Steel Industry (Special Measures) Bill

Jonathan Reynolds Excerpts

2nd reading
Saturday 12th April 2025 Commons Chamber

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

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

We meet in exceptional circumstances to take exceptional action in what are exceptional times. Our request to recall Parliament was not one we made lightly. I am genuinely grateful to hon. Members in all parts of the House for their co-operation, and for being here today as we seek to pass emergency legislation that is unequivocally in our national interest. I thank in particular the staff in Parliament for facilitating today’s sitting, and the Prime Minister, the Chancellor and the Home Secretary for their support. Indeed, we can take this action today only because of the restoration of economic stability and the dedicated resources for steel in the last Budget. I acknowledge my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin), the hon. Member for Brigg and Immingham (Martin Vickers) and all my hon. Friends from Teesside for their advocacy and engagement on this matter, throughout, on behalf of their constituents.

As hon, Members will know, since taking office, the Government have been negotiating in good faith with British Steel’s owner, Jingye. We have worked tirelessly to find a way forward, making a generous offer of support to British Steel that included sensible, common-sense conditions to protect the workforce, protect taxpayers’ money, and create a commercially viable company for the future. Despite our offer to Jingye being substantial, it wanted much more—an excessive amount, frankly. However, we remained committed to negotiation, but over the past few days, it has become clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running. In fact, its intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel.

I want to make it absolutely clear that, separately from any conversation about a possible deal to co-invest in new infrastructure, the British Government offered to purchase the raw materials in a way that would have ensured no losses whatsoever for Jingye in maintaining the blast furnaces for a period of time. A counter-offer was instead made by Jingye: that we transfer hundreds of millions of pounds to it, without any conditions to prevent that money, and potentially other assets, being immediately transferred to China. Jingye also refused the condition of keeping the blast furnaces maintained and in good working order.

Even if I had agreed to those terms, I could not guarantee that further requests for money would not then be made. In that situation, with the clock being run down, doing nothing was not an option. We could not, will not and never will stand idly by while the heat seeps from the UK’s remaining blast furnaces, without any planning, due process or respect for the consequences. That is why I needed colleagues here today.

[David Davis (Goole and Pocklington) (Con)]

From what the Secretary of State has described, it is beginning to sound as though Jingye is trying to manoeuvre the Government into a recompensed nationalisation. Will he make it plain that if it tries to manoeuvre us into nationalisation, we will pay not more than a penny for the business?

[Jonathan Reynolds]

To be clear, where there is a transfer of ownership to the state, we would always pay the fair market value for the assets. In this case, the market value is effectively zero, so I take the right hon. Gentleman’s point entirely. I would say that the intention of Jingye has not been to engineer that situation; its intention has been to keep the downstream mills, which colleagues will know are fundamental to our construction and steel industries, and supply them from China, rather than from Scunthorpe; that is the situation.

[Graham Stuart (Beverley and Holderness) (Con)]

Is it now the view of the Government that primary steel production in the United Kingdom is an overriding national security issue?

[Jonathan Reynolds]

As the right hon. Gentleman will know—we have had this exchange at the Dispatch Box before—I believe that the capacity for primary steel production is important. The steel strategy looks at new ways of ensuring that, and at not just protecting the past, but at what the future may bring. Direct reduced iron technology is of significant potential interest to us for the future. However, this situation—involving the last remaining blast furnaces, and the proposition put to us—is exceptional and unique, and I need all colleagues to recognise that.

The legislation ahead of us today is therefore a proportionate and necessary step. It allows us to take control of British Steel’s blast furnaces, maintaining steel production and, by extension, protecting the company’s 3,500-strong workforce. The Bill does not transfer ownership to the Government. We will have to deal with that matter at a later date. I took the decision that given the exceptional nature of a recall, it would be better to limit the powers in the Bill, which are still significant, rather than introduce more complex matters of property rights and public ownership at this time.

[Sir Jeremy Wright (Kenilworth and Southam) (Con)]

The Secretary of State is taking extremely extensive powers for the Government, and they apply to what he describes in the Bill as “specified assets”. As far as I can see, they are not limited to blast furnaces or assets required for making virgin steel. Does he accept that he is leaving two hands on the tiller, when it comes to the operation of all the steelmaking companies to which the Bill may apply? In other words, he is saying that the Government can direct a company in relation to specified assets, but that company can do other things of its own initiative. Does he recognise that he is creating considerable legal complexity in the operation of those companies going forward? Why is that the right approach?

[Jonathan Reynolds]

I am extremely grateful to the right hon. and learned Gentleman for his thoughtful question. The fundamental purpose of the Bill is to allow me, as Secretary of State, and this Government to take control of this situation. The reason why this is the Steel Industry (Special Measures) Bill, and not a Bill specific to British Steel, is, as he will know, that the latter would be a hybrid Bill, and introducing that would be a far more complex procedure. With the clock being run down, that was not an available option.

The Bill broadly replicates the situation that would apply if the Civil Contingencies Act 2004 had been triggered, but rather than seeking to meet the threshold to trigger that Act, I am seeking parliamentary permission—the consent of this House and the other place—to take control, which I think is a better way forward. I want to make it clear to the right hon. and learned Gentleman and to the House that I want this to be a temporary position—I do not want these powers a minute longer than is necessary—but I need the powers to rectify and save the situation.

[Richard Tice (Boston and Skegness) (Reform)]

Given that the Secretary of State has inferred that the owner, Jingye, is not and has not acted in good faith, surely the right thing to do is to seize this great opportunity now, this weekend, and nationalise British Steel?

[Jonathan Reynolds]

A transfer of ownership to the state remains on the table. It may well, at this stage, given the behaviour of the company, be the likely option. However, our aspirations for British Steel remain a co-investment agreement with a private sector partner to secure a long-term transformation. The action I seek to take today is not a magic wand or a panacea. The state cannot fund the long-term transformation of British Steel, nor would it want to, but a failure to act today would prevent any more desirable outcome from even being considered, and that, again, is why we must act today.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

I applaud my right hon. Friend for his decisive action in this matter. I have only had a chance to read the Bill for 10 minutes—[Interruption.] That is not a criticism; it is the natural procedure of this House. The Bill could not be laid until First Reading. The Bill talks about compensation. He has made the point that he is not planning to take over and run British Steel, which is not the desirable option, but has he done some sort of impact assessment on the potential range of costs to the taxpayer in these circumstances?

[Jonathan Reynolds]

I think my hon. Friend refers to clause 7, which deals with compensation. Again, let me be clear: this is a clause that we would put in any Bill. We are not Russia, and we do not sequester assets. The language in the clause—the legal definition—is something that we would use in most standard procedures. Going back to the question from the right hon. Member for Goole and Pocklington (David Davis), the effective market value of Jingye is zero, so there is no inconsistency between those two points.

[Samantha Niblett (South Derbyshire) (Lab)]

What is happening today is something that mining communities like Swadlincote, in my constituency of South Derbyshire, will be feeling deeply in their souls. It is something that they could have only dreamed of back in the 1980s, when they wanted a Government who had their backs and prioritised the national interest. Instead, they had a Conservative Government who sold them down the river. Does the Secretary of State agree that this is a pivotal moment in our history, because we have a Labour Government prioritising our people and the national interest?

[Jonathan Reynolds]

This is a significant moment. How a country handles economic transitions is not about nostalgia for the past—we have to embrace the future—but how we help our people, our industry and our nation get to that point is key. My hon. Friend and I come from similar places, and we have not managed these transitions particularly well in the past. We are meeting this weekend to discuss the potential loss of thousands of jobs, which is what was on the line. The fact that we do not accept that, and that we will do things differently, is a welcome change.

[Ed Davey (Kingston and Surbiton) (LD)]

We will scrutinise this Bill today, but we want to do so in a constructive fashion. Given the huge damage that President Trump’s tariffs have done to the British steel industry, accelerating this crisis, does the Secretary of State agree that any Member of this House who actively campaigned for President Trump’s election and cheered him on has behaved shamefully unpatriotically and should apologise to British steelworkers?

[Jonathan Reynolds]

I am extremely grateful to the right hon. Member and his party for their presence today. He will not draw me on the other principal issue that we have been dealing with at the Department for Business and Trade over the last few days, but to be clear, the issues around British Steel are about more than the imposition of tariffs. The tariffs are not welcome, and I do not think there is justification for them to be put in place. I believe that it is in our interests, but also in the US’s interests, to agree a position that removes those tariffs in the interests of steelworkers.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I fully understand the nature of what the right hon. Gentleman is bringing forward. I also understand some of the requirements for speed in this case, and we can argue about whether this should have been done before. Having quickly looked through the Bill, I do not see a sunset clause. I ask about that not because I want the Government to set a particular date, but because such a clause would bring them back here to debate whether the process should be extended. It would therefore put a reasonable limit on Government activity without debate. Can he explain why there is no sunset clause in the Bill?

--- Later in debate ---

[Jonathan Reynolds]

I absolutely understand and welcome the right hon. Gentleman’s question. I do not want these powers for a minute more than is necessary. I cannot say at the minute, having drafted the Bill, the timeframe for which they will be required, but I will endeavour—and I commit at the Dispatch Box—to keep the House updated. Perhaps I will ask the Business and Trade Committee for its involvement, in order to make it clear how long we believe it will be. To be absolutely specific, where we make an order in relation to control of a steel undertaking, we can revoke the regulations once that control has been established and is no longer required.

[Several hon. Members rose—]

[Jonathan Reynolds]

I know there is huge interest, but I will make a little more progress and that might deal with some of the matters Members want to raise.

This is what it means to be a Government unashamedly on the side of working people—one that will never hesitate to take action to protect this nation’s assets and economic security. I understand that some have asked about precedent or referred to other troubled industrial situations. To be clear again, this is an exceptional and unique situation. The question for all Members is whether we as a country want to continue to possess a steel industry. Do we want to make the construction steel and rail we need here in the UK, or do we want to be dependent on overseas imports? As a Government, we are not passive in any way about the future of British industry.

[Stephen Flynn (Aberdeen South) (SNP)]

The Secretary of State has said this is “unique” and “exceptional” and made reference to energy transitions and thousands of jobs. In the Scottish context, many minds right now will be focused on the situation in Grangemouth, where we know that hundreds of jobs will be lost directly, as well as thousands in the supply chain. Were I, or perhaps even the local Member, the hon. Member for Alloa and Grangemouth (Brian Leishman), to bring forward a similar Bill to save Scotland’s only oil refinery and give the Secretary of State the executive power to do as he pleases—as he is doing with British Steel—would the Labour party back it as it is backing this Bill today?

[Jonathan Reynolds]

I am pleased for the chance to address this issue. The importance of Grangemouth is why this Labour Government have pledged £200 million to secure its long-term future. It is an important asset, but it is not the only remaining refinery; it is one of three crackers in the United Kingdom—that is important. Specifically, it is not a comparable situation, and the behaviour of the company is not comparable to the case of British Steel.

I also say to the right hon. Member, and indeed to all Members, that this is why we fought and fought again to secure the future of British shipbuilding by saving all four of the Harland and Wolff sites in England, Scotland and Northern Ireland. The right hon. Member will know that the commercial interest was not in the Scottish yards, but we held them together precisely because of our commitment to Scotland and the Union. It is also why within weeks of taking office we secured a better deal for the workers at Port Talbot. We have repeatedly acted, and we will continue to act no matter how hard the circumstances.

[Alan Gemmell (Central Ayrshire) (Lab)]

Does my right hon. Friend agree that the failure of the Tories and the SNP to develop an industrial strategy for Scotland meant that they had no plan for Grangemouth? They knew for over a decade about the problems at the refinery and did nothing. Does he agree that as soon as Labour came into power, we got to work and delivered support for the site, the workforce and the local community?

[Jonathan Reynolds]

I endorse my hon. Friend’s comments entirely. I do not believe there is a history of the SNP calling for the nationalisation of Grangemouth. It was, as ever, on the bandwagon. I think we all recognise that the SNP does not campaign on its record in running Scotland; it campaigns on grievance. My hon. Friend is absolutely right that the contrast is with a Labour Government in this place who are on the side of working people everywhere.

[Jessica Morden (Newport East) (Lab)]

The Secretary of State mentioned Port Talbot. I appreciate the unprecedented circumstances we find ourselves in today, when the Government have rightly moved quickly to safeguard primary steelmaking, and the Secretary of State will be very mindful of the extraordinarily difficult circumstances that the steel industry in south Wales has faced. I recognise the £80 million fund available, but can he make sure that south Wales and Llanwern benefit from their share of the £2.5 billion clean steel fund? Can that also be at the forefront of his mind?

[Jonathan Reynolds]

I am incredibly pleased to have the chance to answer the point my hon. Friend raises. The Port Talbot deal was originally negotiated by the previous Government. I did try to reopen it; I went to see Chandra in Davos and flew to Mumbai to talk to him about it. To be frank, I kept Port Talbot open on polling day, because it would have closed due to the industrial action that almost took place. The previous Government were nowhere to be seen, even before the result of the election was in. We were not able to reopen the deal, but we did negotiate a better deal. As a result, Port Talbot is in a stronger position than British Steel, because it has a long-term future in place. [Interruption.] This is because we improved on the deal that the Leader of the Opposition botched at the time. To be clear, the £2.5 billion green steel fund the Chancellor has put in place is in addition to the £500 million already going to Port Talbot. That is an incredibly important point.

[Sarah Owen (Luton North) (Lab)]

I thank the Secretary of State for giving way and for acting in the national interest—the complete opposite of the hon. Member for Clacton (Nigel Farage), who said he was against intervening to save British Steel two years ago. Does the Secretary of State think the hon. Gentleman said that in the British interest or in the foreign interests the Reform party seeks to serve?

[Jonathan Reynolds]

I believe that that is on the record. I hope to convince all colleagues today to support this action, which is in the national interest.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

When the blast furnaces in Port Talbot closed down last September, this Government could have taken exactly the same legislative action as they have chosen to take today. We will endeavour to amend the Bill to include Wales, because there is still the opportunity for this Government to make a real difference to the community of Port Talbot and the 2,800 jobs that have been lost there.

[Jonathan Reynolds]

I do not want to embarrass the right hon. Lady, but the blast furnaces have already closed at Port Talbot. They are not available to be saved —that situation has moved on. Let me stress again: Port Talbot is in a stronger position because it has that long-term future in place and the potential additional investments through the green steel fund.

[Several hon. Members rose—]

[Jonathan Reynolds]

I think I must progress, Mr Speaker. I can see your indication to do so.

[Dawn Butler (Brent East) (Lab)]

Will my right hon. Friend give way?

[Jonathan Reynolds]

I will take one more intervention.

[Dawn Butler]

I thank my right hon. Friend for giving way and for the considered way in which he is looking after the national interest. The steel unions—the GMB, Community and Unite—would like clarification that any board that is set up will have at its heart the steelworkers who have kept the steelworks going through thick and thin.

[Jonathan Reynolds]

We remain in close engagement with all the unions, which have been monitoring the situation closely. Again, I reiterate that the Bill is not in itself about a change of ownership; it is about a change of control to rectify the situation. However, I will certainly have regard to the comments my hon. Friend has made and, of course, the role of the workforce at all stages.

We will never accept the argument that steelmaking is a sunset industry. Steel is vital to every bit of the modern economy. Domestic demand for steel is set only to go up, not down. In the past few weeks alone, we have seen Heathrow airport announce multibillion-pound expansion plans requiring 400,000 tonnes of new steel, and Universal Studios confirm it will be building Europe’s biggest theme park and, where possible, will use UK-made steel to do so. This Government are backing the builders, not the blockers. With the action we take today, we have the chance to feed that boom with steel made in Britain.

The legislation we are setting out today will help to end the uncertainty that has been hanging over British Steel’s Scunthorpe site for too long. I welcome the Opposition’s support today for this recall, but this issue should have been resolved years ago. I believe they may now view it as a mistake to have given this essential national asset to this company.

I have to address the statement made by the Leader of the Opposition yesterday, which I do as a matter of genuine regret. She claimed that while she did my job, she negotiated a modernisation plan with British Steel to build an electric arc furnace at Teesside, followed by one at Scunthorpe. I wish to make it unequivocally clear to the House that the new Government inherited no such deal. We could not renege on that deal because it did not exist. On day one, I was told that there had been a lack of progress on this matter to date.

[Mrs Kemi Badenoch (North West Essex) (Con)]

rose—

[Jonathan Reynolds]

If such a deal was negotiated, somehow in secret, I ask the Leader of the Opposition to say how much money she agreed to give Jingye for this deal and what conditions were placed on it. To state the obvious, building two electric arc furnaces in two different locations would be more expensive than building one in one location, and, given that Jingye’s request to build two furnaces in Scunthorpe was for £1.2 billion in taxpayers’ support, what—

[Mrs Badenoch]

On a point of order, Mr Speaker. I would like advice on how to counter the points the Secretary of State is making, given that they are factually incorrect and a complete misrepresentation of the situation that he inherited.

[Mr Speaker]

It has just been clarified by your good self. I cannot make the Secretary of State give way when you want to come to the Dispatch Box, but I am sure that if he notices you doing so again, he may wish to.

[Jonathan Reynolds]

This is an excellent chance to clarify that. If the Leader of the Opposition agreed a deal with Jingye to cause massive job losses in Scunthorpe and transfer the jobs to a completely different place, and at higher cost than the request the company made to us, I think she should be able to tell us. I am more than happy to give way.

[Mrs Badenoch]

Labour cannot negotiate. We were negotiating a modernisation deal that would have had limited job losses, just as we had in Port Talbot. The Labour Government inherited a functioning commercial deal in Port Talbot, and the same would have happened with British Steel had we not had a snap election. What the Secretary of State is doing now is the union-pushed deal. They brought that deal to me—I said no; he said yes.

[Jonathan Reynolds]

This is genuinely revelatory. I say again: if Jingye’s request was for £1.2 billion to build at lesser cost in one place, what was the sum of money agreed by the Leader of the Opposition when she was Business Secretary to build in two places? It certainly was not in the accounts that the Chancellor had. I will give way. How much money was agreed to Jingye to close the jobs in Scunthorpe? I ask her.

[Mrs Badenoch]

When you are negotiating, you do not have—[Interruption.] Labour Members are cheering and laughing because they love this; they think that the public taking on billions of pounds in liabilities is fantastic. We had not finished the negotiation so there was no amount, but it would have succeeded better than the terrible plan that the Secretary of State has now.

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[Jonathan Reynolds]

Our friends in the press will follow that up and find out exactly how much money the Leader of the Opposition secretly promised to Jingye to transfer those jobs out of Scunthorpe. I think it might be wise, on all counts, for that statement to be withdrawn.

The situation we inherited across the board on assuming office is one where most of our foundation industries were in some substantial difficulty. Since 2010, UK crude steel production has almost halved, and we know that rebuilding our steel industry after years of neglect will be a challenge, but it is one that this Government have grasped.

[Andy McDonald (Middlesbrough and Thornaby East) (Lab)]

My right hon. Friend and I were in this House in 2015 when the Conservative party sat on its hands and kissed goodbye to the Redcar blast furnace and, with it, the state-of-the-art coke ovens that could have resolved this situation today. Before he sits down, will he say something about the Jingye activities at Lackenby and Skinningrove and how they will be impacted by today’s announcement?

[Jonathan Reynolds]

I am really grateful that my hon. Friend has been able to put that point on the record for his community, to avoid the kind of situation we have seen in lots of industrial communities, to be frank, over the years. This is why we take this action today in the national interest: to provide that bridge and that possibility to the future.

Specifically in relation to the downstream mills, even if we were willing to accept a situation in which they were supplied from a foreign country, as in this case, the confidence of consumers and businesses would surely be put at risk and it would bring into question the entirety of British Steel’s workforce and business and a huge part of our strategic assets. That, again, is why this decisive action today is necessary.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

The right hon. Gentleman said that steel production is strategically important, and I agree. He said that we should be avoiding having to be reliant on imports, and I agree. However, his Government blocked production of the raw material metallurgical coalmine in the north-west. Will he now go back to his colleagues in Government and the company to encourage them to reapply so we can have security not just of steelmaking, but of the raw materials that are needed to make it?

[Jonathan Reynolds]

The hon. Lady will know that the company brought into question whether that coal was the right grade for blast furnace supplies. I remember several debates in this place about that. I should also make it clear—I think hon. Members understand this—that we are talking about two blast furnaces that date from the 1930s and 1950s. We must also be looking to the future, to new technology and new investments. Crucially, having the dedicated resources that this Government have put into steel is why we have the chance to look to the future with optimism. The UK steel industry is an outlier, in the sense that it is a much smaller proportion of our overall economy than in any major comparable economy, so of course there is potential, and we should look to the future. I would be more than willing to work with the hon. Lady as a local MP to do so.

[Mr Joshua Reynolds (Maidenhead) (LD)]

rose—

[Jonathan Reynolds]

I will give way one last time.

[Mr Joshua Reynolds]

I thank the Secretary of State for giving way. Once he has the powers in this Bill, I urge him to use them decisively and swiftly, but then, as he has said, we need to look to the future. Once we have secured Scunthorpe’s future, we need to discuss what happens next, which is clean energy, and investing in the global clean energy that the UK really could succeed in. Does he agree that the people of Scunthorpe have upheld their end of the bargain for decades, and now it is time that we in this House make sure we uphold our end too?

[Jonathan Reynolds]

The hon. Member puts it extremely well, if I may say so. The people who have upheld steel as the backbone of construction in the UK for decades deserve better treatment than they would have had if Parliament had not been recalled today to take this action, and we should all bear that in mind.

Whether it is at Port Talbot, via our upcoming steel strategy, via our work to improve public procurement, or in the introduction of our industrial strategy to tackle the most thorny issues of industrial competitiveness, where others have shied away, this Government have stepped up.

Let me conclude by saying that steel is fundamental to Britain’s industrial strength, our security and our identity as a primary global power. Today’s legislation will help ensure that we can retain that steelmaking capability here in the UK both now and for years to come. For British workers’ security, for British industries’ future and—without hesitation—in our national interest, and for the workers of British Steel and their families, this action is essential, and I commend this Bill to the House.

[Mr Speaker]

I call the shadow Secretary of State.

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[Daisy Cooper]

As the hon. Member knows, the three things that I have just outlined—British Steel being sold for a pound, British Steel entering insolvency and the Government’s Insolvency Service being left temporarily running the firm—all happened in 2019.

