UK Steel Strategy
Peter Kyle Excerpts(2 days, 5 hours ago)
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The Secretary of State for Business and Trade (Peter Kyle)
With permission, I will make a statement on the Government’s steel strategy. I begin by declaring my membership of Community and GMB trade unions.
Resilient economic growth is the main driver of social justice, and steel is essential to both. Steel underpins the key growth-driving sectors in our modern industrial strategy. It has strengthened and sustained communities in England, Scotland and Wales. The future of steel in Britain is about ensuring the future strength and security of our national economy.
We honour steel’s proud industrial past, but we do not live in it. We are ambitious and excited for Britain’s future steel sector. Steel is essential for advanced manufacturing, clean energy, construction, defence and digital technologies. Steel is vital for sustaining thousands of lives and livelihoods, with good jobs, apprenticeships and opportunities. Steel is central to communities in Port Talbot, Motherwell, Scunthorpe, Sheffield and Teesside.
This House will be acutely aware that Britain’s steel sector has experienced decades of decline, from the failures of Thatcherism that closed Consett and Ravenscraig and shrank Corby to the damage done by the Tories to Redcar and Port Talbot. Steel manufacturing in Britain serves as the starkest possible monument to the failure of Thatcherite monetarism and its record of industrial vandalism. By contrast, Labour has an activist industrial strategy that determinedly targets key industries, technologies and strategically important sectors for economic development, national security and resilience.
In the last five decades, steel industry employment in Britain has declined by 90%, from more than 300,000 jobs in 1970 to less than 30,000 today. We are closing that decades-long chapter of deliberate de-industrialisation and committing anew to strengthening and sustaining Britain as a steelmaking nation. High operating costs and global overcapacity have made it much harder for British steel companies to compete. Manufacturers have looked to cheap, imported steel to keep costs down. As a result, investment have tapered off, capabilities have reduced and communities have been let down. Crude steel production has declined by more than 50% in the last decade.
Faced with these challenges, previous Governments failed to present a long-term vision for steel in Britain. They were reactive, not proactive. They intervened to support specific companies at specific times, but failed to improve the general conditions for the industry as a whole. They lacked the necessary boldness, creativity and urgency. This Government will not make that same mistake. Far from believing that steel decline is inevitable, we embrace a future for British steel manufacturing as a staple of sustainable, resilient economic growth and our national security. While the industry still faces challenges today, we will do everything we can to help it adapt, grow and succeed into the future, and our actions on steel will be driven by what is best for our national interest.
Our steel strategy sets out a series of actions to reverse the failures of the past: to build a strong and resilient steel sector, backed up with £2.5 billion of Government investment. That is on top of the £500 million that we have pledged for the steelworks at Port Talbot. Our ambition is for domestic production to meet up to half of Britain’s domestic demand. To support that effort, we will introduce a new trade measure to replace the existing safeguard. From 1 July, overall quotas for imported steel will be reduced by 60% compared with the safeguard. All steel coming into the UK above those levels will be subject to a 50% tariff. This measure will apply to imported steel products that can be made in the UK.
This is not a decision that I have taken lightly. I have done so to shield Britain’s steel industry from the damaging effects of global overcapacity, to ensure that Britain’s steel industry contributes fully to our critical national infrastructure and our defence, and to shore up the UK’s resilience to global shocks. Without this action, the UK’s steelmaking capability faces real jeopardy, leaving us reliant on overseas suppliers. I will not let that happen. Steel is essential for our energy security, our transport infrastructure and our industrial strategy, and in this volatile geopolitical climate in which we find ourselves, that kind of dependence is weakness. Britain’s national interest requires the strength of British-made steel. The tariff will be implemented once import quotas have been fully met. I believe that is essential for the resilience of sectors reliant on steel imports, including the car industry, construction and defence. We will review the measure in 12 months to make sure that it is working effectively.
Our approach reflects months of engagement between my Department, the Steel Council, businesses and trade unions. I thank the trade unions that have helped us, officials in my Department who have poured their heart and soul into this strategy, and my ministerial team for their contributions and leadership. We continue to engage constructively with the EU to protect vital UK-EU steel trade given our highly interconnected supply chains. Beyond the trade measure, we are backing electric arc furnaces to shift to greener, decarbonised steel production. As we see at Sheffield Forgemasters, electric arc furnaces have the technical capability that we need to produce steel to the very highest of standards for nuclear, for aerospace and for defence. This is important, as traditional blast furnaces will eventually reach the end of their operational lives. [Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I want to hear what the Secretary of State has to say. I am also certain that constituents want to hear him. This is a very important statement.
Peter Kyle
It is okay, Madam Deputy Speaker. It is just that everyone is shocked to see the hon. Member for Boston and Skegness (Richard Tice) in his place.
Electric arc furnaces are important as traditional blast furnaces will eventually reach the end of their operational lives and a managed transition is vital to maintaining supply. That is why we took control of British Steel last year, and we are currently working with the owner on the long-term future of the site.
The UK has the opportunity to lead in clean, green steel, and we are going to seize it with both hands. That is why we are also changing the clean industry bonus, making it easier for British steel to be included in British wind farms.
Britain can recycle more steel. Making better use of scrap steel is fundamental to the sector’s future growth. Millions of tonnes are ready to be recycled. We are building the technology to do it right here in Britain. We are creating a more competitive business environment for steel, too. We are tackling the high cost of energy. Our supercharger is delivering millions of pounds in savings for steelmaking firms. These businesses will benefit even further next month thanks to the changes that we are making to the network charging compensation scheme, which will increase the rate of relief from 60% to 90%. We are taking further action to support foundational industries by addressing high electricity costs, with a view to boosting supply-chain resilience. Our British industrial competitiveness scheme could reduce bills for other businesses in the sector by providing a discount of up to £40 per megawatt hour, starting from April 2027.
Private sector investment is essential for the steel sector. It is vital for driving up capacity and capability. That is why, within 10 weeks of taking office, we negotiated a substantially better deal to support the transition to green steelmaking at Port Talbot. We are welcoming investment from new entrants to the UK market. The National Wealth Fund is there to support them.
We will continue to work hand in hand with devolved Governments and steelmaking hubs in Wales and Scotland to bring in that additional investment. This is the vision that our steel strategy sets out: Government, with boldness, certainty, and urgency; industry, with energy, enterprise and expertise; and communities, stronger, safer, and more secure. All will be working together to make our steel sector attractive to new investors, innovators, employees and apprentices. It will be financially stable, internationally competitive and proudly British. Together, the strategy and the new trade measures will help to build a stronger, more resilient steel industry. They will take the immediate action that our steel industry needs and provide a plan to help the steel sector prosper for the long term.
Building a brighter future for Britain’s steel has already begun. Today, UK Export Finance has signed a landmark financing deal with Nigeria, which is refurbishing two major ports. As part of that agreement, British Steel Limited will supply 120,000 tonnes of steel billets for this work. That is a £70 million contract, the largest British Steel order that UKEF has ever backed, strengthening and sustaining Britain’s future as a steelmaking nation.
We need steel made in Britain in all its forms. We need it for the 1.5 million new homes that we are committed to build, for the third runway that we have approved at Heathrow that will require 400,000 tonnes of steel, and for our new data centres and gigafactories, such as the Agratas gigafactory in Somerset. A total of 23,000 tonnes of steel has already gone into its construction, all sourced from the UK.
Britain needs a steel industry for our national security, economic security and national interest. We need to ensure that Britain remains an internationally competitive steelmaking nation not just because our past was built on steel, but because our future depends on it. I commend this statement to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
I thank the Secretary of State for advance sight of his statement. The Conservatives very much believe in a sovereign steel industry, but what we see today is a multibillion-pound shot in the dark, and it heralds the end of primary steel production in the UK. Just to set the record straight, there would no longer be any steel production in Wales without action from the last Government. This steel strategy has no plan to make the industry stand on its own two feet, and it risks a permanent state-funded drain on taxpayers.
British Steel was losing £700,000 a day when the Government took emergency action last year, and now the taxpayer is losing an estimated £1.3 million a day and there is a subsidy of £110,000 per job to keep the Scunthorpe blast furnace operational. This steel strategy does not include any exit strategy, risking a permanent drain on taxpayers, and now the Government are negotiating handing taxpayers’ money to a Chinese business that they said was worth nothing, while hitting British users of steel with a 50% tariff hike. Given that the previous Secretary of State said that British Steel had zero value, will the current Secretary of State confirm whether compensation will be paid to Jingye?
How are these new tariffs going to affect the cost of living for our constituents? How much will the tariffs raise? They represent a massive tax hike on our world-leading automotive, defence and aerospace sectors, which will make building homes, bridges and railways more expensive. Have the Government carried out any impact assessment on the tariffs, and will jobs not be lost in those other sectors?
The Government say in the strategy that electric arc furnaces are the future, but without competitive energy, green steel will simply become no steel. If electric arc furnaces are the future, when will the blast furnaces at Scunthorpe be decommissioned, and how many jobs will be lost in that process? Where will the £2.5 billion go? Is it all going into the Scunthorpe blast furnaces? How is this £2.5 billion spending spree fiscally responsible? What is the Secretary of State cutting to pay for it?
The so-called National Wealth Fund is rapidly become the national slush fund. The shadow Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for East Surrey (Claire Coutinho), has announced our cheap power plan, which will slash energy bills for businesses and households. The Conservatives will axe the carbon tax, scrap extortionate subsidies for wind and solar, repeal the Climate Change Act 2008, and end the ban on new oil and gas licences to maximise domestic extraction and reduce dependence on foreign energy imports. Could the Secretary of State please copy this approach?
This is a Government who are subsidising decline and reaching for protectionist tariffs. After the botched nationalisation of Scunthorpe and the surrender of the Chagos islands, we can see from this steel strategy that when Labour negotiates, the British taxpayer loses.
Peter Kyle
I am glad to see the hon. Lady at the Dispatch Box. It is always an honour to have exchanges with her, as it has been for quite some time.
The hon. Lady mentions Wales, but she seems to have no idea about the breadth and depth of the steel industry across Wales. She seems to think that there is only one steel maker, manufacturer and operator in Wales. There is not. She seems to be forgetting all about 7 Steel in Cardiff. That explains why the Conservatives in government failed to have a strategy and vision for steel and to support the sector because they did not even know who was making steel and where. This Government understand all our steel assets, and we are creating a strategy to make sure that all of them add up to more than the sum of their parts and that we have a domestic industry that is sustainable, secure and growing into the future.
The hon. Lady seems to want to exit from British Steel without any more investment whatsoever. That would be the worst of all worlds. She wants to strand an entire community. We will stand by that community and make sure that the steel industry and sector thrives into the future.
On tariffs, let me just explain to the party that used to be about free and fair trade that free trade depends on fair trade. Fair trade depends on not having overcapacity. We cannot have overcapacity and fair trade. Therefore, we must correct the market and offer protection where overcapacity is in danger of decimating one of our key industries for defence, security and future prosperity.
The worst thing that could be done for the British steel industry is to do nothing. All we have heard from the Conservatives is, “Don’t do any of the things that Labour is doing,” with no alternatives offered whatsoever. They are the “do nothing” party, and that is the worst of all worlds.
Matt Western (Warwick and Leamington) (Lab)
I thank my right hon. Friend for his statement. As he says, steel is national security and economic security. Can I just say, it is terrific at long last to hear a Government showing some mettle? [Hon. Members: “Oh.”]
The array of measures in the strategy is impressive, from tariffs to procurement and scrap, but there are some concerns among our precious automotive sector. Could my right hon. Friend outline some detail about how this will relate to EU measures and how it will support UK manufacturers facing “made in Europe” tariffs?
Peter Kyle
My hon. Friend is right to explain that this strategy is a holistic strategy. It looks at the industry as a whole and considers how all the assets can be brought together and given a sustainable footing. I will invest, modernise and protect where necessary.
On the questions about the EU, I have, of course, been in discussion with my EU counterparts. I met four EU commissioners in the last month and the vice-president. Next week we will have further discussions when we are in Cameroon for the ministerial meetings of the World Trade Organisation. These are important times for both the European Union and the UK. Our reset is important, and that reset work will continue. It is in both our interests to make sure that we invest in, protect and modernise our respective steel industries, and we should be doing so with as much co-operation as possible.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
In 2024, Labour MPs across south Wales stood on a pledge to “save our steel”. They promised £2.5 billion for the steel industry, and they said that they had a plan. They began by saying that they would publish the steel strategy in spring 2025. Then it was autumn 2025, and now finally it arrives in spring 2026. We still do not know how much of that money will be spent in Wales. Will the Secretary of State confirm that to the House today?
In the meantime, British steel production has continued falling, and thousands of jobs have been lost across south Wales since the blast furnaces were turned off. I am not really sure that Labour understands the damage that its party’s failures are having across south Wales. Wales feels abandoned. Steel is in our blood. It is the backbone of our economy. But we are still losing jobs. Skilled workers such as welders are leaving, and tarmac companies are struggling to make asphalt. Consumer spending is falling. People in south Wales are fed up with broken promises. South Wales was promised that the electric arc furnace would be up and running by 2027, but we are now told that it will be 2028. Can the Secretary of State update the House on that deadline?
We need to see so much more urgency. Wales is desperate for the good jobs that the steel industry can provide. There is still—just about, if the Government move quickly—the opportunity to build a home-grown supply chain for the floating offshore wind sector. The Government have told me that they are not expecting to have that sector going until the mid-2030s. That is far too slow. That lackadaisical approach means that the energy that should be created through offshore wind will not be added to the grid until the mid-2030s. The Government must hurry up and deliver on their promises to south Wales.
Peter Kyle
The hon. Gentleman mentioned waiting for the steel strategy. The truth is that the steel sector has been waiting 80 years for a steel strategy, and this is the first time that one has been delivered. I think that showing a little bit of gratitude for what has been delivered today, on behalf of the sectors and businesses that he talked about, would be most welcome. I also point out that the 80 years over which there was no strategy included 2010 to 2015, when his party was in government.
Yesterday I was at Tata in Wales. The management, the ownership, the workers and the unions universally welcome this strategy and the £500 million that has already been put in to help transform the industry. That is the example of how we will move forward—with boldness, creativity and urgency.
Jessica Morden (Newport East) (Lab)
This is indeed a welcome and bold steel strategy, and it stands in direct contrast with what happened under the Conservative party, which never had one. I thank all the Ministers involved, the industry and the unions. I declare an interest as a member of Community and GMB. As I am sure Minister will agree, this is a good start, but we should always aspire to be as ambitious as possible for our UK steel industry, our security and our infrastructure, as well as for the dedicated young workforce at Llanwern steelworks and 7 Steel UK. Will the Secretary of State work with industry to incentivise investments in projects that we do not currently make, so that we can reduce even further our reliance on imported steel?
Peter Kyle
I thank my hon. Friend for her thoughtful contribution, which is based on experience. Llanwern has a fierce advocate in my hon. Friend. I hope that she recognises that her campaigning over many years is reflected in the strategy. I can reassure her that this strategy is not the end; it is just the beginning. The investment, transformation and modernisation programme is only just starting.
