Draft Contracts for Difference (Sustainable Industry Rewards and Contract Budget Notice Amendments) Regulations 2026

Kit Malthouse Excerpts

Tuesday 17th March 2026 General Committees

[Kit Malthouse (North West Hampshire) (Con)]

Notwithstanding the comments from my hon. Friend the Member for West Aberdeenshire and Kincardine, I am a little alarmed by this statutory instrument and its implications for my residents in North West Hampshire. I have a number of questions for the Minister.

My understanding is that this scheme was originally established in the aftermath of the disruption to supply chains caused by the conflict in Ukraine. There was significant concern about the ability of the offshore industry to continue, so the subsidy was put in place on a supposedly temporary basis. That was to allow for the uninterrupted development of an industry that had hitherto been working quite well, but was suffering at that point.

This statutory instrument, however, turns that temporary subsidy into a permanent feature of the landscape. We are voting through, colleagues, a permanent subsidy to the wind industry. [Interruption.] Well, there is no sunset clause; that has been taken out. There is no review mechanism—there is nothing. If the Minister wants to intervene on me, I am quite happy to be corrected, but as far as I can see this is an open-ended subsidy scheme through the CfD system. My questions are configured around that assumption.

First, could the Minister confirm that there will be no annual parliamentary vote on this subsidy? Normally, a subsidy to an industry would expect to come through direct expenditure from the Department for Energy Security and Net Zero, the Department for Business and Trade or whatever it might be. This is being funded through the supplier obligation levy, which is a direct levy on consumer bills. There is no approval by the House of the budget. In fact, I think it is just approved administratively—it is what it is. The consumer will pay, whether we like it or not. If the Minister could confirm that, that would be great.

As I understand it, the budget for AR7 was about £544 million. Could the Minister confirm for us the projected budget that the Government expect for AR8, and therefore how much my residents in North West Hampshire can expect to be added to their electricity bill to pay for this statutory instrument?

Much of the Government’s case for extending what is—let us be clear—an industrial subsidy is that there is a very high leverage. I looked at the maths, and the leverage of private sector to public sector is about 16:1. How was that number reached? I could not see in the impact assessment what the maths was, what assumptions had been made or whether this had been independently verified. Is there some kind of National Audit Office examination of that number? I have been a Minister myself, and I was always very sceptical about these public-private leverage numbers. They are often promoted by the industry looking for the subsidy, and make their way into these sorts of impact assessments without any kind of checking. I would be grateful to understand what the assumptions were.

Could the Minister also confirm that this is now a permanent feature of the landscape—that there is no sunset, statutory timeline, let or control? People will effectively just bid through the CfD system, the subsidy will make up the difference, they get to build their onshore, floating offshore or whatever wind it might be, and my constituents and I have to pay no matter what.

Then I wanted to ask a bit about this fair work charter. I understand that the Government are very keen on employees’ rights. We should all make sure that people are treated with respect in employment, but using a statutory instrument effectively to extend employment regulations seems very odd. I wonder whether that will be an ongoing feature of the landscape for statutory instruments such as this and whether we can expect a kind of extension of regulation by stealth.

I am sure these regulations are perfectly amenable, but their being contemplated in a small Committee of Members, rather than on the Floor of the House, as the Employment Rights Act 2025 was, or indeed going through both Houses in all their pomp, seems to me a slightly sneaky way to get around proper Government scrutiny. I would be very interested if the Minister could point me, please, to the specific statutory authority that permits the use of CfD contracts to impose employment standards on developers and their supply chains. If he cannot point me to that, what is the legal authority, please, for that being included in this statutory instrument?

Finally, CfDs were designed originally to bring down the cost of alternatives. That was the original plan. Yet what we are voting on today will do precisely the reverse: raise the cost for me and my constituents. I wonder how the Minister can justify that at a time of difficulty for so many of our constituents with the cost of living. If this industry is as attractive to the private sector as he says it is, why does it need the subsidy in the first place?

[Michael Shanks]

I will address a few things. There were some contradictory comments from different Members of the same party: on the one hand, we should support the supply chains, but on the other, the Government should do nothing to actually build them up. I will come to that point, because—

[Kit Malthouse]

We think for ourselves.

