Department for Business and Trade

Gareth Davies Excerpts

Wednesday 4th March 2026 Commons Chamber

[Gareth Davies (Grantham and Bourne) (Con)]

Thank you very much, Madam Deputy Speaker, not least for the promotion that you just gave me—I hope the Whips are listening. It is a genuine pleasure, even before the promotion, to respond to the debate on behalf of the official Opposition. I am grateful to all colleagues from across the House for what I think were pretty good speeches that supported local businesses and dealt with the issues at hand.

I also congratulate the Chair of the Business and Trade Committee, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), on what I thought was an incredibly thoughtful, detailed and typical speech for him. As he will hear, it did not inspire my speech, which was pre-written, but I will echo a number of the points that he made so eloquently just a few minutes ago.

The theme of today is that, up and down the country, businesses, entrepreneurs and those they employ are the engine of our economy and the basis for our future prosperity. In so many sectors, it is British business that leads the way. Whether it is life sciences, defence, across professional services or in many other areas, businesses employ millions of people, undertake critical research and attract investment both here and overseas.

In the same sense, everyone who has contributed today, as will be the case for all MPs, will know of some SME in their constituency that seeks to grow, create jobs in their community and provide the bedrock of their local economy. The Opposition know that backing British businesses, both big and small, to grow, trade and invest means reducing the tax and regulatory burdens that they face. Over the past year, covered by the estimate before us today, the Government have indicated that they disagree with that. Just this week, as a result, we have seen business confidence fall yet again, according to the Institute of Directors.

More than ever, I am afraid that Ministers across this Government, including in the Department for Business and Trade, are failing to drive economic growth. Indeed, do not take my word for it, but listen to the Labour Health Secretary and rival to the Prime Minister, who said that the Chancellor has no economic growth strategy at all in a text message to the disgraced Labour peer, Lord Mandelson. Some may question why the Labour Health Secretary is commenting on the economy, but then again he is used to dealing with things in critical condition. Put simply: British businesses need the Government to create a far better environment for firms big and small to trade and, critically, to hire people.

Let me turn specifically, and properly, to the detail of the estimate before us, and I wish to ask a few questions of the Minister. First, to build on the opening remarks of the Chair of the Business and Trade Committee, the supplementary estimate shows an increase to the Department’s total managed expenditure of £1.5 billion, which is an uplift of 31%. For context, that is much higher than any other Department. In fact, the average in-year uplift for a Department under this Labour Government has been 4.6%—that is 31% versus 4.6%. In fact, last year also saw a large in-year uplift, when the departmental budget increased by some £1.8 billion, which was an uplift of 44.8%.

It feels like the Department is developing a pattern of asking Parliament to approve a budget in the main estimate, only to return months later asking for 30% or 40% more. This is far from supplementary; it is a Department that systematically underestimates its budget in the main estimate, and then returns to ask us for even more. As such, can I ask the Minister please to comment on why DBT is such an outlier compared with other Departments, and can I suggest that when its Ministers next come to Parliament with main estimates, they come with a better estimate of how much taxpayers’ money they wish to spend?

One item that particularly jumped out to me in the 10 February 2026 estimates was the cost of the intervention in British Steel, which the right hon. Member for Birmingham Hodge Hill and Solihull North also alluded to. In a written answer to the shadow Secretary of State for Business and Trade, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), on 15 December 2025, the Minister indicated that the total cost to the Exchequer of keeping operations running at British Steel came to £274 million. However, pages 12 and 13 of the supplementary estimates that we are reviewing and discussing today seem to indicate a total cost of more than £830 million across resource departmental expenditure limit and capital departmental expenditure limit business group funding.

That is obviously a significant difference in cost, so when the Minister stands up, I would appreciate it if he could set out the detail of what this is all about. Whatever answer the Minister provides, given that we are still awaiting a steel strategy, as many Members have alluded to, is it not the case that the Government are asking Parliament to approve hundreds of millions of pounds in retrospective spending on an industry they do not really know how to support, and on a company whose future remains undecided and whose costs seem to be open-ended? I would really appreciate it if he could give a detailed answer.

Finally, I turn to the British Business Bank—an organisation that I admire, that I like, and that I had the pleasure of overseeing from within the Treasury. When I looked at the supplementary estimate, I noted that the additional capital DEL that is being provided to DBT for the growth guarantee scheme, which supports business lending, is to the tune of £50 million. Meanwhile, the British Business Bank’s financial capacity has increased to £25.6 billion, and it also has a new industrial strategy growth capital initiative.

The growth guarantee scheme is a perfectly legitimate use of Government funds—it creates Government-backed business lending and performs an important role in the economy. However, according to page 7 of the supplementary estimate, an additional £50 million has been provided to DBT this year, so it is natural that I want to ask a few more questions about the scheme. First, can the Minister tell us what the default rates are for the loans provided by this scheme, and how does he square that with the additional £50 million of capital? Secondly, it is critical to know whether those loans and that amount of money are complementing private lending, or are actually displacing it. What analysis has the Department done to provide this House with an adequate answer that will get us comfortable with approving that £50 million?

From increased taxes to additional red tape, the Government have soured business confidence, and it is working people who are paying the price for their higher unemployment and higher prices. No matter how many billions are spent by the Department and then increased at supplementary estimates, that fact will sadly always remain.