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Oral Answers to Questions

Volume 746: debated on Thursday 7 March 2024

Business and Trade

The Secretary of State was asked—

Exports: Small and Medium-sized Businesses

My Department continues to help small and medium-sized enterprises to grow overseas and export to the world, especially this year—the year of the SME. Businesses can access a digital self-serve offer and a wide network of support, including trade advisers, export champions, the UK Export Academy, our international markets network and UK Export Finance. Last year, UK Export Finance provided £6.5 billion to exporters of all sizes, with SMEs comprising a record 84% of those supported directly with a product.

SMEs in Merthyr Tydfil and Rhymney tell me of their frustrations around exporting goods and now the Government have scrapped the trade show programme, which was set up to support British businesses to attend events and win overseas orders. Will the Minister tell the House and the thousands of businesses that rely on that vital support when there will be a replacement?

UK exports are increasing. Using current prices, they are up by £21 billion compared with 2023.[Official Report, 12 March 2024, Vol. 747, c. 5MC.] (Correction) The UK trade show was a pilot programme that did not yield the successes we thought it would, so we have other schemes in place, including the UK Export Academy, international trade advisers, Help to Grow and the export support service. Focusing on Wales, we will soon be appointing a new international trade adviser to help SMEs.

We are lucky that Enfield North has quite a lot of small and medium-sized businesses, but they are suffering because of the cost of spiralling bills and no Government support. Does the Minister think it is the lack of a Government industrial strategy or the lack of individual support for exporters that is most holding our businesses back?

That is an extraordinary statement, because in the hon. Lady’s constituency the greatest level of exports is from professional and business services, and those exports are increasing not only to the EU but to countries outside the EU.[Official Report, 12 March 2024, Vol. 747, c. 5MC.] (Correction) That is the reality on the ground, so our strategy is working. UK exports were £859 billion in 2023—a figure that has gone up, not down, by £21 billion. The UK is the second biggest services exporter in the world—she should be proud of that because many such businesses are in her constituency. Those exports have increased to 54% from 48%, so there is good news, but we are keen to do more.

The Office for Budget Responsibility said yesterday that exports, including from SMEs, will fall even more than expected this year; growth in exports will be less than 1% in each of the next three years; and other countries will not be hit the same way. There have been cuts in the funding to help businesses start exporting and there has been no deal with the United States, no Diwali deal with India, and no veterinary agreement with the EU to cut red tape and slash costs. What does the Minister think is the best explanation for the Government’s dismal performance on exports so far?

We can get the best explanation from looking at the data behind what the hon. Gentleman set out. He obviously omitted the international reality. In the same report, the OBR referenced the “sluggish growth” in “global economies” and mentioned that British goods and services will outperform, on average, G7 countries. Those are the facts on the ground. When it comes to exports, we are exporting not only into the EU but outside the EU. As I said earlier, professional and business services are increasing outside the EU by 19%.[Official Report, 12 March 2024, Vol. 747, c. 6MC.] (Correction) We have substantial programmes in place to help small and medium-sized enterprises. We are keen to learn and do as much work as we can. There will be far more work coming through as this is the year of the SME.

The trade and co-operation agreement has hit small and medium-sized exporters the hardest, as most do not individually have the capacity to deal with the additional bureaucracy and paperwork created by that trade deal. Does the Minister recognise that the TCA has disproportionately damaged the competitiveness of SMEs? What support can the Government offer SMEs to recapture the market share they have lost in Europe since then?

There has not really been a loss in the market share. I have talked about what is happening internationally. We appreciate that small and medium-sized enterprises may not have the resources they need to export into new markets. That is why we have the UK Export Academy, international trade advisers, Help to Grow and the export support service. We are also looking at what trade barriers we can break down and bust to make it even easier for SMEs to access new markets through the trade deals secured by the Secretary of State.

Steel Industry

Our commitment to the UK steel sector is clear. The Government are contributing up to £500 million in a joint investment with Tata Steel. We are in talks with British Steel following our generous offers of support. We have delivered more than £730 million in energy costs relief since 2013, and the British industry supercharger is coming soon. We updated our procurement policy note to ensure we are procuring more in the UK, and we are trying to do everything we can to continue to support the steel sector.

We are all disappointed that the Government, having abandoned Teesside steel several years ago, are now ready to give up on primary steelmaking in the UK and to rely on recycled material utilising electric arc furnaces. I am pleased to hear that Teesside is pencilled in for one of them, but not so pleased that there have been attempts locally to circumvent proper procedures to secure planning consent. Will the Minister look into that? More importantly, will she confirm that the Government have a final copper-bottomed agreement with the industry that the furnace will definitely be built on Teesside?

A number of the issues that the hon. Gentleman raises are fundamentally locally. We work closely with Mayor Ben Houchen, who has done a remarkable amount of work for his part of the country. The reality is that the steel sector was placed in an area of uncertainty for some time. We were able to provide support for Tata, which has ensured that the steelworks continue at Port Talbot. We provided the largest grant ever made available to steel, and we are now in conversation with British Steel. That is what it means to have a long- term steel strategy to ensure that steelmaking continues here in the UK.

Small Business Council

3. What steps her Department is taking to support small and medium-sized enterprises through the Small Business Council. (901848)

On 1 February, the Government reaffirmed our commitment to all the UK’s 5.5 million small businesses with the creation of the new Small Business Council, which is looking at key areas, such as improving business support, access to finance, support and advice, and breaking down barriers, including barriers to female entrepreneurship.