With Putin’s barbaric war in Europe and Donald Trump’s disastrous tariffs causing economic turmoil around the world, we must secure the future of steel production here at home. We Liberal Democrats welcome the sense of seriousness and urgency shown by the Government in recalling Parliament. We must work together to rescue our steel sector and the tens of thousands of jobs that directly and indirectly rely on it. But under the terms of the Bill, the Secretary of State is giving himself huge and unconstrained powers that could set a very dangerous precedent. I urge him to make a commitment, in the strongest possible terms, to repeal the powers that he is giving himself as soon as possible—within six months at the latest—and to come back to this House for another vote to extend those powers if they are still required after that.

[Jonathan Reynolds]

As I tried to articulate in my opening speech on Second Reading, I understand the gravity of the situation, which gives puts some context to the demands for further powers to be included in the Bill. The limitation, as wide as it is, is the right measure, and I can give the hon. Member my absolute assurance that I shall seek to do exactly as she says.

[Daisy Cooper]

I am incredibly grateful to the Secretary of State for giving that assurance, which is important in the context of what the powers in the Bill actually are.

Clause 3(4)(a) gives the Secretary of State the power to break into anywhere to seize assets. Clause 3(4)(c) gives the Secretary of State the power to take whatever steps he considers appropriate—not what a court or a reasonable person might consider to be appropriate—to seize or secure assets. Clause 4(3), on offences, makes it a crime for anyone not to follow the instructions of the Secretary of State, or to refuse to assist the Secretary of State in taking those steps without a “reasonable excuse”. However, a “reasonable excuse” is not defined in the Bill, no examples are given, and, quite frankly, it is hard to work out what defence of a “reasonable excuse” might be accepted given that, under clause 3(4)(c), it is whatever the Secretary of State himself considers to be okay.

Clause 6(1), on indemnities appears to give the Secretary of State and potentially any other person who is with him—a police officer, a civil servant, or a Border Force official—immunity from prosecution for using any of these wide-ranging powers. These powers are unprecedented and they are unconstrained. I am grateful to the Secretary of State for saying that that is precisely why he intends to repeal them as soon as possible.

More broadly, the Government must now also bring forward plans to guarantee the future of this vital sector. We know the steel industry is surrounded by crippling uncertainty. After decades of underinvestment and shocking indifference to our sovereign economic security, the previous Conservative Government have left our sovereign national capacity on steel diminished and endangered. Yet there is no chance that UK demand for steel will disappear. How absurd and irresponsible is it that we have a sustainable and enduring long-term market for British steel, but that our supply could keel over in a matter of days because of the failures of the failed Conservative party?

So looking ahead, let us remember that saving Scunthorpe is necessary, but not sufficient on its own. There have been significant discussions about the future ownership structure of this company. Given the precarious fiscal position in which the Government find themselves, it is important that all options on ownership are put on the table, so that this House can take an informed decision about what they mean for the public finances. I hope the Government will make a commitment that, in the coming weeks, they will bring forward a report that sets out options for future ownership of the plant.

Looking ahead, many big questions remain unanswered. Will the Government immediately designate UK-made steel a nationally strategic asset? Will they be using direct reduced iron, and, if so, will that form part of the UK’s plans alongside protecting the production of virgin steel at Scunthorpe? When will the Government bring forward a comprehensive plan to ensure that more British steel is used in vital infrastructure projects, from defence to renewable energy? Will Ministers work shoulder to shoulder with our European and Commonwealth partners to tear down trade barriers, including by negotiating a customs union by 2030? Will they develop initiatives to retrain and upskill workers across the country as we transition to greener methods of steel production? How do the Government intend to respond to calls from UK Steel for the Government to achieve the lowest electricity prices in Europe, parity with competitors on network charges, and wholesale electricity market reform?

This case should also raise concerns about the role of Chinese corporate interests in the UK’s national critical infrastructure. The decision by British Steel’s Chinese owners to turn down the Government’s offer of £500 million to support the future of the Scunthorpe plant has directly precipitated this crisis. We must now be clear-eyed about the risks posed by Chinese involvement in our country’s vital infrastructure. To that end, will the Minister tell the House when the Government’s promised UK-China audit will be released, and how the Government plan to strengthen protections for critical infrastructure? Can he assure the House that the Government have assessed whether there is any risk that Jingye, on behalf of the Chinese Government, has deliberately run down the plant to jeopardise the UK’s capacity to produce steel?

We are in a precarious position, and it is not as if there were no warnings. In 2022, the Royal United Services Institute think-tank said:

“Domestically produced steel is used in defence applications, and offshoring the supply chain may have security implications—for example, in a scenario where multiple allied countries rearm simultaneously at a time of global supply disruption, such as during a major geopolitical confrontation.”

The fact that Jingye has now closed down the supply of raw materials is further evidence that the plant should not have been sold to it in the first place. Quite frankly, the fact that some Conservative MPs are calling for nationalisation shows how far through the looking glass we really are.

Is not the Conservatives’ attitude abundantly clear? On national security, they cut troop numbers by 10,000; on food security, they undermined our farmers with unforgiveably bad trade deals; and on economic security, they left our country with almost no sovereign steel capacity. On security, the Conservatives left our island nation severely vulnerable, like flotsam in the sea, passively bobbing up and down or being bashed around by the tides of international events.

As for hon. Members from the private limited company Reform Ltd, they have a bit of cheek to claim to support UK steelworkers while cheering on their pal President Trump, whose punishing trade war is putting those steelworkers’ jobs at risk. Perhaps the company’s directors who sit in this House will come clean about whose side they are really on.

Time and again, we have seen the failures of an ad hoc, piecemeal approach to industry across all sectors, from the failure of our water companies to the shocking state of our housing nationally and the dismal situation of our health service. For too long, there has been no stability for these industries, which are constantly fixed on a short-term basis only, to the point where they are practically held together by string and tape and the dedicated workers who remain. We Liberal Democrats stand ready to help constructively to bring about an outcome that delivers real change.

--- Later in debate ---

[Martin Vickers (Brigg and Immingham) (Con)]

It is a pleasure to follow the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), my Member of Parliament; on this matter we are in complete harmony. Before I talk about the local situation, which is what I want to focus on, may I thank the Secretary of State for giving me a call yesterday evening and outlining the proposals he would be bringing forward this morning? I did say to him that I would not be entirely uncritical, so I am sure he will not mind a few jabs here and there.

The local situation is extremely critical, as has been pointed out. The impact, not only on the workforce but on the wider economy of northern Lincolnshire, would be extensive. I have been a resident in the Grimsby-Cleethorpes area all my life, and I have seen the impact when a town loses its core industry. In the case of Grimsby, of course, that was the deep-sea fishing industry. When that decline happens—it has happened to so many towns up and down the country as a result of the decline in mining, shipbuilding and other heavy industries—it takes a generation or perhaps more for the town to fully recover.

That is the last thing I want to see happen in my neighbouring constituency of Scunthorpe, or to the hundreds of my constituents who work there. Those Members who were here for the Easter Adjournment debate—there were a handful—might have heard me say this only four days ago, but the site extends way beyond the bounds of Scunthorpe, into my Brigg and Immingham constituency. The site is the equivalent of 1,133 Wembley football pitches, which gives an idea of its size and of the amount of work that would be needed were the steelworks to close. There would be demands for vast Government investment over decades, in order to remediate the site and to provide new employment.

I said that I would not be entirely uncritical of the Secretary of State, so I refer him to my first urgent question on this matter, on 5 September last year. I said on that occasion:

“There have been widespread media reports suggesting that coke will stop being imported from October, which would mean production would stop in Scunthorpe by Christmas. There are rumours concerning the fact that employees will be given notice very soon. That is obviously creating great anxiety among those directly employed by British Steel and those in the supply chain, which in northern Lincolnshire extends to many thousands of people and many businesses.”—[Official Report, 5 September 2024; Vol. 753, c. 424.]

Thankfully, we have had a six-month reprieve from those threats in October, but I have to say, the Government have been a little dilatory on this. I appreciate that negotiations have been taking place and Ministers cannot give away their negotiating position, but I made this point as long ago as September, as well as when you granted me an urgent question on 27 March, Mr Speaker—only a couple of weeks ago—and surely the Government were beginning to realise at that point that the negotiations with Jingye were going nowhere.

[Jonathan Reynolds]

I am extremely grateful to the hon. Gentleman for putting that point on the record. It is precisely because of those concerns that we were able to have ready a legal route to intervene to directly offer support to purchase raw materials. What we could not have anticipated or expected was for a company to act in an irrational economic manner when such a clear, distinctive and generous offer was made.

[Martin Vickers]

I thank the right hon. Gentleman for his intervention. I would say merely that he has been party to the negotiations, and he must surely have realised that the company was not negotiating in good faith and expected his officials to prepare legislation, if required, to deal with the situation that we are now in. As others have said, this is crucial not just for thousands of my constituents who work at the site, but for the defence of the nation. I assume and hope that Defence Ministers have been lobbying the Secretary of State to make their concerns clear.

Locally, there is continuing concern. Like the Father of the House, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), I will support the proposals. I floated the nationalisation issue on 27 March, and I see this as a stepping-stone to that situation. To those who will perhaps demand nationalisation today, I would say that this is a very complex issue, and what matters more than anything else is the future of the workforce and the ability to produce virgin steel. Nationalisation legislation would not, I sincerely hope, be passed in three hours; it would involve a great deal of work.

Having got themselves into this situation, the Government are now taking the right action. There has been disappointment locally—to put it mildly—that the Prime Minister did not, following my question to him only 10 days ago, take up the option to meet a cross-party delegation of MPs to discuss the situation, but now that we are where we are, I fully support the Government, and I hope that they accept the sunset clause amendment, which would be prudent. I can assure them of my full support today, which they will continue to have when they act in the best interests of my constituents.

--- Later in debate ---

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

I will try to be brief and stay focused on the Bill. Let me start by saying that we should all focus on the requirement to save the jobs of those 3,500 people who have this threat hanging over them. In fact, I understand from my hon. Friend the Member for Brigg and Immingham (Martin Vickers) that 2,500 people have already received a redundancy notice, and they will be very worried at the moment. Our thoughts should be with them today. Coming in on a Saturday is right if it saves their jobs. I am certainly prepared to vote for that.

The Bill does give vast powers to the right hon. Gentleman the Business Secretary and the Government. As others have said, I trust him personally—this is not an attack on him—but we in this House should never trust Government more than we have to. I have said this on both sides of the Chamber, by the way. I therefore urge him to have another look at the sunset clause, which I raised earlier. It is not saying, “We don’t trust you”; it is saying that sometimes Governments are taken down sidetracks, and before we know what has happened, the powers are beginning to be used for the wrong purpose. I urge him to introduce the sunset clause, or even to do so in the other place, to give the House real powers to come back. For everyone’s sake—even those on the Government Benches—I think that would be worth doing, because it would allow us to have a strong debate on how the powers are being used and would perhaps even enable us to influence what is taking place.

The reason for this debate is clearly the massively changed needs of this country, particularly after the event that we never thought would happen: Russia’s brutal invasion of Ukraine. As a result, weapons and arms are needed on an unprecedented scale, there is a plan to build up the armed forces, and they need the very high-quality virgin steel that is produced in this plant. Without it, we would have to import it. Frankly, China does not produce that quality of steel. The other reason is the tariff war now taking place, which has introduced 25% tariffs on the car industry, which is one of the biggest purchasers of steel. All those things make the Bill very much necessary.

We have another problem, which I hope the Government will deal with in the context of the Bill when they talk to the Department for Energy Security and Net Zero. Things have changed. The Prime Minister himself has said that the world has changed. We have been operating in what we considered to be a global free market. I have argued for some time that this is not a free market. Far too many countries such as China have abused the rules of the free market, subsidised their industries ridiculously and used slave labour to produce their products. When that happens, the free market is dead. We must recognise that we will have to deal with those whom we trust and who do not break the rules. That means a whole rethink of the Government’s China policy and of whether we need to rush to China for investment. We need to ensure that we deal with our industry at home and that we produce things again.

One problem is the energy costs our industry faces, which are really quite stark. Our industry is not just in competition with China; even the costs in Europe are far less now. I will give a short list. The costs in the UK are now the highest in the world, at $400 per megawatt-hour. Germany, which has the highest costs in the rest of Europe, is at $250 per megawatt-hour, while France and the others all have lower costs for producing energy. That energy is critical for the steel industry, and that is one of the big issues that the Secretary of State has to deal with. China, with its subsidies and broken free market rules, is at $60 per megawatt-hour. We should not attempt to compete with it; we must say that it is not competitive at all. [Interruption.] Exactly right, as my right hon. Friend the Member for Goole and Pocklington (David Davis) says.

Others are complaining about China right now. Countries in the far east, such as Vietnam and South Korea, are accusing it of dumping. What we have in China is something that will really hit us hard and make the Secretary of State’s job even worse: very simply, China is now suffering from the over-production of steel. Its housing industry has gone static, and that was one of the biggest users of the steel it produced. Where will that steel go?

By the way, it is no surprise that a Chinese company, Jingye, is involved. In pushing to shut down the blast furnaces in the UK, it knows that we will have to buy slab steel from China. That is not a coincidence; it is all part of the plan. That company is linked directly to the Chinese Communist party, and it is high time that we called that out. In his negotiations, the Secretary of State needs to remind Jingye that the reality is that it is not a private company. The previous Conservative Government should never have awarded it the contract, and I warned them about that. It is time for us to make sure that we deal with China at face value and do not accept the pretence that this company is private or in any way detached from its Government. That is a critical point.

There is much to be dealt with, and I urge the Government to listen to the House and to check all of this. Cheap Chinese steel is a desperate problem for us, and we need to work with other countries in dealing with it. We also need to get our costs down. On net zero, I hope that the Secretary of State will tell the Secretary of State for Energy Security and Net Zero that we cannot go on like this.

[Jonathan Reynolds]

This is such an important point, and I will be exceptionally brief, but the right hon. Gentleman knows from debates that he and I have been in that I am obsessed with the issue of industrial energy prices and by the very substantial rise from 2010 to 2024—a 50% real-terms increase. As I think he knows, the two fundamental issues are: first, our network charges and how we do those, which is different from other countries; and secondly, fundamentally, the marginal cost is set by the price of gas—the fossil fuel price—for the overall system. I am not completely rejecting everything that he is saying, but we must understand that key point: it is the gas price.

[Sir Iain Duncan Smith]

I am grateful for that, because it allows me to say something that I had not been planning to say: we sit on an island of gas, so why, for goodness’ sake, are we not drilling for it? We need it, and we will need it strategically. There is a need for strategic industry, and I agree with the Secretary of State on that. However, the issue does not stop there; it stops elsewhere, in the production of energy. I simply leave that point for him, and he can argue it with his right hon. Friend the Secretary of State for Energy Security and Net Zero.

I want to say one final thing. In the course of this Chinese company’s operations, I have talked to a number of people involved in the business, and its record on health and safety and on the abuse of the workers in the blast furnace area has been shocking. We should look into that much more carefully. The company has brought in cheap Chinese workers and pays them nothing like what it pays the British workers. Many of those workers have ended up burned and in great difficulty. I simply say that this is not a company we should be doing business with right now.

--- Later in debate ---

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr iawn, Dirprwy Lefarydd.

Today’s legislation to safeguard the UK’s last bastion of primary steelmaking capacity is of course to be supported, but what my party cannot support is this Government’s approach to steel in the UK, which deems that steel in Scunthorpe is worth saving but steel in Wales is not. Today is a bitter day for the people of Port Talbot, where the blast furnaces have been extinguished because Labour let that happen. Job losses there will take an estimated £200 million from the local economy in lost wages. People in south Wales have been loyally voting for Labour for decades. Do this Labour Government feel proud that those votes have been paid back by Tory-style deindustrialisation in Port Talbot?

Plaid Cymru has called consistently for nationalisation, but the Labour First Minister of Wales rejected our calls and described nationalisation as “pipe dreams”. Labour in Wales was quick to mock our proposal, which we made 21 times—over and over again—in Cardiff and here in Westminster. Now it is UK Labour policy.

The Government must set out how much of the £2.5 billion steel fund will be allocated to securing Scunthorpe, and how that compares with the amount given to support laid-off workers in Wales.

[Jonathan Reynolds]

Will the right hon. Lady give way on that point?

[Liz Saville Roberts]

The right hon. Gentleman’s Government did not intervene in Wales.

[Jonathan Reynolds]

rose—

[Liz Saville Roberts]

I will take no interventions. His Government did not intervene in Wales. Under his Government, Scunthorpe gets security; Port Talbot gets a pittance. Plaid Cymru believes that Port Talbot should and could have received equal treatment alongside Scunthorpe. That is why we have tabled an amendment to include Wales in the terms of the Bill, and to highlight that the measures we are debating today could have been used to save the blast furnaces at Tata Steel in Wales. We will not let Labour hide from the fact that it owns the decision not to intervene to save Welsh steel when it had the opportunity to do so.

Workers and communities must be at the heart of any long-term solution for the steel industry. So far, Labour in Westminster and Labour in Cardiff have worked in partnership to dispatch thousands of Welsh workers to uncertainty and hopelessness. People in Wales will not forget today. It is a day of bitter disappointment for Port Talbot.

Business and Trade

Jonathan Reynolds Excerpts

Tuesday 8th April 2025 Written Corrections

The following extract is from the statement on UK-US Trade and Tariffs on 3 April 2025.

[Jonathan Reynolds]

With permission, Madam Deputy Speaker, I would like to make a statement on the United Kingdom’s economic relationship with the United States. The UK has a strong and balanced trading relationship with the US worth £315 billion, which supports 2.5 million jobs across both our countries. This is second only to the EU, where our trading relationship is worth £791 billion.

[Official Report, 3 April 2025; Vol. 765, c. 457.]

Written correction submitted by the Secretary of State for Business and Trade, the right hon. Member for Stalybridge and Hyde (Jonathan Reynolds):

[Jonathan Reynolds]

…The UK has a strong and balanced trading relationship with the US worth £315 billion, which supports 2.5 million jobs across both our countries. This is second only to the EU, where our trading relationship is worth £813 billion.

UK-US Trade and Tariffs

Jonathan Reynolds Excerpts

Thursday 3rd April 2025 Commons Chamber

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

With permission, Madam Deputy Speaker, I would like to make a statement on the United Kingdom’s economic relationship with the United States. The UK has a strong and balanced trading relationship with the US worth £315 billion, which supports 2.5 million jobs across both our countries. This is second only to the EU, where our trading relationship is worth £791 billion. Yesterday evening the United States announced a 10% reciprocal tariff on UK exports, and it has today imposed a 25% global tariff on cars. That follows the application of tariffs of 25% on US imports of steel, aluminium and derivative products announced on 12 March.

No country was able to secure an exemption from those announcements, but the UK did receive the lowest reciprocal tariff rate globally. And although that vindicates the pragmatic approach the Government have taken, we know that while the tariffs are still being levied the job is far from done. We are, of course, disappointed by the increase in tariffs on the UK and on other countries around the world. The impact will be felt among all trading nations. But I would like to update the House on how the UK can navigate these turbulent times, acting in our national interest and for the benefit of all our industries.

I would also like to take this opportunity to thank my American counterparts, Secretary of Commerce Howard Lutnick, US trade representative Jamieson Greer, and special envoy Mark Burnett for their engagement over the past few months. While any imposition of tariffs is deeply regrettable, from the beginning they promised to make themselves available and they have been true to their word. I look forward to our continued engagement over the days ahead.

As Members will know, since the new US Administration took office, my colleagues and I have been engaged in intensive discussions on an economic deal between the US and the UK, one that would not just avoid the imposition of significant tariffs but deepen our economic relationship. On everything from defence, economic security, financial services, machinery, tech and regulation, there are clear synergies between the US and UK markets. That is reflected in the fair and balanced trading relationship that already exists between our two countries.

I can confirm to the House that those talks are ongoing and will remain so. It is the Government’s view that a deal is not just possible but favourable to both countries, and that this course of action serves Britain’s interests as an open-facing trading nation. I have been in contact with many businesses, across a broad range of sectors, including those most affected, who have very much welcomed this approach. It is clear to me that industry itself wants to grasp the opportunity a deal can offer and welcomes the Government’s cool-headed approach.

In increasingly insecure times, I have heard some Members cling to the security of simple answers and loud voices. I understand the compulsion, but I caution Members of this House to keep calm and remain clear-eyed on what is in our national interest, not simply to proclaim that we follow the actions of other countries. The British people rightly expect the Government to keep our country secure at home and abroad, and an unnecessary, escalating trade war would serve neither goal.

True strength comes in making the right choices at the right time. Thanks to the actions of our Prime Minister, who has restored Britain’s place on the world stage, the UK is in a unique position to do a deal where we can, and to respond when we must. It remains our belief that the best route to economic stability for working people is a negotiated deal with the US that builds on our shared strengths. However, we do reserve the right to take any action we deem necessary if a deal is not secured.

To enable the UK to have every option open to us in the future, I am today launching a request for input on the implications for British businesses of possible retaliatory action. This is a formal step and it is necessary for us to keep all options on the table. We will seek the views of UK stakeholders over four weeks until 1 May 2025 on products that could potentially be included in any UK tariff response. This exercise will also give businesses the chance to have their say and influence the design of any possible UK action. If we are in a position to agree an economic deal with the US that lifts the tariffs that have been placed on our industries, this request for input will be paused, and any measures flowing from it will be lifted. Further information on the request for input will be published on great.gov.uk later today, alongside an indicative list of potential products that the Government consider most appropriate for inclusion.

I know that this will be an anxious time for all businesses, not just those with direct trade links to America. Let me say very clearly that we stand ready to support businesses through this. That starts by ensuring that businesses have reliable information; any businesses that are concerned about what these changes mean for them can find clear guidance and support on great.gov.uk, where there is now a bespoke webpage.

This Government were elected to bring security back to working people’s lives. At a time of volatility, businesses and workers alike are looking to this Government to keep our heads, act in the national interest and navigate Britain through this period. While some may urge escalation, I simply will not play politics with people’s jobs. This Government will strive for a deal that supports our industries and the well-paid jobs that come with them, while preparing our trade defences and keeping all options on the table. This is the right approach to defend the UK’s domestic industries from the direct and indirect impacts of US tariffs in a way that is both measured and proportionate, while respecting the rules-based international trading system.