[Michael Shanks]

That is how we end up with absolutely no industry left in the country. That is what we are trying to rebuild after 14 years of it falling apart.

I will turn to the specific points. First of all, the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine, made a good point about the strength of supply chains in the north-east of Scotland; I will be in Aberdeen again on Thursday. One of the key things that the North Sea Future Board has taken as a real priority is how we map those supply chains, not just over oil and gas but over what could come in terms of offshore wind, decommissioning, hydrogen and carbon capture. For too long, the pipeline of future projects that that supply chain could be redeployed on has not been clear enough. As a result, we have been losing out on contracts that could be dealt with here in the UK. We are determined to try to fix that, because there are significant supply-chain opportunities, but we need to make it easier for companies to take those up.

The shadow Minister and I always agree on new nuclear, although we slightly disagree on how much he achieved when he was the Nuclear Minister—but I will not mention that, because I want us to work co-operatively on nuclear. New nuclear is incredibly important. As he is right to say, the supply-chain benefits in the UK from nuclear are substantial: thousands and thousands of jobs in communities right across the country, not just in proximity to Sizewell or Hinkley, are contributing in different ways to building what are phenomenal engineering projects here in the UK.

The small modular reactor fleet that the Government not only consulted on but have actually delivered—and are delivering—will result in even more supply-chain jobs across the country as well. The shadow Minister and I also agree that we would like to see some of those SMR projects being built in Scotland, with even closer supply chains in Scotland as well, but we first need to change the Scottish Government in May; I am glad that he will be supporting a vote for Scottish Labour on 7 May to do that.

The shadow Minister also raised a number of other points about the supply chain that I think are right. It is absolutely right to say that floating offshore wind is an expensive technology, but we are at the cutting edge of its development. We have a real opportunity to do something differently on deep-sea wind, which we were not able to do on fixed-bottom wind, to have the supply chain here in the UK. We have the biggest pipeline anywhere in the world; we have one of the biggest projects in the world. That is an opportunity for us to deliver on that innovative supply chain, but it takes investment for that to happen.

The right hon. Member for North West Hampshire asked a number of genuine questions, which I appreciated. First, the regulations themselves very clearly set out the sunset clause as 31 December 2028. This will be eligible for the allocation rounds before that date; if we wanted to continue the scheme beyond that, we would have to come and update these regulations again, but it is not an unlimited fund.

On the projected budget for AR8, I cannot get into projected budgets because they are driven by the initial allocation that is set, and then by the bids that come in. In AR7, we reformed the process so that we could see the bid stack in order to see what projects were in that option round, although they were anonymised. That resulted in the budget getting us the output of offshore wind that we did, at a price that was 40% cheaper than new-build gas. That is what we should hold on to: the AR7 option round was cheaper for consumers than the equivalent would be.

I remind right hon. and hon. Members that there is no option to not build new energy infrastructure in this country. We have two choices: we either double down on gas, and the world as it stands right now is a reminder of why that would be a mistake; or we build renewables. There is no option to build nothing. There is a cost for consumers, regardless of what we choose to do. There is also a huge cost for consumers of building the grid that the previous Government failed to build for 14 years, which we are now determined to do.

On the fair work charter, there is no compulsion on any developers to bid into the clean industry bonus. If they want to participate in the contracts for difference auction, they are very welcome to do that. If they want to participate in the clean industry bonus and have public support for supply chains here in the UK, then they should conform to the requirements of that scheme. We think it is absolutely fair to say that if the hard-working people of this country are putting money into building those factories, fair work should be at the heart of it. I am surprised, frankly, that in 2026 anyone would think that fair work is something that we should not support by any means necessary.

[Kit Malthouse]

As I think I said, I agree that people should be treated with respect; my question was more about why it is being done through this particular route. For the Government to legally have grounds to include what we are discussing as part of, effectively, a procurement process, there has to be a statutory basis on which they are doing that; it cannot just be shoved through on a non-universal basis. I was asking for the authority on which it is included.

