Pulse.Assent

The UK and South Africa will join forces to drive economic growth and turbocharge infrastructure investment, Prime Minister Rishi Sunak has announced today [Tuesday 22nd November] at the start of President Ramaphosa’s formal State Visit.

The next phase of the UK-South Africa Infrastructure Partnership is being launched today, supporting South Africa’s economic growth through major infrastructure developments and offering increased access to UK companies to projects worth up to £5.37bn over the next three years. The UK Government will also confirm new grant-funded technical assistance to South Africa to help unlock green hydrogen opportunities and boost skills in this key sector.

As an example of the opportunities for UK businesses, Globeleq – a UK company which is majority owned by British International Investment – is today announcing they have reached legal close on six solar power projects, with construction expected to kick off in South Africa next year.

South Africa is the continent’s second largest economy and is already the UK’s biggest trading partner in Africa, with trade worth £10.7 billion annually. Unlocking export finance offers significant opportunities for British businesses to invest and trade.

South Africa’s President Cyril Ramaphosa is in London for a two-day state visit, hosted by His Majesty The King. After attending a state banquet for the South African delegation this evening at Buckingham Palace, the Prime Minister will welcome President Ramaphosa to Downing Street for a bilateral meeting and lunch on Wednesday.

Prime Minister Rishi Sunak said:

South Africa is already the UK’s biggest trading partner on the continent, and we have ambitious plans to turbocharge infrastructure investment and economic growth together.

I look forward to welcoming President Ramaphosa to London this week to discuss how we can deepen the partnership between our two great nations and capitalise on shared opportunities, from trade and tourism and security and defence.

A new education and skills partnership between the UK and the South African governments will also promote shared learning in technical and vocational education, driving youth employment.

UK funding will build the highly sought-after technical and entrepreneurial skills in the biggest growth sectors including green technology and electric vehicle manufacture, ensuring South Africa’s youth are benefitting from the green transition.

Foreign Secretary James Cleverly said:

The UK’s relationship with South Africa is hugely important to us. Together we are working to deliver for the British and South African people, creating jobs, enhancing trade and investment, and boosting inclusive economic growth.

This week’s State Visit, the first under His Majesty The King, is a fantastic opportunity to celebrate our ties but also allows us to trigger greater growth, create even more opportunities for British and South African businesses alike, and further promote South Africa’s transition to green energy.

The South Africa Just Energy Transition Partnership, launched at COP26, also offers new opportunities to collaborate on renewable technology and green innovation. The UK and South Africa are today announcing the creation of a new Partnership on Minerals for Future Clean Energy Technologies to promote increased responsible exploration, production and processing of minerals in South and Southern Africa.

Countries in the region are among the world’s leading producers of vital minerals used in clean technology, including platinum group metals and iridium for hydrogen production and vanadium and manganese for battery storage.  This partnership will utilise the UK’s expertise as the home to leading global mining houses and financial services centre for metals to bolster sustainable and responsible production.

Trade Secretary Kemi Badenoch said:

Today we’re moving into a new era of our dynamic trade relationship with South Africa, with exciting collaboration on infrastructure, clean technology, and renewable energy sources.

These new opportunities will unlock trade and investment for businesses from the Eastern Cape to East Anglia and boost growth, create jobs and future-proof our economies against a changing world.

Introduction

Mr Speaker,

In the face of unprecedented global headwinds, families, pensioners, businesses, teachers, nurses and many others are worried about the future.

So today we deliver a plan to tackle the cost-of-living crisis and rebuild our economy.

Our priorities are stability, growth, and public services.

We also protect the vulnerable because to be British is to be compassionate and this is a compassionate government.

We are not alone facing these problems but today our plan reflects British values as we respond to an international crisis.

We are honest about the challenges and fair in our solutions.

Yes, we take difficult decisions to tackle inflation and keep mortgage rises down.

But our plan also leads to a shallower downturn; lower energy bills; higher long-term growth; and a stronger NHS and education system.

Stability

Three priorities then today: stability, growth and public services.

I start with stability.

High inflation is the enemy of stability.

It means higher mortgage rates, more expensive food and fuel bills, businesses failing and unemployment rising.

It erodes savings, causes industrial unrest, and cuts funding for public services.

It hurts the poorest the most and eats away at the trust upon which a strong society is built.

The Office for Budget Responsibility confirms global factors are the primary cause of current inflation.

Most countries are still dealing with the fallout from a once-in-a-century pandemic.

The furlough scheme, the vaccine rollout, and the response of the NHS did our country proud – but they all have to be paid for.

The lasting impact on supply chains has made goods more expensive and fueled inflation.

This has been worsened by a Made in Russia energy crisis.

Putin’s war in Ukraine has caused wholesale gas and electricity prices to rise to eight times their historic average.

Inflation is high here – but higher in Germany, the Netherlands, and Italy.

Interest rates have risen here – but faster in the US, Canada and New Zealand.

Growth forecasts have fallen here – but fallen further in Germany.

The International Monetary Fund expect one third of the world’s economy will be in recession this year or next.

So the Bank of England, which has done an outstanding job since its independence, now has my wholehearted support in its mission to defeat inflation and I today confirm we will not change its remit.

But we need fiscal and monetary policy to work together – and that means the government and the Bank working in lockstep.

It means, in particular, giving the world confidence in our ability to pay our debts.

British families make sacrifices every day to live within their means and so too must their government because the United Kingdom will always pay its way.

I understand the motivation of my predecessor’s mini-budget and he was correct to identify growth as a priority.

But unfunded tax cuts are as risky as unfunded spending which is why we reversed the planned measures quickly.

As a result, government borrowing has fallen.

The pound has strengthened.

And the OBR says today that the lower interest rates generated by the government’s actions are already benefitting our economy and sound public finances.

But credibility cannot be taken for granted and yesterday’s inflation figures show we must continue a relentless fight to bring it down, including a rock solid commitment to rebuild the public finances.

Richard Hughes and his team at the OBR today lay out starkly the impact of global headwinds on the UK economy and I am enormously grateful to him and his team for their thorough work.

The OBR forecast the UK’s inflation rate to be 9.1% this year and 7.4% next year.

They confirm that our actions today help inflation to fall sharply from the middle of next year.

They also judge that the UK, like other countries, is now in recession.

Overall this year, the economy is still forecast to grow by 4.2%.

GDP then falls in 2023 by 1.4%, before rising by 1.3%, 2.6%, and 2.7% in the following three years.

The OBR says higher energy prices explain the majority of the downward revision in cumulative growth since March.

They also expect a rise in unemployment from 3.6% today to 4.9% in 2024 before falling to 4.1%.

Today’s decisions mean that over the next five years, borrowing is more than halved.

This year, we are forecast to borrow 7.1% of GDP or £177 billion; next year, 5.5% of GDP or £140 billion; then by 2027-28, it falls to 2.4% of GDP or £69 billion.

As a result, underlying debt as a percentage of GDP starts to fall from a peak of 97.6% of GDP in 2025-26 to 97.3% in 2027-28.

I also confirm two new fiscal rules: the first is that underlying debt must fall as a percentage of GDP by the fifth year of a rolling five-year period.

The second, that public sector borrowing, over the same period, must be below 3% of GDP.

The plan I’m announcing today meets both rules.

Today’s statement delivers a consolidation of £55 billion and means inflation and interest rates end up significantly lower.

We achieve this in a balanced way.

In the short term, as growth slows and unemployment rises, we will use fiscal policy to support the economy.

The OBR confirm that because of our plans, the recession is shallower, and inflation is reduced. Unemployment is also lower with about 70,000 jobs protected as a result of our decisions today.

Then, once growth returns, we increase the pace of consolidation to get debt falling.

This further reduces the pressure on the Bank to raise interest rates because as Conservatives we do not leave our debts to the next generation.

So, Mr Speaker, this is a balanced path to stability: tackling the inflation to reduce the cost of living and protect pensioner savings whilst supporting the economy on a path to sustainable growth.

But it means taking difficult decisions.

Anyone who says there are easy answers is not being straight with the British people: some argue for spending cuts, but that would not be compatible with high quality public services.

