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—

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[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.

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[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.

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[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.

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[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.

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[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?

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[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?

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[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?

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[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.

[HCWS490]

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.

[HCWS392]

Assimilated Law Report

Jonathan Reynolds Excerpts

Thursday 23rd January 2025 Written Statements

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

Today I have laid a report regarding the Retained EU Law (Revocation and Reform) Act 2023 (REUL Act) before Parliament and published it on gov.uk. This report updates the House in line with the obligations under section 17 of the REUL Act, which requires a report to be published and laid before Parliament every six months detailing all revocations and reforms of assimilated law. This is the third report being laid before the House.

The report today summarises the data on the assimilated law dashboard, providing the public with information about the amount of assimilated law there is and where it sits across Departments. The dashboard reflects the position as of 23 December 2024, showing that a total of 6,901 instruments of REUL/assimilated law concentrated over approximately 400 unique policy areas are on the dashboard. Since the previous update to the dashboard 40 assimilated law instruments have either been revoked or reformed, meaning that 2,395 have now been revoked or reformed in total.

The report gives details of a further 11 statutory instruments using powers under the REUL Act and other domestic legislation, which the Government have laid since the previous report to deliver on their priorities. These include, for example, the Ionising Radiation (Medical Exposure) (Amendments) Regulations 2024, which contain legislative amendments that maximise the efficiencies provided by technological advancements and, in turn, allow for the faster diagnosis of cancers, personalised patient treatment, and a reduction in workforce pressures, all while safeguarding patient safety. These changes support the delivery of the Government’s health mission priorities.

This Government are determined to support economic growth, which is why we are working with industry and businesses to deliver our industrial strategy and small business plan to improve economic opportunities. Delivering these strategies requires the right regulatory frameworks to support innovation, economic growth, investment, and high-quality jobs. We will reform assimilated law, where desirable, to deliver that vision, and to deliver growth for UK businesses and citizens.

This Government will also consider the future reform of assimilated law within the wider context of their national missions, plans for change, and commitment to reset relations with devolved Governments and the EU.

[HCWS384]

Competition and Markets Authority: Appointment of Chair

Jonathan Reynolds Excerpts

Wednesday 22nd January 2025 Written Statements

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

This Government have a clear mission to drive economic growth and aim for the highest sustained growth in the G7. The Prime Minister has been clear that he expects regulators to play their part in delivering these ambitions.

The Government are today announcing the appointment of Doug Gurr as the chair of the Competition and Markets Authority on an interim basis. This follows the resignation of Marcus Bokkerink, which has been accepted by the Secretary of State for Business and Trade. Doug will join the CMA board, working alongside Sarah Cardell in her role as CEO.

The Government are grateful to Marcus for his leadership of the CMA over the last two and a half years and wish to place on the record our thanks for his efforts, achieving the ambitions he set at the start of his tenure and more. All regulators, including the CMA, have a key role to play in driving growth, and this transition will enable a fresh strategic vision at the heart of our competition authority. Doug brings with him experience as an entrepreneur and in the technology and groceries sectors, as well as non-executive leadership, including in artificial intelligence—skills and experience that will be critical as the CMA takes on the challenges of the modern economy. The Government are confident that with fresh leadership on the board, as well as the existing strong leadership and the welcome commitments made by the CMA to supporting economic growth, the organisation will be well positioned to play its part in our collective mission to grow the UK economy.

[HCWS380]

Harland & Wolff

Jonathan Reynolds Excerpts

Thursday 19th December 2024 Commons Chamber

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

With your permission, Madam Deputy Speaker, I shall make a statement on the UK shipbuilding firm Harland & Wolff. I am pleased to inform the House that, subject to approvals, a commercial deal has been reached that will protect jobs, drive investment and secure the future of the workforce. The deal will see Navantia UK, a specialist in shipbuilding, purchase all of Harland & Wolff’s shipyards.

As right hon. and hon. Members will know, Harland & Wolff is a major employer in Belfast, with additional important yards at Arnish and Methil in Scotland and Appledore in Devon. For more than 150 years, the firm has built famous vessels for notable shipping organisations and companies, including the Royal Navy, the Royal Mail and the White Star Line. This industry-led deal, which we expect to complete shortly, will secure all four of Harland & Wolff’s shipyards, protecting around 1,000 jobs right across the UK. I hope that this announcement will come as some relief to Harland & Wolff’s employees. I realise that this has been a deeply worrying time for them, and for everyone affected by the continued speculation over the firm’s future. I welcome Navantia UK’s intention to work closely with the relevant unions to protect workers’ existing terms and conditions. That is important for the hard-working employees and communities who have served the firm over many years.

