(4 days, 12 hours ago)
Commons ChamberThe hon. Member speaks with passion and cares about her constituents. It seems that what she is saying is in parallel with my earlier intervention about the risk of losing the skills of working with steel—welding and suchlike. Does she share my disappointment, but perhaps not surprise, that there is no member of the Scottish National party with us today? We know that the Scottish Government set their face against all new nuclear in Scotland, but we would welcome an SMR at Dounreay in Caithness.
The hon. Member might agree that the Scottish Government are not helpful on defence either. She talks about leadership and shouldering the responsibility, but we have a gap—
Order. Mr Stone, we are here to debate the steel industry, not new nuclear or the pros and cons of the Scottish Government. Perhaps it is better if we stay within the confines of this Bill.
Order. I just want to make it clear that I did allow some latitude, but this is a debate on the nationalisation of the steel industry, not tariffs.
Chris McDonald
Okay. I am happy to give way and we will see what the Members have to say.
Paul Waugh
Simply to follow up, Ms Nokes, on the point the Minister was making about exemptions for individual companies, Hanson Springs in Rochdale relies heavily on imports of steel of a particular length. Will the Minister reassure us that, as with the shadow Minister, he will be engaging with many businesses to ensure that they are not hit by tariffs and that the Bill will not harm them?
I am going to allow the Minister to respond, but I am not going to allow this to turn into a debate on tariffs and how they may or may not impact individual companies around the entire country, which I fear is where we are headed.
Chris McDonald
Thank you, Ms Nokes. Perhaps it would be helpful for me to take the second intervention and respond just once.
Before we proceed to the next business, I have a short statement to make. I have received a report from the Tellers in the No Lobby on the Division that took place in Committee of the whole House at 8.27 pm yesterday on new clause 2 to the Steel Industry (Nationalisation) Bill. The hon. Members for Bangor Aberconwy (Claire Hughes) and for Wells and Mendip Hills (Tessa Munt) have informed me that the number of no votes was erroneously reported as 257, rather than 251. I will direct the Clerk to correct the numbers in the Journal accordingly. The ayes were 65 and the noes were 251.
—[Official Report, 8 June 2026; Vol. 787, c. 111.]
Third Reading
I beg to move, That the Bill be now read the Third time.
This Government believe in Britain’s steel future. This Bill will help to transform that belief into a reality. It will ensure that the long-term vision for our UK steel sector is realised, helping to restore domestic production to sustainable levels and to support this Government’s economic growth plans. This Bill provides powers for the Government to bring steel companies into public ownership, subject to the public interest test being met.
In many ways, the progress of this Bill has shown the House at its very best, with passion, insight and determination to take action in the national interest. We had an excellent and wide-ranging debate, with Members from all parts of the House recognising the importance of passing this legislation. Let me begin by thanking Members for their time and their thoughts. I express my gratitude to those who have contributed to the passage of this Bill so far, especially those who have taken a particular interest in ensuring that we get the details of this vital piece of legislation right.
I also take a moment to recognise those working in and supporting our steelmaking communities. Every day, they make a vital contribution to our country’s economic security. During the passage of this Bill, we have heard much about the specific situation at British Steel Ltd, and in particular about its current ownership status.
Let me be frank with the House: our decision to proceed with this Bill—to take these powers now—has absolutely nothing to do with the national origin of the current owners, Jingye. We have always been and remain country-agnostic about the current ownership. We simply believe that the British public interest should be paramount in determinations about future ownership. We continue to welcome international investment into the UK, including from China. We remain committed to our legal and international obligations to overseas business and foreign investors. We are fully compliant with our treaty undertakings to protect overseas investors and businesses operating in the United Kingdom.
While this Government need to take steps to secure UK Steel’s capability, we are committed to doing so in a manner that respects the rights of businesses. When and where the Government exercise the transfer powers in the Bill, an independent valuer will be appointed to determine what compensation, if any, is payable. The Bill requires a clear public interest test and provides for a compensation scheme where that might be relevant. The Government fully respect the rights of businesses and investors subject to this Bill. We will continue at all times to act fairly, regardless of the nationality or background of those businesses.
I place on record my thanks to parliamentary counsel and officials in my Department for their hard work on drafting and guiding the passage of this Bill. I also thank the Clerks, the Doorkeepers, Hansard and all of the House and its authorities for making the passage of this legislation possible. Let me also, on a personal note, pay tribute to the Minister for Industry, my hon. Friend the Member for Stockton North (Chris McDonald). A lifetime of dedication to the steel sector has brought valuable insight, passion and creative parliamentarian work to the Bill, which has enriched the debate in this place.
The House has sent a clear message about the importance of decisive action to safeguard the future of the steel industry. Since I became Secretary of State, I have championed an activist, interventionist industrial policy—activist, because the years of standing back and watching British industry decline are over; interventionist, because we, like other Governments around the world both right and left, from the United States to France and Germany, step in to invest, modernise and protect our industries. Our policy is both activist and interventionist, because purpose without action is merely rhetoric, and acting without purpose is performative, not strategic. The Bill is action with a purpose, and the purpose is clear: to invest in, modernise and protect Britain’s steel.
I am encouraged to witness the strength of support in the Chamber for this activist, interventionist Bill. As it moves to the other place, let me reiterate my commitment to continued engagement with parliamentarians as it completes its passage and we ensure that the Government’s vision for Britain’s steel sector becomes a reality. I commend the Bill to the House.
(5 days, 12 hours ago)
Commons ChamberI beg to move amendment 21, page 1, line 6, leave out “of or including” and insert “predominantly of”.
This amendment would narrow the definition of a steel undertaking so that it had to be a business consisting predominantly of the manufacture or processing of steel, or iron for the purposes or in connection with the manufacture of steel.
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 14, in clause 2, page 1, line 14, leave out
“includes (but is not limited to)”
and insert “means”.
This amendment would limit the public interest test to the areas set out in subsections (a) to (c).
Amendment 23, page 1, line 20, at end insert—
“(d) preventing the closure of, or the loss of jobs at, a steel undertaking in Wales.”
This amendment includes the public interest in preventing the loss of jobs in Wales and the prevention of the closure of a steel undertaking in Wales in the meaning of public interest for the purposes of the Act.
Amendment 1, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power unless they have laid a statement before both Houses of Parliament explaining their reasons for concluding that it is necessary to exercise the power in the public interest.”