Others say savings should be found by increasing taxes but Conservatives know that high tax economies damage enterprise and erode freedom.

We want low taxes and sound money. But sound money has to come first because inflation eats away at the pound in people’s pockets even more insidiously than taxes.

So, with just under half of the £55 billion consolidation coming from tax, and just over half from spending, this is a balanced plan for stability.

Tax

I turn first to our decisions on tax. I have tried to be fair by following two broad principles: firstly, we ask those with more to contribute more; and secondly, we avoid the tax rises that most damage growth.

Although my decisions today do lead to a substantial tax increase, we have not raised headline rates of taxation, and tax as a percentage of GDP will increase by just 1% over the next five years.

I start with personal taxes.

Asking more from those who have more means that the first difficult decision I take on tax is to reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140.

Those earning £150,000 or more will pay just over £1200 more in tax every year.

We are also taking difficult decisions on tax-free allowances.

I am maintaining at current levels the income tax personal allowance, higher rate threshold, main national insurance thresholds and the inheritance tax thresholds for a further two years taking us to April 2028.

Even after that, we will still have the most generous set of tax-free allowances of any G7 country.

I am also reforming allowances on unearned income.

The dividend allowance will be cut from £2,000 to £1,000 next year and then to £500 from April 2024.

The Annual Exempt Amount for capital gains tax will be cut from £12,300 to £6,000 next year and then to £3,000 from April 2024.

These changes still leave us with more generous allowances overall than countries like Germany, Ireland, France, and Canada.

And, because the OBR forecasts half of all new vehicles will be electric by 2025…

…to make our motoring tax system fairer I have decided that from April 2025 electric vehicles will no longer be exempt from Vehicle Excise Duty.

Company car tax rates will remain lower for electric vehicles and I have listened to industry bodies and will limit rate increases to 1ppt a year for three years from 2025.

The OBR expects housing activity to slow over the next two years, so the stamp duty cuts announced in the mini-budget will remain in place but only until 31st March 2025.

After that, I will sunset the measure, creating an incentive to support the housing market…

…and all the jobs associated with it…

…by boosting transactions during the period the economy most needs it.

I now turn to business taxes.

While I have decided to freeze the Employers NICs threshold until April 2028, we will retain the Employment Allowance at its new, higher level of £5,000. 40% of all businesses will still pay no NICs at all.

The VAT registration threshold is already more than twice as high as the EU and OECD averages. I will maintain it at that level until March 2026.

My RHF the PM successfully negotiated a landmark international tax deal to make sure multinational corporations – including big tech companies – pay the right tax in the countries where they operate.

I will implement these reforms, making sure the UK gets our fair share.

Alongside further measures to tackle tax avoidance and evasion, this will raise an additional £2.8 billion by 2027-28.

I have also heard concerning reports of abuse and fraud in R&D tax relief for SMEs.

So I have decided today to cut the deduction rate for the SME scheme to 86% and the credit rate to 10% but increase the rate of the separate R&D expenditure credit from 13% to 20%.

Despite raising revenue, the OBR have confirmed that these measures have no detrimental impact on the level of R&D investment in the economy.

Ahead of the next Budget, we will work with industry to understand what further support R&D intensive SMEs may require.

Next, windfall taxes. I have no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy prices.

But any such tax should be temporary, not deter investment and recognise the cyclical nature of energy businesses.

Taking account of this, I have decided that from January 1st until March 2028 we will increase the Energy Profits Levy from 25% to 35%.

The structure of our energy market also creates windfall profits for low-carbon electricity generation so, from January 1st, we have also decided to introduce a new, temporary 45% levy on electricity generators.

Together these taxes raise £14 billion next year.

Finally, I turn to business rates.

It is an important principle that bills should accurately reflect market values so we will proceed with the revaluation of business properties from April 2023.

But I will soften the blow on businesses with a nearly £14 billion tax cut over the next five years. Nearly two thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit.

This will include a new government funded Transitional Relief scheme as called for by the CBI, the British Retail Consortium, the Federation of Small Businesses, and others, benefitting around 700,000 businesses.

Our plan for the cost of living delivers lower inflation, lower mortgage rates, a shallower downturn, and lower unemployment.

But it also involves public spending discipline, so I turn next to how we protect public services through a challenging period.

Public Spending

The Prime Minister’s vision for this country has at its heart a strong NHS and world-class education.

We know that a strong economy depends on strong public services so will protect them as much as we can as we deliver our plan for stability and growth.

We have to take difficult decisions on the public finances.

So we are going to grow public spending – but we’re going to grow it more slowly than the growth of the economy.

For the remaining two years of this Spending Review, we will protect the increases in departmental budgets we have already set out in cash terms.

And we will then grow resource spending at 1% a year in real terms, in the three years that follow.

Although departments will have to make efficiencies to deal with inflationary pressures in the next two years, this decision means overall spending in public services will continue to rise, in real terms, for the next five years.

Before I turn to our plans for schools and the NHS, I start with two other areas of spending.

DWP

The Department for Work and Pensions has a critical role in supporting people into work.

I am proud to live in a country with one of the most comprehensive safety nets anywhere in the world…

…but also concerned that we have seen a sharp increase in economically inactive working age adults of 630,000 since the start of the pandemic.

Employment levels have yet to return to pre-pandemic levels which is bad for businesses who cannot fill vacancies and bad for people missing out on the opportunity to do well for themselves and their families.

So the PM has asked the Work and Pensions Secretary to thoroughly review issues holding back workforce participation due to conclude early in the new year.

Alongside this, I am also committed to helping people already in-work to raise their incomes, progress in work, and become financially independent.

That is why we will ask over 600,000 more people on Universal Credit to meet with a work coach so that they can get the support they need to increase their hours or earnings.

I have also decided to move back the managed transition of people from Employment and Support Allowance onto Universal Credit to 2028…

…and will invest an extra £280m in DWP to crack down on benefit fraud and error over the next two years.

The Government’s review of the state pension age will be published in early 2023.

Defence and international commitments

Our security at home depends on our security overseas, so I turn next to defence and other international commitments.

The privilege of being this country’s Foreign Secretary showed me first hand the enormous respect in which this country is held because the United Kingdom is and has always been a force for good in the world.

Nothing sums that up more than the courage of our armed forces, men and women who risk their lives every day in defence of our territory and our belief in freedom.

Alongside them, I salute the citizens of another country right on the frontline of that fight – the brave people of Ukraine.

The United Kingdom has given them military support worth £2.3 billion since the start of Putin’s invasion…

…the second highest contribution in the world after the United States…

…which demonstrates that our commitment to democracy and open societies remains steadfast.

In that context, the Prime Minister and I both recognise the need to increase defence spending.

But before we make that commitment it is necessary to revise and update the Integrated Review, written as it was before the Ukraine invasion.

I have asked for that vital work to be completed ahead of the next budget and today confirm we will continue to maintain the defence budget at least 2% of GDP to be consistent with our NATO commitment.

Another important international commitment is to overseas aid.

The OBR’s forecasts show a significant shock to public finances so it will not be possible to return to the 0.7% target until the fiscal situation allows.

We remain fully committed to the target and the plans I have set out today assume that ODA spending will remain around 0.5% for the forecast period.

As a percentage of GNI, we were the third highest donor in the G7 last year and I am proud that our aid commitment has saved thousands of lives around the world.

I look forward to working closely with my RHF the Member for Sutton Coldfield, now rightly back in his place in Cabinet, to make sure we continue to play a leadership role in tackling global poverty.

The United Kingdom has also been a global leader on climate change, cutting emissions by more than any other G20 country.

But with the existential vulnerability we face now would be the wrong time to step back from our international climate responsibilities…

…so I can confirm that despite the economic pressures we face, we remain fully committed to the historic Glasgow Climate Pact agreed at COP26 including a 68% reduction in our emissions by 2030.

Education

I turn to education. Being pro-education is being pro-growth.

But providing our children with a good education is not just an economic mission, it’s a moral mission – one to which my RHF the Prime Minister has always been deeply committed.

Thanks to the efforts of successive education ministers, particularly my RHFs from Surrey Heath and Bognor Regis, we have risen 9 places in the global league tables for maths and reading since 2015.