I was first informed that Harland & Wolff was in serious financial difficulty on day one of the new Government. As the previous Government had open-book arrangements with the company, it was clear that the firm had significant and unsustainable debts. Members will be aware that, at that point, Harland & Wolff was seeking a Government guarantee or liquidity loan. Had that occurred, the British taxpayer would have been put at significant risk of losing millions of pounds, without the safeguarding of any yards, jobs or ships. I believe that the possibility of the Government providing such a guarantee or loan, which was much speculated on in the press, was preventing a market-based solution. The former Government’s inability to make a decision left the yards and the workforce in limbo. That is why I made it clear in my first weeks in this job that no taxpayer guarantee or loan would be provided. I was dismayed that when I did so Conservative Members opposed that, knowing as they did that with a guarantee or loan there stood a significant risk of losing an eye-watering amount of taxpayers’ money. That was deeply irresponsible.

Crucially, the deal that has been agreed will secure the delivery of the fleet solid support contract of the Ministry of Defence. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed the absolute minimum of changes to the contract to ensure its continued delivery. Navantia UK is the prime contractor of the Team Resolute consortium, which is charged with building three logistics support vessels for the Royal Navy, and it will maintain the required portion of UK-only build as part of this deal. It is also worth saying that FSS is a vital component of the UK carrier strike capability, providing munitions, spares and stores. At a time when strategic alignment with our NATO allies is more critical than ever, the Government fully endorse this deal, which will also see Navantia UK invest significantly on commercial terms in Harland & Wolff shipyards.

Anyone familiar with Navantia UK will know that the firm boasts strong expertise in naval shipbuilding. I am pleased that, thanks to this agreement, it will continue to bring the next generation of technology to its operations here in the UK. This is quite simply a good deal for the Harland & Wolff shipyards, a good deal for its employees, and a good deal for British shipbuilding. It provides the best opportunity to sustain our essential sovereign shipbuilding capacity and capability, now and over the long term. Defence is at the heart of the industrial strategy that we have identified. Defence is one of our eight growth-driving sectors of the UK economy. That industrial strategy is unreservedly and unashamedly pro-business, engaging on complex issues that are currently barriers to growth and investment. National security is one of the foundations of our plan for change. Without it, we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs like those at Harland & Wolff.

UK shipbuilding alone supports some 42,500 jobs nationwide and adds £2.4 billion to the economy every single year. We recognise how important it is, as a vital pillar of our civil and defence industrial base. That is why my Department, together with the Ministry of Defence and the National Shipbuilding Office, is doing everything that we can to bolster our world-class shipbuilding industry. That includes the significant progress that we are making on key procurement programmes. We have a major contract with BAE Systems, which has increased the order from three to eight Type 26 anti-submarine warfare frigates on the Clyde, and a contract with Babcock for five Type 31 general purpose frigates at Rosyth. Those projects have already brought significant recapitalisation investment to shipyards throughout the UK, and there are further procurements to be won, ranging from Border Force and local councils to marine in-port service vessels at His Majesty’s naval bases.

The Government are absolutely committed to supporting vibrant, growing and successful shipbuilding and fabrication industries across the country, and I pay tribute to the skilled, diligent workforces who have made these industries what they are today. Thanks to the deal that has been announced, workers in Belfast, Arnish, Methil, Appledore and right across the country can be confident that the Government are squarely behind them, that UK ship- building is secure, and that together, as a United Kingdom, we will lead the sector into a better future. I hope that all workers in all four yards are now able to enjoy this Christmas with their families, as they should. I commend this statement to the House.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Secretary of State.

--- Later in debate ---

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Secretary of State. Having served in his Department, I too will be paying close attention to the answer.

[Jonathan Reynolds]

I agree with the shadow Secretary of State on the iconic nature of this business; its role in British history and in the community, particularly in Belfast; and the esteem in which it is held. I do feel he could have thanked us for cleaning up another mess that the previous Government left us, although perhaps that is too much to ask. After all, they could have made the decisions to allow the market-based solution with support from Government that we have been able to achieve. Despite those caveats, I welcome the fact that he welcomed the news and recognised it as a substantial good news story for many workers as we go into Christmas and for the next years.

