Responsible Business Conduct
Jonathan Reynolds Excerpts(1 week, 1 day ago)
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The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
In the trade strategy, the Government committed to an evidence-based review of the UK’s approach to promoting responsible business conduct, to assess whether our current framework remains fit for purpose. This highlighted areas where the UK’s approach could be strengthened, and today I am updating the House on the Government’s proposed action to address those findings.
In our review, we found the UK’s current framework for preventing forced labour to be fragmented and overly reliant on voluntary action and reporting measures. While the Modern Slavery Act 2015 was world leading at the time of its introduction, international standards and legislative practice have since moved on, leaving the UK out of step with G7 partners and other major trading economies. While plans to strengthen the Modern Slavery Act through the Immigration and Asylum Bill are an important step, we recognise that further action is needed to bring us into line with key partners. Having carefully considered our findings, alongside the Government’s commitments on economic growth, reducing administrative burdens and maintaining the integrity of the UK internal market, we have concluded that a phased and proportionate approach is appropriate. The Government’s priority is to focus on those interventions most likely to deliver tangible improvements for workers, consumers and businesses, while ensuring that reforms are practical, targeted and capable of being implemented at pace.
We will legislate to introduce a mandatory human rights due diligence regime across the UK for services, and in Great Britain for goods. Only the largest businesses, with the capability and leverage to manage these risks within their supply chains, will be in scope. It will apply to UK businesses with a global turnover of over £350 million, as well as non-UK businesses with a UK-generated turnover of over £350 million. These businesses will be required to identify, assess and address risks of human rights abuses and labour exploitation within their operations and supply chains. The regime will be risk-based, proportionate and reflect how responsible businesses already manage risk by aligning with established international standards, including the OECD guidelines for responsible business conduct and the UN guiding principles on business and human rights.
Under this due diligence regime, we will introduce powers to be able to remove goods made with forced labour from the Great Britain market. A regulator will be empowered to investigate businesses suspected of placing such goods on the market and, where due diligence obligations have not been met and forced labour is identified, direct their withdrawal. This will provide a clear and targeted mechanism for tackling some of the most serious abuses in global supply chains and protecting responsible businesses from unfair competition.
In Northern Ireland, we will apply the EU’s forced labour regulation—EUFLR—under the Windsor framework. Both regimes ensure that goods made with forced labour can be withdrawn from the market and aim to deliver a similar effect in practice.
Alongside this, we will establish a centralised responsible business conduct guidance hub on gov.uk, bringing together guidance, tools and templates in a single location. This will support businesses, particularly those developing due diligence processes for the first time. We will work closely with stakeholders on the design and implementation of these measures and introduce them as soon as parliamentary time allows.
The Government are clear that reform must be proportionate and pragmatic. Requirements will focus on larger businesses best placed to manage supply chain risks, prioritise action over unnecessary paperwork and align with international standards.
This package will safeguard the competitiveness of responsible businesses, strengthen confidence in UK markets and help ensure that goods linked to forced labour do not reach UK consumers. The British public rightly expect that products sold in the United Kingdom are not tainted by forced labour. Responsible businesses should not be undercut by those that turn a blind eye to exploitation. And this Government will not countenance exploitation in the supply chains that serve the UK market.
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Budget Resolutions
Jonathan Reynolds Excerpts(1 week, 2 days ago)
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The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
It is a pleasure to open the final day of the Budget debate. As we begin, let us pause and remember what is really essential to the debate today. Where are we as a country and what do we really need to talk about in this debate? I would put it like this. In the last year, gas prices have tripled, oil prices are up by over 60% and our borrowing costs—alongside those of all the major economies—have risen; and yet, business investment is rising, our economic growth has accelerated and the IMF has singled out the UK for praise for our deficit reduction plan. That is testament to the extraordinary resilience of the British people, British businesses and the British economy.
We know from reading the official documentation that there is no doubt but that ongoing conflicts in Ukraine and Iran have driven up costs here and around the world. However, despite these significant economic headwinds, when the Chancellor came here last week, he delivered a substantial cost of living package to help the British people and long-term reforms to strengthen growth, and he commanded market confidence while he did so in a way that eluded the previous Conservative Government. There is not a shred of complacency on this side of the House, but the package he announced built on the success we have already achieved, with year-on-year growth—again, above 2%; an economy growing per head—not just through higher immigration, but because living standards are increasing; and wages rising faster than prices. It is clear, as we stand here today, that we can say the economy is stronger today than when this Government came to power.
But we know things are still tough. That is why the Budget unveiled much-needed breathing space for families, businesses and working people. Beyond that breathing space, we are beginning and proceeding with the big changes needed to put our country on a better course: reindustrialising Britain, driving good growth in every postcode, and strengthening our national security. The Budget shows entrepreneurs, inventors and investors that the UK is the best place to start and grow a business, with this Government using our industrial strategy and wider policy platform to back them every step of the way. We cannot insulate people from every pressure or meet every ask in one go, but we can provide the targeted support that is necessary where it can make the biggest practical difference.
That is why, to help our high streets and small and medium-sized enterprises, the Budget contains a £1 billion business rates package. In England, shops, restaurants and cafés of all sizes will get a two-year real-terms freeze. Around 70,000 more small retail, hospitality and leisure properties will be taken out of business rates altogether. To ensure that our high streets are vibrant into the future, the Budget also commits us to upgrading 600 post office branches in this financial year. That will help them to provide more accessible, welcoming spaces, simpler transactions and a speedier service for customers. That also includes the essential banking services upon which so many of our high street businesses and SMEs depend.
The House will know that all these reforms form part of a much broader package being implemented by the Government to support the 5.7 million SMEs in this country that are the beating heart of our economy and the backbone of our communities. With our small business plan, we are bringing down costs and using the levers of Government to back British business. In particular, we are cracking down on the scourge of late payments that shuts down the equivalent of 38 firms a day and costs the economy almost £11 billion a year. Our Commercial Payments Bill will give us the strongest laws to tackle late payments in the whole of the G7, with the Bill’s Second Reading set to take place this month; I hope it will command cross-party support.
We are also reducing the regulatory burden on our small and medium-sized businesses. Indeed, when the Prime Minister, Lord Leong and I met business owners at No. 10 North last month, we proudly accepted 14 recommendations from the small business taskforce, which has been working in partnership with the Government to reduce the bureaucracy holding British firms back. We are now making it simpler for smaller firms to bid for public contracts. We are streamlining Office for National Statistics business surveys to reduce form-filling. At the same time, we are making it easier for businesses to find support on gov.uk and helping them to report disproportionate regulations. We are delivering, too, on our “tell us once” ambition, as part of which we are pausing the Companies House profit and loss filing requirement for April 2028. I thank the Federation of Small Businesses for all its work on this agenda and in particular for its support on that decision.
Where there is an opportunity to save businesses time and money, we will seek to do that. As proof positive of that agenda, the Budget included savings of over £600 million per year on regulatory administration, with streamlined company reporting requirements and reduced reporting burdens for asset managers. A simpler home buying and selling process will also save businesses over £100 million a year.
Nigel Huddleston (Droitwich and Evesham) (Con)
I have to ask, was the right hon. Member listening to a different Budget from the one that I heard? I do not recognise anything he has said there. On burdens and costs imposed by regulations on business, the OBR said that the employment Bill—the unemployment Bill—will actually add to the cost of business, completely contrary to what he has just said.
Jonathan Reynolds
I do not want to say that the hon. Gentleman should listen a bit harder to the Chancellor when is giving a Budget, but he went into detail on that. I will expand on what the better regulation taskforce will mean.
Specifically on the employment rights agenda, we know that the Conservatives do not like it—that is not a secret—but I would simply say to the hon. Member that we have a manifesto commitment to address in particular insecurity in the workplace, including the 1 million people on zero-hours contracts. Let Conservative colleagues not forget that the premise of that particular measure is that where a person works a regular number of hours, they will receive, if they wish to, a contract for those hours—not additional costs. Additional costs are not present when someone get a contract that reflects what they are already working.
The rest of the agenda may not be popular with the Conservative party, but it is certainly popular with the country. And because of that agenda—[Interruption.] I know the Conservatives did not stick to their own manifesto commitments, but we will stick to ours. Because of that agenda, of course want to reduce burdens in other places; it is an entirely noble agenda and one that reflects the interests of British business. The hon. Member may be aware—the Chancellor did speak about this in the statement—that there is an aspiration to reduce business burdens by 25% over the course of this Parliament. That will be delivered through the new Better Regulation Executive. It brings together the power of the Treasury, the Cabinet Office and my Department to move us towards a more streamlined and proportionate regulatory system—one that spurs growth, investment and innovation across the country.
I also warmly welcome the Chancellor increasing access to finance for ambitious founders and entrepreneurs. In the Budget, he introduced a new founders relief to encourage a new wave of wealth creation. Founders and early investors will benefit from a 10% capital gains tax rate on up to £10 million of lifetime gains. Dom Hallas from Startup Coalition said:
“The chancellor has delivered the boldest action backing startups and scaleups of any government in years.”
Meanwhile, the trading allowance for people starting new ventures is being tripled from £1,000 to £3,000, and £700 million is going towards home-grown innovation, strengthening Britain’s sovereignty and ensuring that tomorrow’s technologies are developed and adopted right here in the UK.
On top of all that, the Budget gives the British Business Bank £1.4 billion of additional commercial equity capacity, allowing it to back specialist venture capital funds in strategic sectors and larger growth funds capable of writing the cheques needed to keep the UK’s fastest-growing companies scaling here. The package is expected to leverage around £4.2 billion of private capital and create 14,500 additional jobs. That builds on the landmark investments the bank has already made, backing businesses across the UK: from Optima Partners, the Edinburgh-based AI consultancy, to Pharos Marine, the Norfolk manufacturer of navigation aids for offshore wind farms and ports, to Oxford Space Systems, whose satellite antennas were launched into orbit earlier this year.
Our industrial strategy is also making a difference. It is an essential part of our ambition to reindustrialise Britain and back our own sovereign capabilities. It is delivering on industrial energy costs, reversing what we inherited from the previous Government, with the highest industrial energy costs in the developed world. We are slashing electricity bills by 25% for over 10,000 British manufacturers through the British industrial competitiveness scheme. We are cutting electricity costs for those businesses by up to £40 per MWh, bringing their costs closer into line with competitors across Europe, with eligible businesses also receiving a one-off additional payment in 2027 to cover the support that they would have been received if BICS had been in place from April this year, correcting years of Conservative failure.
We are channelling investment into the eight high growth-driving sectors of our economy, including life sciences and advanced manufacturing. The Budget confirmed over £1 billion of new life sciences investment, from Kindeva, Vertex and Convatec, backed by almost £70 million of Government funding. It gave the green light to a partnership that I am particularly proud of: a partnership with Rolls-Royce to develop its next generation of turbine engine technology here in Britain. This is the single biggest reindustrialisation opportunity that the UK has before it.
John Whitby (Derbyshire Dales) (Lab)
I very much welcome the investment in Rolls-Royce; many of my constituents work there. What impact will the investment have on opportunities for young people in Derbyshire Dales?
Jonathan Reynolds
I am extremely grateful to my hon. Friend for the question. The £2.5 billion investment will support thousands of jobs in the midlands, Bristol and across our country. The significance is that it is not just another public-private investment in an exciting area of the future. It is a genuine opportunity for a leading British firm to break into an incredibly lucrative market, which is currently dominated by two main players, where we could be significant in the future.
Last week, I visited the Rolls-Royce site in Derby with the Prime Minister and Chancellor to discuss this very issue: British industry, British talent and British jobs. Everyone in the House will be aware of how outstanding Rolls-Royce is on apprenticeships and opportunities for the next generation. It is excited about what the future holds for the UK, and the Government will work hand in hand with it to make its growth ambitions a reality.
We are backing British business not just through our industrial strategy, but by ensuring that we remain an outward and open-looking economy and that we stay true to the principles on which the modern British economy was built. We intend to reindustrialise our country, but we will not use punitive trade measures and tariffs to do so. In many cases, tariffs hinder businesses and hurt consumers far more than they help them. They are ultimately paid by our own people.
That is why the Government are using the Budget to suspend tariffs on more than 100 essentials, which will support farmers who import fertilisers and households who use heating oil; by lowering costs on products like baked beans, chocolate, marmalade and fruit, it will also support people with their supermarket shop. Government cannot reduce all the pressures on the family shop overnight, but we can use all the levers at our disposal to bring prices down, and that is exactly what we are doing.
While other nations turn inward, restricting trade with the rest of the world, we stand as a proudly internationalist country and global hub for trade and investment that is ready to deepen our partnerships with new friends and old allies—not least the European Union, which remains our largest trading market. That is the message we will be taking into the UK-EU summit later this month.
Our ambition is clear. We want to continue simplifying trade. We want to conclude negotiations on our sanitary and phytosanitary and emissions trading deals, which could add up to £9 billion a year to the UK economy and would be a huge win for small business.
Sir John Hayes (South Holland and The Deepings) (Con)
I wonder whether the right hon. Gentleman can reconcile what he has said about trade with the desire to reindustrialise, manufacture more in order to make more of what we consume. In an uncertain world, national economic resilience is more important than ever, and yet we run a huge trade deficit, which has grown year on year. Our dependence is on many countries who are not friends and could pull the plug on Britain at will.
Jonathan Reynolds
I agree with the sentiment put forward by the right hon. Gentleman, on one of the most substantive issues that the House must grapple with. There is no inconsistency in being proud of the services-led nature of the UK economy while recognising the essential contribution of advanced manufacturing. There are sectors of the UK economy that could gain from the current phase of innovation in artificial intelligence in goods; for instance, robotics could reduce our wage differential with low-wage economies and return industrial functions to the UK.
The basis of British industry will, however, always be export led—that is key in the automative or aerospace sector. I do not see a tension between strengthening our resilience and our domestic industrial capacity and being an outward-facing, internationalist country to the rest of the world. I believe the two things must go together.