As the world continues to change around us, British workers and businesses can be assured of one constant: this is a Government who will not be set off course in choppy waters. The final part of our approach will be to turbo-boost the work this Government are doing to make our economy stronger and more secure, including our new industrial strategy. We will strike trade deals with our partners and work closely with our allies for our shared prosperity. We have a clear destination to deliver economic security for working people. We are progressing a deal that can do just that, laying the foundations to move quickly should it not, and ensuring that British businesses have a clear voice in what happens next. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

[Andrew Griffith (Arundel and South Downs) (Con)]

I thank the Secretary of State for advance sight of his statement.

Businesses, workers and their families woke up this morning with greater fear and more uncertainty about their future. Tariffs make us all poorer by pushing up costs, suppressing demand and making the pound in our pocket buy less of the things we need. It is free trade to which we owe our past prosperity, and free trade that has lifted billions out of poverty since the second world war.

This is a moment for calm words and cool heads, and we will support the Government when they do sensible things to reverse the impacts on our already fragile economy. I am glad they have recommitted to reaching a deal with our closest ally and largest single country trading partner. However, this is also a moment for honesty and telling the truth. The Government, sadly, got no special favours from the White House last night. The Secretary of State refers to vindication. This is no vindication at all. We are in precisely the same band as the Congo, Costa Rica, Kosovo and Christmas Island. In fact, I can count more than 125 countries and territories that have the same US tariff levels as we now do—not that special.

Our automotive manufacturers face unchanged tariffs of 25% on around £8 billion-worth of cars and auto parts exports. Steel and aluminium exports remain at 25% and, on a volume-weighted basis, our exports face an average tariff of closer to 13%.

Above all, last night was a vindication of those who were pilloried and abused for wanting our country to have the freedom to decide our own trade policy. If Labour and the Liberal Democrats had their way, we would still be in the EU. As the Prime Minister acknowledged this morning, thousands of British jobs have been saved today as the result. I hope that he and his colleagues had the decency to regret the 48 times that they voted to stay in Europe, and to thank us for getting Brexit done.

Last week, the OBR warned that these tariffs could knock up to 1% off GDP. We are already in a per capita recession and markets are falling this morning. It is businesses that create jobs and grow our economy, yet, at every turn, the Government have piled on headwinds when they need our support. They put a tax on jobs, more than doubled business rates for many, introduced the family business death tax and are barrelling ahead with flawed recycling charges. No wonder business confidence remains at rock bottom.

To help British exporters survive, the Government must urgently tackle our sky-high energy costs. A business in Birmingham, west midlands, faces energy costs that are four times those of its competitors in Birmingham, Alabama in the US. That dwarfs the impact of tariffs and is no basis on which to compete.

The Secretary of State was responsible for the Employment Rights Bill, which will hit businesses so hard that the OBR has not even begun to assess how much it will hurt the economy. Now is the time, today is the day for the Secretary of State to walk back to his Department and, in the national interest, instruct his officials to shelve the Employment Rights Bill. He should put ideology aside, put the unions on hold and put the Government on the side of British business. The cost of failure is too high, the burdens on business are too great and time is too precious, the Secretary of State must act and act fast.

Let me conclude with some questions for the Secretary of State on behalf of all our constituents. Will he publish an urgent assessment of the impact of today’s tariffs on the UK economy so that the markets can see whether the Chancellor’s emergency Budget sums still add up, or whether she will be back for more taxes? When will he give the car makers the clarity they need on the ZEV—zero emission vehicle—mandate? Will he undertake to keep Parliament informed and to publish the UK’s broader objectives—not its negotiating strategy, but the broader objectives—in these trade negotiations with the UK, precisely as the previous Government did in March 2020? Will he assure us that any deal will back British farmers and food producers and uphold our high environmental protection and animal welfare standards, which we have enhanced and upheld in the agreements that we have reached since leaving the EU?

Will the Secretary of State now surge additional resources for exporters, reallocating resources across Government to fund a new version of the UK trade show programme and enlarge the GREAT campaign? What consideration are the Government giving to the special situation of Northern Ireland? Will he guarantee that all claims under the duty reimbursement scheme for Northern Ireland will be paid promptly and the Government will commit additional resources when required? Can he reassure us that, in the event the UK did see a major trade distortion in Northern Ireland, the Government would be prepared, if necessary, to trigger article 16 of the Windsor framework? Will he reassure the House that any concessions to UK tech giants on the digital services tax will not simply shift the burden to the United Kingdom’s small businesses?

The Conservatives are on the side of business and Britain. We understand the gravity of the situation, and we will support the Government where they act in the national interest. I hope that they will take this moment seriously, get back around the table with their US counter- parts and involve the House in their deliberations.

[Jonathan Reynolds]

I thank the shadow Secretary of State for his response and his tone in responding. I recognise his commitment to free trade and the case he has made for it. I believe it is something we broadly share. He asks for honesty—that is always good in Parliament—but he is a little bit flippant about the position we find ourselves in today. He mentions a series of countries—Christmas Island, Kosovo—that do not have the kind of complex trading relationship that we have with the United States.

The shadow Secretary of State can see from my tone, presentation and words that I am disappointed that we are in this position, but I look at the EU, facing a tariff of 20%; at Japan with 24%; at India with 26%; and at Canada and Mexico with 25% tariffs already in place. Yes, we are in a more favourable position compared with those key friends and allies, but we must go further, especially in relation to the tariffs on the automotive sector, which is a particular concern for me.

The shadow Secretary of State again brings up Brexit, which was perhaps not the Conservative party’s finest hour in preparing the state for large trade shocks, but let us pass over that. As the President of the Board of Trade, I am of the view that it is good that we can set our own trade policy, but I say to him and to all colleagues: is it not time that we try to unite the country for the future, rather than keep on harking back to the past? Is that not how we will find our way through this? Half the country voted one way, and half voted the other way, but let us build together and look to the future. It is the right way forward. My next point is very important: it is false to see this as a choice between working with the US and working with the EU. We can work in a way that is consistent with both, and we should all be committed to that.

The shadow Secretary of State also asked about the implications for the United Kingdom. Broadly, he asked me to reverse a series of policy choices made in the last 14 years; I will go through all of those. In relation to the spring statement, the Chancellor had already rebuilt the headroom substantially higher, due to the global turbulence, than that bequeathed her by the Conservative party.

On the Conservatives’ spending plans, they left no business rates relief whatever: it was a one-year relief, rolled over, that never had any longevity. I have not yet received any credible proposals on how their spending plans would be paid for, but I am always available to receive those in writing.

The shadow Secretary of State asks for reassurance, which we are always happy to provide on domestic policy changes. On things like the ZEV mandate for the automative sector, we are more pragmatic than the Conservative party was when in office. As he knows, the Department for Transport leads on that policy, but our response to the consultation on potential changes will be published soon. As colleagues would expect, I will not comment on the details of any negotiations with the US.

In our manifesto, we committed to the UK’s sanitary, phytosanitary and food safety standards system. Of course the Government will adhere to that. The shadow Secretary of State also knows that we are imminently preparing to publish our trade strategy, which covers a lot of these issues, particularly around support for exporters that we want to proceed with.

Northern Ireland is an incredibly important issue for all colleagues. The potential for a differential response from the European Union could lead to a difficult situation in Northern Ireland. As the Secretary of State highlights, the key policy is the duty reimbursement scheme, because goods entering Northern Ireland from the US that will not go into the wider single market are subject to the reimbursement programme. We must make sure that that works well. I recognise the points that he has made on it, and I will continue to update the House and all colleagues on our work in this area. I recognise how important and relevant it is to all our constituents, so we will endeavour to keep all colleagues updated on progress.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

Workers at BMW at Cowley are deeply concerned by the recent news. BMW is right that a trade war would have no benefits. The Secretary of State is right to engage calmly with his US counterparts, but what discussions has he had with his EU counterparts, given how integrated our automotive sector is with that of EU countries?

[Jonathan Reynolds]

My right hon. Friend is right that some of our iconic automotive manufacturing brands, such as BMW, Jaguar Land Rover and Aston Martin, have had particular success in the US market and are therefore exposed to tariffs. There is close co-operation in Government between the teams working on our EU reset and on our trade negotiations in this area, so I assure my right hon. Friend of the alignment, continuity and consistency of our policy.

My right hon. Friend will know that, along with the changes to domestic policies such as the ZEV mandate, there was significant money in the Budget for incentivising the roll-out of infrastructure for electric vehicles, and £2 billion has been put aside for the wider joint collaboration and research and development initiatives with the automotive sector, which remains a clear and consistent Government priority. I will keep my right hon. Friend updated given her particular constituency interest.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I thank the Secretary of State for advance sight of his statement.

Donald Trump has launched a destructive trade war that threatens the jobs and living standards of people across the UK and around the world. Let us be clear: this is not about reciprocity or a level playing field. The US is conflating our high British standards with trade barriers, and it is doing so on purpose. This is Donald Trump saying to the UK that he will lower tariffs only if we lower standards. He is saying, “Sell out your NHS to US vulture firms, or else; sell out your farmers to US big business, or else; and give up protections against online scammers and for children’s safety to US tech barons, or else.” If the Government give in to Trump’s threats, it will only encourage him to use the same bullying tactics again and again.

It is simultaneously true that the way the White House has made its crude calculation actually makes Britain’s negotiating position a bit better than the position of other countries, and we genuinely welcome that—it is a relief to us all. With regret, there is, however, no sign that the Government’s lobbying has borne any fruit, given that we have been put on the same regime as a number of other countries such as Honduras, Peru and Guatemala. This must be a wake-up call.

We Liberal Democrats believe that we must end this trade war as quickly as possible, which means standing firm with our allies against Trump’s attempts to divide and rule. Will the Government take urgent steps to bring our Commonwealth and European partners together in an economic coalition of the willing against Trump’s tariffs? We welcome the month of consultation with business; will the Government confirm that they will look at energy costs and business rates reform as part of that four-week consultation, especially in respect of the car industry? Will the consultation run in parallel with talks with our allies to draw up plans for the co-ordinated use of retaliatory tariffs?

When do the Government expect to publish an assessment of the impact of the tariffs on small businesses, jobs and the cost of living? Will they look seriously at launching talks with the EU to create a bespoke customs union? Let us be clear: the UK would not be in a worse place if the Government had heeded our calls to negotiate a customs union. Even the Conservative party should be able to see that Turkey has been in a customs union with the EU since 1995, and it has likewise been hit with tariffs of only 10%.

Finally, will the Government rule out once and for all the watering down of the digital services tax, or our digital competition regulations, to appease Trump’s billionaire backers?

[Jonathan Reynolds]

I am grateful to the hon. Lady for her questions and her submission. I am pleased to hear that she feels we need to end any potential trade war—although I am pretty certain I heard her in the media last week demanding that we escalate the trade war. I do not think that is in any of our interests, and it is not the route and direction we need to go in.

The hon. Lady mentions that there is no sign of the UK being treated in any different way; she will know that the US has a view of VAT that we do not share—the US compares VAT to its sales tax. If we look at our rate of VAT and the comparable treatment of the European Union, we see that there is a differential. That does not satisfy me, because I believe we could seriously get to a position in which we not only avoid the imposition of additional trade tariffs and barriers, but deepen our trade relationship and remove some of the barriers that already exist, particularly in the trade in services. That is the Government’s objective.

We of course work closely with a whole range of friends and allies, but when they go into any negotiation, they represent their own national or customs union interest, and we do the same. I would not expect any country to go into a negotiation trying to represent the UK; other countries will have their own interests. I do the same for the United Kingdom: I have to put our interests first. There is a different structure to the trading relationship between the US and the UK—for instance, the US does not have with us the large deficit in traded goods that it has with the EU or China—so it is a different level of conversation and it allows us to put our own interests first. That is all that the Government seek to do in our policy towards the US.

The hon. Lady mentions a range of other issues that I recognise. Colleagues know that I had strong views on the very large increases in industrial energy costs that occurred after 2010—there was an increase of almost 50% in real terms—and I think they need to be addressed. The industrial strategy and other Government initiatives set out our wider policy objectives and tools in this area. The consultation and call for input that I announced today is much more about the formal steps we need to take to understand from businesses the impact and give them the chance to put forward their views. As I say, that will not be necessary if we can come to an agreement, which I believe all Members want us to do. I believe that the relationship can be deepened. If we get it right, it will not come at a cost to our other key trading relationships, such as with the European Union. That is the Government’s objective and I welcome any support from throughout the House for fulfilling it.

[Callum Anderson (Buckingham and Bletchley) (Lab)]

I thank my right hon. Friend for his statement. Yesterday’s dramatic shift in US trade policy marks an historic abdication of the principles of open commerce and global trade that have underpinned the economies of the western world since the end of the second world war. Tariffs bring no winners—there are only losers, through higher costs for consumers and higher barriers for business and industry. Will the Secretary of State set out how the Government are working with international institutions such as the World Trade Organisation to prevent further escalation and position the UK as a leading champion for open markets?

[Jonathan Reynolds]

I warmly welcome my hon. Friend’s question. He is right that this is a substantial change in US policy. It is important that, even if we do not agree with some of the decisions made and the thinking that underpins them, we recognise where they come from. Indeed, they were part of the US presidential campaign, so we have been able to prepare the ground for our conversations.

My hon. Friend asked about international co-operation. We are strongly involved with the WTO, and particularly supported the re-election of Dr Ngozi as its director-general. It is important to remember that despite the problems the multilateral system faces, it is still the basis on which the vast majority of trade around the world takes place. We will continue to play a constructive role in relation to the WTO, and any multilateral organisation, where that serves our interests.

[Steve Barclay (North East Cambridgeshire) (Con)]

What was missing from the Secretary of State’s statement, and from his reply to both Opposition Front-Bench spokespeople, was the Government’s estimate of the cost of the tariffs, particularly in the context of the Chancellor’s fiscal headroom. Will the Secretary of State update the House on that specifically?

[Jonathan Reynolds]

As a former Treasury Minister, the right hon. Gentleman will know the kind of work that goes on to make sure that such assessments are made. The announcement came late last night; it is only last night and this morning that we have had the chance to respond to it. He will also appreciate that the impact on the UK is about not just the direct relationship between the US and the UK, but what happens in the wider global trading system. How other countries choose to react to the US announcements will be the determining factor for the impact on the UK, and we do not know that at this stage.

I promise to keep the House updated, and to update the right hon. Gentleman personally, if he wishes, at any stage on our work to assess the impact on the UK. For all Members of Parliament, this should be a time for reassurance, for calm heads and for giving clear information to British business on how we will navigate these difficult times. That is the correct message to send out from Parliament.

[Ms Stella Creasy (Walthamstow) (Lab/Co-op)]

If those on the Opposition Front Bench are still trying to propagate the arguments of 2016, I suggest they are a bit drunk on chlorinated chicken. We need to get real. Celebrating a tariff of 10% rather than 20% is like a person celebrating the fact that when they were mugged, only their wallet was taken, not their watch as well. The British public deserve better.

I am grateful to the Secretary of State for talking about our relationship with Europe, because who knows what President Trump will bring next week? We do five times more business with the European Union than with America. It is in our interest to have a close and stable trading relationship with Europe, but right now, that is up for grabs, too. What do the tariffs mean for the Secretary of State’s negotiations on the European reset, and for the summit in May?

[Jonathan Reynolds]

I am grateful to my hon. Friend for her question. Let me be clear again: no one is celebrating the position that the country found itself in this morning. We recognise the differential for the UK, but all of us in the House—Members from all parties—are disappointed by the announcement from the United States, and are seeking to provide a way through.

I know that my hon. Friend feels very strongly about this matter, but I reiterate to her that we do not have to make a choice between the US and the EU. They are two key, long-term and important trading partners, and security and defence partners as well. The EU summit next month is a key event. Our aspirations remain for an ambitious EU reset on trade, to rectify flaws in the agreement made by the previous Government. Our objectives are clear and were all in the manifesto on which Government Members stood for election and won. They remain a key priority. I assure my hon. Friend that the alignment in Government between the EU reset and the US negotiation is very strong.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

The Business Secretary delayed and dithered for five months before meeting his US counterparts, and working people and businesses in the UK are paying the price for that dereliction of duty. Does he regret his refusal to meet his US counterparts earlier?

[Jonathan Reynolds]

The hon. Lady is incorrect, and I must ask her to take a bit more of a serious tone in the questions that she brings to the House. This is really serious stuff. I have met my counterparts on many occasions, and we were in contact even before some of the formal procedures on the US side were confirmed. It was not technically possible to have been in touch with them sooner. Their engagement has been consistent and serious. She is incorrect, and I ask her to please approach these important proceedings with a bit more seriousness.

[Bill Esterson (Sefton Central) (Lab)]

The US tariffs have serious implications for UK industry. They are a reminder of the importance of the industrial strategy and Government support, including for domestic steel- making capability, which, sadly, the Conservative party neglected badly over 14 years. Will my right hon. Friend confirm that he is fully committed to the plan for steel, and confirm the importance of our sovereign steelmaking capacity?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his question, and for the work that he did, alongside me, in this area over many years in opposition. He knows the commitment of the Government and Government Members to the steel industry. Of all the issues of industrial neglect that we were bequeathed, those are some of the harder ones to resolve; there is no doubt about that. He knows that our ambition is strong, whether we are talking about the future of British Steel at Scunthorpe and Teesside, or, in terms of sovereign capability, our aspirations under the steel strategy for new investments and new technology. The issues are difficult—particularly this week; I know that all the workers at Scunthorpe are concerned—but the Government’s commitment to and work on the steel sector will go on.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

Can the Secretary of State offer us any guarantee that the Government will not enter into a trade deal with America that will allow the importation and sale in this country of food produced to lower environmental and animal welfare standards than those that we demand from United Kingdom farmers?

[Jonathan Reynolds]

The right hon. Member knows that I will not go into the detail of any negotiation, but he knows of our manifesto commitment to our SPS regime, which I mentioned to the shadow Secretary of State. That commitment is important to the Government, and it affects all our trade negotiations, not just this one.

[Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)]

I welcome the Secretary of State’s statement. The port of Felixstowe is the UK’s busiest container shipping port. Though we import more than we export, we are also the ninth-largest exporter, and the USA market is important for our local and national trading markets. Last night’s news will likely have a significant impact on global trading markets, and it is not an exaggeration to say that it could change the global trading consensus of the last 80 years. Just as President Trump is acting in what he believes is his national interest, will the Secretary of State reassure me and my constituents in Felixstowe and across Suffolk Coastal that he and the Prime Minister will act firmly in our national interests, and do whatever is necessary to protect British jobs, British trade and industry, and British consumers?

[Jonathan Reynolds]

My hon. Friend is right to talk about the historic scale and significance of the announcement last night, particularly for her constituency, which has economic infrastructure that is so vital to the country, and how we will process the scale of the changes. I assure her that the Prime Minister, members of the Cabinet and I as the Secretary of State are at all times doing what she mentioned, in the decisions that we have had to make at pace, so that we can put our national interests forward in a way that has allowed us to progress negotiations and to keep opportunities open.

[Ben Obese-Jecty (Huntingdon) (Con)]

For all the carefully choreographed bonhomie in the Oval Office last November, the Prime Minister failed to secure a US military backstop for his coalition. Despite No. 10 briefing a narrative about productive discussions at the weekend, the Prime Minister has admitted to business leaders that there will be an economic impact from the decisions that the US has taken. On Times Radio this morning, the Business Secretary said that he would roll up his sleeves to try to remove the impact on businesses entirely. That is a bold claim, given the circumstances and the impact that the Chancellor’s Budget is already having. What timeframe does he envisage for an economic deal with the US? What will he be doing until 1 May while waiting for the views of UK shareholders?

--- Later in debate ---

[Jonathan Reynolds]

The hon. Member will have heard me this morning on the media and here in Parliament being clear about how we feel about these decisions. We are deeply disappointed that no country has been able to secure an exemption from the tariffs, but we remain committed to working hard to deliver a potential way through this.

The hon. Member asked how we will respond. Respectfully, the statement covered the fact that we will ask British businesses to work with us on the necessary formal steps. On the timeframe, I shadowed a lot of Conservative Business Secretaries in the last few years—there was fairly rapid turnover at one point—and some of them gave all kinds of timeframes and commitments on trade deals, but that is not in our interests because it puts pressure on us in the negotiations. The US side will have timescales that it wants to engage on, but I believe that no country in the world is further advanced in its talks with the United States, and hope and optimism comes from that.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Chi Onwurah will be followed by Steve Darling.

[Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

The US is our closest ally and the world’s largest economy, as well as being the UK’s greatest source of foreign direct investment, so I welcome my right hon. Friend’s calm and pragmatic approach, and his determination not to abandon British workers’ rights in the face of these tariffs, as the Conservatives urge us to, but rather to focus on the trade talks. Will the Online Safety Act 2023, the Digital Markets Competition and Consumers Act 2024 and the digital sales tax be part of the talks? Will he also say a little more about his counter-argument to the Trump Administration’s view that VAT and the DST represent tariffs, rather than tax?

[Jonathan Reynolds]

My hon. Friend reminds me that I did not get a chance to respond to the shadow Secretary of State. If, following these announcements in the United States, we had come to Parliament and said, “You know, the answer to this is that low-paid people will not get the sick pay they would otherwise have got under this Labour Government,” that would have been the wrong response. Again, as ever, that would be scapegoating the wrong people for difficult things that have nothing to do with their position in the UK economy.

My hon. Friend skilfully leveraged in a number of questions. There are real differences of opinion between us and the United States on VAT. We say that it applies, as it does, to domestically produced goods as much as to goods that come into the UK, and that it is not trade distorting; indeed, the balance of trade between the US and the UK is evidence of that. The argument from the US is slightly different. I will not go into the content of all the negotiations—she will appreciate that—but success in any negotiation is about being willing to be at the table and put forward our argument, while recognising the other side’s argument. That is the approach of this Government, and that is the way forward.

[Steve Darling (Torbay) (LD)]

We must stand up to the bully that is Trump and support British business. This morning, I reached out to Gooch & Housego, a manufacturer in Torbay of fibreoptics that help to facilitate international communications. It has interests in manufacturing in the US, the UK, Europe and Thailand. It and other players in the high-tech sector now have an extremely complex world to navigate. How does the Secretary of State plan to help the high-tech sector navigate the challenging world that we now live in?

[Jonathan Reynolds]

Our job is to defend the UK national interest, and the company in Torbay that the hon. Member described—it sounds like a fantastic company —is an exemplar of why I want businesses to be based in the UK: because they can then access a whole range of markets from the best possible position. That is exactly the kind of company that, because of complex supply chains, will have questions about what the announcements mean for it. We decided to launch bespoke information on great.gov.uk today to coincide with this announcement precisely to attempt to provide such companies with the assurance that they need.

