[Relevant documents:Thirteenth Report of the Business and Trade Committee, Priorities for the Business and Trade Committee for 2026, HC 1411; Oral evidence taken before the Business and Trade Committee on 6 January, on Post Office Horizon scandal: Justice for the sub-postmasters, HC 1598; Oral evidence taken before the Business and Trade Committee on 18 November 2025, on Financing the real economy, HC 1220.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2026, for expenditure by the Department for Business and Trade:
(1) further resources, not exceeding £1,726,964,000, be authorised for use for current purposes as set out in HC 1676,
(2) the resources authorised for capital purposes be reduced by £179,365,000 as so set out, and
(3) the sum authorised for issue out of the Consolidated Fund be reduced by £1,181,297,000.—(Imogen Walker.)
At the end of a long day, let me express my gratitude to the Backbench Business Committee for providing us with this time to debate the supplementary estimates and the priorities of the Department for Business and Trade.
I rise to open this debate and simply make three broad points. This is an important debate because, of all of the supplementary estimates that have been laid before the House this afternoon, the Department for Business and Trade has had by far and away the most significant increase. Day-to-day spending has been increased by some £360 million, which is a rise of almost 18%. Investment spending has risen by £626 million, which is a 41% rise. Those are significant sums, so I pose the following questions to the Ministers. First, are these increases justified? Secondly, is the Department spending its money on the right priorities, given what we have heard from the business community? Thirdly, I want to underline this question about why there is not more significant support for small business, which is suffering what our Committee has found to be pandemic-style pressures but without a pandemic-style support package in place.
Let me start with the significant increases in the Department’s supplementary estimates. Some £375 million has been provisioned extra to support British Steel. That takes the total support that this House has agreed under the Steel Industry (Special Measures) Act 2025 to about £710 million. That is a significant sum. I think it has broad cross-party support. Certainly, the House did not divide when we were recalled for that unusual hearing on a Saturday to agree to the passing of that Act. None the less, there is one significant question that we have to ask this afternoon: where is the steel strategy to go with the extra money that the House is being asked to agree?
When representatives from Tata Steel came before our Committee just a couple of weeks ago, they were very clear that there are now just eight weeks to save the steel industry in this country. Therefore, having passed that Steel Industry (Special Measures) Act, and having been asked to agree this extra money, the House now has to ask the Minister today where that steel strategy is. As we know, a wave of subsidised Chinese steel is about to land on our shores. The United States has put up significant defences. The European Union has put up significant defences. We had significant defences, but they are about to come down in June. Industry is sending a message loudly and clearly to the Government that, unless they act and unless new defences and a steel strategy are put in place, we are looking at the end of the steel industry in this country. Thousands of jobs will go, along with a sovereign capability, which as a country we simply cannot afford to happen.
I have enjoyed an interesting few months on the Committee so far. Does my right hon. Friend agree that it is perplexing that we do not have any understanding as to why there is not more pressure being put on Fujitsu to come up with a figure? Fujitsu keeps saying that it is waiting for the outcome of the inquiry, but it has made a commitment and we would expect some kind of provision to be made to reflect that.
My hon. Friend is absolutely right. The chief executive of Fujitsu came before the Committee to say that Fujitsu did indeed have a moral obligation to make a contribution. That is why we were so surprised when earlier this year, when we asked for him to return, he said that no provision had yet been made. For a company that is making hundreds of millions of pounds out of British taxpayers, it is simply egregious that it has not offered to pay, but it is also wrong that Ministers have not demanded that it pays up, and pays up quickly.
I have touched on a couple of the significant increases in the estimates. There are two more points I want to make in the time available. The second broad point is the question of whether the money that the Department for Business and Trade is asking us to approve is in line with business priorities. As a Committee, we spend a lot of time listening to the business community, and we set out priorities based on what the businesses we talk to when we travel the country think we should be focused on. On our last national road trip we visited seven cities and did many roundtables on that tour. Last year we had 1,000 witnesses appear before the Committee—three quarters in private and a quarter in public—and we received 168 bits of evidence as we set out priorities for the future.
