British Industrial Competitiveness Scheme

Debate between Lord Sharpe of Epsom and Baroness Kramer

Wednesday 22nd April 2026 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, the Minister will soon trumpet the British industrial competitiveness scheme as being very good for business. But, for all the rhetoric and self-congratulation, this policy will have no meaningful impact on the overwhelming majority of British businesses. By the Government’s own figures, around 99% of firms will see no benefit whatever. So while the Government speak grandly of intervention and support, the reality for most businesses—our small manufacturers, our family firms, pubs, farmers, retailers and countless others—is unchanged. They will go on facing the crippling costs that we heard about in the previous debate, with no help at all from this announcement. Even with the reliefs that have been announced, they are staggered, and the earliest will kick in only in April 2027.

What is the wider context in which this Statement must be judged? It is one not of support for enterprise but of cost, burden and damage inflicted by this Government on British industry. Employers have been hit by increased national insurance contributions. Businesses now face the additional costs of the Employment Rights Act, which, by their own admission, run into the billions, together with the further burden of expanded trade union access to workplaces. That is something many employers will regard, in practice, not as access but as a licence to raid workplaces, disrupt operations and undermine confidence. Having said that, we must acknowledge one delicious irony of the Employment Rights Act: the Prime Minister will be seeing the first high-profile victim of an uncapped unfair dismissal award, which we on these Benches warned about.

The Government will now seek to blame the war in the Middle East, but that explanation simply will not wash. Britain’s industrial electricity prices were already among the highest in Europe and around four times those in the United States—long before this latest crisis. These are not sudden or unforeseeable problems; they are the product of policy failure. They are the result of loading electricity bills with the cost of an energy system increasingly structured around subsidising intermittent renewables, managing grid constraints and paying for mechanisms such as contracts for difference. Those costs were there before the latest conflict, and industry has been warning about them for years.

In what sort of alternative reality does it make sense to have to come up with various schemes—this, the BICS, the supercharger package, the energy-intensive industries compensation scheme, the network charging compensation scheme and all the rest, all of which are of mind-bending complexity and designed to mitigate the effect of the Government’s own policies with taxpayers’ money?

Then we come to domestic energy production. At precisely the moment when Britain should have been strengthening resilience and insulating itself from geopolitical shocks, this Government have moved in the opposite direction. They have imposed a punitive 78% tax burden on North Sea oil and gas producers—a windfall tax on windfalls that, in many cases, simply do not exist. They have halted new licences at exactly the wrong moment, when domestic production is needed most to buffer Britain from volatility abroad. The Jackdaw gas field could provide 6% of Britain’s gas needs. As my noble friend Lord Moynihan noted in the previous debate, there is no case not to do this. The result is plain to see: jobs are being exported, gas is being imported, rigs are leaving, investment is frozen, and capital is fleeing to more stable and more welcoming jurisdictions. Hundreds if not thousands of skilled jobs are being lost and Britain is becoming more, not less, exposed.

The Government will soon blame the high international gas price, which is used to set the domestic electricity price two-thirds of the time. But, as any O-level student knows, increasing supply lowers prices. Will the Government therefore reverse the ban on these licences? Is not the simple truth that the Government have chosen to make this country more vulnerable to geopolitical shocks, including conflict in the Middle East, than it needed to be?

In the other place, the Secretary of State, Peter Kyle, said that this package would deliver for Britain’s manufacturing, but what have the Government done to British manufacturing? The manufacturing base has already been damaged by the Government’s disastrous steel strategy, which has raised the cost of both domestic and imported steel. That matters profoundly for sectors such as the automotive sector, where steel is not incidental but foundational. One cannot claim to back manufacturing on Monday while making core industrial inputs more expensive on Tuesday.

The Secretary of State also cited the support of the Society of Motor Manufacturers and Traders, but does the Minister accept that the motor industry is simultaneously being hit by other government policies that are doing real harm? The electric vehicle mandate is imposing enormous costs on manufacturers, and the industry itself has warned of a multi-billion-pound burden—around £6 billion by the SMMT’s own assessment.

The Government’s rhetoric is one thing, but the reality is quite another. They speak of backing British industry while, in practice, they are crushing parts of our industrial base under the combined weight of energy costs, regulation, mandates and taxation. Will the Government consider abolishing, or at least relaxing, the EV mandate to give much-needed relief to the British automotive sector?

