Industry and Exports (Financial Assistance) Bill

Baroness Alexander of Cleveden Excerpts

2nd reading & 3rd reading & Order of Commitment discharged
Thursday 12th March 2026 Lords Chamber

[Baroness Alexander of Cleveden (Lab)]

My Lords, it is a pleasure to speak on a three-clause Bill. I commend the Government on their brevity. It is a welcome change this week after the 220 clauses of the Crime and Policing Bill, the 178 clauses of the Tobacco and Vapes Bill and the 1,200 amendments that we will be wrestling with again tomorrow in the assisted dying Bill.

As every noble Lord who has spoken so far has noted, the Bill does not change policy, only financial thresholds. That narrow focus accounts for the broad cross-party consensus. More fundamentally, industrial assistance and trade policy remain a rarity in modern politics. They are matters of broad common ground. Like the noble Lord, Lord Empey, I served as a Trade Minister, for Labour in Holyrood, and then as a trade envoy for a different Government—proof that trade and industry can be common ground, at least in domestic politics. Of course, updating the financial thresholds after 16 years is eminently sensible, likewise using secondary legislation to raise the limits in the future.

I want to use my time to make one substantive comment on each theme. First, on the industrial assistance aspect, my own interest here dates to 1997, when I was working on the devolution settlement in the early days of the Blair Government. I can reliably report to the House that in all those years of campaigning for a Scottish Parliament, the minutiae of industrial aid rules had not caught the attention of even the most assiduous policy wonk, so in government it proved quite tricky. How do you devolve powers over trade and industry without undermining the financial level playing field within the UK? Today, rightly, financial selective assistance and export finance remain reserved matters but in an elegant constitutional arrangement, Scottish Ministers can prepare cases for financial assistance of up to £10 million for a single project, subject to a Commons resolution.

Last night, after we finished, I took a look at the most recent Industrial Development Act annual report, laid before Parliament in July, on Section 8 spending, which is what we are discussing today. It reported that neither the Scottish Government nor the Welsh Government had any Section 8 spending, compared with £2.9 billion of live schemes in England. There are complexities about the coverage of Section 7 and Section 8 areas and I appreciate, given that I am the last speaker in the debate today—at least from the Back Benches—that the Minister will not have had time to digest material from his officials on this matter. However, I would be grateful if he could write to me about the factors that he believes are influencing the uptake of Section 7 and Section 8 spending in the devolved Governments. These complex distributional issues should not detract from the value of industrial assistance, which is supporting thousands of jobs across the UK and leveraging in billions of pounds of private capital.

I therefore turn to export finance. The Government can take pride that their export finance portfolio is larger than at any point in history. At 70% current utilisation and with a strong pipeline of commercial opportunities, it is right to provide ongoing certainty to British businesses around future export support. Here, I echo the remarks of the noble Lord, Lord Pitkeathley, and others: on export finance, the devil is in the operational detail of the specific working capital and insurance schemes, and the ease of access to them by companies. I place on record that the Minister spent his entire pre-parliamentary life in the private sector, so he is well placed to ensure that bureaucratic creep does not diminish the effectiveness of support for exports—particularly, as others have recognised, for small and medium-sized enterprises. They are, in fairness, 88% of the beneficiaries of UK export finance, but we have to watch the opportunity costs for small firms caught in long, complex, unsuccessful applications that are deemed too high risk.

I come to my final substantive point. I ask the Minister to comment on the success of UK Export Finance in delivering its underlying mandate, which is to support exports at no net extra cost to the taxpayer over time. Therefore, echoing the question from the noble Lord, Lord Sharpe, I invite the Government to comment on their attitude to risk. Are the higher thresholds that we are being asked to approve a choice to adopt a higher risk appetite with respect to the likely return, or are they simply an attempt to anticipate greater demand in the pipeline and in the future? I welcome any guidance on that point.

In conclusion, I welcome the steps announced by the Government this week to crack down on sanctions-busting. This is a point that the Opposition raised in the other place. The Minister has responded this week with a new licensing scheme where there are any high-risk exports that could be used in sanctions-busting situations. Finally, I commend the focus of UK Export Finance in helping British business to be part of supporting the reconstruction in Ukraine. On that basis, I support the Bill and look forward to the Minister’s response.