As chair of the women and enterprise all-party parliamentary group, it has been fantastic to see the boom in female-led businesses over the past few years. We now want to see consideration of how some of them can grow. Can the Minister set out how the new Small Business Council can help them to do that?

I thank my hon. Friend for his question and for all he does for women in entrepreneurship and on the APPG, on which he has worked for many years. The Small Business Council has excellent entrepreneurs on it, such as Emma Heal from Lucky Saint and Julianne Ponan from Creative Nature, who we rely on for expert advice. We also have the investing in women taskforce, which has helped to increase the number of female entrepreneur businesses from 56,000 in 2018 to 150,000 in 2022. The investing in women code has 240 signatories. We are keen to do more and to work alongside my hon. Friend to ensure that the world of entrepreneurship is as friendly as possible to female entrepreneurs.

Will the Minister ask the Small Business Council to wake up to the opportunities in the hydrogen sector, not only in terms of the engineering that supplies that sector, the coming replacement of batteries and all that transportation stuff, but in the infrastructure of our country? We have great engineering that is ready to go with a hydrogen future. When will he wake up to that opportunity?

We already have woken up to that opportunity. As the hon. Gentleman knows, we have great opportunities in hydrogen in Teesside and in Yorkshire, with the Humber hydrogen cluster. It is something we are keen to support as a Government, and I would appreciate it if he offered his support, too.

The perfect storm of rising borrowing, rent and labour costs is continuing to cripple businesses, and the UK small business index fell 78 points last December, according to Xero Small Business Insights, to the lowest reading since the middle of the pandemic in August 2020. The Government have had 14 years to tackle the barriers facing SMEs. What specifically will the Small Business Council do, and what will Ministers do to halt the alarming trend of more businesses closing than opening?

I am sorry that the shadow Minister is so pessimistic about the world of business. We have spoken at events together many times, and she hears the mood in those audiences, which is far more positive than she sets out. We are active in many areas, as she knows. At the event we both spoke at this week, I talked about access to finance, support and advice, and removing barriers. Access to finance has been key, with £1 billion of Start Up loans having been made to 100,000 businesses. If she listened to the Budget yesterday, she will have heard about the rise in the VAT threshold and the growth guarantee scheme. There are many opportunities for small businesses. We will have 200,000 more workers coming back into the workplace, tackling another barrier for businesses. Get with the programme; it is much more exciting than she thinks.

Free Trade Agreement Negotiations: Israel

16. What recent progress her Department has made on negotiating a free trade agreement with Israel. (901868)

Israel remains a part of the FTA programme, and negotiations continue. I had a productive meeting with Israel’s Minister of Economy, Nir Barkat, last week in Abu Dhabi, where we discussed our existing trading relationship as well as how Israel is managing the challenges of working on an FTA while fighting a war.

Israel is facing immense challenges in its war with Hamas, but it is known around the world as a start-up nation thanks to its extraordinary tech sector, which Brits benefit from every day. Given the enormous opportunities that a bespoke free trade agreement with Israel offers to the UK, will my right hon. Friend update the House on what steps she is taking to advance negotiations?

My hon. Friend will be pleased to know that we held a virtual negotiating round with Israel in February, focused primarily on services. That is one of the things that we are doing to move the FTA forward, and we will update Parliament shortly in the usual way via a written ministerial statement.

My hon. Friend is right to highlight Israel’s world-leading tech sector, which is a reason why we want to modernise and upgrade our relations with Israel. Our current FTA was signed in 1995—it is a roll-over from the one we had with the EU—and technical collaboration, which Israel specialises in, will be made easier through an enhanced FTA.

Can the Secretary of State give me some assurance that any free trade agreement with Israel will not allow the importation of goods produced in settlements on the west bank?

Yes, I can give the right hon. Member that assurance. We are clear under our existing UK-Israel trade and partnership agreement that Israeli goods originating from the State of Israel receive tariff preferences. We also have a separate interim agreement between the UK and the Palestinian Authority. I confirm that that will continue to be the case with an upgraded FTA with Israel. We will not compromise our long-standing positions on the middle east process throughout this negotiation, including with respect to settlements.

Trade with Commonwealth Countries

The United Kingdom has trade deals with 33 Commonwealth countries, and our new developing countries trading scheme offers more generous tariffs, rules of origin and trading conditions to developing countries, including 19 Commonwealth countries. The UK-Australia FTA has seen sharp rises in many UK export sectors, including furniture tripling year on year and car exports doubling. Meanwhile, of the 11 parties to the comprehensive and progressive agreement for trans-Pacific partnership, six are Commonwealth countries, and that agreement gives us new or improved access to those important markets.

Mr Speaker, I know that you will be celebrating Commonwealth day on Monday with the raising of the Commonwealth flag. Will the Minister take this opportunity to expand our trading relations with the Commonwealth and look at the idea of an opt-in, opt-out WTO-style organisation involving all Commonwealth countries? Surely this is a great opportunity to expand our trade with some of the world’s emerging economic powerhouses.

I thank my hon. Friend for that question and his commitment to the Commonwealth. As a constituency MP with a huge Commonwealth diaspora in Chelsea and Fulham, I totally understand his sympathies and look forward to celebrating Commonwealth day with him and others next week. He knows that the Commonwealth does not make trade rules, nor is it a trade agreement body like the Gulf Co-operation Council, the European Free Trade Association or the CPTPP. We think that the better course at present is to ratify our CPTPP membership and continue to have reduced tariffs under our developing countries trading scheme. However, we are always open to new ideas at the Department for Business and Trade and I am happy to meet my hon. Friend to discuss this further.