Martin Vickers (Brigg and Immingham) (Con)
Hundreds of my constituents work at the Scunthorpe steelworks, and hundreds more are reliant on the supply chain. They want certainty about their future. Will the Secretary of State give a clear indication of how long he anticipates the existing blast furnaces will be in operation? If the Government’s intention is to build arc furnaces, will they be established in Scunthorpe?
Peter Kyle
I am grateful to the hon. Gentleman for his thoughtful intervention. He has campaigned on this issue for a long time. I can reassure him that conversations with the owner are ongoing, and that the £2.5 billion that the Government have committed is for the transformation of the sector for a sustainable future. There will be more domestic demand, we will benefit from efficiencies and economies of scale, and we can start to rebuild and re-industrialise the steel sector. That benefits his community and other steel communities up and down the country.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
I declare an interest as a very proud member of Community. I warmly welcome the announcement of this much-needed steel strategy, which promises to deliver across Britain. Dalzell plate mill is physically and emotionally at the heart of Motherwell, and it is the only steelworks operating in Scotland. Can the Secretary of State confirm for my constituents that our plate mill will remain central to the British steel strategy, and will be supported to thrive again?
Peter Kyle
I thank my hon. Friend for her campaigning and advocacy. I hope that she recognises it in the strategy that we have announced. Dalzell is central to our defence industry up and down the country, and to the community of Motherwell. I can assure her that it is front and centre of my thinking, as we look to the future in those key sectors.
Peter Kyle
The right hon. Gentleman mentions Thatcher. I lost my father not so long ago, and have been going through his belongings. I found a letter that my father wrote to Mrs Thatcher when she was the Leader of Opposition in the ’70s. The reply, which came from a private secretary on behalf of the Leader of the Opposition, was signed by one Edward Leigh. I understand his insight into that particular moment in our country’s history, and I am grateful to have this exchange with him over the Dispatch Box. I wish my father was here to see it.
On Scunthorpe and other steel communities, I hope that the right hon. Gentleman has the time to read the strategy. When he has done so, I will make time to sit with him and work through it. He will see that it contains the intent to create sustainable steel production. Our belief and intention is that we will have the domestic capability to produce all grades of steel needed by our economy, in an economically and financially sustainable way. Those are the things that workers in the steel sector, in Scunthorpe and right around the country, need the most.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the strategy. Sheffield’s history is inextricably linked to steel, and we want our future to be linked to steel as well. My right hon. Friend mentioned the excellent work that Forgemasters is doing to provide steel for our nuclear reactors, our nuclear submarines and, hopefully, our civil nuclear program, through small modular reactors. The strategy mentions the procurement of British steel. Will the Secretary of State set out how the Government will ensure that public bodies do procure British steel rather than just saying that they will?
My hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball) has fought so hard for the future of Liberty in the past few months. What would the Secretary of State say to her about Stocksbridge steelworks? Will this deal ensure that the steelworks has a viable future and that jobs are retained for the whole of Sheffield?
Peter Kyle
I thank my hon. Friend for his tireless campaigning on these issues over many years. Forgemasters is, of course, important to our defence sector. His constituency also has the capacity to make stainless steel. He gives great voice to those two assets in his community. I hope that he sees much of his campaigning reflected in the strategy, which will give a sustainable long-term future to the industries that he represents and speaks for in the House.
Chris Law (Dundee Central) (SNP)
The Secretary of State has made great efforts to make the point that investing in steel production is crucial to the strength of the economy and to our national security, which is true. It is also true that Brexit has been disastrous for our steel industries, as he is aware. It is stark that the UK Government are willing to invest in those critical industries in England and Wales, but have continually failed to do so in Scotland. Despite their election promises to save Grangemouth, it was allowed to close; Mossmorran slammed shut its doors; and Labour’s damaging energy policies have cost 1,000 jobs per month. Will he apologise to the people in the east and north-east of Scotland who feel utterly betrayed and abandoned by the UK Labour Government?
Peter Kyle
As I have mentioned, we have been supporting the Dalzell plant. I also refer the hon. Gentleman to the fact that we have a National Wealth Fund for the entire United Kingdom. Many billions of pounds will now be unleashed to renew our country, including Scotland, which would be bereft of that funding should it be taken out of the United Kingdom and denied access to it.
Euan Stainbank (Falkirk) (Lab)
I welcome the Government’s steel strategy. The welcome ambition for the steel sector will be shared by industrial communities across the country, especially in Motherwell. Industrial communities such as those in Falkirk and the Forth valley must see similar ambition. Today is the one-year anniversary of the publication of Project Willow, so will the Secretary of State commit from the Dispatch Box to redoubling his Department’s engagement with prospective investors in Grangemouth, trade unions, the Grangemouth future industry board and local Members, so that the jobs and industry that the project promised our community materialise at pace over the coming years?
Peter Kyle
My hon. Friend speaks to many different sectors and industries, all of which we have stepped in to support since coming into office. We are investing in their modernisation and putting them on a sustainable footing for the future. He asks me to redouble my efforts—I have redoubled my efforts every day in this job. He will see from how my Department and I acted when Jaguar Land Rover had its hour of need and when Grangemouth needed support and investment, and from today’s steel strategy, which I announced on a visit to Port Talbot just yesterday, that this is a Government who seek to modernise and to protect where necessary, but always to invest in the future.
Harriet Cross (Gordon and Buchan) (Con)
What assessment, if any, has the Department made of the impact that moving from blast furnaces to arc furnaces will have on our virgin steel capabilities? The Minister for Trade, who did the morning round, seemed to accept that it would mean our virgin steel capabilities being undermined.
Peter Kyle
I can reassure the hon. Lady that all grades of steel that are needed by the British economy will be available post transition.
Bill Esterson (Sefton Central) (Lab)
It really is in the national interest to secure the future of the steel industry in this country. It is extraordinary to hear the opposition to the plan from the Opposition Benches, but perhaps not surprising, given that the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), was the adviser to the previous Government when they sold the British steelworks at Scunthorpe to Jingye, with all the disastrous consequences. On the subject of energy for Scunthorpe, can the Secretary of State say what is being done to bring forward the date for the electricity connection to the site, which I know has been a significant challenge over many years?
Peter Kyle
My hon. Friend will know full well that when it comes to energy, we have announced the supercharger programme. Compensation is now being increased from 60% to 90%, offering relief and injecting competitiveness into the sector at the same time as offering protection. If we had done one without the other, we would, of course, just be pouring money down the drain. I can assure him that we are working with the National Grid and colleagues in the Department for Energy Security and Net Zero to make sure that we get the energy supply needed for the conversion to electric arc furnaces as quickly as possible.
Greg Smith (Mid Buckinghamshire) (Con)
Now that the Government have some experience of running a business with British Steel, what assessment has the Secretary of State made of the £37 million cost of the Employment Rights Act 2025 and the national insurance jobs tax increases on the viability of our steel industry?
Peter Kyle
I am grateful to the hon. Gentleman for giving himself the opportunity to score an own goal. When we came into office, we inherited a broken economy that was not delivering for working people. Our international relationships were on their knees, public services were stretched to breaking point and our economy simply was not generating income because of the circumstances that we inherited. We have acted to update workers’ rights for the moment we are living in, while getting a grip on the public finances that the previous Government left in utter chaos. Those are the fundamentals that we need moving forward to deal with all the global challenges that will come our way. If we had not got the finances on a stable footing, we would be in a much worse state now that we are facing the challenges that have come our way in recent times.
Dame Nia Griffith (Llanelli) (Lab)
I very much welcome the Government’s commitment to supporting our Welsh steel industry and to using much more steel made in the UK, but Llanelli’s Trostre works needs high-quality steel to make the steel packaging products it produces. That steel used to come from Port Talbot’s blast furnaces. Can the Minister tell us more about what he is doing to secure supplies of appropriate scrap metal for the electric arc furnace, and to stimulate research to ensure that the electric arc furnace can produce steel of the quality that Trostre needs?
Peter Kyle
My hon. Friend has been speaking about this issue for a long time. In the run-up to the transition period for electric arc furnaces, I assure her that we have a scrap working group, which is working to identify the sources of scrap metal that will be required. Just yesterday in Port Talbot, I was talking with the management, the workers and the unions, and I saw the infrastructure being built to get scrap from across the United Kingdom to where it needs to be on an enormous scale.
Richard Tice (Boston and Skegness) (Reform)
Well, at least this Government have a steel strategy, unlike the previous Administration. Credit where credit is due: they are right to impose tariffs and quotas. But that is as far as it goes, because otherwise it is visionless and hamstrung by net stupid zero. We have the absurd situation in which the public sector is buying tens of thousands of tonnes of steel from China, rather than from Scunthorpe and British Steel. This is a complete betrayal of thousands of workers in Scunthorpe. There is no vision. Will the Secretary of State confirm when the blast furnaces will be closed at Scunthorpe—Reform would renew and replace them—and will he guarantee that when the electric arc furnace in Port Talbot is built, it will definitely open for business?
Peter Kyle
I have not yet had the opportunity to welcome the self-appointed shadow shadow—or, as I say, shadowy—Secretary of State to his position. Despite the investment and the protections we are putting in, and despite the modernisations, which he recognises are all good, his point seems to be that it is not quite visionary enough. However, he is not able to point to a vision for a more comprehensive future for the steel industry. He also seems to think that electric arc furnaces are woke. Let me say that there is nothing woke about an electric arc furnace, which, when rolled out in the transition, will make us a market leader globally, which is what the industry itself—the British domestic suppliers and those who are demanding that steel is required into the future—is calling for. I can assure him that we are on the side of the industry and its vision. We are matching its ambition and its potential for the future. He wants to cast us back into the past.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
May I say how proud I am that my birth certificate says, “Father’s occupation: labourer in the steelworks”? This strategy is a shot in the arm for steelmakers across the UK; it is in stark contrast to the failures of the last Tory Governments. But can the Secretary of State say more about the infrastructure projects and plans to refine the public procurement notice for steel? What will that mean in practice for jobs in our communities?
Peter Kyle
In the many years I have observed my hon. Friend contributing to these debates, he has always been thoughtful and powerfully on the side of the steel sector. I can reassure him that the Government are investing in infrastructure on an unprecedented peacetime scale. The new runways and the 1.5 million homes that will be built as a result of this Government, and the building out between Oxford and Cambridge, to name a few, will all require enormous amounts of steel. This Government’s policy is to increase the supply of domestic steel from 30% to 50% of the requirement. We will use all the powers we have in policy and incentives to ensure that British steel producers benefit from all these opportunities.
Ben Lake (Ceredigion Preseli) (PC)
I welcome today’s statement on the introduction of a strategy for such a critical industry, and particularly commend the Government for the emphasis they place on the importance of steel sites across Wales. With that in mind, can the Secretary of State offer greater detail on the types of investment he envisages in the strategy to go into sites in Wales, and the rough timescale over which we can expect to receive it?
Peter Kyle
The hon. Member will notice from the steel strategy, which sits alongside the industrial strategy, that place-based investment is incredibly important to this Government. Yesterday, I was in Port Talbot with the First Minister for Wales. When two Governments are aligned in trying to get investment into parts of the country—when two Labour Governments work hand in hand—they deliver for the people of Wales and for people across the United Kingdom.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I refer proudly to my membership of GMB and Unite. I welcome this brilliant announcement and especially the backing of Welsh steel, because Welsh steelmaking is expected to account for half of all future UK steelmaking. As the Secretary of State mentioned, I was proud to recently visit with my Front-Bench colleagues 7 Steel in Cardiff, where we already have an electric arc furnace. Does the Secretary of State agree that the steel strategy from this Labour Government marks a welcome departure after the years of failure to have a strategy by Conservative Governments—and, let us not forget, the coalition Government—who repeatedly left this vital industry on the brink of collapse?
Peter Kyle
My hon. Friend’s analysis is absolutely correct, and he has been a tireless advocate ever since he joined this place. It is correct to say that we have invested and are investing in steel in Wales, but we are also investing in modernising the economy and infrastructure of Wales. The creation of two AI growth zones sits alongside the work we are doing on steel and other areas of infrastructure in Wales. Again, it demonstrates two Labour Governments working together for the benefit of the people of Wales. It works, and he is part of that, for which I am grateful.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. What a contrast there is between the Government of just over a decade ago, who ripped the heart out of my region, and this Government, who finally have a strategy after many decades. I welcome it, but what is more, so does the industry—I spoke to those in the industry this week, and they strongly welcome the measures, particularly on procurement and trade. This is a Government on the side of British steelworkers.
One of the biggest issues affecting the industry is, of course, energy. I hear what the Secretary of State says about the supercharger, but even with that, there will still be an energy price gap with many of our competitors. What more can we do to ensure that we reduce these gaps for our industry and protect jobs years into the future?
Peter Kyle
The workers at Skinningrove have a true advocate in this place in my hon. Friend. I can reassure him that the work we have done on the supercharger will make a tangible difference to the workers and the sustainability of that plant. I can also reassure him that this is a Government who act when we have to. We are in constant touch with the steel industry. We are on its side. We are working with it to create a sustainable industry into the future.
UK Steel Strategy
Peter Kyle Excerpts(2 days, 5 hours ago)
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The Secretary of State for Business and Trade (Peter Kyle)
The Government are today announcing a comprehensive set of measures to secure and enhance the long-term future of UK steel-making, strengthen national security and position the UK as a world leader in clean, modern steel production.
Steel production has played a central role in the UK’s history and is essential to our economic success and national security. It underpins key growth-driving sectors of the industrial strategy, including advanced manufacturing, clean energy, defence and digital technologies. The sector supports thousands of skilled jobs and remains integral to communities across the country. It is a bedrock of our economic resilience and national security.
Despite its strategic importance, the UK steel sector has faced 20 years of decline. High operating costs and global over-capacity have significantly affected the competitiveness and viability of the UK steel industry, and manufacturers have increasingly turned to imported steel at artificially low prices. This situation has contributed to reduced investment, diminished capabilities and severe impacts on steel-making communities. Crude steel production has fallen by more than 50% over the last decade. Successive Governments have intervened to support individual companies, but have not addressed the underlying causes of decline across the sector, or fostered broader, long-term conditions for a sustainable domestic industry.
While the sector faces challenges, this Government do not accept that decline is inevitable. That is why we have today published our new steel strategy, which sets out a comprehensive plan to reverse historical trends and build a strong and resilient industry, supported by up to £2.5 billion of Government investment, in addition to £500 million for Tata Steel.
A key part of the strategy is the introduction of a new trade measure to ensure the future of domestic steel production in the face of global over-capacity, given the sector’s central role in critical national infrastructure, defence, and economic resilience. From 1 July 2026, overall quota levels for steel imports will be significantly reduced by 60% compared with the safeguard, and steel coming into the UK above these levels will be subject to a 50% tariff. This measure will apply to imported steel products that can be made in the UK.
A stable, thriving steel sector will provide a secure supply of high-quality steel to downstream customers. The tariff will apply only once import quotas have been met, which will facilitate continued imports for industries that rely on them, including those in the automotive, construction and defence sectors.