I give the right hon. Member for South Holland and The Deepings (Sir John Hayes) a specific example: our critical minerals strategy. We cannot reduce our dependence on other countries entirely, but we can reduce the degree of exposure to individual markets and use the levers of Government, through investing in tungsten or lithium mining in the south-west of England, looking at how the refining process works, and working with allies. It is a balance between the two things. I recognise absolutely the substance of the right hon. Gentleman’s question and its importance to this debate.
On the UK-EU summit, in addition to the premise of the deal we seek to strike, we want to make progress on electric vehicle rules of origin, steel tariffs and economic security, recognising that in many cases we share similar challenges. We face those challenges together, and we can overcome them together. To that end, the Prime Minister will say more later this year about options for our long-term relationship with the EU—one that strengthens our collective security and our collective prosperity.
Peter Swallow (Bracknell) (Lab)
The Secretary of State makes an important point about our relationship with the EU. He will be aware that Bracknell is home to lots of companies that work in cloud technologies. Is he alive to concerns around the EU’s proposed cloud and AI development Act, and will he ensure that we address those concerns robustly as part of our negotiations in the summit and thereafter? We do need to get that right.
Jonathan Reynolds
The agenda known in shorthand as “Made in Europe”, which affects the CADA and the Industrial Accelerator Act—it runs through as many as 50 different pieces of EU legislative files—is a top priority not just for me and Ministers in my Department, but for the whole Government. It cannot be the case that we must seek a bespoke solution for each separate area. We need something that provides business with certainty going forward. We need to recognise—in a way that the previous Government did not, frankly—that whatever our relationship to the EU, what the EU does will affect us. That is the nature of integrated supply chains and a key market on your doorstep.
I am confident that the approach that the Prime Minister has led from the front—I credit him with this—has given us the space to provide the answers for that agenda. It is a far more productive approach than the kind of adversarial relationship we saw towards the European Union from the previous Government. The bottom line is that it gets results for people in this area.
Julia Lopez (Hornchurch and Upminster) (Con)
You are giving them everything they want.
Jonathan Reynolds
I am tempted to respond to that, but I will proceed with my speech; as ever, we are all waiting to hear from those on the shadow Front Bench. Actually, I will bite—go on. [Laughter.] When it concerns something of such fundamental importance to British industry as access to the single market, when it is and always will be our major trading market, gaining access for British businesses and businesses based in the UK and ensuring that British workers will not lose their jobs is not giving the other side everything that they want—it is delivering for Britain in a way that the Opposition never quite managed.
Sir James Cleverly (Braintree) (Con)
I negotiated directly with Maroš Šefčovič, the lead negotiator for the European Union. We had a very good working relationship and got a lot done. Does the right hon. Gentleman not understand that standing at the Dispatch Box and setting out the UK’s desired end position gives a huge advantage to the EU negotiating team, who are trying not to damage the UK but to get the best possible deal for the EU? Publicly setting out the desired end state from the UK’s position makes the right hon. Gentleman’s job in future negotiations harder, which is why we get rolled over by the excellent EU negotiators every time his Government go across to Brussels.
Jonathan Reynolds
Colleagues, it is great to receive some advice from the Conservative party on negotiating with Europe, is it not? I have a lot of time for the right hon. Gentleman. First, the premise of the UK-EU summit—[Interruption.] Perhaps the right hon. Gentleman should just listen to the point. The premise of the UK-EU summit—agreement on SPS, food and agricultural trade, on emissions trading and on electricity systems working with each other—is all already in the public domain. We agreed the memorandum on that last year. This is about the implementation of that deal. On whether we would like the single market to operate rules that completely shut out British industry and British supply chains, it is no secret that we do not fancy that very much and are seeking a solution to it.
I will turn back to the deal, which the right hon. Gentleman says he is very proud of. As he will know, you left us a few things—
Madam Deputy Speaker (Caroline Nokes)
Order. That is the second time the Secretary of State has said “you”. I did not leave anything, Secretary of State.
Jonathan Reynolds
I would never suggest that you negotiated the deal with the European Union, Madam Deputy Speaker. I can see why you would want to distance yourself from that, as we all would.
Let us move on. The British people should know that we will always seek to make things a little easier where we can. We will transform our country for the long term, but we will also act now to provide support for people in the short term. That is what the Budget was all about. That is why 2.3 million workers will benefit from increases to the national minimum wage. Thanks to these changes, a full-time worker on the national living wage will see their earnings rise by £910 a year before tax. This is a balanced approach which recognises market conditions. I want to put on the record my thanks to the Low Pay Commission for its expert advice and support on these measures.
I am also pleased that this Government committed in the Budget to expanding parental pay. We are making the system fairer so that more parents can spend time with their family after the birth or adoption of their children. From April 2029, self-employed fathers, partners and adopters in Great Britain will be able to access a parental allowance. Those only recently employed, those who have been made redundant and those who have an irregular pattern of employment will also qualify for some degree of financial support. All in all, over 150,000 people in Great Britain per year will benefit from the reforms. Thanks to the changes we are making, things will be easier for them and for working parents everywhere.
As the Chancellor said last week, this is a downpayment that will begin to address some of the issues around working men and paternity provision as we prepare the final outcome of our review of the full parental leave system next year.
I would also like to acknowledge that many in this country are quietly, conscientiously providing care for a loved one, whether that be a child, parent, grandparent, sibling, friend or neighbour. About 5.8 million people in the UK provide unpaid care for a family member or friend. In the Budget, this Government are moving to support them. We are replacing the current carer’s allowance earnings cliff-edge rules with an earnings taper. That measure alone will benefit 50,000 unpaid carers—a real injustice being righted.
We are also reviewing employment rights for unpaid carers to help those balancing their caring responsibilities with work, because it is not easy to help a relative out of bed, get them dressed, take them to the doctor or hospital appointments and cook them meals while holding down a job and working 35 or 40-hour weeks. This review, which will look at unpaid leave, the right to return, paid carers’ leave and paid leave for parents of seriously ill children, will conclude in early 2027. I can assure the House that we will act on its findings.
This is what we mean by fresh hope, good growth and support for those who need it. In our first 100 days, this Government have shown that we will do all we can to give people and businesses the breathing space that they need. This Budget has shown that commitment, too, with real, tangible measures to help—with business rates cut, tariffs reduced, energy bills slashed, living costs lowered and the minimum wage increased.
We are doing all of that while keeping Government borrowing falling faster than any other G7 economy. We are doing it while getting employment up this year, higher than previously forecast in March and while ensuring that business investment relative to the size of the economy remains at its highest level for a decade and whole-economy investment higher than at any other time since 1990.
For all these reasons, people should have hope—fresh hope—for what the future holds for them, our economy and our country. They should know that we are resilient, that we should be optimistic for the future and that the best days of this nation lie ahead. That is why I proudly commend this Budget to the House.
Julia Lopez (Hornchurch and Upminster) (Con)
The Government gave today’s Budget debate a theme: “Fresh hope for the future”. The debate will be closed by the Chief Secretary to the Treasury, who this weekend let slip,
“I don’t think employers are working people”.
I recommend that she does not deliver her message of fresh hope to the salon owners, café owners, shop owners, services firms, gym owners, pub landlords, builders, dentists and restauranteurs in her constituency of Wycombe, for she may never get served again. These are the people who are not only providing for themselves but taking risks to build businesses that employ and serve others. Everything that they do is fuelled by the hope that their relentless hard work will one day create something bigger than themselves—a better life for their families and employees. But they feel hopeless right now. Many are questioning whether they can make the numbers work. Tax, regulation and energy costs have all relentlessly climbed. But if businesses put their prices up again to cover those costs, they risk driving their customers away. That is the reality they face as working people.
They are filling shifts themselves because they can no longer afford the staff. They work harder simply to stand still. They are wondering whether they can continue to justify the sacrifice to their families. But if they pack up, it is a problem for us all, because it is their taxes that are helping to keep this show on the road.
When the Chief Secretary to the Treasury said, “I don’t think employers are working people”, it was one of those Labour truths—the sort of truth that Labour Chief Secretaries have such form in letting slip out. “I’m afraid there is no money. Kind regards—and good luck!”—the handover note of another Chief Secretary after Labour’s last chance in power in 2010. But who left the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) with no money when he wrote that fateful note? It was one of his predecessors as Chief Secretary—a man who during his second tilt at the Labour leadership was forced to apologise for his own failure to get public spending under control before a brutal financial crisis hit. That Chief Secretary is now the Prime Minister, and his first Budget suggests that he has not learned his own lesson.
“Employers are not working people,” “There is no money,” “We failed to control public spending before a crisis, sorry”—three Labour admissions, three different moments in our recent political history that tell us an awful lot about the way that this party governs. They are a neat summary, too, of this Budget, for there is precious little in it for working people. Labour has no money to fund the basics of defence, and it is failing to get public spending under control. No wonder that despite all the briefings about a Budget for bloody-minded entrepreneurs, it undershoots at almost every opportunity.
Take business rates. I welcome the Chancellor’s decision to exempt 70,000 businesses from rates altogether, but Conservative plans would take a quarter of a million firms out of paying rates. On the minimum wage, it is right that the Chancellor has not levelled it up for younger workers, but Conservative plans would halve employer national insurance for under-25s. Labour offers employers the temporary bung of the youth guarantee, but that scheme is necessary only because this Government have made it so much more expensive and risky to take people on.
If entrepreneurs look under the bonnet of the new founders’ relief, they will discover something hopelessly complex that is likely to benefit very few. This is no return of entrepreneurs’ relief, and it comes as this Government halve the limit on business asset disposal relief. Last year 61,000 people claimed that relief, and only a few hundred are thought likely to benefit from founders’ relief. Labour’s entrepreneurship adviser, Alexandra Depledge, has left her role after mere months, saying that the Government treat entrepreneurship and innovation as “a sideshow”.
What about sole traders and freelancers, such as personal trainers, electricians and creatives—the people who do not have an army of accountants? The reward for their hard work is having to report their earnings to His Majesty’s Revenue and Customs more frequently so that they can be squeezed for more tax, while there is no such vigilance on checking the eligibility of benefits claimants. Has the Chancellor ever had to deal with the realities of cash flow—of a few good months followed by a fallow period?
Meanwhile, by taxing banks the Chancellor risks making them less internationally competitive while driving up the cost of borrowing for businesses across the economy. Shifting energy costs from green levies to general taxation does nothing to tackle the underlying drivers of our staggeringly uncompetitive energy prices. The Chancellor slipped out another Labour truth last week when he said that the Energy Secretary opposed Jackdaw. I expect that she is opposing Rosebank, too. We can forget reindustrialisation.
Consider British food producers. It is all well and good to take a few pence off imported gherkins—we support cheaper goods—but at the same time Labour should help domestic producers compete. They are hamstrung by higher taxes, higher energy bills and rising wage costs.
Jonathan Reynolds
The hon. Lady knows that her party left us with the highest industrial energy costs in the developed world. Is she saying that she opposes taking policy costs off bills and putting them into taxation? I think she said that, but that would obviously result in higher bills than we have now.
Julia Lopez
Our cheap power plan would lower bills across the board. The right hon. Gentleman’s plan is to just shift costs from green levies to general taxation.
Perhaps the most damning thing about this Budget is what it does not attempt to do. After seeing off Keir Starmer, this new Prime Minister wants to press the reset button and pretend that this first 100 days is a fresh start, but Labour owns the last two years and the last two Budgets. If the Prime Minister will not reverse their measures, the consequences of the decisions that have already been taken are his to own as well.
The national insurance rise has been devastating. Chef Tommy Banks said,
“Over the 20 years I’ve been in the industry, this is without doubt the hardest time it’s ever been to operate…I’m seeing restaurant owners saying, ‘We’re closing tomorrow. We’re going to make everybody redundant.’”
He says employer national insurance has increased his business costs by 162% and that, with a couple of hundred staff, that can mean half a million pounds.
The Employment Rights Act 2025 has not even begun to have its full effect, yet I spoke to a small business last week that is already having to shell out £8,000 to prepare for its implementation. Another is being quoted £200,000 in legal fees to fight a tribunal. Another is winding down its disability employment activities; it used to give opportunities to people with cognitive impairments who needed extra support, but it will no longer take the risk. Since 2024, 170,000 jobs have been lost, and by the OBR’s reckoning another 215,000 jobs are to go by the decade’s end. Does this Budget do anything to stop that slow-motion car crash?
There is no review of the farm and family business taxes, which are crushing our food producers and entrepreneurs at a time when the nation needs the food security they provide. I recently spoke to a business that has been in the same family since the 1850s. The owners cannot risk losing it on death, so they are trying to offload it early, at the expense of investment in the business itself. That will not generate growth. Last week, another private school closure, in Leweston, left parents and children in limbo because Labour refuses to review its envy-driven tax on independent schools.
The pressures on these businesses are flowing out into the wider economy, which is why everything is costing people more. It costs more to go out for a meal, have your hair done, take a few days away with the kids or buy the weekly shop. The Prime Minister now owns Keir Starmer’s choices.
The most damning part of the Budget was the difference between the Prime Minister’s homely “breathing space” rhetoric and the hard reality that real household disposable income is falling this year and is lower in every year of the forecast—nearly £1,500 lower than forecast under the last Conservative Government. What is everyone getting in return for all the extra tax? Better public services? No. The Government are spending £124 billion a year on debt interest alone. That is up £14 billion since March, and is more than we spend on defence, policing and prisons combined. Are we at least building up a buffer to make ourselves more resilient? No. The Chancellor has cut fiscal headroom to just £15 billion, the equivalent of barely 3.5 days of public spending. The Government are even kicking defence spending into the long grass.
Businesses are paying more tax, families are getting poorer, public services are not improving and the Government are leaving the country dangerously exposed to the next economic shock. There are only two sustainable ways out of that: grow or cut spending. On both, the Government are found wanting. Last week, Ministers went full Vicky Pollard when asked whether they would grip the welfare budget this Parliament: yes, said the Chancellor, and no, said the Treasury and No. 10. The Prime Minister said, “As soon as possible.” No, eventually concluded the Chancellor—yeah, but no, but yeah, but no. The Chancellor’s leader is making a fool of him.