A business like that can genuinely help us through this difficult period, because whatever hon. Members think of the President and his agenda, that agenda is based on returning a certain type of good-quality manufacturing job to the United States, and in many cases British firms and British business already provide those. They will provide more if we can find a way through these trade tensions and the imposition of tariffs, so they can work with us on the solution to these problems. I am grateful to the hon. Member for mentioning that company.

[Dr Marie Tidball (Penistone and Stocksbridge) (Lab)]

I am pleased to hear the Secretary of State’s commitment to steel. Stocksbridge Speciality Steels in my constituency is a strategically significant site with world-class, unique capability for creating specialist parts that will be essential in increasing our defence capacity and net zero infrastructure. Last week, I held a community listening event on the Government’s excellent steel strategy. The message was clear: let us ensure that British-made steel is best. Does the Secretary of State agree that today’s news further demonstrates why it is so important that this Government are committed to a £2.5 billion plan for steel?

[Jonathan Reynolds]

I greatly appreciate my hon. Friend’s advocacy for steel. She puts the case extremely well, which is that the kind of products that we make in the UK steel sector and which, in the main—where we export them to the US—are niche, high value and in critical sectors such as defence and the manufacturing supply chain, are complementary to the US. That is a good case of why I believe there is no need and no argument for the imposition of tariffs in the sector. Our steel sector is complementary to the US, whether that is in defence or the manufacturing supply chain. That is the basis on which we can find a way through this.

My hon. Friend is right to say that the level of domestic support has increased considerably through the steel strategy and the £2.5 billion—£3 billion in total, including Port Talbot—that this Government have put forward. It is very important to us that we support the foundation industries. The steel strategy is a clear example of that.

[Madam Deputy Speaker]

From another steel constituency, I call Martin Vickers.

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[Martin Vickers (Brigg and Immingham) (Con)]

Dealing with the erratic Trump Administration must be something of a nightmare for negotiations. The unexpected can always emerge from the White House, but one certainty is that tariffs were going to form part of the Trump agenda. It is somewhat surprising that the Minister is only today launching a consultation about the implications of retaliatory measures. Building on the previous questions about steel, will the Secretary of State at least acknowledge that the current uncertainty in the whole of the world market increases the pressure on the Government to acknowledge that further support will be needed for that industry?

[Jonathan Reynolds]

I am grateful to the hon. Gentleman for his comments. He knows that I always have time for him to discuss the particularly challenging constituency issues that he faces through the position at British Steel. Just to be clear, today’s announcement is the formal step necessary to engage with British business about last night’s announcements. That is an important stage and the right way forward, and we have been prepared for it.

In relation to the other challenges around the steel industry, this is a particularly challenging situation—he and my hon. Friend the Member for Scunthorpe (Sir Nicholas Dakin) know that better than anyone. Our commitment, even in difficult circumstances, is absolute. We will continue with that, and I will continue to keep him and his constituents updated at all times.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Many of us may remember a time when Boris Johnson and many of those on the Conservative Benches claimed that a trade deal with Donald Trump could increase our trade with the US by up to five times. It was clearly more difficult than they thought, but it is important to learn from failure. I wonder whether the Opposition had been in a position to pass on any pearls of wisdom or any advice—maybe even an oven-ready deal—that might help the country at this time of difficulties. [Laughter.]

[Jonathan Reynolds]

I am grateful to my hon. Friend. I have been in touch with a lot of people who have been this country’s Business Secretary, including some Conservative colleagues who remain in touch. I find that, at times, to be a very useful and worthwhile thing. I cannot tell my right hon. Friend that I am in touch with Boris Johnson on this or any other matter.

On the work of the previous Government, nothing substantive was negotiated in the trade talks they had with the US. This is a very different situation, but one where I think, if we get it right, there are gains. As I say, it is not just to avoid what was announced last night or before that on steel, aluminium and automotive tariffs, but to genuinely improve that trading relationship to our mutual benefit.

[Sir Desmond Swayne (New Forest West) (Con)]

Tariffs are always and everywhere a diminution of the choice available to consumers. So it is not liberation day; it is the very antithesis. I hope the Secretary of State will bear that in mind as he considers the policy and the consultation on any retaliatory action.

[Jonathan Reynolds]

I am grateful to the right hon. Gentleman for how he has put that. I think he is right on where the burdens of policy fall in that area. It is not in anyone’s interest. No one wins a trade war; that is impossible. However, it requires us to react in a way that is calm, reassuring and pragmatic and which seeks a way forward. I can tell him that that is exactly what this Government will seek to do.

[Andrew Cooper (Mid Cheshire) (Lab)]

I thank the Secretary of State and his colleagues for all he has done so far in negotiating an economic partnership deal with the US. The automotive sector is an incredibly important one for Cheshire and Merseyside, both for manufacturers such as Bentley, Vauxhall and Jaguar Land Rover, and the wider supply chain, which supports the employment of tens of thousands. The US is the biggest export market for Bentley Motors in Crewe, so it is likely to be at the sharp end of the tariffs. We all hope that my right hon. Friend’s calm-headed approach has meant that we are in the best position to secure a deal. What specific support does he have in mind for the automotive sector to help it weather the storm?

[Jonathan Reynolds]

My hon. Friend is right to highlight that. I am tremendously proud of our automotive sector. Indeed, he may know that I come from and grew up in one of our automotive sector powerhouses, Sunderland, with the Nissan plant. It is incredibly important to lots of communities in the supply chain all around the UK, but particularly to our exports. The US is a key market, particularly for the high-value models, some of which he mentioned, which are incredibly valuable to this country. We want and seek to maintain that success.

On the kind of support, first, it is about dealing with this issue. Secondly, there are things such as the announcement in the Budget of the £2 billion for collaboration with the private sector in the automotive field, the money incentives for electric vehicle infrastructure and the changes around the wider ZEV mandate that we are consulting on and about to publish a response to, for which we need a more pragmatic response than we have seen in the past.

[Stephen Flynn (Aberdeen South) (SNP)]

Despite there being a trade deficit and despite the best efforts of this Government, including the Secretary of State, for whom I have a great deal of personal respect, the reality is that we have still been hit by significant tariffs from the States. People at home right now will be worried about jobs, inflation and the global headwinds, which will undoubtedly hit us irrespective of our own tariff situation. One industry in particular, back home in Scotland, that will be watching with eager eyes is the Scotch whisky industry, given the billions of pounds of exports that go to the United States. I do not want the Secretary of State to try and control—nor could he—Trump’s tariffs policy. What he can do, however, is control his domestic taxation regime. Will he take this opportunity to re-engage with the Chancellor in and around the Scotch whisky taxation status?

[Jonathan Reynolds]

The right hon. Gentleman knows the value that we place as a Department on the incredible product that is Scotch whisky. We have a particular set of policy initiatives on geographic indicators to make sure the brand is protected, and I always do everything I can to support Scotch whisky, which is just absolutely world class and always will be.

He is right to say that our joint success in Scotch whisky produces a prominence that sometimes makes it vulnerable to retaliatory measures because of the recognition of the success in that field. On domestic policy, I remain in close contact with the Chancellor on all matters and will do on this one. There are tremendous opportunities for Scotch whisky from some of the other trade negotiations that we are having, such as with India in particular, which is the biggest whisky market in the world, as the right hon. Gentleman will know. I think there could be real steps forward in terms of our market access there and the arrangements that we have, which will give us an advantage over other countries, and that is also a prominent part of our work.

[Mr Calvin Bailey (Leyton and Wanstead) (Lab)]

War does not benefit anyone. A trade war between the UK and its closest ally will not benefit our industry nor our people and will stifle our ability to grow our way out of 14 years of Conservative mess. For that reason, I thank the Minister for his pragmatic and cool-headed approach. However, the measures also threaten our ability to prevent military conflict here on the continent of Europe. Will he detail what action he is taking to ensure that our air and space industry can work with our European partners to implement the defence industrial strategy, which is central to ensuring peace here in Europe?

[Jonathan Reynolds]

My hon. Friend is absolutely right in his assessment of the burdens and benefits of solving the challenge we have been faced with by the announcements yesterday evening. He will know that the defence sector is one of the eight priority sectors of our industrial strategy. There is a whole range of work across areas like air and space that we are engaged in with Ministry of Defence colleagues. Of course, we have also had a significant increase in defence spending, which is a crucial part of how we respond to these threats. The US will always be a crucial security ally for us, and our shared interests—whether they are economic or in the defence and security space—are enduring. That is something we should always bear in mind as we try to find a way through.

[Sir Christopher Chope (Christchurch) (Con)]

I very much support the Secretary of State’s concerns about the automotive industry in this country. Will he therefore take action immediately to remove the arbitrary restrictions on the ability of our domestic motor manufacturers to produce and sell vehicles with internal combustion engines? The Government’s policy has already reduced the domestic production of vehicles in this country by a third between February last year and February this year. Why does he not lead by example and remove all tariffs on US vehicles?

[Jonathan Reynolds]

I thank the hon. Member for his words on the automotive sector. On the ZEV mandate that he references, it was a policy of the previous Government to be clear. We inherited that policy. The consultation we have opened with our colleagues in Department for Energy Security and Net Zero and the Department for Transport will look at that in the context of a fall across all European markets in automotive production and demand, and this incredible entry on to the world economy of increased Chinese production, which is a challenge for all of us. He will also know that the automotive sector is very much an export-led sector—we export 80% of what we make—and all our key markets have the transition policies in place towards electric vehicles, so if we did not make that transition, we would not have a product to sell in those key markets. We have to work with industry to do it, but we also have to recognise that what we inherited from the Conservative party was not working. That is why we opened the consultation, and we will publish the response very soon.

[Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)]

I thank my right hon. Friend for his statement and for his efforts and those of his team thus far. I also welcome the fact that there will be engagement with businesses on the potential for retaliatory action—that input is vital. While the UK has the lowest rate of reciprocal tariffs, that will be cold comfort to the many businesses in my constituency of Bathgate and Linlithgow and, indeed, for those in the whisky and salmon industries, which employ thousands of people across Scotland. Will the Secretary of State assure the business community that he will work at pace with his team to secure a sustainable trade deal with lower tariffs and to bring much-needed certainty to businesses and households across this country?

[Jonathan Reynolds]

I thank my hon. Friend for her support. We are taking steps to ensure that all options are on the table for the action we may need to take in future—that is important. It is inevitable when an announcement of this magnitude has occurred that businesses will be concerned, and I understand that will be what her constituents are telling her this morning. I absolutely assure her that the approach I have laid out today will be something that we continue to work towards at pace. Our tone, the assurances we can give and the fact we are approaching this with calm-headed pragmatism is vital, and that will be part of how we can reassure businesses. We will work to get to the position she articulates—a better set of trade terms with the US—and that is the objective of the Government.

[Munira Wilson (Twickenham) (LD)]

The Business Secretary said in his statement,

“True strength comes in making the right choices at the right time.”

Will he assure parents, carers and young people up and down this country that he will show true strength with Donald Trump and his sidekick Elon Musk, and make the right choice by refusing point blank to trade away our children’s safety online in watering down—in any way, shape or form—the implementation of the Online Safety Act 2023?

[Jonathan Reynolds]

I do believe that strength comes in making the right choices at the right time in our national interest. I can tell the hon. Member that the talks I have had with my US counterparts are not to do with what she has articulated; they are to do with goods, services, the regulation of professional bodies and all the things we would associate with normal trade talks. The United States is not seeking to make our children unsafe or more vulnerable. That is not the right approach to take to our key and core ally. I think sometimes the Liberal Democrats are inventing problems to try to propose that they are the solution. This is a conversation about trade, and it is vital that we keep it in those important and appropriate terms.

[Barry Gardiner (Brent West) (Lab)]

There is a threat, but there is also an opportunity. What measures is my right hon. Friend taking to combat trade leakage and the diversion of goods produced in countries hit by high US tariffs, which may dump their products in the UK, undercutting our domestic producers? What steps is he taking to encourage manufacturers based in those countries and, indeed, in the EU, to relocate to the UK and export from here to the US to take advantage of our lower 10% tariff?

[Jonathan Reynolds]

I am grateful to my hon. Friend for raising one of the most important issues we face: the impact of trade diversion—not just the relationship between the US and the UK, but what it means for goods that potentially would have gone to other countries coming to the UK market. That is something we have to be extremely vigilant about. He will know that we have those safeguards in place on the tariffs already announced on steel and aluminium, and that we have our own quotas and 25% tariff to protect domestic production to ensure that that is not the case. I can tell him that we stand ready to use those powers for any sector of the economy that we need to use them for, or indeed to take further powers if that is deemed to be necessary.

I want businesses to be based in the United Kingdom and to serve a whole range of markets from the United Kingdom. That pitch is not just about the comparative position we find ourselves in, but about the kind of policies we put in place to ensure we have the level of competitiveness we need. That is something that every country in the world is engaged in, but I assure my hon. Friend—not so much on the announcements last night, but on the wider agenda of the Government—that that is our commitment.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

Tariffs are a tax on import paid by domestic businesses. As the Business Secretary reflects over the forthcoming weeks and consults with businesses, will he reflect on the taxes he has raised on our own domestic businesses and think about whether that is an appropriate response to what is happening?

[Jonathan Reynolds]

We always reflect on the decisions we have made as the UK Government. I say to the hon. Member again—we have probably had this exchange a few times—that I am always willing to hear from the Conservative party how it plans to fund its spending plans, but it certainly did not set that out in the spending plans we inherited. If the Conservatives are ready to make a decision on that, we would love to hear from them, but until they do so, they should stop criticising us for fixing their mess.

[Alex Sobel (Leeds Central and Headingley) (Lab/Co-op)]

I hope the Secretary of State agrees that protectionism is not the way to protect consumers and businesses. Our own history teaches us that: the Tory corn laws kept working people impoverished for generations in this country. I hope our approach will be that we should have free and fair trade with other countries and not see rising prices for British people, American people or people anywhere else in the world, and that we will do our best to ensure that people’s living standards rise by ensuring the fair and free flow of goods and services.

--- Later in debate ---

[Jonathan Reynolds]

We have talked about not reliving the arguments of Brexit; my hon. Friend has brought up the corn laws—it is about time we had that one again. He will know that if we go back to arguments from the past, such as those around imperial preference, and look at the stance the Labour party took, it was always for free trade. That is because free trade makes food and other goods and services cheaper for the people we represent. That has always been our history and our commitment. What we are announcing today and how we are seeking a way through these difficult and disappointing sets of announcements is entirely consistent with our own history in the Labour party and our commitment to internationalism.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr, Madam Dirprwy Lefarydd. Some commentators are fawning over a 10% tariff simply because our nearest neighbours have been hit worse. Let’s get real: the 25% tariff on steel and aluminium will hit Wales’s biggest export to the US—machinery and transport equipment. The EU is Wales’s greatest trading partner, with Welsh exports valued at £11.2 billion. In the face of the American President’s obsession with international economic revenge, does the Secretary of State recognise that it is economic common sense to accelerate the scrapping of trade barriers with Europe?

[Jonathan Reynolds]

I am grateful for that question. Again, the right hon. Lady can see that no one in this Government is fawning over the relative position we find ourselves in. That is why we are so determined to find a better way through. She is right to say that the announcement on steel and aluminium is a real danger to us, particularly the potential for derivative tariffs—that is, on a product that is not the raw steel or aluminium but is produced from them. That is why we are taking this so seriously.

We have an ambitious commitment to the EU reset. We need a partner on the other side. There has been some relative political instability in some key European partners, and they have to be in a position to have that conversation. But I say again that this is not a choice between the US and the EU—we can tackle this together. We can improve our trading relationship with both partners and with India, the Gulf and other parts of the world, and it is the commitment of this Government to do so.

[Luke Murphy (Basingstoke) (Lab)]

In January 2017, the then Conservative Foreign Secretary claimed that the UK would be “first in line” for a US trade deal; 2,722 days later, when the Conservatives left office, precisely nothing had been achieved. Incidentally, that is 37 times longer than the 73 days President Trump has been in power for his second term. Does the Business Secretary agree that it is hard to take the Conservative party’s criticisms of our trade approach seriously, given its appalling record on meeting its claims to be able to achieve trade deals? I urge him to continue with his calm approach to this, in the interests of businesses in Basingstoke and across the country, and to take those decisions in the national interest.

[Jonathan Reynolds]

I am grateful for my hon. Friend’s support. There was no real progress on a federal level with the US under the previous Government. The former President made the decision that he would not pursue trade deals, so there was perhaps not much they could do on that, but I do sometimes reflect that the Conservative Government broke our relationship with our nearest and most important trading partner, which is the European Union; they then fell out with countries in the Gulf and could not do that deal; they could not do the deal with India; and they would not engage with China. For a global Britain policy, there is not much of the globe left if we find ourselves in that position. That is not best practice for us to follow, but we welcome Conservative Members’ support for our approach if it exists and continue to say that this is surely the right way forward for all our constituents.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Farming, textiles and whisky are all important parts of the economy in the Scottish Borders and across Scotland more broadly, and they will be affected by these tariffs. There are also real concerns in Scotland that products currently heading to the United States market from other countries will be redirected and dumped into the UK market, which will impact the domestic market. What action are the Government taking to address that? Will the Secretary of State undertake to engage with the National Farmers Union of Scotland, the Scotch Whisky Association and other representatives of industry in Scotland to ensure that this problem is tackled head-on?

[Jonathan Reynolds]

I agree: this is one of the principal issues that we have to address. Whether it is on farming, textiles or whisky, what is going on in the rest of the world and other countries’ relationship to the US have a direct impact, even though that does not relate directly to the conversation about tariffs and our own trade deal with the US. I am meeting the chair and chief executive of the Trade Remedies Authority imminently. This is a crucial part of the work that we have to get right. We have some measures in place for steel and aluminium, but we have to ensure that we are ready for other sectors of the economy, too.

[Rachel Taylor (North Warwickshire and Bedworth) (Lab)]

Many of my constituents work at Jaguar Land Rover or in the motor manufacturing supply chain, and they are really concerned about 25% tariffs on exports to the US. Can the Secretary of State set out what steps he is taking to get those tariffs reduced and to support west midlands businesses before I meet Jaguar Land Rover later today? Does he agree that a calm and measured approach is exactly what is needed to get the best deal for British businesses?

[Jonathan Reynolds]

JLR is an example of an incredible UK-based business in terms of its success in the US, China and other parts of the world. We want to maintain that and give that business the platform it needs for that success. I am in regular contact at the most senior levels with JLR. I am delighted to hear that my hon. Friend is meeting it today to share some of these messages of reassurance. I know that, like all businesses, it supports this calm, pragmatic, rational approach to finding a better trade relationship with the US, not just to avoid the imposition of what was announced yesterday evening.

[Jeremy Corbyn (Islington North) (Ind)]

The previous Government undertook secretive trade negotiations with the USA that included health. Will the Secretary of State assure the House that in any bilateral discussions with the USA, there will be no question of US private healthcare interests coming into Britain to undermine our national health service or, indeed, take over sections of it?

[Jonathan Reynolds]

The right hon. Gentleman knows that I do not comment on the detail of talks, but I can tell him that there have been no discussions in relation to the NHS or anything that would concern him in that regard. This is about goods and services and how we recognise each other’s standards. There is nothing relating to the health sector that I have been able to talk about with US counterparts. I hope he finds that reassuring.

[Chris Curtis (Milton Keynes North) (Lab)]

The automotive industry is incredibly important for workers in Milton Keynes, with many headquarters based there, such as Volkswagen’s. I realise that these tariffs will be incredibly difficult for the automotive sector, and it is good to hear what the Secretary of State said about looking for a pragmatic approach to the ZEV mandate. What else will he be doing to support the automotive industry here in the UK?

[Jonathan Reynolds]

I thank my hon. Friend for his support. He has some tremendous businesses based in his area, and it is great having him here as a champion for them. In terms of the automotive sector, it is about the regulatory environment, which we have discussed, and it is about the funding that we make available for co-investment with the private sector, which is always a priority, and £2 billion was allocated for that in the Budget. We have to accelerate and improve our electric vehicle charging infrastructure, and there was £300 million for that in the Budget. The pressures on the automotive sector across Europe are fierce—that is widely recognised—with changes in consumer demand and much more competition from China coming into the market. We have to be serious about making sure that the UK is the place to be a producer of automotive vehicles. My personal commitment to that is very strong.

[Sorcha Eastwood (Lagan Valley) (Alliance)]

I thank the Secretary of State for his responses so far on Northern Ireland. I trust that he will continue to engage with my colleagues in the Northern Ireland Executive in the days ahead. However, he has not been able to allay my fears about the possible inclusion of online safety in any US deal. Can he reassure me and the Molly Rose Foundation that no more young lives will be sacrificed in order to try to get a deal with the US?

[Jonathan Reynolds]

As I said, I updated the First Minister and Deputy First Minister yesterday. It is a particular situation that we need to remain very much aligned to, making sure the system is working as it should, difficult as that will be. The hon. Lady knows that I will not go into the specific negotiations on any part of a deal, but I say seriously to any colleague that their concerns are misplaced if they think this is what the negotiation is about. It is about goods and services and regulation, and that is what we are focused on delivering.

[Sally Jameson (Doncaster Central) (Lab/Co-op)]

The Prime Minister has rightly said that this Labour Government will always work in the national interest, so can the Secretary of State assure the House that it is in our national interest to protect the copyright of our creative industries and the £126 billion of economic power they bring to Great Britain?

[Jonathan Reynolds]

The creative industries are not just a wonderful cultural asset to the UK but a tremendous economic asset as well. I do not necessarily agree with the commentary in parts of the media that posits a tension between being a creative powerhouse and supporting the tech sector. There is a way through that, and that is what my work in government seeks to achieve. I think we all recognise the economic impact on the UK of our creative sector, the cultural soft power that comes from it and the huge asset it represents. That is always first and foremost in our thoughts.

[Dr Neil Shastri-Hurst (Solihull West and Shirley) (Con)]

It is estimated that 25,000 jobs directly linked to the automotive sector are at risk due to reduced exports to the United States. That is a deep concern to many of my constituents who work at either JLR in Solihull or Aston Martin in Gaydon. Can the Secretary of State set out what specific steps he is taking to protect those jobs, and whether it will involve reforming the regulatory environment in which they operate?