Following engagement with downstream importers, we are exploring a transitional arrangement under which the new tariff would not apply to goods under contract agreed before 14 March and imported between 1 July and 30 September 2026. We are finalising the details to ensure that the agreement provides genuine support to firms facing unexpected costs, while still protecting the UK market from excessive imports. Our quotas will be administered on a quarterly basis, with roll-over between quarters within the same accounting year. We will also review the measure after 12 months to ensure that it remains effective.
Alongside the new trade measure being announced today, the Government will also launch a process at the World Trade Organisation under article 28 of the general agreement on tariffs trade to negotiate and agree an increase in the UK’s maximum most favoured nation steel tariffs to 50%. This will create the space for applied MFN tariffs to be increased in the future, protecting domestic industry in the long run from the impacts of global over-capacity.
The Government’s approach is the result of extensive engagement with the Steel Council, trade unions and businesses, and with responses to the recent call for evidence on supply chain needs. It aligns with the Government industrial strategy and trade strategy, which supports resilient supply chains and secure growth in critical sectors.
The UK is not alone in taking steps to improve the security and resilience of the steel sector. Our neighbours and allies face the same challenges from over-capacity, which is challenging global markets. The European Union announced its own measure on steel trade last year. We are acting on the basis of shared concerns. That is why we are focused on engaging constructively with the EU, with whom our supply chains are so connected.
This trade measure, alongside our wider strategy, will reinforce the UK steel sector’s resilience and help us meet our ambition for domestic production to meet 40% to 50% of the UK’s steel demand. Achieving these goals will also require investment in the sector’s future. Building on the direct support the Government have provided so far, the National Wealth Fund will be the main mechanism for providing further financing for investment in the steel sector. The NWF is actively seeking engagement with steel firms and is looking to crowd in significant private capital to support the sector.
The Government have reformed the clean industry bonus to create new incentives for manufacturers to invest in UK steel in domestic wind turbines and wind farms. In parallel, electric arc furnace capacity will be expanded, recognising that stabilisation of the sector will mean a transition to more highly productive, decarbonised steel-making. As we see at Sheffield Forgemasters, electric arc furnaces have the technical capability we need to produce steel at the highest of standards, including for safety-critical sectors such as nuclear, aerospace and defence.
Blast furnace capacity will continue to be required in the immediate term, and the Government will therefore pursue a managed transition to ensure security of supply.
The strategy also places renewed emphasis on recycling. Greater use of domestically available scrap steel is a major opportunity for growth, and the Government, through the creation of a new working group, is engaging with industry, academia and other stakeholders to ensure this potential is fully realised. We are announcing a new innovation working group, chaired by an expert to increase collaboration between our research community and industry. It will develop a clear direction for steel research and development. Through the Steel Council, we will foster collaboration between industry, devolved Governments and wider stakeholders to address the sector’s workforce requirements.
To improve the business environment, the Government are addressing the long-standing challenge of high energy costs as set out in the industrial strategy. Under our clean energy superpower mission, we will increase our energy security and reduce electricity bills by investing in clean energy and strengthening our connections to the EU energy market. While we will focus on translating the cheaper wholesale costs of clean power into lower bills, we also recognise the need to act quickly to support sectors with high growth potential and significant exposure to high electricity prices.
The British industry supercharger policy has already delivered substantial savings for steel-making firms, and further benefits will follow from forthcoming changes to the network charging compensation scheme; the British industrial competitiveness scheme, which could save eligible firms up to £40 per megawatt hour from April 2027; and continued support for the energy intensive industries compensation scheme, announced in the Budget, which has delivered financial support for steel businesses since 2013, and will continue to deliver electricity costs support for steel companies. These measures help reduce electricity costs for steel companies to make them more competitive.
The Government recognise that public investment alone cannot deliver the scale of renewal required. New private sector investment is essential to increasing capacity and capability and stabilising the sector. Britain welcomes new entrants to the market, supported by Government finance where appropriate. We will continue to work closely with the devolved Governments in Wales and Scotland to attract further investment.
The steel strategy sets out a vision of Government, industry and communities working together to make the UK steel sector more attractive to investors, more financially stable and more internationally competitive. This vision is already being realised. UK Export Finance has today signed a major financing agreement with Nigeria for the refurbishment of two major ports. Under this arrangement, British Steel Ltd will supply 120,000 tonnes of steel billets, a contract worth £70 million and the largest British steel order that UKEF has ever backed.
The steel strategy will support the country’s broader ambitions in infrastructure, defence and technology. Steel produced in the UK will be required for the delivery of 1.5 million new homes, and for the approved third runway at Heathrow, which alone will require 400,000 tonnes of steel. Steel made in the UK will be key to delivering the AUKUS submarine programme, a trilateral security partnership between Australia, the UK and the United States. The strategy will also support new data centres and gigafactories, including the Agratas facility in Oxfordshire, where 23,000 tonnes of steel, fully sourced from the UK, have already been used in construction.
The Government are taking action to secure the future of the UK steel industry, recognising its importance to the nation’s economic and national security. Britain’s industrial past was built on steel, and our future will be too.
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Oral Answers to Questions
Peter Kyle Excerpts(1 week, 2 days ago)
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Lloyd Hatton (South Dorset) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
The industrial strategy focuses on business investment and creating high-quality jobs. We back our strengths and are unblocking barriers, including through £1.2 billion of skills investment by 2028-29. This Labour Government are investing in skills, in jobs, and in creating wealth and opportunity across the United Kingdom.
David Pinto-Duschinsky
I thank the Secretary of State for his answer. Communities like mine in Hendon were let down by 14 years of economic instability and the lack of a strategic approach to driving growth under the Conservative party. Will the Secretary of State set out how our modern industrial strategy will help to accelerate growth in places like Hendon?
Peter Kyle
I absolutely will. First, Hendon has a champion in you—I mean my hon. Friend—and that counts for a lot. It also has a champion in you, Mr Speaker, as you make sure that we get through these questions so swiftly and efficiently. I can assure the House that the industrial strategy has delivered, on average, over £7,900 more in wages in the sectors that we are supporting through it. Over 50,000 jobs have been supported through investment commitments made to the industrial strategy’s eight sectors in the last quarter alone. This Government are attracting investment, spending it wisely and making sure that all communities, including Hendon, benefit from it.
Lloyd Hatton
It is no secret that clean energy is creating the next generation of well-paid jobs, and it is essential that South Dorset gets its fair share of them. The development of offshore wind at Portland, including the exciting Morwind and PortWind projects, would certainly help to create much-needed maritime, engineering and construction jobs for local people. With that in mind, will the Minister work with me, the Department for Energy Security and Net Zero, and the Crown Estate to support the development of offshore wind off the coast of Portland?
Peter Kyle
It would be a pleasure to work with my hon. Friend to unlock more investment in offshore wind in South Dorset. Dorset council and the Crown Estate have already committed up to £1 million to support a feasibility study for a £500 million clean energy port facility adjacent to Portland port that has been proposed by energy developer Morwind. Clean energy industries are expected to support 860,000 jobs across the UK by 2030, including up to 100,000 direct and indirect jobs in offshore wind. Thanks to the work that my hon. Friend is putting in, I am sure that South Dorset will benefit from this incredible and growing British industry.
Dame Harriett Baldwin (West Worcestershire) (Con)
Of course, there are lots of well-paid jobs in the steel sector. In fact, the taxpayer is now subsidising every job at British Steel to the tune of £110,000. Can the Secretary of State update the House on how his negotiations are going with Jingye, and on when he will finally publish his long-awaited steel strategy?
Peter Kyle
I am very grateful for the hon. Lady’s question. Of course, after 14 years of the Conservatives running the steel industry, we have landed in a place where this Government are having to sort it out. I can reassure her that the negotiations with Jingye are well under way. I will update the House shortly on progress and, of course, on the strategy that I have been working very hard on, with colleagues, on behalf of the steel industry.
Sarah Olney (Richmond Park) (LD)
Research from the Entrepreneurs Network shows that 54% of Britain’s 100 fastest growing companies have a foreign-born founder or co-founder. International entrepreneurs play a vital role in driving innovation, investment and job creation across the UK, yet this Government are recklessly introducing unworkable visa regulations for those very people. Since the Budget in October 2024, 110,000 jobs have been lost in the hospitality sector and 74,000 in retail, and 700,000 graduates are currently unemployed. Youth unemployment has just hit 16%. What impact assessment have the Government undertaken on the impact of their proposed changes to indefinite leave to remain on job creation, and what conversations has the Minister had with the Home Secretary regarding this damaging disincentive to those looking to build their businesses and create jobs here in the UK?
Peter Kyle
I am afraid that the hon. Lady describes the doom-laden Lib Dem world that she inhabits, not the real world that is inhabited by entrepreneurs and businesses right across the country. The reality is that 381,000 more people are in work since the start of 2025 because of this Labour Government. She may have missed the fact that my Department, under my leadership and this team, has set up the global talent taskforce, accompanied by a global talent visa. Around the world, we are out there hunting down the best talent, attracting people to the UK and aligning this endeavour with investment, making the UK the best place to invest, to grow and to scale a business anywhere in the world.
Rosie Wrighting (Kettering) (Lab)
James Asser (West Ham and Beckton) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
UK-EU collaboration is vital for growth and security, with 46% of the UK’s total trade, after all, with the EU. In recent weeks, I have gone to Brussels and signed a new competition co-operation agreement, furthering the partnership between our two territories in the interests of businesses. I had constructive meetings with Commissioners Ribera, Mînzatu and Virkkunen.
Tom Rutland
After years of the Conservatives and Reform trying their best to ruin our relationship with our nearest neighbours, and damaging business exports, this Labour Government have been working hard to ensure that my constituents feel the benefit of our renewed relationship with the European Union. Will my right hon. Friend update the House on the work he is doing to ensure that businesses like Worthing’s very own musical instrument business Hobgoblin Music can benefit from the reset in relations we have had with our European neighbours?
Peter Kyle
I am grateful to my hon. Friend and constituency neighbour down in sunny Sussex for that question. The reset relationship with the EU has been fundamental and has delivered for businesses right across Britain, including Hobgoblin in Worthing on the sunny south coast of England. We are tackling the barriers to trade. The dialogue we have with the EU on business mobility and recognition of professional services will unlock opportunities into the future. Where working with the EU delivers for Britain, we will do so enthusiastically.
James Asser
I put on record my role as chair of the all-party parliamentary group for Bulgaria. The APPG recently visited Sofia, where we met businesses that are keen to build their trade relationships with this country, particularly in the energy and tech sectors. We also saw the good work being done by our embassy in partnership with the UK-Bulgarian chamber of commerce. Does the Secretary of State agree that we need to look at trading with many of the newer markets in eastern Europe, which are keen to create trade, particularly when we have active business communities from those countries in the UK that are keen to build a partnership that will benefit both our country and theirs?
Peter Kyle
My hon. Friend is absolutely right, and his work in this area is incredibly important. Our trade with every one of the newer EU member states has increased over the 12 months to September 2025, and I can give some examples of the kind of work we are engaged in. We are supporting Rolls-Royce, which is planning to build up to six small modular reactor units in the Czech Republic. One of the EU’s fastest growing economies in Europe is, in fact, Poland, and we won Polish Airlines’ first order of 40 Airbus aircrafts, which will benefit the British economy. We have also agreed to start trade policy dialogue with Norway, and we are negotiating a trade agreement with Switzerland to boost trade services. Non-EU countries of course play a vital role in that tapestry as well.
Vikki Slade (Mid Dorset and North Poole) (LD)
A sector in need of urgent attention is road haulage—moving not only goods but people across Europe for the purposes of tourism and education but also, importantly, film, TV, sport and music. My constituent Cameron works mainly in the music sector, supporting European tours and festivals. He tells me that the 90/180-day rule is leading to cancelled events and job losses, with some firms only employing dual nationals, using European firms rather than British ones or flying drivers home to swap out on longer journeys to avoid breaching the rules. Although the rules have existed since 2021, as the Secretary of State has told me, they have not been fully enforced. As part of the UK-EU reset, will he look at finding a way to help professional drivers keep the show on the road?
Peter Kyle
The hon. Member points to one of the areas where the Brexit deal negotiated by the Conservative party let down Britain. We are aware of those issues, and they are part of our negotiations. We will see what we can do for the sector into the future.
Clive Jones (Wokingham) (LD)
I have heard from so many businesses in Wokingham that have suffered post Brexit with masses of red tape limiting their exports. Losing key trade relationships in Europe has meant that many local businesses have seen their profits evaporate. What are the Government doing to develop and strengthen trade with Europe, so that businesses in Wokingham can start to grow again? Agreeing a bespoke customs union would be a really good start.
Peter Kyle
The area over which we have the most agency is regulation in this country, and this Government are pledging to reduce the burden on business by 25%. We are very aware of the issue of regulation and barriers to trade, and I mentioned it in my meetings with three EU commissioners just in the last fortnight. Part of the reset is aimed at reducing the burdens on business.
It is good to see that Members from many parties in this House have a real interest in engaging in debate about healing our relationship with the EU and creating new opportunities with our biggest trading partner—with the exception of one party opposite, whose Members are all sitting there, silent. I wonder why.
Daniel Francis (Bexleyheath and Crayford) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
In the face of global uncertainty, the Government are acting with boldness, creativity and urgency to back British business. We will soon publish our steel strategy to secure an internationally competitive, investible and sustainable future for British-made steel. We are making highly significant interventions on energy. The supercharger discount will increase next month, further cutting costs for around 500 of the most energy-intensive businesses. The British industrial competitiveness scheme will slash electricity bills for 7,000 businesses by up to 25% from 2027.
We are helping businesses to scale and grow, with the British Business Bank making the largest ever equity investments and UK Export Finance working with banks to generate £11 billion-worth of support for small businesses to export. We are opening new markets, with the India free trade arrangement now through both Houses of Parliament. Just last week, I was in Brussels to sign a new competition co-operation agreement. I expect my Department to match the dynamism of the best of British entrepreneurs, and I am proud to report that with this Labour Government, it is.
Jayne Kirkham
Soul Farm, which delivers organic and sustainable food, is an example of a co-operative business in my constituency that benefits its community. I also have the “Save the Stag” campaign in Ponsanooth, which is trying to take over and run the local pub, as has already been done at the Ship Inn at Portloe. Setting up or transitioning to a co-op model can be difficult. Will the Minister update me on what support the Government are providing to help new co-ops to start up and existing businesses to transition to employee ownership?
Peter Kyle
I am grateful for my hon. Friend’s important question. She will know that our manifesto committed to double the size of the co-op and mutual sector, and we are well on the way to doing so. She will also know that a consultation on this issue closed very recently. We are analysing the results and we will make further statements very soon.
Andrew Griffith (Arundel and South Downs) (Con)
The Government do not create jobs; business does. With unemployment rising, this is the last chance to ask the Secretary of State a question ahead of the start of April when a tsunami of business rate rises will hit. Shops and restaurants will see a 50% increase on average and the business rates of hotels will double. He and I both represent wonderful Sussex constituencies full of hospitality, high street and tourism businesses, but young people need those jobs. For their sake and for others, will he finally postpone his business rate rise?
