Industry and Exports (Financial Assistance) Bill

Judith Cummins Excerpts

Monday 23rd February 2026 Commons Chamber

[Judith Cummins in the Chair]

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

I remind Members that in Committee they should not address the Chair as “Deputy Speaker”. Please use our names when addressing the Chair. “Madam Chair”, “Chair” and “Madam Chairman” are also acceptable.

Clause 1

Limit on selective financial assistance for industry

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 3, in clause 2, page 1, line 8, at end insert—

“(a) In subsection (1), at the beginning insert ‘Except in respect of exports to which subsections (4B) and (4C) apply,’”.

Amendment 1, page 1, line 8, at end insert—

“(ab) In subsection (1), at the end insert ‘except in respect of exports to which the condition in subsection (4B) is met, where the amount shall not exceed £0’”.

This amendment is linked to Amendment 2. Together they provide that where the Secretary of State had reason to believe that modern slavery or human trafficking were likely to be present in the supply chain of the business recipient of the goods exported from the United Kingdom, the limit of commitments which could be made under arrangements relating to exports and insurance could not exceed zero.

Amendment 2, page 1, line 14, at end insert—

“(ca) After subsection (4A) insert—

‘(4B) The condition in this subsection is that the Secretary of State has reason to believe that modern slavery or human trafficking are likely to be present in the supply chain of the business recipient of the goods exported from the United Kingdom.’”

See explanatory statement for Amendment 1.

Amendment 4, page 1, line 14, at end insert—

“(ca) After subsection (4A) insert—

‘(4B) This subsection applies to exports of goods in respect of which the Secretary of State has reason to believe that the goods exported from the United Kingdom are likely to be re-exported in a way that would, had the goods been exported directly from the United Kingdom, be contrary to any provision of the any Sanctions and Anti-Money Laundering Act 2018, or of any sanctions regulations made under that Act.

(4C) In respect of exports to which subsection (4B) applies, the aggregate amount of the Secretary of State’s commitments at any time under arrangements relating to exports and insurance shall not exceed £0.’”

Clauses 2 and 3 stand part.

New clause 1—Impact of financial assistance limits—

“Within one year beginning on the date on which this Act is passed, and once every year thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact of the limits set by this Act on—

(a) England,

(b) Northern Ireland,

(c) Scotland, and

(d) Wales.”

This new clause would require the Secretary of State to publish an annual report on the impact of the limits set by this Act on each of the UK's devolved nations.

New clause 2—Impact of financial assistance limits on the steel industry—

“(1) No later than one year after this Act is passed, and annually thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact on the UK steel industry of the increases in the limit on selective financial assistance for industry and the commitment limits on financial assistance for exports and overseas investment for which this Act provides.

(2) A report under this section must include a statement of—

(a) the level of financial assistance provided in each month to UK steel undertakings under section 8 of the Industrial Development Act 1982 (as amended by this Act); and

(b) the number of UK-based full time equivalent jobs in the steel industry which, in the opinion of the Secretary of State, would have been lost had it not been for the increases in the limit on selective financial assistance for industry and the commitment limits on financial assistance for exports and overseas investment for which this Act provides.”

New clause 3—Impact of financial assistance limits (No. 2)—

“Within one year beginning on the date on which this Act is passed, and once every year thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact of the limits set by this Act on—

(a) gross domestic product (GDP),

(b) export capacity of small and medium-sized enterprises (SMEs), and

(c) volume of trade between the United Kingdom and the European Union.”

This new clause would require the Secretary of State to publish an annual report on the impact of the limits set by this Act on GDP, SMEs, and trade between the United Kingdom and the European Union.

--- Later in debate ---

I support the Bill. I support the intent behind clauses 1 and 2 to create headroom so that the Government can act to support manufacturers and exporters, but I ask the Minister for reassurance on three points: that SMEs will be able to access trade finance in practice; that downstream steel processors and manufacturers will not be overlooked in favour of larger players; and that defence exporters will see improvements in licensing speed and fair access to finance.

[The First Deputy Chairman]

I call the Liberal Democrat spokesperson.

[Mr Joshua Reynolds (Maidenhead) (LD)]

The Liberal Democrats support this Bill, and we support the amendments that are before the Committee today. The Bill does something that is straightforward and necessary: it raises the Industrial Development Act cap from £12 billion to £20 billion, reflecting inflation since the alignment was last set in 2009, and it nearly doubles UK Export Finance’s commitment limit from £84 billion to around £160 billion. Both the industrial assistance and export finance frameworks would hit their ceilings if we did not make these changes, so it is really important to make them. We support the Bill because British businesses need the Government’s backing to compete globally, and these limits need to keep pace with our ambition.