I am sorry if I misread the time limits regulation. Could the Minister confirm that, if the Government give notice before 31 December 2028 for 12, 15, 19 or 120 more rounds to come, they will then be able to continue post that deadline? So they can in fact manufacture a deadline.

Finally—rather than my having to intervene again; I hope you will bear with me, Ms Jardine—could the Minister confirm to colleagues what he said: we are being asked to vote today for higher energy bills for our constituents in perpetuity, or certainly for the next few years, as a result of this instrument? Just so everyone is clear: you are voting for higher bills.

[Michael Shanks]

I thank the right hon. Member for his second speech in the debate.

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[Kit Malthouse]

I was trying to save time; I can intervene more if the Minister wants.

[Michael Shanks]

I understand the point. First of all, I have been really clear. This regulation, as it clearly sets out, comes to an end on 31 December 2028. We will come back to the Committee to update the regulations should we wish to continue the scheme. We have run AR7—it was a successful scheme. Obviously, we want to monitor what happens in AR8 and AR9. We may be able to devise other schemes. It may be that by then that our industrial strategy has delivered the supply-chain benefits across the UK and that that is not necessary, but supply chains do not come out of nowhere.

The shadow Minister, the hon. Member for West Aberdeenshire and Kincardine, made one other point that I wanted to come back to. When we left Government, two supply chain companies were building solar in this country. When we took back Government in 2024, there were none. If we want to have supply chains in the UK, we have to support and invest in them. That is not just a cost. It also delivers good jobs across the country, and our energy security.

On the question about raising bills, the right hon. Member for North West Hampshire is quite wrong. The outcome of building the clean power system is that we will bring down bills, but we have to be able to build it and that means supply chains here in the UK as well, because the rest of the world is also in a race to build clean energy infrastructure.

[Kit Malthouse]

So is that a yes about voting for higher bills?

[Michael Shanks]

It is a no, because the counterfactual, of relying on gas, as his party is so determined to do, would put up everyone’s bills significantly. We are the ones bringing down bills, and on 1 April all our constituents will see that the decisions this Government have made will reduce their bills by 7%.

There are a number of points in this statutory instrument that I could go over again; in the interests of everyone’s time, I will not. I reinforce the point that we believe that if we are building an energy system for the future here, we should deliver the good jobs and industrial benefits that come with that. That should not be a controversial argument, but it seems that it still is. If we want to have an industrial strategy, we cannot be agnostic, sit on the sidelines and hope that someone else will do it—we have to drive it forward. If we want our constituents to have good, well paid jobs across the country, helping build the energy system, we have to do something about it. This Government are doing that, and I commend the regulations to the Committee.

[Kit Malthouse]

On a point of order, Ms Jardine. I do not mean to be difficult, but the Minister has not answered all the questions I posed—not least about the assumptions of the 16:1 leverage, which is apparently the big bonus coming in. I also do not know whether it is appropriate for us to vote on what is effectively an open-ended budget. Fundamentally, the impact I am most worried about is the one on my constituents—that I am not going to be able to tell them how much this will cost them; that is quite a significant hole in the Government’s argument. I am not aware of other statutory instruments where we vote for an open-ended budgetary allocation that our constituents will have to pay for, whether they like it or not.

I have time this afternoon. If you, Ms Jardine, want to suspend the sitting while the Minister goes and finds the answers to those questions, I am quite happy for that to happen. It seems to me disrespectful for us to rattle through something that will have an impact quite soon on people’s electricity bills.

[The Chair]

Thank you. That is not a matter for the Chair but the right hon. Member’s comments are on the record, and I have taken note of them. It is appropriate now for us to move on.

Question put.

UK Modern Industrial Strategy

Kit Malthouse Excerpts

Monday 23rd June 2025 Commons Chamber

[Jonathan Reynolds]

I very much welcome the question and the work that my hon. Friend has done. He has been an ally in ensuring that there are no problems around the defence sector being seen as a legitimate source of business investment and economic activity. We recognise why we need that in the national interest, but we should not in any way be squeamish about the contribution that defence makes because the deterrence value is a fundamental contribution to peace, as well as to economic security.