Peter Kyle
I enjoy these exchanges with the shadow Secretary of State. I note that Reform’s self-styled shadow Secretary of State—or, as I call him, the shadowy Secretary of State—is not in his place, despite being just next door in the Tea Room a few minutes ago. I think that speaks volumes.
The shadow Secretary of State knows that the private sector has created 380,000 jobs under this Government. We will continue to grow the economy and the number of people in work, and make sure that people benefit from all the rights we are delivering, which are pro-business and pro-worker. He spent 14 years letting down Britain. Now he has spent 18 months talking it down.
Andrew Griffith
The Secretary of State forgets that I have not even been here for 14 years. Some days it feels like that, but I can assure him that it is not the case. There was no answer to that question, so let me try another. Does he agree that there is something pretty badly wrong with employment law in this country when Peter Mandelson, the friend of a convicted paedophile and leaker of classified Government documents, walks away with a £75,000 pay-off? The permanent secretary thinks that is good value for money. Will the Secretary of State review Labour’s policy of uncapping employment tribunal payouts for the highest earners?
Peter Kyle
As is so often the case when we have these exchanges, the shadow Secretary of State spends a lot of his time slagging off his own record in office. The Conservatives had 14 years to reform tribunal rights—they did not even touch it. They had 14 years to update workers’ rights and employment status in this country—they did not do it. The economy moved forward; they failed to move forward.
Turning to the issue of Peter Mandelson, I start by recognising that there are victims at the heart of this debate and the issues surrounding it. Those victims are in my mind today as I answer this question, and they have been all the way through. We will make sure that those victims get the justice they deserve. When it comes to the issues surrounding Peter Mandelson, there are multiple inquiries under way. Thames Valley police is leading on a criminal inquiry, and I will leave it at that.
Tracy Gilbert (Edinburgh North and Leith) (Lab)
Tom Tugendhat (Tonbridge) (Con)
Peter Kyle
I am always grateful for invitations to drinks with the right hon. Gentleman. I might well ask him to come to Hove, though; I have been to his constituency a number of times over the years and it is about time he visited mine. When he is there, he will see a thriving hospitality sector, but one that does need support to meet its full potential. We accept that, which is why we have introduced so many support packages since we came into office. What the hospitality sector needs is what every other sector in the economy needs: a stable industrial strategy—
Mr Speaker
Order. Secretary of State, we have a lot of Back-Benchers who are desperate to get in and who want to hear from you.
Sally Jameson (Doncaster Central) (Lab/Co-op)
From Kingswood accountants to Automated Analytics and our young traders market, Doncaster is home to many businesses run by ambitious entrepreneurs. Will the Minister update the House on how Government support, such as the start-up loan scheme and the growth guarantee scheme, are helping young entrepreneurs and start-ups, and on what more we can do in this policy area?
Peter Kyle
I am grateful for my hon. Friend’s advocacy on this issue. Britain is the start-up capital of Europe. We are doubling down to ensure that once businesses are started up, they can scale up, stay and build their innovation here, which is why we are also the unicorn capital of Europe. We will double down and make sure that all that innovation, job creation and wealth creation remain here benefiting Britain, including my hon. Friend’s constituency.
Mr Gagan Mohindra (South West Hertfordshire) (Con)
Anchor Sound and Security, based in Kings Langley, explained to me how it is disincentivised to hire more employees due to rising compliance costs and regulatory uncertainty. What is the Minister doing to stop regulations stifling small business growth and destroying the strong relationships between employer and employees?
Peter Kyle
The Government have a commitment to reduce the regulatory burden on business by 25%. My Department led on almost £1 billion of regulatory reform for company reporting in just the first weeks of our taking office. The small business plan and strategy will deliver for small businesses, on top of the industrial strategy, of course, which is getting our economy facing the future and into solid growth for now and the future.
Lauren Edwards (Rochester and Strood) (Lab)
I add my voice to that of my hon. Friend the Member for Bexleyheath and Crayford (Daniel Francis) in calling on the Government to publish the review of market access for small breweries as soon as possible. I was delighted that Moot Brew brewery from Halling in my constituency produced the guest ale for the Strangers’ Bar in the House of Commons before Christmas. Will the Secretary of State support a national guest beer agreement policy, so that more fantastic local brewers such as Moot are represented in my local pubs?
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
Small-volume business manufacturers in the automotive sector are having a terrible time at the moment. They rely on exports, and exports to the US are critical. Although I welcome the agreement the Government struck, costs are still four times what they were before President Trump introduced his tariffs, and those businesses are also being squeezed by business rates and national insurance at home. Will the Secretary of State make urgent representations to the Chancellor? The market is very delicate, and something must be done to reduce costs.
Peter Kyle
The right hon. Gentleman raises an issue that is close to my heart. The Government and I care deeply about the future of the automotive sector. Exports are incredibly important to it, but so is the security of supply chains. I have raised this issue not only with our US counterparts and other export markets but with the EU, to protect supply chains. My ministerial colleague chaired the Automotive Council just yesterday; we are listening, gauging and acting on behalf of the sector. Automotive production fell by 50% when the Conservatives were running the country. We are trying to get it back up to where it deserves to be.
Martin Vickers (Brigg and Immingham) (Con)
Since part of Grimsby falls in my constituency, I join my Member of Parliament, the hon. Member for Great Grimsby and Cleethorpes (Melanie Onn), in celebrating Great Grimsby Day. I recently attended a meeting with the hon. Member for Scunthorpe (Sir Nicholas Dakin) and a group of potential investors in the steel industry, who I know have made approaches to the Secretary of State. Can he give me an assurance that all potential private sector investments in the industry will be given serious consideration?
Peter Kyle
I congratulate the hon. Member on Great Grimsby Day, and I can give him that assurance.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
I thank the Minister for speaking to me about the poor postal service in Dargavel Village in Bishopton. I know he is working hard to resolve matters and answer questions and had meetings yesterday, and I thank him for that. However, as he will appreciate, this matter is of particular importance in Scotland due to the elections on 7 May, because postal votes will be issued soon. In Scotland we have an NHS with significant waiting lists, and we cannot have people missing medical appointments, so on behalf of residents of Bishopton in particular, may I stress the urgency of this matter?
Dr Al Pinkerton (Surrey Heath) (LD)
Yesterday I met representatives of the British Chambers of Commerce, who relayed the profound concerns of the UK automative industry that it might be excluded from the European Union’s proposed industrial accelerator Act. Nissan and Honda have already broken cover to say that their futures may be uncertain unless they are included in the “made in Europe” rules. What is the Secretary of State doing, with his Front-Bench team and across Government, to ensure that the UK automotive sector is not placed at a competitive disadvantage as a consequence of those measures?
Peter Kyle
The hon. Member’s question is incredibly important. He will know that my ministerial team and I have been very active on this issue. Just a couple of weeks ago in Brussels I raised it directly with Commissioners. He will also know that in the proposed Act, which has not yet been introduced, there are potential challenges for the automotive sector. We are working with our EU colleagues to make sure that voices of the business community are being heard loud and clear and that the automotive sector—in which 86% of the components assembled in this country come from EU countries—is respected, valued, and secure in the future.
Brian Leishman (Alloa and Grangemouth) (Lab)
The sudden shift in steel import policy has created uncertainty for firms that have invested heavily in expanding their operations based on previously stable trading conditions. Will the Secretary of State commit to working with affected businesses in Scotland, including Central Rebar in Alloa, and provide clarity to prevent further disruption and to ensure that companies vital to the Scottish industrial base are not placed at a competitive disadvantage?
Euan Stainbank (Falkirk) (Lab)
Given the global energy crisis, manufacturers reliant on gas will struggle with the recent spikes in energy costs. Will the Secretary of State confirm whether his Department is considering a transitional dual fuel discount, alongside the British industrial competitiveness scheme, for industries that will continue to use gas for the foreseeable future?
Peter Kyle
My hon. Friend will know that the impact of BICS is essential, and it will be fundamental in getting growth into the economy and sustainable businesses into the future. We are looking carefully at how the learning from that can be applied in other areas.
UK-EU Competition Co-operation Agreement
Peter Kyle Excerpts(3 weeks, 3 days ago)
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The Secretary of State for Business and Trade (Peter Kyle)
I am pleased to announce that today in Brussels the United Kingdom and the European Union have signed the UK-EU competition co-operation agreement.
This is the first supplementary agreement to the UK-EU trade and co-operation agreement signed since the TCA came into force in 2021, and it demonstrates our shared commitment to strengthening co-operation between the UK and the EU for our mutual benefit.
The agreement will strengthen co-operation between our respective competition authorities, supporting more effective enforcement of competition law to address harms, protect consumers and promote fair and dynamic markets.
It will facilitate enhanced dialogue and operational co-operation between the Competition and Markets Authority, the European Commission and the national competition authorities of EU member states. In particular, it will support more effective co-ordination on similar or parallel cases, including through co-operation and information sharing in investigations into cross-border anti-competitive practices. The agreement will strengthen co-operation between our respective competition authorities, supporting more effective enforcement of competition law to address harms, protect consumers and promote fair and dynamic markets; strengthening the conditions for sustainable economic growth by promoting effective competition and innovation that delivers long term benefits for businesses and consumers.
This Government’s central mission is to deliver economic growth. Effective competition in dynamic markets drives investment, innovation, productivity and, ultimately, growth. As set out in the industrial strategy, strengthening competition and refining the competition regime are essential to achieving this mission, with a commitment to
“unlock the full potential of competition to increase market dynamism and growth”.
In our strategic steer to the CMA, the Government emphasised the importance of considering actions taken by competition and consumer protection agencies internationally, and, where appropriate, ensuring that parallel regulatory action is timely, coherent and avoids unnecessary duplication. This agreement will be an important tool in supporting these objectives.
The agreement will be formally laid before Parliament for scrutiny, in line with the provisions of the Constitutional Reform and Governance Act 2010.
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US Trade and Pharmaceuticals
Peter Kyle Excerpts(3 months, 2 weeks ago)
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The Secretary of State for Business and Trade (Peter Kyle)
Our trading relationship with the United States is one of the world’s most important. Trade with the US was worth £322 billion in 2024, representing 18% of total UK trade.
In May, we announced the general terms for the UK-US economic prosperity deal. Since then, we have secured the removal of tariffs on civil aerospace exports, and the lowest tariffs of 10% on cars and lumber, and we remain the only country in the world to benefit from a preferential 25% rate on steel, aluminium and derivative exports.
Today we are seeing that relationship strengthened further.
Through productive negotiations with the US, we have secured a zero per cent tariff on all pharmaceuticals exported to the US for three years. This will protect UK-based manufacturing and cement our place as a world leader for life sciences investment.
The agreement has also secured mitigations under the US’s “most favoured nation” drug pricing initiative, which will encourage pharmaceutical companies from around the world to continue to prioritise the UK for early launches of their new medicines, meaning British patients could be among the first globally to access breakthrough treatments. These changes will ensure that the National Institute for Health and Care Excellence is able to continue its world-leading approach to assessing drugs and treatments, and can keep pace with the commercial and economic environment in which pharmaceutical companies are operating today.
The deal will also secure preferential terms for the UK’s medical technology exports for three years, meaning no additional new tariffs on medical technologies in order to unlock further investments in the UK and a further boost to growth.
The UK is the only country with wide-reaching zero tariff commitments on pharmaceuticals. It is clear evidence of the value of the special relationship, and demonstrates that this Government are delivering on our promises in the industrial strategy and life sciences sector plan.
The UK’s life sciences sector is one of our most productive sectors. It not only saves lives but creates jobs, drives investment, and powers innovation across our economy. In 2024, UK exports of pharmaceutical products to the US were worth over £5 billion. The manufacture of pharmaceutical products contributed £25 billion to the UK economy in 2024. This deal will offer security and stability to this extremely valuable sector and will dramatically improve our standings on the global stage as a destination for life sciences investment.
This agreement was supported by the Government’s commitment to investing 25% more in new innovative medicines—the first major increase in over two decades—which will support improved access to new medicines for NHS patients. This deal will be funded by allocations made at the spending review, where frontline services will remain protected through the record funding secured.
This will be achieved through changes to the NICE cost-effectiveness threshold and to the NICE value set—meaning NICE will now be able to approve medicines that deliver significant health improvements but might previously not have been recommended on the basis of current cost-effectiveness thresholds. This could include breakthrough cancer treatments, therapies for rare diseases, and innovative approaches to conditions that have long been difficult to treat. Investing in medicines helps to keep people healthier for longer, reducing pressure on the health service over the longer term and ensuring we have an NHS that is fit for the future. Over time we will increase the spend on medicines in the NHS from around 10% of total spend to around 12%. This will ensure faster and more equitable access of innovative medicines across the country.
We have worked tirelessly alongside the Department of Health and Social Care, and the Department for Science, Innovation and Technology to secure an outcome in our negotiations with the US that reflects the strength of our relationship and delivers real benefits for UK industry and UK patients.
This deal is a huge boost for the UK as a top destination for pharmaceutical investment and growth. Furthermore, it will support our ambition—set out in the life sciences sector plan—for the UK to become Europe’s leading life sciences economy by 2030.
We are continuing intensive discussions on other sectors under section 232 investigation, and on the range of issues outlined in the general terms.
The economic prosperity deal will continue to deliver: saving thousands of jobs, protecting key British industries, and helping to drive economic growth for the UK.
[HCWS1121]
Mozambique LNG: UK Export Finance Withdrawal
Peter Kyle Excerpts(3 months, 2 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business and Trade (Peter Kyle)
In 2020, the Government committed UK Export Finance support for the Mozambique liquified natural gas project operated by TotalEnergies. Mozambique LNG was paused in 2021 when force majeure was called due to the deteriorating local security situation and the terrorist insurgency. In preparation to restart the project, UKEF was presented with a proposal to amend the financing terms it had agreed originally. There has been much media speculation on this matter, and I am now able to address the subject and update members of the House. After a detailed review, the UK Government have decided to end UKEF’s participation in the project.
My officials have evaluated the risks around the project, and it is the view of His Majesty’s Government that these risks have increased since 2020. This view is based on a comprehensive assessment of the project and the interests of UK taxpayers, which are best served by ending our participation in the project at this time. While these decisions are never easy, the Government believe that UK financing of this project will not advance the interests of our country.
UKEF has over 100 years’ track record as a reliable financing partner in support of UK exports and exporters. The decision to end participation in Mozambique LNG at this time is specific to this project and made with the agreement of the project sponsors and other participants. UK Export Finance will reimburse the project for the premium paid, reflecting the end of the Department’s risk exposure to the project.
The Government remain committed to backing British exporters, including through support from UKEF, as we have set out in our industrial and trade strategies. We also remain committed to our national partnership with Mozambique and building long-term respectful relationships with African countries to boost sustainable growth, tackle the climate crisis and address insecurity.
