Industry and Exports (Financial Assistance) Bill

Judith Cummins Excerpts

2nd reading
Monday 15th December 2025 Commons Chamber

[Chris Bryant]

Well, I hope that I can find the right hon. Gentleman’s sweet spot, as he is such a dedicated follower of fashion. He has made a very fair point. This is the classic problem for Governments when it comes to any industrial support, whether it is a loan or a grant: if the business is so successful, why does it need additional financial support? That is why, because of the structure that we have created through those two Acts, UK Export Finance actually makes money for the British Government. It is based on loans being made at normal rates, and sometimes it manages to lever in retail finance as well, which is a particularly important part of its work. However, when we provide a grant we have to ensure that it is intended to achieve a set series of aims. For instance, the £128 million—I think—that has been given to BioNTech is specifically designed to develop two new R&D hubs producing 400 new highly paid jobs in the life sciences sector, and also, incidentally, to tackle skin conditions and melanoma, which are among the subjects on which it is working.

The right hon. Gentleman is right to say that a difficult moment often arises, but one of the complaints I have received from quite a few sectors is that the UK can be a bit slow about deciding when we are going to support someone, and I want to be able to speed up that process as much as possible. As I said to the hon. Member for Strangford (Jim Shannon) and the hon. and learned Member for North Antrim (Jim Allister), I think the key to much of what we are trying to do involves supporting SMEs. Of course there will be massive contracts, such as the $3.5 billion expression of interest that we have allowed for the building of the new Dubai airport so that British businesses will be able to put in for some of the ensuing tenders—perhaps for hangar doors, the building of additional facilities, maintenance services or architectural designs. However, 88% of what we are talking about in respect of UK Export Finance is for SMEs.

I will make two more points, and then I will come to a close. Through existing provisions in the Industrial Development Act, the British Business Bank’s northern powerhouse investment fund II has directly invested £115 million in more than 300 small businesses. Similarly, in the midlands, the midlands engine investment fund II has launched a £400 million fund to drive sustainable economic growth by supporting innovation and creating local opportunity for new and growing businesses.

I am getting a feeling from the Chamber that everyone will be supporting the Bill. I think that, broadly speaking, it has cross-party support, and I think it important that we get it on the statute book soon enough to be able to provide that support for the businesses in the UK in the next financial year, so that we can prosper, grow the economy and protect jobs.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

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

This is an important Bill, not only for the agenda of increasing trade and therefore economic growth, but for our entire foreign policy in this chaotic and insecure international environment. My work over the past year as trade envoy to southern Africa has shown me just how important joined-up trade finance is to our diplomacy and to securing UK interests around the world, particularly, as my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer) said, in the steel industry. In many contexts, but particularly in Africa, economic diplomacy that centres trade and investment is what our partners want from us, and this is reflected in the new UK-Africa approach that was launched earlier today. Unless we have the means to commit financially and an anchor to bring together UK businesses and investors, there will be many serious challenges that we cannot overcome.

We need to build partnerships on critical minerals that protect our economy from the weaponisation of supply chains, particularly by China, and to implement the new critical minerals strategy. We need to create deeper economic ties with fast-growing countries and regions, including many of our partners in Africa, because we have been losing out on serious growth opportunities for the lack of a focused, strategic approach over the past decade and a half. We need to show our partners that we have a modern approach to international development that recognises and works with their own strategies and ambitions and therefore puts economic transformation at its heart. This requires us to be much more joined up across Government, and to do more with the resources available.

I want to ask the Minister how the changes in the Bill will complement UK Export Finance’s update of its own strategy. How will we enable organisations with a very long-term focus, including not only UKEF but British International Investment, to be more nimble and more ambitious in working together with our diplomats? As the Minister knows, I firmly believe that what our partners want from the UK is the exercise of cohering power: not providing the whole solution to our shared challenges, but being more willing to step forward and play a leading role in building that solution. Within this, our institutions could provide a bigger economic impact and secure far more UK influence if they worked more in collaboration on larger projects such as infrastructure, trade corridors, energy grid developments and critical minerals processing. This includes working together with close partner institutions, such as those of Japan and Canada, as well as with our EU partners.