I thank the Minister very much for a positive response. The Commonwealth is important for all of us. The value of UK exports to the Commonwealth increased by 23% in cash terms between 2021 and 2022, while the value of imports from the Commonwealth increased by some 30%. We can clearly benefit each other. How can we ensure that Northern Ireland companies benefit fully from this enhanced trading partnership?

Of course, Northern Ireland benefits from all our free trade agreements. I very much look forward to putting the case for Northern Irish goods and services in the months ahead. We have economic partnership agreements with 27 Commonwealth countries. We also have the Commonwealth Heads of Government meeting in October to look forward to, where we can ensure that the export of Northern Irish goods and services, as well as those from the whole of the UK, takes centre stage.

EU Withdrawal: Impact on Businesses

Since we left the EU, we have used our new freedoms to secure free trade deals with 73 countries, including EU partners, and that accounted for £1.1 trillion of UK trade in 2022. We have simplified import tariffs to lower costs for businesses and households. We plan to remove over 50% of inherited EU regulations by 2026. Our reforms to employment laws could save UK businesses up to £1 billion a year, ensuring that the UK is the best place in the world to start up and grow a business.

I thank my right hon. Friend for her reply. Measured by tonnage, the port of Immingham in my constituency is the largest port in the country, with almost 50 million tonnes of cargo each year. It is also a vital part of the renewable energy sector. Immingham is surely an example of the fact that not only EU trade but worldwide trade is important to the UK. If my right hon. Friend were able to visit at some time, she would be able to see that for herself.

As ever, my hon. Friend is a great advocate for his Cleethorpes constituency. He is right that Immingham is the No. 1 port in terms of tonnage and is vital to our trade with the EU and the rest of the world. If our diaries allow, I or one of my Ministers will be delighted to visit and see at first hand the vital role Immingham plays in the transition to renewable energy.

In December, the British Chambers of Commerce found that a staggering 97% of surveyed businesses continued to face difficulties using the trade and co-operation agreement. Despite the TCA being introduced over three years ago, businesses are still struggling to deal with the added headache that the regulations have created. If 97% of businesses still face difficulties after three years, how many years is it anticipated that it will take for these issues to be resolved?

I thank the hon. Lady for her question. Many of the issues that businesses have been raising with us are specific not to the TCA but to member countries. That is why Ministers and I, along with officials, go to all these countries, and we have removed many of the market access barriers, which are not specific to the TCA. The hon. Lady will know that the TCA will be up for review. If she has specific things she would like us to take to EU Trade Commissioners, we are very happy to do so.

This week, the Financial Times reported the most significant decline in UK trade volumes since 1997. It is clearer than ever that this Government’s hard Brexit policy has exacerbated challenges for British businesses. With a 7.4% drop in trade since 2018 and exports down by 12.4%, we are starkly lagging behind our G7 peers. Can the Secretary of State explain how 14 years of Conservative rule have prepared British businesses for their despair around extra red tape and the chaos unleashed by this Tory hard Brexit policy?

I think the hon. Gentleman has just time-travelled from 2018 or 2019—it has been a long time since I have heard the phrase “hard Brexit”. He will of course know that we left the European Union with a deal, so he needs to catch up with what has actually happened. It is also interesting that he talked about an FT report from 1997; I should let him know that we have not been in government since 1997—we have been in government since 2010. Many of the things he is pointing out are things we have said will occur as trade flows move away from the European Union to the Indo-Pacific. That is why we have left; that is why we are trading with the rest of the world. The hon. Gentleman should also know that our economy is 80% services, so most of the things he is talking about will not impact on the vast majority of the economy. Services exports are booming, and we are doing well since leaving the EU.

Free Trade Agreement Negotiations: South Korea

We have excellent relations with South Korea, as my right hon. Friend will know as the Prime Minister’s trade envoy there. Bilateral trade totalled £16 billion in the 12 months to September 2023. Negotiations to upgrade our FTA with South Korea were launched as part of President Yoon’s state visit in November. Round 1 of the talks has already taken place, and round 2 will take place later this month here in London.

On Tuesday, in my capacity as trade envoy, I attended the Korean embassy for the signing of a memorandum of understanding on the joint development of a small modular nuclear reactor—just one area in which the business between our two countries is growing ever stronger. Will my right hon. Friend press ahead with the enhanced free trade agreement, which will offer huge opportunities to build on the existing £17 billion trade relationship?

My right hon. Friend is absolutely right. In the UK, of course, we have our own, superb Rolls-Royce model of small modular reactor as well. He is right about the importance of our growing trading relationship with Korea. As a former Secretary of State for Culture, Media and Sport, he will also know that 71% of our services trade with Korea last year was delivered digitally.[Official Report, 11 March 2024, Vol. 747, c. 2MC.] (Correction) We need to upgrade the deal to make sure that it reflects modern, digital trade as well. Both countries are making good progress in the negotiations.

Trade with Zimbabwe

The Government were pleased that my hon. Friend, who is the Prime Minister’s trade envoy to Angola, Zambia and Ethiopia, and members of the Westminster Africa Business Group visited Zimbabwe on the group’s inaugural trade mission. That is part of the Government’s work to promote opportunities for UK companies, particularly in critical minerals, renewable energy and sustainable agriculture.

I am grateful to the Minister for that response. On my visit to Zimbabwe in January, I met the President and a number of other Ministers. They made it very clear that they wanted to draw a line under the past, move forward and increase friendship—and, indeed, trade links—with this country. What more can the Government do to enlighten companies and businesses in the UK about the many opportunities in Zimbabwe?