[Jonathan Reynolds]

I have seen the Institute for Public Policy Research report that contains that figure. Because the automotive sector is such a jewel in our crown, we are all aware of what would happen if we were not able to find a way through this. Our work to find that deal and remove this threat of tariffs is intended precisely to deliver that way through. I met Aston Martin yesterday, as an example of the work we are trying to do.

The hon. Gentleman asks a specific question about the regulatory environment we inherited. I cannot pre-empt the publication of the consultation, which has just finished, but he will be aware of comments I have made publicly about changing that to reflect different circumstances. He will not have to wait long for the outcome to be published, and I can tell him that the Secretary of State for Transport, the Secretary of State for Energy Security and Net Zero and I are aligned on ensuring that we get the regulatory environment correct for the future.

[Liam Conlon (Beckenham and Penge) (Lab)]

I thank the Secretary of State and his colleagues for the practical and pragmatic approach they have taken to put us in the best possible position with the US. Does he agree that as well as the US, political and economic co-operation with our European friends and neighbours is essential and in our best interests?

[Jonathan Reynolds]

It absolutely is, and there is no tension between those two things, as I have said. It is a false choice if people try to present it in that way, and I am particularly looking forward to some of the progress that I hope we will make in our relationship with the European Union. It is looking not to the past but to the future, and of course it is in both our interests to do so.

[Lisa Smart (Hazel Grove) (LD)]

The US is clearly seeking concessions from the UK, and it has been widely speculated that the UK Government are considering a reduction in the digital services tax as a way of placating Trump and his ally Elon Musk. My hon. Friend the Member for St Albans (Daisy Cooper) asked the Secretary of State this question but I did not quite catch an answer in his response: will he commit today not to cut the digital services tax, as that is the way the tech giants pay their fair share here in the UK?

[Jonathan Reynolds]

The hon. Lady has heard me say repeatedly that I will not go into specific negotiations, but ensuring that not just a US tech company but any tech company pays a fair rate of taxation in the UK, for the economic activity that it has in the UK, is something that all parts of the British Government are committed to—she does not need to be worried about that. In any discussion there will always be a lot of issues that need to be dealt with. In the main, those are trade issues. I understand that there are all kinds of speculation, but speculation is not always correct. I ask all colleagues to bear that in mind and understand that we cannot publicly share every single aspect of such a negotiation. If she is worried about US tech companies, or any tech companies, paying the right rate of tax in the UK, let me say that that is something we are deeply committed to.

[Deirdre Costigan (Ealing Southall) (Lab)]

Does the Secretary of State agree that now is time for unity across the Chamber in the national interest, in contrast to the politicking that we had earlier from the shadow Minister? Will he commit that this Labour Government will always put country first and party second?

[Jonathan Reynolds]

Absolutely, country first. I would hope that all Members of the House could get behind the approach we are taking, which is genuinely in the national interest. That is the way forward and the way to deliver what all our constituents want in these troubling times, which is a much better path towards the future.

[Mr Andrew Snowden (Fylde) (Con)]

I appreciate the tone of concern with which the Secretary of State has come here today. I am particularly concerned about what these measures mean for the UK defence industry, particularly companies such as BAE Systems in Fylde and across Lancashire that manufacture component parts for US-UK defence programmes such as the F-35. What conversations has he had with those in the Ministry of Defence about working with their US counterparts to address this issue from a national security perspective, for both the US and the UK? Can he give an assurance that the order of 25 fighter jets that the RAF needs to place will not be used as a bargaining chip in any trade deal, and that British-built Typhoon jets will be used for the RAF?

[Jonathan Reynolds]

I thank the hon. Gentleman for his question. I have constituency interests that are similar to his, and the close alignment between ourselves and the US on defence and security matters is an enduring and huge asset to both countries, so I share the sentiments he has raised. He asks whether we can engage US counter- parts in this conversation about a more constructive way forward. Yes, that was always part of our thinking, and our trading bodies in the UK have excellent US links in the main, and they engage in similar activity around that. On his specific point, I have no detail to give him— I have no knowledge of anything like that being used as a bargaining chip, but if I need to give him additional information, I am happy to write to him to provide that.

[Peter Swallow (Bracknell) (Lab)]

Bracknell is home to the UK and European headquarters of many US companies, as well as to many UK businesses that do business in America. Can the Secretary of State assure businesses in Bracknell that this Government’s position is that barriers to trade are bad for growth on both sides of the Atlantic, and that he is working hard with a cool head to secure a trade deal?

[Jonathan Reynolds]

My hon. Friend is right; Bracknell has some tremendous businesses, such as Honeywell, Dell and 3M, so he will be seeking to promote and defend particular constituency interests. I have had tremendous support for the approach that I have mapped out today not just from UK businesses but from US businesses as well, particularly those with an economic relationship with the UK. Right now people are seeking evidence that countries around the world are trying to deal with this difficult situation in the right way, in their own national interests but also in a way that gives us an opportunity to strengthen rather than weaken those important trading relationships.

[Ellie Chowns (North Herefordshire) (Green)]

It is clear that the UK needs to show some backbone in standing up to the US President’s bullyboy tactics on trade. The Secretary of State says that he is keen to negotiate a deal, but at what cost? What is he putting on the table? Can he assure the House that, in seeking a carve-out from President Trump’s tariffs, he is not prepared to offer President Trump and his big tech billionaire buddies an opportunity to carve up the NHS, our environmental and food standards, or our sovereign right to make our own decisions on taxing digital giants?

[Jonathan Reynolds]

The hon. Lady will have heard the answers I have given to some of the questions she raises, and the unequivocal assurances I have been able to provide. She talks about backbone—backbone and strength. Strength and wisdom are not opposing values. Backbone comes from putting our own national interest first, and negotiating on a basis in the interests of all our constituents, not bandying around rhetoric and escalating the situation. That, respectfully, is not the right way forward. The right way forward is to engage on national interest, make sure we are delivering and have the chance to find the right way through this.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

I thank the Secretary of State and his team for the enormous amount of hard work they have put in on this issue. It feels apt to mention that I represent the town of Kirkcaldy, the birthplace of Adam Smith, who I am sure would have had something to say about last night’s events. My right hon. Friend is keenly aware of the importance of the US market for Scottish exports, including but not limited to salmon and whisky, which I know he is very fond of. What further reassurance can he offer to Scotland’s leading export industries about the impact of these developments on trade with the US?

--- Later in debate ---

[Jonathan Reynolds]

I am tremendously grateful for my hon. Friend’s support and for her question—Adam Smith is probably the best historical reference we have had in this statement so far. As she knows, I have always aspired for my Department to be one of the most pro-Scottish UK ministries, because of the interests that we are there to defend and promote. She will also know that this week is Tartan Week in the US. The Secretary of State for Scotland is in the US right now, and I admire the way that he has turned the Scottland Office into such an economically focused Department, working with Scottish businesses, and working closely with me. That is a tremendous initiative, and one that we will continue to promote.

[Blake Stephenson (Mid Bedfordshire) (Con)]

Trump’s tariffs will make everyone poorer and are extremely disappointing, so is it noteworthy that Reform Members have not bothered to turn up to share in our disappointment? Our automative sector is already announcing closures and layoffs, including Stellantis in Luton, which has provided great jobs for my constituents for many years. In his review of the regulatory environment in response to these tariffs, will the Secretary of State ensure that it will be easier, not harder, to create jobs in the UK in future?

[Jonathan Reynolds]

I thank the hon. Gentleman for that question, and he is right to note some conspicuous absences from the Chamber on such an important subject. I could not make it clearer: I care a great deal not just about the transition to new technologies in the automotive sector, but about ensuring that we make those vehicles in the UK. We face tremendous competitive pressures, as he will know from the stories his constituents tell him. We must be alert to that and willing to be adaptable, to ensure that we are a place where vehicles can be made. We have some tremendous industries. If we chart the productivity and efficiency of some of our plants on a global scale, we see that are at the top end. We must get that policy and regulatory environment right, and I give the hon. Gentleman a total assurance that that is my personal objective.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

I thank my right hon. Friend for his statement and for all the work that he has done so far in negotiating an economic partnership with the United States. He will appreciate that the lower levy applied to the UK will be of cold comfort to my constituents, who will see their bills rise. Can he assure me that he will resist calls for a knee-jerk reaction to this? The escalation of a trade war will not help anybody, and the way we achieve a negotiated settlement is through constructive dialogue and a calm approach—I say that as somebody who spent 20-odd years as a negotiator prior to entering this House.

[Jonathan Reynolds]

My hon. Friend is a formidable negotiator, as I have seen at first hand—we might see if she is available for some of the work we have to do. She is right that this is about delivering for our constituents, who must be concerned when something of this magnitude has been announced. No one in Government or in any part of the Chamber is relaxed about the relatively better position we find ourselves in, because it is still something that we have to find a way through. We must keep all options on the table—that is behind some of the announcements I made in the statement—but the approach that my hon. Friend advocates and promotes is my approach, and I thank her for her support.

[Jim Shannon (Strangford) (DUP)]

I watched the Secretary of State on television this morning, and I thank him for his calm, collected and carefully chosen words. He understands my real concerns about Northern Ireland businesses—my stomach is doing somersaults worrying about the impact for Northern Ireland. My party leader, my right hon. Friend the Member for Belfast East (Gavin Robinson), made a point at Prime Minister’s questions that still stands: Northern Ireland remains exposed to potential EU retaliation, and local businesses must not become collateral damage. The Government must take urgent steps to protect Northern Ireland interests and to ensure that our place in the United Kingdom internal market is fully safeguarded. In his reply to my right hon. Friend yesterday, the Prime Minister kindly committed to act in our national interest, so will the Secretary of State outline for the record what steps will be taken to do just that?

[Jonathan Reynolds]

I thank the hon. Gentleman for his question and for his kind words. It has been quite a week so far, and we still have some way to go. This is an issue not just for Northern Ireland Members, but for all Members of the House. We have to be alert to the particular situation that would occur if there were a different retaliatory stance from us and the EU. That is why I briefed the First Minister, the Deputy First Minister and my counterpart yesterday. The shadow Minister was right that the issues around the duty reimbursement scheme are key. On the formal steps that we have taken, businesses can now input their concerns and what the tariffs will mean to them directly to Government. We need to work together, particularly in relation to Northern Ireland, to ensure that specific voice and that specific question are a key part of how we look at the issue and respond. I am keen to work with the hon. Gentleman in that regard.

[Ben Coleman (Chelsea and Fulham) (Lab)]

May I echo the thanks to the Secretary of State and the Prime Minister for the calm and effective way that they are dealing with the United States? Unlike some of the frivolous comments we have heard from Conservative Members, does my right hon. Friend agree that the US’s 20% tariff on EU goods is to be deeply regretted, as it could indirectly affect the many UK businesses that supply components to EU manufacturers that export to the US, particularly in the automotive, aerospace and pharmaceutical sectors? What discussions has he had with European counterparts about the US decision? How he will represent our concerns to them in the coming days, if there is an escalation of tariffs?

[Jonathan Reynolds]

My hon. Friend is right that our concerns have to be not just about what this means for our own relationship with the United States, but about the second-order impact on the UK from the trading relationship changes between the US and other key allies and markets. No discussion on trade or tariffs is complete without bringing up rules of origin. The complexities of some of the supply chains, particularly in the automotive industry, are key issues; we have to ensure that we have preferential tariff access to markets and that the products we make in our country qualify for those under the rules of origin. We are closely engaged with all partners. He will know that the Minister for the Cabinet Office, my right hon. Friend the Member for Torfaen (Nick Thomas-Symonds), deals with the EU reset, but we will continue to have a very close working relationship, as well as having direct conversations with our European Commission counterparts.

[Bobby Dean (Carshalton and Wallington) (LD)]

In answers to questions so far, the Secretary of State seems to have dismissed the threat of the US trade negotiations to the safety of our children. I am sure he has seen the abandonment of content moderation on social media platforms and heard what Trump, J. D. Vance and Musk have said about free speech in our country: what they mean is the freedom of US social media giants to keep our children addicted to their platforms, no matter how harmful the content. I know the Secretary of State says that he does not want to get into the specifics of the negotiations, but is the Online Safety Act 2023 part of those negotiations, or will he take the opportunity to rule that out?

[Jonathan Reynolds]

I want to be clear with colleagues, not to invent problems that do not exist. I am aware of comments that have been made about freedom of speech in the UK. They have not been part of the trade negotiations. The hon. Gentleman recognises that I cannot share details of negotiations, but then he asks me to share those details. He knows that I am not going to do that because it would not be in our national interest. However, I say to colleagues that these negotiations are about goods and services in the main. It is important to focus on that—let us not make this more difficult than it is.

[Sarah Coombes (West Bromwich) (Lab)]

West Bromwich is a metal industry heartland. We are home to the Confederation of British Metalforming and many brilliant exporting businesses are in the automotive steel and aluminium supply chain. This morning, I spoke to the chief executive of William King, one of those brilliant local businesses, and she was clear that the Government are right to remain calm and to work to do the deal. While Ministers are working towards that deal, what else can we do to support those businesses to continue to trade and invest with confidence?

[Jonathan Reynolds]

That is the right approach to take. I welcome my hon. Friend’s support and that of the businesses in her constituency that she mentioned. Of course we are trying to find a way through this, but given the situation we inherited after the election, our domestic competitiveness is not what it could be and what it needs to be. Even Conservative Members recognise the impact of aspects of regulation, energy prices and the direction of travel. The output of foundation industries last year and this year is at levels that should concern us all. We have to get that right, which is why this Government are committed to an industrial strategy and a trade strategy that works in partnership with it. As well as endorsing our approach, the feedback from businesses is that that is exactly what they want. West Bromwich is a powerhouse, but I want it to be an even bigger powerhouse in the future, and the same applies to the constituencies of many Members across the House.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

The tariffs announced by Trump last night will be concerning for many businesses in the UK, not least British farmers, including in my constituency of Stratford-on-Avon. We all recognise that Trump will use the imposition of tariffs to try to get concessions from countries around the world. Will the Business Secretary reassure the whole country and commit today that he will not agree to any deal with the US that would lower food standards and undermine British farmers?

[Jonathan Reynolds]

The hon. Lady will have heard me say very clearly that we are committed to the sanitary and phytosanitary regime, as set out in the Labour manifesto. The UK is currently the biggest importer in Europe of US agriculture, so we should not present this as something that we do not already have that the US is trying to open up. We have a strong, mutually beneficial relationship. British agricultural products are premium products that have a tremendous reputation, whether in the US or in other parts of the world. Seeking to remove trade barriers on both sides, while maintaining the SPS regime in UK, which is very important to our other trading relationships, is vital, but that could be a positive story of how we open up more markets to excellent US products. That is fundamentally what good trade policy is about.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Secretary of State for coming to the House and for his calm head in a difficult situation. My constituency is home to many businesses, including Wright’s Flour, A1 Bacon, Harlow Group and Raytheon, that trade directly and indirectly with the US. What reassurance can the Secretary of State give to those businesses and their consumers? Does he think that Raytheon’s work sourcing UK parts for its defence systems will be increasingly vital in the months and years to come?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his support and for mentioning some of the excellent local businesses in his area. On the impact of the pandemic and the war in Ukraine on supply chains, the private sector has been working with Government to look at vulnerabilities to ensure we do not have strategic weaknesses. We intend to include that vital work in the trade strategy, which is due to be published imminently, but that aspect of economic security is extremely important.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

The Secretary of State cannot have failed to notice the number of Members from all parties who have raised the food and drink industry, particularly in Scotland, where many products are made in my constituency. I admire his approach of speaking softly and carrying a big stick as he prepares his plan B, but retaliatory action is not the only lever that we could pull. In discussions with the Chancellor, would he be prepared to offer some sort of mitigation to businesses in the food and drink industry in the autumn statement?

[Jonathan Reynolds]

The hon. Gentleman has skilfully raised issues relevant to the autumn statement that are more for the Chancellor than for me. Products from the food and drink industry form a prominent part of our economic exports. Because of that industry’s success and what it means to the prosperity of every bit of the United Kingdom, it features heavily in all our decisions, whether on trade, business support, export support or the wider regulatory and policy environment. I assure the hon. Gentleman that his constituents and the excellent and successful businesses in his area are always prominent in our thinking.

[Laura Kyrke-Smith (Aylesbury) (Lab)]

I thank the Secretary of State for his hard work and for his calm and pragmatic approach. In my constituency of Aylesbury, there are almost 5,000 small and medium-sized businesses, several of which export to the US or have been seeking to do so. Will the Secretary of State set out what he is doing to protect our SMEs in his ongoing negotiations with the Trump Administration?

[Jonathan Reynolds]

Fundamentally, I want to see greater market access to the US for small and medium-sized businesses in every part of the UK. We can tackle particular things as part of that, such as the regulatory system in the United States and the federal-state dichotomy, particularly for services and exports. All that is the prize on offer if we get this right. A big part of trade policy is also about not just free trade agreements, even though they tend to get the most prominence, but how we come to agreement on e-commerce and functions of online marketplaces and transactions. All that is a very practical difference that we can make, through good trade policy, to small and medium-sized businesses. That will be a premium and important part of the trade policy we are about to publish.

[Tom Gordon (Harrogate and Knaresborough) (LD)]

The pharmaceutical sector appears temporarily to have avoided tariffs, but that may well change. However, medical devices and diagnostics do not appear to have that same exemption. The UK is home to many medtech and diagnostic companies, and the tariffs will have an impact on them both here and abroad and may well push up prices. What conversations is the Secretary of State having with colleagues in the Department of Health and Social Care about ensuring access to medtech and diagnostics in the face of increasing prices?

[Jonathan Reynolds]

I thank the hon. Gentleman for his question. He may be aware of the biopharma conference held in the UK yesterday with the top chief executive officers of many of the leading companies in this area. It was attended by myself, the Prime Minister, the Secretary of State for Health and Social Care and the Secretary of State for Science, Innovation and Technology.

The hon. Gentleman is right to say that we could see further announcements in this area. There are particular US issues, such as the differential in drug pricing, which has always been a fairly prominent part of trade negotiations. There is an integration and shared aspiration between people in Government, such as myself and the Health Secretary, and recognition of our need to be more forward-leaning, to use more innovation, to look at how we provide that and the relative allocation of resources in our existing health system. We take that very seriously, and we are very much looking at that. There is a lot to do, and it is a difficult situation, but we need more of the success that the hon. Gentleman outlined.

[Douglas McAllister (West Dunbartonshire) (Lab)]

I thank the Secretary of State for his statement. The announcement of a 10% tariff on all products exported from the UK to the United States means that for the second time in just five years, the Scotch whisky industry could be impacted by tariffs in the industry’s largest global market. That will be concerning news across communities where Scotch whisky is a major employer, including in my constituency. Scotch whisky makes up a quarter of all Scottish exports to the US, but it is not one-way traffic; to give just one example, the Scotch whisky industry imports up to $300 million of ex-bourbon casks every year. I urge the Secretary of State to work with the US Administration and ensure that a mutually beneficial resolution can be agreed as soon as possible to support the Scotch whisky industry.

[Jonathan Reynolds]

I am incredibly grateful to my hon. Friend for his question and for his accurate insight into some of the co-dependencies and relationships that exist between Scotch whisky and other key international sectors of the food and drink economy. If he ever wants to come and see me in my office in the Old Admiralty Building, I keep a bottle of Lagavulin there, which I think we can all agree is an excellent choice. You would be welcome to come for that conversation at any time, Madam Deputy Speaker. We have to keep the numbers down, but we will look at that if we come through with a deal. [Interruption.] Of course the shadow Secretary of State would also be very welcome to come—what an excellent meeting we have just set up accidentally.

Often an equivalence is made in some markets between, for instance, the tariff on bourbon from the US and Scotch whisky. A comparison is made, and those are often seen as competing products, but there is an interdependency as well. The point about the sherry barrels is also really important and fascinating. I can tell my hon. Friend that we are in regular contact with the Scotch Whisky Association, which is tremendously supportive as a resource to us and is very closely engaged with Government. These issues, which are so important to his constituency, are always considered and prominent at the highest levels in Government.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I thank the Secretary of State for his statement and congratulate him on his choice of whisky; that is my favourite as well.

There are no winners in this dire situation—we think of the people waking up this morning in Vietnam, Cambodia and so on—but we have to acknowledge that the cool heads in Government have meant, at least for now, as we start this process, that the jobs of people in Edinburgh South West have been saved. I do no doubt that, as we speak, businesses in my constituency and across the UK are trying to figure out what this means for them, so we have to redouble our efforts in our search for growth.

I welcome the pragmatic words given around the zero emission vehicle mandate. Ultimately, without compromising our aims, we can work together with businesses and trade unions to get a better outcome, but I wonder if the same approach can be taken elsewhere. The AI regulations that we have been discussing, which I think were mentioned earlier, come to mind. [Interruption.] I will be very quick, Madam Deputy Speaker. There is also HFSS advertising and the sustainable aviation fuel mandate. We do not need to compromise on all those things, but we can work closely with industry to get the right outcome.

[Jonathan Reynolds]

I warmly welcome my hon. Friend’s words and his endorsement and seconding of my whisky choice. I should say that other excellent whiskies are available; a lot of Scottish Members are present, and I do not want to offend anyone. He is right to say that businesses will need reassurance: I hope they will get that from the tone that the Government are striking today, but they will need information. If Members get out their phones and go on to great.gov.uk, they will see a link to a bespoke page where that information is provided. We have advertised around that.

My hon. Friend makes an important point. Where we can look at alleviating some of the domestic pressures, whether through regulation or other areas, this is clearly the time to do so. I have had those conversations with Cabinet colleagues. He is right to say that this is not about changing policy, but about looking at the impact right now and how we can make a difference. That is a very wise observation to make.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

I commend my right hon. Friend for the measured tone he has taken on events in Washington. I want to reflect on the agency we have here in London and with our allies in Brussels. Does the Secretary of State agree that now is the moment to seek the most ambitious trade deal we possibly can with the European Union, seeking deep alignment in goods and services? Furthermore, while the United States may want to make it harder to trade, does he agree that the UK-EU reset provides us with an opportunity to break down the barriers to trade that the Conservatives put up when they were in government? If we get this right, the prize on offer from the UK-EU trade deal could be even greater than what was lost overnight.