This amendment would require the Secretary of State to lay a statement before Parliament explaining their reasons for concluding that it is necessary to exercise a principal transfer power in the national interest, before exercising that power.
Amendment 15, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power unless he has commissioned an independent assessment of whether the exercise of the power is in the public interest, and that assessment has demonstrated that it is in the public interest.
(2B) The Secretary of State may appoint such independent person as he thinks fit to carry out an independent assessment under subsection (2A) above, and may pay remuneration and allowances to that person.”
This amendment would require an independent assessment of whether the public interest test had been met before the Secretary of State could exercise the principal transfer powers.
Amendment 16, page 2, line 20, at end insert—
“(2A) The exercise of a principal transfer power may only be considered to be in the public interest under subsection (1) if the Secretary of State has is satisfied that the exercise of the power would provide value for money for the taxpayer.”
This amendment would require the NAO to have concluded that the exercise of the principal transfer power was good value for money before the Secretary of State could consider it to be in the public interest.
Amendment 17, page 2, line 20, at end insert—
“(2A) The Secretary of State may not exercise a principal transfer power under subsection (1) unless they have laid a report before Parliament containing full details of the criteria used to assess whether the exercise of power would be in the public interest.”
This amendment would require the Secretary of State to publish full details of the criteria used to assess the public interest test before exercising the principal transfer power.
Clause 2 stand part.
Amendment 12, in clause 3, page 2, line 10, leave out subsections (3) to (5).
This amendment would prevent the Secretary of State extending the sunset of the principal transfer powers.
Clause 3 stand part.
Amendment 2, in clause 4, page 2, line 30, leave out “negative” and insert “affirmative”.
This amendment changes the procedure for share transfer regulations from the negative procedure to the affirmative procedure.
Clauses 4 to 14 stand part.
Amendment 3, in clause 15, page 8, line 21, leave out “negative” and insert “affirmative”.
This amendment changes the procedure for property transfer regulations from the negative procedure to the affirmative procedure.
Clauses 15 to 38 stand part.
Amendment 18, in clause 39, page 25, line 32, leave out “negative” and insert “affirmative”.
This amendment would require regulations relating to continuity obligations to be subject to the affirmative procedure.
Clauses 39 to 44 stand part.
Amendment 19, in clause 45, page 28, line 37, leave out “negative” and insert “affirmative”.
This amendment would require regulations related to enforcement to be subject to the affirmative procedure.
Clauses 45 to 51 stand part.
New clause 2—Stakeholder Advisory Committee—
“(1) The Secretary of State must establish a Stakeholder Advisory Committee to provide advice on the exercise of principal transfer powers under this Act (“the Committee”).
(2) The Secretary of State must ensure that the membership of the Committee includes representation from stakeholders, including but not limited to—
(a) industries that rely on the supply of steel, including the defence sector and critical national infrastructure,
(b) representatives of the workforce of the steel undertaking, and
(c) local authorities for the areas in which the steel undertaking operates.
(3) The Secretary of State must consult, and have regard to the advice of, the Committee before making a determination that the exercise of a principal transfer power is necessary in the public interest under section 2.”
This new clause requires the Secretary of State to establish a stakeholder advisory committee. The Secretary of State would be required to seek the committee's advice before making a determination that the exercise of a principal transfer power under the Act was in the public interest.
New clause 3—Jobs and industrial transition strategy—
“(1) Where the Secretary of State has exercised a principal transfer power in respect of a steel undertaking, the Secretary of State must prepare and publish a jobs and industrial transition strategy.
(2) A strategy under subsection (1) must explicitly set out how the Government's investment and transition plans for the specified steel undertaking will—
(a) protect skilled employment,
(b) provide and support reskilling and redeployment opportunities for the workforce, and
(c) deliver tangible economic renewal and support economic resilience in the local communities dependent on the steel undertaking.
(3) The strategy must be laid before Parliament within six months of the day on which the regulations exercising the principal transfer power take effect.”
This new clause requires that the Secretary of State publishes a report on jobs and industrial transition strategy where it exercises a principal transfer power.
New clause 5—Duty to report: 10-year strategy for nationalised steel undertakings—
“(1) Within three months of exercising a principal transfer power in relation to a steel undertaking under this Act, the Secretary of State must publish and lay before both Houses of Parliament a report containing a 10-year strategy for the steel undertaking.
(2) Any report published under subsection (1) must include—
(a) a strategy for the operation of any blast furnaces which form part of the steel undertaking,
(b) an investment plan for the steel undertaking,
(c) a vision for the future of the site of the steel undertaking, and
(d) consideration of the need for a steel procurement strategy which prioritises British steel to support the steel undertaking,
for the following 10 years.”
This new clause would require the Secretary of State to publish a 10-year strategy for any steel undertaking nationalised under this Act.
New clause 8—Contingent liabilities—
“(1) The Secretary of State may not exercise a principal transfer power in relation to a steel undertaking unless they have made a statement to Parliament on the value of contingent liabilities associated with the use of the power.
(2) The statement made under subsection (1) must include—
(a) the value of any contingent liabilities to be acquired; and,
(b) the steps the Secretary of State will take to seek to minimise taxpayer exposure to any contingent liabilities so acquired.”
This new clause would require the Secretary of State to make a statement to Parliament on contingent liabilities acquired before they exercise a principal transfer power under this Act.
If I may, I would also like to speak to the other amendments in my name and those of my hon. Friends, and, before I do that, approach the Bill with the serious concern it deserves. Today’s amendments reflect some of the points the Opposition made on Second Reading: that the Bill is a chaotic, unplanned intervention that risks landing taxpayers with an open-ended and potentially unlimited bill. Without addressing those issues as we make this legislation, we need to really focus on the things that are currently making the domestic production of steel unprofitable, such as higher employment costs and policies in pursuit of net zero, such as carbon taxes and associated regulations and levies.
Before I turn to the amendments in detail, I put on record how much I respect the Under-Secretary of State for Business and Trade, the hon. Member for Stockton North (Chris McDonald), and his real-life expertise in the steel business. He is truly a rare example on the Government Benches of someone who has deep private-sector experience and really knows his subject—I salute that. My own private-sector expertise is as an investor, so most of the amendments in my name and those of my hon. Friends are trying to protect the taxpayer from some of the financial risks the Bill lands them with.
