Industry and Exports (Financial Assistance) Bill

Jim Allister Excerpts

2nd reading
Monday 15th December 2025 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

rose—

[Jim Allister (North Antrim) (TUV)]

rose—

[Chris Bryant]

The hon. Member for Strangford (Jim Shannon) was there first, and then I will take an intervention from the hon. and learned Member for North Antrim (Jim Allister).

[Chris Bryant]

The hon. Member is absolutely right that the vast majority of the companies we will be talking about are SMEs—88% of the companies that benefit from UK Export Finance are SMEs. We are bringing forward this Bill because we are getting to the limit of what is allowed under current legislation and we need to expand that. I have specifically spoken to UK Export Finance about looking at new ways to support SMEs. The retail banking sector in the UK also sometimes needs to understand better how it can support small and medium-sized enterprises to export around the world. One of the things that I have been trying in my own small way is to do a supermarket sweep when I have been abroad for trade missions: to see whether Rose’s lime marmalade, Walker’s biscuits, Marmite, Irn-Bru or Penderyn whisky—or whatever it may be—is available around the world. The more we can encourage businesses to export, the more likely they are to prosper.

One of the advantages in Northern Ireland in particular is that, because of the Windsor framework, it has an opportunity to enter into an EU market much more readily than elsewhere. One of the sadnesses of Brexit is that 16,000 fewer businesses in the UK now export, and that is largely because they have given up on Europe. That is one of the things I radically want to change.

[Jim Allister]

rose—

[Chris Bryant]

I can see the hon. and learned Gentleman is practically pregnant with a question.

[Jim Allister]

It is always good to hear about a rise in the availability of financial assistance to industry. In the context of Northern Ireland, the Minister has referred to the Windsor framework. One of its drawbacks is that Northern Ireland is subject to EU state aid rules. In my constituency, I have a large bus manufacturer that sells buses to Germany. Can I seek an assurance from the Minister that that company, for example, will not be disadvantaged by the cap in state aid rules in comparison with a competitor bus manufacturer in another part of the United Kingdom where there is not a state aid limitation?

[Chris Bryant]

This is one of the problems with Brexit, isn’t it? It has provided a variety of different sets of rules for different parts of the United Kingdom, and that was always one of its inherent problems. Northern Ireland voted against Brexit, and we are now trying to make it work as best we can. The hon. and learned Gentleman is absolutely right. Of course there are going to be problems under state aid rules for some businesses in Northern Ireland. That is why we are trying to do two things at the same time: to ensure that the Windsor framework is adhered to, but also ensure that we have a single UK internal market.

The Bill is short—it just manages to get on to a second page—but it does some important things. First, it increases the Industrial Development Act limit on financial assistance from £12 billion to £20 billion. Secondly, it raises the amount that the Secretary of State may increase the limit by from £1 billion to £1.5 billion. That is something he can do four times under the 1982 Act. Thirdly, the Bill amends the Export and Investment Guarantees Act 1991 to increase the commitment level from roughly £84 billion to £160 billion. Fourthly, the Bill allows the limit to be increased by increments of up to £15 billion by secondary legislation. Finally—this is perhaps the single most important and most useful thing to the ordinary punter out there—it changes the 1991 Act so that the limit is expressed in pounds sterling. In other words, it will be in common parlance, rather than referring to special drawing rights, which I think has confused an awful lot of people for a long time.

I will give just a few examples of why all of this matters. Some £14.5 billion of UK Export Finance support last year was used to support 70,000 jobs, adding £5.4 billion to GDP in the UK, including across several key industrial sectors such as clean energy, advanced manufacturing, life sciences and automotive.

Industry and Exports (Financial Assistance) Bill

Jim Allister Excerpts

Committee of the whole House
Monday 23rd February 2026 Commons Chamber

Given that ours was the first country in the history of the world to abolish slavery, the record of this House should remain that wherever we see slavery we will stamp it out. This is yet another way of doing that, so I urge the Minister to go off script and say that he will do this. It is morally right, it is economically right, and it is right for this House, and the people elected to it, to get this done.

[Jim Allister (North Antrim) (TUV)]

Given that the Bill applies across this United Kingdom, one would naturally assume that it will bring a level playing field to this United Kingdom, and deliver parity and equality of opportunity for companies across the United Kingdom. These companies are all taxed on the same basis and pay into the same Treasury, so the reasonable expectation would be that if financial assistance is available and they qualify for it, they should be equally able to obtain it.

Sadly—although one would not know it from reading the Bill—that is not so, because the Bill is subject to a higher authority in respect of my constituency and the whole of Northern Ireland: sadly, we remain subject to EU state aid rules, which cap the delivery of that parity and equal opportunity for companies operating in my part of the United Kingdom.

The imposition of the EU’s state aid rules arises from article 10 of the protocol now called the Windsor framework, which the EU has accurately described in these terms:

“This means that EU State aid rules will continue to apply to the EU Member States, as well as to the United Kingdom in respect of aid that has an effect on the trade between Northern Ireland and the European Union that is subject to the Windsor Framework. It follows from other provisions of the Windsor Framework, and in particular its Articles 5 and 9, that trade in goods and wholesale electricity is subject to the Windsor Framework”.