I can tell my hon. Friend that the strategy commits us to double the amount of the defence budget that goes specifically to SMEs, rising to £2.5 billion a year. SMEs, in diversifying the defence supply chain and creating those opportunities, are absolutely a part of this strategy, and if he has any red tape to show me that we need to get rid of, let’s work together to get rid of it.

[Kit Malthouse (North West Hampshire) (Con)]

I draw attention to my entry in the Register of Members’ Financial Interests. This is the sixth industrial strategy announced from that Dispatch Box since “New Industry, New Jobs” by Gordon Brown in 2009. While they have all been filled with a box of chocolates selected by the Secretary of State, with his or her preference often underpinned by a huge subsidy, not a single one of them has made any significant difference to the UK’s growth rate, and that is because they all miss a particular piece of the jigsaw. I urge the Secretary of State to recognise that the Government can build as many roads and bridges as they want, train as many young people as they like, pump as much money into the British Business Bank as they want, but unless they can find individuals to take a risk with their own capital, they will not get any investment. Unless these individuals can see a return on that capital, they will not invest. I urge him, as we move towards a Budget in November, to work with the Chancellor of the Exchequer to increase entrepreneurs’ relief, cut capital gains tax, and reduce the taxation on dividends so investors can see a return on their risk.

[Jonathan Reynolds]

I hesitate to say this, but I think the right hon. Gentleman underestimates the number of strategies there have been in recent years. It is certainly more than six; we are at 11 in the past decade, or something like that. There have been six Business Secretaries in five years, which is certainly far too many. I think we can all agree that we need some long-term consistency in that area alone.

I agree with the right hon. Gentleman’s point on risk. That is one of the more thoughtful contributions I have heard on the low economic growth, mainly under a Conservative Government, since the financial crisis. We have to consider that attitude to risk in terms of regulation. Maybe our role as parliamentarians, when we ask regulators to fix every problem and stop every bad thing happening, is to ask ourselves whether that is the right balance, whether that is a reasonable request, or should it be—of course, with that in mind—proportionate to the performance of the economy.

The right hon. Gentleman mentions some specific measures. We have the lowest corporation tax in the G7 and a competitive tax rate overall, but we are always seeking to improve that. We need supply side tools, fiscal changes and a consistent long-term environment. That is what we seek to put in place.

Budget Resolutions

Kit Malthouse Excerpts

Wednesday 6th November 2024 Commons Chamber

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

It is a pleasure to open this final day of the debate on the Chancellor’s growth Budget. Can I welcome the new shadow team? It is lovely to see them in place. I think many of us on this side would admit that we were shadow Ministers for longer than we ideally would have been, and I know that it is a tough and thankless job at times. On a personal level, I wish them well for the future.

As the Chancellor rightly stated, growth is our only path to prosperity, to increasing living standards and to delivering the change that the British people voted for so decisively over the summer, and we on these Benches recognise that we cannot have growth without investment. Growth demands investment in our infrastructure, into our public services, into the cities and regions that have gone overlooked and under-invested in by past Administrations, and that is what this Budget chooses. It chooses investment over decline, with more than £100 billion of public investment into our roads and our railways, our parks and our playgrounds, our schools and our surgeries—all the things upon which a successful economy and a healthy society depend.

This was a Budget for affordable homes, for the NHS, for the school rebuilding programme and—a personal priority for me as MP for Stalybridge and Hyde—for the trans-Pennine route upgrade, including a new station at Mossley, which is something I am sure the whole House can be excited about and get behind. This is literally rebuilding Britain in action, and make no mistake, businesses need that public investment too, because it creates the right environment for them to thrive now and long into the future. That is why the Office for Budget Responsibility says that our increases in spending will drive up the long-term increase in GDP by up to 1.4%.

[Kit Malthouse (North West Hampshire) (Con)]

The Secretary of State makes much of growth. Of course we all want growth, but the OBR report actually says that growth in real GDP will start to slow over the next three years and that in years four and five of the Parliament it will go negative. It is telling us that the Government’s Budget is actually going to result in a smaller private sector, not a larger one. How is he going to explain that to business?