Yes, we welcome the announcement that the carbon price support will be removed from April 2028, but if the Government now accept that this burden damages competitiveness, why on earth are they waiting until 2028? Why must British industry continue to suffer for another two years before any relief is given? British industry needs lower costs, a competitive tax regime and a Government who stop making this country harder in which to invest, to manufacture and to do business.

[Baroness Kramer (LD)]

My Lords, this debate picks up from the Oral Question earlier on the IMF, which warned that the global economy is losing momentum as a result of the Iran war, with the UK expected to be the hardest hit of the G7 economies. The Government need to rethink in the shadow of war, not just to watch and wait.

That brings me to BICS. We welcome plans to bring down some of the highest energy prices in the world, and we are pleased that BICS, which benefits 10,000 of the most energy-intensive businesses, will also provide a one-off payment to cover this year. However, the money will not actually come until next year, so when will those businesses, all of which have to plan ahead and need to know the details—indeed, many are negotiating a whole variety of contracts as we speak—find out exactly what they will get, including which benefits and when they will come?

Many other businesses are threatened by rising costs here and now. I am not clear that the Government have recognised the acute energy cost problems for food businesses and agribusinesses, which not only will have a huge impact on the cost of living of ordinary people but, as we are now starting to hear from some reports, might even lead in certain areas to food shortages. Surely this is a call to action, so what action can we expect?

Frankly, many SMEs, the backbone of our communities, are on the brink from many kinds of pressures, as the Government will be very much aware. SMEs are exposed to a deregulated energy market, with very little support to face it. There is widespread concern about a lack of competition, which has the effect of locking them out of good deals by which they can price energy more effectively. SMEs with more than 50 employees do not even have access to the Energy Ombudsman. The hospitality industry is an extreme case right now and, frankly, it is pretty desperate. Will the Government at the very least instruct the CMA to open an urgent investigation into the state of competition in the energy retail market for hospitality? Will they find some quick solutions for all the areas I have covered? We cannot afford for these industries to endure any more stress and potentially curtail or curb their business.

Of course SMEs need to achieve energy efficiency, but we all know that means upfront costs. Will the Government set up an energy security bank as a mechanism to provide SMEs with low-cost finance so that they can invest in energy tech? They can then repay that finance because of the savings they make, so it would be a sensible and appropriate way to generate a circle of financing. With that, we would need a real overhaul of the business rates system. At the moment, firms are penalised if they invest in productive energy saving investments made on their premises. This is surely the opposite of what the Government want. Will they take action on these fronts quickly?

UK Modern Industrial Strategy

Debate between Lord Sharpe of Epsom and Baroness Kramer

Monday 30th June 2025 Lords Chamber

[Lord Sharpe of Epsom (Con)]

My Lords, I genuinely admire the intent of the industrial strategy. The sectors that it highlights are sensible. I like the aspiration to focus on all regions and to nurture clusters. All that is very good, but it is a list of aspirations; it is not a strategy. A strategy is a plan of action designed to achieve a long-term or overall aim, and this is not that. All the aspirations in it are good and no one could reasonably argue with them, but the economy and the growth we need will not be delivered by this, or by fine words and noble sentiments.

Growth is not a slogan, it is a result. Indeed, the introduction to the industrial strategy says that

“the Government’s priority mission is to deliver strong, secure, and sustainable economic growth”,

but the Government continue to mistake the former for the latter.

Despite the Chancellor’s triumphant declarations that growth is the number one priority, the harsh reality confronting British businesses tells a starkly different story. The Governor of the Bank of England has delivered a sobering assessment that should give this House pause. He has categorically dismissed the Chancellor’s claims that Britain’s economy has turned a corner, warning instead that growth is slowing precisely because high taxes are biting deep into our economic foundations.

The Governor’s analysis is both precise and damning. What the Chancellor has hailed as evidence of economic recovery is nothing more than a temporary blip driven by fleeting factors that will not be repeated. British businesses, rather than preparing for prosperity, must now brace themselves for an economic slowdown of this Government’s making.

The employment figures alone should shame any Administration who claim to champion working people. Unemployment has risen every single month—all nine months—since the Government took office. This is not coincidence; it is consequence.

Perhaps most telling is the collapse in Britain’s international standing as an investment destination. The number of foreign direct investment projects has plummeted to the lowest level since records began 18 years ago. According to EY, the Government have made the UK a less attractive place to do business than Oman, the Czech Republic and Saudi Arabia. Before the Chancellor’s Budget last year, a PwC survey ranked the United Kingdom as the second most attractive place for investment in the world. That is our record: their record is destroying that competitive advantage in less than a year.