Being subject to the Windsor framework means that, under article 10, we are subject not to the rules of this House on state aid but to the rules of a foreign jurisdiction, which makes rules and laws that we can neither unmake nor change. Therein lies the fundamental objection: though we are passing a Bill that rightly raises the thresholds of available assistance in Northern Ireland, this House is not sovereign in that regard. The Government can only grant that state aid to the level that the EU permits under its state aid rules.

[Sammy Wilson (East Antrim) (DUP)]

Does the hon. and learned Member accept that the situation is even worse than that? If goods that are subsidised or get state aid in GB have a tenuous connection with markets in Northern Ireland, the EU can again limit the amount of state aid given, disadvantaging some producers even here in GB.

[Jim Allister]

Yes, that is absolutely right. The Windsor framework is premised on an assumption of risk that goods from Northern Ireland will permeate the EU market, and therefore goods supplied from GB companies into Northern Ireland are also subject to that risk. If that risk is manifested, it would appear that those companies are also subject—or could be subject—to the same state aid restrictions.

We are supposed to be one sovereign United Kingdom, but the EU requires that businesses in Northern Ireland do not benefit from the same state aid to the extent that the goods in question might be sold into the EU. That inevitably puts businesses in my constituency, which pay the same taxes as businesses across the United Kingdom, at a distinct disadvantage compared with what in some cases might be competitors across GB in the production of goods.

In fact, it is even worse for Northern Ireland companies, particularly manufacturing companies. As part of the integrated United Kingdom market, those companies depend more often than not on their supplies and raw materials coming from GB, but that supply is now fettered by the Irish sea border. Those raw materials now have to pass through an international customs border with paperwork, declarations and, in some cases, tariffs, all of which add to the cost of business. Not only are businesses subject to the extra cost insisted upon through the Irish sea border, but they are now put in a position where they cannot have equal access to the state aid that might be available elsewhere. That is a fundamental inequity as it applies across this United Kingdom.

The situation is further compounded by the fact that if there is a dispute about whether something amounts to state aid or whether it infringes EU state aid rules, that is not decided by our courts, but by the European Court of Justice. Not only are we deprived within the supposedly sovereign United Kingdom of the right to grant equal state aid across this United Kingdom, but, if there is a question as to its validity, it is a foreign court that adjudicates upon that because of our subjection to EU law. It really is a double whammy in that regard.

Of course, the inevitable consequence is a chilling effect when it comes to Government considering whether to give state aid to Northern Ireland: they know that there could be a challenge from the EU and that that challenge could go to the European Court of Justice, with all the bother that entails. That chilling effect will therefore cause the Government to hold back from giving that aid. The loser, again, is businesses in Northern Ireland.

[Sammy Wilson]

Would the hon. and learned Gentleman accept that there is a further chilling effect? Namely, companies that might decide to invest in GB or in Northern Ireland may well feel that since they would be able to achieve less support in Northern Ireland than in GB, they will simply choose to invest outside Northern Ireland in GB, and jobs and investment opportunities will therefore be lost as a result of the picture he has painted.

[Jim Allister]

Of course. That is further compounded by the fact that if those companies did set up in Northern Ireland and were manufacturing businesses dependent on raw materials coming from GB, as most are, they would have to pass through an international customs border with extra costs as well. In Northern Ireland, they are being invited not only to set up in a place where state aid may be capped by a foreign jurisdiction, but to set up in a jurisdiction where the raw materials will, by virtue of the Irish sea border, cost them more.

The Minister will say, as he has said to me before, “Ah, but you have the advantage of dual market access.” No, we do not. We have the worst of all worlds in Northern Ireland. We have the worst of all worlds in the sense that our raw materials are hiked in price because of the Irish sea border, and we now have the reduction in available state aid—

[The First Deputy Chairman of Ways and Means (Judith Cummins)]

Order. I am sure that the hon. and learned Gentleman is minded of the Bill that we are discussing and will soon get back to it.

[Jim Allister]

Indeed I will, but it was in fact during a debate on this Bill on a previous occasion that the Minister made the very point that I was seeking to answer.

It is those circumstances that caused me to move new clause 1, supported by right hon. and hon. colleagues. Going forward, it is right not just in the interests of transparency but in order to see just how level or unlevel our playing field is under this Bill for the whole United Kingdom that the Government should publish annually the levels of support given to each part. We are all here as constituency Members to jealously represent the interests of our constituents, and I want to know from this Government if my constituents and the businesses in my constituency are getting a fair crack of the whip. That is why, as set out in new clause 1, we should have a reporting mechanism to indicate that to us. I commend new clause 1 to the Committee. I also support the other amendments before the Committee.

[Carla Lockhart (Upper Bann) (DUP)]

It is an honour to follow the hon. and learned Member for North Antrim (Jim Allister). I stand to speak in support of new clause 1 in his name, which is supported by numerous people across the Opposition Benches.