The Minister will have read my views on these matters. It is clear that the UK is viewed as a cohering partner in sub-Saharan Africa, and I hope that UKEF being front and centre of that cohering international co-operation will help to address Chinese influence in the region. How does he think we can more effectively support UKEF and others to do that, given that it may require a more nimble and flexible approach than the UK institutions are used to? Today’s Africa approach rightly highlights the UK’s support for the African continental free trade area, but promoting intra-Africa trade and the critical agenda to move up the value chain often requires us to look across borders and apply a regional lens when we assess which projects to support. Can the Minister tell us how UKEF will do this?

Finally, I note that resource constraints are inevitably a threat to the implementation of the Africa approach, the critical minerals strategy and trade growth more widely. I have seen some innovative approaches across the continent that we can learn lessons from, including greater use of chambers of commerce to ensure that country and regional expertise on UK trade and investment relationships is preserved. I want to pour praise on the ambassadors in Mozambique, Zambia, Gabon, the Democratic Republic of the Congo and Angola, who have all demonstrated exceptional approaches to trade creation and innovation. I wish to ensure that they have the Minister’s support in the retention of those posts and our diplomatic network. Will the Minister set out how UKEF and our other key public institutions will work seamlessly across all mechanisms of government to ensure that we get the greatest value for public money, even when resources are tight?

Expanded trade finance through UKEF is an essential tool for putting these strategies into practice and making our country and our partners more prosperous and secure. The Bill takes welcome steps in fixing the framework governing UKEF and making that progress possible. I thank the Minister and his Government colleagues for their engagement with me on these issues over the past months, and I look forward to playing my part in driving this shared agenda forward.

[Madam Deputy Speaker (Judith Cummins)]

To wind up, with the leave of the House, I call the shadow Minister.

[Dame Harriett Baldwin]

I would like to pick up on some of the points made in today’s interesting debate and to reiterate that, as Conservatives, we have always stood shoulder to shoulder with Britain’s businesses and great exporters. In my opening remarks, I asked some questions of the Minister, and I look forward to hearing his replies. I thank my hon. Friend the Member for Chelsea and Fulham (Ben Coleman) and the hon. Member for Leyton and Wanstead (Mr Bailey) for all the work they are doing as trade envoys to the west and south of Africa. I remember when I was Africa Minister thinking how enormous the potential is for us to do more business with these nations, so it is interesting to hear how that work is moving forward.

A number of Members highlighted the excellent export work done by small and medium-sized businesses, and we heard some excellent examples from the north-east in particular. We also heard the case made by the hon. Member for Maidenhead (Mr Reynolds) for the importance of small and medium-sized businesses. I reiterate to the Minister, so that he is aware, the importance for the House of this money not just getting swallowed up by some of the larger household names, such as Rolls-Royce, Airbus and BAE Systems, but it giving that fighting chance to some of the smaller exporters.

I want to pick up on the point that the hon. Member for Maidenhead made about the customs union. The House will recognise how much work was put in to getting landmark trade agreements with 70 countries that give UK exporters preferential access to markets worth trillions of pounds. It is work that the Minister continues energetically around the world, and he will no doubt in his closing remarks point to the India and US free trade deals, which are important pieces of work that he has been involved in. Those free trade agreements that the UK has managed to negotiate would not be possible if we were in the European Union customs union. I challenge the hon. Member to point to where the research is on this fabled £25 billion.

In conclusion, the words of Ronald Reagan keep popping into my head during debates in this Parliament. He famously said:

“If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

I hope to hear from the Minister at the Dispatch Box how he will ensure that this additional money is used in the way that I said in my opening remarks, where it crowds in private sector investment and is there as a last resort to get a deal over the line, rather than crowding out private sector funding that would have been there were it not for the Government funds. Without further ado, having got my favourite Reagan quote about this Government on the record, I can assure the House that we will not be opposing the Bill.

[Madam Deputy Speaker (Judith Cummins)]

With the leave of the House, I call the Minister.