[Jonathan Reynolds]

I warmly thank my hon. Friend for his question and his support for the approach we are taking. I believe there is a competitive advantage to seek for the UK where we are able to reach agreement with the US. We are able to do those trade deals and negotiations with countries such as India or customs unions such as the Gulf Co-operation Council, and also to get the EU reset right. Although this is not about looking to the past, a lot of smaller businesses stopped exporting entirely after Brexit. They almost certainly set up subsidiaries in the single market, which was not to our advantage, and we saw a real decline in certain types of food and drink trade, even though we had a broadly similar SPS regime in place. We can work on those practical things, and that is our objective. There is real gain to be had from that. We need a partner on the other side who sees the benefits as well, but I believe that they exist, and that is a crucial focus for what we call the twin-track approach to trade under this Government.

[Jonathan Davies (Mid Derbyshire) (Lab)]

I thank the Secretary of State for his statement and for the work he is doing as we face this challenge. I welcome the Government’s commitment to increase defence spending. That is good for not just our national security, but our economy. The sector employs many people in Derbyshire, including at Rolls-Royce. As we seek a trade deal that will create the economic conditions for our public services to thrive and for prices and bills to remain as low as possible, can I encourage the Secretary of State to remind the US of the importance of manufacturers such as Rolls-Royce and the defence sector, and the strategic and economic partnerships they offer us, so that we can work with them more constructively?

[Jonathan Reynolds]

Those are very wise words, and I am grateful to my hon. Friend for putting them on the record. Defence spending is crucial for our national security. The big change and uplift that we have seen is a big part of that, but he is right to say that it would be wrong for anyone in this country to think there is not a domestic economic dividend for that. Those jobs are spread all around the United Kingdom, including in places that are really reliant on them, so it is great news on the economic front for all parts of the UK and Derbyshire—Rolls-Royce is a great example of that.

My hon. Friend talks about how we can get this right with our relationship to the US. We already have some great things under way. We can think about the AUKUS agreement, in which the US treats domestic UK suppliers as part of the domestic supply chain; there is equivalence there. We can think about steel and the role that Sheffield Forgemasters plays, for instance; that is a crucial part of the defence supply chain for the US. These are really important and mutually beneficial strengths to recognise. If we look at the facts and at how our trade inter- dependencies work, there is a great prize on offer if we get this right.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call David Pinto-Duschinsky to ask the final question.

[David Pinto-Duschinsky (Hendon) (Lab)]

Thank you, Madam Deputy Speaker—a joy as ever. I thank my right hon. Friend and the Prime Minister for their tireless efforts, which have secured the best, most powerful position available for our country. Of course, there is deep disappointment that tariffs have been levied, but the fact that they have been levied at the lowest band is a vindication of the Government’s strategy, and businesses I have spoken to—in Hendon and nationally—have been unanimous in their support for the Government’s approach. Does my right hon. Friend agree that the best way to stand up for Britain is through a cool, calm, collected and pragmatic approach, and that we must reject the knee- jerk response and calls for action on invented problems that some Opposition Members demand?

[Jonathan Reynolds]

I am extremely grateful to my hon. Friend for his question. He has articulated our approach, which is that we are not complacent or happy; we are disappointed about any tariffs being imposed on the UK. We recognise that the lowest band has been applied to the UK, but that does not mean that we will not redouble our efforts to secure an agreement that offers a way through.

I am grateful for the support of my hon. Friend’s constituents. I hear in every part of the country that our approach is genuinely the one that businesses want us to take. It is calm—I am not sure whether it is cool—and, I hope, reassuring to businesses in my hon. Friend’s area. A lot of people are always offering advice in this area. At times, they are offering to escalate a conflict, and perhaps do not have a plan to de-escalate it, but this Government’s approach is always to pursue our national interest, work with partners, and look at the mutual benefits we could get from doing things right. I am extremely grateful for the support for that policy from Members in all parts of the House today.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

That marks the end of the very lengthy statement on UK-US trade and tariffs.

UK-US Trade

Jonathan Reynolds Excerpts

Thursday 3rd April 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The planned statement will be delivered orally today by the Secretary of State for Business and Trade.

[HCWS575]

Product Regulation and Metrology Bill [Lords]

Jonathan Reynolds Excerpts

2nd reading
Tuesday 1st April 2025 Commons Chamber

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

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

[Sir Desmond Swayne (New Forest West) (Con)]

Will the Secretary of State give way? [Laughter.]

[Jonathan Reynolds]

Of course—why not?

[Sir Desmond Swayne]

When did weights and measures become metrology? Is this use of newspeak deliberate to cover an Orwellian attempt to cloak this huge grab for power, and to what end?

[Jonathan Reynolds]

I am grateful for that intervention very early on in proceedings. I cannot provide a definitive answer to the right hon. Gentleman on the naming of the Bill, but I promise that I will find out and put it to him in writing. But he will know that the Bill was, I believe, originally planned by the previous Government because of the need to repatriate powers to the United Kingdom as a result of our exit from the European Union. It is something we need in our toolkit, so, far from being Orwellian, it is a pragmatic, practical proposal. I look forward to now making the case for it in more detail.

The primary mission of this Government, and the driving force of my Department, is stronger economic growth: not just growth that looks good on paper, but growth that is seen and is felt on our high streets, in our towns and cities, and in the communities we serve; growth that reverses 15 years of stagnation, with all the negative consequences we all felt during that time. To do that, we need an economy in which shops and small businesses can compete on a more level playing field with online marketplaces and the big tech giants. We need an economy that promotes investment and innovation, but at the same time ensures consumers and businesses have real, modern protections. That is why the Product Regulation and Metrology Bill is a small but hugely important piece of legislation, one that will further cement the UK’s status as a world leader in product regulation and safety.

[Adam Thompson (Erewash) (Lab)]

My right hon. Friend is giving an important introduction to the Bill. Does he agree that international alignment in the standards we are discussing on scientific matters is essential for the smooth operation of modern advanced manufacturing?

[Jonathan Reynolds]

I am hugely grateful to my hon. Friend for that intervention. I believe I am correct in saying that he is not only a metrologist, but the first metrologist elected to Parliament. I put no heavy expectations on his speech today, but we are all looking forward to it with interest.

My hon. Friend is right that there are areas where we will choose to work with international standards, and there will be areas where we choose to diverge, but that decision is made possible only by having the powers to begin with. No decisions will be made in this Bill, if it becomes an Act of Parliament, as to how we will do that; however, without it, we would not have the toolkit to make those decisions. The essence of these proposed laws is that we are taking back control for the House of Commons and Parliament to make these kinds of decisions.

[Sir Julian Lewis (New Forest East) (Con)]

The Secretary of State will be aware from the Second Reading debate in the Lords that a number of what I shall gently refer to as Eurosceptic peers have expressed concerns that the Bill is a form of dynamic alignment with the European Union, and that, far from taking back control over which standards are involved and which guidelines are necessary, we will be abdicating control in favour of whatever the European Union decides. Can he set our minds at rest over those concerns? I am sure he would not wish to be diverted along such a dead-end route.

[Jonathan Reynolds]

I am extremely grateful to the right hon. Gentleman for that intervention; he always brings wisdom to these debates. I can absolutely give him the assurance that the Bill makes no decision as to how we should use these powers. The reason we are bringing it forward today is the same reason the previous Conservative Government first proposed a Bill of this kind: having left the European Union, we need the powers to properly regulate these products in this way; without this legislation, we would not necessarily have the ability to do that.

[Sir John Hayes (South Holland and The Deepings) (Con)]

On that specific point, further to the remarks of my right hon. Friend the Member for New Forest East (Sir Julian Lewis), that presumably means that the Government will press for recognition of UK standards where they prevail and where we think we are doing the job better. There will absolutely be occasions where we can learn from others, and other occasions where they can learn from us. Is that the Government’s intention? Will the Secretary of State make that clear now?

[Jonathan Reynolds]

I am more than happy to make that clear. We see that in a number of areas—it is the case across the whole field of regulation. Let us look at AI, which is topical right now: we have chosen a different regulatory path in the UK from the European Union, which is to our economic advantage. I am very confident in the approach that we are taking. I am sure that when I get to the provisions of the Bill, and in particular when it comes to weights and measures, the whole House will be united in being able to say that we believe that traditional British standards are particularly important to us.

I say again, however, that having the power to set standards in itself makes no decision as to how these powers are used. We can all clearly recognise the need to repatriate these powers to our own statute book.

[Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)]

rose—

--- Later in debate ---

[Jonathan Reynolds]

I was going to make a little progress, but I cannot resist the right hon. Gentleman.

[Sir Iain Duncan Smith]

I just want to raise a small point. When I was doing some work on this matter for a previous Government, looking at what we could do with our regulations and standards on leaving the EU, it became apparent that the UK is behind only America and China globally in setting standards for the rest of the world. To what degree is the Secretary of State planning to enhance that, rather than returning to any European usage of standards, when we already dominate the field?

[Jonathan Reynolds]

The right hon. Gentleman will have heard me say just now that our intention is to cement the UK’s status as a world leader in product regulation and safety. I am sure we would all recognise the tremendous benefits for both consumers and businesses that come from being a jurisdiction whose consumer protections are widely recognised and where people have confidence that the goods and services they buy will be to the highest standard possible. Where we see gaps in our provision, because of the substantial change that has occurred with our leaving the European Union, we would surely want to fill those gaps so that we are in a position to continue our success in this area.

[Sammy Wilson (East Antrim) (DUP)]

The Minister gives the House the assurance that the idea is not to take us back to EU laws or to have EU laws imposed on the United Kingdom, and yet the Bill heavily references EU laws. How does he explain that?

[Jonathan Reynolds]

I can explain it very clearly. Colleagues who are interested in this legislation will have followed the proceedings in the other place and the discussions on this area. I put the case very straightforwardly: we do not have the ability without this Bill to regulate product standards in a whole range of areas. There are some cases where there will be a strong consumer or business demand for alignment with other jurisdictions; there will also be cases where we wish to diverge, because we see that as being in our economic interests.

However, we surely all accept that we cannot have a position where we do not have the ability to regulate key products, and in particular products that have come from the new technology that is available and the opportunities that come from that. Once again, I say politely to anyone on the Opposition Benches who is not quite reassured that the previous Conservative Government were planning a similar Bill to fill this exact gap in the statute book.

[Graham Stringer (Blackley and Middleton South) (Lab)]

I would like to make two points. First, this House can do what it wants. It does not need this Bill to regulate anything. To say that is does simply is not true. Secondly, on the question of whether the Bill will lead to dynamic realignment with the EU, can the Secretary of State explain what clause 2(7)(a) is for? It seems to me that it could be used to dynamically realign with EU regulations.

--- Later in debate ---

[Jonathan Reynolds]

I will give way to the right hon. Member.

[Sir John Hayes]

I wish to give the Secretary of State time to read the clause. He owes me now, Madam Deputy Speaker.

The key thing is that we must not use EU standards as the default. The hon. Member for Blackley and Middleton South (Graham Stringer) is right that we have the authority to make our own standards, and we often do so very well. But the risk is that where we have not yet done that, the EU standard will become the default position. The Minister can make it crystal clear to us today that that is not the case.

[Jonathan Reynolds]

As ever, I am particularly grateful to the right hon. Member for his courtesy. To my hon. Friend the Member for Blackley and Middleton South (Graham Stringer), I say that clause 2(7) says:

“Product regulations may provide that a product requirement is to be treated as met if—”.

It clearly says “may” and “if”. Again, I say that there will be times when it is in our economic interest to have a close relationship with the product standards in, for instance, the European Union or another jurisdiction. There will also be times when it is not. That will be our choice. I think we would all recognise the absence of powers without this Bill.

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The right hon. Gentleman makes reference to the ability of this House to make regulations. We can, of course, do so by primary legislation. There was a parliamentarian who said that

“the use of delegated powers carries a risk of abuse by the Executive, which is not something the Opposition could ever support.”––[Official Report, Taxation (Cross-border Trade) Public Bill Committee, 1 February 2018; c. 305.]

The Secretary of State should agree with that, because it was he who said it.

[Jonathan Reynolds]

That was obviously part of a very wise set of remarks that I made from the Dispatch Box. But, yes, we must recognise that. I say again, because the Bill has been through the other place, that changes have been made as a result of that feedback: we have removed a number of Henry VIII powers; we have introduced a consultation requirement; we have provided for additional affirmative resolution procedures; and we have said that we will publish a code of conduct that sets out the statutory and non-statutory controls to ensure that regulation is proportionate, evidence-based and developed through consultation. Because of the process that we have been through, we have responded to the kind of concerns that I was wisely articulating in relation to primary legislation.

Perhaps it will be of use to the House if I say a little about that journey and the work of the other place in this regard. I wish to thank in particular my ministerial colleague, Lord Leong, for his great efforts in taking the Bill through the other place. I also thank the many Members and Committees of the other House for their assistance in creating what I believe is strong and effective legislation—legislation that will benefit millions of UK businesses, tens of millions of consumers, and, of course, all those who enjoy a pint or two at the pub.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

On pints—

--- Later in debate ---

[Jonathan Reynolds]

I give way on that point.

[Dr Murrison]

The Minister is right to praise the House of Lords for making sure that the great British pint is in this Bill as an exclusion from the metrology regulations. However, this will not satisfy the metric martyrs. The Minister will remember that the ability to sell in imperial measures was a big issue a few years ago. Why is it that there is an elaborate schedule to the product regulations, but not to metrology, and why in particular is food generically not included in the exemptions from what the Minister proposes to do?

[Jonathan Reynolds]

We would say with confidence that there was never a danger to the pint, but because of the concerns that were raised in the other place and perhaps by some colleagues here, I am more than happy to have made the changes to assure everyone present and everyone watching that the pint will be defended and secured in the Bill. I have to say that I have received no entreaties from businesses that they wish to sell in imperial measurements. However, if the right hon. Gentleman believes that there is an absence of provisions in the Bill, he can write to me and I shall write back to him and hopefully be able to reassure him. I think he may be misplaced in thinking that that is a principal issue for UK businesses.

As all hon. Members know, the digital age in which we live has created significant growth opportunities. The consumer and technology landscapes that we have today are almost unrecognisable from those we had 20 or 30 years ago, so the products that we buy and the way in which we buy them are evolving rapidly. That means that the relevant rules and regulations must adapt, too. If we are to protect consumers and businesses, especially smaller firms, that is essential.

As we have examined in some detail, product regulation and metrology are policy areas that have largely been repatriated from the EU following our withdrawal in 2021. Since then the UK Government have simply not had the necessary powers to continue regulating these areas effectively. We have brought forward this legislation so that we can respond to anticipated changes in the global regulatory landscape. That is why, to be frank, I am somewhat bemused by the reasoned amendments tabled today.

The Bill will ensure that the UK is better placed to address modern-day safety issues. It gives us the power to better regulate items such as potentially dangerous baby sleep products and toys. It will enable us to reduce burdens on business and keep up with technological developments, for example by updating the outdoor noise regulations in Great Britain. It will align testing methods across the UK, which was overwhelmingly supported in our recent call for evidence, and it will protect the public from noise pollution from products like lawn mowers and power generators.

[Graham Stuart (Beverley and Holderness) (Con)]

I have only closely scrutinised the Bill today, so I am just bringing myself up to date on this. It appears to give the Secretary of State the power to ban any product he wishes for whatever reason. We make law in this place not for when we are dealing with a Minister of the moral calibre of the right hon. Gentleman, but on the basis that we might have someone who lacks such qualities; that is who we legislate for. Is it true that this Bill would give the Secretary of State the power to ban literally any product, and that all that would have to be done is to notify this House?

[Jonathan Reynolds]

I am grateful to the right hon. Gentleman for his concern and his regard. I believe that if we were of the view that a product was a danger to the public, the right hon. Gentleman would expect me as Secretary of State in my Department to take action. If he is concerned about provisions in the Bill, he can look to the changes that have been made. It has been through an extensive scrutiny process in the other place, particularly in relation to the powers and delegated powers given to the Secretary of State. I think he recognises the case we are making for the safety of the public; indeed, it is why Opposition Members themselves recognise the need for a Bill of this kind.

The Bill will help to create a level playing field between the high street and online marketplaces. Critically, we are able to protect consumers by reducing the number of unsafe and non-complying goods that are sold online. This could include asking sites to verify third-party sellers before allowing them to list their goods or to have a product safety reporting function for customers on their sites. One example is e-scooters and e-bikes, which like many products are reliant on lithium-ion batteries. These batteries have been attributed as the cause of a number of fires in recent years, both in households and on public transport.

While we know that the vast majority of products are safe, in recent years we have seen some goods mis-sold by a minority of unscrupulous manufacturers and sellers. As a result, low-standard, high-risk products have been able to enter the UK market. Some people have paid for this with their homes and, in some cases, their lives. I think we would all recognise that that is unconscionable.

I want to pay tribute to the family of Sofia Duarte. Sofia tragically died when a bicycle that had been converted into an e-bike burst into flames. The bike’s lithium battery pack failed, causing a fire on new year’s day 2023. I know that the whole House will join me in recognising the bravery and courage of Sofia’s family in campaigning for change in memory of their daughter and in fighting for better regulation of e-bikes, along with the batteries and chargers associated with them. I also thank the London Fire Brigade for its campaigning on this issue in recent years. It has been on the frontline, seeing at first hand the devastation that has been wrought by some of these products.

This Bill is about keeping the public safe. The Office for Product Safety and Standards has taken action in this area already. It has issued 26 withdrawal notices on eight online marketplaces, two manufacturers and 16 sellers. This has removed two dangerous models of e-bike battery from sale, and I am glad that the legislation we are discussing today will allow us to consider further steps on enforcement.

[Sir Iain Duncan Smith]

I have campaigned for greater regulation of bicycles, which have got away with killing individuals, not to mention e-bikes. I want to pick the Secretary of State up on a particular point. I do not disagree with him on the need for regulation, and it should have been done some time ago, so we are as one on that. However, I still do not think that he has quite answered the question posed by the hon. Member for Blackley and Middleton South (Graham Stringer) and by my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) just now. Why do we need to have a wide-sweeping Bill like this if we could do it already in the House by vote?

If we have a powerful enough argument to say to both Houses, “This must be done,” then they will see it through very quickly by the power of persuasion, but they would have the right to vote on it and to disagree. The Bill takes that right away and achieves the same result, but only by way of a diktat from whoever is in power—and, by the way, I agreed with what the Secretary of State said in opposition.

[Jonathan Reynolds]

I am sorry that we have not convinced the right hon. Gentleman, but I am certain that the Government need powers in this area. We need to be able to respond to fast-moving changes in technology and regulation. The public would expect me, as Secretary of State, as well as my Department and the Government, to have these powers to keep them safe. Perhaps we have not convinced him at this stage, but he can look at proceedings in the other place and in Committee.

[Jerome Mayhew]

rose—

[Jonathan Reynolds]

I will give way one more time before we come to the amendments that were made in the Lords.

[Jerome Mayhew]

I am genuinely grateful to the right hon. Gentleman. He says that he has failed to persuade Opposition Members in this place, but does he accept that he has also failed to persuade the Delegated Powers and Regulatory Reform Committee in the other place? That Committee, which is chaired by Labour, said last month:

“We remain of the view”

that

“the delegation to Ministers of law-making powers in this Bill involves legislative power shifting to an unacceptable extent from the…legislature to the Executive.”

Why does he think the Committee remains against his view?

[Jonathan Reynolds]

I find that when political parties go into opposition, all of a sudden they seem less keen on the Government having decisive powers to take action in a whole range of areas. We have listened carefully to the criticism from the Delegated Powers and Regulatory Reform Committee, and significant changes have been made to the legislation, which I am happy to take the hon. Member through. They relate to the number of Henry VIII powers, the consultation requirement and the additional affirmative resolution procedure. We are always seeking feedback.

I will now go through some of the other amendments that were made in the other place.

[Graham Stuart]

rose—

[Jonathan Reynolds]

The question I always have for the right hon. Gentleman is: is it going to be good? I will give way one more time.

[Graham Stuart]

It will be brief. Forget the Delegated Powers and Regulatory Reform Committee; what about the Secretary of State’s colleague, Lord Leong? He said in the House of Lords that he did not think the Bill was right. In what way does it need to be improved? Will the Secretary of State look carefully at the extent of these powers? Even from this short debate, it is clear how wide-ranging and over the top they are.

[Jonathan Reynolds]

On Second Reading, we have a Bill that is even stronger than the one that started in the other House. Once again, I thank all our colleagues in the other place for their constructive feedback and contributions to the debate. I will not go through every change that has been made, but I will mention some aspects of the Bill that have been strengthened.

First, we have amended the Bill to ensure that there is more parliamentary scrutiny, and we have provided for a statutory consultation requirement to ensure that regulations are informed by those who would be impacted by them. There will also be that additional use of the affirmative procedure for regulations stemming from the Bill. Secondly, the Bill now includes a requirement for me, as the Secretary of State, to publish a statement setting out how my Department expects to identify and assess high-risk products.

Finally, contrary to previous suggestions from the Conservative party, the great British pint will clearly not be affected by this legislation, whether that is ale, cider or indeed milk. We do not believe that the Bill in its original form posed any threat to the pint, but we do not want to run the risk of colleagues thinking that my reassurances are small beer, so we accepted an amendment tabled in the other place that will give the pint statutory protection. That means, Madam Deputy Speaker, that in a few weeks’ time, when I hope you will confirm to the House that the Bill has received Royal Assent, we will all be able to raise a pint—protected under statute—to the Bill. I did inquire about whether I was allowed to bring a pint with me to the Chamber to illustrate the point, but that is apparently not in order; only the Chancellor has that ability. Given the week I am having, perhaps we will look at that at a later date.

To summarise, this legislation will finally enable the Government to properly regulate in areas where we have been unable to do so post Brexit. It will also give us the tools we need to better regulate modern-day consumer products. The Bill will help to create a fairer environment for high street shops and small businesses, support our growth mission and provide better protection for millions of consumers. For all those reasons, I commend the Bill to the House.

[Madam Deputy Speaker (Caroline Nokes)]

I call the shadow Secretary of State.

[Andrew Griffith (Arundel and South Downs) (Con)]

I beg to move an amendment, to leave out from “That” to the end of the Question and add:

“this House declines to give a Second Reading to the Product Regulation and Metrology Bill [Lords] because it will provide for regulatory alignment with the European Union, and it has been condemned three times by the House of Lords Delegated Powers and Regulatory Reform Committee as a skeleton Bill which provides, without justification, inappropriately wide powers for Ministers to re-write the regulatory regimes for product safety and the weights and measures of goods by regulations.”