What about growth? The Prime Minister’s big idea is to reopen the debate about rejoining the EU. That is a debate that the Business Secretary does not want to have: he says that it creates uncertainty for business, which companies explicitly do not want. [Interruption.] He is now trying to nuance his way out of it, but we know what he said. It is also a debate about free movement that the Home Secretary does not want. It is a debate that will tie us to the slow-growth lane, and we will pay for the privilege. Why do we have to pay the fees of EU students to access “Made in Europe” when our participation is in the EU’s interests and the matter has not yet been settled in the EU Parliament? The Prime Minister is weakening our hand to build a left-wing coalition that will keep him in power.
If growth is the goal, why does the Prime Minister not pull the levers that the Government already have by bringing down energy costs, making it easier to employ people, cutting tax and getting more people off welfare? Because those decisions require real courage and a willingness to test the mandate that the Prime Minister fears he lacks among those on his own Benches and in the wider country.
“Employers are not working people.” “There is no money.” “We failed to get public spending under control before crisis hit.” Those three Labour truths run through this Budget, which has been overseen by a Prime Minister who is more interested in the perception of being on people’s side than in the reality, and is offering a debate about a future he may not control rather than taking tough decisions that he could own today if only he were to find the courage.
Oral Answers to Questions
Jonathan Reynolds Excerpts(4 weeks ago)
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Joe Robertson (Isle of Wight East) (Con)
The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
Everything my Department does—from industrial strategy, small business support, trade and exports to innovation and science—has the creation of good jobs at the heart of it. In the UK, there are challenges around jobs for young people, no doubt, but youth unemployment has shown to be outperforming that of comparable economies such as France and Italy, and the Government have a further agenda in this area.
Aphra Brandreth
The wonderful family-run Ice Cream Farm in Tattenhall is one of our region’s largest youth employers, giving many young people their very first job, but the current rules limit children below school-leaving age to just two hours’ work on Sundays, even during school holidays. For businesses in rural areas, where parents often have to drive considerable distances to get their kids to work, this simply is not practical. Will the Secretary of State review the restriction while maintaining important safeguards, so that businesses such as the Ice Cream Farm can offer more young people vital first work experience?
Jonathan Reynolds
I appreciate the hon. Lady’s question. This subject has come up with me before, both on a constituency basis and as the Secretary of State. There is the potential to look at the regulations in this area. I do not think it is about exploitation; it is about providing reasonable opportunities that young people desire. I promise that I will go away and look at this issue, and write to the hon. Lady with further information.
Joe Robertson
Jobs and opportunities for young people have dried up over the last two years because the Government have made it more expensive to employ them. On the Isle of Wight, this has compounded our pre-existing structural problems. Will the Government now do the right thing and halve national insurance contributions for employing under-25s, to help grow more opportunities and jobs for young people?
Jonathan Reynolds
No one in this Government is complacent about the challenges of youth unemployment, but there has been no spike in the figures since 2024. The rise has been consistent since 2022, in an entirely linear fashion. The hon. Gentleman will know that employers do not pay national insurance for under-21s, or for apprentices under the age of 25—it is important to be clear about how the system works. On the challenges in his constituency, there is a further agenda coming in this area through the Milburn review. It has an exciting set of proposals that I believe employers in the hon. Gentleman’s area will get behind, if we make them a substantial offer.
Amanda Hack (North West Leicestershire) (Lab)
It was my pleasure to host the British Retail Consortium in Parliament for its announcement of Opening Shift, a partnership between Government and 40 retailers, providing over 11,000 work placements to help support young people who are not in education, training or employment into work. Could the Secretary of State update me on what progress has been made on getting other retailers involved, but also on how we could extend Opening Shift to ensure that semi-rural constituencies like mine can benefit?
Jonathan Reynolds
I commend my hon. Friend for the work she is doing. One of my first jobs as a young person was in Foster Menswear in Sunderland city centre—my performance was mixed, to be honest, but it was an important set of skills to learn. The retail sector is known for the opportunities it provides for young people. My hon. Friend will know that there is already a set of proposals from the Government on not just national insurance, but incentives to take young people into employment if they have been out of work for a period of time, or into apprenticeships if they are in that age cohort. There is more we can do in this area, but there is an offer there and she is doing the right thing by highlighting that to businesses in her constituency.
Brian Leishman (Alloa and Grangemouth) (Lab)
Syngenta in Grangemouth recently announced 377 redundancies. Along with the recent closures of Versalis, Fujifilm and, of course, the Grangemouth oil refinery, this means a real reduction in positive destinations for local young people. What can the UK Government do to accelerate the readiness of sites in Grangemouth in order to unlock the £200 million from the National Wealth Fund, so that we can build Grangemouth and Scotland’s industrial future?
Jonathan Reynolds
Obviously, the immediate activity is supporting the affected employees throughout the consultation period. My hon. Friend will know that the use of the powers of Government—the powers of the state —to make sites available quickly for inward investment to the UK has always been a priority of mine. He is right to say that the National Wealth Fund has already made a nominal allocation to Grangemouth. Other programmes in the industrial strategy, such as the strategic sites accelerator, are all about trying to improve the pace at which we can take advantage of the investment opportunities the UK is presented with. I promise him that I will remain in close consultation with him, and of course with the Secretary of State for Energy and Net Zero.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the acting shadow Secretary of State.
Julia Lopez (Hornchurch and Upminster) (Con)
It is British Beauty Week—I can see you have been celebrating, Madam Deputy Speaker, and I am sure the Secretary of State has been, too—but it is tough out there for our salons. The industry lost one in five employees last year, which is the largest loss of any job type in the UK. Many will have been young people starting their careers in the industry, and few salons can afford to employ and train them because they are getting hammered by the jobs tax, soaring business rates and higher utility bills. What hope is the Prime Minister offering them?
Jonathan Reynolds
I notice the hon. Lady did not go first on British Beauty Week to me, but to you, Madam Deputy Speaker, and that is fair. British Beauty Week is an important moment, not least to celebrate the contribution of the sector and the, I believe, over 5,000 new apprentices starting in the sector in every corner of the UK this year.
The hon. Lady in effect asks what the big economic story in the UK is, and I would say that the hope comes from the fact that, despite the challenges that exist in the global economy around the world, the economy under this Government is clearly performing more strongly than it did for 14 years under the Tories. My proof points for that are that wages are rising faster than prices and, crucially, that GDP is rising not just overall, but per head, as opposed to the modest increases under the Conservatives, which were really from population increases and large-scale immigration. An economy performing more strongly is in the interests of every business. On the opportunities for young people, there are the tax and fiscal incentives I have mentioned, with the further agenda coming through the Milburn review.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
Youth unemployment stands at 15%, and in London that figure is 25%, while 700,000 graduates are out of work. Retail and hospitality are cornerstones of the everyday economy, providing vital employment, driving local growth and creating thriving town centres. However, average employment costs have increased by 11% since Labour took office, which disproportionately affects sectors that traditionally offer entry level jobs. Policy decisions taken by this Government are making it impossibly hard for businesses to provide young people with their first foot on the career ladder. Will the Secretary of State acknowledge the damage being done to young people, and will Ministers ensure that, as they implement secondary legislation under the Employment Rights Act 2025, they balance the rights of employees fairly with the needs of businesses to provide jobs for young people?
Jonathan Reynolds
The Lib Dem spokesperson raises a few issues, but I would say first that doing a job like this, or any job in government, means acknowledging the trade-offs. The simple truth is that the things we will be talking about during this session and that everyone in the House wants to see funded were not funded in the plans that we inherited. Yes, it is always difficult to raise the tax burden on anyone in the UK, but priorities promised to the British people—for this successor Department, the money for the Port Talbot steelworks transformation and the compensation for the post office sub-postmasters—were not funded, so the Chancellor at the time did have to raise or find the money to fulfil the existing pledges that had been made.
However, I promise the hon. Member that the aggregate impact or the balance for business—whether it is on employment rights or on taxation—is something this Department always fights very hard for in Government, because we are aware that the only way to fulfil the true ambitions of the British people is with an economy that is performing strongly, employing more people, and giving them hope and opportunity for the future. I do believe that this new Department, with the extra things that have come into it, has a genuinely exciting opportunity to bring a more coherent story to these interventions from Government, and that is the best way to a stronger economy.
Hannah Spencer (Gorton and Denton) (Green)
The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
I welcome this question from my constituency neighbour, and I am grateful to her for raising it. The Prime Minister and I have been clear that Jodrell Bank has a secure future. Just to be clear with the House about what is happening, the primary radio astronomy project will move from the e-MERLIN radio telescope to the Square Kilometre Array observatory in March 2028. That was a science-based decision, but we are exploring the long-term options for the sustainability of Jodrell Bank.
Hannah Spencer
Funding for the e-MERLIN radio telescope network is due to end in 2028, putting Jodrell Bank’s future at risk. People across Gorton and Denton have made clear to me the vital role the observatory plays in opening science up to people of all ages. Many of us went there on school trips as kids. The Prime Minister assured us that his Government will find a funding solution, so will the Secretary of State explain how the Government intend to honour that heartfelt commitment and secure Jodrell Bank’s long-term future as an active sovereign scientific facility?
Jonathan Reynolds
I am grateful to the hon. Lady for raising this issue. I recognise the strength of feeling that she talked about in her question. She will know that, on a clear day, you can see Jodrell Bank from Matley Lane in Tameside and it is a wonderful sight. It is important, given that we have a very significant research and development budget in the UK, that scientific decisions are made on the basis of the science, but that still does not mean there is no future for Jodrell Bank as an asset. That is consistent with making sure that we are making science-based decisions on the prioritisation of that funding. I met the University of Manchester just a few days ago on this issue, and the local MPs for the area have been incredibly supportive in finding a solution. I hope to have more to say on that soon.
Several hon. Members rose—
Peter Fortune (Bromley and Biggin Hill) (Con)
Thank you, Madam Deputy Speaker—the renationalisation of the railways is not working. [Laughter.]
The Drayson partitions exist to ensure that costs which the UK must meet and cannot change, such as international subscriptions that give us access to scientific facilities, are treated separately to costs that we have control over, such as grants funding. With the Science and Technology Facilities Council given a flat cash settlement, but with international subscriptions rising with inflation, the STFC now has less money to spend on actual research, leading to world-leading scientific research being dropped and to the closure of facilities such as Jodrell Bank. Can I ask the Secretary of State who made the decision to disregard the Drayson partitions?
Jonathan Reynolds
It is good to see the shadow Minister and I thank him for his question.
Let me be clear with the House. If we take the UKRI budget in aggregate for the spending review period, it is nearly £39 billion. If we take the overall R&D budget for the UK in the spending review period, it is £86 billion —record levels of funding making a difference. It is absolutely crucial within that that we make sure the decisions on the prioritisation of funding are science-based. The issue the hon. Gentleman identifies, the tension between research projects and subscription projects and their funding, is one I am familiar with, and he is making a serious point that has to be explored. As for who made the decision, the process runs through, I think, 30 different meetings of the research council. It has a process where submissions are taken from a very wide range of areas. There will always be more people wanting more funding than is available, no matter how big I make the spending pot, but as a House we should be clear that we want these decisions to be made primarily on a scientific basis.
Adam Thompson (Erewash) (Lab)
Patrick Hurley (Southport) (Lab)
The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
As we have heard, this new Department brings together a range of essential policy areas to back industries, technologies and jobs that will power future growth. For me, sustained economic growth can come only through greater private investment and private capital. The business investment figures for the UK are encouraging, with our industrial strategy using the policy tools at its disposal to attract more than £390 billion of private investment commitments since it came into force.
Patrick Hurley
I welcome the GDP figures that have been published this morning, but if we are serious about growth, we need to ramp up our manufacturing capacity and ensure that GDP growth is matched with jobs growth. Will the Secretary of State therefore consider setting an ambition of 1 million new manufacturing jobs in the next decade, putting reindustrialisation at the heart of the Government’s growth strategy?
Jonathan Reynolds
I warmly welcome my hon. Friend’s question on reindustrialisation, which is an essential part of the Government’s programme. Backing reindustrialisation does not mean that we do not recognise the tremendous contribution of services, and it is not nostalgia—it is about looking at the brilliant innovation that we have in the UK and seeing it scaled up. Doing so requires policy intervention, and I am extremely pleased that the British industrial competitiveness scheme will shortly come online, bringing down our energy and electricity prices for 10,000 British manufacturers and ending the situation we inherited from the Tories where we had the highest energy prices of any industrialised major nation. We do have to look at targets, and I will look at the one my hon. Friend has proposed, but I also think there are other areas we have to include in that to get the holistic impact that we need.
Max Wilkinson (Cheltenham) (LD)
The Golden Valley development in west Cheltenham enjoys the support of this Government—I can see the Minister smiling, because I have spoken to him about it a lot—and enjoyed the support of the previous Government, too. It is driven locally by the local council, and supported by businesses like the developer, HBD. It will generate 12,000 jobs and close to £1 billion of investment supporting our cyber and tech industry, and will crucially support the work of GCHQ. However, to really unlock the success of the development, we need to be given designated area status so that the local council can then start to reinvest in the local business community, as it has done so far at the development. Will the Secretary of State have a word with the Chancellor, ahead of the Budget, to see if we can bring about success in that bid?
Jonathan Reynolds
Everything the hon. Gentleman has said sounds hugely attractive to me. He has clearly already engaged with Government to some degree, but I will follow up on his question and see what we can do to support his local area.
Mark Garnier (Wyre Forest) (Con)
May I start by thanking the Secretary of State for his very measured and intelligent thoughts about the GDP growth rate? I lament that some others in his Government seem almost complacent about the International Monetary Fund’s increasing GDP growth expectations from 1% to just 1.3%, putting us second in the G7. Does that not show a certain lack of reality in the Government? What we should be looking for is GDP growth of more like 2.5%. The G20 is averaging 3.1%, and we are 14th in the G20. Does the Secretary of State recognise that over-regulating, over-taxing and charging too much for energy is holding back our great entrepreneurs and businesses, who could be delivering the GDP growth that this country really needs?