I still, however, have concerns that not all school leavers get the skills they need for a modern economy.

Our current Education Secretary left school at 16 to become an apprentice, and knows first hand why good skills matter.

There are many important initiatives in place but as Chancellor I want to know the answer to one simple question: will every young person leave the education system with the skills they would get in Japan, Germany or Switzerland?

So I have appointed Sir Michael Barber to advise me and my RHF the Education Secretary on the implementation of our skills reforms programme.

But as we raise the skill levels of our school leavers, I want to ensure that even in an economic crisis, the improvement in school standards continues to accelerate.

Some have suggested putting VAT on independent school fees as a way of increasing core funding for schools, which would raise around £1.7 billion.

But according to certain estimates this would result in up to 90,000 children from the independent sector switching to state schools, giving with one hand and taking away with another.

So instead of being ideological I am going to be practical.

Because this government wants school standards continue to rise for every single child, we’re going to do more than protect the schools budget – we’re going to increase it.

I can announce today that next year and the year after, we will invest an extra £2.3 billion per year in our schools.

Our message to heads and teachers and classroom assistants today is thank you for your brilliant work, we need it to continue…

…and in difficult economic circumstances, we are investing more in the public service that defines all of our futures.

Health and Social care

Mr Speaker, the service we depend on more than any other is the NHS.

As a former Health Secretary, I know how hard people are working on the frontline and how much they are struggling after the pandemic.

The biggest issues are workforce shortages and pressures in the social care sector so today I address them both.

On staff shortages, the former Chair of the Health and Social Care Select Committee put forward the case for a long-term workforce plan.

I have listened carefully to his proposals and believe they have merit.

So the Department of Health and Social Care and the NHS will publish…

…an independently-verified plan for the number of doctors, nurses and other professionals we will need in 5, 10 and 15 years’ time…

…taking full account of the need for better retention and productivity improvements.

I have also listened to extensive representations about the challenges facing the social care sector.

It did a heroic job looking after children, disabled adults, and older people during the pandemic.

Its 1.6 million employees work incredibly hard. But even outside the pandemic, the increasing number of over 80s is putting massive pressure on their services.

I also heard the very real concerns from local authorities about their ability to deliver the Dilnot reforms immediately…

…so will delay the implementation of this important reform for two years, allocating the funding to allow local authorities to provide more care packages.

I also want the social care system to help free up some of the 13,500 hospital beds that are occupied by those who should be at home.

I have therefore decided to allocate for adult social care additional grant funding of £1 billion next year and £1.7 billion the year after.

Combined with the savings from the delayed Dilnot reforms and more council tax flexibilities, this means an increase in funding available for the social care sector of up to £2.8 billion next year and £4.7 billion the year after.

How we look after our most vulnerable citizens is not just a practical issue but speaks to our values as a society…

…so today’s increase in funding will allow the social care system to help deliver an estimated 200,000 more care packages over the next two years…

…the biggest increase under any government of any colour in history.

The NHS budget has been increased to record levels to deal with the pandemic and today I am asking it to join all public services in tackling waste and inefficiency.

We want Scandinavian quality alongside Singaporean efficiency, both better outcomes for citizens and better value for taxpayers.

That does not mean asking people on the frontline, often exhausted and burned out, to work harder, which would not be fair.

But it does mean asking challenging questions about how to reform all our public services for the better.

With respect to the NHS I have asked former Health Secretary and Chair of the Norfolk and Waveney Integrated Care System Patricia Hewitt…

…to help me and the Health Secretary achieve that by advising us on how to make sure the new Integrated Care Boards operates efficiently with appropriate autonomy and accountability.

I have also had discussions with NHS England about the inflationary pressures on their budget.

I recognize that efficiency savings alone will not be enough to deliver the services we all need.

So because of difficult decisions taken elsewhere today I will increase the NHS budget, in each of the next two years, by an extra £3.3 billion.

The Chief Executive of the NHS, Amanda Pritchard, has said this should provide sufficient funding for the NHS to fulfil its key priorities and shows the government is serious about its commitment to prioritise the NHS.

That is why today we commit to a record £8 billion package for our health and social care system – a government putting the NHS first.

And, Mr Speaker, the NHS and schools in Scotland, Wales and Northern Ireland face equivalent pressures so the Barnett consequentials of today’s decisions mean…

…an extra £1.5 billion for the Scottish Government; £1.2 billion for the Welsh Government, and £650m for the Northern Ireland Executive.

Mr Speaker, our support for public services means that despite needing to find £55 billion in savings and tax rises, we are protecting the amount going into public services in real terms over the five-year period.

But if we are going to sustain our public services and avoid a doom loop of ever higher taxes and ever lower dynamism, we need economic growth.

So today I also outline our three priorities for growth.

Growth

Mr Speaker,

You cannot borrow your way to growth. Sound money is the rock on which long term prosperity rests – but it is not enough on its own.

Our plan is designed to build a high wage, high skill economy that leads to long-term prosperity. In his Mais lecture, My RHF friend the Prime Minister identified the keys to doing this – people, capital and ideas.

Today’s increase in the education budget demonstrates our commitment to people and skills and I now outline three further growth priorities – energy, infrastructure and innovation.

Energy

Cheap, low carbon, reliable energy must sit at the heart of any modern economy.

But Putin’s weaponisation of international gas prices has helped drive the cost of our national energy consumption right up.

This year we will be spending an extra £150 billion on energy compared to pre-pandemic levels, equivalent to paying for an entire second NHS through our energy bills.

In 2019, a third of global emissions came from the energy supply so unless we radically change our approach we will both bankrupt our economy and harm our planet.

Over the long term, there is only one way to stop ourselves being at the mercy of international gas prices: energy independence combined with energy efficiency.

Energy independence, so neither Putin or anyone else can use energy to blackmail us; and energy efficiency to reduce demand and climate impact as much as possible.

Britain is a global leader in renewable energy.

Last year nearly 40% of our electricity came from offshore wind, solar and other renewable sources.

Since 2010, our renewable energy production grew faster than any other large country in Europe.

We need to go further, with a major acceleration of home-grown technologies like offshore wind, carbon capture and storage, and, above all, nuclear.

This will deliver new jobs, industries and export opportunities and secure the clean, affordable energy we need to power our future economy and reach Net Zero..

So I can today announce that the government will proceed with the new plant at Sizewell C.

Subject to final government approvals, the contracts for the initial investment will be signed with relevant parties, including EDF, in the coming weeks.

This will create 10,000 highly skilled jobs and provide reliable, low-carbon, power to the equivalent of 6 million homes for over 50 years.

Our £700 million investment is the first state backing for a nuclear project in over 30 years and represents the biggest step in our journey to energy independence.

But energy efficiency is just as important.

So today, we set our country a new ambition: by 2030, we want to reduce energy consumption from buildings and industry by 15%.

Reducing demand by this much means, in today’s prices, a £28 billion saving from our national energy bill or £450 off the average household bill.

This must be a shared mission with families and businesses playing their part – but so will the government.

In this Parliament, we’re already planning to invest, in energy efficiency, a total of £6.6 billion.

Today, I’m announcing new funding, from 2025, of a further £6 billion – doubling our annual investment to deliver this new national ambition.

Our commitment to the British people is, over time, to remove this single biggest driver of inflation and volatility facing British businesses and consumers.

My RHF the Business and Energy Secretary will publish further details on our energy independence plans and launch a new Energy Efficiency Taskforce shortly.

Infrastructure

Mr Speaker,

If a modern economy needs secure, clean and affordable energy – it also needs good roads, rail, broadband and 5G infrastructure.

Such connections allow wealth and opportunity to spread which is why infrastructure is our second growth priority.

Thanks to decisions by this government, right now workers right across the country are building or maintaining thousands of miles of roads and railways; installing mobile masts and broadband cables to connect the remotest parts of rural Britain; building and repairing hospitals; and constructing new wind turbines in the North Sea.

When looking for cuts, capital is sometimes seen as an easy option.

But doing so limits not our budgets but our future.

So today I can announce that I am not cutting a penny from our capital budgets in the next two years and maintaining them at that level in cash terms for the following three years.