I turn to the hon. Gentleman’s specific questions. On the delivery of the fleet solid support contract, the issues that the previous Government left us may have some material impact, although there is no large, foreseen delay to the delivery of the project at this stage. On the support to the business, there is no support going directly from Government to the business to subsidise the transaction. There have been amendments to the contracts supported by my Department and the Ministry of Defence. He asked for the details. I will not reveal it in the House because of the commercial sensitivity, but I will find out whether there is a way to share that with him. On whether the deal is compliant with the Windsor framework and our commitments as a country under those arrangements, I am satisfied with all that. Despite the fact that we will always respect those arrangements, we are the UK Government and we make decisions for every part of the UK, with the regulatory approvals, and I seek no one’s permission to be the Secretary of State for Business and Trade across all the UK.

On additional work packages, there are no additional promises from the Government, although he will know that there is a 30-year supply pipeline for shipbuilding in the UK and many opportunities, particularly in sectors such as energy, maintenance and fabrication, and a whole range of functions where Members across the House would want to have a strong, diverse and competitive shipbuilding and maintenance sector.

Finally, on defence spending, the hon. Gentleman had a bit of a try-on. He asked what assurances the sector can have. The biggest assurance I can give is that we only ever hit that 2.5% under Labour Governments. The fact is that we have a Labour Government with that commitment to the defence sector and its role—the ability to deliver maximum economic benefits for the UK, as well as that vibrant and important defence role—and we will continue to deliver on the way to that.

[Madam Deputy Speaker]

I call the Chair of the Business and Trade Committee.

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

Congratulations to the Secretary of State. This is excellent news for the people of Appledore and of Northern Ireland and for workers across the Harland & Wolff supply chain. He might want to confirm that the peril of providing a Government guarantee was the possibility of entailing a huge payout to a US-based hedge fund, which was the largest creditor for Harland & Wolff. What is happening to the contract value for the FSS deal? It was priced at about £1.6 billion. Has that contract value now gone up? Crucially, what does the Secretary of State envisage for Harland & Wolff after that enormous contract is safely and soundly delivered?

[Jonathan Reynolds]

I thank the Select Committee Chair for his kind words. I am delighted that we have been able to secure this future for Harland & Wolff. His assessment is right that the largest creditor to Harland & Wolff when we took office was Riverstone, a significant US hedge fund. He is right to say that had we gone ahead with that Government guarantee or loan, there would likely have been no real return to the taxpayer—no guarantee of jobs, shipyards or ships being built. That money would have gone to the creditors. Actually, in the commercial market-based solution that we have been able to broker, all creditors have behaved responsibly, but, understandably, if anyone thinks the Government will come along and give them free money, they will hold out for that option. That was why it was so important to make that decision early on to secure this far better outcome.

On the specific question, and I should have directed my answer to the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), there is no change to the UK-based content of the contract. As I said in the statement, there have been some changes on commercial terms, although they are relatively minor based on the overall value of the contract.

On the future, I can tell the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) that the deal we have brokered guarantees not only all four yards, but the jobs in the Belfast yard for three years and jobs in the three other yards for two years. We therefore have a chance not just for new investment coming into those yards, but for the long-term future to be secured for a pipeline of work and energy and defence contracts, which is a vibrant and successful opportunity for the future.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson, who has up to two minutes.

[Steve Darling (Torbay) (LD)]

This is an outstanding Christmas present for the 1,000 employees from Devon to the Isle of Lewis who will benefit from this decision and the deal that has been pulled off by the Government. In the west country, we have a low-wage economy, and in the Appledore dockyard, which is not too far from my constituency of Torbay, this will go down extremely well, so congratulations are in order. That is in sharp contrast with the failure of the previous Administration on implementing an industrial strategy, supporting our shipping industry and growing our economy over many years. The position that the Conservatives are taking now is utterly shameful. How can we hardwire that long-term support for our shipping industry so that we see growth in this area and support for industries such as steel manufacturing?

[Jonathan Reynolds]

I am extremely grateful to be able to deliver that outcome for the hon. Gentleman’s constituents as a result of the announcement. He is right to say that successful UK Government policy must be about more than one-off solutions to specific problems such as this. That is why we have adopted an ambitious industrial strategy that covers key sectors of the economy and delivers exactly what he has asked for: consistency, long termism, and policy that covers every aspect of government rather than being seen as led by one Department. When we get it right, good long-term and effective public policy—working hand in hand with the private sector—delivers tremendous outcomes for the country, and that is what we are seeking. Ultimately, any strategy is only as good as its delivery, and this statement is evidence that the Government will deliver.