[HCWS1111]
Oral Answers to Questions
Peter Kyle Excerpts(4 months, 3 weeks ago)
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Martin Rhodes (Glasgow North) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
It is good to be before you in a new role, Mr Speaker. In fact, even though I might not look it, we have an entirely fresh ministerial team before the House today. With your forbearance, may I offer the House’s congratulations to my hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball) on becoming parliamentarian of the year at The Spectator awards yesterday. I reap the benefits of her as a Parliamentary Private Secretary, and I am very grateful for it.
This Government are committed to harnessing the insight of a range of stakeholders in delivering the review into responsible business conduct, announced in the trade strategy. That includes producer countries and experts from the global south. As chair of the all-party parliamentary group on Fairtrade, my hon. Friend will be pleased to know that my officials have already held discussions with Fairtrade tea experts from India and Kenya. The Minister for Trade is also engaging with businesses, civil society and trade unions.
Martin Rhodes
I recently met a campaigner from south-east Asia who is involved in freedom of association and independent trade union repression in the garment sector. With that in mind, and given that trade and business are facilitated through relationships, from national Governments to businesses to workers and their trade union representatives, does the Secretary of State agree that it is essential to involve stakeholders at every level of the supply chain, including those representing workers and unions in the global south, when informing the review of the UK and how we promote responsible business practices?
Peter Kyle
I am grateful for my hon. Friend’s work in this area, the conversations that he has and the insight that he shares with the House, as recently as today in his contribution. The responsible business conduct review will be critical to ensuring that businesses respect human rights, labour rights, the environment and anti-corruption measures across their operations and supply chains. I reassure him that, in the conversations that I have already had with international counterparts in the few short weeks that I have been in this job, these issues, including forced labour situations and workers’ rights, are raised. British values and the expectations we have as a country are raised with our international partners in trade talks.
Terry Jermy (South West Norfolk) (Lab)
Dr Scott Arthur (Edinburgh South West) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
We are delivering bold action to drive investment and growth nationwide. Our modern industrial strategy is cutting red tape, saving businesses nearly £6 billion a year, and unlocking quicker, simpler ways to do business. We are investing £6.6 billion through the British Business Bank to help innovative firms scale, and we are rebuilding our infrastructure with a 10-year strategy, backed by at least £725 billion-worth of Government capital, providing the certainty needed to boost productivity, secure growth and jobs, and deliver sustainable growth right around the United Kingdom.
Terry Jermy
A report by the Rural Coalition highlights that with the right policy framework, the rural economy could increase productivity, leading to an additional £19 billion a year. Will the Secretary of State outline what steps the Department is taking to help to support businesses in rural areas, such as my constituency, to unlock that growth potential?
Peter Kyle
I am grateful to my hon. Friend not just for his contribution, but for his advocacy for the rural economy. This Government are committed to supporting businesses, including those in rural areas such as South West Norfolk, to thrive and grow. We know that rural areas offer significant growth potential, contributing £259 billion to England’s gross value added in 2023. My Department provides support through the Help to Grow: Management business support service and the New Anglia Growth Hub. Our plan for small businesses will hardwire small business voices into Government to boost growth. On top of that and underpinning all of it is the modern industrial strategy, which provides stability into the long term—stability for which the business community right across the United Kingdom has been crying out for too long.
Sarah Hall
In Warrington, Platform is transforming the former Unilever site where Surf and Persil were once produced into a next-generation modular data centre that will provide the capacity, resilience and connectivity needed to power the UK’s AI revolution. From Persil to pixels, Platform is taking a brownfield industrial site with more than a century of manufacturing heritage and bringing it into the 21st-century economy. Will the Secretary of State set out what more the Department can do to support home-grown, local companies such as Platform to deliver projects of this kind, which combine cutting-edge AI infrastructure, data sovereignty, regional growth and high-value skills for the future workforce?
Peter Kyle
Warrington has been at the centre of previous industrial revolutions, and we are determined that it will be at the forefront of the industrial revolution that is unfolding, with a wave of digital technology and AI flowing across the world. We will use all the agency of this Government to ensure that all parts of the United Kingdom benefit equally from that. My hon. Friend will know that work such as that by Platform on the transformation of the Unilever site in Warrington is exactly the kind of bold, future-facing investment that we want to enable. That is why we delivered the AI opportunities action plan so swiftly. We will create AI growth zones across the United Kingdom to create the infrastructure in which new businesses and businesses that are transforming places and communities such as Warrington will be at the forefront and able to grasp the very best of the global economy in the regions and nations of every part of the United Kingdom.
Dr Arthur
One of the great things about Edinburgh South West is that it has a flourishing renewables sector, which I think is reaching critical mass. A few weeks ago, I attended a fantastic roundtable that demonstrated the industry’s desire to work with the UK Government to make their industrial strategy a complete success. Will the Secretary of State commit to meeting organisations in Edinburgh South West to discuss how we can ensure that our industrial strategy brings as many jobs as possible to Scotland’s capital?
Peter Kyle
Again, my hon. Friend is a great advocate for the community that he represents in Parliament. I am very excited to meet the businesses that he references. We hit a milestone in the second quarter of this year, because the UK started to produce more than 50% of its energy using renewables. His community as well as other communities around the UK will benefit from the transition to renewables. This is an exciting time to do business, and this is an exciting sector of our economy; it is one of the fastest growing sectors in the global economy, and right here in the UK we are benefiting the most from it.
David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)
A major lodge development at Irvine House near Canonbie, and the potential for a Center Parcs in the borders, show that there is still great potential for jobs in the tourism industry my constituency. Will the Secretary of State encourage the Chancellor to follow the advice of the Scottish Hospitality Group and give hospitality a fair deal in the Budget, rather than clobbering it as she did last time?
Peter Kyle
I assure the right hon. Gentleman that every sector of our economy is at the forefront of the Chancellor’s mind as she stabilises and recovers our economy from the 14 years of chaos and confusion wrought by the Conservative party. I also assure him that there will be no repeat of the mini-Budget that the Conservatives inflicted on our economy, the consequences of which we are still suffering today, which the right hon. Gentleman voted for and supported. We inherited a growth emergency because of the decisions taken by the Conservative party in government. We will recover from it; we will build back better; and we will make sure that every sector, including hospitality, benefits from the great economy we are moving towards.
Wera Hobhouse (Bath) (LD)
One change that would encourage significant investment is UK participation in the EU’s internal electricity market. Energy trading with our closest neighbour is currently hugely inefficient, which only adds to the burden of energy costs that our businesses face. Will the Government put real pressure behind the negotiations that are ongoing with the EU to reinstate our internal energy trading with the EU?
Peter Kyle
As the hon. Lady knows, we have put a lot of effort into the reset with the EU. We have built new opportunities for British people and British business, and we will continue to do so.
Nick Timothy (West Suffolk) (Con)
Every Labour Government in history have ended their time in office with unemployment higher than when they started, and this Government have made a record-breaking start. Businesses large and small in West Suffolk are putting off investment decisions, freezing recruitment and laying off staff because of the burdens already imposed on them by this Government—business property relief, the family farms tax, national insurance contributions, and the employment rights legislation. After the last Budget, the Chancellor told the Confederation of British Industry that she was not going to “come back for more”, so will the Secretary of State take this opportunity to end the uncertainty and tell business very clearly that there are going to be no more tax rises on business in the Budget?
Peter Kyle
I reassure the hon. Gentleman that the industrial strategy gives clarity on policy for 10 years into the future, which has been welcomed by businesses large and small. I also reassure him and the businesses in his community that there will be no repeat of the mini-Budget that the Conservatives inflicted on our country, for which we are still paying the price. Finally, I reassure him that we have a Chancellor who puts first and foremost the primary mission of this Government, which is economic growth—the kind of growth that is delivering record investment in our economy, from which every business, large and small, is benefiting equally right around the United Kingdom.
Peter Kyle
I am very grateful to the hon. Lady for welcoming me to the Dispatch Box. We are very aware that we inherited a crisis—a crisis created by the Conservative party, including the state in which they left our global relations, the lack of growth in the economy and the effects of the mini-Budget. The reputation of our country was in tatters as a result and our public services were on their knees, but all of those things are being turned around because of the decisions taken by this Chancellor. The Conservatives should be celebrating the fact that we had the fastest growing economy in the G7 for the first six months of this year, because these are the kinds of actions that show we are getting growth and stability back into our economy, and give businesses the predictability upon which to build future success and prosperity and the creation of jobs. The Conservatives should be celebrating that, not talking our country down.
Henry Tufnell (Mid and South Pembrokeshire) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
I regularly engage with my right hon. Friend the Work and Pensions Secretary, as my hon. Friend would expect. We share the importance of increasing the uptake of the excellent cars built across the United Kingdom. The Motability scheme supports those in receipt of a qualifying mobility allowance, and the Government will continue to work with Motability to ensure that the scheme meets the transport needs of disabled people.
Alex Sobel
One in five new cars is now purchased through the Motability Scheme. This presents an unprecedented opportunity for the British car industry, as the scheme stipulates what cars its users can buy. Has the Secretary of State considered that we could hugely increase the sales of British cars by stipulating that only British-built cars can be bought—and this is public money—by Motability users, which would not just safeguard thousands of British jobs, but create a world-leading industry in accessible vehicles?
Peter Kyle
That was a very thoughtful contribution, and I am very grateful for it. The Motability Foundation is an independent charity and is regulated by the Charity Commission, but it does engage fully with the Government in the most respectful way. As my hon. Friend would imagine, I have instructed my officials to work with those in the Department for Work and Pensions to see how we can make recommendations and certainly to support the take-up of British cars as much as possible. This Government are of course committed to the growth of the automotive sector. We are providing support through programmes such as DRIVE35, the electric car grant, which will invest up to £2.5 billion of support into zero emission manufacturing across the UK.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
The Secretary of State for Business and Trade (Peter Kyle)
This Government wasted no time when it came to trade deals—not just talking about them, but delivering them. We have already secured trade deals with the biggest economy in the world, one of the fastest-growing economies in the world, and our biggest trading market. The Government’s clear principle is to deliver for British businesses and the British people. That is why in the first month of my new role I travelled to three continents to further strengthen UK trade and investment.
Torcuil Crichton
I welcome the Secretary of State to his place and invite him to Benbecula Distillery in my place. It is a dramatic lighthouse distillery, and a great addition to the landscape. It recently secured £1.5 million from the British Business Bank’s investment fund. Benbecula’s distillery is one of a chain of small distilleries across the Western Isles and other islands. I had a wee dram in Raasay, where that distillery has revived the island as much as its product revived me. What is the Secretary of State doing to make sure that this new wave of small Scottish distilleries will be part of the next round of trade deals?
Peter Kyle
I am extremely grateful for the invitation. I can reassure my hon. Friend that when we have the opportunity to take delegations abroad, the Scotch Whisky Association and representatives of those distilleries are always with us. We fight hard for the Scotch whisky business. We know how important it is right across the United Kingdom and to the UK’s economy overall. The week before last I was in India with the Prime Minister where we were furthering the trade deal we have secured and making sure that we exploit all the opportunities that these trade deals present. It is important to not only secure trade deals but make sure that we exploit all the opportunities right across the economy. That deal alone will unleash over £1 billion-worth of opportunities for the Scotch whisky industry, and that is something we should all celebrate.
Chris Law (Dundee Central) (SNP)
In taking steps to improve our trading relationship with other countries, I welcome the new sanctions announced by the UK and the US targeting Russia’s two largest oil companies: Rosneft and Lukoil. However, despite pointing out to Ministers on several occasions that hundreds of billions of pounds have been generated for Russia as a result of oil and gas being shipped under British companies with British insurance, no action has been taken to stop this. Given that every vessel transporting Russian liquefied natural gas is financing the destruction of Ukrainian villages, towns and cities and the deaths of Ukrainian soldiers and civilians, when will this Government act to end the complicity of UK companies in this?
Peter Kyle
The hon. Member will know that the Prime Minister and this Government stand shoulder to shoulder with Ukraine, and we have since the moment we came into office. We are highly aware of the risks that Russia poses, not just to Ukraine but to the continent of Europe. We are also aware of the constant attacks this country undergoes from cyber-security threats via Russia and Russia-sponsored activity. I can assure the hon. Member, from conversations I constantly have across Government and the forums across Government I am part of, that we are very aware of this threat and act constantly against it.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The Secretary of State for Business and Trade (Peter Kyle)
I am grateful to the right hon. Member for his question. The UK was the first country to secure such an agreement with the US—one which will save thousands of jobs, protect key British industries and farmers, and drive economic growth. People said that it would be impossible to deliver such a deal without compromising on food standards, but we have proven them wrong. This Government have delivered a deal that protects our high food standards while giving British farmers access to a market of 340 million people where they can sell their high-quality beef.
Mr Carmichael
The Secretary of State is right that any threat of an imminent increase in US beef imports in particular is clearly not the problem, but it has not gone away either. The US Department of Agriculture has a foreign agricultural service with 100 different offices, embassies and trade missions. They work with US farming groups around the world to promote their product, and they are not spending that money just to stand still. What will the Secretary of State be doing to ensure that our farmers have the same opportunities, so that they can see free trade agreements not just as threats but opportunities too?
Peter Kyle
I am grateful for the right hon. Member’s insightful and thoughtful contribution. As I said, striking trade deals is vital. That is why we put so much energy into it and have had so much success, and there will be more to come. It is very important that the whole British economy and Government make sure that we exploit the full opportunities that all these agreements offer. The Department for Business and Trade has embedded highly talented trade experts right across the world, and they are trying to do just that on the frontline of all the economic opportunities we perceive around the world, and that includes agriculture. If there are specific areas where the right hon. Member perceives that the agricultural sector, either in his patch or across the United Kingdom, has an opportunity that is not yet being exploited, I want to hear from and work with him to make sure that British farmers benefit.
Oliver Ryan (Burnley) (Lab/Co-op)
Ben Obese-Jecty (Huntingdon) (Con)
The Secretary of State for Business and Trade (Peter Kyle)
The growth emergency we inherited from the previous Government demands a proportionate response. That means an unrelenting focus on pro-business policies. It means harnessing investment in our high growth sectors and tirelessly implementing our modern industrial strategy. It means shaking up our entire regulatory system. The Department for Business and Trade is stripping out the rules, regulations and red tape that are holding business back. We are helping reduce the regulatory burden by 25%, cutting out 200 hours of needless paperwork for companies so far. We are simplifying rules around company reporting, saving firms £230 million. We are bringing in a strengthened growth duty for regulators and launching a new performance dashboard, injecting agility into our regulatory regime. Where regulators are doubling up, we are streamlining them. We are abolishing the British Hallmarking Council, transferring functions to the Department. This is a new ministerial team acting with urgency. We are using every lever we have to grow the economy and to deliver for this Government’s plan for change.