Industry and Exports (Financial Assistance) Bill

Judith Cummins Excerpts

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

[Judith Cummins in the Chair]

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

I remind Members that in Committee they should not address the Chair as “Deputy Speaker”. Please use our names when addressing the Chair. “Madam Chair”, “Chair” and “Madam Chairman” are also acceptable.

Clause 1

Limit on selective financial assistance for industry

Question proposed, That the clause stand part of the Bill.

[The First Deputy Chairman]

With this it will be convenient to discuss the following:

Amendment 3, in clause 2, page 1, line 8, at end insert—

“(a) In subsection (1), at the beginning insert ‘Except in respect of exports to which subsections (4B) and (4C) apply,’”.

Amendment 1, page 1, line 8, at end insert—

“(ab) In subsection (1), at the end insert ‘except in respect of exports to which the condition in subsection (4B) is met, where the amount shall not exceed £0’”.

This amendment is linked to Amendment 2. Together they provide that where the Secretary of State had reason to believe that modern slavery or human trafficking were likely to be present in the supply chain of the business recipient of the goods exported from the United Kingdom, the limit of commitments which could be made under arrangements relating to exports and insurance could not exceed zero.

Amendment 2, page 1, line 14, at end insert—

“(ca) After subsection (4A) insert—

‘(4B) The condition in this subsection is that the Secretary of State has reason to believe that modern slavery or human trafficking are likely to be present in the supply chain of the business recipient of the goods exported from the United Kingdom.’”

See explanatory statement for Amendment 1.

Amendment 4, page 1, line 14, at end insert—

“(ca) After subsection (4A) insert—

‘(4B) This subsection applies to exports of goods in respect of which the Secretary of State has reason to believe that the goods exported from the United Kingdom are likely to be re-exported in a way that would, had the goods been exported directly from the United Kingdom, be contrary to any provision of the any Sanctions and Anti-Money Laundering Act 2018, or of any sanctions regulations made under that Act.

(4C) In respect of exports to which subsection (4B) applies, the aggregate amount of the Secretary of State’s commitments at any time under arrangements relating to exports and insurance shall not exceed £0.’”

Clauses 2 and 3 stand part.

New clause 1—Impact of financial assistance limits—

“Within one year beginning on the date on which this Act is passed, and once every year thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact of the limits set by this Act on—

(a) England,

(b) Northern Ireland,

(c) Scotland, and

(d) Wales.”

This new clause would require the Secretary of State to publish an annual report on the impact of the limits set by this Act on each of the UK's devolved nations.

New clause 2—Impact of financial assistance limits on the steel industry—

“(1) No later than one year after this Act is passed, and annually thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact on the UK steel industry of the increases in the limit on selective financial assistance for industry and the commitment limits on financial assistance for exports and overseas investment for which this Act provides.

(2) A report under this section must include a statement of—

(a) the level of financial assistance provided in each month to UK steel undertakings under section 8 of the Industrial Development Act 1982 (as amended by this Act); and

(b) the number of UK-based full time equivalent jobs in the steel industry which, in the opinion of the Secretary of State, would have been lost had it not been for the increases in the limit on selective financial assistance for industry and the commitment limits on financial assistance for exports and overseas investment for which this Act provides.”

New clause 3—Impact of financial assistance limits (No. 2)—

“Within one year beginning on the date on which this Act is passed, and once every year thereafter, the Secretary of State must publish and lay before Parliament a report assessing the impact of the limits set by this Act on—

(a) gross domestic product (GDP),

(b) export capacity of small and medium-sized enterprises (SMEs), and

(c) volume of trade between the United Kingdom and the European Union.”

This new clause would require the Secretary of State to publish an annual report on the impact of the limits set by this Act on GDP, SMEs, and trade between the United Kingdom and the European Union.

--- Later in debate ---

I support the Bill. I support the intent behind clauses 1 and 2 to create headroom so that the Government can act to support manufacturers and exporters, but I ask the Minister for reassurance on three points: that SMEs will be able to access trade finance in practice; that downstream steel processors and manufacturers will not be overlooked in favour of larger players; and that defence exporters will see improvements in licensing speed and fair access to finance.

[The First Deputy Chairman]

I call the Liberal Democrat spokesperson.

