Industry and Exports (Financial Assistance) Bill

Lord Empey Excerpts

2nd reading
Thursday 12th March 2026 Lords Chamber

[Lord Empey (UUP)]

My Lords, I speak as someone who served as a Trade Minister in Northern Ireland. I was also vice-president of the Institute of Export and International Trade for many years. The first committee I served on in your Lordships’ House was in about 2012. It held an inquiry into SMEs, and I listened very carefully to what the noble Lord, Lord Pitkeathley, just said. One of the interesting things was that at that time, UK Export Finance had just begun, I think, in its current iteration, away from the old Export Credits Guarantee Department, which still exists. That had only guaranteed companies in single figures, and they all tended to be the big battalions —Rolls-Royce, British Aerospace, et cetera. It has changed, and I have no issue with the perfectly sensible raising of the limits but, as the previous speaker said, it is about what you do with the raised figures.

It is supporting, allegedly, 2,700 companies in the current year. That is a tiny fraction of SMEs in the United Kingdom, which can be measured in their hundreds of thousands, and it has become increasingly challenging to get companies to export, because of the associated risks. We have only to look at our newspapers and television screens today to see some of those risks clearly and visibly exposed.

The scale at which it is helping SMEs is insufficient because it is not simply UK Export Finance putting money in its pocket and giving it to a company; it is guaranteeing it. A bank gives the money and then goes through its processes. That is where things start to unravel because the banks take their own attitude to lending, particularly to small and medium-sized companies. With a Rolls-Royce or BAE Systems, it is happy days. They are big companies with a lot of government contracts; that is easy stuff.

If we look at the need to resolve this matter, we have only to look at our balance of trade. This country has not had a balance of trade surplus since 1983. Look at the massive gap with China. I have asked on a number of occasions whether the departments will look at having a policy of providing information to companies on import substitution. It used to happen but if we are moving towards closer integration with the EU again, I guess that will be seen by them as a challenge to their way of doing things.

I agree entirely that raising the limits is perfectly sensible, but there must be a focus on getting our smaller businesses to export. There are challenges, and if simply we leave it to how the banks are going to measure these things, we will not get the breakthrough that we need. I therefore ask the Minister to take that back to his department because getting small and medium-sized businesses to get exporting into their minds, or even be open to the possibility of it, is the only way that we will fix our balance of trade. Relying on a diminishing number of large companies, which is the reality, will not be sufficient. We need the small, often family-owned companies. We know of the system with the two BMWs in the driveway—why take the risk? Why bother? But if we do not bother, we will not see those companies create the jobs for the next generation.

We are facing AI challenges and all the other things which we do not know how to measure at the moment. Will the Minister ask his department to look again at whether some kind of direction or advice can be given, not only to UK Export Finance but to our financial institutions as a whole, because that is the source of the guaranteed funding?