This means that although we are not growing our capital budget as planned, it will still increase from £63 billion four years ago to £114 billion next year and £115 billion the year after – and remain at that level..

Smart countries build on their long-term commitments rather than discard them.

So today I confirm that because of this decision, alongside Sizewell C, we will deliver the core Northern Powerhouse Rail. HS2 to Manchester. East West Rail. The new hospitals programme. And gigabit broadband rollout.

All these and more will be funded as promised, with over £600 billion of investment over the next five years to connect our country and grow our economy.

Our national mission is to level up economic opportunity across the country.

And that too, needs investment in infrastructure.

So I will proceed with round 2 of the levelling up fund, at least matching the £1.7 billion value of Round One.

We will also drive growth across the UK by working with the Scottish Government on the feasibility study for the A75, supporting the Advanced Technology Research Centre in Wales, and funding a trade and investment event in Northern Ireland next year.

But to unlock growth right across the country, we need to make it easier for local leaders to make things happen without banging on a Whitehall door.

Our brilliant mayors have shown the power of civic entrepreneurship.

But we need more of this inspirational local leadership.

So today I can announce a new devolution deal that will bring an elected Mayor to Suffolk, and deals to bring Mayors to Cornwall, Norfolk and an area in the North-East to follow shortly.

We are making progress towards trailblazer devolution deals with the Greater Manchester Combined Authority and West Midlands Combined Authority, and soon over half of England will be covered by devolution deals.

Taken together, that £600 billion investment over the next five years means the largest investment in public works for forty years.

Our children and grandchildren can be confident that this Conservative government is investing in their future.

Innovation

Energy and infrastructure…and now our third growth priority – innovation.

We have a national genius for innovation.

Britain is the land of Newton, Darwin, Fleming, Faraday, Franklin, Gilbert and Berners Lee.

The home of three of the world’s top 10 universities.

The country with the largest life sciences largest technology sectors in Europe.

Thanks to successive Conservative governments, we remain a science superpower and I salute the work of former Chancellor George Osborne, my RHF from Tunbridge Wells and my HF the Science Minister and Member for Mid Norfolk for laying the vital foundations to make this possible.

21st century economies will be defined by new developments in artificial intelligence, quantum technologies and robotics.

But we need to be better at turning world class innovation into world class companies.

So as a former entrepreneur, I had to get it in somewhere… I want to combine our technology and science brilliance with our formidable financial services to turn Britain into the world’s next Silicon Valley.

We learned from the success of Nigel Lawson’s Big Bang in 1986 that smart regulatory reform can spur investment from all over the world.

So today, using our Brexit freedoms, I confirm the next step in our supply side transformation.

By the end of next year, we will decide and announce changes to EU regulations in our five growth industries: digital technology, life sciences, green industries, financial services and advanced manufacturing.

And I have asked the Chief Scientific Adviser Sir Patrick Vallance who did such a brilliant job in the pandemic, to lead new work on how we should change regulation to better support safe and fast introduction of new emerging technologies.

The second lesson of Nigel Lawson’s Big Bang is that the most important driver of global success is not tax subsidies but competition.

So we will legislate to give the Digital Markets Unit new powers to challenge monopolies and increase the competitive pressure to innovate.

To further spur competition, I have listened to requests from businesses and today I’m removing import tariffs on over 100 goods used by UK businesses in their production processes, from car seat parts to bicycle frames.

I will also change our approach to investment zones which will now focus on leveraging our research strengths, to help build clusters for our new growth industries.

My RHF the Levelling Up Secretary will work with Mayors, Devolved Administrations and local partners to achieve that with the first decisions announced ahead of the Spring budget.

I have also heard some speculation that we might cut the research and development budget today.

I believe that would be a profound mistake.

In 2017, we announced a target to invest 2.4% of our GDP in R & D and the latest ONS data suggests the UK is close to meeting that target.

I want to go further, so today I protect our entire research budget and confirm that we will increase public funding for R&D to £20 billion by 2024-5 as part of our mission to make the United Kingdom a science superpower.

And finally Nigel Lawson’s Big Bang inspires us today – but nearly 40 years on we must stay true to its mission to make the UK the world’s most innovative and competitive global financial centre.

So to further support investment across our economy, I can also announce we are publishing our decision on Solvency II, which will unlock tens of billions of pounds of investment for our growth-enhancing industries.

Three priorities for growth, then. Energy security, investment in infrastructure and a plan to turn the United Kingdom into the world’s next Silicon Valley.

Transforming British intellectual genius into British commercial success.

But alongside British genius we must also remember another great national quality, British compassion.

The final part of our plan protects the most vulnerable. It is to that I now turn.

Protecting the Most Vulnerable

Strong public finances are not just to make accountants happy.

It is because we took difficult decisions in 2010 that we could afford record funding increases for the NHS, the landmark furlough scheme, and now the Energy Price Guarantee.

Today the discipline we have shown means we can provide targeted support to help our most vulnerable citizens with the cost of living.

Energy Support

One of the biggest worries for families is energy bills, and I pay credit to my predecessor the Rt Hon Member for Spelthorne and the former Prime Minister the Rt Hon Member for South West Norfolk for their leadership in this area.

This winter, we will stick with the plan to spend £55 billion to help households and businesses with their energy bills – one of the largest support plans in Europe.

From April, we will continue the Energy Price Guarantee for a further 12 months at a higher level of £3000 per year for the average household.

With prices forecast to remain elevated through next year, this will still mean an average of £500 support for every household in the country.

At the same time, for the most vulnerable we will introduce additional cost of living payments next year, of £900 to households on means-tested benefits; £300 to pensioner households; and £150 for individuals on disability benefit.

We will also provide an additional £1 billion of funding to enable a further twelve-month extension to the Household Support Fund, helping Local Authorities to assist those who might otherwise fall through the cracks.

And for those households who use alternative fuels such as heating oil and LPG to heat their homes, I am today doubling the amount of support from £100 to £200, which will be delivered as soon as possible this winter.

Before the end of this year, we will also bring forward a new targeted approach to support businesses from next April.

Vulnerable people and pensioners

I want to go further to support people most exposed to high inflation.

Around four million families live in the social rented sector – almost one fifth of households in England.

Their rents are set at one per cent above the September inflation rate which means that on current plans they are set to see rent hikes next year of up to 11%.

For many, that would clearly be unaffordable so today I can announce that this government will cap the increase in social rents at a maximum of 7% in 2023-24.

Compared to current plans, that is a saving for the average tenant of £200 next year.

This government introduced the National Living Wage which has been a giant step to eliminating low pay.

So today I am accepting the recommendation of the Low Pay Commission to increase it next year by 9.7%.

That means, from April 2023, the hourly rate will be £10.42 which represents an annual pay rise worth over £1600 to a full-time worker.

It is expected to benefit over two million of the lowest paid workers in the country and keeps us on track for our target to reach two thirds of median earnings by 2024.

And it is the largest cash increase in the UK’s National Living Wage ever.

Mr Speaker, there have also been some representations to keep the uplift to working age and disability benefits below the level of inflation given the financial constraints we face.

But that would not be consistent with our commitment to protect the most vulnerable so today I also commit to uprate such benefits by inflation with an increase of 10.1%.

That is an expensive commitment costing £11 billion.

But it means 10 million working age families will see a much-needed increase next year.

On average, a family on Universal Credit will benefit next year by around £600.

And to increase the number of households who can benefit from this decision I will also exceptionally increase the benefit cap with inflation next year.

Finally, Mr Speaker, I have talked a lot today about British values – of compassion, hard work, dignity, fairness.

There is no more British value than our commitment to protect and honour those who built the country we live in.

To support the poorest pensioners, I have decided to increase pension credit by 10.1% which is worth up to £1470 for a couple and £960 for a single pensioner in our most vulnerable households.

But the cost of living crisis is harming not just poor pensioners but all pensioners so because we have taken difficult decisions elsewhere in this statement, I can today announce that we will fulfil our pledge to the country to protect the pensions Triple Lock.

So, in April, the state pension will increase in line with inflation, an £870 increase which represents the biggest ever cash increase in the state pension.

To the millions of pensioners who will benefit from this measure I say – now and always, this government is on your side.