Jonathan Reynolds
I believe that the figures show a level of resilience in an extraordinarily difficult global climate. In terms of our ambitions, I am pleased that we are turning around the underperformance of the 14 years of Conservative government, but I want more, and I am ambitious and hungry for that.
In order to achieve that, the Government have already committed to certain interventions. Going back to my previous point, we inherited the highest industrial electricity prices of any developed nation, but we are bringing those down by a quarter for 10,000 British businesses. I want more progress in that space, and I will be speaking to the Chancellor about further work on that agenda.
We are bringing down the costs for business, giving them new markets through the success we have had with our trade deals, and ensuring that the regulatory system supports those objectives. All of that contributes to what I believe is a set of tremendous opportunities for the UK because of the assets that we have. We should be ambitious for the future.
Cat Eccles (Stourbridge) (Lab)
Freddie van Mierlo (Henley and Thame) (LD)
The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
I have just led one of the largest trade missions we have ever sent to India, which is the fastest-growing economy in the G20. I was joined by northern mayors, the Environment Secretary, the Scotland Secretary and a Great North delegation of more than 200 businesses. We announced over £1 billion-worth of new deals, benefiting a host of British firms, including Menzies Aviation, Panakeia and Oxford Nanopore Technologies. Since our trade agreement was signed, £12 billion in new business has been announced, supporting thousands of jobs and driving good growth in every postcode of our country.
During the visit, I co-chaired the Joint Economic and Trade Committee with Minister Goyal on tackling any remaining trade barriers. With our northern mayors, we also launched the UK-Maharashtra growth partnership, to foster closer regional ties and drive the creation of high-value jobs in both our countries. This is just the start. Our free trade agreement is forecast to boost bilateral trade by over £25 billion a year. We have opened the door, and businesses are walking through it, with Government backing them every step of the way.
Freddie van Mierlo
The Diamond Light Source facility and ISIS Neutron and Muon Source facility neighbour my constituency of Henley and Thame. They are on the frontline of cuts to the Science and Technology Facilities Council, and now there are concerns that further savings may be required. Can the Minister confirm to the House today that those facilities will remain open and operational to the end of the financial year, and through to 2028?
Jonathan Reynolds
I am grateful for the hon. Member’s championing of science. I revert to the comments I made about the scale of investment this Government are making in science and research and development, and the prioritisation of funding, which comes from a science-based assessment. There is an element of funding for the defence package that we had to find from the former Department for Science, Innovation and Technology budget. I will write to him about any concerns he has, but I reiterate that this is a Government and a country that are committed to science.
Julia Lopez (Hornchurch and Upminster) (Con)
The Secretary of State confessed last month that business leaders have urged him not to return to the political uncertainty around our relationship with the EU. The Prime Minister has now completely ignored him, and them, and says that the UK could pursue a customs union or a single market, or go all the way back in. He clearly was not in the 2017 to 2019 Parliament; he has barely been in this one. Will the Secretary of State tell businesses what the Prime Minister’s preferred option is?
Jonathan Reynolds
I am grateful for that question. I am proud of the trade deals that this Government have done with the rest of the world—we have talked about India, the Gulf, South Korea and Switzerland—and we have retained membership of the comprehensive and progressive agreement for trans-Pacific partnership. However, there is uncertainty from action taken on the European side; that is the Prime Minister’s point. The “Made in Europe” agenda is one of great uncertainty for UK businesses. It is primarily about automative and aerospace at this stage, but it runs through some 50 different bits of EU legislation. The Prime Minister is right to have the aspiration for a closer trading relationship with the EU—I support that entirely—that is consistent with our work with the rest of the world. We must get to a point where we remove uncertainty by getting clarity on what this will mean for the long-term future of our relationship with the European Union.
Julia Lopez
The Secretary of State could not say what the Prime Minister’s preferred relationship is, and I think that is because the Prime Minister himself does not actually have a clue. Today, the Business Secretary trumpeted the free trade agreement struck with India; he took northern mayors, and a rep from Man City, on his trip this week to expand that. Sir Keir Starmer spoke about his pride and relief at telling Jaguar Land Rover workers that he had struck a trade deal on cars with America that would save their jobs. Those deals are possible because we are not in the EU. Can the Secretary of State guarantee that in the UK-EU trade talks that are under way, the Prime Minister will offer no concessions that could jeopardise our non-EU trade deals?
Jonathan Reynolds
First, we took 200 businesses to India; the mayors took their own delegation. The Manchester City representative came with the Mayor of Greater Manchester, rather than with me. I wish to put that on the record to avoid any lack of clarity. A lot of what the Conservative Government promised on trade but were not able to deliver has been delivered by this Government, and of course I am proud of that. The fact is that the Prime Minister is right to have that aspiration for a closer trading relationship—seven of our top-10 trading partners are other EU member states—and to seek clarity for the future. That is what he is doing, and I support him in that.
Chris Ward (Brighton Kemptown and Peacehaven) (Lab)
Jonathan Reynolds
I recognise the specific issues in Brighton, and what the closure of R-Bar and Charles Street Tap will mean for Brighton’s LGBTQ+ community. The Government recognise the needs of hospitality. We have talked in this Question Time about lower business rates, and about the doubling of the employment allowance. Of course I want to work with my hon. Friend, and I am grateful to him for raising this issue directly with me. No one ever turns down a visit to Brighton, so we will see if we can get that sorted.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
On Monday, the Prime Minister joined the Liberal Democrats in acknowledging that refusing to countenance closer UK relations with the EU would be a “dereliction of duty”, yet the Government remain committed to their red lines. Joining the single market and a new UK-EU customs union could boost UK GDP by at least 3.6% and result in around £27 billion a year in extra tax revenue. Does the Secretary of State agree that refusing to cross those red lines, while knowing the damage that Brexit continues to cause businesses up and down the country, is in fact a dereliction of duty?
Jonathan Reynolds
In my first year doing this job, after the election, there was some mixed advice from Liberal Democrats on trade at various times, particularly on our engagement with the US and the EU. I believe that our package of measures that forms the basis of the UK-EU reset is ambitious. As for what the sanitary and phytosanitary agreement would mean for small businesses in the hon. Lady’s constituency, and for us all, it would make a fundamental difference. Of course we are right to recognise that the situation has been very hard for business, and there is more red tape for people exporting to our major export market, but at times I get frustrated when people do not acknowledge that the things that already form part of those negotiations would make a difference to British businesses. We will have more ambitions, and our own views on how things should go, but there is an ambitious package that we should all get behind.
Callum Anderson (Buckingham and Bletchley) (Lab)
Robert Jenrick (Newark) (Reform)
Sean Egan from Morrisons in Walsall, Gary MacArthur from Sainsbury’s in Wickham and Jorge Costa from Sainsbury’s in Hertford are all workers who were sacked by their employers for confronting shoplifters. In Gary’s case, that happened just hours after he had applied CPR to the store’s only security guard, who would otherwise have died. Does the Secretary of State agree with me that those workers deserve their jobs back, and that we need greater protection for workers who just do the right thing and confront shoplifters?
Jonathan Reynolds
I am more than happy to look into the cases that the right hon. Gentleman raises, and we will be in touch with him about them.
Josh Newbury (Cannock Chase) (Lab)
When I visited Alpro and Navara Oat Milling over the summer, I heard how rising energy costs are putting pressure on food manufacturers, with knock-on effects for their supply chain and, ultimately, food inflation. Given the importance of these energy-intensive industries to our economy, how is the Department helping British manufacturers remain competitive, attract investment and mitigate rising food production costs?
Chris Law (Dundee Central) (SNP)
As well as breaking the UK’s legally binding climate commitments and contributing to a global climate disaster, the approval of Rosebank will result in the UK continuing to facilitate illegal Israeli settlements in Palestine and being complicit in breaches of international law. Israeli energy company Delek Group, which owns Ithaca Energy, has been named in the United Nations list of businesses whose activities in the west bank have raised particular human rights concerns, and it has received over £200 million in revenue from the Rosebank field. Given that Norway’s sovereign wealth fund and largest pension fund have already divested from Delek, will the Secretary of State confirm that Delek Group Ltd will be one of the companies sanctioned for its role in illegal settlement expansion?
Jonathan Reynolds
The hon. Gentleman knows that the licensing of North sea oilfields is a matter for the Energy Secretary. In relation to his point about our announcement on sanctions for illegal Israeli settlements, we have made a clear and consistent stand. We have talked about how the legal regime for that will be the SAMLA—Sanctions and Anti-Money Laundering Act 2018—regime. That will provide more certainty and it will have real consequences—it is not just a symbolic gesture. I will not comment on any individual company, but if the hon. Gentleman’s intentions and aspirations are for strong action in this area, this Government are providing it.
Tessa Munt (Wells and Mendip Hills) (LD)
I have been contacted by Petruth Paddocks, a family-run camping business on the outskirts of Cheddar, which welcomes more than 20,000 visitors a year and supports more than 50 jobs. Its business rates liability this year has increased by almost 2,700%, from £1,070 per annum to £28,820 per annum, with no meaningful warning and no chance to plan for this catastrophic hike. Will a Minister or the Secretary of State meet me to discuss what can be done in rural Somerset, where so many businesses depend on hospitality and tourism? They really cannot take this kind of kicking.
Jonathan Reynolds
Those are obviously dramatic figures —I assume that they have happened through revaluation. I will endeavour to get the hon. Lady in contact perhaps with the Treasury, rather than this Department, to support her constituency.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Chair of the Select Committee.
Christine Jardine (Edinburgh West) (LD)
A lot of work is being done in Scotland—in Edinburgh, Glasgow and elsewhere—to develop a space culture, with space technology and satellite technology. With the controversy this week about potential interference in the Ukrainian war effort using satellite technology, do the Government intend to step up investment and support for research and development in this area, in the interests of our own national security?
Jonathan Reynolds
I was very much hoping for a space question, so I am very grateful to the hon. Lady. Space technology is one of the most exciting and fundamental horizontal technologies for our economy; I recently attended the International Space Summit in Paris to hear about that. We have launched our space strategy, and Scotland is key to that. She will know about the SaxaVord launch capacity investment. I assure her that we will keep her involved in the progress of this successful strategy.
Leigh Ingham (Stafford) (Lab)
It will surprise no one in this House to hear that I believe growth in every postcode should start in our towns. Will the Minister tell me what we are doing to support brilliant businesses such as Hill Helicopters in my constituency to grow, thrive and export?
Mr Will Forster (Woking) (LD)
Last month, McLaren announced a £500 million investment, which will create 1,000 jobs. That is particularly beneficial in my constituency, and I know that the Secretary of State visited the constituency to share in that good news. What steps are he and the Government taking to ensure that McLaren and other businesses can expand in that way?
Jonathan Reynolds
It is always a pleasure to visit McLaren, and I was delighted that it was part of an investment in the automotive sector in this month alone of £850 million. Those incredibly strong and supportive investments reflect the incentives we have put in place in the industrial strategy. I know that there is a specific issue locally with ensuring that that investment happens, and we will talk to the company about that. Our trade, innovation and wider business agenda is all about supporting successful businesses.
Markus Campbell-Savours (Penrith and Solway) (Lab)
Will the Secretary of State join me in congratulating Malcolm Wilson OBE and the team at M-Sport in Dovenby on re-securing the Ford world rally car championship programme, creating new skilled jobs for Cumbria? Can he also tell us what support the Department can provide to help high-performance automotive firms such as M-Sport create skilled apprenticeships for our young people?
Jonathan Reynolds
I thoroughly endorse what my hon. Friend has said—I believe that he and I once campaigned quite close to where that business is based. It is brilliant news, and reflects the tremendous industrial heritage of Cumbria.
Susan Murray
Hungry, yes. If growth is the mission, will the Secretary of State open talks on a customs union with the EU?
Jonathan Reynolds
We can all go for breakfast soon. Of course, I understand the hon. Lady’s point, particularly on food and agriculture—addressing that is part of the EU-UK reset. I would also point her to, for instance, the tremendous opportunities we have created, such as reducing the tariff on Scottish whisky in India from 150% to 75% and then 40% in time. Scottish salmon is also part of that, so I promise the hon. Lady that we are always championing the interests of her constituents in every market.
Alison Hume (Scarborough and Whitby) (Lab)
Boulby underground laboratory in North Yorkshire is competing to host XLZD, a prestigious physics experiment that could deliver Nobel prize-winning discoveries in the UK. In the light of the Science and Technology Facilities Council cuts, can the Minister reaffirm the Government’s commitment to securing the XLZD dark matter experiment for the UK?
Speciality Steel UK
Jonathan Reynolds Excerpts(1 month, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
With permission, I shall make a statement on Speciality Steel UK, but before I do so, I would like to say that I know the thoughts of the whole House will be with the Prime Minister following the passing of his father Roy earlier today.
The workers at Speciality Steel UK have faced years of uncertainty. The plants have been mothballed and the jobs furloughed for several years. This outrageous situation is a monument to years of neglect by successive Conservative Governments who let this industry decline, but this Government and I have taken a different approach. We have done all we can to rebuild the sector, and we have confronted its challenges head-on. In the case of Speciality Steel, complex ownership structures and opaque financing arrangements have amplified the headwinds of the wider sector. I do not need to remind the House about this case’s links to a prominent ongoing corporate scandal involving a former Conservative Prime Minister.
As the House may recall, Speciality Steel UK entered liquidation in August last year, with the independent court-appointed official receiver managing the liquidation process. Since then, the Government have provided funding to enable the official receiver to carry out his statutory duties, including maintaining site safety, supporting employees and conducting a sales process for the business and its assets. Throughout that period, our priority has been facilitating a private sector solution. The official receiver engaged with a range of interested parties and earlier this year identified a preferred bidder. That bidder subsequently requested Government support to make its purchase of Speciality Steel UK possible. However, following extensive engagement between the bidder and its advisers, and having done all the due diligence and given the case the consideration that taxpayers would expect, the Government have decided that they cannot provide support on the proposed terms.