I thank my hon. Friend for his report and letter to me all about that. I am pleased with the high-level meetings he had on his recent visit and a lot of the media coverage. Our embassy is following up by preparing for the Zimbabwe international trade fair in April, and it is expecting a strong UK presence. My hon. Friend’s return visit in April will be a perfect chance to progress the deals that we have and boost British investment for this year and beyond.

Trade Agreements: Environmental Protections

The Government are committed to pursuing environmental provisions in our trade agreements and to using our multilateral trade policy, diplomatic efforts and trade promotion activity, all of which support our green objectives.

The Government boast about the trade deals they have done and the environmental protections they have secured, so presumably they have had the chance to analyse the impact. Will the Minister tell the House whether the deals secured so far have improved or degraded our environment? What lessons have been learned for negotiating future deals?

The hon. Gentleman raises an interesting point. Many of the agreements have actually, for the first time, included environmental provisions. If I recall correctly, he did not like the Australia trade deal, but it is the first time Australia has committed in a trade agreement to the Paris agreement and so on. When it comes to the impact of our trading policy over the last 14 years, he will also find, for example, that 86% of UK imports of palm oil—a key interest for environmentalists—are certified as sustainable, up from 16% in 2010. Again, we are seeing real results of UK trade policy moving in a much more environmentally friendly direction.

Kinship Carers: Employment Leave

11. If she will make an assessment with the Secretary of State for Education on the potential merits of introducing a right to paid employment leave for kinship carers. (901858)

Some 130,000 children are in the care of close family members in England alone. We recognise the vital role that kinship carers play in looking after children who cannot live with their parents. Last year, the Government published the national kinship care strategy and announced a £20 million package of support for kinship carers in 2024-25.

The Minister just referenced the Government’s kinship strategy, which was published in December. Their own strategy has recognised that kinship carers in employment often report the need to give up work or reduce their hours to be able to care for the children they support; it cites a survey revealing that 45% of kinship carers give up work and a similar number have to reduce their hours permanently. Given the Minister’s desire to drive up employment and the fact that kinship carers stepping up overnight to look after children saves the taxpayer a huge amount of money in comparison with when children go into local authority care, why are the Government not making paid employment leave a statutory right and only publishing guidance?

The hon. Lady raises a very important point. We call on local authorities to be considerate to people who are in employment when they take on a child to look after in a kinship care situation. We think that employers are the right people to make sure that any provision we provide is a floor, not a ceiling. Companies such as John Lewis take a very considerate approach to people in that situation. We urge them to do so, but we also encourage local authorities, which have budgets allocated to this particular issue, to provide support where they can.

Infrastructure: Impact on Business Investment

12. If she will make an assessment of the potential impact of infrastructure on levels of business investment. (901861)

13. If she will make an assessment of the potential impact of infrastructure on levels of business investment. (901862)

High-quality infrastructure is crucial for delivering economic growth. To quote a previous Prime Minister:

“You and I come by road and rail, but economists travel on infrastructure.”

We know how important investment is. The whole House will agree that the UK is the leading light when it comes to offshore wind farms, where we are already securing investment.

Let me point to a few examples of further investment: Nissan is investing £2 billion in new electric car models in the UK, Microsoft and Google have announced data centres worth over £3 billion, and my Secretary of State oversaw the global investment summit, unlocking £30 billion of investment. In fact, since 2010 we have secured more inward investment than any other country in Europe. Over the last few years, we have received the third highest amount in the world, after the United States and China. I could go on, Mr Speaker, but I might test your patience.

That is all very well, but the Government’s decision to defer the banning of petrol and diesel vehicles until 2035 has led to huge uncertainty among consumers and investors, as the Minister well knows. Compared with other countries, it seems that the Government lack ambition when it comes to investment in electric vehicle infrastructure. France, for example, will have something like 400,000 installations by 2030—50% more than the UK. What plans does the Minister have to ensure that the UK’s investment keeps up with our competitors and meets the growing demand for electric vehicles?

As the Minister for the auto sector, I am very keen to ensure that we are breaking bad memes around the electric vehicle sector. We are doing a huge amount of work in this space. At the moment, we have 53,600 public charge points. We have a rapid charging fund and a local electric vehicle infrastructure fund— I am sure that the hon. Gentleman’s local authority will want to tap into those. The Department for Transport is working with local authorities to ensure that they have charging strategies. We have a £381 million local EV infrastructure fund, which will deliver tens of thousands more charging points and support for on-street residential charge points, too. It is really important that local authorities are aware of the funds available, and I suggest that the hon. Gentleman get in touch with the DFT to support the installation of charging points in his constituency.

I do not think that any hon. or right hon. Member could disagree in general terms with the Minister’s reply. It would have been a more interesting reply if she had made an assessment of the reduction in investment since the cancellation of High Speed 2, because there is no doubt, as she said, that investment in rail infrastructure leads to business investment all along the route. We can see that in Birmingham and Manchester, and we can now see the lack of new investment because of the cancellation. Was it not a mistake to swap that investment, which would have led to many new high-technology jobs, for money to replace what has been taken from local government to fill potholes?

In my previous response, I wanted to expose the opportunities and grants that are available to ensure that charging points are criss-crossing the country. Often parliamentarians are not aware of all the great work we are doing.