Conclusion

Mr Speaker,

There is a global energy crisis, a global inflation crisis and a global economic crisis.

But the British people are tough, inventive and resourceful.

We have risen to bigger challenges before.

We aren’t immune to these headwinds but with this plan for stability, growth and public services, we will face into the storm.

There may be a recession Made in Russia but there is a recovery Made in Britain.

And we commitment to our plan today with British resilience and British compassion.

Because of the difficult decisions we take in our plan…

We strengthen our public finances…

…bring down inflation.

…and protect jobs.

We build the first state backed nuclear power station for 30 years.

And continue the biggest programme of capital investment for 40 years.

We protect standards in schools.

….cut NHS waiting times.

…fund social care.

…cap energy bills.

…support those on benefits.

We protect workers with the biggest ever increase in the National Living Wage…

…and our pensioners on the triple lock with the biggest ever increase in the state pension.

It is a balanced plan for stability, a plan for growth and a plan for public services.

It shows that you don’t need to choose either a strong economy or good public services…

… I commend this statement to the House.

• Announced at UKEF’s annual Finance Forum, the new Bills and Notes Guarantee product is part of its wider package to support SMEs in securing exporting contracts.
• The Bills and Notes Guarantee enables overseas buyers of UK goods to benefit from extended payment terms.
• Andrew Bowie, Minister for Exports, highlights the vital role UKEF can play in supporting SMEs in the challenging global economy.

UK Export Finance has launched a new product to help support SMEs through challenging market conditions. Announced by Minister for Exports Andrew Bowie, at UKEF’s annual Finance Forum, the new Bills and Notes product is now open to guarantee payments by overseas buyers. The product will be available to more financial institutions with a simpler, more streamlined process.

The announcement came almost a year to the day of the Government’s launch of its export strategy and the concrete target of getting UK PLC to 1 trillion pounds of export sales.

Andrew Bowie, Minister for Exports, said:

To deliver growth, level up the country, and future proof our economy, we need to export more.

That’s why UKEF helps businesses of all sizes to expand and start their exporting journeys. The support that UKEF provides is crucial for firms, especially for small businesses in particular while they grapple with the current economic headwinds. That’s why our new Bills and Notes Guarantee is so welcome. It’s the latest in our support for SMEs and provides a faster and more streamlined process to get money in businesses accounts.

In the last year UKEF has provided record support for small and medium businesses across the UK and I am committed to building on this momentum.

Bills and Notes are a standard method of payment where money is due under bills of exchange or promissory notes. UKEF has now improved its offer to enable overseas buyers of UK goods to benefit from extended payment terms structured using these methods. Simply put it means small UK businesses can get paid more quickly and easily for their exports. This helps with crucial cash flow and liquidity.

As part of its wider package of support for SMEs, it is the latest announcement by UKEF in its mission to remove barriers to trade. Through partnerships with specialist lenders, UKEF can now support a greater range of UK exporters – including those with smaller transactions – by arranging tailored, deferred payment facilities for companies worldwide.

In 2021-22, 81% of companies supported by UKEF were SMEs, a new record for UKEF. This is underpinned by the ‘gamechanging’ General Export Facility (GEF) designed to give SME exporters more flexibility in accessing trade finance.

Moreover, UKEF provided £27 million of support to ensure UK SMEs got paid up front to fulfil export contracts, using its Standard Buyer Loan Guarantee scheme, while overseas buyers benefit from flexible repayment terms.

The Environment Secretary Thérèse Coffey has today called for renewed global action on nature as she sets out an ambitious path forward for nature at COP’s Biodiversity Day (16 November).

Outlining the importance of next month’s vital meeting of the UN Convention on Biological Diversity in Montreal , she is calling on countries to come together at that summit and  agree a robust global plan for tackling nature loss. While significant progress has been made, more action is needed from both the public and private sectors to bridge the reported $700 billion funding gap needed to stop nature loss.

Our security, livelihoods and productivity depend on the global web of life including our forests and the ocean, with over half of the world’s GDP reliant on nature.

Today at Biodiversity Day, the UK Government continues to drive global  efforts to embrace nature to help lower global temperatures and build a sustainable future. It will:

• Commit £30 million of seed finance into the Big Nature Impact Fund – a new public-private fund for nature in the UK which will unlock significant private investment into nature projects, such as new tree planting or restoring peatlands. Managed by Federated Hermes and Finance Earth, these habitat creation projects will aid small business growth and job creation as well as soak up carbon emissions and support cleaner air and water. 
• Pledge an additional £12 million to the Ocean Risk and Resilience Action Alliance to protect and restore vulnerable coastal communities and habitats
• Commit a further £6 million to provide capacity building support to developing countries to increase commitments to nature and nature-based solutions under the Paris Agreement, through the UNDP Climate Promise.
• Announce new UK climate finance contribution of £5 million toward the Inter-American Development Bank’s (IDB) Multi-Donor Trust Fund for the Amazon. This will help to tackle deforestation through community-led projects harnessing local knowledge to protect the world’s most precious forests that the planet relies on, whilst providing sustainable business opportunities to Indigenous People whose livelihoods depend on forests.
• Raise awareness of the incredible importance of mangroves and their role in coastal resilience by endorsing the Mangrove Breakthrough led by the UNFCCC High-Level Champions and the Global Mangrove Alliance. This vital project aims to secure the future of vital coastal mangrove forests.
• Highlight the climate benefits of blue carbon through continued support for the new Global Ocean Decade Programme for Blue Carbon (GO-BC), which has now launched a new Global Graduate scheme for early career blue carbon researchers.

Speaking at Biodiversity Day at COP27, Environment Secretary Thérèse Coffey said:

Over half of the world’s GDP reliant on nature, which is why the United Kingdom  put nature at the heart of our COP26 Presidency and led calls to protect 30 per cent of land and ocean by 2030.

We continue to demonstrate international leadership through commitments to create a natural world that is richer in plants and wildlife to tackle the climate crisis, and at next month’s meeting of the UN Convention on Biological Diversity we will strive for an ambitious agreement that includes a global 30by30 target, a commitment to halt and reverse biodiversity loss, and an increase in resources for the conservation and protection of nature from all sources.

Lord Goldsmith, Minister for International Environment, Climate, Forests & Energy, said:

The fastest route to Net Zero is restoring the world’s forests and protecting nature. And the value of forests and other ecosystems goes so much further than climate. The greatest guardians of nature has always been indigenous people, which is why the UK is delighted to support communities in the Amazon in their efforts to protect and restore their environment.

Global momentum is now behind plans to halt nature’s decline, with 95 world leaders and over 100 non-state actors having now signed the Leaders’ Pledge for Nature which commits to global action to reverse biodiversity loss by 2030.

This momentum will only continue if the right incentives are in place. The UK, together with Ecuador, Gabon and the Maldives, recently led the creation of a Political Vision: 10 Point Plan for Financing Biodiversity (10PP), launched with 17 early endorsers. At COP27, ministers and representatives from 15 existing signatories and others were drawn together in a closed door meeting to kick-start next steps on translating this plan into action ahead of CBD-COP15.2 in Montreal.

As outgoing UNFCCC (UN Framework Convention on Climate Change) COP Presidents, it is vital that the United Kingdom’s level of ambition for nature is continued under future Presidencies to achieve Net Zero goals and halt the damage that climate change is causing to our planet.

Looking ahead to UN CBD, this includes scaling strong investments into nature-based solutions, committing to protecting and restoring critical ecosystems, such as mangroves and peatlands, improving the abundance of species and plants, and halting the decline of biodiversity to create a more sustainable future and drive economic growth.

ENDS.

Notes to editors:

Further information on the Big Nature Impact Fund

• The new blended fund is being launched with £30 million of government investment. From the 16 November the fund will start to engage with private investors to help fund green projects around the country, this will include tree planting, peat restoration and water quality improvement projects.
• The £30m seed public investment will drive much greater investment from the private sector to invest in nature projects in England to help tackle climate change.
• Investment generated through the fund will support new woodland creation in England – equivalent to 15-16 million trees of new planting. The fund will also support peatland restoration and habitat creation.
• The Big Nature Impact Fund will boost the economy through new nature recovery projects that will create green jobs, secure existing ones and open up new avenues in UK green finance.
• Projects will generate revenue to provide a financial return for investors by selling high-integrity carbon and biodiversity units to businesses to help them fulfil their net zero commitments and biodiversity net gain obligations.

