help to bring down their energy bills?

[Chris McDonald]

I thank my hon. Friend for his question and for the incredibly constructive Westminster Hall debate we had last week on the ceramics industry, which was supported by my hon. Friend and other Members representing ceramics constituencies around the Stoke and Staffordshire area.

I recognise my hon. Friend’s call for ceramics to be considered under the review of the supercharger scheme, and I have ensured that those calls have been heard within the Department. I want to ensure that ceramics is considered very carefully as part of that. I also appreciate the continued commitment of Ceramics UK, which I met with last week, and the rest of the ceramics industry to work together with me to see how we can improve the competitiveness of the industry.

[Clive Jones (Wokingham) (LD)]

In Wokingham we are lucky to have 119 great hospitality businesses. Those businesses are struggling under the burden of rising energy costs, increases in national insurance and business rates and many other cost increases. The Liberal Democrats called for a 5% cut in VAT to help the hospitality sector, but the Chancellor ignored that proposal, which would have gone some way to help businesses cope with rising energy costs. What is the Minister doing to ease the concerns of business owners in Wokingham, who will be worried about their businesses?

[Chris McDonald]

The Government are, of course, very concerned about cost pressures on hospitality businesses. The Under-Secretary of State for Business and Trade, my hon. Friend the Member for East Renfrewshire (Blair McDougall) met with hospitality businesses just this week to discuss exactly that. The hon. Member raises the question of a reduction in value added tax, which would affect the whole industry, so it would be something of a blunt instrument. Instead, the Government are providing transitional support for those businesses, particularly on business rates. We continue to listen to and work with the sector.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

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[Mr Speaker]

Order. One of us is going to have to sit down. Please, it is topicals and I have some Members who did not get in before you. You’ve got to help them, please.

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

I thank my hon. Friend for her question, and for so kindly hosting me on a trip to Falmouth port, where I saw for myself the great potential in her constituency for critical minerals and floating offshore wind. I recognise the skills issue, and the Government are supporting the sector through the Government’s clean energy jobs plan and another £180 million for demonstration projects. She should be assured that I have raised the potential of Falmouth, particularly the extensive anchorage there, with both the National Wealth Fund and the Crown Estate.

[Mr Speaker]

I call the shadow Secretary of State, Andrew Griffith.

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[Matt Western (Warwick and Leamington) (Lab)]

The UK-US economic prosperity deal was very welcome for the automotive sector, but there are some challenges for that sector. The current quota of 100,000 units and the quarterly thresholds are particularly difficult for small-volume and micro manufacturers, such as Aston Martin, McLaren and Morgan. What conversations are taking place between the US and the UK on those details?

[Chris McDonald]

I certainly recognise the issue of the quota, and the importance of our small-volume manufacturers such as Aston Martin and McLaren. I met McLaren last week, I had a meeting with Aston Martin this week as part of the Automotive Council UK, and I will meet Aston Martin’s chief executive in the new year. This is perhaps a good opportunity to congratulate McLaren and Lando Norris on his outstanding win at the Formula 1 championship—only 35 men have won the F1 championship, and 11 of them have been British. The motorsport industry is a fine example of British engineering and British sportsmanship coming together.

[Jessica Morden (Newport East) (Lab)]

Last week I met Community union representatives representing steelworkers across Wales, including in Llanwern— I draw attention to my entry in the Register of Members’ Financial Interests. They support the welcome movement on energy costs, and they know that the Government are working on procurement and that there will be a steel strategy, but the most urgent ask is on the EU’s steel import quotas and tariffs. Can the Minister please give us an update on those?