[Mrs Emma Lewell-Buck (South Shields) (Lab)]

Today’s news is welcome. My right hon. Friend knows how vital the FSS ships are to our Royal Navy. RFA Fort Victoria, our only remaining solid store support ship, is due to be decommissioned in 2028, yet even before this rescue deal, new FSS ships were not due to enter service until 2032. Is there any scope at all to accelerate that and close the capability gap?

[Jonathan Reynolds]

I am grateful to my hon. Friend for her expertise and insight on this matter. I understand the point that she makes, but it is perhaps one for my colleagues in the Ministry of Defence. I will ask them to engage with her on those ambitions to remedy the absence of capability, but I believe that that would be challenging.

[Mark Pritchard (The Wrekin) (Con)]

I welcome the statement, and particularly the protection of the fleet solid support programme, but I join my Front-Bench colleague, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), in saying that we will have to wait to see the details. In principle, however, the deal sounds very encouraging indeed, and I congratulate the Secretary of State and all his team and officials for getting it over the line. He mentions world-class shipbuilding in the UK. He said from the Dispatch Box that national security is the foundation of the plan for change, and his Department’s online statement talked about sovereign capability, but does he accept that without steel, ships cannot be built? Will he take this opportunity to say what more can be done, in a dangerous world, to reduce the UK’s increasing reliance on imports from elsewhere, including from Sweden and Asia, so that ships can be delivered in times of conflict or war?

[Jonathan Reynolds]

I very much share the right hon. Gentleman’s aspirations. He will know that most defence steels are higher end—they are specialised and tend to come from electric arc furnaces—and one challenge that we have inherited relates to the two remaining blast furnace sites in the UK. We have improved the situation in Port Talbot, but we could not change direction, with the blast furnaces going offline before the arc furnace was installed. We have inherited an even more challenging position in relation to Scunthorpe, but we are working closely with the company to find a solution.

I believe that we are missing real capabilities in the UK. I can see the economic and business case for plate mill, for instance, and for the long-term question of direct reduced iron in steel production. The steel strategy is part of delivering on that. A whole range of horizontal policies, particularly on energy prices, would have to be in a corresponding position for us to do that. The fact that the UK has such a small steel sector relative to the size of our economy makes us an outlier among developed nations and suggests that there is a real evidence base for improving it, and I will work with any Member of the House to deliver that.

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

Merry Christmas, Madam Deputy Speaker. This is a great Christmas for Methil. I thank the Secretary of State for Business and Trade, the Secretary of State for Scotland, and all those in Government who have worked so hard to secure this deal, which has saved 200 skilled jobs and apprenticeships at the Methil yard in my constituency, and 150 jobs at Arnish in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton). Does the Secretary of State agree that it is vital that all levels of Government, trade unions and stakeholders in the future of the Methil yard continue to work together so that, with GB Energy headquartered in Scotland, the yard can fulfil its huge potential in contributing to our ambitions for growth in the renewables industry in Scotland and the UK?

[Jonathan Reynolds]

I thank my hon. Friend for all his support and repeated submissions to the Department. I know how significant this matter is for his community, and he has fulfilled his role as a Member of Parliament in articulating it at every level of Government. I say the same for our hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton)—I visited the Arnish shipyard during the election campaign. It is so important in a job such as mine, and in a Department such as mine, to recognise that we must deliver for the whole United Kingdom. The diverse challenges we face do not detract from the fact that we must deliver for every part of the UK, and that is what we plan to do.

I also thank my hon. Friend for his comments about my officials, who worked very hard to deliver this outcome. I agree with him about the huge potential out there not just for shipbuilding, fabrication and maintenance, but for energy in particular. There is real optimism for the future, but it requires the kinds of foundations that we have put in place through this agreement.

[Sir Bernard Jenkin (Harwich and North Essex) (Con)]

I add my congratulations to the Government for getting this agreement over the line, but when will we get their defence industrial strategy? So far we have had only a rather lengthy statement of intent. We need to reindustrialise our defence industrial base in order to face modern challenges, and that is particularly essential given the threats we face from the east of Europe at this time. That is very difficult to do in government, because the Treasury hates his stuff, as the Secretary of State may already have discovered, but we will hold him to account on what he described as leading this sector into future growth, and indeed on reindustrialising our steel industrial base and so on, so that we have the self-sufficiency that is vital for the defence of the country.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I encourage the Secretary of State to be brave in responding to the point about the Treasury.