Oral Answers to Questions

Kit Malthouse Excerpts

Thursday 31st October 2024 Commons Chamber

[Gareth Thomas]

Let me take this opportunity to congratulate my hon. Friend on her election, too. I agree that local authorities working with local communities are fundamental to supporting SMEs in local economies. That is one reason why, as well as backing local authorities in yesterday’s Budget, we are backing Tracy Brabin, the excellent Mayor of West Yorkshire, with funding to support the priorities of local communities in constituencies such as that of my hon. Friend. It is also why we are introducing measures such as high street rental auctions and a powerful community right to buy, so that local communities can start the process of reviving their high streets.

[Kit Malthouse (North West Hampshire) (Con)]

I draw the attention of the House to my entry in the Register of Members’ Financial Interests. The Minister mentioned that access to finance is vital for small business, but I hope he knows that the past few days have seen chaos in the motor finance market, with a number of major lenders suspending lending entirely in response to a judgment in the appeal court. This has caused consternation across the entire business lending sector. Can the Minister reassure us that the Government are fully engaged with the industry and the Financial Conduct Authority in sorting out an issue that could have a very, very significant impact on the entire sector and its supply chain?

[Gareth Thomas]

We are certainly looking at the issues that have arisen for the industry from the judgment. More generally on access to finance, I am sure the right hon. Gentleman will welcome our launch, at the investment summit referenced by the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), of the British Growth Partnership, which is aimed at unlocking investment in businesses that want to scale up.

--- Later in debate ---

[Gareth Thomas]

I welcome the decision by my right hon. Friend’s Select Committee to take a further look at the issue. It is a priority for the Department to speed up the compensation process. Victims are still coming forward, and we are actively looking at whether all those who come forward are covered by the compensation schemes. We have asked the Post Office to write to all those sub-postmasters who have not yet come forward to see if they are eligible for compensation.

[Kit Malthouse (North West Hampshire) (Con)]

We should all welcome the work of both Governments that resulted in the announcement of £63 billion of inward investment into the UK. However, since then, as a number of Members have pointed out, we have had significant new regulation in the labour market and massive new taxes on businesses. If any of those investors now change their minds, will the Secretary of State come to the House and inform us, please?

[Sarah Jones]

We will of course keep the House updated on the results of the investment summit, but the £63 billion, as I said earlier, was a massive show of confidence in this new Government.

Post Office Horizon Scandal

Kit Malthouse Excerpts

Thursday 18th July 2024 Commons Chamber

[Justin Madders]

I thank the right hon. Member for her question. Those are the principles that we want to address and carry on with from the previous Government: the system should be fair, swift and simple. We know that postmasters have already gone through an incredibly difficult time. We do not want to make it even harder by having a convoluted system. We absolutely agree that justice should be fair, quick, complete and straightforward for people.

[Kit Malthouse (North West Hampshire) (Con)]

Beyond compensation, one of the most important things that campaigners are looking for is consequences for those people who played a part in the creation of this scandal. The Prime Minister has made much about the integrity and accountability of his Government. Presumably that is retrospective. What consequence does the Minister envisage for those current serving Government Ministers who are deemed by the inquiry to have been negligent in their conduct in ministerial office in the past?

[Justin Madders]

That is a very important question. It would be premature of us to draw conclusions before the inquiry has been completed but, absolutely, we should be looking very carefully at all those individuals whose behaviour unfortunately led to the scandal happening and to it taking far too long to address. That is a matter for the inquiry to make recommendations on and, certainly, we will be looking to follow those up.

Economic Crime and Corporate Transparency Bill

Kit Malthouse Excerpts

Consideration of Lords message
Wednesday 13th September 2023 Commons Chamber

[Dame Margaret Hodge]

In the interest of trying to get to the vote on time I will close my speech, but I urge all Members to please support the amendments proposed by Conservatives in the House of Lords, which are eminently sensible, rational and pragmatic.

[Kit Malthouse (North West Hampshire) (Con)]

I am afraid that I am going to disappoint the right hon. Member for Barking (Dame Margaret Hodge) and speak very strongly against Lords amendments 151B and 151C, and I refer the House to my entry in the Register of Members' Financial Interests. I am surprised at Lord Garnier’s lack of any conception of what it is like to run a small business and the cumulative impact of Government regulation thereupon. The limits that are drawn here will draw in all manner of businesses, not least some eminent barristers who will fall foul of some of the numbers. Indeed, the average town-centre or city-centre pub will be covered by these regulations, such is their level of turnover and employees. It is worrying that I am perhaps the only small-business voice here and that there are not enough small-business people in the House to point out the problems with this issue.