The fact is that nobody wanted to nationalise British Steel. The Government told us last year, when they brought in emergency legislation—and brought Members back on a Saturday for the first time since the Falklands war—that they did not want to nationalise British Steel. They may now claim to their Back Benchers and union backers that this is something to celebrate as true socialism, but the reality is that it is an outcome that the Government wanted to avoid.
The Government failed to negotiate a good outcome with the Chinese owners of British Steel. The Prime Minister and the Business Secretary went all the way to China and failed to get a deal. Whenever this Government negotiate, the taxpayer loses out. The Conservatives do not think that the Government should nationalise British Steel, because we do not think politicians should be running businesses. Since the Government intervened last year, it has cost taxpayers over £1.3 million every day.
The Bill is deeply flawed, and it is in a spirit of goodwill that I offer the Government the chance to adopt the Opposition’s amendments. I am sure that they will want to agree to them, as they are all sensible.
Before I call the Minister, I will set the record straight: sadly, it is just plain old Ms Nokes in Committee of the whole House.
The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)
I thank the shadow Minister, the hon. Member for West Worcestershire (Dame Harriett Baldwin), for her incredibly generous remarks at the start of the debate. I think we all try our best here with whatever expertise we have; of course, I recognise her expertise in finance, and will aim to address some of the serious issues she raised.
At the heart of the Bill and this debate is the future of our steel industry. The difference in opinion between the Government and the Opposition over the use of nationalisation as a tool of industrial strategy may be irreconcilable, but it is a useful tool—although not one to be used lightly. It is important that it is used in situations of market failure or some other private sector issue, which is certainly the case today. It was also the case when the previous Conservative Government briefly nationalised one of our steel companies, before that led to a failed private sector ownership.
(3 weeks, 2 days ago)
Commons Chamber
Liam Byrne
The hon. Gentleman makes an excellent point that I am about to come on to. My point, I suppose, is that there is a case for this Bill. I think it is actually quite important, and the powers that it confers are also important, but if we are to get value for money from it, there have to be five other components, which I will come on to now.
The second area is lower energy costs. The British industrial competitiveness scheme is welcome, but it does not come online until 2027. Steelmakers, like much of our manufacturing industry, are saying very clearly to the Business and Trade Committee that there is a widening gap between UK wholesale electricity prices and the prices of our peers in the wake of the Iran crisis. My question to the Minister is: what further targeted support will be available to energy-intensive industries before 2027? As the hon. Member for Bridgwater (Sir Ashley Fox) rightly points out, that is an essential component of the package.
The third area that the shadow Minister was right to highlight is the issue of tariffs. This is now an urgent issue. The Committee heard evidence this afternoon at our own roundtable about the need to refine the tariff structures that have been put in place. The key thing is that we get a better deal with the European Union, to which we export 80% of our steel. It is about to cut tariff-free quotas by 47%, double tariffs from 25% to 50%, and impose melt and pour requirements. Unless we can get a deal in place with the European Union before the end of July, I am afraid that many of the good intentions behind this Bill will be confounded.
The fourth area is procurement. We must ensure that there is a proper demand curve from the UK state for the things that British Steel makes. In the British economy, British state procurement makes up £1 in every £6. Right now, despite the excellent changes in the Procurement Act 2023, we do not have a sufficiently clear forward pipeline. That has to change, not least because when we talk to defence companies—which are, of course, patiently awaiting the defence investment plan—and defence contractors, they still tell us that the kind of steel that they need to make the things that keep this country safe are not made in this country. Ensuring that there are advanced market commitments alongside the defence equipment plan, along with the range of other big, long-term ambitions that I know the Secretary of State has, is very important.
The penultimate area I want to touch on is scrap supply. The Secretary of State has ultimately come to the conclusion—wisely, I suspect—that we should shift to electric arc furnaces, but that kind of industry model will work only if there is a healthy supply of scrap. I think that Ministers are being just a tiny bit too complacent about whether we have the plans in place to source all that scrap. I know that there is a roundtable proposed for later this month, but as part and parcel of ensuring that the steel strategy actually works, can we have, at the very least, a read-out for Parliament about what scrap supplies will be kept in our country, rather than exported?
The final point I wanted to flag is about consolidation. One of the virtues of this Bill is that it bestows on the Secretary of State the power to ensure that there is consolidation in the UK steel industry for the future needs of the economy. In particular, it should allow us to take assets that have gone to firms that are currently out of business, and to rationalise the industry in a way that makes sense. I would like to hear more about what the Secretary of State is proposing when it comes to consolidating the industry.
Ultimately, in the world that we are in, when there are so many visible hands in the global economy interfering with the free market in steel, we will have to have a stronger visible hand. That is what the Secretary of State is proposing through this Bill. There will be a lot more work to do in the Bill’s subsequent stages to satisfy the House that he has got right the statecraft package behind this measure of statism. I look forward to hearing some reassuring noises on that point when the Minister winds up.
Several hon. Members rose—
With a five-minute time limit, I call Jessica Morden.
Several hon. Members rose—
I am setting a three-minute time limit, which will allow most Members to get in, but not all.
David Chadwick
There are at least 6,000 vacancies for welders, so we absolutely need a lot more of them.
The skills shortages present opportunities to get future generations into well-paid and secure trades. Artificial intelligence cannot do welding yet, because it does not have any arms—yet. Our education system is not producing the skills that our economy needs, and our economy is suffering from that failure. Steel is strategic. It is part of our sovereign capability and part of British power. That is why steel matters.
As has been mentioned, the steel industry is affected by the geopolitical tensions that are so rampant across the world. Our steel industry has been hammered by the Chinese, who have flooded the international market with cheap Chinese steel and have run one of our biggest companies into the ground. China has wiped out our steel industry intentionally, yet today the Conservatives seem to be saying that they do not think the Government should do anything about it. Just yesterday they were complaining about our lack of defence readiness. Well, what do they think tanks and ships are made from?
Today, this Government ask Parliament to move heaven and earth to save steel in Scunthorpe. It is right to act—of course the Government should have the proposed powers—but people in Wales are asking one simple question today: where was this Bill in July 2024, when the blast furnaces at Port Talbot were switched off for the last time? When Welsh communities were crying out for help, Westminster shrugged its shoulders. That was despite Welsh Labour MPs and candidates, in the months prior to the general election, lining up in front of giant election posters that read, “Save our steel.” They said they had a £2.5 billion fund to spend on steel. Given that the Government have admitted to spending £1.3 million a day to keep the Scunthorpe plant going, how much of that fund is left to spend in Wales?