The human cost of these policy failures is becoming increasingly apparent. The British Chambers of Commerce has revealed that almost one-third of small and medium-sized employers have made redundancies or are actively contemplating job cuts as a direct consequence of the Government’s decision to hike employers’ national insurance contributions. Its survey of over 570 member firms found that 13% had already wielded the axe, while 19% were sharpening it for future use.

In times of global uncertainty, businesses look to their own Governments for stability and support. Instead, this Government have chosen to pile domestic chaos upon international volatility. They have created a perfect storm of their own making. They speak eloquently of cutting energy costs while systematically pursuing policies that guarantee the opposite outcome. Their obsession with net zero has created an energy regime that punishes British businesses with costs five times higher than those faced by their American counterparts.

The introduction to the strategy says on page 33:

“There can be no plan for economic stability or sustainable growth that does not include a credible plan for net zero”.


That is obvious nonsense: of course there can. This is a choice, and publishing elegant explanations about how they are going to alleviate the worst effects of their own policies is simply baffling, but it is not strategy.

While pouring billions of pounds into subsidies for renewables, they steadfastly refuse to end the windfall tax on oil and gas companies or to issue new licences for drilling in the North Sea. They have turned their backs on our own North Sea resources, preferring instead to import energy from abroad rather than harness the secure—that word deserves repeating—and reliable supplies beneath our own waters. The result is an energy policy that reads like a masterclass in economic self-harm, and also puts us at a strategic disadvantage in a dangerous world.

It would be remiss of me if I did not acknowledge credit where it is due. The commitment to free trade principles offers a glimmer of hope, and recent trade agreements suggest that the Government have not entirely abandoned the opportunities that Brexit provides. However, if we are truly to harness these benefits, we need comprehensive free trade deals, not the minor economic agreements that currently pass for trade policy.

Their promise to reduce regulatory burdens by 25% reveals another layer of the Government’s duplicity. This sounds precisely like telling businesses what they want to hear, while doing the exact opposite in practice. The Employment Rights Bill alone, which they proudly champion, will impose £5 billion—the Government’s own impact assessment number—in administrative costs on British businesses and introduce a new agency, which is a regulator by any other name. How is that part of a strategy to reduce regulatory burdens?

I suspect that this £5 billionfigure will represent only the tip of the iceberg. What the Government have failed to factor into their calculations is the true cost of empowering trade unions to constantly disrupt business operations, of making it infinitely riskier and more expensive to hire workers, and of creating a labyrinth of legal obligations that will tie employers in knots for years to come. Small businesses, already struggling with the highest tax burden in a generation, will find themselves drowning in compliance costs that will inevitably dwarf the Government’s modest £5 billion estimate.

The impact on young people seeking employment is particularly troubling. At a time when youth unemployment demands urgent attention, the Government are making it more expensive and riskier for employers to take a chance on inexperienced workers. The Employment Rights Bill, whatever its intentions, will price young people out of the job market at the very moment they need opportunity most.

We have also witnessed a hat-trick of U-turns from the Prime Minister, including on welfare reform. We were told that these measures were necessary to get people back into work. I suspect that the Government are not that interested in that after all. What is the point of an industrial strategy if there is no industry left? Will the cost of this U-turn simply mean more taxes, or will the Minister unequivocally rule out further tax rises today?

The Government have shown they do not understand how wealth is created and how economies grow. You cannot tax your way to prosperity, you cannot regulate your way to competitiveness, and you certainly cannot lecture businesses about growth while systematically undermining the conditions that make growth possible. The question before us is simple: will the Government recognise that their approach is failing, or will they continue down a path that leads inevitably to economic decline? The evidence is mounting, the damage is spreading and time is running short.

[Baroness Kramer (LD)]

My Lords, we on these Benches remember how powerfully business welcomed the industrial strategy produced by Vince Cable during the coalition years, and the shock and dismay with which it greeted the Conservative decision, when that party was in government alone, first to weaken it and eventually to scrap it. Such a strategy is vital to drive business investment, good jobs and prosperity.

It was notable that the Conservatives not only scrapped the industrial strategy but sold off the Green Investment Bank. How different our energy position could have been today, had that not happened. They also readied the British Business Bank for sale; I remember direct conversations with Sajid Javid and his relief that it was to be done away with. It survived only because Covid struck and it was needed to distribute Covid loans.