As the Minister has said, hundreds of thousands of businesses will be drawn into the net. This is not necessarily about the compliance cost. The kind of regulation that comes with the prospect of a criminal offence has a chilling effect on small businesses. I speak as somebody who has owned one for nearly 30 years. When the Revenue, health and safety or trading standards show up with some new regulation, a whole industry cranks into place to terrify the owners of small businesses into some kind of compliance. Then along come the consultants, the accountants, the webinars and the newsletters telling us what we do and do not have to do. All of this distracts us from what we should be doing, which is trying to create employment and wealth and paying tax to the rest of the country.

The other issue is that this misunderstands the dynamic of businesses of this size. If a business of this size is going to engage in fraud, it is very possible—more than likely, actually—that the principal will be the instigator of that fraud. The idea that, alongside all the other offences, they should take steps to prevent themselves from perpetrating fraud seems ridiculous. Added to those general difficulties are the specific ones presented by the Heath Robinson-type calculation that every business will have to undertake every month: adding together how many employees there are and how many are employed in each month in year P, then taking away the number you first thought of and dividing it by the number of months. We are all going to have to do this every single month to work out whether we are above the threshold or not. Should we have the steps? Should we not have the steps? It all seems particularly nonsensical.

We know that a vast amount of this fraud takes place in larger companies, and they have the capacity and the wherewithal to deal with it. If my hon. Friends really think that senior barristers, whose turnover and assets will be more than the threshold, should be taking and showing procedural steps to avoid conducting fraud—do not forget that they are sole practitioners—then I am afraid we have gone through the looking glass of what Conservative Members think is appropriate.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Barry Gardiner.

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[Kevin Hollinrake]

I welcome the hon. Member for Bethnal Green and Bow (Rushanara Ali) to her place. We worked closely together on the Treasury Committee and it is a pleasure to work across the House with her today. I also pay tribute to her predecessor, the hon. Member for Feltham and Heston (Seema Malhotra) for her similar approach to the work we have done on this legislation. I thank all hon. and right hon. Members for their contributions to this debate and their support for the Government’s amendments made in the other place. I want to refer to a number of points that have been raised today.

The shadow Minister, the hon. Member for Bethnal Green and Bow, referred to the Government turning a blind eye to the issue of economic crime, but nothing could be further from the truth. Many of us have worked on this cross-party across the House from the Back Benches and now on the Front Benches, and this is the second piece of legislation we have brought forward on economic crime in the past 18 months. These are groundbreaking new measures. This Bill contains further reforms to the Register of Overseas Entities introduced in the previous legislation. Our legislation on strategic lawsuits against public participation—SLAPPs—is world leading, and we now have the “failure to prevent” offence, which I will speak to in a moment.

The hon. Lady also referred to the resources made available to our law enforcement agencies. We are continuing to invest in measures to tackle economic crime, and we have increased the budget of the National Crime Agency year on year since 2019. Its budget has now increased 40% from the figure in 2019 and stands at just over £700 million.

Together, the recent spending review settlement and private sector contributions through the new economic crime levy will provide £400 million of funding over the spending review period, and the levy is estimated to bring in £100 million per annum starting from this financial year, 2023-24. There will be a wide-ranging review by the end of 2027, providing transparency on how the levy is performing against its original purpose, including on how the money is spent. Existing efforts will move at pace to enhance and further drive forward the unit in what are inevitably complex and lengthy operations. In considering this legislation, we have often debated the extra resources that we are determined to deliver for Companies House and will pay for at least 400 more people. That is an incredibly important part of the Bill.

My hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill) stated very clearly that he feels the failure to prevent threshold is too widely drawn, and I understand his point. As I said in my opening speech, all the cases I have dealt with in this place—whether it be Lloyds HBOS Reading, HSBC, NatWest or others—have involved large organisations that turned a blind eye to fraud or let it happen on their watch. We believe it is right to strike a balance between the offence’s crime prevention benefits and the burden placed on business. There is a balance between risk and regulation, and we want to make sure that the regulations do not put excessive costs on business.

My right hon. and learned Friend the Member for South Swindon (Sir Robert Buckland) made similar points. He cast doubt on the figures I have in front of me on the costs of the burden on business, which we believe will be £1.5 billion of implementation costs and around £192 million of recurrent annual costs. I am happy to look at other costs and analyses, but those are the figures before me.

My right hon. and learned Friend makes an interesting point that the threshold will facilitate economic crime in certain companies, but the Lords amendment allows some companies to be outside the rules. I am not sure how he can draw a line to say that there will be economic crime in some companies and not in others. It is very difficult to draw a line, and we believe that drawing a line at larger companies is right.

[Kit Malthouse]

Lines matter. At a point in a business’s evolution, as my hon. Friend will know from building his own business, it crosses a line. It is perfectly possible, under the definitions in Lords amendment 151C, that a company that satisfies the financial criterion will decide to go from nine employees to 10 or 11, and suddenly it crosses into this world of pain—the compliance people show up, and the company needs a whole new process and procedure that comes with employing that single extra person, on top of all the other employment and safety regulation it is having to deal with. Setting these thresholds at a level at which companies can absorb the step up in responsibility, and without a disproportionate amount of cost, seems critical. Does he agree?

[Kevin Hollinrake]

I do agree. I listened closely to my right hon. Friend’s remarks. He said he might be the only small business owner currently in the Chamber, but he is talking to one. I have owned a business for 30 years, growing it from a small business to a larger one, and I absolutely agree that it is not just the legislation itself but its implementation and the requirement to implement prevention procedures. As he puts it, that would almost create a new industry of advisers to advise on what needs to be done, be they accountants or third parties. He is right to raise those concerns on behalf of small and medium-sized enterprises.

My hon. Friend the Member for Bromley and Chislehurst asked about setting the threshold at a different level, the small company threshold rather than the current micro company threshold. The small company threshold is 50 employers, £10.2 million of turnover and a £5.1 million balance sheet, according to Companies House, whereas we think a 250-employee threshold would be more appropriate. That is where we differ, but I am happy to continue that conversation.

CPTPP: Conclusion of Negotiations

Kit Malthouse Excerpts

Monday 17th April 2023 Commons Chamber

[Kemi Badenoch]

It will benefit businesses in north-west Wales in exactly the same way as it will benefit all the nations of the UK—this is not a deal that is particular to any one nation. The hon. Gentleman should tell his businesses about the words of the many business representative organisations and larger company representatives who have been talking about what a fantastic deal this will be for this country; we are happy to provide some of those quotes, if he is concerned. The Windsor framework has made this deal even easier by ensuring that Northern Ireland in particular is not left out and has just the same benefits as all the other nations in the UK—in fact, more benefits.

[Kit Malthouse (North West Hampshire) (Con)]

Laurels in abundance are due to the Secretary of State and her team for a significant achievement. The urgent need to reorient our economy to the east was one of the many reasons why so many of us voted to leave the European Union.

On 3 November, I asked the then Minister of State, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), about the place that lamb and sheepmeat and UK lamb and sheep farmers played in the CPTPP negotiations. Will the Secretary of State outline the benefits to those specific producers of sheepmeat that she has achieved in this deal, so that I can reassure the farmers of North West Hampshire—and, indeed, the whole of the United Kingdom—that our fantastic British lamb will appear on tables across the world?

[Kemi Badenoch]

My right hon. Friend will be very pleased to know that I have good news for his sheep farmers, which is that we have created more liberalised market access for them in many of the CPTPP countries. That includes some countries with which we already had deals, but now there will be staged liberalisation—in countries such as Mexico, in particular, there will be significant benefits. As I said earlier, we know that exporting is what will be most helpful to our agricultural sector, and ensuring that farmers in my right hon. Friend’s constituency have more markets and deeper, broader markets to export to is one of the reasons why I am very proud to be supporting this deal.