At the UN CBD meeting in Montreal in December, the United Kingdom will:

• Seek further support for the target to protect at least 30% of the land and of the ocean globally by 2030 (‘30by30’)
• Continue leading calls for ambitious and meaningful outcomes for the ocean
• Aim to provide a significant increase in the mobilisation of resources from all sources to fund the global effort to halt nature loss.
• Look to strengthen mechanisms for holding countries to account for implementing the framework.
• Work towards agreement on ensuring that benefits arising from the use of biodiversity are shared with the communities that take care of them

Forests

• The Inter-American Development Bank (IDB) Multi-Donor Trust Fund for the Amazon is a new initiative that will work to promote forest protection and sustainable development across the Amazon. As part of the initiative, the UK will work together with the IDB, Amazon countries and other key regional stakeholders, and partners such as the Netherlands and Germany, to fund innovative projects that improve management of vital forest landscapes, support sustainable, nature-positive livelihoods for indigenous people and local communities, and upscale economic solutions to eliminate deforestation and ecosystem degradation. The initiative will deliver support across eight Amazon countries – Brazil, Colombia, Bolivia, Peru, Guyana, Venezuela, Ecuador, and Suriname.
• In addition, we invested over £2 million through  the Mobilising Finance for Forests programme in projects to conserve, restore and sustainably manage two million hectares of tropical forest landscapes that will reduce emissions significantly by 2030.
• This year, the UK has also invested through the UK’s Conflict, Stability and Security Fund (CSSF) an additional £800,000 in climate security projects tackling the illegal drivers of deforestation in the Amazon region.

Mangroves breakthrough:

• The Mangrove Breakthrough was launched by the Global Mangrove Alliance (GMA) in conjunction with Nigel Topping and the UNFCCC High-Level Climate Champions (HLCs). They  launched at COP27 on 10 November with endorsements from states (including the UK) and non-state actors.
• The Mangrove Breakthrough’s aims to catalyse the financial support needed to achieve its target of $4bn corresponding to 15million hectares of mangroves globally by 2030, through collective action on halting mangrove loss, restoring half of recent losses, doubling protection of mangroves globally, and ensuring sustainable long-term finance for all existing mangroves.
• The ambition aligns with Defra and HMG priorities to champion ocean-climate action and to drive forward a step change in nature-based solutions, including under the Blue Planet Fund, and towards the Glasgow Leaders Declaration on Forests, recognising mangroves as blue forests.

GO-BC:

• Defra provides support for the running of Global Ocean Decade Programme for Blue Carbon (GO-BC), a new research programme within the UN Decade of Ocean Science for Sustainable Development. GO-BC It is looking to build blue carbon scientific capability (in part through launching its global graduate scheme) and exploring potential blue carbon research projects it will endorse (one such project where there could be future opportunities for collaboration is the Convex Seascape Survey).

Glasgow legacy

• The Glasgow Leaders Declaration on Forests and Land Use is part of the ambitious legacy from COP26. Led by the United Kingdom, 145 countries – representing over 90% of the world’s forests – signed a pledge to halt deforestation and land degradation by 2030 while delivering sustainable development and rural transformation. This commitment will deliver resilient and inclusive growth and accelerate efforts to limit global warming.  Countries now need to deliver on their Glasgow commitments and the Forests and Climate Leaders’ Partnership – launched earlier this week – will play a critical part in driving this through providing accountability and space for enhanced cooperation. The declaration was signed by 145 countries at COP26. For more information visit: Glasgow Leaders’ Declaration on Forests and Land Use – UN Climate Change Conference (COP26) at the SEC – Glasgow 2021 (ukcop26.org)
• COP26 also gave much greater prominence to the ocean’s role in climate action. Since Glasgow, the United Kingdom has increased support to developing countries through the flagship £500m Blue Planet Fund to support adaptation to climate change and build sustainable, prosperous coastal communities. The United Kingdom will build on this ambition at COP15, seeking agreement of an ambitious Global Biodiversity Framework to halt and reverse biodiversity loss by 2030.
• The 10 Point Plan is a political blueprint that defines a clear pathway for bridging the global nature finance gap and to manage the significant risks of biodiversity loss to the global economy and public health. It was launched at the UN General Assembly (UNGA 77) on 20 September 2022. 17 countries have signed up to the 10 Point Plan, led by Ecuador, Gabon, Maldives and the UK. The plan demonstrates the role that all sources of finance have to play, including domestic, international, public and private. It has a particular focus on how international, public finance can support developing countries to accelerate the transition to become nature positive. The 10 Point Plan for financing biodiversity – GOV.UK (www.gov.uk)

Ocean Risk and Resilience Action Alliance:

• ORRAA is a multi-sector collaboration connecting the international finance and insurance sectors, governments, non-profits, and stakeholders from the Global South to pioneer finance products that incentivise investment into coastal and ocean Nature-based Solutions. The Alliance’s goal, by 2030, is to activate at least $500 million of investment into this space, and in so doing, help build the resilience of at least 250 million climate vulnerable coastal people Homepage – ORRAA (oceanriskalliance.org)

• The new Indonesia Just Energy Transition Partnership (JETP) will mobilise $20 billion [£17bn] over the next three to five years to accelerate a just energy transition.
• The UK stands ready to support delivery of the partnership, including through a $1 billion World Bank guarantee. ¹
• The Indonesia JETP launch builds on momentum of other JETP progress during the COP27 Summit in Sharm El-Sheikh, Egypt.

Prime Minister Rishi Sunak joined other world leaders at the G20 today [15 November] to launch the Indonesia Just Energy Transition Partnership (JETP) at the Partnership for Global Infrastructure and Investment (PGII) side event.

This country-led partnership will help Indonesia pursue an accelerated just energy transition away from fossil fuels and towards renewable sources. The JETP includes an ambitious pathway to reduce power sector emissions, a strategy based on the expansion of renewable energy, and the phase down of coal. This transition will not only deliver enhanced climate action, but will help support economic growth, new skilled jobs, reduced pollution, and a resilient, prosperous future for Indonesians.

The agreement focuses on achieving this transition in a way that considers all workers, communities and societal groups affected directly or indirectly by an energy transition away from coal, and helps to ensure that they are supported through concrete commitments.

The JETP model was pioneered at the COP26 Summit in Glasgow last year, where South Africa and an International Partners Group (IPG) of France, Germany, the United Kingdom, the United States of America, and the European Union announced a ground-breaking long-term $8.5bn JETP, setting a new precedent in the global just energy transition.

Indonesia is the second country to launch a JETP. Among the world’s ten largest greenhouse gas emitters, Indonesia is now accelerating its transition to clean energy through the JETP’s strengthened commitments to maximise the use of abundant renewable energy resources and a strong political commitment to phase down coal-fired power in the medium-term.

In support of these commitments and actions, the Indonesia JETP will mobilise $20 billion over the next three to five years. $10 billion of public money will be mobilised by the IPG members and at least $10bn of private finance will be mobilised and facilitated by the Glasgow Financial Alliance for Net Zero (GFANZ) Working Group.

The United Kingdom has been an instrumental member of the IPG helping to agree this ambitious new JETP with Indonesia. The UK stands ready to support delivery of the partnership, including through a $1 billion World Bank guarantee. This facility will allow the Government of Indonesia to extend their borrowing on affordable World Bank terms by up to $1 billion.

The partnership will be a long-term political agreement between the Government of Indonesia and an IPG comprising the United States of America and Japan as joint leads, along with the United Kingdom, Germany, France, the European Union, Canada, Italy, Norway, and Denmark.

Prime Minister, Rishi Sunak said:

“I am proud to launch a new Just Energy Transition Partnership with the Government of Indonesia. This will unlock billions in private finance for new green infrastructure.”