Ben Obese-Jecty
On Tuesday, the Ministry of Defence announced the launch of Project Fairfax, which will see a defence technology cluster established on surplus MOD land at RAF Wyton in Huntingdon. This is a hugely exciting opportunity for both Huntingdon and the MOD, as we seek to create a defence ecosystem in sites we have identified across Huntingdonshire. With a decision yet to be made about identifying investible sites, and regarding the £600 million fund available through the strategic sites accelerator programme, will the Secretary of State meet me and the chief executive of my local council to discuss the inclusion of potential defence sites in Huntingdon?
Peter Kyle
I am grateful for the hon. Gentleman’s question, and I know that his community will be grateful for his question, too. I can assure him that we are working to mobilise the strategic sites accelerator, which will operate across the nation. We expect to communicate how and when the programme will deploy in the coming period into spring. As he knows, RAF Wyton is a key site for cyber and specialist operations command. It is an important asset for our nation. I, or the relevant Minister, will of course meet him to discuss how we can better support that site going forward, but already within Government it is a very highly valued asset.
Michael Payne (Gedling) (Lab)
Andrew Griffith (Arundel and South Downs) (Con)
I welcome the team to their significant roles for the United Kingdom.
This week, the other place voted for five reasonable amendments to the Employment Rights Bill, representing a meaningful compromise with cross-party support to mitigate some of the worst of the damage caused by the Bill. As the Office for Budget Responsibility now scores the impact of that legislation, this is one of the last chances to avoid the costs, taxes and spending cuts that will result from it. Will the Secretary of State now put country before party, do the right thing by British business and accept those compromise amendments?
Peter Kyle
I am grateful for the shadow Secretary of State’s warm words. He shadowed me when I first went into my role at the Department for Science, Innovation and Technology; he was then moved here before me, so I have followed him to this role. I watch with trepidation the next reshuffle on his Benches.
The shadow Secretary of State mentions the workers’ rights Bill, which is still between the two Houses; I hope we will be reconciled as soon as possible so that it can get Royal Assent and benefit workers and businesses right across the nation. Once the Bill passes, we will, of course, undertake a period of implementation. My predecessor and the previous Deputy Prime Minister, who championed this legislation, were clear from the outset that the Bill will modernise the British workplace so that it is beneficial for businesses and for the people who work in them.
The modern economy has changed; it is different from 20 years ago. The Conservatives had the time to modernise the economy and the relationships within workplaces, and they chose not to take that—
Mr Speaker
Order. I don’t want to do this, but this is topicals, and all these Members need to get in. We did not get through the list already. You have to help me to help them.
Andrew Griffith
I will save time, Mr Speaker, by not mentioning the 13 leading business organisations that have all called for certainty now—not well-intentioned future consultations on implementation, but certainty now, because jobs and the economy are bleeding out. The Secretary of State will know that even the Resolution Foundation—that wonderful finishing school for aspiring Labour Ministers—said this week that some of the measures in the Bill should not be proceeded with.
Peter Kyle
Again, the Conservatives had 14 years in which the economy was changing. They had the chance to tackle zero-hours contracts, and what did they do? Nothing. They had the chance to tackle fire and rehire, and they did nothing. They had the chance to tackle the challenges of being an app-based employee, and they chose to do nothing. We are acting to modernise the economy and the relationship out there between businesses and workers because that is what is needed. It is what workers and businesses need, and it is what this Government are delivering.
Peter Swallow (Bracknell) (Lab)
Sarah Olney (Richmond Park) (LD)
Businesses across the country are struggling with unaffordable energy costs. The burden of this Government’s national insurance contributions rise and uncertainty over the Employment Rights Bill are compounded by the immense struggle caused by sky-high energy bills. I urge the Government to act with more urgency in addressing energy costs for businesses, including through accelerating the launch of the industrial competitiveness scheme, the consultation for which is not even due to be launched until the end of the year. What discussions has the Minister had with the Secretary of State for Energy Security and Net Zero to cut operating costs for businesses, and will the Government consider Liberal Democrat proposals to break the link between gas and energy prices, halving bills within a decade and easing pressures?
Peter Kyle
I can assure the hon. Lady that we are in constant contact with the Energy Secretary. When I was at DSIT, we co-chaired the AI energy council, and we are working together to get the transition to renewable power done as swiftly as possible, generating the wealth that our country needs from the transition period. Also, we are lowering bills and, through some targeted interventions, ensuring that those key businesses get the support they need on the challenges with energy prices and supply that we inherited when we came into office.
Phil Brickell (Bolton West) (Lab)
Peter Kyle
I am grateful for my hon. Friend’s passionate question. As he will know, we have struck a trade deal with the EU and reset the relationship with it. We will continue to build on that to deliver for all parts of our economy.
Graham Stuart (Beverley and Holderness) (Con)
Ben Goldsborough (South Norfolk) (Lab)
In rural constituencies like South Norfolk, I can think of no better place for employment than our pubs. From the Wheel of Fortune in Alpington to the Angel Inn in Loddon, these pubs are not just vital hubs of our communities but drivers of economic growth. In fact, Mr Speaker, you are more than welcome to join my Christmas pub team on 13 December. What support are the Government putting in place to help those businesses provide decent employment?
Peter Kyle
I am grateful for my hon. Friend’s question— I am glad he got in today. I can assure him that we are working closely with pubs. We want pubs to be at the beating heart of communities up and down the country. We know we have inherited a challenging environment for pubs. We listen to them and will be acting.
Gareth Bacon (Orpington) (Con)
Peter Kyle
You would have thought, Mr Speaker, that the hon. Gentleman might say a good word about our British automotive sector. The trade deal that we struck with America—the first and the best such trade deal—protected 44,000 jobs from the tariff challenges being felt around the world. We are creating new opportunities and investing. As the House saw, the Government acted at speed to protect Jaguar Land Rover and its entire supply chain in its hour of need. This Government act when we need to and create opportunities wherever we can, and we will continue to do so.
Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)
To make steel in this country, we need ceramics. To build houses in this country, we need ceramics. Five of the eight industrial strategy growth sectors require ceramics. Ahead of the launch of the British industrial competitiveness scheme, might there be any interim relief from energy prices for energy-intensive industries?
James Wild (North West Norfolk) (Con)
To show his deregulatory zeal, the Business Secretary just boasted about scrapping the British Hallmarking Council, which has one part-time employee. Given that every £1 of regulatory costs has the same impact on investment as £1 taken in tax, why are the Government proceeding with their unemployment Bill and proposing a £5 billion a year tax on British businesses?
Peter Kyle
It is quite extraordinary; after just a couple of weeks in the job, I have announced £230 million of deregulation every year—£1 billion-worth between now and the next general election—and what do the Conservatives do? They say that we are not going far enough. They had 14 years; I have had a couple of weeks! It is about time they started coming up with better questions, and stopped criticising a Government who act where they failed to.
Perran Moon (Camborne and Redruth) (Lab)
Meur ras, Mr Speaker. Spinning out of the industrial strategy is the eagerly awaited critical minerals strategy, the launch of which will happen in due course—or dreckly, as we say in Cornwall. It is of particular interest to my constituency. Canada, the US and Australia have already established new mineral exploration funds. Such funds support junior exploration companies in building up energy security and contributing to export-led growth. Is the Department considering such a fund as part of the critical minerals strategy?
Sonia Kumar (Dudley) (Lab)
What steps is the Department taking to improve access to finance for UK start-ups seeking to scale up, given that only 1% of UK start-ups raise equity of more than £100 million? By comparison, in the US, 6% of start-ups do so. Furthermore, how can we ensure that women get a fair share of access to finance?
Peter Kyle
My hon. Friend asks exactly the right questions, which I am extremely grateful for, because they are central to the programme of economic reform that this Government are undertaking. She will know from the Mansion House reforms that we are unlocking capital into our economy via the pensions reforms being undertaken. We are making sure, right from the start, that women have a voice. I did the same in my role in the Department for Science, Innovation and Technology, and in this role, I will continue to ensure that women are championed right across the economy, that we get capital where it needs to be, and that we accept that we have brilliant businesses that need targeted intervention, which we will provide to make sure that scale-ups happen.
Grahame Morris (Easington) (Lab)
Power Roll in my constituency has pioneered a world-beating, flexible, lightweight solar panel module. The next four weeks are a critical period for the company; a £5 million investment is needed to keep production and jobs in the north-east. Will my hon. and right hon. Friends on the Front Bench work with me to help secure this Great British innovation’s future in east Durham?
Employment Rights Bill
Peter Kyle ExcerptsMonday 15th September 2025
(6 months ago)
Commons ChamberRead Full debate Employment Rights Act 2025 View all Employment Rights Act 2025 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Commons Consideration of Lords Amendments as at 15 September 2025 - (15 Sep 2025)
Madam Deputy Speaker (Caroline Nokes)
I must draw the House’s attention to the fact that Lords amendments 66, 88, 90, 91 and 101 engage Commons financial privilege. If any of those Lords amendments is agreed to, I will cause the customary entry waiving Commons financial privilege to be entered in the Journal.
After Clause 22
Contractual duties of confidentiality relating to harassment and discrimination
4.43 pm
The Secretary of State for Business and Trade (Peter Kyle)
I beg to move amendment (a) to Lords amendment 22.
Madam Deputy Speaker
With this it will be convenient to discuss:
Lords amendment 22 and Government amendment (b).
Lords amendment 1, and Government motion to disagree. Lords amendment 7, and Government motion to disagree. Lords amendment 8, and Government motion to disagree.
Lords amendment 21, Government motion to disagree, and Government amendments (a) and (b) in lieu.
Lords amendment 23, and Government motion to disagree.
Lords amendment 106, Government motion to disagree, and Government amendment (a) to the words so restored to the Bill.
Lords amendments 107 to 120, and Government motions to disagree.
Lords amendments 46 to 49, and Government motions to disagree.
Lords amendments 60 to 62, and Government motions to disagree.
Lords amendment 72, and Government motion to disagree.
Lords amendment 121, and Government motion to disagree.
Lords amendments 2 to 6, 9 to 20, 24 to 45, 50 to 59, 63 to 71, 73 to 105 and 122 to 169.
Peter Kyle
It is a pleasure to make my first appearance at the Dispatch Box as Secretary of State for Business and Trade to deliver the biggest improvements in workers’ rights for a generation, as part of the Labour Government’s Employment Rights Bill, which formed a key plank of my party’s manifesto commitments.
I take this opportunity to pay tribute to my predecessor, the right hon. Member for Stalybridge and Hyde (Jonathan Reynolds), for his work on the Bill and, more widely, in supporting our country to get to growth. I pay tribute to my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner) for her tireless fight for the rights of working people. Without her, this Bill would simply not exist. I also pay tribute to my hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders), who worked so hard to get the legislation to this point, and to my dear friend Baroness Jones of Whitchurch, whose indefatigable work in the other place has ensured that this Bill was steered through the legislative process with a very steady hand. To many who have worked on this Bill, it has been a life’s work, and the culmination of an enormous amount of effort on their part, for which I am extremely grateful.
This is a landmark Bill. It is pro-worker and pro-business, and it supports the Government’s objectives of boosting growth and improving living standards across the country.
Dr Luke Evans (Hinckley and Bosworth) (Con)
Will the Secretary of State give way?
Peter Kyle
Of course I can. Many businesses have now come out in support of the Bill. The hon. Gentleman asked for a small business or a large business; let me give him one of each. I have talked to small and medium-sized enterprises. R & W Scott Ltd, a leading UK manufacturer based in south Lancashire specialising in high-quality ingredients for jams, came out in steadfast support. If the hon. Gentleman wants to know of large businesses who back this Bill, I could mention the Co-op, Centrica and Richer Sounds—all businesses that, as he will know, serve his community and his constituents. He should get behind those businesses in their support of the Bill.
Chris Vince (Harlow) (Lab/Co-op)
I welcome the Secretary of State to his new role. He will be aware—as will the Minister of State, Department for Business and Trade, the hon. Member for Rhondda and Ogmore (Chris Bryant), who is next to him—that IKEA in my constituency welcomed this legislation, but when the Conservatives heard that, they heckled, and said, “Oh, they’re Swedish.” Will my right hon. Friend recognise the huge amount of employment that IKEA provides in this country, and welcome its foreign investment? Does he agree that IKEA welcomes this legislation because it realises that supporting its staff leads to better productivity and more loyalty to the company?
Peter Kyle
I congratulate my hon. Friend on being a champion for investment in our country, unlike the Conservative party, which did down the country while it was in government, and is doing it down while in opposition, too.
The task this Government have set themself is formidable: to update employment law and make it fit for the age in which we live; and to reward good employers, and ensure that the employment protections given by the best are extended to millions more workers.
Sir Julian Lewis (New Forest East) (Con)
I have a letter from the Hampshire chamber of commerce, which, the Secretary of State will be pleased to hear, says that businesses are not opposed to all the changes that will be made to employment legislation, but it does focus on several areas of concern, such as the involvement of a tribunal in deciding whether an employee has been legitimately dismissed during their probation period, removing statutory sick pay waiting days, and changes to trade union recognition and industrial action thresholds. Will the Secretary of State do more to engage with chambers of commerce about these concerns?
Peter Kyle
I am grateful to the right hon. Gentleman for his thoughtful contribution, and for reflecting the voice of chambers, who do an incredible job right around our country—and around the world. I say to the chambers, and to him, that the Bill reflects the best standards that are already in use right around the country by the very best employers—indeed, by most employers. Those employers have nothing to fear and a lot to gain from this legislation.
On consultation, this is a Government who listen constantly, and we will continue to listen. On those measures for which an implementation phase is really important, there are, unusually, formal consultations in which businesses can engage. This is a listening Government and an acting Government, and we will deliver on our manifesto commitments.
Jim Shannon (Strangford) (DUP)
We welcome many aspects of the legislation, but I put this question on behalf of my small businesses. They say that sickness absence costs them £3,500 a year—it costs some £5 billion across all the United Kingdom of Great Britain and Northern Ireland—and they are worried that the legislation could dramatically raise their fees and costs for the next year. How will this Bill support small businesses that literally cannot afford to pay sick pay as well as hire someone in the place of the sick? That is a constructive question, and my small businesses need the answer.
Peter Kyle
In all the Front-Bench jobs I have had, I have enjoyed my exchanges with the hon. Gentleman, who is always constructive and well intentioned. I did not expect that we would enjoy that renewed relationship so soon in my new position. I say to him, and to the incredible businesses in his community, which I have had the pleasure of visiting, that a healthy workforce is a productive workforce. We intend to ensure the health and wellbeing of employees, and to ensure support for them in the workplace, structured in a way to get the very best out of them. That will be of benefit to employees, and certainly to employers as well.
Andy McDonald (Middlesbrough and Thornaby East) (Lab)
My right hon. Friend will, without doubt, remember those dark days of covid, when people had to turn up in the workplace, despite being poorly. That contributed to the spread of the pandemic. Does that not illustrate the need to ensure that when people are ill, they can rely on a sickness absence framework that supports them, and allows them to return to work when they have recovered?
