Industry and Exports (Financial Assistance) Bill

Gareth Snell Excerpts

2nd reading
Monday 15th December 2025 Commons Chamber

[The Minister of State, Department for Business and Trade (Chris Bryant)]

I beg to move, That the Bill be now read a Second time.

We want businesses to grow, innovate, expand, invest, find new markets here and overseas, develop new products and new services, and bring them successfully to market. That often requires two forms of financial support from Government: grants and loans. That is why the Bill builds on two different Acts of Parliament: the Industrial Development Act 1982, which provides grants to industry in the UK, and the Export and Investment Guarantees Act 1991, which enables financial support by means of investment finance.

Of course, as Trade Minister, I am ambitious about trying to get more UK companies to export. It is a shame that only one in 10 British businesses exports, compared with three out of 10 French businesses and four out of 10 German businesses. If we could match the ambition of other countries, that would be a significant boost to the UK economy.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Will the Minister give way?

[Chris Bryant]

Oh, all right.

[Gareth Snell]

It’s nice to be loved, isn’t it, Madam Deputy Speaker? I congratulate the Minister on bringing forward the Bill. On exports, the world-leading ceramics industry in Stoke-on-Trent tells me that there used to be a fund that allowed companies to get help with the cost of going to trade expositions or being part of trade delegations, and that meant they could take their wares around the world to try to get those all-important exports. That fund no longer exists. If that fund could be brought back, I know that ceramics companies in Stoke would appreciate the opportunity to export, as this country is trying to do. Will the Minister look at that?

[Chris Bryant]

There are funds. Especially when there is a new free trade agreement, as in relation to India at the moment, we help lots of businesses. Businesses in the beauty industry, which I know my hon. Friend knows a lot about, have gone to a recent exhibition in India, because under the FTA, India will be taking the tariff down from, I think, 20% or so to zero. That is a big opportunity for British businesses. There are sometimes funds available.

I will look at how the ceramics industry in particular is treated. As my hon. Friend knows, I would like to establish stronger support for the ceramics industry in general, because we should be proud of it. As he also knows, I am looking at the presents that we as Government Ministers give to other Government Ministers; we could be a bit more ambitious about ensuring that they are things that people really want, and perhaps they could come from one of our creative industries, such as ceramics.

Free trade agreements can get rid of tariffs, and that is a very important way of enabling more exports, but we can also often do a great deal by getting rid of the non-tariff barriers that exist in many countries. Export ambition, even from companies that would like to export, often needs financial assistance. That is precisely what UK Export Finance is there for.

--- Later in debate ---

[Mr Joshua Reynolds (Maidenhead) (LD)]

Let me be clear at the outset that the Liberal Democrats support the Bill. We do so because we recognise that British businesses need backing to compete globally, and both the industrial support package and the export finance package have vital roles to play in that. The increases proposed in the Bill represent a major expansion in Government capacity and give us the opportunity to ensure that that expansion serves our priorities as a country: supporting small businesses, driving green growth and maintaining proper democratic oversight.

Small business owners have told me that the current system simply does not work for them. UK Export Finance’s processes are designed for larger transactions, larger businesses and those that are already exporting. UK Export Finance’s criteria state clearly that in any one of the last three years at least 20%, or in each of the last three years at least 5%, of a business’s annual turnover needs to be made up from export sales, but those thresholds mean that businesses trying to break into the export market, or those growing still quite modest export activity, cannot access support. As we expand UK Export Finance’s capacity, let us make sure that the commitment made is about not just bigger deals and bigger companies, but making UK Export Finance work for smaller businesses—the backbone of British exports—with simpler application processes, lower eligibility thresholds for SMEs and dedicated support teams made up of those who really understand SMEs the best.