On HS2, just last week we announced the extra support that will be made available for local transport plans, which cover everything including rail, road and even buses and, of course, potholes. Network Rail has received £36 billion from the Government to improve transport in every region of the UK. Just last week, we announced an extra £4.7 billion of additional funding for local transport authorities in the north and midlands. We want to make sure that decisions on transport are made locally and that the infrastructure is needed and wanted by local communities, which is why we are making sure that the funds from HS2 are being made available.

Regulatory Costs: Small and Medium-sized Enterprises

14. If she will make an assessment of the potential impact of regulatory costs on small and medium-sized enterprises. (901864)

We are hacking through the red tape, not least with our smarter regulation programme. We have announced reforms to employment law and the recording requirements of the working time directive, which will save UK businesses up to £1 billion, particularly benefiting SMEs.

I note that the Minister welcomed yesterday’s Budget as helping small businesses, particularly in the hospitality sector, which is very hard hit in my constituency. One of the problems that many businesses tell us about is the business rates system. More businesses have failed in the past two and a half years than have been established. In Scotland, we often find that while the downsides of this Government’s policy are happily passed on by the Scottish Government, any benefits are not. We would like to see complete reform of the rating system—not tinkering but reform. Can the Minister tell us whether widespread reform is planned? How would he plan to do it? How could businesses in Scotland also benefit?

The hon. Lady is absolutely right to point to some of the difficulties in the hospitality sector. I speak to hospitality entrepreneurs in my constituency and across the country who are finding it difficult, which is why we stepped in with, first, a package of about £13 billion of business rates support, and there was £4.3 billion of business rates support last autumn. We passed the equivalent moneys on to the Scottish Government to pass on to their hospitality venues, but they passed on none of it.

A typical pub in Scotland is £15,000 worse off than a typical pub in England, and a typical guest house is £30,000 worse off. That is why Scotland has a 30% higher failure rate than England. Similarly, a typical pub in Labour-run Wales is £6,000 worse off and a typical guest house is £12,000 worse off, and there is a 19% higher failure rate. It is critical that the benefits are passed on to those businesses, and that we look for structural reform. Anyone who wants to scrap business rates needs to show where the £22.5 billion of income will come from, rather than simply saying that they will scrap them without announcing a replacement.

National Minimum Wage Enforcement

15. What assessment she has made of the effectiveness of publicly naming employers for the enforcement of the national minimum wage. (901866)

Since 2011, we have published 20 press releases and named around 3,200 employers that have, in total, repaid over £41 million in arrears to over 460,000 workers. We have recently had round 20 of the scheme.

Naming and shaming serves as a deterrent, but should we not go further against persistent offenders? Paying the minimum wage is not an opt-out; it is a law that no company is above. Stronger penalties, including fines proportionate to the severity of the violation, to ensure that no employer can exploit its workers with impunity, would level the balance between employers and employees. Will the Minister commit to exploring these measures to safeguard the rights and the dignity of workers?

The hon. Gentleman is right to point to this measure. We know that naming and shaming is a significant deterrent against underpayment of the national minimum wage, and we are very keen to ensure that naming continues. Alas, in the most recent naming and shaming round, 2,800 minimum wage investigations returned more than £16.3 million in arrears to over 120,000 workers. His Majesty’s Revenue and Customs issued businesses with nearly 700 fines, totalling £13.2 million. As the hon. Gentleman recognises, naming and shaming alone is a significant deterrent and we intend to continue doing it.

My hon. Friend the Member for Bury South (Christian Wakeford) is right that too many employers still think they can opt out of paying the minimum wage. Earlier this week, the Low Pay Commission published its 2023 report, which said that non-compliance “appears persistent” in the social care sector. I have heard a range of evidence citing problems with record keeping, exploitation of migrant workers, and workers routinely not being paid for travel time.

It is clear that the social care sector has a real issue with the minimum wage but, when browsing through the latest naming and shaming list published by the Department a couple of week ago, I found only 17 employers classed as being within the social care sector, which is less than 0.1% of the total number of employers in the sector. What will the Minister do to ensure that everyone working in the social care sector gets at least the minimum wage?

The hon. Gentleman is right to raise this issue, on which we do much. For example, we make sure that people can anonymously report the underpayment of the national living wage through either His Majesty’s Revenue and Customs or ACAS. It is really important that we do that. We have labour market enforcement undertakings and orders, and we provide the tools for serious cases. As of April 2022, 40 employers were on labour market enforcement undertakings and 18 employers have been prosecuted. The message should be loud and clear to employers that if they do not comply with the law, we will take action.

Smart Data Road Map

My officials are co-ordinating and leading on the drafting of the road map, which will set out the Government’s ambition for future smart data scheme development across seven different sectors. We will publish that very shortly.

I am delighted to hear that the road map is coming very shortly. My hon. Friend will recall that I asked this question just before Christmas and he said it would be out in January. We were then hoping it might be coming out in yesterday’s otherwise excellent Budget, but it did not. Other countries are coming up on the rails and trying to overtake us. The noise of the approaching herd is growing in our ears, so can we please move as fast as possible on this?

My hon. Friend is right to hold our feet to the fire on this. We are pressing forward and we are determined to get it right, not just out quickly. He rightly said that I set the ambition to get it out in January, and that has put officials’ feet to the fire as well in getting it out. I signed off the road map yesterday, so it should be out very shortly. I do not agree that other nations are hot on our heels on this issue, as we are way ahead. There are billions of calls in open banking every month, and millions are using this every day without even knowing it. We are going to extend those opportunities to energy, telecoms and, crucially, small and medium-sized enterprise finance, making the journey for SMEs to get business finance far easier.