If protecting primary steel production is so important, why did they allow the biggest steelworks in Britain to be turned off? Welsh workers were told that nothing could be done. People in my constituency have lost their jobs because of this. When 2,800 jobs were wiped out in Port Talbot, there was no emergency Saturday sitting, no recall of Parliament, no emergency legislation and no sudden declaration that steel was a vital national—
Several hon. Members rose—
That brings us to the Front-Bench contributions. I call the shadow Minister.
(3 weeks, 5 days ago)
Commons Chamber
Gregory Stafford (Farnham and Bordon) (Con)
I agree with my right hon. Friends the Members for New Forest West (Sir Desmond Swayne) and for Tonbridge (Tom Tugendhat) that there seems to be a complete lack of understanding from those on the Government Benches of the absolute disaster they are presiding over when it comes to the economy and, most importantly, growth. The evidence is hard to ignore. The hon. Member for Exeter (Steve Race) talked about a battle of ideas—
Order. I remind Members that if they have intervened in a debate, they might like to have the courtesy to wait a while before departing the Chamber.
Gregory Stafford
Thank you, Madam Deputy Speaker.
The hon. Member for Exeter talked about a battle of ideas, but those on the Government Benches seem to be totally devoid of any ideas that will actually get this country moving again. The ITEM Club forecasts around 160,000 job losses this year alone, with manufacturing, retail and construction expected to be hit the hardest. Unemployment has risen month after month and now stands at 5.2%. His Majesty’s Revenue and Customs payroll data shows 110,000 fewer people in employment than when Labour took office.
In my constituency of Farnham and Bordon, in Haslemere, Liphook and the surrounding villages, there has been a 28% increase in the number of young people claiming unemployment-related benefits in a single year. This is the reality behind the rhetoric that comes from the Government: young people unable to get a foothold in work, businesses pausing recruitment, families feeling the squeeze in their bills, and high streets losing momentum.
The reason is not difficult to identify, and businesses across the country are telling us the same thing: Labour has increased the cost of employment, raised taxes and layered on regulation that is undermining confidence. The Employment Rights Act alone introduced more than 330 pages of additional obligations on employers. The Government’s own assessment acknowledged a cost of around £1 billion a year. Both the Federation of Small Businesses and the Institute of Directors warned that the legislation would reduce hiring and investment, which is exactly what we are seeing. What is the Government’s response? A regulating for growth Bill. It is like asking a vegetarian how they would like their steak cooked. The reality is that this is not the way to get growth.
At a recent hospitality roundtable in my constituency, one publican told me that there is now “no incentive to hire someone under 25”. That should concern every single Member of this House, but Labour Members simply parrot the Government’s talking points. They are totally detached from what is going on in the real world. The unemployment rate is now close to one in six among 16 to 24-year-olds, and I cannot believe that Labour Members are not being told this by their constituents. For many young people, their first job is the foundation for everything that follows—skills, confidence, independence and ambition—but too many are now finding the door closed.
Ben Coleman
I am most grateful for that intervention, but it does not in any way even attempt to address the point I was making about the loss of money to this country through trade and the fact that so many businesses have gone under.
On state aid and product procurement, I will accept that one of the most unpalatable things that civil servants have always said, along with “commercial in confidence”, is, “No, we can’t do that because of EU procurement rules.” After the changes to EU procurement rules there was, even while we were in the European Union, a huge amount that you could do to prefer small and local firms, as I knew when I was deputy leader of my local council and got officials to do that. The civil servants you were dealing with perhaps should have looked again—
Order. We have been here for two years; you have to stop using “you” and “your”, because it refers to me. It was not me who was dealing with civil servants.
Ben Coleman
I am most grateful, Madam Deputy Speaker. Such officials as gave that information could have looked again.
My right hon. Friend makes an important point. I will make a slightly different point, which is that there are huge opportunities for good growth in this country. Speaking as someone who has had a 16-year career backing the industries of tomorrow, whether it is in fusion, SMR nuclear technologies, agritech, bioscience, the bioeconomy on Teesside, or the satellite economy in Glasgow, we have an opportunity to turn these into the industries of tomorrow. I welcome the Government’s industrial strategy commitment to do it, but it is at 50,000 feet; we need to drop down to some more tangible and bolder policies to back those industries.
I know the Secretary of State gave a tub-thumping speech about the 1980s, but the truth is we have made a lot of progress over the last 20 years. I was doing my work as the Minister for Life Sciences, for agritech and for Science and Technology following in the footsteps of Paul Drayson and David Sainsbury. In life science, fusion, AI and quantum, we have built an unbelievably competitive economy, but other countries are moving fast. Our competitors are more agile. We are terrible at adopting technology in the public services. Our scale-ups are not getting the finance they need in the city. Kate Bingham in The Times today is right.
How do we unlock this? I want to suggest a ten-point plan for renewal. I support the Government’s ambition. I say this because if all of us fail, the Benches to my left of pub populists who are promising everything will win, and we will see even deeper disillusionment. I am calling in this speech for, first, real honesty of a 1979 scale about the extent of the emergency; secondly, bold devolution to the people, cities and mayors who know how to do it better—frankly, they could not do worse than Whitehall—thirdly, serious Whitehall reforms, so that we end the juvenile process of His Majesty’s Treasury playing Departments off against each other for funding, which in the end comes very late and is taken back; and fourthly, a serious backing for the innovation economy. I welcome the £20 billion of R&D, but how we allocate it is key. We need to allocate it in a way that attracts private investment. Fifthly, we need a bold revolution of tax incentives for enterprises—a new deal for new business. There should be no national insurance or VAT for a couple of years for someone starting a company and growing it. Sixthly, we need regulation for innovation. That is not just cutting regulations, but leading in setting the regulation. I welcome the Government’s work in setting up the Regulatory Innovation Office. We then have skills and patriotic capitalism. I do not think it is communism to get the city investing in British business. Boldness—
(1 month, 4 weeks ago)
Commons ChamberWith permission, I would like to make a statement on industrial energy costs.