Peter Kyle
My hon. Friend makes an incredibly important point. Both in times of crisis, such as during covid, and in good times, there are good employers and those who sometimes fall beneath standards. Covid shone a light on the challenges that can be faced in the workforce. In those times, we needed to see the best from everyone. The majority of businesses supported their employees through that time of challenge. We want to ensure that the floor is high enough, and that the standards for every workforce are those that were set by the best, not by those who fell short of what we expect in Britain in the 2020s.
Today, I ask the House to renew its commitment to this legislation. I will ask hon. Members to endorse Government amendments that seek to clarify and strengthen a number of measures, and to reject the amendments of Conservative and Liberal Democrat peers who joined forces to undermine the progress that we are attempting to make. I make an exception of those in the other place who had the sincere aim of scrutinising, and who ensured that the Bill was steered through the legislative process there with a steady hand.
Dr Andrew Murrison (South West Wiltshire) (Con)
In opposition, those now in government probably rightly criticised the Conservative Government for introducing Henry VIII powers, yet the Bill is absolutely riddled with them. Does the Secretary of State agree with the Attorney General that such powers strike at the heart of the rule of law?
Peter Kyle
I agree that such powers need to be used wisely. The House will notice that many clauses provide for guidance in primary legislation during the implementation phase, and consultation with the businesses affected. Members will have their voice heard, as will businesses and workers affected by the Bill. During the passage of the Bill through both Houses, there have been improvements to the legislation, and I am grateful to Members of both Houses for their tireless work.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The vast majority of the Employment Rights Bill is very much to be welcomed. Amendment 61, which relates to heritage railways and heritage tramways, would allow people under the age of 16 to volunteer on those heritage railway lines. It has been so narrowly worded as to be specifically for those sectors, and it would give young people fantastic opportunities to learn about technology, to work across generations, and to contribute to their communities. Will the Government please consider it again?
Peter Kyle
I know that this is something that affects the community that right hon. Lady represents, and that she is a tireless champion for her community here in Parliament, via the all-party parliamentary group on heritage rail. I will come to that amendment specifically, so I think it is best that I leave the answer until then. If she wants to come back to me once she has heard the explanation as to why we will not support amendment 61, I will happily take another intervention.
I will start by speaking to the amendments that the Government made in another place. The majority of them reinforce and strengthen existing measures in the Bill by making technical adjustments. They close loopholes to safeguard policy functionality, resolve uncertainty and ensure that measures are comprehensive and effectively deliver the policy as intended, as set out by the plan to make work pay. Some of the substantial amendments follow excellent campaigning by Members of this House and the other place, and demonstrate that the Government are listening and taking action, where appropriate.
The Government’s amendments on zero-hours contracts strengthen and clarify provisions that were already in the Bill when it left this place. Our commitment to banning exploitative zero-hours contracts is the culmination of years of campaigning by Labour MPs, trade unions and the wider Labour movement. For too long, these contracts have been used to replace full-time jobs. The Government amendments tabled in the other place reflect our commitment to getting the detail right, and were informed by extensive engagement with a wide range of businesses, trade unions and other expert stakeholders.
Susan Murray (Mid Dunbartonshire) (LD)
My husband suffered a catastrophic brain haemorrhage, which meant that he could not return to his work, but after he began to recover, he started to work again in another job, helped by a zero-hours contract. It meant that if he was not well enough to work, he could agree with his employer that his hours could be adjusted to suit. The practical and fair solution is to give staff a right to request a zero-hours contract, rather than replacing a requirement for businesses to offer a zero-hours contract.
Peter Kyle
I hope that the hon. Lady will pass on my sympathy and encouragement, and that of the whole House, to her husband, who has shown tenacity and resilience. I will come to the relevant part of the Bill shortly but, in summary, we feel that putting the onus on employees to request, rather than on employers to deliver, such contracts would alienate several categories of workers, particularly younger workers and those with vulnerabilities. I will come to that in a minute, and it would be a delight to take any further interventions that she might have then.
Technical changes include clarification of how zero-hours contract provisions apply to agency workers; reinforcement of the guaranteed hours provisions in relation to workers with annualised contracts and interaction with unfair dismissal; refinement of the right to payment for short-notice provisions, in relation to when payments and notices of exemptions are due; and expansion of those provisions to staff employed by both Houses. Together, these amendments strengthen the legislation by ensuring it is fair, proportionate and clear.
Chris Law (Dundee Central) (SNP)
On short-notice periods for zero-hour contracts, there was an opportunity in the House of Lords to support the Liberal Democrat amendment that would require employers to give employees at least 48 hours’ notice. Labour peers voted against that amendment and the Government have not come forward with an alternative, suggesting that it will take until 2027 before there will be consideration of those measures. Will the Minister explain why we will have to wait nearly three years before we can get a response to that?
Peter Kyle
The powers that the hon. Gentleman refers to are strident powers. We have firmly committed to consulting on those powers and to reporting back, based on the outcome of the consultation, and that shows that we are listening. We will learn from the consultation and, if necessary, we will act.
Sarah Bool (South Northamptonshire) (Con)
When the Minister consults on those powers, will he include the agricultural sector? With seasonal work, there is a big concern that employers will not necessarily have time to provide a notice period as the weather changes. On behalf of all our farmers, I ask him to consider that.
Peter Kyle
As a Member of Parliament representing a constituency in the beautiful county of Sussex, I am aware of the needs of seasonal workers, including those in the agricultural sector. We believe that the Bill allows flexibility for that sector, but if the hon. Lady would like to write to me with further updates, I am always willing to listen.
Sir Desmond Swayne (New Forest West) (Con)
On that point, will the Minister give way?
Peter Kyle
Let me make a little progress, then I will come back to the right hon. Gentleman; I am sure he will understand.
We move on to bereavement leave. The Bill will ensure that every employee has an immediate right to bereavement leave from the first day of employment. As both Houses have agreed, bereavement is not an illness or a holiday, and it needs its own special category. The Government amendments in the other place expand bereavement leave entitlement in the Bill to include pregnancy loss occurring before 24 weeks. I pay tribute to all those who have campaigned on that change, such as the Women and Equalities Committee—specifically my hon. Friend the Member for Luton North (Sarah Owen)—and countless women who have told their own very personal and painful stories of loss as part of the campaign for this important change. I have been very open about my own experiences with grief and loss, and I feel strongly that people need time away from work to grieve. No one going through the heartache of pregnancy loss should be worrying about work; they must be able to take time to recover.
I give way to the right hon. Member for New Forest West (Sir Desmond Swayne).
Sir Desmond Swayne
Let me take the Secretary of State back to zero-hours contracts. The seasonality of the hospitality industry and, indeed, boat building down in my constituency, where large numbers of students are taken on, means that scheduling for guaranteed hours is very difficult, particularly when those students benefit from the provision, because they want to partake in races and other seasonal activities of a leisure nature.
Peter Kyle
I am grateful to the right hon. Gentleman for raising his concerns in this area. I represent a constituency in Brighton and Hove that has a vibrant hospitality and night-time economy and two universities, so I have paid particularly close attention to these issues. I reassure him that the Bill refers to exploitative zero-hours contracts. It is clear that some people will want employment on different terms, and we have flexibility in the Bill for those circumstances. Where there is exploitation or the potential for it—which surely we all agree exists in the economy at the present time—we should act against those sorts of things.
Damian Hinds (East Hampshire) (Con)
In the positive spirit in which the Secretary of State speaks, will he commit on the Floor of the House that the reference period used to calculate hours for sectors that have serious seasonality—we have heard about boat building, hospitality, tourism and farming—will not be a ridiculously short period, such as 12 weeks? Will it be long enough to reflect the seasonal nature of that type of work?
Peter Kyle
I am grateful to the right hon. Gentleman for the passion with which he speaks. That is a very important point, and that is why we are consulting on the time threshold; we want to get it right. As my predecessors and I have said repeatedly, this Bill is good for workers and good for business, and that is the spirit in which we will continue.
Let me move on to fire and rehire, on which hon. Members will know there has been a long-running campaign led by trade unions. The provisions in the Bill will ensure that employers are no longer able to use cruel fire and rehire practices. No longer will unscrupulous employers be able to fire employees to replace them on low pay. The Bill also ensures protection for employees replaced by non-employee workers, such as agency staff, to do the same role. As we said in our manifesto, these reforms are a pro-business, pro-worker set of measures. They strike a balance, curbing misuse while allowing fair businesses time for adaptation.
Maureen Burke (Glasgow North East) (Lab)
This Bill will make work fairer for thousands in my constituency. However, my constituents are worried that Conservative Members seek to water down this legislation. Can the Secretary of State confirm that the Government will resist their attempts and are committed to introducing the Bill in full?
Peter Kyle
I understand that there will be workers around the country who are worried about the watering down of such legislation. I reassure my hon. Friend that as long as they vote Labour, that will never happen.
In the other place, the Government made amendments to strengthen protections for social care workers and school support staff, ensuring that workers whose employers go above and beyond the minimum standards set out by the negotiating bodies will have those better terms protected.
Mrs Sureena Brackenridge (Wolverhampton North East) (Lab)
On that point, will the Secretary of State give way?
Mrs Brackenridge
As a former schoolteacher and leader, I know the value of support staff and how critical they are, but does the Secretary of State agree that Lords amendment 121 is unnecessary? The Bill already ensures that no negotiating body can prevent employers from offering better terms and conditions where they wish to do so. The school support staff negotiating body was regrettably abolished in 2010, but this Government will reinstate it. The amendment would add needless bureaucracy and would risk impeding the flexibility that schools and staff rightly expect.
Peter Kyle
My hon. Friend has demonstrated many things in that intervention, including what a great teacher she was. As a former chair of governors and a governor of a couple of schools, I can assure her that I too understand the value of teaching assistants and all those who support the education of young people. I agree that the Bill gets the balance right—that is why we are proceeding as we are.
I turn to the Lords amendments dealing with the international maritime provisions. The Government amendment clarifies that a regulation to implement future agreements may not be brought into force before the agreement is ratified, but by implication, such regulations may be made before it is ratified. This will allow the UK to meet its international obligations by ensuring such regulations can be made ahead of the deadline for bringing them into force.
The Fair Work Agency provisions will establish a single body to enforce a wide range of employment rights. The Government amendments are technical refinements to improve enforcement and co-ordination. They clarify definitions of “worker” and “employer”, enable summary sheriffs in Scotland to act on underpayment notices, and refine provisions on data sharing between enforcement bodies. The amendments will ensure that the Fair Work Agency can operate smoothly and effectively.
In another place, the Government also made an amendment to change the time limit in the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006 from three months to six months, ensuring consistency with wider employment tribunal time limit reforms.
Amendments were made in another place to the trade union provisions. The Government have refined the provisions on trade union recognition by adding sanctions for non-compliance, requiring timely sharing of worker data, and tightening timelines to protect bargaining units. Together, these amendments enhance fairness, transparency and enforceability in trade union recognition.
I now turn to non-disclosure agreements. The Government are committed to ending the misuse of NDAs, which silence victims of sexual harassment, discrimination and bullying. I thank Members of this House and those in another place for their work on this issue, as well as Zelda Perkins, the founder of Can’t Buy My Silence, for her tireless campaigning, and my right hon. Friend the Member for Sheffield Heeley (Louise Haigh), who has championed this cause for many years. Today must be a good day for her, as she sees another step forward taken in delivering those rights.
Louise Haigh (Sheffield Heeley) (Lab)
I am sure all Members of the House would like to note that Zelda Perkins joins us in the Under-Gallery today, and to thank her for her tireless work in campaigning on this issue. The road map for implementation of this legislation was published before the Government tabled their amendments, so will the Secretary of State confirm when he will commence consultation, and when the Government are aiming for this primary legislation to commence so that the ban on NDAs can come into force?
Peter Kyle
It is great to know that Zelda is in the Chamber with us today, and that my right hon. Friend is also in the Chamber to give voice to so many campaigners and the work she has done. The Prime Minister has confirmed that the road map remains as is.
In another place, we made two amendments to strengthen the provisions in the Bill that protect victims, while preserving NDAs to protect legitimate business interests. The new clause will allow workers to speak freely about their experiences and allow those who have witnessed misconduct or have knowledge of it to call it out by voiding a non-disclosure agreement that has been used to try to silence victims. The Government will consult on related secondary legislation before commencing the measure.
The Government propose two new amendments. The first will extend the scope of the clause to include staff of both Houses. We are proposing that change following discussions with parliamentary authorities. The second amendment is designed to give disabled workers more protection. It will extend the scope of relevant discrimination to include a failure to make reasonable adjustments for disabled persons under section 21 of the Equality Act 2010. That will ensure that all forms of harassment and discrimination in the Equality Act are covered.
I will now set out the Government’s position on the 28 non-Government amendments made to the Bill in the other place, which cover 12 policy areas. Lords amendment 1 addresses provisions on zero-hours contracts and seeks to change the onus from the employer to the employee on the right to guaranteed hours. The amendment shifts it from a duty on employers to offer guaranteed hours to qualifying workers to a model where employees must actively request them. The Government believe that the duty to offer guaranteed hours should lie with the employer. A right-to-request model could create undesirable barriers, making it especially difficult for vulnerable workers on exploitative zero-hours contracts to access their right to guaranteed hours, especially as many such workers are younger and may be in their first job. As of June 2025, approximately 480,000 people in employment aged 16 to 24 are on zero-hours contracts. That is out of a total of 1.18 million workers on zero-hours contracts overall. Our position strikes a fair balance between protection and choice. For that reason, the Government do not support the amendment.
Susan Murray
I think we have a difference in how we look at Lords amendment 1. It does not water down the Bill; it adds more flexibility so that people get the opportunity to have the kind of employment that works for them. That is particularly important in an environment where we are trying to get people off disability benefits and back into work.
Peter Kyle
I am grateful for the hon. Member’s thoughtful intervention. I still believe that in order to exercise rights, people have to know that they exist. The majority of people—young people in particular—entering the workforce in such numbers via zero-hours contracts simply would not know that those rights exist for them. By changing the onus so it is on employers, it clarifies the rights they have and ensures that every workplace must offer equal access to employment hours. This Bill includes flexibilities, and I think those will encompass the situations over which she has legitimate concern.
Lords amendments 7 and 8 seek to provide that a short-notice cancellation payment is due only where the shift is cancelled less than 48 hours before it is due to start. The Government intend to set out short notice period regulations following a consultation.
Ian Roome (North Devon) (LD)
I know that 48 hours seems a long time to some Ministers, but does he agree that having a shift cancelled at short notice would be bad news for many workers across the country? This Bill should be amended to specify an acceptable notice period.
Peter Kyle
I think the Bill gets the balance right. For most people in most workplaces, 48 hours is a long time, although I have witnessed some speeches in this place that have been a lot shorter than that, but seemed a lot longer—perhaps the one currently unfolding is an example.
The consultation will determine a fair short notice period that works for businesses and workers. Putting the implementation detail in regulations will retain the flexibility to respond to changing circumstances. The Government have already stated in the Bill that “short notice” will not be more than seven days, and we are committed to continuing to work closely with businesses and trade unions and considering carefully the right approach to this matter. That is why the Government will be rejecting the amendment.