We heard very clearly that what business is looking for is far more certainty about the investment environment for the years ahead. Businesses want a better return on investment. For that, they need energy costs and business rates to come down, and they need the skills system to be far more flexible and available. Critically, they need much better access to finance so that we can mobilise capital on a different scale. Trade deals need to become a gateway to increasing exports. Finally, they are asking for a lot more coherence in regulation. Right now people are being smothered in red tape, often because one Department is not talking to another.
I will make some brief remarks. I note that the Department’s estimates memorandum made specific reference to spending supporting the objectives to make the UK the best place in the world to do business, the best place to do business from, and to deliver great services to businesses. I will talk about a roundtable I held for hospitality businesses in my constituency last week. The organisations that attended varied hugely in size, turnover and business model—North East Fife is a place that generally people want to visit, and it caters for a number of visitors accordingly—but none of them thought that the Department for Business and Trade was making this the best place in the world to be operating.
Part of the reason for the debate was because the Department has increased its budgets for the British Business Bank and the growth guarantee scheme, which the Chair of the Business and Trade Committee mentioned. There are other sectors in North East Fife—we have seen losses in manufacturing, largely due to our departure from the EU, and we have the University of St Andrews doing groundbreaking work and research—but we are largely a rural economy, with farmers across the constituency.
Turning to hospitality, one of the issues raised at my business roundtable was the difficulty in accessing finance. Given that has already been raised by the Chair of the Committee, I hope that the Minister will address that point in particular. As has been already touched on, the feeling is that hospitality is being hammered from every direction at the moment—the question asked was: how much more can businesses take?
Across the board, businesses understood the reasons behind the changes to national insurance contributions, and they were supportive of the national living wage. Part of that is because most leaders in hospitality have worked their way up within the sector, and they know that the hard work of the service industry deserves proper pay. But as business owners they are also acutely aware that their wage bills are going up unsustainably.
I congratulate the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) on securing this debate. I want to touch on three areas of Department for Business and Trade activity where the estimates and the funding it receives could be put to best use. One relates to the industrial energy problems that we face in this country, which I know the Select Committee has looked at. As the Minister is acutely aware, this has a direct impact on communities such as Stoke-on-Trent because of the foundation manufacturing industries that we still have that are energy intensive.
I very much welcomed serving on the delegated legislation Committee that passed the statutory instrument to extend the reduction in electricity costs by up to 90% for the supercharger. I know that some of the estimates, if approved today, will go towards funding that. As always, I want to press the Minister on whether, as well as increasing the amount that the discount can be applied to, he would consider extending the scope of that discount to sectors that are currently outside it—namely, of course, the UK ceramic sector. It is not currently covered by the supercharger scheme, but a small amount of help would go a long way in securing the jobs in the communities that most need it.
I also want to talk about the fact that Stoke-on-Trent is a foundational area of ceramics that is gas-intensive. The Government have previously discussed the fact that gas is an international commodity, the price of which is traded on the world market. With the events that are taking place in the middle east, we are all expecting to see an increase in world gas prices. That could result in a hugely damaging economic hit to sectors that are not eligible for any other form of relief. If any part of what is being approved today in the Department could be used as a cushion for those sectors that are unable to bring down those costs in any other way, it would bring relief to parts of my community.
It is a pleasure to take part in this debate, and I congratulate the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne), who chairs the Business and Trade Committee on which I serve. As Chair of such a Committee, he is that rarest of things: capable of independent thought.
We know that growth is predicted to be sclerotic, and that is before global conflicts whip up the waters around us such that Labour’s Britain is but a cork in storm-tossed seas. If growth truly were the mission, then the shock troops ought to be the Department for Business and Trade. Yet the Department’s plans to cut 1,500 jobs have been branded “irrational and arbitrary” by the civil service’s biggest union, the Public and Commercial Services Union. That is despite the 17.8% increase in day-to-day funding, plus extra capital compared with the main estimates that we have heard about today. The Minister for Trade, the hon. Member for Rhondda and Ogmore (Chris Bryant), has said that
“we’re going to have to achieve more with fewer people”
—fine words and congratulations to the spads who crafted them, but the reality on the ground is we will inevitably get less done by fewer people.
What a disaster, just as free trade agreements—the fruits of Brexit from seeds planted by previous Conservative Governments—come piling in. We should be maximising these deals given that global economic power is shifting towards a Pacific rim with a burgeoning middle class. Our far too few DBT experts will have their ranks thinned, making it tougher for British firms to tap into lucrative markets abroad.