When I became Business Secretary, I said that we needed to be bolder, to go further and to move faster to support British enterprise. Today, I want to set out what that means for reduced electricity costs for British industry. The events of recent days and weeks serve to demonstrate the strategic weaknesses and the economic threats inherent in Britain’s over-dependence on the geopolitics of the global oil market. It is high time that Britain gained energy independence by ending that dangerous over-reliance and instead transitioned to become a clean energy superpower.
My right hon. Friend the Secretary of State for Energy Security and Net Zero is overseeing that transition; however, British manufacturing continues to have some of the highest electricity costs in Europe. That undermines our manufacturing base, impacts our manufacturing jobs, and damages the lives and livelihoods of cherished communities across the country. The Government were elected to halt and reverse Britain’s industrial decline. That is why our modern industrial strategy addresses high electricity costs for British businesses.
As part of our British industry supercharger package, I have already increased support for over 550 of the UK’s most energy-intensive businesses—those in our heavy industries. We have increased the network charging compensation scheme discount from 60% to 90%, saving companies up to £420 million a year on their electricity bills, and we have started building the UK’s first small modular reactor in north Wales, laying the groundwork for manufacturers to benefit from reliable, low-carbon electricity.
Last year, I launched the consultation on the British industrial competitiveness scheme, or BICS—our plan to bring industrial electricity costs more closely in line with those in other European economies. I am grateful for the support of the Chancellor in establishing BICS. The response to our consultation, which we are publishing today, shows overwhelming business support for BICS. The scheme has been endorsed by the Confederation of British Industry and the Society of Motor Manufacturers and Traders. Our partners have done more than just support the policy; they have been co-creators, helping us to shape the scope and scale of the scheme. BICS is bigger, bolder and better as a result of their hard work and partnership.
I am announcing today that BICS will benefit 10,000 electricity-intensive manufacturing businesses—those best equipped to drive growth in our economy. Those 10,000 businesses will save up to £40 per megawatt-hour from next year. They will be exempt from paying the indirect costs of three other schemes: the renewables obligation, feed-in tariffs and the capacity market. BICS is designed to support eligible businesses across all regions of Great Britain. The eligible sectors collectively employ 900,000 people, of whom 700,000 live outside London and the south-east. That is a real advantage for working families and communities around the country, and it gives British businesses a real competitive advantage in the global economy. That is the difference that a Labour Government with an activist industrial strategy makes. This is not just about high hopes or warm words; it is real action to reduce energy costs and increase industrial competitiveness.
I pledged not just to be bolder and to go further, but to act faster in the interests of British businesses. Business is keen, as I am sure the whole House is, for the benefits of BICS to take into account the challenging economic reality that we face. I can announce a one-off payment for businesses eligible for BICS, covering the 2026-27 period, and reflecting the support that businesses would have received had the scheme been in place this year. It will be delivered next year, and my Department will set out more details shortly.
Our focus now is on making sure that BICS is as strong and significant as possible, and that it delivers for our car industry, aerospace and defence—the best of British manufacturing. My Department is inviting businesses to help us finalise the operational details of BICS. I invite all companies that can benefit from it to go to the Department for Business and Trade’s website, submit their views, and help us prepare for this final phase together.
This is a major industrial intervention and financial commitment by this Government. I am determined to get it absolutely right from the start. We said that our industrial strategy was never about a single publication or a single moment in time. It is a marked departure from the old economic orthodoxies of Thatcherite de-industrialisation and a failed free market ideology that let whole towns, regions and communities go to the wall. Ours is an activist industrial strategy, supporting British businesses when they need it, intervening when circumstances demand it, and investing in wealth creation and opportunity for all.
We recognise the instability in the global economy. As the Prime Minister has said, the conflict in Iran is not our war, but we must do everything in our power to shield British businesses from the worst effects of it. Businesses are rightly concerned about the impact of the conflict in the middle east. The Chancellor will set out the principles guiding the Government’s thinking as we consider our response.
Today’s announcement of our bigger, bolder scheme is proof positive of our commitment to backing British businesses for the long term. It sits alongside our continued focus on short-term impacts, on which we will not hesitate to act where needed. We will continue using our activist industrial strategy to create the right conditions for British firms to succeed and grow. We do so because we know that when the Government and enterprise work in partnership, we can make Britain stronger, wealthier and more resilient. I commend this statement to the House.
I am grateful to my hon. Friend for his passionate intervention. I came into Parliament 10 years ago, and he came here just a short time afterwards. He has been raising these issues in Parliament for a very long time, about a sector that has long been under stress for various reasons, both global and domestic. I have been determined to ensure that my Department is connected, and as open as possible to listening, and to seeing how we can support the sector. There are monthly meetings with officials. There was a meeting just last week, attended by my hon. Friend, other MPs and industry figures from the sector. I have just discovered that no Secretary of State for Business has visited Stoke to meet ceramic industry figures for over five years. I am willing to do that, and in the coming days, my Department will reach out to the people running those companies to see if my going there, listening to the concerns and seeing what could be done would be of interest to them. If they would like that, I will be there.
I want to stress that my hon. Friend has listed a whole series of very different components of the ceramics industry. It is a diverse industry with diverse inputs. Some of them—I admit, a minority—could be eligible for the BIC scheme that I have announced today. That diversity means that there needs to be a very focused, comprehensive look at the sector. I am willing to go there and meet the industry figures myself.
I thank the Secretary of State for advance sight of his statement. Our country is in a very fragile state. We cannot defend ourselves, we cannot feed ourselves and we cannot power ourselves. Our national security, our food security and our energy security are deeply interconnected, and the Government’s response is far too sluggish. The CBI and others are very clear: their response to the announcement is that industry cannot wait until next year. A back payment in 12 months will not cut it; businesses are negotiating their energy deals now, they need support now, and the failure to provide that will mean that jobs will be lost, companies will close and our sovereign capabilities will collapse. I urge the Secretary of State to come back to the House next week, and to make then whatever announcement about the back payment he was going to make in 12 months’ time.