James Wild (North West Norfolk) (Con)
I am grateful to the Secretary of State for giving way; he is being very generous. Can he explain why, before he took up his present post and took responsibility for the Bill, no assessment was made of the hiring practices that would occur if the unfair dismissal period was reduced from two years? Why was no modelling done? It is in the Labour party manifesto, but where is the evidence of what it will do to jobs and economy? That is what my constituents are concerned about.
Peter Kyle
Of course many of the hon. Gentleman’s constituents will be concerned about their workforce protections, and those who are setting up, running and managing businesses will want us to get the balance right as well, but we have many years of experience that have informed the decisions we have taken, and our engagement with trade unions and other bodies has ensured that we have got that balance right.
Mr Joshua Reynolds (Maidenhead) (LD)
I am glad that the Secretary of State has mentioned trade unions, because that allows me a moment to return to his earlier point about banning fire and rehire. In July, the general secretary of Unite said that what Birmingham was proposing for its bin workers was fire and rehire. If this Labour Government do not like the idea of fire and rehire, when will they tell their colleagues in Birmingham about that?
Peter Kyle
I think that the hon. Gentleman is making an argument for the Bill. We want to ensure that every employer in the country has the same legislative framework in which to operate.
Peter Kyle
I will, but I must alert all Members to the fact that I want to have time to listen to their own speeches, so I shall be rattling through from now on.
Sir Desmond Swayne
What can the Secretary of State say to those in the boatbuilding industry who have made representations to me about protection from day one? When someone takes on a craftsman, it can take quite a long time to establish whether he is any good and up to the job.
Peter Kyle
The reassurance that I give is that we will implement this policy, having listened to employers. We will make sure that the rights to which we have committed in our manifesto are fully upheld.
What employers want is to have workers who are fully committed to their life in the workplace. If employees feel that they have an unreasonable sword of Damocles over their head, employers will not get the best productivity out of those workers.
Peter Kyle
I am going to make some progress.
We have said explicitly that our intention is to provide a less onerous approach for businesses to follow in order to dismiss someone during the statutory probation period for reasons to do with their performance and suitability for the role. The Government are committed to undertaking a public consultation to get the details of the statutory probation period right, to keep it light touch and to get the standards right. Most employers who use contractual probation periods operate them for six months or less. The Government’s preference is for the statutory probation period to be nine months long. That will enable an employer to operate a basic six-month probation period, with an option for extension where employers wish to give their employees further time to improve their performance. We will consult on the duration, which is why the Government will not agree to Lords amendments 23 and 106 to 120.
Lords amendment 48 seeks to impose a duty on the Secretary of State to have regard to the requirements for seasonal workers when making regulations. The Government do not believe the amendment is necessary, because the Bill already reflects the realities of seasonal work. For example, it allows guaranteed offers for limited-term contracts where appropriate, such as for task-based or time-bound roles. This Government do not believe the amendment is necessary, as the approach taken in the Bill already protects seasonal jobs while ensuring fair rights for workers, which is why the Government decline to support this amendment.
Lords amendment 49 seeks to require a consultation on the effects of provisions in part 1, and to ensure that at least 500 small and medium-sized businesses are included in the consultation. SMEs are the backbone of the British economy, and their insights are vital to shaping policy that works in practice. That is why our approach to the implementation of the Bill includes 13 targeted consultations, running through to 2026. We think it is more effective and proportionate for us to engage extensively with SMEs, as planned through the consultation that we have described in our road map, and to ensure that SMEs’ views help shape the implementation. Given the comprehensive process, the Government consider that the amendment must be rejected.
Lords amendment 46 would have the effect of requiring the Secretary of State to make regulations within six months to extend the circumstances in which an employee is automatically considered to have been unfairly dismissed for whistleblowing. It would require certain employers to take responsible steps to investigate whistleblowing claims. The Government do not support the amendment. We recognise that the whistleblowing framework in the Employment Rights Act 1996 may not be operating as effectively as it should be, but we believe that any reform should be considered as part of a broader assessment of that framework. That is why the Government consider that the amendment must be rejected.
Lords amendment 47 would insert a new clause into the Bill that relates to workplace representation. The amendment would allow workers and employees to be accompanied at grievance hearings by a certified professional companion. The law already guarantees workers the right to be accompanied at a disciplinary or grievance hearing by a fellow worker, a trade union representative or an official employed by a trade union. Employers may allow other companions to attend formal meetings on a discretionary basis. The current law has served workers and employees for well over two decades. It strikes the right balance between fairness, flexibility and practicality, and we believe it should remain this way.
Lords amendment 60 seeks to remove the restrictions on young people aged 14 to 16 working on a heritage railway or a heritage tramway from the meaning of
“employment in an industrial undertaking”.
The Government do not believe that this amendment is necessary. The benefits of youth volunteering in heritage railways cannot be overestimated and, with proper health and safety management, it already works well. The Employment of Women, Young Persons, and Children Act 1920 does not ban youth volunteering in appropriate roles on heritage railways. Well-run schemes, such as the one in Swanage, show that young people can still take part safely and legally.
Liz Saville Roberts
I politely remind the Secretary of State that he is therefore advising heritage railways to in effect break the law, because that is how the law stands. If parents or a local authority were to bring an action against a heritage railway, it would find itself in such a position. If he cannot change that in this legislation, I really urge him to discuss with me how to bring this forward in another way.
Peter Kyle
This matter has been the source of a lot of consternation and examination in my Department. I assure the right hon. Member that we have looked very closely at it and believe that the existing law is fit for purpose in this case. We will proceed on that basis, but as she will have found during the time we have both been in this place, I am always happy to sit down with her, and especially, being so new in the job, so to learn about that specific case. However, we will proceed in that way because the advice is very clear on this matter.
Lords amendments 61 and 72 seek to remove clause 59 relating to trade union political funds from the Bill. Clause 59 reverses the changes introduced by the Trade Union Act 2016, reinstating arrangements whereby union members are automatically opted in to contribute to political funds, unless they choose to opt out. This is a key step in lifting the burden of the 2016 Act and returning to a long-standing precedent that worked for 70 years. Removing clause 59 would break a clear Government commitment, which is why the Government consider that Lords amendment 61 should be rejected.
Lords amendment 62 seeks to remove clause 65(2) from the Bill, the effect of which would be to retain the 50% turnout threshold requirement for industrial action ballots. The Government do not support this amendment. The Bill brings union democracy into line with other democratic mandates, including votes in this Parliament and elections for each and every one of us. Clause 65 is a step towards fairness and consistency in how we respect collective voices, which is why this Government consider that the amendment must be rejected.
Lords amendment 121 is another duplicate amendment. We agree that the school support staff negotiating body should not block employers that wish to go further than the minimum terms and conditions, but that is already stipulated in the Bill. The amendment duplicates the effect of proposed new section 148M(6)(b), which is why the Government will be rejecting the amendment.
I urge Members to support the Government amendments before the House, including the amendments in lieu in relation to the extension of rights to time off for special constables. We have listened throughout the Bill’s passage, and we have made meaningful changes where needed, including on bereavement leave and non-disclosure arrangements. We will continue to listen in relation to the further work to be undertaken when implementing the Bill.
The Employment Rights Bill is a major step forward in modernising protections and delivering on our commitment to make work pay. Thank you, Madam Deputy Speaker, for the opportunity to speak on the Bill, and I will now allow others to speak.
Madam Deputy Speaker (Caroline Nokes)
I call the shadow Secretary of State.
Damian Hinds
I am very grateful to the Secretary of State for suggesting that he will try.
I turn to the provisions dealing with guaranteed hours and zero-hours contracts. I understand why it is attractive to the Government and the Labour party to seek to restrict the availability of contracts that do not have a guaranteed number of hours. From listening to Labour colleagues, it seems almost as if “exploitative zero-hours contracts” is one word. It is as if those words must always go together. We all want to end exploitation—that is why, in 2015, the then Government passed legislation to stop employers imposing exclusivity. We said, “If you are not going to guarantee your employee a minimum number of hours, it is not all right to say that they must not work for somebody else.” But not all zero-hours contracts are necessarily exploitative.
One of the biggest users of zero-hours contracts in our country is none other than the national health service, through its use of bank staff. I notice that the Liberal Democrats announced a new policy today, which would require extra pay for people on zero-hours contracts; I do not know whether they have yet costed that policy. By the way, for many of the people working as bank staff in the NHS, that is not their primary job but a second job. This allows a hospital or other setting to respond to spikes in demand. For many people with a zero-hours contract job, it is their second job, not their primary source of income. Zero-hours contract jobs are also very important to people coming back into work, as the hon. Member for Mid Dunbartonshire (Susan Murray) said powerfully in an intervention.
Many people on zero-hours contracts are students. Particularly in hospitality, there is a pattern of work whereby an employee lives in two places: at home, and at their term-time address. They can stay on the books of their employer at home—it might be a local pub—while they are away studying during term time. It could be the other way around: they could have a job in their university town, and stay on the books when they come home. They can dial up or dial down their hours; for example, many students do not want to work a lot of hours, or any hours, during exam time. Contrary to what we might expect, and contrary to the all-one-word conception of “exploitative zero-hours contracts”, some people actually prefer a zero-hours contract.
Madam Deputy Speaker (Judith Cummins)
With the leave of the House, I call the Secretary of State.
Peter Kyle
I thank you, Madam Deputy Speaker, and your colleagues for conducting this debate so efficiently and effectively. I am grateful to Members from across the House for the contributions they have made to the debate today and throughout the development of this legislation. It has been exhaustively debated—in Committee and in both Chambers—and now it has come back again to be exhaustively voted on this evening.
The Employment Rights Bill will benefit millions of people across the country, raising the floor for workers and strengthening protections in the modern workplace. It will help unlock higher productivity, drive innovation and create the right conditions for long-term, sustainable and secure economic growth. This has been a constructive debate, and I thank Members from across the House for their varied and valuable views. I will now turn to individual contributions. Many Members spoke about their broad views on the Bill without asking specific questions, but I would like to unpick as many as I can, because it was a good, high-quality debate.
I start with the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), whose contribution I enjoyed very much, particularly because we are both Sussex MPs. He referred to many places in his constituency and asked whether I had visited some of them. I grew up in Bognor Regis just down the road and at weekends would often walk to places that he now represents in Parliament. It is one of the most beautiful parts of the Sussex Downs.
The shadow Secretary of State said that the Bill was a bad day for democracy. He is not unknown for overstatement, but given that the Bill was in the manifesto that won the trust of the public, I would say that today is a good day for democracy. It is a day when the Government elected by the people deliver on a promise made to the people, when a Bill that was introduced in the House of Commons, debated here in Committee, and debated extensively in House of Lords, has come back. This is democracy at its very best. I hope he will reflect on that.
There are a lot of issues with voting percentage thresholds, which the shadow Secretary of State also raised. I point out that he was elected to this place on 28% of the vote of the community that he represents. If we apply his logic, he is advocating one rule for him and another for every other worker in the country. To the Labour party, that simply does not stand.
I also point out that during the Conservatives’ period in government from 2010 onwards, employment tribunal delays increased by 60%. We therefore take no lectures from those who criticise some of the costs that may or may not be incurred as a result of the Bill, because they inflicted enormous measures and costs on businesses around the country.
My hon. Friend the Member for Ellesmere Port and Bromborough (Justin Madders) made a passionate, detailed and personal speech about the Bill. It is clear that the Bill is the culmination of his career before coming into politics and in politics, both in opposition and in government. I cannot thank him enough for his work and for how he has engaged with me since I was appointed to this job just over a week ago. I hope that he sees in the debate and the approach of this Front-Bench team the legacy he left being represented loud and clear.
My hon. Friend the Member for Chatham and Aylesford (Tristan Osborne) spoke passionately about the cause of seasonal workers. He spoke for the consultation that we have pledged to have to ensure that we get this right. Several hon. Members from across the House spoke about seasonal workers; it was good to see them represented. As a Member of Parliament for Sussex—my hon. Friend is a Member of Parliament for Kent—we care deeply about these issues, and we will strive to ensure that we get it right.
My right hon. Friend the Member for Sheffield Heeley (Louise Haigh) raised an important point on non-disclosure arrangements, which she has campaigned so hard for. I thank her not only for speaking with passion but for standing on a record of delivery on this matter. She is an advocate for whom we should all be proud, because she has used her parliamentary prowess to deliver the real change needed on NDA reform. I thank Zelda Perkins —I believe she is not in the Gallery now, but she was here—who has shown extraordinary bravery through her advocacy for victims of harassment and discrimination. I have stood by in admiration of the work she has undertaken.
My right hon. Friend asked what the consultation will cover. We will consult on the regulations that expand the types of individuals and measures that apply beyond those who were within the definition of “employee” and “worker”, and on the conditions for excepted NDAs. To give an example, where a victim requests one and workers are covered by an excepted NDA, they can speak about the relevant harassment and discrimination to, for example, a lawyer or a medical professional.
My right hon. Friend also asked about the timings. Unfortunately, I cannot provide a timetable tonight, but I want to be clear that this is a personal priority for me. I reassure her that we will be moving as fast as possible to consult on the related secondary legislation and commence the measure. I will stay in touch with her so that she is fully informed along the way.
I am grateful to hon. Members across the House for their contributions today and for their hard work in getting the Bill where it is. It is of paramount importance that we get the Bill on to the statute book and start delivering for businesses and workers as soon as possible.
Laurence Turner
My right hon. Friend is rightly talking about the contributions made in the debate by hon. Members of various parties. I am always reluctant to criticise individual Members who may not attend a debate, because they often have good reasons, but there has now become a pattern: at no point in the Bill’s passage has any Reform Member spoken to justify their stance of scrapping thousands of laws, including employment laws. Does my right hon. Friend agree that there is a democratic deficit in not one Reform Member ever having spoken to defend their stance?
Peter Kyle
Yes, indeed. When we talk about seasonal workers, we do not mean Reform Members. Of course, Members have lots of duties elsewhere, but it is not surprising to me that a party led by somebody who goes to another country and invites that country to punish this country would be absent from a debate all about giving rights to workers right across the country. Reform wants to strip our workers of their rights, their dignity and, through its actions, the pay in their pockets. The absence of Reform Members today suggests nothing else.
I urge hon. Members on both sides of the House to consider carefully the amendments I have proposed in lieu of those made in the other place. One of my predecessors as President of the Board of Trade once argued that workers need protection because, without it,
“the good employer is undercut by the bad, and the bad employer is undercut by the worst”.—[Official Report, 28 April 1909; Vol. 4, c. 388.]
That predecessor was Winston Churchill. He knew that the best employers need protecting from unfair competition by companies who trade at the expense of rights at work. The Bill protects workers from exploitation and protects businesses from unfair competition. That is why the Bill is pro-worker and pro-business.
Government amendment (a) made to Lords amendment 22.
Government amendment (b) made to Lords amendment 22.
Lords amendment 22, as amended, agreed to.
Clause 1
Right to guaranteed hours
Motion made, and Question put, That this House disagrees with Lords amendment 1.—(Peter Kyle.)