COP26 President, Alok Sharma said:

“Just Energy Transition Partnerships (JETPs) are an innovative finance model that I am proud to say came out of COP26 and embody the ambition we called for in Glasgow. They provide a means for partner countries to work with climate finance donors and private sector investors on a clean, just energy transition to create new jobs, economic growth, clean air and a resilient, prosperous future.

“This country-led partnership will support Indonesia to accelerate its transition away from coal as part of the country’s commitment to its 2060 net zero target”.

The Indonesia JETP launch builds on the momentum from the COP27 Summit in Sharm El-Sheikh, which saw progress on implementing the South Africa JETP and commitment to launch a JETP with Viet Nam this year ² . It demonstrates progress on the UK-launched G7 Partnership for Global Infrastructure and Investment (PGII). JETPs are a core delivery mechanism of PGII, which aims to narrow the infrastructure investment gap in developing countries ³ .

Just ahead of COP27, South Africa released their Just Energy Transition Investment Plan which outlines clear pathways for implementation. At COP27, Prime Minister Rishi Sunak met with the President of South Africa Cyril Ramaphosa, along with the European Union, United States of America, Germany, and France to discuss the JETP. Following this key milestone, a 12 month update on progress in advancing the South Africa JETP was published which acknowledges the progress made and outlines the next steps in this long-term partnership.

At COP27, COP26 President Alok Sharma, met with Tran Hong Ha, Vietnam’s Minister for Natural Resources and Environment to discuss a potential JETP between the IPG and Vietnam. Minister Ha and Mr. Sharma recommitted to finalising the details of an ambitious political declaration and package of financial support for Viet Nam’s energy transition, with the intent to launch the agreement before the end of 2022.

Work also continues between the IPG and the Government of India towards concluding a partnership on just energy transition in 2023 during India’s G20 Presidency. The IPG is also working closely with the Government of Senegal to explore a way forward for a JETP. Further details will be shared in due course.

¹ Government has agreed to provide a guarantee. Parliament will be consulted before the final guarantee is signed.

² https://www.gov.uk/government/news/cop26-president-meeting-with-vietnamese-minister-ha-8-november-2022

³ https://www.gov.uk/government/news/g7-leaders-statement-partnership-for-infrastructure-and-investment

Businesses will be given an additional 2 years to apply new product safety marking, giving thousands of businesses the freedom to focus on growth, Business Secretary Grant Shapps has announced today (Monday 14 November).

The UK Conformity Assessed (UKCA) marking has been introduced as part of the UK’s own robust regulatory framework. It shows that products comply with our product safety regulations which are designed to protect consumers.

However, given the difficult economic conditions created by post-pandemic shifts in demand and supply, alongside Putin’s war in Ukraine and the associated high energy prices, the government does not want to burden business with the requirement to meet the original (31 December 2022) deadline.

The government will continue to recognise the CE marking for 2 years, therefore allowing businesses until 31 December 2024 to prepare for the UKCA marking. Businesses can also use the UKCA marking, giving them flexibility to choose which marking to apply.

Business Secretary Grant Shapps said:

The government is determined to remove barriers to businesses so they can get on with their top priorities, like providing quality customer service, enabling growth and supporting their staff.

This move will give businesses the breathing space and flexibility they need at this crucial time and ensure that our future system for product safety marking is fit for purpose, providing the highest standard for consumers without harming businesses.

To support manufacturers, the government is also reviewing the wider product safety framework, ensuring we minimise the burdens on business while keeping our system up to date with new innovative methods such as e-labelling.

As part of this, the government will make it easier than ever for businesses to apply product markings.

This package will give thousands of businesses, including electronics and lift manufacturers, additional time to focus on delivering growth and creating jobs, while giving them flexibility in how they meet their legal obligations.

There will be different rules for medical devices, construction products, cableways, transportable pressure equipment, unmanned aircraft systems, rail products, and marine equipment. Government departments responsible for these sectors are making sector specific arrangements.

Notes to editors

The UKCA marking covers most goods which previously required the CE marking, known as ‘new approach’ goods, in addition to aerosols that previously required the ‘reverse epsilon’ marking.

Whilst the UKCA marking can be used now this extension means businesses can choose to use the CE marking until 31 December 2024.

This sits alongside measures to reduce the costs of retesting products and labelling.

To reduce labelling costs, we will allow businesses to affix the UKCA marking and include importer information for products from EEA countries on an accompanying document or label until 31 December 2027.

We will also allow conformity assessment activities for CE marking undertaken by 31 December 2024 to be used by manufacturers as the basis for the UKCA marking, until 31 December 2027.

To extend the deadline, the government has today laid secondary legislation before Parliament which, subject to parliamentary approval, will implement these measures.

Businesses have been able to use the UKCA mark since 1 January 2021 to demonstrate their conformity with product standards in England, Scotland and Wales.

Under the terms of the Protocol, Northern Ireland will continue to recognise the CE marking for goods placed on the market in Northern Ireland. They will need to use the UKNI marking if they use a UK Conformity Assessment Body to test their products.

The government has published the UK Market Conformity Assessment Bodies database which businesses can use to identify the appropriate body to certify their products.

To find out which regulations apply to your product, businesses should read the Product safety for businesses: A to Z of industry, guidance published by the Office for Product Safety and Standards.

The UK is today leading a global agreement to make green technologies cheaper and more accessible around the world, while also creating green jobs for generations both at home and abroad, Grant Shapps said today (11 November).

Speaking at the COP27 negotiations in Egypt, the Business Secretary announced over £65 million investment to help speed up the development of new green technologies – backed by the talent and expertise of British business.

This builds on the legacy of COP26 in Glasgow, where the UK founded a coalition of countries to scale and speed up the development and deployment of clean technologies and drive down costs this decade, known as the Breakthrough Agenda.

Mr Shapps said it will be the efforts of entrepreneurs, innovators and the international community that will help cut global emissions in the coming decade and achieve net zero by 2050 – something today’s investments will help achieve.

These measures will help expand a whole global market in clean energy technologies, making them accessible and affordable to developing countries – and enabling UK companies to share their talent and expertise in this vital and growing industry.

Business Secretary Grant Shapps said:

Green means growth, and with our existing talents in clean technologies, UK businesses could be world leaders in an industry that will only expand, creating jobs for generations to come while also protecting our precious planet.

At COP27 we are leading international efforts to ensure these new innovations can be more accessible and affordable to heavy, energy-intensive industries in some of the world’s poorest countries.

These agreements are a key part of us achieving our net zero targets and our global efforts to cut emissions – but I am also proud that they will mean more countries will benefit from the knowledge and expertise we have nurtured here on UK shores.

The UK is already a world leader in the latest green technologies, ranging from the development of hydrogen as an alternative fuel, to the manufacture of electric vehicles.

Today’s announcements not only highlight the UK’s leading position on tackling climate change, they also show how this country is influencing international markets to go greener, in a way that gives the UK an advantage over other countries in delivering jobs, growth and investment in the UK.

The Business Secretary today announced:

• that the UK has built a coalition of governments, representing more than half of global GDP, who will take forward actions to speed up the development of new alternatives to fossil fuels for the carbon-intensive sectors, so that by 2030 they use the cheapest and most attractive options available to businesses in emerging and developing economies
• a UK pledge of £65 million towards the world’s first large scale Industry Transition Programme, by the Climate Investment Funds, to support energy-intensive industries in developing economies including India and Indonesia to go green
• UK government’s support, alongside Germany, for a new funding window for projects developing innovative and transformational clean technologies. Set to open in 2023, this funding from the Mitigation Action Facility will go to key priority sectors – energy, transport and industry – identified in the Breakthrough Agenda at COP27. This will support developing countries to achieve their goals for tackling climate change and reducing emissions

This comes on top of the Prime Minister’s announcement of a further £65.5 million for the Clean Energy Innovation Facility, which provides grants to researchers and scientists to accelerate the development of innovative clean energy technologies in developing countries. Since the UK-led fund was launched in 2019 it has so far supported 76 projects, including the creation of biomass-powered refrigeration in India, prototype lithium-ion batteries in Nigeria and clean hydrogen-based fuels for steel production in Morocco, among other innovations. Its beneficiaries have praised the programme for its ability to identify business and community needs as it unlocks innovation opportunities.