Topical Questions

Last week, I travelled to Abu Dhabi for the 13th World Trade Organisation ministerial conference, where I met counterparts from many countries, including Australia, New Zealand, Canada and South Africa, along with trade representatives from the United States, European Union and the Gulf Co-operation Council. Alongside WTO members, we negotiated real outcomes for the UK and important agreements with our trading partners. We delivered for British business through the renewal of the e-commerce moratorium, a global agreement to avoid taxes on online transactions, from emails to movies and music. Building on the momentum from the 13th ministerial conference, we will continue to champion free, fair, open trade at every opportunity, recognising its potential to lower costs and increase prosperity, both here in the UK and around the world.

I thank the Minister for that statement.

We are no longer constrained by European competition law. The German Government are providing at least €6 billion in support for their steel industry. Given the very credible plan put forward by my union, Unite the union, to protect jobs and expand production at the steel plant at Port Talbot, why are the UK Government not investing more to create a viable future for our steel?

I am disappointed that the hon. Gentleman feels that we have not been investing as much as we should. What we have done in Port Talbot is the biggest investment that Government has ever made in steel. We are turning Port Talbot around; it is going to be regenerated. We are replacing high carbon emitting blast furnaces with electric arc furnaces to help reduce emissions, which his party and all of us across the House signed up to when we made the commitment to net zero. He may have specific things he thinks we can do on the transition, so I can tell him that we have a transition board to help those whose jobs are not going to be there with electric arc furnaces. However, we have done a significant amount for Port Talbot.

T2. May I commend to my right hon. Friend the recent paper on industrial policy by Policy Exchange and its conclusion that we should avoid entering a subsidy race and should instead concentrate on broad, long-term measures supporting investment right across all industries? (901871)

I am grateful to my right hon. Friend for highlighting the Policy Exchange report, and I agree that the UK should not enter a subsidy race with other industrial nations. We already have our advanced manufacturing plan, which, obviously, focuses on advanced manufacturing, and the Chancellor is also looking at green industries, life sciences, creative industries and digital technology. Those are all areas in which we know we can grow as well. I have spoken about the record levels of investment we get into the UK. Last autumn, when the Chancellor announced full expensing, more than 200 business leaders and the CBI said that that was a game changer and the single most transformative thing we could do to fire up the British economy. We will continue to be competitive and ensure that we continue to be the third country, after the USA and China, in securing inward investment—of course, beating our European counterparts.

Last month, the Secretary of State said at the Dispatch Box that she could state explicitly that trade talks with Canada had not broken down. However, the Canadian high commission has since contradicted that in writing, saying that neither negotiations nor technical discussions with respect to any of the outstanding issues have occurred since the UK unilaterally broke them off on 25 January. Mr Speaker, I just want to know who is telling the truth.

I am very happy to expand on what I said last time I was at the Dispatch Box on this topic. I repeat that our engagement with Canada on trade issues has been extensive across multiple Departments covering the free trade agreement, cheese quotas and rules of origin. On 25 January, the UK confirmed to Canada that we would pause FTA talks on the basis that cheese access had been removed and that Canada had signalled that rules of origin provisions would not be extended. That is how negotiations work.

I can tell the hon. Member that there was a meeting on 8 February between the Foreign Secretary and his Canadian counterpart where the cheese issue was discussed, and I raised cheese and rules of origin directly with the Canadians in Abu Dhabi last week. I must say to the hon. Member that chasing headlines based on things he has been told by the people with whom we are negotiating is not helpful to achieving the outcomes that our businesses, farmers and auto industry want to see.

That was a lot of words for the Secretary of State to use to say that she believes the Canadian high commission was correct in the answer that it gave.

May I ask an important question about the proposed UK carbon border adjustment mechanism? Labour very much supports the introduction of a UK CBAM, but we are concerned that the Government will do so a year after the EU, resulting in the UK potentially being flooded with carbon-intensive products originally destined for Europe, including steel, cement and fertiliser. Do the Government recognise that danger? If they do, what is their plan?

Just on the first point, if the hon. Member still wants to believe Canada before the UK, that is his business, but we on the Conservative Benches know who we are working for, and we are working for British businesses.

On the hon. Member’s second point, carbon leakage is a global problem facing all countries that are ambitious in tackling climate change, and we are working with international partners on how we tackle it together. We are following developments on the EU CBAM closely, and we are engaging with the European Commission to discuss technical considerations relevant to UK manufacturers. We share its concerns on carbon leakage, but we need to make sure that the UK response, whatever it is, is tailored to what the UK needs, not just a copying and pasting of what others are doing.

T4. Kettering is the beating heart of the east midlands economy, so will the Secretary of State be kind enough to facilitate a visit from her ministerial team to Ball Corporation in Burton Latimer? It has the newest, largest and most modern aluminium can manufacturing plant in Europe and a fantastic example of the very best of successful foreign direct investment into the UK economy. (901873)

I commend the Ball Corporation in Burton Latimer for all it is doing. I also thank my hon. Friend for what he is doing to promote inward investment, which supported more than 2,800 jobs across the east midlands in 2023. He has spoken to me before about the importance of the Ball Corporation to Kettering, and I am happy to confirm that either myself or one of my Ministers would be delighted to visit when diaries allow.

While the UK Government struggle to support small and medium-sized enterprises exporting to Europe, they are providing a £600 million export guarantee to INEOS so that it can build the largest chemical plant in Europe for 30 years in Antwerp, Belgium. Why can the UK Government find £600 million to support that investment, but not match the £500 million that the Scottish Government are investing in domestic energy transition at home?