The amendments before us would strengthen the Bill in a few distinct ways. Amendments 1 and 2 would ensure that Government-backed export finance cannot be used to support businesses whose supply chains involve modern slavery or human trafficking. That is a straightforward ethical line. British taxpayers should not be underwriting exploitation, and we Liberal Democrats are glad to support the amendments. I ask the Minister to confirm what existing safeguards are in place, and whether implementation guidance will be issued so that businesses know where they stand.

Amendments 3 and 4 would address the risk that UK Export Finance could facilitate sanctions evasion through re-exporting. As we raise the statutory limit to £160 billion, Parliament must be satisfied that none of this expanded headroom can be used in a way that undermines our sanctions regime, so we support the amendments.

New clause 1 would require annual reports on the impact of the limit changes on each of the four UK nations. Although export finance is a reserved matter, outcomes are not necessarily evenly distributed. A report would allow Parliament to scrutinise whether the expanded capacity is reaching every single part of the United Kingdom, so we support the new clause. New clause 2 would require annual reports on the steel industry. Steel is of profound strategic importance to the UK and deserves the dedicated parliamentary scrutiny that the new clause suggests, so we support it.

New clause 3, which appears in my name, would require the Secretary of State to report on the annual impact of the Bill on GDP, on the export capacity of small and medium-sized enterprises, and on the volume of trade between the United Kingdom and the European Union. UKEF’s 2024 to 2025 activity contributed £5.4 billion to the UK economy, and Parliament should be able to verify such a claim on an annual basis. According to the Office for National Statistics, there are 5.7 million SMEs in the UK, yet UKEF’s annual report shows that it supported just 667 businesses. Annual reporting would hold the Government to their own target of supporting an additional 1,000 SMEs to export. It would make visible whether the current eligibility criteria, which require at least 20% of a business’s annual turnover to be from exports in any one of the previous three years, continue to lock out businesses trying to break into export markets for the first time.

On the UK-EU trade part of new clause 3, the Chartered Institute of Export & International Trade has documented a 30% fall in EU export value among the smallest firms since the trade and co-operation agreement came into force. A recent Institute of Directors policy voice survey found that 54% of businesses that stopped exporting to the EU cited the trading relationship with the EU as one of the reasons why. These are not businesses that failed to break into new markets, but established exporters that have walked away from our largest and nearest trading partner because the barriers in their way are too great to bear. Every customs declaration and every check that did not exist before 2021 is another reason why businesses are not exporting to the EU, because it simply is not worth it for them. Those are the realities behind the statistics that simply increasing UKEF capacity alone cannot fix. Parliament should be able to see whether expanded UKEF capacity is making a measurable difference to those figures, so we hope the Minister will support new clause 3.

The most effective long-term support for British exporters would be a new bespoke UK-EU customs union. Analysis by Frontier Economics, commissioned by Best for Britain, in February 2025 suggested that a customs union could boost British GDP by 2.2%. The House of Commons Library estimates that this could generate £25 billion in additional annual tax revenue for His Majesty’s Revenue and Customs, which I know the Chancellor would be grateful for. New clause 3 is the link or accountability mechanism that would allow Parliament to see whether what has been proposed is working.

We will support the Bill and the amendments to it, because capacity without accessibility is meaningless, and capacity without accountability is unacceptable. The Government need to accept the new clauses that match the expanded headroom with the practical reforms to ensure that they reach the 5.7 million SMEs, which are the backbone of British business, currently not being supported by UK Export Finance.

--- Later in debate ---

[Jim Allister]

Of course. That is further compounded by the fact that if those companies did set up in Northern Ireland and were manufacturing businesses dependent on raw materials coming from GB, as most are, they would have to pass through an international customs border with extra costs as well. In Northern Ireland, they are being invited not only to set up in a place where state aid may be capped by a foreign jurisdiction, but to set up in a jurisdiction where the raw materials will, by virtue of the Irish sea border, cost them more.

The Minister will say, as he has said to me before, “Ah, but you have the advantage of dual market access.” No, we do not. We have the worst of all worlds in Northern Ireland. We have the worst of all worlds in the sense that our raw materials are hiked in price because of the Irish sea border, and we now have the reduction in available state aid—

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

Order. I am sure that the hon. and learned Gentleman is minded of the Bill that we are discussing and will soon get back to it.