[Mr Joshua Reynolds (Maidenhead) (LD)]

The Liberal Democrats support this Bill, and we support the amendments that are before the Committee today. The Bill does something that is straightforward and necessary: it raises the Industrial Development Act cap from £12 billion to £20 billion, reflecting inflation since the alignment was last set in 2009, and it nearly doubles UK Export Finance’s commitment limit from £84 billion to around £160 billion. Both the industrial assistance and export finance frameworks would hit their ceilings if we did not make these changes, so it is really important to make them. We support the Bill because British businesses need the Government’s backing to compete globally, and these limits need to keep pace with our ambition.

The amendments before us would strengthen the Bill in a few distinct ways. Amendments 1 and 2 would ensure that Government-backed export finance cannot be used to support businesses whose supply chains involve modern slavery or human trafficking. That is a straightforward ethical line. British taxpayers should not be underwriting exploitation, and we Liberal Democrats are glad to support the amendments. I ask the Minister to confirm what existing safeguards are in place, and whether implementation guidance will be issued so that businesses know where they stand.

Amendments 3 and 4 would address the risk that UK Export Finance could facilitate sanctions evasion through re-exporting. As we raise the statutory limit to £160 billion, Parliament must be satisfied that none of this expanded headroom can be used in a way that undermines our sanctions regime, so we support the amendments.

New clause 1 would require annual reports on the impact of the limit changes on each of the four UK nations. Although export finance is a reserved matter, outcomes are not necessarily evenly distributed. A report would allow Parliament to scrutinise whether the expanded capacity is reaching every single part of the United Kingdom, so we support the new clause. New clause 2 would require annual reports on the steel industry. Steel is of profound strategic importance to the UK and deserves the dedicated parliamentary scrutiny that the new clause suggests, so we support it.

New clause 3, which appears in my name, would require the Secretary of State to report on the annual impact of the Bill on GDP, on the export capacity of small and medium-sized enterprises, and on the volume of trade between the United Kingdom and the European Union. UKEF’s 2024 to 2025 activity contributed £5.4 billion to the UK economy, and Parliament should be able to verify such a claim on an annual basis. According to the Office for National Statistics, there are 5.7 million SMEs in the UK, yet UKEF’s annual report shows that it supported just 667 businesses. Annual reporting would hold the Government to their own target of supporting an additional 1,000 SMEs to export. It would make visible whether the current eligibility criteria, which require at least 20% of a business’s annual turnover to be from exports in any one of the previous three years, continue to lock out businesses trying to break into export markets for the first time.

On the UK-EU trade part of new clause 3, the Chartered Institute of Export & International Trade has documented a 30% fall in EU export value among the smallest firms since the trade and co-operation agreement came into force. A recent Institute of Directors policy voice survey found that 54% of businesses that stopped exporting to the EU cited the trading relationship with the EU as one of the reasons why. These are not businesses that failed to break into new markets, but established exporters that have walked away from our largest and nearest trading partner because the barriers in their way are too great to bear. Every customs declaration and every check that did not exist before 2021 is another reason why businesses are not exporting to the EU, because it simply is not worth it for them. Those are the realities behind the statistics that simply increasing UKEF capacity alone cannot fix. Parliament should be able to see whether expanded UKEF capacity is making a measurable difference to those figures, so we hope the Minister will support new clause 3.

The most effective long-term support for British exporters would be a new bespoke UK-EU customs union. Analysis by Frontier Economics, commissioned by Best for Britain, in February 2025 suggested that a customs union could boost British GDP by 2.2%. The House of Commons Library estimates that this could generate £25 billion in additional annual tax revenue for His Majesty’s Revenue and Customs, which I know the Chancellor would be grateful for. New clause 3 is the link or accountability mechanism that would allow Parliament to see whether what has been proposed is working.

We will support the Bill and the amendments to it, because capacity without accessibility is meaningless, and capacity without accountability is unacceptable. The Government need to accept the new clauses that match the expanded headroom with the practical reforms to ensure that they reach the 5.7 million SMEs, which are the backbone of British business, currently not being supported by UK Export Finance.

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[Jim Allister]

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

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

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

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