New clause 1 is not radical or wrecking; it is actually very reasonable in what it asks, and should therefore be accepted. It seeks to ensure that when the House votes to increase financial assistance for industry and exports, the Government return within a year, and every year thereafter, and tell Parliament plainly how each part of the United Kingdom has benefited. That should not be controversial in any way, but it is sadly necessary, because Northern Ireland does not stand on equal ground.

The Bill lifts the cap on financial assistance under the Industrial Development Act 1982 and increases UK Export Finance’s statutory commitment limit. That is a good thing and it should, in theory, benefit every business across our country. However, under article 10 of the Windsor framework, EU state aid rules continue to apply in Northern Ireland, where support may affect trade in goods within the European Union. While the rest of the United Kingdom moves forward under one subsidy regime, Northern Ireland therefore operates under a different legal shadow.

The practical effect is hesitation—hesitation in Departments, hesitation in advice and hesitation in investment—because the final interpretation does not rest with the UK courts alone. That is not equality within the Union. We cannot view this in isolation from the wider damage that has already been inflicted on Northern Ireland by the protocol and the Windsor framework.

As I have said before in the House, the protocol and the Windsor framework are not a minor technical adjustment to trade, but a bureaucratic burden, a constitutional compromise and an economic noose around the businesses simply trading within our own internal market. We see that evidenced here in the Bill where it does not apply to Northern Ireland. The failure is not anecdotal; it is measurable, documented and deeply felt. The Federation of Small Businesses has reported that 58% of businesses in Northern Ireland face moderate to significant challenges because of those arrangements and that more than one third have stopped trading with Great Britain altogether to avoid the cost and complexity. Let the reality of that sink in. That is not frictionless trade or the best of both worlds; that is economic distortion inside our own country.

I have spoken about the businesses that have had essential goods delivered from Scotland, costing time and money. I have raised the case of used agricultural machinery being refused entry unless it meets EU standards, despite being road driven and clean. I have heard from retailers struggling to source ordinary goods from their main market in Great Britain because of paperwork and regulatory barriers that simply do not exist anywhere else in the United Kingdom. This is the lived reality of the Irish sea border.

We are told that all of this is necessary to protect the Belfast agreement, but it is not. The agreement is built on consent—the principle that Northern Ireland’s place within the United Kingdom cannot change without consent of its people—yet our economic and legal position has been fundamentally altered without that consent. The agreement does not require an internal border within our sovereign state. It does not require that one part of the United Kingdom be subject to a distinct regulatory and subsidy regime, overseen in part by a foreign court, the European Court of Justice.

This Bill increases state support for British industry, but unless we confront the consequences of the Windsor framework honestly, Northern Ireland will potentially not benefit in step with England, Scotland and Wales. New clause 1 simply asks for transparency. If Northern Ireland is genuinely benefiting equally, let the Government publish the evidence annually. But if, once again, Northern Ireland is constrained while the rest of the United Kingdom moves freely, this House deserves to know just that.

Northern Ireland is part of the United Kingdom. Our businesses pay the same taxes, and they deserve the same support without qualification, hesitation or constraint. That is why I support new clause 1, along with my colleagues on these Benches, and I commend the hon. and learned Member for North Antrim for bringing it forward.

--- Later in debate ---

[Chris Bryant]

I cannot say anything more clearly than that I want to make sure that we in the UK are not reliant for our economic prosperity on the forced labour of others. We need to make that as comprehensive and effective as we possibly can. I know the two cases that the right hon. Member referred to, and I am happy to write to him, if he wants, in precise detail about those rather than to delay the House tonight. Funnily enough, the precise processes that we went through in the UK with UKEF in relation to those cases would have been met by the US legislation as well, which is arguably not as effective as it would like to be. I am as interested as he is in being effective in this space.

The hon. and learned Member for North Antrim (Jim Allister) gave an exceptionally good speech, I thought, on why we should not have left the European Union and why we should never have accepted the deal that was put on the table. I note that the people of Northern Ireland agreed with me and not with him on whether the UK should leave the European Union. I am afraid that—

[Jim Allister]

Will the Minister give way?

[Chris Bryant]

If the hon. and learned Member will allow me, I will respond to the points that were made by him and the hon. Member for Upper Bann (Carla Lockhart).

First of all, the requirements under new clause 1 are completely unnecessary because UKEF already reports annually, as required by legislation. All of that is cleared through the National Audit Office. It is all there, perfectly available for anybody to see. I got a sense that there was a suggestion that Northern Ireland was losing out because of the money from UKEF. It is quite the reverse. If either Member wants to go through what is already published in this sphere, they will see for themselves precisely how well Northern Ireland does—and, of course, it should do.

The whole point of the two Acts that we are referring to today is that they should be able to enable—[Interruption.] I will give way to the right hon. Member for East Antrim (Sammy Wilson), if he could just hold his horses for a very brief moment.

I have two further points. First, UKEF has offices across the whole of the United Kingdom, including in Northern Ireland. I think there is a misunderstanding here. Some people seem to suggest that what happens is that the Government say, “Give money to that business over there.” That is not what happens. This is a demand-led process, where UKEF is able to respond to the demand that arises. We need to make sure that that is spread across the whole of the United Kingdom, and that is what we intend to do.