This decision has not been taken lightly. For over a year, we have funded the official receiver process, while working constructively on efforts to secure a private buyer. We took a long, hard look at the offer that was on the table, but the truth is that we had serious concerns about the proposed financing of it, the protections for UK taxpayers, and whether it could offer long-term stability for the local economy and community. Having concluded that we cannot support the preferred bidder’s proposal, we are faced with a choice: we can allow events to take their course through the liquidation process, and risk being left with no say in the future of the sites, or we can act. This Government choose to act.
We have made a commitment to reindustrialise Britain—to bring good growth to every postcode of our country. Backing the proud communities of Stocksbridge, Rotherham, Wednesbury and Brinsworth is absolutely part of that commitment. These workers and those across the wider business have endured a prolonged period of uncertainty. The Government cannot accept the prospect of another prolonged process that will create more worry and anxiety for workers, deter businesses and hang over the local community. Nor can we accept a situation in which decisions impacting the future of communities in South Yorkshire are effectively taken by default, rather than through a deliberate assessment of what will best support growth, opportunity and prosperity in the years ahead.
We will therefore engage with the official receiver’s sale process and develop a proposal for the public acquisition of SSUK. This will preserve strategic control and ensure that all credible future opportunities can be properly considered before irreversible decisions are taken. We are taking this step because SSUK occupies a unique place in the UK’s steel ecosystem. It offers specialist capabilities that have served advanced manufacturing supply chains, including in aerospace and defence. In other words, it is capable of supplying the growth-driving sectors of our economy—those that we have committed to supporting through our industrial strategy. SSUK’s strategic value extends well beyond its economic contribution. It lies in its specialist steelmaking capabilities, which have historically produced products like aircraft landing gear, helicopter rotors, missiles and munitions. It would not be right to let this go by default.
I want to make an important clarifying point: we will work towards public acquisition, but that is not the end of the process, or the end of the conversation about the long-term future of the business and its sites. It means that we are keeping our options open while Government, local leaders, industry experts, private investors, workers and other partners consider what is best for these strategically important locations.
I want to thank those Members of this House with SSUK sites in their constituencies for their engagement with my Department, and I welcome their continued input. That includes my right hon. Friend the Member for Rawmarsh and Conisbrough (John Healey), and my hon. Friends the Members for Rotherham (Sarah Champion), for Penistone and Stocksbridge (Dr Tidball), and for Tipton and Wednesbury (Antonia Bance). I recognise the role played by the Mayor of South Yorkshire, Oliver Coppard, and his team in ensuring a joined-up vision for the future of South Yorkshire. I welcome the work that I know we will do in lockstep to deliver this future.
Working towards public acquisition will create the time and space necessary for undertaking a full assessment of the opportunities available. It will let us consider future industrial use, regeneration opportunities and the role that specialist manufacturing capabilities could play in supporting growth and our national resilience. One option that will be assessed carefully is the future of speciality steel production. However, we are not prejudging the outcome of that assessment. All options will be considered rigorously against their economic and industrial benefits, their impact on regional growth and their value for money. I should note that all future decisions and spending commitments will be subject to detailed due diligence and funded from existing Government budgets.
Our announcement today must also be seen in the wider context of the Government’s commitment to the future of the British steel industry. Steel remains fundamental to our economy, our infrastructure, our energy system, our advanced manufacturing base and our national security. It underpins critical supply chains and supports thousands of skilled jobs across the United Kingdom. That is why we nationalised British Steel earlier this year; why we intervened to secure stability and maintain production at the site while we develop long-term options; and why we secured a better deal for the steel communities of south Wales, with £500 million of Government support for a new electric arc furnace at Port Talbot.
In our steel strategy, we committed to stabilising and rebuilding the steel sector. What is more, we set out a goal of supporting productive and profitable steel producers that can meet their customers’ needs, strengthen our national security and provide high-quality, secure, long-term jobs, backed by private investment. That was not an empty promise or wishful thinking. We have acted to tackle the challenge posed by global steel overcapacity through trade measures that protect our domestic production from unfair pressure and support the viability of the nation’s steelmaking.
I want to speak directly to the workers of Speciality Steel UK, who have been stuck on furlough, unable to do the jobs of which they are so rightly proud, through no fault of their own. I know that they feel ignored and let down by previous Governments, but as Business Secretary, I will not duck these difficult decisions, and neither will this Government. I will do all that I can to secure a bright future for you, your communities and your families.
Taken together, these actions demonstrate that this Government are serious about reindustrialising Britain, and the steel sector playing its part. We want to attract private investment, strengthen domestic supply chains and ensure that industrial communities have a genuine opportunity to thrive in the decades ahead. That is why we are moving towards the public acquisition of Speciality Steel UK. As ever, I commit to keeping all Members informed as this important work progresses. I commend this statement to the House.
Bradley Thomas (Bromsgrove) (Con)
On behalf of Conservative Members, I send my thoughts to the Prime Minister, following the tragic passing of his father.
I thank the Secretary of State for his statement. In her statement to the House following the insolvency of Speciality Steel UK in September last year, the then Minister for Industry, the hon. Member for Croydon West (Sarah Jones), stated that the Government would pursue every avenue to keep the company’s sites producing, as part of the Government’s wider work to grow a resilient domestic steel industry. We can all agree that the compulsory winding-up order against Liberty Speciality Steels created a great deal of uncertainty, especially for the more than 1,000 workers employed there. I am keen to hear how the Government have kept their promise to stand by the entire workforce throughout this process, including while overseeing bids to sell former assets. Will any redundancies follow nationalisation?
However, continuous operational failures have already pushed businesses into a state of chronic uncertainty; a failure to file accounts for more than six years led to a separate prosecution by Companies House, and there was an investigation by the Serious Fraud Office into suspected fraud, fraudulent trading and money laundering. The Secretary of State said that the official receiver wanted to gain a better understanding of the company’s business and the conduct of its directors in the period leading up to the liquidation. Can he give an update on any investigations into conduct that the Government have undertaken, and on any steps taken to recover money belonging either to the business or to the British taxpayer?
Despite the rhetoric about the Government supporting the UK steel industry, all that the industry has experienced is increased pressure and apprehension. From the steel strategy, which is likely to lead to ever higher costs for taxpayers, to the introduction of the UK carbon border adjustment mechanism, which fatally weakens our national resilience, the survivability of steel producers is becoming more difficult. Indeed, a manufacturer in my constituency told me some months ago that it will likely dissolve by Christmas if the Government do not change course.
Energy prices are also a significant hurdle for steel plants. The Government’s Clean Power 2030 action plan risks making things worse; it could force rapid change without ensuring the infrastructure or investment to support it, while increasing costs for manufacturers and threatening jobs in key industrial communities. Nearly 92% of global steel production faces no comparable carbon pricing. Only the UK, the EU, Canada and New Zealand, covering just 8% of global output, apply prices in the £30 to £70 per tonne range, but we expect our industry to compete with countries that pay a fraction of that, or nothing at all.
The Secretary of State will say that the Government are helping to address the burden of high bills for manufacturers via the British industrial competitiveness scheme, but unfortunately their efforts are too little, too late. Having a strong steel industry is vital to our national security and resilience. Traditional bulk commodity steelmaking is vital to our national infrastructure, and modern advanced steel manufacturing is a vital foundation for sectors such as aerospace, defence, nuclear and automotive, all of which are critical, given rising geopolitical tensions. I understand that another issue facing Speciality Steel UK was having the capital to buy raw materials that would allow the continued production of advanced steels, such as the landing gears produced at Stocksbridge. Could the Government therefore outline what support has been given to maintain site operation through this process, and whether advanced steel manufacturing will be a priority following nationalisation?
Circling back to the Government’s commitment to pursue every avenue, can the Minister explain how much consideration has been given to private investment as a solution? How much was spent on private sector solutions before the decision to nationalise, and what was the main basis for that decision? Considering that a preferred bidder had been identified, it is surprising that the Government have moved away from this completely. Indeed, at the Business and Trade Committee on 22 June, the Department’s director for materials and industry noted that “significant investment” was required, and stressed that the majority of this should come from the private sector. Other than a new Prime Minister who is ideologically committed to nationalisation, what has changed? Will the Minister outline the terms asked for by the private bidder that the Government were not willing to agree to? If the business has unique capabilities and demand is there for its products, does that not imply that the barrier to a viable private sector buyer is either the Government’s own ideological obsession with nationalisation, or an economic climate in which it is increasingly impossible to run a successful manufacturing business in Britain?
Jonathan Reynolds
I thank the shadow Minister for his response. I particularly appreciate his words for the Prime Minister, which I know he will appreciate, as will his family.
The shadow Minister began with a long list of neglect regarding the policy, operations and ownership of this particular set of steel businesses. The obvious question is why the Conservatives did not do anything about it when they were in power—it certainly was not for want of requests to act from Labour Members. He has asked for reassurances about the workforce, and I am happy to give those to him. The cost of funding the official receiver, both to date and ongoing, is essentially the wages of the staff. They are in a position where they will be paid, which is paramount.
The shadow Minister talked about the business environment. I say politely to all Conservative colleagues that they left us with the highest industrial energy prices in the developed world. That was the legacy—it is not due to any policy changes made by Labour. What do our industrial subsidies mean? For a sector such as steel, where an electric arc furnace is obviously incredibly energy intensive, the supercharger package—not the BICS package, because the supercharger package applies in this case—will bring down average electricity prices from approximately £168 per megawatt-hour to £86 per megawatt-hour. It is not just about being competitive with peers; that is a genuinely competitive position with our rivals. We introduced those subsidies because we were aware that the business environment we inherited from the Conservative party was not satisfactory. We had to act, which is why we have done so.
Turning to wider measures, yes, we have activated a substantial trade defence policy. That is not just about maintaining domestic production; it is about being a country where the rules of the game apply. If we want people to be based here in the UK, they have to be able to take advantage of effective trade remedies when they are facing unfair competition. I know that that is an issue for the downstream users, but it is the position that I think the country has to take. What the shadow Minister has said about carbon border adjustment mechanisms is, I think, a new policy since I was last Secretary of State—the Conservatives are perhaps disowning the policies they had at the end of the last Government, because they were certainly committed to CBAMs then. Of course, CBAMs are fundamentally about trying to maintain fair competition between carbon-intensive sectors in developed countries such as ours and the rest of the world, so there is a little bit of incoherence there, to say the least.
On the issue of working capital, the opportunity presented to us by Speciality Steel UK is that previously, the business only produced when the customer effectively supplied working capital—a highly irregular position, but one reflective of the opaque and byzantine financing arrangements under the previous owners. I believe the opportunity exists to operate a successful business in this space. There is nothing ideological about this; my ideal is for the business to be run in the private sector. The shadow Minister has asked why we could not take forward the preferred bidder. I will not go into the details, but when I come to this Dispatch Box I have to be satisfied that any public support given meets the reasonable conditions we would expect, such as that taxpayer money will be protected and will not be spent without delivering the outcome for which it has been granted. If I cannot do that, I cannot grant that subsidy, which I think is the position any Secretary of State would have to take.
What is the barrier to a private sector solution? Effectively, it is risk—the fact that this was left so long without activity from the Conservative Government and the workforce have not been making steel. The customers are therefore in a position where that is a big, substantial challenge for any private sector entity to take on. If we do end up with a public ownership position, I think the state will be better able to take on that challenge, but it is the legacy of neglect that has been the barrier. That is exactly what this Government are determined to resolve.
Sarah Champion (Rotherham) (Lab)
Today is a really good day. I have been in this Chamber for more than a decade, watching my industry being allowed to wither on the vine. Secretary of State, a huge thank you to you for understanding the potential in the Rotherham, Brinsworth, and Stocksbridge sites, which work hand in hand. It is not just about the sites themselves, but the infrastructure around them. We have a whole supply chain that needs these sites back and running again. Of course, this is green steel, or recycled steel, so it fits exactly with the Government’s industrial strategy—it is the linchpin.
Secretary of State, thank you for continuing the pay so far and thank you for committing to continue it for the next six months. Can he also speak a little about the training that the staff will get? While they are grateful to be furloughed, they want to be working, and that means that they need to be fit the day that he says we can open the doors. They want to be ready to go. Can he also say a little about product accreditation? Literally every week, I have people from around the country calling in, trying to purchase steel. However, to purchase it, accreditation needs to be in place. Finally, can he speak a little about any anticipated restart costs? I know the workers are doing all they can to maintain the sites, but there are likely to be costs. Today is a good day, and I thank the Secretary of State.
Mr Speaker
Order. Can all Members look at the Chair when speaking? Sometimes we cannot hear what is said. Also, the Member is not addressing the Secretary of State, but the Chair. It will help us all if we do it that way.
Jonathan Reynolds
I thank my hon. Friend for her engagement, her support and her advocacy on behalf of her constituents. This has been and is a difficult situation for them, and it is exactly because of our commitment that we are seeking to resolve things in a favourable way. The work we can now do will have to look at the capacities, the potential for new investment that might be required, the product lines, where the customers are and so forth. The key issue—I am not sure if this has ever been put on the record in Hansard before—is homologation. That is the assets of these sites and the accreditations they have for such a speciality set of products. Those assets are incredibly valuable. Not many parts of the world can produce to the standard that we are talking about. We now have a process—I want that to be as short as possible—where we can assess that. I will remain in close contact with her. I want to be in a position where, if we can take this forward, we can pass that good news on to her constituents.
Daisy Cooper (St Albans) (LD)
First, may I pass on my condolences and those of my party to the Prime Minister on the sad passing of his father? I thank the Secretary of State for his statement. We Liberal Democrats recognise that national security, energy security and food security are all intertwined. Steel is critical to our renewables sector, our defence and our national infrastructure. In a previous debate on this company, we said on the record that nothing should be off the table, and we look forward to receiving further details from the Secretary of State as the process continues.
I have a few questions for the Secretary of State. First, on jobs and the employees, can he offer any further information not just on training, as another hon. Member has raised, but on the timeline by which staff will have more information about what this decision means for them? The Secretary of State highlighted that this process may end up in public acquisition. Is he in a position to say how much that would likely cost the taxpayer? Can he give us a broad estimate or range for how much those costs might be? Related to that, I note that the Secretary of State said that it would be funded through existing budgets. Can he say where that money might come from and whether it might get rediverted from other sources of funding, such as for transport, energy projects or something else?