[Jonathan Reynolds]

Absolutely, Madam Deputy Speaker. I very much welcome the question and would like to put on the record that I have only good things to say about His Majesty’s Treasury at all times. [Laughter.] It is true; I mean that. The hon. Gentleman is absolutely right to say that there is great imperative—with a particular degree of responsibility in the defence part of the industrial strategy—in the challenges we face. It is imperative not just that we work closely with colleagues in the Ministry of Defence on procurement issues and Government-to-Government sales, in which my Department plays a major role, but that we address wider regulatory issues.

As the hon. Gentleman may know, the Department recently did work on environmental, social and governance criteria to ensure that they do not prevent investment into defence companies. There are issues with small and medium-sized enterprises in the defence sector struggling to access bank accounts—not through a prohibition on defence, but perhaps because of a lack of understanding about such commercial contracts being different from those in other parts of the economy. There are a whole range of issues that we must get right, but I think that, in the main, Members across the House share his aspirations and objectives. He has been a voice of expertise and authority on these issues throughout my time in Parliament, and I am grateful for his engagement on them.

[Amanda Martin (Portsmouth North) (Lab)]

Today’s announcement will surely be well received by the House, the country, the Royal Navy and the workers directly affected, especially given the previous Government’s lack of industrial strategy. Alongside the fantastic announcement for seafarer and worker conditions and protections, the agreement shows the Government’s commitment to the vital maritime and industrial sector. Shipbuilding was once a proud industry and the backbone of the community in my city of Portsmouth, but it was decimated by the previous Government. What assessment has the Secretary of State made of the deal’s wider implications for the UK economy, and specifically for the shipbuilding and defence sectors?

[Jonathan Reynolds]

I recognise the role that shipbuilding has played in my hon. Friend’s city. I grew up in Sunderland —part of what was once one of the major civil shipbuilding locations in the world—and I recognise the identity and pride that comes with that industrial heritage. In many cases, people feel that it is something of the past, but in this statement we are stressing exactly what she said about the contemporary contribution and the opportunities for the future, about which we should be excited. There are a whole range of increasing needs to shipbuilding expertise, particularly in the energy sector—offshore wind, for example, creates a range of demand for different types of maintenance and supply vessels—so this should be an optimistic story for the future. Sometimes I feel that the wider British public perhaps do not understand the number of jobs or the economic benefit that come from such a sector, so it is always good to make that case from the Dispatch Box—as my hon. Friend does every day from the Back Benches.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call John Cooper, a member of the Business and Trade Committee.

[John Cooper (Dumfries and Galloway) (Con)]

I congratulate this Front-Bench team and the wider Government on landing this deal in the face of what the Secretary of State has euphemistically called the “headwinds” —I would call them a full-force gale—created by the Budget. Did Navantia raise concerns about the forthcoming Employment Rights Bill? It swings the pendulum very much in favour of trade unions, which, as we know, are very often red in tooth and claw. Was that an issue in landing the deal?

[Jonathan Reynolds]

No, it was not—it is a good try, but no. First, the employment rights framework in most parts of continental Europe is very different from our own. Secondly, as I have repeatedly said, the changes in the Employment Rights Bill do raise terms and conditions for some of the lowest-paid workers in the country, but many companies in the UK—particularly larger ones—already operate to a significantly higher level. Shipbuilding is historically a fairly unionised sector, so I do not think there are any concerns or worries in that field—to be frank, the trade unions in that sector often fought harder for the industry than former Conservative Governments. I understand the try-on point that the hon. Gentleman is making, but no, the Employment Rights Bill has not been a problem. In terms of wider UK Government policy, this has been a great endorsement of our EU reset and our willingness not to revisit the arguments of Brexit, but to work more closely with friends and allies in Europe, to ensure that we are getting the maximum opportunities for the UK and always working in our national interest.