What does it say about this Government’s ambition? They would rather rush back to the skirts of nanny Europe—familiar old Europe with its feeble growth—when we could be the trading nation that Adam Smith envisaged 250 years ago with his book, “The Wealth of Nations”. We could and should be maximising the comprehensive and progressive agreement for trans-Pacific partnership, or CPTPP, giving us access to a market of 12 countries worth some £12 trillion and with 500 million potential customers. Even the EU, which never saw a trade deal it liked, is interested in joining.
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I would be very grateful if the Minister could explain how, if the House is to agree the spending, we are actually going to make sure that that money is not wasted, because there will be further policy measures in place to ensure that we do not lose our steel industry in the weeks ahead.
That takes me to the Post Office. Post Office provisions for the Horizon scandal and the payouts have now risen to about £1.2 billion. Our Committee has consistently criticised Governments of all stripes for not paying out the money to those victims much faster. The Committee has now agreed a further report on measures, which we think Ministers should take in order to ensure that justice is genuinely delivered to all of the victims of this scandal. That report will be published in a few days’ time. The House is being asked to agree this increase in the provision to £1.2 billion, yet the question we have for Ministers is this: where is the provision that Fujitsu is supposed to be making? After all, the Fujitsu system was at least half the cause of this scandal.
We now think that the total cost of the Horizon scandal, when we add in the legal costs, will be something like £2 billion, yet when we asked the head of Fujitsu what provision he had made for contributing to that bill, the answer was zero. When we followed up with the auditors, they confirmed that the directors had acted within the law because the Government had not yet made any demands on Fujitsu for the money that should come back from that company in order to help fund it. Just to add insult to injury, this is a company that has taken a grand total of £362 million in new contracts over the past year alone. It promised us a moratorium on bidding for new contracts, but that moratorium turned out not to be real and was merely a press stunt.
Why are we not asking for more money from Fujitsu, so that we do not have to put up these provisions of £1.2 billion? I would be grateful if the Minister could answer that question.
As we look at those priorities and at the estimates in front of us, we see that certainty has improved. The spring statement was a step forward, and the Chancellor has increased her headroom significantly. That definitely takes risk out of the investment environment. But there is nothing in these supplementary estimates about driving down energy costs. There is nothing about driving down business rates. There is nothing about making the skills system better financed and more available, in particular to small business.
Where there is progress is in the extra £200 million for the British Business Bank and the £50 million for the growth guarantee scheme. That is significant, but it is probably not quite enough. Indeed, the evidence we have received suggests that the market for loan guarantees is probably about £2 billion bigger than the Government have provided for. If we want small and big business to have access to scale-up finance in particular, we need to make sure that the British Business Bank has a much bigger loan guarantee scheme available.
Finally, there was nothing in the estimates to roll back the very deep cuts to export support. At a time when we have basically finished signing the free trade agreements that are available to us as a country, it is surprising to the Committee that export support staff are being cut so aggressively. If we want to make the most of these new opportunities and new free trade deals, we would have thought that increasing export support would be a Government priority.
My final point is about the emergency facing small business. Right now, as I said in my introductory remarks, small business tells us that it is facing pandemic levels of pressure without a pandemic-style support package. Labour costs have gone up. As we know, the national minimum wage has gone up, which in my view is a good thing, and the Employment Rights Act 2025, which will improve rights, is coming through. That is also a good thing. But when we add on the national insurance contributions, we must accept that labour costs will rise. That means that labour has got to become more productive, and that the skills system has got to become better available to small businesses. But when we add to that rising energy costs—so much higher; perhaps 50% bigger than before the covid crisis—the lack of regulation in third-party intermediaries, the increases in business rates, the costs from crime, the organised crime takeover of the high street, late payments and a lack of access to procurement, we see the crisis that small business now confronts.
Those are the priorities where we would have liked to have seen more action in the supplementary estimate. They will certainly be a focus of the Committee’s scrutiny work over the course of the next year.
A significant amount of hospitality businesses’ costs relate to staffing—some of them quoted 30% to 40%, or even higher. With the lower threshold for contributions dropping to £5,000, employees now pay national insurance on more of their employees’ earnings, which means that many part-time roles have been impacted and part-time recruitment is no longer happening. More full-time roles are being recruited, which stops young people, for example, from finding that first rung on the hospitality ladder.