UK Export Finance does not give the money; it provides guarantees to loans that are being provided by banks. There is quite a significant distinction: we have not given that money; we have guaranteed a loan. The reason why we provide those guarantees is that they guarantee jobs to British businesses. There is a big difference between a loan guarantee and giving money. If he would like more of an explanation on that, we are happy to provide one to him.

T5. As chair of the British-Switzerland all-party parliamentary group, I am delighted to commend the Government on the forthcoming new trade agreement with Switzerland, but will the Secretary of State please update the House on progress? Particularly, will she tell us which of the 20-plus working groups the Government intend to prioritise as part of the negotiations? (901874)

I thank my hon. Friend, who is a leading member of the British-Switzerland APPG, for his interest. Both the Secretary of State and I met the Swiss Trade Minister in Abu Dhabi last week. The trade talks are progressing well. We are seeking high-ambition outcomes in all areas, including services and investment, mobility, digital, and the environment, which are not covered by our existing FTA. In short, there are a large number of high-priority areas for us, building on the agreement that we did on financial services in Bern at the end of last year, to ensure that this UK-Switzerland FTA really takes forward the bilateral trade relationship. The fourth round of negotiations is taking place in Bern this week.

T3. We know the impact that mandatory pay gap reporting can have on tackling low pay and in-work poverty, but little progress is being made on tackling the disability pay gap, which is higher now than it was a decade ago, with disabled people earning on average £3,400 less—effectively working for 47 days for free. When will the Government introduce mandatory disability pay gap reporting, and what steps is the Secretary of State taking to close the gap? (901872)

The hon. Lady raises a significant issue around ensuring that disabled people are able to access employment and are paid properly. We have no plans to introduce mandatory disability pay gap reporting—no plans to introduce disability pay gap reporting at all. Unlike gender pay gap reporting, which is very simple, binary and easy to execute, disability pay gap reporting, like ethnicity pay gap reporting, is very complex. There are a range of disabilities that could not be easily monitored, so I would like to work with her on other areas where we can help to improve the lives of disabled people at work. We do not believe that disability pay gap reporting is the answer.

T6. [R] Israel is one of the United Kingdom’s most dynamic trading partners, so does my right hon. Friend agree that prioritising a free trade deal with Israel will complement the good work that the Government are doing to defeat the haters as part of the Economic Activity of Public Bodies (Overseas Matters) Bill, and send an unmistakeable message that the UK stands ready to strengthen our unbreakable friendship with Israel? (901875)

My hon. Friend is right. Israel’s current relationship with the UK is worth about £6.4 billion, but our FTA is a roll-over of the one that Israel signed in 1995 with the EU. It does not take into account services, digital, artificial intelligence or genome sequencing. There is a lot that we can do. That is why we are working on this FTA. It is a priority for us. As I said earlier, we face many challenges in carrying on negotiations with a country that is at war, but we are working to overcome them.

T8. Quarter 4 of 2023 was the 10th quarter in a row in which more British businesses closed their doors than opened up. Just yesterday, a small business owner in Twickenham contacted me to tell me that his business was on the brink. If the Secretary of State will not consider business rate reform, as my hon. Friend the Member for Edinburgh West (Christine Jardine) suggested, what is she doing to help our small and medium-sized businesses, and to stem the tide of insolvencies? (901878)

The hon. Lady raises an important point. We do not shy away from the fact that things have been difficult for businesses, with the covid crisis, of course, followed by the cost of doing business crisis. That is why we stepped in to support businesses, with a £4.3 billion package for rates last autumn, which has helped many businesses to get through a difficult time. Unfortunately, that support has not been passed on in Scotland and Wales, but it certainly has in England. I am very happy to meet with her to discuss her particular business problem.

T7. Because of its very large population and economic activity, Nigeria offers many opportunities for British businesses. I understand that there was a recent ministerial visit to that country. Could we have a brief report of the outcome of that visit? (901877)

My hon. Friend is right. I signed the enhanced trade and investment partnership in Nigeria, alongside my counterpart, Dr Doris Uzoka-Anite, on Tuesday 13 February this year. It was the first of its kind in terms of the UK’s trade commitments across the region. The partnership aims to remove market access barriers and promote technical co-operation in areas such as financial and professional services. The UK and Nigeria have co-created a partnership that tackles issues that businesses face, and this is the first step in a significant relationship and an already strong trading partnership worth a total of £6.7 billion in the 12 months to September.

T9. Last week, Carl Cresswell, director of business resilience in the Department for Business and Trade, told the Select Committee that he personally thinks that we will end up spending more money on Horizon compensation overall than that £1 billion currently allocated by the Treasury, but we did not hear anything about that in yesterday’s Budget. Does the Secretary of State share that view? (901879)

We have always been clear that the £1 billion is not a cap. Clearly, the amount of compensation that needs to be paid for redress is to get people back to where they were before the scandal took place. At the moment, we are not nearing that £1 billion, but I think that over time we will be. As I say, it is not a cap; if we need to raise the amount, we will.

I understand that another round of negotiations is about to start in India on our long-promised trade deal. The original proposal was to complete the trade deal by Diwali. This year, Diwali is on 1 November, so will the Secretary of State give us an update on negotiations and agree that we should conclude the deal by 1 November?

