Department for Business and Trade

Chris McDonald Excerpts

Wednesday 4th March 2026 Commons Chamber

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

I thank everyone who has participated in today’s debate. I particularly thank my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) for opening the debate, as well as for his work as Chair of the Business and Trade Committee, and the members of that Committee who have spoken in today and produced a number of reports in this Parliament. I have very much enjoyed reading those reports, and they have been drawn on extensively during this debate. Members have made some incredibly important and pertinent speeches, and in the time available, I will try to trot through some of the answers at pace. Forgive me in advance if I do not manage to respond to everyone: I am happy to write and fill in any detail that might be missing afterwards.

I will start with the overarching strategy of the Department and why it has produced these estimates. The Department has reset our programme of spend around our growth mission and our industrial strategy. Our major investments in key sectors, combined with efforts to attract private capital, will ensure that taxpayers’ money is used effectively. At the same time, we are ensuring that the right resources are going into delivering our small business plan, creating the right conditions for small businesses to grow. I will say more on that shortly, as I know that many Members are concerned about small businesses.

I also need to explain, as it was mentioned by several Members, the rationale behind the in-year budget increase. It is primarily for three activities—British Steel, the Post Office and the British Business Bank. There has been a £1.351 billion increase in the annual managed expenditure budget, recognising that additional provisions are needed for postmaster compensation. That covers funding for the capture redress scheme, and for redress to family members of postmasters impacted by Horizon. There is a £626 million increase in capital department expenditure limits, largely for two reserve claims. The first is £375 million of funding for the Department’s support for British Steel, and the second is £200 million for growth sector businesses via the British Business Bank, to help more firms to scale up and become home-grown success stories. The reserve claim will ensure that we do not unnecessarily restrict the bank.

The shadow Minister queried why the Department is coming back with estimates, as it also did last year. Fundamentally, that is partly built into the structure of the British Business Bank. In order to provide the bank with the level of in-year flexibility that it needs to work with fund managers and draw down investment in businesses, it is important that the bank is not restricted at the outset and that we do not overcompensate or undercompensate the bank. That is one of the primary reasons why the Department is an outlier among the estimates. It is actually a sign of a well-functioning Department and a very well-functioning element of the British Business Bank.

I turn to some of the specific items. Given the scale of the support for the steel industry, I shall start there. It was raised by the Chair of the Select Committee and many other Members. Our steel industry is of course strategically important as part of British heavy industry, supporting the UK’s industrial base, our construction sector and our national and economic security, as we heard in the earlier estimates debate on the Ministry of Defence. Transforming the steel sector is essential for securing a competitive, modern and sustainable industrial base, ensuring the UK can meet its long-term net zero commitments while maintaining critical domestic capability.

Our commitment to the sector is evident in the intervention we made in April last year at Scunthorpe to ensure uninterrupted steel production and avoid the permanent and disorderly closure of the UK’s last operating blast furnaces, the Queen Anne and the Queen Bess in Scunthorpe. Government officials are continuing to provide on-site support in Scunthorpe, ensuring uninterrupted domestic steel production and carefully monitoring the use of taxpayer funds.

Several hon. Members mentioned the steel strategy, including my hon. Friend the Member for Tipton and Wednesbury (Antonia Bance). We have a commitment to publish the strategy early in 2026. We had hoped to publish it before Christmas but we thought it best to publish it alongside the trade measures following changes in trade arrangements. We have worked carefully with the industry, UK Steel and the trade unions, and I hope that we will bring the proposals on trade and on the steel strategy to the House in a very short time.

I commend the management, the trade unions and the workforce at Scunthorpe on their diligence in this period. In difficult circumstances, they have achieved an excellent health and safety performance in stabilising operations. I also commend the commercial team at Scunthorpe for their high-speed rail order from Turkey. I think we can all take great pleasure in steel exports from the UK to Turkey. The shadow Minister was concerned that the Government did not have the know-how to support the industry. I can tell him that, having worked for 29 years in the industry myself, I am exercising very careful oversight of the production and operational activities of British Steel.

Several Members queried the numbers. To date, the Government have spent approximately £370 million on support for British Steel, covering items such as raw materials, salaries and unpaid bills. I understand the concern, but I note that that is still less than half the amount that the previous Government spent last time British Steel was in great difficulties. They simply flipped the business out to Greybull, a company that could not even run Rileys snooker halls without Rileys going into administration. This Government are developing a steel strategy, and planning to ensure that we maintain our ironmaking capacity at Scunthorpe as well.

More broadly, the Government are committed to providing up to £2.5 billon to support the UK steel industry. Funding and financing for steel companies is being delivered via the National Wealth Fund and direct support, including an additional £500 million grant for Tata Steel at Port Talbot and support for the official receiver’s sale process for Speciality Steel’s UK sites in Rotherham and Stocksbridge. Separately, the Government have committed an additional £420 million to new investment in Sheffield Forgemasters to expand capacity further as a direct result of the AUKUS submarine deal, bringing our total investment in Forgemasters to over £1.3 billion.

That was the first item; the second is the Post Office. I should begin by acknowledging the sub-postmasters who were impacted by the Horizon scandal, and, again, thanking my right hon. Friend the Member for Birmingham Hodge Hill and Solihull North and the members of his Committee for their support and their challenges on these issues. The Government welcome that scrutiny. My right hon. Friend said that the Committee would publish a new report in the coming days, and we stand ready to review and respond to it.

I can confirm that we have now paid redress to more than 11,300 postmasters and made redress payments of £1.2 billion. My hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) and the Chair of the Committee were concerned about Fujitsu, as am I. Fujitsu has accepted that it bears a moral responsibility for what has happened, and has expressed its willingness to contribute financially. Let me make it clear that Fujitsu will have to pay. As for the amount that it will have to pay, it is important for the inquiry to complete its work and publish all the volumes of its report so that we can establish the level of compensation.

In respect of small business support, a number of issues were raised in connection with energy efficiency and energy costs. My hon. Friend the Member for Tipton and Wednesbury mentioned the British industrial competitiveness scheme. There are a number of other kinds of support for energy efficiency in small businesses, but I have already committed myself, at the Dispatch Box, to looking further at what can be done in that regard. The hon. Member for Maidenhead (Mr Reynolds) asked what we could do for Laura. I would direct Laura towards our plan for small businesses, which includes legislation on late payments, a business growth service and tailored support for high streets, which, hopefully, she will find helpful.

[Catherine Atkinson (Derby North) (Lab)]

We are seeing fantastic and significant investment and regeneration in our city centre in Derby, but it still bears the scars of 14 years of austerity and neglect. Will the Minister tell us a bit more about how the Government are helping businesses to grow?

[Chris McDonald]

Look out for our plan for high streets, which will be published shortly.

My hon. Friends the Members for Stoke-on-Trent Central (Gareth Snell) and for Stoke-on-Trent South (Dr Gardner) mentioned the gas-intensive nature of ceramics businesses. I am aware of that, and am looking at it very carefully.

I hope that I have been able to trot through some of the main issues. I now want to leave some time for the Chair of the Committee to make some concluding remarks.