Industry and Exports (Financial Assistance) Bill

Jim Shannon Excerpts

Monday 23rd February 2026 Commons Chamber

[The Minister for Trade (Chris Bryant)]

It is good to see you in the Chair, Mrs Cummins. I welcome all Members to this slightly unusual Committee. Normally, a Committee of the whole House is awfully contentious, with everybody shouting at one another, but it will not be so contentious this afternoon—certainly not as regards the main body of the Bill. I will introduce the Bill now, and at the end I will respond to the debate, and on the amendments that several hon. Members have tabled.

Clause 1(a) will increase from £12 billion to £20 billion the aggregate limit of financial assistance that can be provided under section 8(1) of the Industrial Development Act 1982; this is to reflect inflation adjustments since the limit was last raised in 2009. Clause 1(b) will raise from £1 billion to £1.5 billion the level of incremental increases that can be made in an order by the Secretary of State; again, this reflects inflation adjustments since the limit was last raised in 2009. The parliamentary scrutiny arrangements for these incremental increases will remain precisely as they were, namely that they will be subject to the affirmative legislative procedure.

Clause 2 will amend the financial assistance for exports and overseas investment under the Export and Investment Guarantees Act 1991. It will make four changes to the Act: it will raise the commitment limit from £84 billion to £160 billion; it will simplify the legislation by expressing the limit in sterling, rather than in special drawing rights; it makes provision for the limit to be increased by increments of up to £15 billion through secondary legislation, as the need arises; and it will remove the limit on the number of occasions on which the commitment limit can be raised.

Clause 3 outlines the territorial extent of the Bill. I can confirm that the Bill does not engage the legislative consent motion process. My Department had discussions, prior to the introduction of the Bill, with all the devolved Governments; they confirm that the legislative consent motion process is not engaged.

I hope all hon. Members will agree that all three clauses should stand part of the Bill. I look forward to hearing the debate on the amendments.

[Jim Shannon (Strangford) (DUP)]

Will the Minister give way?

[Chris Bryant]

I was about to sit down, I am afraid. I had finished.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

This is a short Bill, but it involves potentially raising and spending a huge amount of public money, so in the interests of thorough scrutiny, I will speak to Opposition amendments 3 and 4 to clause 2, concerning the use of public finance for exports that may ultimately be re-exported to sanctioned destinations. Our amendments would prevent the Government from providing export finance or insurance where there is reason to believe that goods may be re-exported to Russia, or to any other country subject to UK sanctions. In such cases, the Secretary of State’s financial commitments would be capped at zero.

These amendments are not abstract. They respond to a very real problem in our world today that has been highlighted by independent analysis. For example, Sky’s Ed Conway has done extensive reporting showing that although direct exports to Russia have collapsed since sanctions were imposed, goods of UK origin are still reaching Russia through third countries. Exports to states such as Kyrgyzstan, Armenia and Uzbekistan have surged by extraordinary amounts—sometimes more than 1,000%. Obviously, these are not normal market movements; they are clear indications of diversion routes being used to circumvent sanctions.

These are not just trade flows on a spreadsheet. Sky News has shown that components of UK origin have been found inside Russian military equipment used on the battlefield in Ukraine. Among the items that have been identified in Russian systems are British-made microchips found in Russian drones, UK-origin electronic components inside Russian missiles and dual-use technology that should never have been able to reach Russia under the sanctions regime. Those components were not exported directly from the UK to Russia; they were routed through intermediary countries, often the same countries to which UK exports have suddenly spiked. President Zelensky has publicly raised concerns that UK goods are still making their way into Russia, despite sanctions.

That is why we believe that amendments 3 and 4 are necessary. They represent a simple but important safeguard. The UK must ensure that its export finance system does not inadvertently support supply chains that undermine our sanctions regime. In the case of Russia, we must be absolutely certain that no UK-backed goods are being diverted in ways that could support its illegal war against Ukraine.

The Minister has spoken about the need to expand UK Export Finance’s capacity and to support small and medium-sized enterprises in particular. We agree that export finance has an important role to play, but it must be deployed responsibly. I am sure that the whole Committee agrees that public money should never be used in ways that conflict with our foreign policy or national security objectives. Our amendments would ensure that the Government exercise due diligence, and that UK Export Finance support is aligned with the UK’s sanctions framework. I am sure that the Minister will agree that that is a constructive and proportionate proposal, and will want to support it tonight.

New clause 2, in the name of His Majesty’s Opposition, is about the steel industry. We can all agree that steel made in the UK is a strategic foundation sector for the United Kingdom. It supports thousands of skilled jobs and underpins supply chains across manufacturing, construction and defence. We did not oppose the Government’s emergency legislation last April, although we warned that it was rushed, and that the Government did not have a proper plan. Nearly a year on from that emergency legislation, and nearly two years into this Government, we are still waiting for the long-promised steel strategy.

The Government have still not been able to agree a deal with the Chinese, despite the Prime Minister’s visit to China. There has been secret meeting after secret meeting between Ministers and Jingye—meetings on which the Government have refused to update Parliament. New clause 2 would simply require the Secretary of State to publish an annual report on the impact of the increased financial assistance limits on the UK steel industry. That report would set out, first, the amount of financial assistance provided each month to UK steel undertakings under section 8 of the Industrial Development Act 1982, and secondly, the number of full-time equivalent steel jobs that, in the Secretary of State’s view, would have been lost without the increased limit. It is a straightforward accountability measure. If public money is being used to support the steel sector, Parliament and the public deserve to know how much is being spent, why it is necessary and what outcomes it is delivering.

The Government have repeatedly spoken about the importance of steel, and we agree that steel is very important, but without a clear strategy or transparent reporting, it is impossible to judge whether interventions are effective, and whether they represent value for money. How do we know that we are not providing a limitless amount of funding that will crowd out support for other industries, and how can we assess whether it is good value for the taxpayer? New clause 2 would not constrain the Government’s ability to act; it would simply ensure that support is justified, targeted and effective. I hope that the Minister will recognise the value of this additional transparency and accept the new clause.

I turn to amendments 1 and 2, tabled by my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith). We believe that they are sensible and straightforward. If the Secretary of State has reason to believe that modern slavery or human trafficking is likely to be present in the supply chain of a business receiving export-supported goods, obviously the amount of public financial support should be zero. That is surely the only responsible position that this House can take. We are inherently supportive of the need for transparency in supply chains, and will support the amendments.

I turn to new clause 1, tabled by the hon. and learned Member for North Antrim (Jim Allister). Providing transparency on the amounts that are allocated across the whole United Kingdom would seem to be helpful assistance to this House.

[Jim Shannon]

May I commend the shadow Minister for what she has said? The Minister referred to discussions with the regional Administrations. UK Export Finance’s industrial support has helped a number of companies in Northern Ireland, including Wrightbus, with guarantees for international sales, to the tune of hundreds of millions of pounds. We in Northern Ireland are of the opinion that we still adhere to EU rules. Does the shadow Minister agree that this needs to be clarified, and that we need the transparency to which she has referred, so that the EU cannot continue to dictate terms to this nation through the back door of Northern Ireland? Does she agree that that is very important, and that the Minister and Government must respond to that?

[Dame Harriett Baldwin]

The hon. Member makes a very important point, and I know that the House will be eager to hear how enthusiastic the Minister is about all the amendments that have been tabled. I am sure we will shortly hear whether he supports them, or why he does not and why he will urge his colleagues to vote against them this evening.