Business rates are also going up. As a Scottish MP, I appreciate that that problem lies squarely at the feet of the SNP Government in Scotland, who could pause this year’s re-evaluations but are refusing to do so. I am grateful to my colleagues in the Scottish Parliament, who have secured hospitality reliefs in our budget negotiations with them. Food inflation—especially with the impact of tariffs—is a real concern, and the only real lever to control soaring costs is to cut back on training, hours and staff: those things that the Chair of the Business and Trade Committee said are so critical to delivering some of the change that the Government want to see.
The biggest ask that came from hospitality was to cut VAT from 20% to 15%, which is a move that the Liberal Democrats have been calling for for some time. I know that that is not in the gift of the Minister, but I urge him to make representations to the Treasury if we want this to be the best place in the world to do business. It is also a measure that would support hospitality across the UK, and I say that as a Scottish MP.
Hospitality is important for so many reasons. Last September, there were 2.6 million jobs in the hospitality industry and it is estimated to be worth £70 billion to our economy. It is also part of our community. That came across very strongly in the roundtable. On the day that my son was born, our local pub was across the road from our house and I went there to wet his head, because why should I miss out on all the fun? Since then, it is the place he has worked in and the place where he had his 18th birthday. We need to support these hospitality industries.
Some of the money that is being granted to the Department should be used to promote better buying British and building British procurement. The right hon. Member for Birmingham Hodge Hill and Solihull North has championed this, both in his role in this place and when he was running to be the West Midlands Mayor. He pulled together a wonderful strategy that I think we could learn from. Small and medium-sized businesses in Stoke-on-Trent tell me that they would love to do more business with the Government, public sector and commissioning bodies that have public money, but such contracts are often big and unwieldy and a challenge to access, as the businesses can meet only part of the contract rather than all of it. Anything we can do to break down those barriers to opportunities in procurement, and to focus on companies that make, build and employ people in this country, would bring an economic benefit to support communities up and down this country. Without costing the taxpayer any more, it would just be a better use of the money that we are spending.
Finally, I want to touch on how we do trade protection. I am not a protectionist. I do not believe that we should be putting arbitrary tariffs on things to prevent imports, but I do worry about the ever-creeping non-market economy. Countries such as China and increasingly, sadly, Türkiye, are using manufacturing in their own bases to import into this country to undermine domestic production with the intention that once our own country’s ability to produce has gone down, they will raise their prices. That could involve tyres or ceramics, which would affect Stoke-on-Trent, or it could be other products that we become dependent on in this country. If we are not putting in the correct trade remedies to secure domestic production, or at least to make domestic production as competitive as imports, we run the risk of becoming dependent on countries on which we cannot rely for the things that we want to make and build in this country. That would be very damaging for our own national sovereign capabilities.
The great prize in the much-vaunted but barely discernible “reset” with the EU is, we are told, a sanitary and phytosanitary deal supposed to smooth the way for agricultural goods, seafood and livestock into and out of Europe. It should not have taken the renegotiation of the entire deal to get—French, especially—customs to stop being le squad awkward. Worse, so-called dynamic alignment on SPS is a cage without a key, meaning that Britain will once again revert to being rule takers and not rule makers.
Turning to steel, I recall being in this place on that extraordinary Saturday listening to the self-congratulatory backslapping of Labour MPs hailing the saving of the industry in what was nationalisation in all but name. It seems to me that taxpayers are keeping blast furnaces alight with bundles of £20 notes, for the supplementary estimates earmarked £300 million for steel plants with no sign of the comprehensive steel strategy.
Perhaps nothing sums up more the meltdown of the sector under DBT’s yoke than the reported news that the Dalzell plate mill in Scotland lacked the cash to buy slab steel from British Steel, risking the raw material that Navantia needs for the fleet solid support ships at their Harland & Wolff yard in Belfast. Not so much for the want of a horseshoe nail the kingdom was lost, but for the lack of a cohesive DBT strategy, the steel industry and billons in cash may be lost.
For the wider economy, pivotal to each and every one of our constituents, the Department for Business and Trade looks like the linchpin which holds the wheels to the axle. The question is whether that pin is too small and too brittle.