There is a significant gap in the Government’s industrial strategy: we Liberal Democrats believe that the food and farming sector should have been included. Will the Government confirm whether the backdated payment in 12 months’ time and the BIC scheme will apply to the food and farming industry, including agri-tech businesses? Reports in The Times today suggest that the UK may face food shortages due to the Iran conflict. That would impact farming and the hospitality sector, and increase food bills for families. For months, the Liberal Democrats have highlighted that many non-domestic energy retailers refuse to offer good energy deals to hospitality businesses. The broken business rates system also penalises firms for investing in energy-saving measures. May I urge the Government for the umpteenth time to please instruct the Competition and Markets Authority to investigate the energy retail market for hospitality businesses? Will the Government create an energy security bank, which would offer low-interest loans that enabled households and small and medium-sized enterprises to take up energy-saving measures? Will they exclude energy-saving investments from business rates—
I could have listened to the hon. Lady for much longer, because she is listing important areas across the sector. I am very aware of the challenges and opportunities in an economy that is full of great enterprise and a lot of highly profitable businesses doing great things with great entrepreneurs. Listening to her, we would think that the economy was not full of people and businesses that are thriving. She only focuses on the challenges.
Let me be clear on how BICS happened. It came about through consultation with the very businesses that the hon. Lady is asking us to listen to. They have been part of designing the system. We will release and implement a targeted scheme that will have maximum benefit. We will announce over the summer an eligibility checker, so that businesses can see their eligibility for the scheme. Of course, as we move forward, we will make payments for costs that may have been incurred this year.
Let me be really clear, however, about how those businesses are working. Most of the businesses—I include the business that was on the Radio 4 “Today” programme this morning; Sharon from Tees Components up in Teesside was on the programme—have entered into a contract with fixed prices for the coming year. Most companies in the categories that we are targeting, which have manufacturing processes in which electricity is a high-component cost, are either hedging, or are in contracts, so that they have some stability into the future. We have designed a scheme that takes that into account, will be there when they need it, and supplies support for costs that they would have had this year.
On CO2 and the issues that are in the news, six months ago, within days of becoming Secretary of State, I mothballed Ensus up in Teesside—a fantastic company. I have had to un-mothball it, and I did so in the first couple of days of the strikes in Iran to ensure resilience in key parts of our economy. That was leaked; we do not normally comment on leaks, but that is out there now. These are the things that I am doing. I am being bold and creative, and am acting in the interests of the whole of society and the economy to make sure that we have the resilience to carry on doing business, and come out of this with growth in our economy.
(2 months, 3 weeks ago)
Commons ChamberI thank my hon. Friend for her campaigning and advocacy. I hope that she recognises it in the strategy that we have announced. Dalzell is central to our defence industry up and down the country, and to the community of Motherwell. I can assure her that it is front and centre of my thinking, as we look to the future in those key sectors.
I suspect that the problems of Scunthorpe, where many of my constituents work, are less to do with the anti-protectionist policies of Mrs Thatcher—given that she left office 36 years ago—and more to do with the fact that Scunthorpe is paying the highest energy costs of any steelworks in Europe. That is very important. Will the Secretary of State answer the question of my constituency neighbour, my hon. Friend the Member for Brigg and Immingham (Martin Vickers), and of all our constituents who work at Scunthorpe? Blast furnaces only have six or seven years of life, but we need them to make virgin steel, particularly in the defence industries. Is this the end of our ability to make virgin steel? Given that it takes two or three years to create an arc furnace, will the Secretary of State commit to one at Scunthorpe?
(3 months, 1 week ago)
Commons ChamberI call the Chair of the Business and Trade Committee.
Several hon. Members rose—
There will be an immediate four-minute time limit.
Chris Vince
My hon. Friend is absolutely right, and I am sure the Minister will reflect on that when he responds to the debate.
In conclusion, I welcome much of what the Government are doing, much of which has been discussed already, such as the modern industrial strategy and £70 billion of investment, trade deals with India, South Korea and the EU, the small business strategy, and working to get energy costs down, although I emphasise that there is much more to do. I congratulate my hon. Friend the Member for Portsmouth North (Amanda Martin) on her work ensuring that we tackle tool theft, which is potentially a big issue for business owners in my constituency. We also have action to protect British Steel, and I echo comments about the need for a steel strategy. I ask the Minister to reflect on how we can continue to bring down energy costs for businesses, both electric and gas, and work with other Departments to focus on the skills that employers need.
Mr Joshua Reynolds (Maidenhead) (LD)
Britain is in the middle of a cost-of-doing-business crisis. I see it on my high street and I hear about it from local employers, and colleagues from across the House will hear exactly the same in their constituencies. From the Government’s national insurance hikes to sky-high energy bills and uncertainty over what the Employment Rights Act 2025 will mean in practice, British businesses are being pulled in one direction and then another. The Government say that they want to grow the economy, but significantly adding to the tax burden of the very organisations that are trying to do that does not help.
The increase in employers NICs is an unfair jobs tax, and its impact is being felt across the country. UKHospitality estimates that the combined impact of the autumn Budget has landed £3.4 billion in additional costs on the hospitality sector. Jobs are being lost, hours are being reduced and venues are closing. A Government who think that relaxed licensing laws will help hospitality when businesses are already reducing hours do not understand the sector. The Liberal Democrats voted against the NI jobs tax changes at every opportunity because we could see this coming. The Government now need to face the consequences of their own choices and scrap this jobs tax before the damage becomes irreversible.
In 2019, the Conservative Government promised a fundamental review of business rates, but they never delivered it. Now this Government have promised to revamp the system, yet we are still waiting for proper rebalancing. UKHospitality estimates that the average tax increase for hospitality would be 76% over the next three years, compared with warehouses at 16%, offices at 7% and large supermarkets at 4%. The businesses at the heart of our high streets are being asked to carry an unfair share of this burden, and the adjustments do not come close to fixing that.
I can point to a business in Maidenhead, in my constituency. Laura set up Piccolo Land less than a year ago. It is a children’s role-playing village, and the kind of place that gives young families in Maidenhead a reason to come to town to spend time and to spend their money. When she started the business, her business rates valuation for a 2,500 square foot unit was £71,000—significantly more than her annual rent. She challenged that figure with the Valuation Office Agency and it was reduced to £42,000, but from April 2026 that bill will rise to £55,000. Laura has done everything right, but she cannot make this work. How do the Government expect businesses like this, which is barely a year old, serving young families and employing young people, to absorb that kind of increase? Maybe the Minister will be able to write to Laura to let her know which part of the Government’s growth plan she is meant to be benefiting from, because we cannot find it.