Those constructive moves were pure ideology: in essence, it was private good, public bad. So I listened with interest to the Conservative Front Bench today and there is a change of tone but—my goodness—this country would have benefited had that change started a few years ago.

We find some common ground in one area. The Conservatives did not exactly name it, but we have talked about it in the past. Raising employers’ NICs, especially SME employers, was the wrong way to start the revival of business and enterprise.

We support core elements of the strategy, but we still have questions. My noble friend Lord Russell, if he has the opportunity to speak on this Statement, will talk much more about energy prices, because we welcome the help of a wider range of energy-intensive industries. But why would we wait another two years to find out who will qualify? What about the burden of electricity prices on service industries such as hospitality?

If the Government want to see a quantum growth in exports, the answer is surely to negotiate to rejoin the EU customs union. By comparison, everything else is small beer. Have the Government noticed today’s FT article charting the decline in productivity—especially in London, which is key to the economy—since Brexit? It played such a significant role, with its impact on business investment and the opportunity to participate in supply chains. This Government are keen on U-turns, so why not make a U-turn that would actually bring money into the country and the Treasury and work to find our way back into the EU customs union?

A business in rural England involved in agribusiness and farming would be asking, “Why does this strategy have so little for me?”, especially in an era of food insecurity, climate change and tariffs. Can the Minister elaborate and provide some reassurance? A business looking for skilled staff would welcome the funding boost for skills but ask, “Why not the fundamental reform of apprenticeships that we need, and where is lifelong learning?” Today’s report of a sharp drop in entry-level jobs surely underscores that need. Can they have a place in the strategy?

A creative reading the importance of data as an asset—in fact, the industrial strategy is quite good on the creative sector, but not on the importance of data as an asset—would ask why the Government have refused to strengthen copyright transparency rules to prevent the US mega-techs scraping intellectual property without recompense. Where is the logic and the justice, particularly when data is identified as critical?

An innovative small business would welcome the Government’s intention to use procurement to drive enterprise, but why do the rules still mean that the Government can then take the intellectual property of that small business and, on the grounds of transparency, give it to its competitors free of charge? This is an issue that my noble friend Lady Bowles raises often, and it still needs an answer.

One issue in particular grates with me. The Government have simply not grasped the need for access to finance for the whole breadth of small businesses, not just priority sectors such as high tech. To build our communities and make sure that good jobs and prospects are available everywhere, we cannot be in a position where small businesses grow from retained earnings only. We need a genuine community banking sector. The high street banks and most alternative finance is not interested in meeting the need. The British Business Bank has a small £150 million pot over the next two years to support community banking, but it is minimal compared, for example, to the $300 billion in community bank financing that is the backbone of small business finance and growth in the United States. Does the Minister understand that this is a missed opportunity?

In many ways, we see this industrial strategy as a positive and strong step forward, but we will not be in a full position to judge it until we see practical support and solutions. Implementation and delivery are key. I hope that, by the time we have such clarity, my noble friend Lord Fox, whose knowledge in this area is so much greater than mine, is back on these Benches. I can tell your Lordships that he will expect answers.

Employment Rights Bill

Debate between Lord Sharpe of Epsom and Baroness Kramer

Committee stage
Wednesday 21st May 2025 Lords Chamber

[Baroness Kramer (LD)]

I will just say to the noble Baroness, Lady Fox, that the greatest danger we have is that the Bill passes and yet we have groups of people in the workplace who are not in any way protected, or not sufficiently protected, either from violence or from harassment. I thought the case was brilliantly made by the noble Baroness, Lady Smith of Llanfaes, backed up by the noble Lord, Lord Russell of Liverpool, and the noble Baroness, Lady Jones of Moulsecoomb.

I say to the Minister: carpe diem. Here is an opportunity to make sure that there is not a gaping omission in the work that the whole Bill is attempting to do to provide proper protection in the workplace. I find it quite ingenious that the approach here is to try to use the Health and Safety at Work etc. Act. If the Minister has a better way of doing it, I am sure that everyone will be very eager and willing to listen. It contains within it the capacity for both investigation and enforcement. When we talked in previous groups, it was very evident that investigation and enforcement are very often the vital missing elements in the arrangements that we have set in place today. This seems to me to have been a very sensible approach to try to find an organisation that is appropriate and has the relevant kind of teeth.