Notes to editors

Breakthrough Agenda

The Breakthrough Agenda was agreed at COP26 in Glasgow between the UK and 46 other countries to help some of the highest emitting sectors of the global economy to decarbonise.  At COP27, a coalition of governments representing more than half of global GDP will launch the Breakthrough Agenda Priority Actions, which will support the key sectors of power, road transport, steel, hydrogen and agriculture, working to decarbonise them by 2030 by making clean technology in those sectors affordable and accessible to all.

The programme announced today are:

Climate Investment Funds’ Industry Transition Programme

• the CIF Industry Transition programme aims to overcome the challenges of decarbonisation within the industrial sector (with a focus on manufacturing sectors such as iron, steel, cement, glass, chemicals and petrochemicals, pulp and paper, and mining). This is especially important as heavy industry has shifted to emerging and developing countries, where there are huge differences in technological standards and regulations, and where the Industrial sector is expected to become the largest source of emissions within a decade
• a country of expression interest will be launched shortly after COP27

Climate Investment Funds (CIF)

• the UK is the largest investor and a founding member of the multilateral Climate Investment Funds (CIF), which speeds up climate action in clean energy and transport technology, energy access, Nature and climate adaptation and resilience. It works exclusively through Multilateral Development Banks as implementing partners

On Monday 7 November at COP27, the Prime Minister announced up to £65.5 million to expand the UK’s Clean Energy Innovation Facility (CEIF):

• the Facility aims to accelerate the commercialisation of innovative clean energy technologies in developing countries and the expansion is a key part of the UK government’s £1 billion Ayrton Fund commitment for clean energy research, development and demonstration (RD&D) in countries eligible to receive Official Development Assistance (ODA)
• the existing £50 million CEIF programme was launched in 2019 and currently contains 4 thematic funds, managed by leading delivery partners in those themes: sustainable cooling innovation (International Finance Corporation), industrial decarbonisation innovation (World Bank), energy storage innovation (Innovate UK) and smart energy innovation (Asian Development Bank)

Mitigation Action Facility (previously known as the NAMA Facility)

• the NAMA Facility (NF) is a multi-donor fund established in 2012 by the United Kingdom  and Germany later joined by Denmark, the European Commission, and the Children’s Investment Fund Foundation (CIFF)
• Germany and the UK both contribute approximately 45% of funding to NF
• on 11 November 2022 NF’s new name ‘Mitigation Action Facility’ was presented at COP27
• the overarching aim of Mitigation Action Facility is to enable ODA-eligible countries to reduce their emissions through implementing sectoral decarbonisation projects as building blocks of NDC implementation
• the Facility awards high value grants (up to EUR 25 million) to projects that have a combination of a permanent policy shift (to create an enabling environment) and capital investment to create financing offers for scaling up deployment of clean technologies
• the projects must have a government sponsor, so it provides an effective diplomatic tool to our teams at Post for bilateral engagement.
• going forward the Mitigation Action Facility will be focused on energy, industry and transport sectors – supporting the Breakthrough Agenda Report recommendations

Introduction

Good afternoon everyone, and thank you for joining us at this Cyber Essentials showcase event. I’m very excited to be here today, and it is great to see so many people here from a range of organisations including large and small businesses, government departments, trade bodies and charities. I would like to thank everyone for taking the time to attend and celebrate this fantastic event with all of us here at DCMS.

It has been great to hear about the Cyber Essentials journey from Chris [Pinder, IASME] and Lindy [Cameron, CEO, National Cyber Security Centre], and some of the noteworthy milestones of the scheme over the past 8 years. It is amazing to be able to say that the 100,000th certificate was awarded a few months ago, and I know that many of you here today are Cyber Essentials certified and are counted in that number.

The UK government is working to make the UK the safest place to live and work online. DCMS plays a critical role in strengthening the UK’s cyber ecosystem and building a resilient and thriving digital UK, in line with our £2.6 billion National Cyber Strategy. As part of that strategy, we are committed to increasing the uptake of standards such as Cyber Essentials. To date, Cyber Essentials has had a profound impact in driving improved cyber security across a wide range of organisations. It is becoming increasingly embedded within our economy and it is playing a vital role in driving a more resilient and prosperous UK.

We regularly hear from organisations that are benefitting from the scheme – from large blue chip companies to small organisations and local charities, helping the most vulnerable in society – a small managed service provider in Northern Ireland, a nursing home in Liverpool, a domestic abuse charity in the Midlands and a charity supporting those with visual or hearing loss in Scotland – are just a few organisations that have gone through the Cyber Essentials scheme recently.

We have heard a lot about growth today, not just of the Cyber Essentials scheme itself but of the entire ecosystem that surrounds it. It is also helping improve all organisations’ productivity and growth as they securely embrace digital technologies. The government’s vision is for this growth to continue, especially in the face of economic adversity. We want to raise awareness of the scheme, to see an exponential increase in the number of Cyber Essentials certifications and to raise the baseline of cyber resilience across the economy. We want all organisations in the UK to be working towards Cyber Essentials. To do this, we need organisations to be asking their suppliers, partners and other third parties they engage with to have it. Most suppliers to government need to have Cyber Essentials and we believe that organisations across the wider economy should be asking their own suppliers to do likewise and that is our ask of you today – to promote and use Cyber Essentials as a key tool when assessing the security of your suppliers.

Supply chains

I know a lot of you are grappling with cyber security challenges in your supply chains. Worrying incidents have shown us that exploiting supply chain vulnerabilities can have severe, far reaching consequences. In the supply chain call for views we published last year, 46% of organisations said a lack of tools is a severe barrier to managing their supplier risk.

I believe Cyber Essentials has an important role to play here. It is not a silver bullet and does not guarantee organisations won’t  fall victim to a cyber attack, but it does provide protection and resilience for so many. In our engagements with industry, including many of you, we are seeing an increasing number of organisations use Cyber Essentials as a tool to assure themselves that third parties, including suppliers, have implemented minimum cyber security controls.

For example, the NHS recently introduced a requirement for IT suppliers to have Cyber Essentials, thus raising the bar for those organisations that wish to do business with the NHS.  Other organisations have seen reduced costs and increased efficiency in their due diligence processes by requiring suppliers to have Cyber Essentials. A well known property website recently told us that asking for Cyber Essentials from suppliers has reduced their due diligence process from days to hours. For them, Cyber Essentials has a commercial benefit and is saving them money.

In a similar vein, we are delighted to announce that DCMS is now working in partnership with St James’s Place, a large financial services firm, who have recently required all of their partners to become Cyber Essentials Plus certified. We will hear more from them in our panel discussion in just a few minutes, but this is a great example of an organisation proactively driving improved security practices in those organisations they work so closely with.

Cyber Essentials Pathways

Now, it would be remiss of me to not recognise the fact that for some organisations, especially those with large and complex IT infrastructures, it is a struggle to comply with all aspects of Cyber Essentials. As Lindy mentioned, we are looking forward to seeing the results of the Cyber Essentials Pathways pilot and anticipate this will provide a further opportunity for organisations to attain Cyber Essentials. We want to ensure that being Cyber Essentials certified is accessible for all organisations. To this end, we are also in the process of launching an evaluation of the scheme, to help us identify and address any barriers that organisations face when going through the Cyber Essentials process.

Conclusion

On that note, I wanted to close by saying that my officials and I would love to hear from you, to better understand how DCMS and industry can work together to ensure Cyber Essentials is an effective certification scheme. I invite you to collaborate with us, to join us on the journey to improve Cyber Essentials and ensure it continues to raise the baseline level of cyber security across our supply chains.

The new government remains intent on improving cyber security across our economy. Our Product Security and Telecoms Infrastructure Bill is close to completing its passage through Parliament and when it becomes law, this will ensure much better security in consumer IoT products. We are also working to improve our cyber resilience legislation and expand the number of skilled people working in cyber security. We’re continuing to build our digital identity framework, which will help the public and businesses verify identities in an easy, secure and trustworthy manner.

Together we can reduce the social and economic harm that we continue to see from cyber security attacks and drive a more resilient and prosperous UK. Thank you once again for working with us on this amazing scheme.