Pubs, live-music venues, hotels, restaurants, cafés, and visitor and tourist attractions are all facing the same rising bills, collapsing margins and impossible choices between cutting staff, putting up prices or closing their doors. To add insult to injury, the Government’s business rates U-turn is not going to fix the issue they have created, just make the pain less bad. The Government need to reduce VAT on hospitality, accommodation and attractions. This is not untested—the previous Government did that during the pandemic and it worked.
When asked about VAT cuts in December last year, the Government did not even attempt to justify their position. They simply pointed to business rates reform and moved on. Our high streets and town centres cannot wait for a Government who will not engage with that topic.
Every time we visit shops in our constituencies we will hear the same thing about shoplifting having effectively been decriminalised. Thieves do not fear consequences because there are none, and shoplifting has risen by 48% in England and Wales over the past five years. Shop owners tell me time and again that when they contact the police, they are told it is not an effective use of resources to follow up on minor thefts. However, these are not minor thefts to the people running those businesses, and they are not minor to the staff, often young people, who are being put in harm’s way simply for doing their jobs. With over 800 offences going unpunished every day, businesses are haemorrhaging money, driving up costs for consumers and pushing businesses to close their doors for good.
So here is a concrete proposal that the Government should adopt: a small shop needs about £6,500 for adequate modern CCTV, so the Government can make available grants for half that cost to every independent convenience store, and they can work with high street lenders to provide affordable loans to cover the rest. This is not just our idea: it is supported by the Federation of Independent Retailers.
I could go on about youth unemployment, shoplifting, business energy costs, Brexit or general trade barriers, but we do not have the time. What the Government have delivered is a jobs tax, broken business rates, unaffordable energy bills and a shoplifting epidemic that they refuse to take seriously. Businesses right across the country are resilient, but resilience has limits, and this Government have tested those limits to breaking point. The Government have the tools to act, but they needs to use them to bring down the cost of doing business, because we are in a complete crisis.
(3 months, 3 weeks ago)
Commons ChamberI beg to move, That the Bill be now read the Third time.
I thank all colleagues for their engagement on the Bill. As you will know, Madam Deputy Speaker, Voltaire said, “A small book is a great evil”, but this small Bill will do a great deal of good. It will ensure that the Government can continue to support British industry and British exporters.
Some £14.5 billion of UK Export Finance support last year is supporting up to 70,000 jobs, including across key industrial sectors such as clean energy, advanced manufacturing, life sciences and automotives. Through existing provisions in the Industrial Development Act 1982, the British Business Bank’s northern powerhouse investment fund II has directly invested £115 million into over 300 small businesses. Similarly in the midlands, the midlands engine investment fund II has launched a £400 million fund to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.
The Bill ensures that the Government can continue their investment into the British businesses that are the backbone of this economy, and I would like to thank the officials in my Department, in particular James Copeland, Cal Stewart, Ellie Buck and Andrew Fernandez, and of course the whole of my private office, who have helped me take it to this point. In tandem with our new trade strategy, it will ensure that more businesses than ever before will be empowered to export, with the financial firepower of Government behind them. In combination with the modern industrial strategy, this Government have ensured that the UK remains one of the strongest, most attractive and innovative economies in the world, both now and in the future, so it is with great pleasure that I commend the Bill to the House.
I sense that this is an occasion when the House would appreciate it if I were quite brief, but I am grateful to set out our support for the principles of the Bill, and we will not oppose it on Third Reading. The Bill raises the statutory limits in a way that will enable the Government to provide UK industry with additional support, and as His Majesty’s official Opposition we of course want exports to grow, investment to increase and UK firms to thrive. We also believe that public money must be used responsibly, transparently and only where it is genuinely needed, which is why we regret that the Government opposed our amendments this evening.
The Government did not accept our amendments, but we will continue to press for greater transparency around these large sums and expenditure of public money. We will press for stronger safeguards and a more coherent industrial strategy, particularly in the steel sector. We want British businesses to succeed, and exporters to have the support they need. We want public money to be used wisely and in the national interest, so while we will not oppose the Bill today, we will continue to scrutinise closely the work of the Department.
(4 months ago)
Commons ChamberI will talk about human rights in a moment, but if the hon. Gentleman can come up with a better way of finding a 0.14% increase in GDP, I would be very happy to hear it. Frankly, the idea that we would just turn our backs on one of the biggest economies and largest democracies in the world, and not say yes to a trade deal, is for the birds.
There is a whole series of human rights issues that we always want to raise with our trade partners, and we do so. When we are negotiating a free trade agreement, they are not necessarily a central part of it, but in this deal, for the first time ever, we have clauses on a whole range of human rights-related issues. The hon. Gentleman could easily point out that these are not legally enforceable, but they are an opportunity—both at the first review, which will come at entry into force, and on future occasions, which are laid out in the free trade agreement—for us to talk through these issues. Human rights issues are primarily the responsibility of the Foreign, Commonwealth and Development Office, through which we raise issues relating to Kashmir, particular individuals, labour laws and so on.
I am aware that non-tariff barriers are being removed through improved customs processes, reductions in technical barriers to trade, increased facilitation of digital trade, supportive intellectual property commitments and greater collaboration on new technologies. This will all help to make trade quicker, cheaper and easier.
On services, which are obviously very important for us as a services superpower, market access is locked in, including ensuring that UK companies are treated on an equal footing with Indian companies. The deal includes India’s first ever financial services and telecoms chapters. The free trade agreement is expected to boost services exports by £1.6 billion. On procurement, which again is very important for the UK, brand-new access to India’s federal procurement market will be locked in, guaranteeing access to approximately 40,000 tenders per year, worth at least £38 billion per annum, and exclusive treatment for UK companies. For the first time, UK companies will have access to India’s procurement portal.
I hope the colleagues will agree that CETA is a good deal for the UK, but I want to respond to a couple of points made in the Business and Trade Committee’s report. First, the deal will only be of any use if it is actually used by UK companies. We know that it will not always be plain sailing, thanks to varying rules in different states and provinces—that point was made in evidence to the Committee—the staging of tariff liberalisation will need explaining, and non-tariff barriers can be just as important as tariff barriers.