Too often when the public think of Parliament, they think of out-of-touch power and bad laws. The Bill is the archetype of everything that is wrong with Westminster. There should be an unwritten rule in this postcode: never trust a Bill with a convoluted name. This Bill is no exception.

Although it professes to simplify our regulatory framework, the reality is that this is an EU Trojan horse of a Bill, which will sabotage our Brexit freedoms, undermine the integrity of the United Kingdom, disrespect Parliament, befuddle British business with uncertainty and take us back to being a Brussels rule-taker—all from a party that voted 48 times to overturn the will of the British people.

[Jonathan Reynolds]

Will the hon. Member give way?

[Andrew Griffith]

I will not, but before I get into further—[Interruption.] I will say something nice about the right hon. Gentleman in a minute.

Before I get into detail, let me welcome the Government’s U-turn on their plan to scrap the great British pint. Let us hope that that is the first of many. When I raised that on 26 February, Labour Members described it as “a conspiracy theory”. The hon. Member for St Albans (Daisy Cooper) said it was “scaremongering”, and the Exchequer Secretary to the Treasury, the hon. Member for Ealing North (James Murray), said that an amendment was no more needed than a

“law to say that the sun must rise in the morning.”—[Official Report, 26 February 2025; Vol. 762, c. 812.]

The truth is that the Government were caught red-handed trying to ditch our British pint by this back-door Bill. Had the Opposition not fought back, the power to crush the British pint would have rested on the whim of a Minister’s pen. Welcome though that U-turn is, let us not ignore the fact that the Labour Government wanted to give themselves the power in the first place.

[Jonathan Reynolds]

rose—

[Laurence Turner (Birmingham Northfield) (Lab)]

rose—

--- Later in debate ---

[Andrew Griffith]

No, I will make some progress.

The anti-pub, anti-hospitality agenda goes far beyond this Bill. The jobs tax, the threshold change, the attack on seasonal and flexible working, the more than doubling of business rates, the war on pub banter and the garden smoking ban are all from this Government. Our hospitality industry—the Secretary of State is smirking—deserves infinitely better than this from this Government.

[Jonathan Reynolds]

Will the hon. Member give way?

[Andrew Griffith]

I am happy to give way if the right hon. Gentleman talks about what he will do to repeal the Employment Rights Bill.

[Jonathan Reynolds]

The hon. Member was a senior member of the previous Government and played a well-known role in the mini Budget, as well as a number of other things that that Government did. Will he confirm that they were planning exactly the same piece of legislation because of an absence in the statute book?

[Andrew Griffith]

Once again, the Secretary of State has failed to engage on the key issue, which is that British businesses—[Interruption.] It is not funny. British businesses are bleeding out, business confidence is at a record low, unemployment is rising, and all the Government have to talk about is the past, not what they are currently delivering.

[Andrew Griffith]

My right hon. Friend has great wisdom on these matters.

[Jonathan Reynolds]

Will the hon. Member give way?

[Andrew Griffith]

Let me move on. The biggest flaw of many in this Bill is that, as the hon. Member for Blackley and Middleton South (Graham Stringer) and my right hon. Friend the Member for Beverley and Holderness (Graham Stuart) have both identified, it hands over too much power with too little accountability. There is

“a real need to consider the balance between primary and secondary legislation, which in recent years has weighed too heavily in favour of delegated powers…excessive reliance on delegated powers, Henry VIII clauses, or skeleton legislation—”

such as this Bill—

“upsets the proper balance between Parliament and the executive.”

Those are not my words, but those of the Attorney General. They are taken from a speech that he made in October, while in government, about the importance of restoring parliamentary sovereignty. No one who considered that speech could fail to agree.

The Lords’ Delegated Powers and Regulatory Reform Committee has slammed the Bill not once, not twice, but three times, including after the Government’s changes were made. To put this into context, the wide powers contained in this 15-page Bill will allow Ministers unilaterally to amend product safety regulation, impose obligations on online marketplaces, meddle with standards for weights and measures or entirely align British regulatory standards with the European Union, posing a threat to the integrity of the UK internal market. It is 15 pages of the most egregious Whitehall overreach.

--- Later in debate ---

[Andrew Griffith]

The right hon. Gentleman is exactly right, and we can contrast the number of references to the European Union throughout the Bill with, for example, our biggest single country trading partner—the United States.

[Jonathan Reynolds]

I want to directly answer the point made by the right hon. Member for South West Wiltshire (Dr Murrison) and provide clarification that I have just sought. Clause 2(7)(a) is not about alignment; it is about recognition. We already recognise certain EU product requirements on a mutual recognition basis, and where it is of benefit to do so, that is what the clause allows. Rather than take European standards as the basis for our own and align with them, it enables that where it is recognised that we have the interest. I can write to him in detail if he wishes.

[Andrew Griffith]

On behalf of my right hon. Friend the Member for South West Wiltshire (Dr Murrison), I thank the Secretary of State for intervening. It is important that we legislate with full understanding of what the law says, but the point still stands on the overweighting of references to EU standards versus comparable standards from the United States and Commonwealth friends of this great nation.

--- Later in debate ---

[Andrew Griffith]

The hon. Member makes exactly the right point. This is a blank cheque Bill and a Trojan horse Bill. It is simply not clear under this Secretary of State, or any Secretary of State in the future once these powers have been ceded by this place, how they will be implemented. There is a real asymmetry in the constant litany of references to the European Union—a valued trading partners of ours, but only one valued trading partner of ours, as I hope the Secretary of State is about to reveal over the coming days. Tomorrow we understand that tariffs will be imposed by the United States on British exporters. If that is the case, that would be the worst failure of trade policy for a generation. It is businesses, jobs and our economy that will all pay the price. The Chancellor’s emergency Budget will not have lasted a single week because she made no provision for the imposition of tariffs—if that is indeed what is to come.

It is frankly outrageous that the Government have failed to make a statement about where we are, despite the Prime Minister’s official spokesman briefing the Lobby, and the Business and Trade Secretary himself finding time this morning to conduct a round of media interviews. If the Secretary of State would like to comment on the progress of US talks, I will happily give way.

[Jonathan Reynolds]

This is a little off-topic for a Second Reading, but the hon. Gentleman could have just listened to the “Today” programme this morning. He would have heard me articulate those concerns. We are engaged with our US counterparts, more so than any other country, in those negotiations. He will know that I will not share the content or detail of those talks. The policy originates with the President of the United States and we are responding to and engaging with it. The hon. Gentleman will understand that it comes from the mandate and the agenda of the US Administration.

[Madam Deputy Speaker (Caroline Nokes)]

Order. I remind the Secretary of State and the shadow Secretary of State that we are debating the Second Reading of the Product Regulation and Metrology Bill, and not necessarily tariffs.

--- Later in debate ---

[Clive Jones]

I doubt that very much.

Nearly a decade since the Brexit referendum, this House is still grappling with what it means to be outside of the European Union. Away from the big headlines about trade deals and newly erected borders, the technical nitty-gritty of product safety and metrology is ever more important now that we must decide what we want our policies to be in this area. Our original framework, derived from EU law, must now keep up with fast-evolving technologies and consumer behaviours. Technological changes in the 21st century may have created new opportunities, but they have also left us exposed to new risks, such as AI, battery hazards and e-bike fires.

Our online marketplaces and the complex digital commerce that facilitates them have reduced barriers to small and medium-sized enterprises sharing their products across the UK and the world, but the internet is still a wild west in many ways, leaving small businesses and consumers exposed. That is why the Liberal Democrats welcome aspects of this Bill. We fully understand and support the need to update the regulatory framework for the UK marketplace to give businesses and consumers confidence in their products. We welcome in principle the powers in the Bill to put new responsibilities on online marketplaces throughout the supply chain, and we support enhanced consumer protection for products that pose a safety risk.

The product regulations falling in scope of this Bill will have an impact on our country’s trade policy, and the Liberal Democrats are clear when it comes to trade: we believe the Government must pull the most powerful and readily available lever at their disposal to kickstart economic growth by urgently launching negotiations for a new UK-EU customs union. That would create jobs, boost our public finances and reverse much of the damage inflicted on our economy by the previous Conservative Government’s terrible trade deal with Europe. I take this opportunity to urge the Government to move in that direction and to commit that, as part of these trade negotiations, they will use the provisions in the Bill to facilitate a new customs union, which could have such a transformative effect on our economy.

[Jonathan Reynolds]

I am really grateful to the hon. Gentleman for engaging with the issues about product safety and consumer protection in the Bill, and he is making a serious speech in relation to them.

First, on the point of the customs union, which was skilfully woven into his speech, that would preclude us from reaching any arrangements with the United States, India, the Gulf states or other countries. For my money, if we wish to be part of something without a say in how it would affect our trade policy, that would be a very difficult position to take. I will come back to the references made by Conservative MPs, who often feel like they are fighting the old, last war. They cannot get past it—

[Madam Deputy Speaker (Caroline Nokes)]

Order. First, I gently suggest to the Secretary of State that he is meant to be making an intervention. Secondly, we are quite definitely debating the Second Reading of the Product Regulation and Metrology Bill, not a customs union. Perhaps the Secretary of State will conclude his remarks.

[Jonathan Reynolds]

I will, Madam Deputy Speaker. In relation to the number of references made to the EU in this Bill, the EU is explicitly referenced simply because UK product regulations are derived from a lot of EU regulations. We have to reference that when looking to the future, particularly when we recognise some of those European standards, but it is wrong to simply look at those references and try to make them out to be something they are not.

[Clive Jones]

Thank you for your intervention, Secretary of State. You are right—

Oral Answers to Questions

Jonathan Reynolds Excerpts

Thursday 13th March 2025 Commons Chamber

[Luke Akehurst (North Durham) (Lab)]

6. What assessment his Department has made of the potential impact of the national minimum wage and national living wage on families.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

More than 3 million workers are expected to receive a pay rise due to increases to the national minimum wage in April, protecting the lowest paid in society. After our changes to the remit, we accepted in full the recommendations of the Low Pay Commission, which considers the impact of rates on business, competitiveness, the labour market, the wider economy and the cost of living. Our impact assessments are available only by region—estimates by constituency are not available—but the simple truth is that workers in every constituency are better off under this Labour Government.

[Kenneth Stevenson]

I thank the Secretary of State for that answer. Just yesterday, Parliament approved Labour’s new deal for working people—the biggest upgrade to workers’ rights in a generation. This will see a pay rise for more than 200,000 working Scots, many in the Airdrie and Shotts constituency, and a marked improvement to terms and conditions, which will be beneficial to our young workforce. Does he agree that with a Government committed to improving the pay, terms and conditions of workers across the country, the working people of Airdrie and Shotts will always get a better deal with Labour?

[Jonathan Reynolds]

The plan to make work pay is a core part of our mission to grow the economy, raise living standards and create opportunities for all, and there will be significant benefits for workers in insecure and low-paid jobs in central Scotland, including in Airdrie and Shotts. This plan is about making people stay in work. It is about making work more secure and more family-friendly, improving living standards and putting more money in workers’ pockets, but it is also about showing that politics can work for people who may have given up on this place as somewhere that can improve their living standards, their lives and those of their families. For that, I am very proud of this Government.

[Luke Akehurst]

The 6.7% increase in the national living wage in April clearly shows that this Labour Government are on the side of working people in North Durham and across the country and are making work pay. Can the Minister tell me how many families in north-east England will benefit from the increase in the national living wage and national minimum wage next month?

[Jonathan Reynolds]

I thank my hon. Friend for his support. Around 140,000 workers in north-east England will feel the benefits of this direct pay rise. I know his North Durham constituency well—I am no stranger to Chester-le-Street—and not only will his constituents get a pay rise, but his local shops, his restaurants, his pubs and more will get what they need most of all: customers who have got a bit of money to spend.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

Last Friday, I spent the day visiting local shopkeepers in Kelso, many of whom employ their staff on the national minimum wage and the national living wage. Their biggest pressure just now is dealing with this Labour Government’s national insurance hike. They are facing a very difficult choice about whether they continue to employ people. What is the message from the Minister to those hard-working local shopkeepers?

[Jonathan Reynolds]

The thing I would cite most of all to the hon. Member’s constituents is the doubling of the employment allowance in the Budget and the threshold being removed, which means that some smaller businesses will actually be paying lower national insurance contributions than they would have paid before the Budget. However, I never shy away from the fact that the choices we had to make in the Budget were out of necessity, due to the black hole that was left behind. I am yet to hear any offer from Conservative Members as to how they would fill it.

At these questions, we will talk about tripling compensation for victims of the Post Office Horizon scandal only because the money is there. It was not there under the Conservative party. We will talk about money for the steel industry, standing behind that industry. Again, money was promised but not delivered. If promises are made, the resources to do those things have to be there. They were not there under the Conservative party. They are under Labour.

[Robbie Moore (Keighley and Ilkley) (Con)]

Whether it be the increase in the minimum wage, the increase in employer national insurance, the increase in business rates, or indeed the changes made to the Employment Rights Bill, all of these measures collectively are negatively penalising many businesses across my constituency, whether in Keighley, Ilkley or further afield. As a result, redundancies are having to be made, or the price of products and services are having to increase, and these businesses cannot absorb the additional increase that this Labour Government are putting on them. Did the Government undertake any economic impact assessment of what all of these measures collectively would have on hard-working businesses across my constituency?

[Jonathan Reynolds]

As I have said to Conservative Members before, of course we are very sensitive to the aggregate impact of Government policy, because, frankly, having observed the Conservative Governments of the previous 14 years, I thought they completely missed this point and at many times had different Departments doing completely opposing things.

I want to say something specific on business rates. No business rates relief was planned had the Conservative party won the election. The reduction to 40% was an increase in what was in the national accounts—again, short-term decisions for short-term, partisan, political benefit; no serious plan for the future.

The hon. Gentleman will have seen the figures from the Insolvency Service this week, which are very interesting. They show that fewer people have been made redundant over the past 12 months than in the year before, so I am afraid that the doom-mongers of the Conservative party have been proved absolutely wrong by the statistics that we have.

[Tony Vaughan (Folkestone and Hythe) (Lab)]

7. What steps his Department is taking to help microbusinesses comply with the general product safety regulations.

--- Later in debate ---

[Dr Allison Gardner (Stoke-on-Trent South) (Lab)]

14. What steps his Department is taking to support small businesses.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

Small businesses need a better deal—certainly better than the one they got from the last Government—and our small business strategy, which is due this year, is designed to do that. We have already provided more support through the British Business Bank; we have worked with the Federation of Small Businesses to take action on issues such as late payment and retail crime; and we have announced the creation of the new business growth service, which aims to transform business support services. Later today I will attend a small business summit in Sussex to progress those plans and meet small business leaders.

[Alex Baker]

Too many small and medium-sized defence businesses in my community struggle to access the banking and finance facilities they need, often on the basis of self-imposed ethical criteria. Will the Business Secretary join me in welcoming how many investors and financial institutions have responded to the campaign I am leading with my hon. Friend the Member for York Outer (Mr Charters) and 100 other Labour parliamentarians, calling on our banks and fund managers to broaden their approach to defence investment? Will he call on investors to take action so that we can defend our country, support Ukraine, and fire up our industrial base?

[Jonathan Reynolds]

I agree 100% with my hon. Friend and thank her very much for her question. She will know that my Department, alongside the Treasury and the Ministry of Defence, convened a roundtable in December to listen to these perspectives, and now all three Departments are working together to ensure that the problems she has articulated do not occur.

It is essential that the British people do not think that the substantial, significant and historic investments in defence that this Government are making come in some way at the expense of domestic prosperity. There is no prosperity without security, but we should also acknowledge the tremendous economic contribution made by our defence sector—there is not a foreign and domestic split in that regard. I thank my hon. Friend for her outstanding leadership in galvanising parliamentary support for that campaign, and I hope it will have unanimous agreement in every part of the House.

[Dr Gardner]

As the Secretary of State is aware, the ceramics industry, including in my constituency of Stoke-on-Trent South, is facing immense competition from imported counterfeit goods. Many of those goods contain false backstamps that mislead consumers and—as the GMB union has raised with me—threaten great British companies such as Dunoon, Duchess and many others. Will the Minister meet me again to discuss in more detail creating offences and tabling regulations to deal with imported counterfeit ceramic goods?

[Jonathan Reynolds]

My Department has a very strong relationship with the ceramics sector through the Energy Intensive Users Group. We have regular meetings with that group, and I would also like to mention the British Ceramic Confederation and our old friend Rob Flello, who is a strong voice for the sector. There are many challenges for the ceramics sector, not least decarbonisation, but on the subject of consumer protection, it is firmly against UK consumer law for firms—wherever they are located—to give consumers false information, such as through fake product markings. We have strengthened the regime in this regard, with new enforcement powers for the Competition and Markets Authority coming into force next month, but I will of course get my hon. Friend any meeting she requires.

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

A constituent in Chorleywood recently contacted me after needing an emergency locksmith due to a broken key. Initially quoted £40 over the phone, she was later charged £1,460, and was only given the new key after making that payment. While I applaud this Government’s ambition to reduce regulation, can we ensure that there is appropriate regulation so that consumers are not unfairly overcharged, as in this instance?

[Jonathan Reynolds]

I, too, have heard the kinds of stories that the hon. Gentleman has articulated—there are definitely concerns in that regard. Broadly, the Government’s regulation agenda is not necessarily about deregulation, but about effective and proportionate regulation. I feel that our regulatory sector has grown a lot in recent years, and that it does not always compare well to those of other countries in terms of timeliness and business response. That is the agenda we are pursuing, but I will certainly write to the hon. Gentleman about the issues he has raised, which are very relevant. I appreciate the opportunity to do so and thank him for raising them today.

[Alison Bennett (Mid Sussex) (LD)]

Many families are supported by the work of my constituents, Alison and Kevin, who run a small care business. They tell me that they already operate on tight margins in a sector under huge pressure. The hike in employer national insurance contributions will force them to make tough decisions on staffing and simply reduce the amount of care they can offer. Kevin and Alison rightly say that this hike makes no sense at a time when the Government tell us that they want to move to community care provision and get people out of hospitals. Does the Secretary of State not agree?

[Jonathan Reynolds]

I thank the hon. Member for her question, and I thank Alison and Kevin for their important work. We already talked about the difficult choices that the Government faced and the unenviable choices that had to be made. Health and social care was a beneficiary of the additional revenue that needed to be raised to meet some of the challenges we face, but we are not casual about the impact of that, and we recognise the pressures that come from that. I would say that I do not agree. Taxes have to apply to every sector, and we cannot carve out certain sectors. However, I appreciate the pressures that she articulates. That is why the rest of the Government’s agenda is set to address all those factors.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Clive Jones (Wokingham) (LD)]

Small businesses are the backbone of the British economy. Up and down the country, we have success stories of innovative start-ups and family-run businesses that should be part of the Government’s plan to get Britain growing again. Under the Conservatives, the number of small businesses in my constituency decreased by 360 between 2021 and 2024. The Tories messed up our national and local economy. Is the Minister concerned that his Government’s national insurance rises will damage the economy, just as the Conservatives did?

[Jonathan Reynolds]

If we were listing the difficult things that small businesses had to deal with in the previous 14 years, we would be here for most of the day and the weekend, if we are being honest. Whether it is how the Conservatives handled Brexit, the mini-Budget or austerity, we could go on and on. I say to the hon. Member that we are not casual about what we have had to ask of business because of the unenviable situation we inherited, but the fundamentals of the UK are incredibly strong in political stability and openness to the world, and we have the changes we are making to planning, skills, regulation and energy to make sure we are delivering.

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

13. What recent assessment he has made of the potential impact of changes to employer national insurance contributions on small and medium-sized enterprises.

--- Later in debate ---

[Joy Morrissey (Beaconsfield) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

My Department works night and day to deliver our plan for change by making Britain the best place to invest, work and do business. This Government have provided political stability and openness to the world, and we are continually improving the business environment.

Since the last Business and Trade questions, we have published a new steer for the Competition and Markets Authority so that it has growth and investment in mind, and more pro-business regulatory reforms will follow. In Delhi last month, I relaunched our trade negotiations with India, and I have just returned from Tokyo, where the Foreign Secretary and I announced a first-of-its-kind industrial strategy partnership with Japan. We are also ensuring that our “make work pay” reforms deliver for businesses and workers.

Finally, we have engaged closely with the new US Administration, including Commerce Secretary Howard Lutnick and the new US trade representative, Jamieson Greer. The new US trade policy is challenging, but we believe that our decision to engage and seek potential agreement on a new economic deal between the UK and the US offers us an opportunity to ensure that the UK is the best-connected market in the world.

[Joy Morrissey]

Businesses across Beaconsfield, Marlow and the south Bucks villages are facing crippling costs from the Government’s national insurance tax raid and the Employment Rights Bill. Can the Secretary of State reassure or advise my businesses? Should they stop hiring, cut staff, increase prices, or all of the above?

[Jonathan Reynolds]

I would say that businesses in the hon. Lady’s constituency should contact their local Conservative MP and say, “What was your plan?” because I think we have had three oral question sessions where this has broadly been the only thing that the Conservatives have to say. I genuinely want to know: what was the plan to pay for Post Office compensation? What was the plan to pay for the steel industry? When the Conservatives commissioned the public sector pay bodies with the remit that they were given, got the findings back, hid them and did not tell the British people during the general election campaign, what was the plan? How would they have reconciled that? The small business leaders, and businesses of every size, in the hon. Lady’s constituency know how to make difficult decisions. What—

[Mr Speaker]

Order. Look, this is getting ridiculous. We are on topicals, and that is the worst example I have seen of an answer to a topical.

--- Later in debate ---

[Andrew Griffith (Arundel and South Downs) (Con)]

How have we got to this point? After 35 weeks as Trade Secretary, 18 weeks since the US election, and an entire month since steel and aluminium tariffs were first announced, the Secretary of State is only now going to sit down with the Secretary of Commerce of our closest ally. While he has been correcting his CV, steelworkers and businesses are hurting today. This is a colossal failure of trade policy on his watch. Why has it taken so long, and when can we expect an agreement?

[Jonathan Reynolds]

The hon. Gentleman may have not seen the news recently, but the UK, led by our Prime Minister, has had the best engagement of any country with the new US Administration. Is it not good to see again a British Prime Minister who is respected on the world stage and delivering for Britain? We have had tremendous engagement with the new US Administration, and I am looking forward to meeting them in person next week.