I have two final questions. We know that the warning lights were flashing for a very long time—the Secretary of State mentioned that himself. Will there be any formal process to look at the lessons learned, both politically and administratively, to make sure that something like this never happens again? Finally, he will know that as well as using domestic steel suppliers for our British procurement, the way to really boost British industry is to have a stronger relationship with Europe, so that British steel can be used throughout supply chains and procurement right across Europe. Will the Government look at strengthening that relationship?
Jonathan Reynolds
I thank the hon. Lady for her questions. I entirely endorse what she said about the centrality of steel to security and infrastructure, and, indeed, I echo her words. This is entirely pragmatic. I am seeking to resolve a series of long-running problems, which a great many of my Conservative predecessors—and there were a great many—ignored, considering them to be too difficult. That is the central lesson that I would learn: we have to be willing to confront these hard problems. We might think that we can pass them on to the next person, but that is not serving the country in the way that is required.
Let me now deal with the hon. Lady’s specific questions. I expect this process to take between four and six months, but I want it to be resolved as quickly as possible. I think it important to point out that there are costs either way: there are costs involved in running the business in public ownership, and there would also be costs to the state from the remediation and regeneration, partly because of the legacy of public ownership but also because such big steel industrial sites come with so many issues to resolve if they are remediated that some of that would fall on the Exchequer. If this were a matter of public ownership, we would have to pay off the creditors, reach an accommodation with them, acquire the assets, and then inject some working capital over a period of between one and three years. I would expect the cost of that to be about £350 million, and I would expect something comparable were the option to be regeneration and remediation.
The hon. Lady asked about existing budgets. We knew when we came to power that we needed to pay attention to the steel industry. There was a commitment in our manifesto for £2.5 billion, on top of on top of the £500 million that was granted to Tata in Port Talbot under the previous Government. We have spent some of that, although the lion's share of the sum has gone to British Steel, but the support for Tata has continued. Some of the money has gone on the official receiver process here. We have that existing budget in which to commence this work. These are obviously significant assets, and I think that this is an entirely appropriate use of them.
The hon. Lady also mentioned the relationship with Europe. She will know that when the European Union changed its own trade defence measures on steel, that had some adverse consequences for us. My call to Commissioner Šefčovič was one of my first in the job, for a number of reasons. We talked explicitly about this, and are seeking a resolution specifically on steel, which I believe would be in our interests and those of the European Union.
Antonia Bance (Tipton and Wednesbury) (Lab)
I welcome the direction that the Secretary of State has set out today. Wednesbury Bright Bar is part of Speciality Steel UK. It is a specialist steel-finishing plant that produces precision-engineered bright steel bar in the heart of the UK metal-finishing industry area. It is used for automotive and advanced manufacturing across the Black Country and beyond. This is not primary steel production, and it will need a clear strategy separate from that for the primary steel production, which is the business in Rotherham, in Stocksbridge and elsewhere in the country. What specific consideration will the Secretary of State give to securing the long-term future of Wednesbury Bright Bar as part of work towards the public acquisition of Speciality Steel UK, and how will this support the skills, jobs and manufacturing supply chains across the west midlands and beyond?
Jonathan Reynolds
I am grateful to the hon. Member for her support and engagement on behalf of her constituents. There is a co-dependency between the four sites in terms of how the business operates, but any long-term consideration, whether in the private or the public sector of the business, will have to include consideration of products, customers and markets if the business is to be run profitably. That will be central to the assessment that we can now make. However, I can give the hon. Member the reassurance that every part of this business clearly has worth—which is why they have been grouped in this way, historically and in a contemporary sense—and, of course, we are seeking the best solution for the workers in all four of the plants.
Sir Edward Leigh (Gainsborough) (Con)
We know that Speciality Steel has been severely impacted by high electricity costs, and we know just what that means from people in Scunthorpe, the constituency next to mine, which is a very heavy user of electricity. They are paying 50% more for their electricity than is being paid in France, for instance. However, the Government insist on phasing out the blast furnaces. Once we have electric arcs in Scunthorpe, people there will have to use twice as much electricity, paying much more. Does the Secretary of State agree that we cannot reindustrialise Britain simply through public ownership, but must reduce our energy costs? Will he take steps, over the next year or two, not to worry about green energy and all that, but just to reduce our energy costs to a level roughly equivalent to that in France?
Jonathan Reynolds
I am always grateful for the support of the Father of the House, who has a long-standing interest in all industrial matters. However, I consider myself more obsessed with industrial energy prices than, frankly, any other Member of this House. I am great company when this subject comes up.
On electric arc furnaces—which are the technology in use here and will be, I hope, in Scunthorpe at some point —we already have in place a set of policies that do not just put us on a par with some of our rivals, but actually give us a competitive position. That is the supercharger scheme for the most energy-intensive electricity users. The Father of the House will know that we have also launched, as part of the industrial strategy, the British industrial competitiveness scheme which is about to come into force. In effect, it is a scheme for manufacturers, and again it significantly moves the dial on their competitiveness.
I recognise this issue, but we have done more than previous Governments, and we will continue to do more on it. I agree entirely with the Father of the House’s case, but I think we must recognise the very substantial work that has already gone on. I considered BICS to be the centrepiece of the industrial strategy when we launched it, because it moves the dial so significantly on our competitiveness not just for steel, but across a range of manufacturing sectors.
Jessica Morden (Newport East) (Lab)
I acknowledge and thank the Secretary of State for the substantial support given to the steel industry, which, as my hon. Friend the Member for Rotherham (Sarah Champion) said, is in direct contrast to the Conservatives, who did very little when they were in government. However, he will know of the particular concerns at Llanwern steelworks about the new quota levels for galvanised steel. Can I ask him to acknowledge that, to listen to the concerns of the workers at Llanwern and to tell us what more he is doing?
Jonathan Reynolds
Again, I am grateful to my hon. Friend, with whom I have been discussing steel matters in this House for many years. I am aware of the specific challenges at Llanwern. I believe it is a very sound business, and our trade defence measures will directly benefit it. Again, we have to strike a balance. People would sometimes like us to go further in one direction than the other, but this is all part of the support we have given the steel industry. I believe that the downstream use she mentioned will be central to the future of steel production in Wales.
Mark Pritchard (The Wrekin) (Con)
There is a central inconsistency in the Secretary of State’s argument. He talks about steel as a strategic asset, and I of course agree with that, but so are oil and gas, yet the Government do not seem to be coming forward with any proposals on that sector. He mentioned in his oral statement that the Government are going to pay this from “existing Government budgets”, but in answer to a question, he said that the money would possibly “fall on the Exchequer”, so how much is this going to cost? He also mentioned that he would prefer for the business to remain in the private sector, which is encouraging to hear, so does he have an indicative timetable for when it might go back on the market and be sold?
Jonathan Reynolds
The right hon. Member will understand that I will not comment on matters pertaining to the Secretary of State for Energy Security and Net Zero, but stick to the considerable number of issues in the domain of BIST. He specifically asked about cost. The cost for the official receiver is £11 million a month, which is in the main to meet the payroll cost of the more than 1,200 members of staff that the sites employ. That is what we have done to date, and it is what we will continue to do.
On returning it to the private sector, we first have to see whether there is an opportunity to save this business. That may require public acquisition, as I said in my statement. If we follow the path in that direction, we would have to inject working capital—the process can now ascertain what that sum of money would be—to make the products and the business plan attractive and enable a return to the private sector, but that is a long way down the road. If we put in public money, I would want a return for that public money. I am more than willing—keen, in fact—to see this business return to the private sector, but if we put in public money to turn it around, I would obviously want to protect that money. I think is an entirely pragmatic and reasonable consideration.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I welcome this statement, which shows a Labour Government once again stepping in to protect jobs and protect our specialist steel industry. What steps will the Government take to get this steelmaking business back up and running, and what intervention will they be making with those in the downstream sector to support them to buy British wherever possible?
Jonathan Reynolds
The process to date has in effect been working with potential private sector bidders on the viability of their plans. That task is entirely different from what we can do now, which is essentially to assess whether there is a viable future for this business under public acquisition. If there is—and, again, the strength of the products and the history of these sites are well known, as we have discussed in the House today—the opportunity would present itself to return to steel production.
My hon. Friend mentions the changes to procurement, and yes, there have been considerable changes to what we can do. In the main, I would say that when steel products are made in the UK, they do tend to be purchased in the UK. There is a significant export side to the UK business, but they are in the main purchased around that. Historically, the problem has been goods and products that we do not make in the UK and have had to import. Again, I think there are gaps in the market in that regard.
Richard Tice (Boston and Skegness) (Reform)
I congratulate the Government on making the decision to take Speciality Steel UK into public ownership, but the truth is that it should have been taken earlier. The preferred bidder was never going to perform. It has never made any steel, it did not have any money, it was seeking aggressive financing and it was using an investment adviser who fundamentally failed. I am troubled that the Government are now using the same investment adviser to advise them on British Steel. I urge the Government and the Secretary of State, who are doing the right thing with steel, to come up with a combined vision for Speciality Steel UK and British Steel. Merge them, invest in them, get the working capital going and get the production going. That will make it viable, that will get the cash flow positive again and that is in the strategic national interest.
Jonathan Reynolds
I welcome the support from the hon. Gentleman for the decisive action we are taking. On his point about potentially combining British Steel and, if it were acquired in the public interest, Speciality Steel UK, I urge caution in that regard. The job required at Scunthorpe and Teesside for British Steel is in itself a significant industrial transformation. Not many transformations of this kind or scale have actually been done in Europe. What Tata Steel is doing with us in Port Talbot is a significant example of that. This is another set of issues. I think the House is aware that a different set of factors that really pertain to ownership have led us to this situation, so there are two distinct problems. We are taking action on both, but they are distinct and I would not at this stage recommend the bringing together of those two things. That is too big a task. We are better served by looking at them as distinct things to solve.
Cat Eccles (Stourbridge) (Lab)
I thank the Secretary of State for his positive announcement. Downstream businesses in Stourbridge, Brierley Hill and Netherton used to source many items from Speciality Steel UK. I spent a lot of time working with it and the Department and Ministers to update product codes ahead of the tariff that Spain introduced. I am grateful for their engagement during that time. I understand that the upscaling of production will take time, but will he commit to continuing to work with the industry as the products come back online in the UK, so that none of the businesses in my constituency or elsewhere in the country are unfairly penalised?
Jonathan Reynolds
I thank my hon. Friend for her support and for her question. My ideal is that I want steelworkers making steel. I do not think that is complicated, but it has been too complicated to date. All we are seeking is a chance for those proud people to return to the jobs that they so love and which have defined their communities for so many years. It will not be easy. I am grateful for the support across the House today, but it will not be easy. We are deliberately taking on this challenge rather than ignoring it and walking away, as I believe other Governments have done. I will remain closely engaged with her on the question she raises about how best to do that.
Martin Vickers (Brigg and Immingham) (Con)
In his reference to the wider steel industry in his statement, the Secretary of State mentioned Scunthorpe. He knows that I have consistently supported the Government in the actions they have taken to keep the works going. I think he is a little too eager to criticise the previous Government; I gently remind him that for about 18 months they paid the wages and the bills at Scunthorpe to keep the jobs there. I appreciate that we get written statements, but when does he anticipate being able to come to the House and give an oral statement about the future of Scunthorpe?
Jonathan Reynolds
I am grateful to the hon. Gentleman. He and I have discussed this issue many times. I remember calling him to tell him that we were about to recall Parliament at that particularly significant time for the site at Scunthorpe. I am always aware of his substantial constituency interest. We will rekindle that relationship, if that is the right terminology. He will have seen that we have just appointed a chair of British Steel. I am eager to crack on with the work that is required on a transformational plan for Scunthorpe. As soon as I have substantive information to share, I am always happy to come to the House to talk about steel. If he has any specific questions, he knows that he can contact me directly and I will always seek to give him the answers he needs.
Catherine Fookes (Monmouthshire) (Lab)
I thank the Secretary of State for his support for domestic steelmaking. People do not often think of Monmouthshire as a steelmaking community, but we have excellent downstream steelmaking companies and hundreds of workers going every day to Llanwern, in the constituency of my hon. Friend the Member for Newport East (Jessica Morden). Will the Secretary of State share what the Government are doing to support downstream steel and to ensure that we are buying more Welsh steel in all UK projects and construction that are undertaken?
Jonathan Reynolds
The quality of the downstream products we create in the UK, particularly in Wales, is well known, but there are gaps in the market. I often compare the level of domestic consumption in most European countries to where we are with domestic production in the UK, and there are clearly gaps in that market. That has always been about the need to improve the business environment, so that the sector can work constructively with the Government to provide the public-private capex solutions that we have seen a lot of across Europe but have not seen many of in the UK. I am grateful to my hon. Friend and to all colleagues who make the case for what is, I believe, a business and a sector fundamentally important to the UK.
Helen Morgan (North Shropshire) (LD)
The Secretary of State mentioned the wider steel sector in his statement. I raise the issues experienced by Fowler and Gilbert and EverEdge in my constituency, both of which manufacture steel products and have been impacted by quotas and tariffs on steel imports. That is particularly the case with materials not produced in the UK, because it essentially adds a manufacturing tax to the work that they do. While their raw material costs are rising, there are no equivalent restrictions on imported finished products, particularly low-quality and low-cost imports from China. Those businesses face a situation where it is cheaper to import from overseas than to manufacture in the UK. Will the Secretary of State meet me to discuss the concerns of those businesses, which are significant local employers in my constituency, and to find a solution that works for the whole steel sector?