As the first Minister for trade policy and for exports, I am keen to ensure that businesses have all the support they need to exploit this deal. That is why we are protecting the Department for Business and Trade team in India, and why we have already engaged with more than 5,000 UK businesses on how to exploit CETA, through guidance, events and roadshows. As I said earlier, this is not just about Scotch whisky; it is also about Fever-Tree ginger ale to go with it and its Indian tonic water. We have also provided specific support to the UK cosmetics industry to exploit the cut in cosmetics tariffs, which will benefit companies such as Charlotte Tilbury and Dr.PAWPAW. As the Committee suggests, once we get to entry into force, we will monitor the operation of CETA’s provisions, including through the regular reviews built into the agreement.
This is also not the full stop in our developing relationship with India. Vision 2035, agreed with India alongside the free trade agreement, sets out a shared framework for deeper co-operation across technology, defence, climate and strategic exports, reinforcing the long-term direction of the bilateral partnership. We will also try to resolve other market access issues not solved in the free trade agreement—for example, legal services, recognition of qualifications and other specific state-level barriers. The UK is open to continuing negotiations for a bilateral investment treaty, as long as it works for UK businesses.
As I have said, this is a trade agreement, but I want to assure Members that it also promotes British values. We have secured India’s first ever chapters on anti-corruption, consumer protections, labour rights, the environment, gender and development, and the agreement includes the strongest environmental commitments that India has ever made in an FTA. Our key commitments and red lines have been maintained throughout, including protecting the NHS; ensuring that our immigration system is not affected; carving out defence and protecting our export controls; excluding sensitive agricultural sectors, including pork, chicken, eggs and milled rice; maintaining our food standards and animal welfare levels; and keeping the carbon border adjustment mechanism out of the deal.
Plagiarism is the sincerest form of flattery, so I am glad that the European Union has now reached political agreement on its own FTA with India, for which it seems the UK deal was used as a baseline, but the UK retains first mover advantage. I am hopeful that we will get to entry into force before the end of the summer, so that UK businesses can start exploiting the reduced tariffs this year, while the EU will still take some time to achieve ratification, and only the UK has secured access to India’s £38 billion federal procurement market.
Let me make one final point. The UK is a trading nation: we rely on free and fair trade, and we believe that global trade needs a set of rules. The World Trade Organisation will meet in Cameroon in the next few weeks. We believe that it needs upholding and reforming so that it can tackle the challenges of today, including electronic commerce, unfair subsidies, dumping and secure supply chains with agility and dependability. However, we also believe that trade agreements such as these, along with our membership of the comprehensive and progressive agreement for trans-Pacific partnership, help to secure our prosperity and enhance our international standing. We are still pursuing new or enhanced deals with the Gulf Co-operation Council, Türkiye, Switzerland and Greenland, and we are completing the text of our economic prosperity deal with the United States of America and our deal with the European Union. I commend this deal to the House, and I congratulate the former Ministers who secured it.
I was not going to make the point that the hon. Member went on to make—that his Government signed up to lots of similar arrangements—but I was going to respond to the intervention from the hon. Member for Dewsbury and Batley (Iqbal Mohamed). It is important that we make it clear that under the double contributions convention, a detached Indian worker and their employer in the UK would need to pay into the Indian provident fund. On top of that, they will need to pay £3,105 in NHS surcharges, and up to £769 in visa fees. On top of that, the employer would pay an immigration skills charge of £3,000, and £525 to issue a certificate of sponsorship, so I do not think that the numbers add up in the way that the hon. Member for Dewsbury and Batley was suggesting.
Order. The shadow Secretary of State has already spoken for longer than the Minister, which must be something of a record. I appreciate that there have been a lot of interventions on the shadow Secretary of State from Government Front Benchers, but perhaps he can draw his remarks to a close. The Minister will have ample time to make his points in the wind-up.
I shall take good heed of those comments, Madam Deputy Speaker.
We support having a sovereign trade policy, and this is an excellent example of where it could have advantages. We are talking about one of the largest economies on the planet, which is growing approximately five times faster than the European Union. However, the deal could have been better. We are passionate about supporting our investors, lawyers, engineers, scientists and the wonderful services industry. We believe that they can compete anywhere in the world, provided that the field is level and the rules are fair, but we did not need to get a “good enough” deal across the line. British businesses needed something with a really good kick in it to get this country growing. Instead of a vindaloo of a deal, the Prime Minister came back with a bag of soggy poppadoms.
(5 months, 4 weeks ago)
Commons ChamberOn a point of order, Madam Deputy Speaker. This is a slightly unusual point of order, but one that it is important to deal with now as it may become more of an issue going forward. Last week, it was claimed I had participated in a Westminster Hall debate on digital ID, where I allegedly not only spoke but voted in favour of digital ID. Of course, as we know, we do not usually hold votes in Westminster Hall; I was also actually in the Chamber at the time, speaking on the Employment Rights Bill. On further inquiry, it transpired that Google AI had claimed that I was in Westminster Hall at the time, speaking in favour of digital ID. As I know many more constituents will seek to use these devices to understand our positions on various matters, I wonder whether there is any way that I could correct the record, and in fact whether the House could give some advice to these tech companies on using Hansard as the authoritative source for positions on various subjects.
I thank the hon. Gentleman for advance notice of his point of order. As he acknowledges, external AI services are not a matter for the Chair. However, he has certainly put his accurate position—and his presence in this Chamber, and not in Westminster Hall—on the record.
Blake Stephenson (Mid Bedfordshire) (Con)
On a point of order, Madam Deputy Speaker. This morning I received a notification via the Facebook page of the hon. Member for Bedford (Mohammad Yasin) that the planning for the Universal UK theme park, which is located wholly within my constituency of Mid Bedfordshire, has been approved. The hon. Member for Bedford shared a letter that he had received from the Secretary of State for Housing, Communities and Local Government. Subsequent to notifying the Secretary of State about this point of order, I received a letter. Madam Deputy Speaker, could you advise whether it is appropriate for Ministers to provide notification of a planning approval in a Member’s constituency to the neighbouring Labour MP but not to the Member themselves?
I am grateful to the hon. Member for giving notice of his point of order and for informing the Secretary the State that he intended to raise this matter. There is no specific rule or convention of the House that I am aware of relating to notification of planning consents, but as a general principle, if a Minister is informing hon. Members of a development of any kind, as a courtesy they should include the hon. Member in whose constituency the development is to take place.
Further to that point of order, Madam Deputy Speaker. It sounds like there was an error made by the Department, and for that I sincerely apologise. I will discuss this with Ministers and officials to make sure that it does not happen again.