As the hon. Member for Chelsea and Fulham (Ben Coleman) said, we also need to understand the elephant in the room, which is that we are discussing expanding capacity of UK Export Finance at precisely the moment when British exporters face unprecedented challenges with our largest trading partner, the EU. The Chartered Institute of Export and International Trade has documented the impact, saying that among the smallest firms—those with six employees or fewer—the value of their exports to the EU fell by 30% after the trade and co-operation agreement was struck; meanwhile, firms with more than 107 employees were largely unaffected.

The Institute of Directors’ January 2025 “Policy Voice” survey found that 54.8% of businesses that previously exported and have stopped cited as a reason the UK’s trading relationship with the EU. More than half of former exporters surveyed gave up because of the barriers to trade with Europe. We are not talking about businesses that have failed to break into distant markets; we are talking about established exporters abandoning our nearest and largest market because the barriers have become insurmountable.

The priority for small manufacturers is assistance in navigating customs declarations and rules of origin to sell in Europe. These are markets they have served for decades, which is why the Liberal Democrats are calling for a fundamental reset of our relationship with Europe—a new bespoke UK-EU customs union that would cut through red tape, boost gross domestic product by an estimated 2.2% and generate roughly £25 billion in tax revenues, according to the House of Commons Library.

[Gareth Snell]

I hate to burst the hon. Gentleman’s bubble, but in 2019, when this House was grappling with how to take forward Brexit, there was a vote on 1 April on a proposal from the then Member for Rushcliffe, now Lord Clarke, on staying in the customs union. I voted for that, as did my party, but it failed by three votes. Five Members from his party, including the now party leader, voted against that proposal, on the basis that trying to kill any deal might keep us in the European Union. I appreciate the position he is coming from, but one of the reasons we do not have a customs union today is the actions of his party many years ago.

[Mr Reynolds]

In reality, we need to look at the positions that were on the table at the time. The hon. Gentleman knows as well as I do the positions that both our parties took when the votes were happening. Obviously I was not in the House at the time, but I recall watching and listening to colleagues on the Labour Benches opposing various things that we put forward. The proposal that the Liberal Democrats are putting forward today would add £25 billion a year to the revenue coming into the Treasury. That money is not to be sniffed at, and it should be supported across the whole House.

In discussing the doubling of UK Export Finance’s capacity to £160 billion, we need to ask ourselves whether that extra money is going to address the export challenges that British businesses actually face. Despite the fundamental barriers to the markets, the Government’s answer is simply to expand capacity, without addressing whether that capacity will be able to reach the businesses that need it most.

While I appreciate that, according to its 2024-25 annual report, UK Export Finance put in £14.5 billion of new finance, that only supported 667 UK businesses to grow and invest. UK Export Finance’s business plan for 2024 to 2029 clearly states its five-year milestones, including that it wants to support an extra 1,000 SMEs to export every year until 2029. That target was introduced under the previous Government, but it has not been amended under the current Government. Considering that there are 5.7 million SMEs in the UK and that facilitating export is a critical tool for economic growth, that number seems pitifully small. I would value the Minister’s thoughts on whether that target of 1,000 is his target and whether it can be improved. It is my hope that the Bill will ultimately support a more ambitious target for UK Export Finance. It would be stronger if we acknowledged the reality of supporting small businesses and removed the practical barriers that stop SMEs from exporting.

That brings me to my final point: parliamentary oversight. We are to spend £20 billion on industry assistance and guarantee up to £160 billion for export finance. This House deserves more than just retrospective annual reports. Fundamentally, these are political decisions about which sectors succeed, which regions benefit and how Britain competes globally. We need to have regular parliamentary scrutiny of spending decisions, transparent criteria for allocating support and proper impact assessments that show whether the funding is actually working. The assessments must show not just how much has been spent but whether it is reaching the businesses that need it the most and delivering the economic growth that we were promised.

We support the Bill. The Government have brought forward legislation that recognises that British businesses need backing, but British businesses need proper industry and export support that is strategically directed, environmentally responsible, democratically accountable and rooted in the challenges that they actually face. I hope that the Bill will deliver that.