Jonathan Reynolds
I acknowledge the issues that the hon. Lady raises. She knows that our trade defence measures are a necessary response to global over-production. It is a problem that every Trade, Commerce and Business Minister around the world must grapple with. The role of our trade defence measures is to provide a level playing field for domestic production. If the hon. Lady believes that there is inconsistency with the products that are needed in her constituency, we are happy to meet her to take the matter forward. There is sometimes misalignment between certain product codes and trade defence measures. However, I genuinely believe that there is a consensus across the House that we have to be a country that is willing to intervene sometimes to ensure that there is a level playing field, both for the sectors directly affected and because, frankly, no one would base their business here if they thought it could be wiped out by the unfair competition that, I am afraid, is sometimes a feature of the global economy.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
I wholeheartedly welcome the Government’s action to secure the Speciality Steel UK sites in England. The Secretary of State is aware that the workforce in Motherwell’s Dalzell plate mill have been repeatedly and sorely let down by Speciality Steel, which has left the site underfunded and unable to carry out contracts. The workforce have also been let down by the SNP Government, which sold the site to those cowboys in the first place and then left the playing field. Dalzell was part of British Steel; that plate mill is the jigsaw piece that completes our steel offering in the UK. It makes sense for it to be brought back into the fold as soon as possible. Will the Secretary of State confirm to the House that he will take all necessary actions to save Dalzell and get it up and running again, ensuring that growth in every postcode includes ML1?
Jonathan Reynolds
I am grateful to my hon. Friend for her advocacy on behalf of her constituents. She and I have discussed the matter several times. For colleagues who are less aware of the issue, Dalzell is a separate legal entity and company from Speciality Steel and thus separate from the full plans that we are talking about. Dalzell is still owned by the Gupta Family Group, but many of the same issues are found there. My hon. Friend knows that because that part of the business is not being run by the official receiver—it is a different set of circumstances—with any interest that we had, we would have to establish the level of liability, and the flow of public money that would be required, given the former associations that it has. We do not have current plans to do that, but we will remain closely engaged with my hon. Friend. I know that her constituents want to be back at work, and I share their frustration, but the House should be aware that Dalzell is in a different position from the rest of SSUK.
Llinos Medi (Ynys Môn) (PC)
I wish to pass on my party’s condolences to the Prime Minister and his family.
While recognising the £500 million transition fund to Port Talbot, there are real concerns that Welsh steel will not receive a fair share of the £2.5 billion steel fund. Today the Secretary of State has announced that the public acquisition of Speciality Steel will be funded from that steel fund. Can the Secretary of State reassure the Welsh steel sector that Wales will get its fair share of the steel fund following today’s announcement?
Jonathan Reynolds
Yes. On both a per capita basis and on a straightforward cash basis, Wales had until fairly recently had the lion’s share—the biggest allocations —from Government because of the significance of the transformation programme at Port Talbot, which remains a fundamental part of the steel sector across the UK. Being frank, it is also one of the sector’s success stories: the transformation of Port Talbot is a major project supported by significant public money and significant private capital, and it is exactly the kind of transformation we are seeking in other parts of the UK. It is to the credit of the workforce at Port Talbot that they are at the forefront of this; notwithstanding the difficult issues involved in such a transformation, it is something to be proud of.
Perran Moon (Camborne and Redruth) (Lab)
I very much welcome the Secretary of State’s statement. Does he agree that workers and communities are ultimately paying the price for the reckless conduct associated with Lex Greensill and those who championed his business model, and that this Government are now stepping in with the leadership that was previously so lacking?
Jonathan Reynolds
My hon. Friend tempts me to comment on certain issues, which I might swerve a little. He is right to say that the priority for politicians should be trying to resolve these issues and get steelworkers back to work, and anything that detracts from that or that goes in a different direction is deeply regrettable.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his responses. For businesses in Northern Ireland that rely on imported steel from large producers such as Speciality Steel, these changes create a significant risk of increasing costs, forced changes to suppliers and disruption to supply chains. Steel is a critical input for Northern Ireland, contributing to some 10% of our workforce, and the potential consequences for manufacturing, construction and engineering industries in Northern Ireland are significant. Does the Secretary of State agree that every effort must be made to ensure that Northern Ireland is not economically cut off by steel import arrangements protection for GB, and that this must not be at a cost to businesses in Northern Ireland?
Jonathan Reynolds
The hon. Gentleman is right to say that historically these plants have served a number of first-class manufacturers and engineering works in Northern Ireland, although they have not been doing so to date, as the workforce has been furloughed and the plants have not been operating. I would love to rekindle that relationship and see these issues resolved—that is the focus of the statement and the decisive action that the Government have taken.
On the wider complexities of steel imports and the movement of steel products between Northern Ireland and the island of Great Britain, that is a complex situation that reflects the Windsor agreement. There are things, particularly in the reset of the Government’s relationship with the EU, that Northern Ireland stands to gain from, and this is one of those areas. Again, that is a priority for the Government to resolve.
Trade Remedies Authority Recommendation Rejection: Bicycles
Jonathan Reynolds Excerpts(2 months ago)
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The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
On 23 August 2024, the UK’s Trade Remedies Authority initiated a transition review of the anti-dumping measure applied on bicycles and certain bicycle parts of Chinese origin—including bicycles consigned from Cambodia, Indonesia, Malaysia, Pakistan, the Philippines, Sri Lanka and Tunisia. The review assessed whether dumping and injury to UK producers would likely recur if the measure was revoked.
During the review, the TRA invited evidence to be submitted by both domestic and international industry and organisations. After careful consideration of the facts, it recommended to me that the measure should be extended for a further five years from its original date of expiry—to 29 August 2029—at the same duty rates of 0% to 48.5%.
I have considered the evidence contained within the recommendation made by the TRA and wider matters in the public interest, including the UK’s obligations under the relevant World Trade Organisation agreement. As a result of these deliberations, I have decided to reject the TRA’s recommendation and take a different decision.
My decision is still to extend the measure for a further five years, from the original expiration date, and at the same duties of 0% to 48.5%—as the TRA has recommended—but I would amend the description of category 2 goods to bring the measure back into alignment with how the measure was applied prior to our exit from the European Union. I believe this to be in the public interest. The reason for this is that those trade remedy measures applied by the EU on behalf of its 28 member states prior to Brexit were applied on behalf of the UK. The Government at the time determined that all those trade remedy measures were applied by all 28 EU member states, including the UK. Consequently, the UK should continue to apply all 43 transitioned trade remedy measures in the same way until such a time as each measure is individually reviewed. This anti-dumping measure was one of those 43 measures.
My decision therefore corrects the definition of category 2 goods and brings the application of the anti-dumping measure back into alignment with how the measure was applied prior to our exit. This ensures that the anti-dumping measure continues to be applied consistently with how it was prior to our exit from the EU. It will also necessitate His Majesty’s Revenue and Customs considering whether any UK importers of certain bicycle parts should be refunded where they otherwise should not have paid a duty.
The decision on this measure came into effect on 23 July 2026. The Government published a public notice on 22 July 2026 to give effect to this decision.
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Trade Remedies Authority Recommendation Rejection: US-origin HVO Biodiesel
Jonathan Reynolds Excerpts(2 months ago)
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The Secretary of State for Business, Innovation, Science and Trade (Jonathan Reynolds)
On 22 July 2026, the UK’s Trade Remedies Authority concluded a subsidy investigation on imports of US hydrotreated vegetable oil biodiesel, submitting to me its final determination. The TRA recommended that a definitive anti-subsidy measure be imposed, with fixed duties of between £257.80 and £266.68 per tonne, dependent on the US exporter. This recommendation was made on the basis that, in the period of investigation, UK domestic industry was being injured by subsidised US imports of HVO biodiesel.
In all investigations, the TRA is required to conduct the economic interest test. This assessment considers whether the imposition of a measure would be in the economic interests of the UK. In an investigation, this test is presumed to be met, unless there is clear evidence to the contrary. In this investigation, the TRA considered that a definitive measure would not be in the UK’s economic interests.
I recognise that the relevant World Trade Organisation evidentiary criteria for imposing a definitive anti-subsidy measure have been met. However, on balance, I judge that it would not be in the public interest to do so. I took this decision due to the significant scale by which the economic interest test was assessed by the TRA to have not been met. The TRA assessed that while a measure could provide some benefits to UK producers and upstream businesses, these would be significantly outweighed by the costs imposed on downstream businesses, importers and consumers. As a result, and on balance, I judge that the prospective injury case for UK producers and the benefits of imposing a measure are outweighed by the benefits of not imposing one for the UK’s wider economy.
The Government published a public notice on 10 September 2026 to give effect to this decision to not impose a definitive anti-subsidy measure on imports of US HVO biodiesel.
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Comprehensive Economic and Trade Agreement with India
Jonathan Reynolds Excerpts(1 year, 2 months ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
On 24 July 2025, the Government signed the UK-India trade deal. This deal will unlock economic growth in every corner of the UK, put money back into working people’s pockets, and delivers on the plan for change. It is expected to increase bilateral trade by £25.5 billion, increase UK GDP by £4.8 billion, and boost wages by £2.2 billion every year. We are showing the world that we stand for free, fair, and open trade. In an increasingly unstable and volatile world, this deal provides businesses with confidence as they grow and expand.
This agreement drops the average Indian tariff on UK products from 15% to 3%, with tariff duties falling by around £400 million from entry into force, rising to £900 million after staging. This is alongside securing unprecedented preferential access to India’s federal procurement market, locking in guaranteed market access for UK service suppliers, and making trade quicker, cheaper, and easier through improved customs and digital processes.
This agreement will unlock new opportunities for businesses in every corner of the UK, including an expected £190 million boost for the west midlands and Scotland and £210 million for the north-west of England. The deal also aligns with our industrial strategy, supporting the UK’s high growth sectors.
And as India grows, so will the opportunities for the UK, giving businesses a competitive edge with the fastest-growing economy in the G20.
The UK Government have published a Command Paper titled “Informational Copy of the Comprehensive Economic and Trade Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the Republic of India and associated documents, including the Impact Assessment and draft Explanatory Memorandum”. Copies of these have been placed in the Libraries of both Houses. Further information on the trade agreement has also been published on gov.uk.
The Government have commenced the necessary pre-ratification steps. On 24 July, the UK Government formally commissioned the Trade and Agriculture Commission as well as the Food Standards Agency and Food Standards Scotland to provide independent advice. Informed by this advice, the Government will then lay its own report under section 42 of the Agriculture Act 2020. After the TAC and section 42 reports have been laid before Parliament, the Government will begin the processes under the Constitutional Reform and Governance Act 2010 in order to ratify the agreement. All needed legislation to implement the agreement will follow standard procedures. In parallel, negotiations for the double contribution convention will be finalised, which will then also be subject to the CRaG process.
I look forward to working closely with the business and trade and international agreements committees on the scrutiny of this agreement and updating the House further in due course.
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Oral Answers to Questions
Jonathan Reynolds Excerpts(1 year, 3 months ago)
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Andrew Ranger (Wrexham) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
I am delighted by the hugely positive response that the industrial strategy has received. It is a plan to lift every part of the country, making it easier and quicker to do business and to invest. For north Wales, with its formidable prowess in advanced manufacturing, it is a very significant set of proposals. The same is true for Wales as a whole, as I demonstrated on Monday at Port Talbot at the groundbreaking of the new electric arc furnace, which will get the enhanced supercharger discounted energy price.
Andrew Ranger
I totally agree with my right hon. Friend; this Government’s industrial strategy backs businesses in Wales not just with words, but with action and billions of pounds of investment over the next decade. In Wrexham, we are fortunate to have fantastic businesses, such as Kellogg’s and Hydro Aluminium among others, which have exciting ambitions for high-tech expansion. One barrier that needs to be overcome is sufficient power supply to the industrial and trading estates where they are based. Will the Secretary of State please update me on how the strategic sites accelerator will support them in doing so and the proposed timeline for its implementation?
Jonathan Reynolds
I thank my hon. Friend warmly for his question. I am excited about this. The strategic sites accelerator will prepare and accelerate sites for development by using Government tools, such as land acquisition, planning certainty and infrastructure support, to overcome existing barriers to investment on sites. It is designed to create jobs, to attract investment and to support our industrial and net zero priorities. It will work alongside other initiatives such as the connections accelerator service, which will streamline grid connections for major investment projects. It is about going faster, being bigger and being more ambitious for new investments, such as those that could come to my hon. Friend’s area. I can tell him that the Office for Investment is working jointly with the Ministry of Housing, Communities and Local Government and Ofgem to take this vital work forward. I expect capital to be deployed initially under this programme in 2026-27.
Charlie Maynard (Witney) (LD)
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
My hon. Friend’s area is one of the most exciting investment locations in the world—in clean energy opportunities, carbon capture and storage, and offshore wind, but also in creative and digital investment, chemicals production and steel. Specific interventions for the Tees Valley include recommitting £160 million for its investment zone, enhanced support for the Teesside freeport for clean energy industries, and a lot of money for transport for city regions funding. Of particular interest to businesses in his area will be the new British industrial competitiveness scheme, which will reduce electricity costs by £35 to £40 per megawatt-hour for many businesses in Teesside.
Luke Myer
I am pleased that the Government have been listening to us and backing Teesside businesses with serious investment—I have been pushing for investment in clean power and advanced manufacturing. Last year, the 2024 UK tech jobs report named Middlesbrough as the UK’s fastest-growing tech destination. Will Ministers work with me to bring in investment in frontier technologies such as artificial intelligence to our region as well?
Jonathan Reynolds
My hon. Friend and his colleagues are incredible champions for bringing investment into the area, and I recognise and thank him for that support. He is right to say that some of the perhaps more traditional industries, though very exciting for the future, are not just the only story in his area. He has mentioned tech and the creative industries too, and I would say they are huge opportunities. Specifically, our investment in skills to make sure that there is a pipeline of talent in every part of the country is a formidable and significant contribution to delivering on those opportunities. I look forward to continuing to work with him on these issues.
Emma Foody (Cramlington and Killingworth) (Lab/Co-op)
Perran Moon (Camborne and Redruth) (Lab)
The Secretary of State for Business and Trade (Jonathan Reynolds)
As we have heard, the industrial strategy is a plan to lift every part of the country, and it specifically recognises clean energy opportunities for offshore wind and nuclear in the great south-west. The strategy also highlights foundational industries relevant to its eight sectors’ supply chains, including spotlighting critical minerals clusters in Cornwall. It included the launch of a new UK Export Finance loan guarantee scheme for domestic suppliers selling critical minerals to UK exporters. The upcoming 2025 critical minerals strategy will aim to secure a steady supply of minerals, optimising domestic resources and enhancing international collaboration.