[Andrew Griffith]

Once again, no answers come there forth. Over 1 million jobs in this country depend on trade with the United States, including thousands of jobs in our steel industry. The Secretary of State does not know when he is going to get a deal. Will he publish his red lines for that deal, his objectives and what he hopes to achieve from meetings next week?

[Jonathan Reynolds]

On steel and aluminium tariffs, the US Administration’s position is that there are no exemptions for anybody—that is across the board. I think they recognise the very strong case that we have, but that is their position.

No, I will not publish my negotiating red lines before a negotiation. Frankly, that is the worst advice I have ever heard in the House of Commons. The Conservative party fell out with the EU, would not deal with China and could not do a deal with India. It fell out with the United Arab Emirates and could not do a deal with the Gulf. It got nothing out of the US. It did deals with Australia and New Zealand, then disowned them. We will take no lessons from the Conservatives.

[Jo Platt (Leigh and Atherton) (Lab/Co-op)]

T4. Social enterprises contribute 3.4% of GDP, and towns such as Leigh and Atherton benefit greatly from them. Will the Minister outline what the Department is doing to support social enterprise and co-operatives so they can contribute to the growth agenda in the UK?

--- Later in debate ---

[Clive Jones (Wokingham) (LD)]

If the Government have to push forward with retaliatory measures against the United States for its steel tariffs, they must strike at the political allies of the President to meaningfully move on the conversation. Can the Secretary of State confirm whether Elon Musk’s Tesla is being considered as a potential target for retaliatory measures?

[Jonathan Reynolds]

We reserve the right to take any action in response to any changes to our trading relationships, but I do think we can look to the opportunity for the UK, which is greater than for any other country, to get to an agreement that improves our terms of trade with the US. I reserve the right to take any action, but I think we can look forward in a positive way to improving that trading relationship, and that right now is my message and focus.

[Mr Speaker]

I call Chris Bloore.

--- Later in debate ---

[Mr Speaker]

It was Chris Bloore’s turn. I am following the Order Paper, but I am going from side to side. Chris Law will come afterwards; he was not next.

[Jonathan Reynolds]

There are many Members called Chris.

I thank my hon. Friend for his question. As he will know, the creative industries are part of our industrial strategy. We are hugely proud of their soft power and economic impact, and of course we will get him the meeting he requests.

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

T3.   I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Some 66% of hospitality firms say they will have to cut staff or staff hours, 75% say they will cut investment, and 97% say they will increase prices because of the Chancellor’s manifesto-breaking national insurance increases. What assessment has the Minister made of the number of workers being dragged into national insurance contributions for the first time, and if the Government must continue with this disastrous policy, will they at least delay it for 12 months to bring it into line with the introduction of business rates reforms?

--- Later in debate ---

[Chris Law (Dundee Central) (SNP)]

T5. Thank you, Mr Speaker. The US President said that the EU was created to “screw over the US”. However, while the EU stood up for its economy and imposed a $28 billion counter-tariff, the UK is being screwed by the US, which has made it clear that the UK will not be an exception to its levies, despite the Prime Minister’s pleading. Will the Secretary of State tell me whether the Government are content to remain a bridge between the EU and the US if it is a bridge that the US continues to walk all over, risking the UK economy with every single step?

[Jonathan Reynolds]

The simple position is that we will represent the UK’s national interest in this matter. The US has objections about its significant deficits in manufacturing goods with China and the EU, but that is not the relationship between the US and the UK, so there is a chance for the UK to pursue a different policy —one that produces greater benefits for every part of the UK than perhaps are available to other countries. Of course we are cognisant of the overall impact—no one wants to see this type of turmoil in the global economy—but our job is to deliver for the UK, and that is exactly what we are focused on doing.

[Amanda Hack (North West Leicestershire) (Lab)]

T8. Rural businesses in North West Leicestershire highlight the lack of accessible public transport, including having no passenger rail, as a barrier to attracting new employees and to growth. What conversations has the Minister had with the Department for Transport about the barriers that rural businesses are facing?

--- Later in debate ---

[Liam Byrne (Birmingham Hodge Hill and Solihull North) (Lab)]

President Trump’s new tariffs are double trouble for Britain’s steel and aluminium suppliers. They will dent £350 million of sales, but they also risk swamping the UK with over-subsidised Chinese steel diverted from America. What is the Secretary of State’s game plan now to redouble defences for our UK metal makers?

[Jonathan Reynolds]

I am incredibly grateful to the Chair of the Business and Trade Committee for that question. He is right to say that the challenge here is not just the direct trade we have with the US, but the impact of trade diversion. He knows we already have 16 anti-dumping, anti-subsidy measures in place against 14 separate product categories. Once the annual tariff-free quota is hit, a 25% tariff applies to those. I can tell him and the House today, though, that I will support UK Steel’s application to the Trade Remedies Authority for a review of the steel safeguards—we do have to think about what will be coming—and a new one for the aluminium sectors.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

I am sure that Ministers will join me in welcoming the £90 million investment by dairy firm Arla in the plant in my constituency, which will create up to 90 jobs. Does not that reinforce the fact that agriculture remains at the heart of the rural economy in constituencies such as mine? Should not the Government be supporting that industry, rather than trying to destroy it?

--- Later in debate ---

[Ellie Chowns (North Herefordshire) (Green)]

In my constituency, a planning moratorium has been in place for more than five years due to water pollution, with an estimated effect on the local construction industry of half a billion pounds, despite the fact that new house building is a minute proportion of the problem. Will the Secretary of State meet me and representatives of the Herefordshire construction industry to try to find a solution to this devastating problem?

[Jonathan Reynolds]

The frustration that comes across in the hon. Lady’s question relates to exactly the sort of problem the Government are fixing. I would be more than happy to work with her and any Secretary of State or Department necessary to unblock that for her.

[Julia Buckley (Shrewsbury) (Lab)]

Will the Minister outline what steps the Department is taking to help increase trade with the Asia Pacific, and in particular the Philippines, where a major local company in my constituency, Beaver Bridges, is hoping to expand and grow significantly, with the trade support of this Government?

Board of Trade: Appointments

Jonathan Reynolds Excerpts

Thursday 13th March 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

I am delighted to announce that I have appointed a new Board of Trade.

The newly formed Board will be an advocate for UK businesses at home and abroad, championing the country’s 5.5 million SMEs and realising their export potential. This will help super-charge growth for the economy as part of the plan for change.

The newly appointed advisers have been hand-picked for their deep sector expertise and knowledge, representing some of the UK’s most successful businesses. They will play a crucial role in supporting the Department’s growth priorities, focusing on supporting small businesses and boosting exports.

The Secretary of State is pleased to appoint:

Omar Ali

Mike Hawes OBE

Dame Vivian Hunt DBE

Allison Kirkby

Paul Lindley OBE

Catherine McGuinness CBE

Michelle Ovens CBE

Mike Soutar

Sarah Walker

Dr Charles Woodburn CBE

In addition to the following ex-officio advisers:

Secretary of State for Scotland, the right hon. Ian Murray MP

Secretary of State for Wales, the right hon. Jo Stevens MP

Secretary of State for Northern Ireland, the right hon. Hilary Benn MP

The Lord Mayor of London, Alastair King

Minister of State for Investment, Baroness Gustafsson of Chesterton CBE

Minister of State for Industry, Sarah Jones MP

Minister of State for Trade Policy and Economic Security, the right hon. Mr Douglas Alexander MP

Parliamentary Under-Secretary of State for Employment Rights, Competition and Markets, Justin Madders MP

Parliamentary Under-Secretary of State for Services, Small Business and Exports, Gareth Thomas MP

Parliamentary Under-Secretary of State for the Future Digital Economy and Online Safety, Parliamentary Under-Secretary of State (Minister for Legislation) and Baroness in Waiting (Government Whip), Baroness Jones of Whitchurch.

The role as a Board of Trade adviser is unpaid and voluntary.

[HCWS517]

Employment Rights Bill

Jonathan Reynolds Excerpts

Report stage
Wednesday 12th March 2025 Commons Chamber

Bill read the Third time and passed.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

On a point of order, Madam Deputy Speaker. It has come to my attention that in a speech that I gave on 28 April 2014, recorded in column 614 of Hansard, on the subject of high-speed rail, I made a reference to my experience of using our local transport system in Greater Manchester when

“I worked as a solicitor in Manchester city centre.”—[Official Report, 28 April 2014; Vol. 579, c. 614.]

I should have made it clear that, specifically, that was a reference to being at the time a trainee solicitor. This was an inadvertent error and, although the speech was over a decade ago, as it has been brought to my attention, I would like to formally correct the record, and I seek your advice on doing so.

[Madam Deputy Speaker (Judith Cummins)]

I thank the right hon. Member for giving advance notice of his point of order and for placing his correction on the record.

Making Work Pay: Consultation Responses

Jonathan Reynolds Excerpts

Tuesday 4th March 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Government’s plan to make work pay is a core part of our mission to grow the economy, raise living standards across the country and create opportunities for all. It will tackle the low pay, poor working conditions and poor job security that has been holding our economy back. The landmark Employment Rights Bill (ERB) will benefit more than 10 million workers in every corner of the country.

We are committed to working with all stakeholders on how to best put these measures into practice. In October the Deputy Prime Minister, the Secretary of State for Work and Pensions and I launched an initial package of four consultations, with the potential to inform amendments to the ERB. We greatly appreciated the many detailed responses we received. The insights we have gained from businesses, trade unions, representative organisations, civil society, and others have been invaluable in developing proportionate and effective policy.

Today we are publishing the Government’s response to each consultation on gov.uk, including our next steps, as well as the Government’s response to a consultation undertaken by the previous Government on tackling non-compliance in the umbrella company market. I will also be tabling a number of amendments to the Employment Rights Bill today for consideration at Report stage, reflecting the outcomes of these consultations.

The Government are committed to continuing with this approach through full and comprehensive consultation on the implementation of Make Work Pay to ensure that the changes we are making work for both workers and businesses of all sizes.

Consultation 1: The application of zero hours contracts measures to agency workers

The Government believe that every worker should be able to access a contract which reflects the hours they regularly work. We believe this should extend to agency workers, not only to offer them greater certainty of hours and security of income, but to ensure that agency work does not become a loophole in the plans to end exploitative zero hours contracts. We also recognise the important role that the temporary work sector plays in both the public and private sector, and the need for employers to retain flexibility in their workforces. This consultation sought views on how to apply zero hours contract measures to agency workers, receiving 629 responses from a broad range of stakeholders.

Based on the consultation responses and further stakeholder engagement, we will table amendments to the Employment Rights Bill which would allow the Government to implement the zero hours contracts rights for agency workers. We believe it is important to narrow the broad power currently in the Bill so that end hirers, agencies and agency workers are clear where responsibilities will sit in relation to the new rights. The obligation to provide a guaranteed hours offer will rest with the end hirer, but legislation will maintain flexibility to place the obligation on agencies or other intermediaries instead, in certain scenarios, which will be set out in secondary legislation. Both the end hirer and agency will be responsible for providing an agency worker with reasonable notice of shifts, shift cancellations and changes to shifts. Agencies will be responsible for making payments to workers which result from short notice cancellations, movements or curtailments of a shift. Agencies and hirers will remain free to negotiate terms which may allow these costs to be recouped from the hirer where the hirer was in fact responsible for the change. In the case of pre-existing contracts, legislation will allow agencies to recoup these costs to the extent the hirer was responsible.

Significant details of the legislation will be set in regulations. We will take the necessary time to consult on the regulations, to ensure clear, detailed and workable provisions. We will continue to engage with employer organisations, the recruitment sector and trade unions to identify the best way to achieve the policy objective of extending rights for agency workers without causing unintended consequences to employment agencies and end hirers.

Consultation 2: Creating a modern framework for industrial relations

This consultation sought views on proposals to update the legislative framework in which trade unions operate to align it with modern work practices, removing unnecessary restrictions on trade union activity and ensuring industrial relations are underpinned by collaboration, proportionality, accountability, and a system that balances the interests of workers, businesses and the wider public. This consultation received 165 responses from a range of stakeholders.

We will table amendments to improve the process and transparency around trade union recognition and access, including streamlining the trade union recognition process and strengthening protections against unfair practices. This includes addressing unfair practices to prevent mass recruitment designed to influence the bargaining unit and prevent recognition being granted; a new fixed timeline for employers and trade unions to agree access arrangements for recognition purposes; removing the requirement to prove that an unfair practice influenced voting behaviour; extending the code of practice on access and unfair practices from the point the CAC accept a recognition application; and extending the unfair practice complaint timeframe from 24 hours to five days. We will also amend the Bill so that independent unions can apply for recognition where an employer has voluntarily recognised a non-independent union following receipt of a formal request for voluntary recognition by the independent union.

We will also table amendments to extend the trade union access provisions to cover digital access, in line with modern-day workplaces, while also introducing a fast-track route for achieving an “off-the-shelf" access agreement where certain conditions are met, alongside a mechanism to ensure there are robust penalties in place for non-compliance.

As part of our efforts to remove unnecessary bureaucratic hurdles, and deliver a balance between allowing for effective industrial action, while also ensuring that employers are able to reasonably prepare, we will amend the ERB to abolish the 10-year requirement for unions to ballot members on political fund maintenance, simplify the information requirements for industrial action ballots and notice to employers, extend the expiry of mandate for industrial action from six to 12 months, and ensure that trade unions provide a 10-day notice period for industrial action.

The Government also want to ensure that trade unions have a meaningful mandate to support relationships and negotiation with employers and deliver effective dispute resolution. That is why we are committed to making balloting more accessible by delivering e-balloting, which we anticipate will increase participation in statutory ballots and demonstrate clear mandates. We will launch a working group with trade unions and businesses imminently. While we continue to engage on how to ensure that trade unions are able to secure a meaningful mandate for industrial action, and as the other reforms to trade union legislation come into force, the Government will table an amendment to the ERB specifying that the repeal of the 50% industrial action ballot turnout threshold will be subject to commencement on a date to be specified in regulations. The intention behind this approach is to align as closely as possible the removal of thresholds with the introduction of e-balloting. This will ensure that industrial action mandates will have demonstrably broad support.

Consultation 3: Strengthening remedies against abuse of rules on collective redundancy and fire and rehire

This consultation sought views on increasing the maximum period of the protective award for failing to adhere to collective consultation requirements, and on applying interim relief to fire and rehire and collective redundancy scenarios. We received 195 responses, from a range of stakeholders.

We will table an amendment to increase the maximum period of the protective award to 180 days (up from the current maximum of 90 days). Increasing the maximum value of the award means an employment tribunal will be able to grant larger awards to employees for an employer’s failure to meet consultation requirements.

The Government want to enhance the deterrent against employers deliberately ignoring their collective consultation obligations and ensure it is not financially beneficial to do so. The Government are not proposing to bring forward the proposals to make interim relief available for either collective redundancy or fire and rehire scenarios. The most overarching and prominent theme from the responses on this section of the consultation is that it would be difficult to implement interim relief in practice, and the complexities for the employee in bringing a claim would outweigh any benefits in doing so. We will keep the area under review though and if it is found that further measures are needed, we will look to introduce them.

Consultation 4: strengthening statutory sick pay

Through the Employment Rights Bill, we are removing the waiting period so that SSP is paid from the first day of sickness absence and extending eligibility to those earning below the lower earnings limit.

We are introducing a new rate for statutory sick pay which will be paid to the lowest earners, including all those earning below the lower earnings limit. An employee will be entitled to the flat rate or a percentage of their earnings, whichever is lower. We consulted on what this percentage rate of earnings should be.

Following this consultation, and together with the Secretary of State for Work and Pensions, I am today tabling an amendment to set the percentage rate of statutory sick pay that will be paid up to the flat rate of SSP at 80% of an employee’s normal weekly earnings. This percentage rate provides a fair earnings replacement and strikes the right balance between providing financial security to employees who are unable to work due to sickness, while also limiting additional costs to businesses.

The Secretary of State for Work and Pensions will also publish the full Government response to the consultation on statutory sick pay, which sets out the findings and rationale in more detail, and will submit the Government’s response to the Work and Pensions Select Committee report on statutory sick pay.

Consultation 5: Tackling non-compliance in the umbrella company market consultation

In 2023 the previous Government consulted on proposals to regulate umbrella companies and options to tackle tax non-compliance in the umbrella company market, but no action was taken to address this. This means that many workers are unaware of who is responsible for providing their employment rights, or whether they are entitled to any employment rights at all. Many have reported a lack of pay-related transparency and mishandling of pay (typically, non-transparent deduction from wages). Yet the Employment Agency Standards Inspectorate is currently unable to take action against non-compliant umbrella companies, as they do not fall within scope of the legislation covering employment agencies and employment businesses.

We will therefore table an amendment to the Employment Rights Bill to expand the scope of the Employment Agencies Act 1973, allowing umbrella companies to be regulated for the purposes of employment rights. We will set out the detail in regulations following further consultation, aiming to ensure that workers have comparable rights and protections when working through an umbrella company as when taken on directly by an employment business.

Next steps for consultation

This package represents the first phase of formal public consultations on how best to put our plans into practice. We have committed to full consultation on the implementation of this legislation, and expect this to begin this year, ensuring reforms work for employers and workers alike.

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UK Trade Envoy Programme

Jonathan Reynolds Excerpts

Tuesday 28th January 2025 Written Statements

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

The Secretary of State has today appointed 32 Parliamentarians covering 79 markets to the United Kingdom’s trade envoy programme.

The United Kingdom’s trade envoys will play an integral role in the Government’s growth mission and delivering our plan for change by helping to create opportunities for UK business to compete abroad, break into new markets and attract greater inward investment from their markets.

They will play a crucial role in supporting my Department’s growth priorities, in particular through helping deliver the industrial and trade strategies and attracting foreign direct investment to every region in the UK. They complement the work of our ambassadors, high commissioners and His Majesty’s trade commissioners in their respective markets by engaging with their host Governments, leading trade delegations, hosting inward delegations, meeting businesses in the UK and in market, and lobbying on market-access issues.

The role as a United Kingdom trade envoy is unpaid and voluntary with cross-party membership from both Houses.

The Secretary of State is pleased to appoint:

The hon. Member for Richmond Park (Sarah Olney MP) as the United Kingdom’s Trade Envoy to North Africa.

The hon. Member for Bolton South and Walkden (Yasmin Qureshi MP) as the United Kingdom’s Trade Envoy to Egypt.

The hon. Member for Leyton and Wanstead (Calvin Bailey MP) as the United Kingdom’s Trade Envoy to Southern Africa.

The hon. Member for Chelsea and Fulham (Ben Coleman MP) as the United Kingdom’s Trade Envoy to Morocco and Francophone West Africa.

The right hon. Baroness Ramsey of Wall Heath (Jane Ramsey) as the United Kingdom’s Trade Envoy to Ethiopia.

The hon. Member for Clapham and Brixton Hill (Bell Ribeiro-Addy MP) as the United Kingdom’s Trade Envoy to Ghana.

The hon. Member for Vauxhall and Camberwell Green (Flo Eshalomi MP) as the United Kingdom’s Trade Envoy to Nigeria.

The hon. Member for Edmonton and Winchmore Hill (Kate Osamor MP) as the United Kingdom’s Trade Envoy to East Africa.

The hon. Member for Tooting (Dr Rosena Allin-Khan MP) as the United Kingdom’s Trade Envoy to South Africa.

The right hon. Lord Spellar of Smethwick (John Spellar) as the United Kingdom’s Trade Envoy to Australia.

The hon. Member for Neath and Swansea East (Carolyn Harris MP) as the United Kingdom’s Trade Envoy to New Zealand.

The right hon. Lord Watson of Wyre Forest (Tom Watson) as the United Kingdom’s Trade Envoy to the Republic of Korea.

The right hon. Lord Faulkner of Worcester (Richard Faulkner) as the United Kingdom’s Trade Envoy to Taiwan.

The hon. Member for Bradford West (Naz Shah MP) as the United Kingdom’s Trade Envoy to Indonesia and ASEAN.

The hon. Member for Warwick and Leamington (Matt Western MP) as the United Kingdom’s Trade Envoy to Thailand, Vietnam, Cambodia and Laos.

The hon. Member for Mid Norfolk (George Freeman MP) as the United Kingdom’s Trade Envoy to Malaysia, Philippines, Singapore and Brunei.

The hon. Member for Washington and Gateshead South (Sharon Hodgson MP) as the United Kingdom’s Trade Envoy to Japan.

The hon. Member for Manchester Rusholme (Afzal Khan CBE MP) as the United Kingdom’s Trade Envoy to Türkiye.

The hon. Member for Leeds Central and Headingley (Alex Sobel MP) as the United Kingdom’s Trade Envoy to Ukraine.

The right hon. Lord Austin of Dudley (Ian Austin) as the United Kingdom’s Trade Envoy to Israel.

The hon. Member for Hendon (David Pinto-Duschinsky MP) as the United Kingdom’s Trade Envoy to Switzerland and Lichtenstein.

The right hon. Lord Alderdice (John Alderdice) as the United Kingdom’s Trade Envoy to Azerbaijan and Central Asia.

The right hon. Lord McNicol of West Kilbride (lain McNicol) as the United Kingdom’s Trade Envoy to Jordan, Kuwait and Palestine Territories.

The hon. Member for Bedford (Mohammad Yasin MP) as the United Kingdom’s Trade Envoy to Pakistan.

The hon. Member for Liverpool Walton (Dan Carden MP) as the United Kingdom’s Trade Envoy to Mexico.

The hon. Member for Leeds North East (Fabian Hamilton MP) as the United Kingdom’s Trade Envoy to Southern Cone.

The hon. Member for Birmingham Erdington (Paulette Hamilton MP) as the United Kingdom’s Trade Envoy to Commonwealth Caribbean.

The right hon. Lord Liddle (Roger Liddle) as the United Kingdom’s Trade Envoy to Andean.

The hon. Member for Whitehaven and Workington (Josh MacAlister OBE MP) as the United Kingdom’s Trade Envoy to Brazil.

The hon. Member for Newport East (Jessica Morden MP) as the United Kingdom’s Trade Envoy to Central America.

The right hon. Lord Hannett of Everton (John Hannett OBE) as the United Kingdom’s Trade Envoy to Sri Lanka.

The right hon. Baroness Winterton of Doncaster (Rosie Winterton DBE PC) as the United Kingdom’s Trade Envoy to Bangladesh.

The new title of United Kingdom trade envoy programme better reflects the envoys’ duties in representing the whole United Kingdom, with the support of the Prime Minister, Secretary of State and Ministers.

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