I thank my hon. Friend for that question and for his continual interest in us getting a high-quality trade deal with India, for which he has long been a passionate advocate. Of course, the most important thing is what is in the deal, rather than the date that it is delivered. We remain in round 14 and we recently welcomed Government of India negotiators to London. The prize remains large—with tariffs as high as 150% for whisky and 125% for autos—and we want to ensure that we get our key service sectors able to export into a market of 1.4 billion people.

The Secretary of State will have seen the recommendations that our Committee set out this morning for ending the circus of the Post Office administration of the redress schemes for victims of the Horizon scandal. I know that she takes this incredibly seriously and so I know that she will study our cross-party recommendations for the new legislation that she is about to bring before the House. The question for today is this: if we put all the ongoing investigations to one side, on the basis of the facts as they are known today, does she still have full confidence in Nick Read as the chief executive of the Post Office to run the redress schemes currently under way?

We thank the right hon. Gentleman for his work. I have taken a quick look at the report, although it was only issued this morning. All the recommendations he makes in that report we have either fixed or are fixing with the assistance of the Horizon compensation advisory board. We agree with him that we need to bring the compensation schemes in house. The GLO—group litigation order—scheme is already being delivered by the Department for Business and Trade. We believe that further compensation will flow from our overturning of convictions. We will be overturning hundreds of convictions through legislation in this House very shortly, as quickly as possible, and that will provide a flow of hundreds of millions of pounds in compensation for those individuals. That will be done by the Department for Business and Trade.

As the trade envoy to the western Balkans, the issue of Government-to-Government agreements is raised with me frequently. There is no doubt that if they were available, more deals could be done with the Balkan countries. Will the Minister give an update on the Government’s position, please?

I thank my hon. Friend, in particular for his brilliant work as a trade envoy. He covers more markets than any of our other trade envoys with great skill and dexterity. Back in 2017, this Department and I were pioneers in putting in place a G-to-G agreement with Peru for the UK to be the delivery partner for the 2019 Pan American games. A great deal of business with and in Peru has resulted since. We remain open to future G-to-G agreements on a case-by-case basis. I am happy to meet him to discuss what specific things he has in mind that would work in the western Balkans.

I have repeatedly asked Ministers whether any strings were attached to the £500 million of taxpayers’ money that was given to Tata Steel, particularly with regard to job guarantees. I have not had a straight answer, so I will try again today. Can the Secretary of State please confirm whether any conditionality was attached to the £500 million, or did the Government simply buy Tata Steel’s bluff about closure, and give it £500 million so that we could make 2,800 people redundant?

The hon. Gentleman attends the transition board meetings, so he knows that his question is not really relevant to what he is trying to get to the bottom of. We provided £500 million to ensure that steel making continues in Port Talbot. Tata made it clear that it was uneconomic and unsustainable to continue with steel making, so the support that we have given will ensure that north of 5,000 jobs will continue in Port Talbot, and it will support supply chains. On top of that, £100 million has been provided to the transition board, so that its members, including the hon. Gentleman, the unions and all the local representatives, can ensure that local people who need to go through transition get the support that they need. Without that support, there would not be any future steel making at Port Talbot.

When will the Secretary of State wake up to the huge potential of universities to tackle all the problems in society, including climate change? Will she come to Huddersfield, which has one of the best universities in the country? It is working with local businesses to make the future safe for our country.

If the hon. Gentleman sent a proposal to my office about what we could do on a visit to the University of Huddersfield, I would be very keen to take a look. We support our universities. If he has a specific business and trade angle in mind, we will see what we can do, if diaries allow.

Mr Hussein from east Devon, whom I represent, has effectively been robbed of £100,000, given that £40,000 of sub-standard building work has to be levelled and destroyed. The Federation of Master Builders has campaigned for a compulsory licence scheme for construction companies. The Domestic Buildings Works (Consumer Protection) Bill would outlaw cowboy builders, provide compensation for consumers and ensure that reputable builders were not undercut by unlicensed rogues. Will the Minister take a fresh look at that Bill?

The hon. Gentleman raises an important point. Some of the most frequent correspondence that I get from colleagues from across the House relates to rogue builders. We are determined to ensure that this does not happen to our constituents. We advise them to use builders registered with TrustMark, which is a trusted scheme, to ensure that work is done properly. I would be very happy to meet him to discuss that potential legislation.

Goldman Sachs has found that Brexit Britain has significantly underperformed compared with other advanced economies; the result is that UK GDP is 5% lower than it would have been had we not left the European Union. Does the Secretary of State appreciate that best way to grow the economy, boost business confidence and reduce trade barriers is to rejoin to the EU?

I recommend to the hon. Lady the report produced by my Department on 31 January about the benefits of Brexit. It explains exactly what is happening with the UK economy. Claiming that GDP would have been 5% higher when we are outperforming our G7 partners is simply not credible. She wants to take us back to square one, but that is exactly the reason why people need to stick with the Conservative plan.

I am very encouraged by the Secretary of State’s comments about the free trade deal with Israel. The UK is a friend of Israel, and Israel is a friend of the UK, so what more can we do to increase trade between us? More importantly—and very regionally —how can the Secretary of State ensure that Northern Ireland is very much part of that trade deal, so that companies in Strangford and across Northern Ireland also feel the benefit?

The hon. Gentleman will remember that we had the Northern Ireland investment summit, at which we talked about bringing more investment into Northern Ireland. He will know that around 500 Israeli firms operate in the United Kingdom. That investment from overseas is creating thousands of jobs in high-value sectors, and a free trade agreement will help to increase the investment. That will benefit businesses in Northern Ireland, too.