Perran Moon
As the Secretary of State mentions, with its vast renewable energy and critical mineral resources, Cornwall is uniquely positioned to become a key driver of UK economic growth. Although the industrial strategy emphasises the role of mayoral strategic authorities and city regions, particularly in the north and midlands, does the Secretary of State agree that Cornwall’s immense industrial potential must not be overlooked, and can he reassure me that unleashing the Cornish Celtic tiger with the economic investment that we need is not contingent on joining a mayoral combined authority?
Jonathan Reynolds
I can give my hon. Friend that assurance. I was dismayed this morning to wake up and hear the Reform party actively arguing for less investment in Britain and telling businesses they should not invest in the UK. I find that absolutely absurd. There are a whole range of tools for local areas to shape their economies in the industrial strategy. Some relate to mayors, but many do not. It has the mix of tools that is required to unleash the potential of every part of the country, including his own.
Andrew George (St Ives) (LD)
Further to that very encouraging response from the Secretary of State, does he acknowledge that Cornwall is the poorest region in the United Kingdom? It has great opportunities, as the hon. Member for Camborne and Redruth (Perran Moon) pointed out, but it has been hampered since losing the highest level of EU structural aid. If we are going to take the opportunities and overcome the challenges that Cornwall faces, would the Secretary of State be prepared to meet the hon. Member for Camborne and Redruth, me and other Cornish Members to establish a bespoke strategy for Cornwall to drive the private and public investment needed?
Jonathan Reynolds
First, let me say that, as someone who used to spend their family holidays in Cornwall, I must protest: I have had two questions from Cornish colleagues and not a single invite to visit Cornwall over the summer holidays. I really think that is unacceptable.
The economic history of Cornwall is particularly interesting—I have had this discussion with my hon. Friend the Member for Camborne and Redruth (Perran Moon)—and I recognise some of the specific issues that the hon. Member for St Ives (Andrew George) has identified there. Of course, I am always willing to meet him, either in Cornwall or here in Parliament, to have that discussion. I believe there are key parts of the industrial strategy that will deliver the opportunities and the tools required to unleash what both colleagues are trying to achieve.
Lee Barron (Corby and East Northamptonshire) (Lab)
Martin Vickers (Brigg and Immingham) (Con)
The Secretary of State for Business and Trade (Jonathan Reynolds)
This has been a year of real achievement for the Department for Business and Trade. From holding our record-breaking international investment summit, which saw £63 billion committed to the UK, to intervening decisively to save British Steel’s Scunthorpe site and all the shipyards at Harland and Wolff, we have safeguarded thousands of jobs. We have reformed the Competition and Markets Authority, changed the zero emission vehicle mandate, altered the remit of the Low Pay Commission and introduced the Employment Rights Bill.
We have quadrupled compensation payments to victims of the Horizon scandal. We have agreed trade deals with India, the EU and the US and published a comprehensive trade strategy to help us to secure greater access to global markets for British business. We have brought forward our industrial strategy, and last week a survey by Deloitte found that Britain has become the most attractive place to invest in the world. We are delivering this Government’s plan for change, putting money into people’s pockets, driving growth and kickstarting a decade of national renewal.
Martin Vickers
The Secretary of State has tried to paint a glowing picture of what is happening, but I can tell him that in northern Lincolnshire there are growing concerns. There have been a number of business failures in the last few weeks in the Grimsby and Immingham areas, and he will be aware of the threat to hundreds of jobs at the Prax oil refinery. All that makes it even more important that the Scunthorpe steelworks has a long-term future. Can he update the House on the state of things at Scunthorpe?
Jonathan Reynolds
I am always keen to update the hon. Member and colleagues on the situation with British Steel. We have cancelled the redundancy consultation and removed the immediate risk to 2,700 jobs. We have taken on new apprentices and invested significantly in improving health and safety on the site. We have provided significant working capital—that does not take into account yet the future revenue that will come. I am sure he will have been pleased to see that Network Rail has awarded British Steel a contract worth £500 million. We will continue to ensure that there is a long-term future for British Steel, and we will keep the House and himself updated to that effect.
Callum Anderson (Buckingham and Bletchley) (Lab)
Andrew Griffith (Arundel and South Downs) (Con)
May I start by paying tribute to Norman Tebbit? He was a former Secretary of State for Trade and Industry and a great reformer who did a great deal to unleash growth in this country.
The only thing growing under this Government are the unemployment queues. Today, the Office for National Statistics revealed that the number of payrolled employees has fallen by 180,000 over the last year and 40,000 in the last month alone. Unemployment has been higher in every month since the Chancellor has been in office. In the last hour, we have heard news of another 500 job losses at Jaguar Land Rover. This is a great country with great people. When the Secretary of State talks to businesses, what reason do they give to him for unemployment rising?
Jonathan Reynolds
It is always nice to hear from the shadow Secretary of State. First, as he knows, the Office for National Statistics workforce survey shows that the overall number of jobs is higher after a year of this Government than it would have been if the Conservatives had remained in government—there are 380,000 additional jobs. He mentioned payroll jobs. Of course, they are important; they are one key factor, as is wages, which, as he knows, have risen faster in the first 10 months of this Government than they did in the first 10 years of the previous Government. Our productivity figures have also risen, and of course, we closely monitor the impacts of technology.
The shadow Secretary of State asked what businesses say to me. They say that this Government have brought stability after the mini-Budget disaster, which he was a key part of. They say that we have brought openness to the world and are navigating a difficult trading environment better than anyone else, and they recognise that our pro-business, pro-growth measures are delivering. There was nothing like the list I just gave of problems after 14 years of the previous Government.
Andrew Griffith
That answer was complacent and unsympathetic. It is the most vulnerable—those looking for their first shot, their first chance—who pay the price of unemployment.
Let us start again. Last night in the other place, the unemployment Bill was improved with sensible amendments to probation periods, a definition of seasonal workers that protects hospitality and agriculture, and provision for a consultation about the impact on the smallest businesses. Those measures have been proposed by employers, and by independent business groups such as the Confederation of British Industry, Make UK and the Federation of Small Businesses, who say that the Bill in its current form is deeply damaging. If the Secretary of State will not shelve the Bill entirely, will he at least commit to accepting those entirely reasonable amendments?
Jonathan Reynolds
The shadow Secretary of State talks about vulnerable people. Which Government left one in eight young people not in education, employment or training, while net immigration hit 1 million? It was absolutely shameful, and we will take no lessons from Conservative Members. He talks about tackling barriers; who gave us the highest industrial energy prices in the developed world? The Conservative party. Who is dealing with that? Who has put millions into skills and training, finance, and the tools that local areas need? Those are the things that businesses want.
The shadow Secretary of State also talks about the Employment Rights Bill. I regret the Conservatives’ knee-jerk ideological opposition to it; they could have been pragmatic. The Bill was a manifesto commitment, and we will deliver our manifesto commitments in full. There are issues on which we have to get the balance right, such as probation periods and the future monitoring of zero-hours contracts, and the commitment is of course real. Pragmatic engagement would have been a more constructive way forward than this knee-jerk ideological opposition.
Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)
The Business and Trade Committee’s inquiry on small business is still open for evidence from Members from across the House. On Tuesday, we took evidence from the chief executive of Ofgem, who made it perfectly clear that a complete collapse of regulation in the years after covid led to thousands of businesses across our country paying higher energy bills than they needed to. Can the Secretary of State assure the House that the small business strategy, when published, will contain a strategy for bearing down on the energy rip-off that is challenging small businesses across our country?
Jonathan Reynolds
I am always grateful to the Chair of the Select Committee for his helpful and pragmatic work and engagement. I recognise the issue that he has highlighted. A lot of small businesses were locked into uncompetitive contracts after covid, and the legacy of that has been very difficult. Of course, we will always look at measures to address that. Fundamentally, we must break the link that means that gas sets the price of electricity in the UK. There are no shortcuts to that; we have to get enough clean energy on to the system to make that possible, which is exactly what the Government are doing.
John Glen (Salisbury) (Con)
Gregor Poynton (Livingston) (Lab)
Does the Secretary of State agree that the UK Labour Government are getting on with the serious business of delivering an industrial strategy that will support jobs in my Livingston constituency? That is in sharp contrast to the failing SNP Government, who have no industrial strategy, no plan for workers, and no plan to support Scotland’s key sectors.
Jonathan Reynolds
I very much agree with my hon. Friend. Nationalism is fundamentally a creed based on grievance, rather than real solutions, and that stands in contrast to our approach. There are specific instances where we could deliver billions of pounds of investment to Scotland if there was a change in policy from the Scottish Government, be it on new nuclear in places where Scotland could benefit from small modular reactors, or on the recent decision to pull support for the Rolls-Royce-led plan for a welding centre for apprentices in the defence sector, which would enable them to support the maintenance of Royal Navy submarines. The SNP Government are actively making decisions that get in the way of that investment. If we cannot change their policy, let us change the Scottish Government.
Josh Babarinde (Eastbourne) (LD)
Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)
On Friday, the Select Committee on Science, Innovation and Technology published its report on social media algorithms, following the Southport riots. Indeed, there is a Select Committee statement on the report this afternoon. Stakeholders have expressed concern that ongoing trade negotiations with the United States might prevent the Government from responding to the report’s recommendations, holding social media companies to account and keeping the public safe online. Can the Minister reassure us that that is not the case?
Jonathan Reynolds
I can reassure my hon. Friend and all colleagues that those decisions will always be in the domain of this Government and this Parliament in the UK. There has been a lot of speculation, during the trade negotiations, about what may or may not be involved, but we have shown that we deliver on jobs, goods and services, and that is the basis of sound trade negotiations.
Ben Maguire (North Cornwall) (LD)
Ben Goldsborough (South Norfolk) (Lab)
The over 1,000 employees at the Lotus plant in South Norfolk and Norwich North are the pride of our constituencies, and I thank the Secretary of State for his support in recent weeks. May I ask for a meeting with him and my hon. Friend the Member for Norwich North (Alice Macdonald), so that we can talk about our discussions with local employees?
Jonathan Reynolds
I can absolutely guarantee my hon. Friend that we will have that meeting. I appreciate the work that we have been able to do together, reacting to the media reports that initially surfaced. There is some clarity from the company, but not the full degree of clarity that we need. I will make sure that we get that meeting set up for him and his colleagues.
Bobby Dean (Carshalton and Wallington) (LD)
We have just had our fifth consecutive month of job losses announced, and research shows that as many as 17% of companies are considering redundancies. What is the Government’s analysis of why this is happening?
UK Steel Safeguard
Jonathan Reynolds Excerpts(1 year, 4 months ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
On 28 February 2025, the UK’s Trade Remedies Authority initiated a review of the steel safeguard measure. The review assessed whether exemptions afforded to developing countries should be updated to reflect recent trade flows and whether the allocation of the tariff-free quotas across all 14 product categories were appropriate to ensure the overall effectiveness of the measure.
During the review, the TRA considered evidence from both domestic and international industry and organisations. After careful consideration of the facts, it recommended to me on 9 June 2025 that developing country exemptions should be updated and that certain changes should be made to the allocation of the tariff-rate quotas.
I have considered the evidence contained within the recommendation made by the TRA and wider matters in the public interest, including the UK’s obligations under the relevant World Trade Organisation agreement. As a result of these deliberations, I have decided to reject the TRA’s recommendation and take a different decision. The reason is to ensure the overall effectiveness of the UK’s steel safeguard measure for domestic producers while balancing the need for security of supply for the UK market.
I have decided to:
Increase the overall volume of each category’s tariff-rate quota by 0.1% from 1 July 2025.
Apply a 15% cap in the residual quota of category four and a 20% cap in the residual quotas of categories seven and 13 to ensure that UK imports from exporting countries are more closely aligned with traditional trade flows, effective from 1 July 2025.
I have also decided to amend the allocation of the tariff-rate quotas as below, in line with the TRA’s recommendation:
Prevent any unused quarterly quotas from being made available in the following quarter.
Prevent WTO members with a country-specific quota from being able to access the residual quota in the final quarter.
Update developing country exemptions based on UK import data for the period 1 January 2024 to 31 December 2024 and in line with the WTO agreement on safeguards.
This Government are unapologetic in our support for the steel sector. It is fundamental to Britain’s industrial strength, our security and our identity as a primary global power. We will not allow UK interests to suffer. Through these measures we are supporting not only our producers but also the thousands of families that depend on them and the supply chains reliant on high-quality UK-made steel.
We are determined to reverse the years of decline and neglect in the steel industry, caused in a large part by global excess capacity and market distortions. We will continue to take effective action, and we will publish our “Steel Strategy” later in the year. The strategy will bring everything together to set an ambitious vision for the sector and a more competitive business landscape.
The decision on the steel safeguard will come into effect from 1 July 2025. The Government will publish a public notice on 30 June 2025 to give effect to these decisions to enter into force on 1 July.
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UK Modern Industrial Strategy
Jonathan Reynolds Excerpts(1 year, 4 months ago)
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The Secretary of State for Business and Trade (Jonathan Reynolds)
Today the Government have published and laid before Parliament their industrial strategy.
The UK’s modern industrial strategy sets out our 10-year plan to transform business investment, grow the industries of the future, deliver economic growth and put more money in people’s pockets to deliver our plan for change.
The strategy focuses on the high-growth potential sectors that will drive prosperity now and in the future: advanced manufacturing; professional and business services; clean energy; creative industries; digital and technology; financial services; life sciences; and defence. In tandem with the industrial strategy, the Government are today publishing on www.gov.uk sector plans covering the first five of these sectors, with others to follow in the coming months.
The industrial strategy follows on from the publication in November 2024 of our Green Paper entitled “Invest 2035: the UK’s modern Industrial Strategy”. Following publication of the Green Paper, the Government have considered the views of thousands of stakeholders from business, industry, academia, unions, local leaders and the public.
Today’s publication sets out how we will tackle barriers to investment and growth and make the UK the best place in the world to start and grow a business.
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