Mr Joshua Reynolds

Let me be clear at the outset that the Liberal Democrats support the Bill. We do so because we recognise that British businesses need backing to compete globally, and both the industrial support package and the export finance package have vital roles to play in that. The increases proposed in the Bill represent a major expansion in Government capacity and give us the opportunity to ensure that that expansion serves our priorities as a country: supporting small businesses, driving green growth and maintaining proper democratic oversight. Small business owners have told me that the current system simply does not work for them. UK Export Finance’s processes are designed for larger transactions, larger businesses and those that are already exporting. UK Export Finance’s criteria state clearly that in any one of the last three years at least 20%, or in each of the last three years at least 5%, of a business’s annual turnover needs to be made up from export sales, but those thresholds mean that businesses trying to break into the export market, or those growing still quite modest export activity, cannot access support. As we expand UK Export Finance’s capacity, let us make sure that the commitment made is about not just bigger deals and bigger companies, but making UK Export Finance work for smaller businesses—the backbone of British exports—with simpler application processes, lower eligibility thresholds for SMEs and dedicated support teams made up of those who really understand SMEs the best. As the hon. Member for Chelsea and Fulham (Ben Coleman) said, we also need to understand the elephant in the room, which is that we are discussing expanding capacity of UK Export Finance at precisely the moment when British exporters face unprecedented challenges with our largest trading partner, the EU. The Chartered Institute of Export and International Trade has documented the impact, saying that among the smallest firms—those with six employees or fewer—the value of their exports to the EU fell by 30% after the trade and co-operation agreement was struck; meanwhile, firms with more than 107 employees were largely unaffected. The Institute of Directors’ January 2025 “Policy Voice” survey found that 54.8% of businesses that previously exported and have stopped cited as a reason the UK’s trading relationship with the EU. More than half of former exporters surveyed gave up because of the barriers to trade with Europe. We are not talking about businesses that have failed to break into distant markets; we are talking about established exporters abandoning our nearest and largest market because the barriers have become insurmountable. The priority for small manufacturers is assistance in navigating customs declarations and rules of origin to sell in Europe. These are markets they have served for decades, which is why the Liberal Democrats are calling for a fundamental reset of our relationship with Europe—a new bespoke UK-EU customs union that would cut through red tape, boost gross domestic product by an estimated 2.2% and generate roughly £25 billion in tax revenues, according to the House of Commons Library.