I will not attempt to expand on the case as it has been made so eloquently. I am sort of filling in on this Bill when others have been called away—in this particular case to a NATO meeting. But I would have been very pleased to add my name to these amendments.

[Lord Sharpe of Epsom (Con)]

My Lords, I join the general congratulations offered to the noble Baroness, Lady Smith of Llanfaes, on her very comprehensive introduction of these amendments; she deployed some incredibly powerful examples.

We are all in agreement that violence and harassment, particularly sexual harassment and gender-based abuse, have absolutely no place in any workplace. Every worker, whether in an office, on a site or working remotely, deserves to feel safe, respected and protected. Tackling those issues must remain a top priority.

The amendment before us seeks to introduce stronger duties on employers to prevent and respond to these harms. Measures such as risk assessments, training and clear reporting systems can be important in building a workplace culture where abuse is not tolerated and victims are supported, so we absolutely understand the intention behind the amendment.

Although we agree that there is a need for action, we do not believe that the Health and Safety Executive is the right body to enforce these new responsibilities. That is not meant as a criticism of the Health and Safety Executive; it is simply a recognition that there are fundamentally different areas of concern that we think require a different kind of regulatory response. That is not the same as saying that we do not support the intentions of the amendment.

We do not support Amendment 100. We need solutions that deliver real protections to address sexual harassment. Finally, I have to say, from a very personal point of view, that I completely agree with my friend, the noble Baroness, Lady Fox, and her reservations about proposed new subsection (3B).

Knife Crime: Violence Reduction Units

Debate between Lord Sharpe of Epsom and Baroness Kramer

Tuesday 20th February 2024 Lords Chamber

[Lord Sharpe of Epsom (Con)]

I thank my noble friend for that question. Part of the funding for VRUs has to be allocated towards evaluation, but an independent evaluation programme shows that, alongside the Grip, which we have talked about before from this Dispatch Box, there are serious violent hotspot programmes. These are putting additional highly visible police patrols into key locations. The VRU programme is having a statistically significant positive effect, as I referenced earlier. An estimated 3,220 hospital admissions for violent injury have been avoided since funding began in 2019.

[Baroness Kramer (LD)]

Can I just challenge the Minister? He suggested that in the future, VRUs will depend on match funding and non-governmental sources of money. Surely, violence reduction and the protection of our young people is a core activity and it is entirely right that it should be fully funded by the taxpayer. Other money is for add-ons and extras: this, surely, is not an add-on or an extra.

[Lord Sharpe of Epsom (Con)]

I was not making the case that it was an add-on or an extra; I was saying that future funding beyond 2025 will be dependent on the needs of the VRUs and the outcome of future spending reviews, and of course the evaluation that is already under way.

Refugees: Notice Period for Home Office Accommodation

Debate between Lord Sharpe of Epsom and Baroness Kramer

Monday 18th December 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

I certainly regret the individual circumstances described by the noble Lord and, obviously, we would prefer that not to be the case.

[Baroness Kramer (LD)]

My Lords, I wonder if the Minister would actually answer the question from the right reverend Prelate the Bishop of London. She made the point that sources—I assume they are sources that she respects—inform her that people have seven days in which to find alternative accommodation. Will the Minister look into the examples that she has raised? Surely everything he says means that he at least thinks 28 days is necessary.

[Lord Sharpe of Epsom (Con)]

Yes, I think 28 days is necessary, and of course I will look into those. As I say, everyone gets 28 days from the issue of the biometric residence permit.

Banks: Forged Customer Signatures

Debate between Lord Sharpe of Epsom and Baroness Kramer

Monday 16th January 2023 Lords Chamber

[Lord Sharpe of Epsom (Con)]

The noble Lord makes a number of fairly grave and unfounded allegations. The relevant experts in the NECC have been assessing the extensive material provided; he knows how extensive it was. The NECC has extended its review as new material has been supplied, but, recognising the complexity of fraud cases, I hope that all noble Lords will understand the length of time that this has taken. As I say, the NECC is in the process of notifying the complainants at the moment.

[Baroness Kramer (LD)]

My Lords, does the Minister recognise that both the regulators and the enforcement agencies are seriously underresourced in tackling wrongdoing in the financial services sector? Will he support our proposals to distribute the fines from financial services-related prosecutions to the regulators and agencies in order to beef up their capacity?