[Mr Mark Sewards (Leeds South West and Morley) (Lab)]

I congratulate the Government on this announcement, which is incredibly welcome news for all those workers who get to keep their jobs as a result. It is a shame that the Conservative Front-Bench spokesman chose to attack the Government over the 2.5% target while responding to the statement, and asked for a timeline for when we are going to deliver 2.5%. Fourteen years is a timeline, and the Conservatives did not meet that target even once. If we are to avoid situations like this in the future, we need to have a modern industrial strategy. What progress have we made towards that strategy? How does it feed into our wider growth mission, and how will it support the UK economy to grow over the next Parliament?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his comments on the deal and for his observations about the questions from the Opposition Front-Bench spokesman about the 2.5% target. On the modern industrial strategy that we are creating, we have had an incredible response to our Green Paper—some 22,000 individual answers to the questions it asked—showing that there is a huge appetite from industry across the board, both in the UK and abroad, to engage with what the Government are seeking to do. Again, I stress that that should always be on a cross-party basis; there is nothing in that Green Paper that anyone of any political stripe should be able to oppose. It is based on our national interest and the goal of being more competitive and business-friendly, succeeding to a greater degree on the world stage.

This week, we had our first meeting of the Industrial Strategy Advisory Council, with some tremendous representatives with expertise across the board—UK industry, academics and business figures. It is an incredibly exciting time. This is just one component of our growth mission, but clearly an important one, alongside areas of work for me such as the small business plan that we are putting together. I genuinely believe that everyone should be excited about the future.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call Alison Griffiths, a member of the Select Committee.

--- Later in debate ---

[Jonathan Reynolds]

I am sorry if the hon. Lady missed it, but I was clear that what we have announced today does not change the provisions in the original contract agreed by the former Conservative Government. What has changed is that we have saved all four of these yards, at a time when we could have lost them all through the inability of the previous Government to take the action required, so it is an incredibly positive story. We have saved the position of those yards and guaranteed those jobs, and not for months but for years to come.

[Chris Law (Dundee Central) (SNP)]

I take this opportunity to wish you a merry Christmas, Madam Deputy Speaker.

I thank the Secretary of State very much for what is wonderful news for all four sites across the UK. Obviously, I am going to be slightly biased towards the two in Scotland, one in Arnish on the Isle of Lewis and the other in Methil in Fife—that is very welcome news in the week before Christmas. I also thank the Government for their co-operation with the Scottish Government over the past months, particularly in the early days when UK Labour had come into government, and I put on record the work that the Deputy First Minister of Scotland, Kate Forbes, has contributed.

I have a couple of questions. First, given that we are moving forward, are the workers’ current terms and conditions going to continue as they are? Secondly, I have listened to what has been said about future contracts. We know that both yards in Scotland will be protected for the next two years, but can the Secretary of State tell us a little bit more about the longer-term sustainable footing, not least because this company has changed hands three times in the past four years?

[Jonathan Reynolds]

I am grateful to the hon. Gentleman for his observations and questions. It was really important to us that we keep all four yards together—there had been an assessment that, for understandable reasons, the Belfast yard was more commercially valuable, so there was a real chance that any unstructured rescue package could have lost the two Scottish yards. There were question marks about those yards in particular, so keeping the business together and protecting the future of those workers was hugely important to us, and I am delighted that we have been able to achieve that.

The job guarantees for the non-Belfast yards will last for two years. The guarantee is for 90% of the overall job numbers, simply to provide the usual degree of flexibility in running that business, but that guarantee covers the majority of the workforce and keeps them in place. The deal also comes with investment in those Scottish yards, so whatever the future holds, those yards will be even more competitive and more able to bid for the kinds of contracts that will secure the long-term prosperity we are all seeking. I am always genuinely willing to work with colleagues across any part of the UK to secure the kind of outcome we have achieved today, and I am grateful to the hon. Gentleman for recognising that.

[Bob Blackman (Harrow East) (Con)]

As someone who has consistently and regularly called for more shipbuilding to take place in the UK rather than be exported, today’s statement is good news, and I congratulate the Secretary of State on announcing this decision. He has clearly said that further orders have been added as a result of this deal. What further defence and—much more importantly—commercial opportunities are there for Harland & Wolff to acquire contracts from across the world, rather than building elsewhere?

[Jonathan Reynolds]

I share the hon. Gentleman’s aspirations and recognise his calls for UK shipbuilding to have a higher priority in future than it has in the past. To be specific on what I was saying in the statement, there has been a revision to the value of the fleet solid support contract; it has required a little bit of additional support—but not greatly and on commercial terms—in order to deliver it. There are not promises of additional work packages on top of the contractual agreements made by the previous Government, but because Navantia UK is such a world-renowned expert builder of shipping of all sizes, as well as the investment that comes with this deal and the more competitive nature of the yards in future, there are genuine grounds for optimism. I see real opportunities in fabrication and maintenance, but particularly in energy. I also think that a little bit of competitive diversification in the military shipbuilding sector’s supply chain is welcome, creating better value for money in procurement. Across the board, this is a positive story for Harland & Wolff and its employees, but as the hon. Gentleman has described, it is also a positive story for UK shipbuilding.

[Jim Shannon (Strangford) (DUP)]

This announcement is really good news, and everybody across the House will welcome it. It is probably time to break out the Christmas cake and the mince pies early, because there is good news coming and the Secretary of State has delivered it today. This morning I spoke to my right hon. Friend the Member for Belfast East (Gavin Robinson), who has worked tirelessly with the company to secure this progress. We all agree that it is great news, particularly for the 1,000-strong workforce in Belfast, and especially in the run-up to Christmas—well done. My right hon. Friend will be at the yard with the Secretary of State for Northern Ireland this afternoon, probably in about an hour’s time.

If the national shipbuilding strategy is to mean anything, it must be that the Government invest in skills and capacity throughout the United Kingdom of Great Britain and Northern Ireland. Does the Secretary of State agree that more could be done to increase research and innovation support across the United Kingdom and, in particular, in Northern Ireland?

[Jonathan Reynolds]

I am grateful to the hon. Gentleman for asking what I think will be my last question of the year. I would particularly like to recognise what he said about his colleague, the right hon. Member for Belfast East (Gavin Robinson). Obviously, he has a constituency interest and a leading role in Northern Ireland, and I think he understood the decisions we had to make. We had to explain in confidence to all colleagues affected why the initial decision on the guarantee alone was not the right way forward, but that we were committed to the kind of solution we have announced today. I am extremely grateful for being able to work with the right hon. Gentleman on that. It is great news that he is going to the yard today; my colleagues the Secretary of State for Northern Ireland and the Minister for Industry are also in Belfast today, and I understand that the Secretary of State for Scotland will be at one of the yards in Scotland too.

On the hon. Gentleman’s point about innovation and research and development, that is the basis on which we have to compete. Whether in the sectors of aerospace, automotive or shipbuilding, what we need is high-end, sophisticated R&D, innovation and world-leading products. That is what we have in many of our advanced manufacturing sectors, but it is such a competitive world that we have to maintain that edge. In particular, R&D is an area where core support and core funding between Government and industry has real benefits. We have seen that in lots of sectors—maybe not to the degree we have needed in shipbuilding, but let us look at that for the future and approach the next year with some real positivity.

Future of Harland & Wolff

Jonathan Reynolds Excerpts

Thursday 19th December 2024 Written Statements

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

National security is the foundation of our plan for change—without it we cannot deliver on our milestones to raise living standards across the UK, with good, skilled, productive jobs.

I am pleased to announce that a commercial deal has been reached, subject to approvals, that will see Navantia UK—a specialist in shipbuilding—purchase Harland & Wolff’s shipyards in Belfast, Arnish and Methil in Scotland, and Appledore in Devon. This industry-led deal will secure the future of all four of Harland & Wolff’s shipyards and protect around 1,000 jobs across the UK.

The deal will ensure the delivery of the Ministry of Defence’s fleet solid support (FSS) contract. The Government have worked closely with Navantia UK on the future of the FSS programme. We have agreed with Navantia UK on the absolute minimum of changes to the contract, ensuring its continued delivery.

Defence is at the heart of the industrial strategy, where we have identified it as one of eight growth-driving sectors for the UK economy. Our industrial strategy is unreservedly pro-business, engaging on complex issues that are barriers to growth and investment.

Navantia UK has committed to invest significantly on commercial terms into Harland & Wolff’s shipyards, a major investment into the UK’s industrial base. This is a good deal for Harland & Wolff, its employees, and the British shipbuilding sector more broadly, as it provides the best opportunity to sustain essential sovereign shipbuilding capacity and capability for future naval work, safeguarding both current and future jobs in the UK.

We are committed to supporting vibrant and successful shipbuilding and offshore fabrication industries, and our skilled workforces who deliver them, in all parts of the UK, in which Harland & Wolff has an important role to play.

[HCWS344]