Business and Trade Committee

The committee scrutinised China-linked technology risks in everyday consumer devices and the adequacy of UK regulation, with witnesses arguing that connected vehicles and cellular IoT modules create serious dependency, data and physical-sabotage risks and are not yet governed robustly enough. It also examined UK-China science collaboration, where witnesses said research security controls have improved markedly since 2019 but are still slow, inconsistent and under-resourced. Extracted government positions included that existing laws and case-by-case vetting are being used, that the UK needs to balance security and economic openness, and that collaboration should continue in selected areas under the Joint Committee on China’s recommendations.

The Committee scrutinised how China’s industrial overcapacity, subsidies, coercive trade practices and technology ambitions affect the UK economy, with witnesses arguing that China shock 2.0 is more enduring than the first wave and now reaches higher-value sectors such as EVs, semiconductors, AI services and critical minerals. Witnesses and Members explored policy responses including tariffs, minimum prices, allied procurement, export controls, supply-chain mapping, investment screening and anti-coercion tools. A major thread was that the UK is underprepared: witnesses said the Government lacks full visibility of dependencies, uses limited FDI conditions, and has weak protection against forced labour in supply chains. The hearing also extracted clear calls for stronger legislation, particularly a forced labour import ban and human-rights/environmental due diligence, plus more coordination with allies on trade defence and strategic sectors.

The 28 April 2026 Business and Trade Committee evidence sessions scrutinised energy-price pressures on energy-intensive industries, the future of UK automotive under the industrial strategy, and governance challenges in implementing IS8. Witnesses highlighted structural drivers of high UK energy costs (policy-financing of infrastructure via bills, gas-price volatility, and levies), called for reform of subsidy schemes (BICS), decarbonisation barriers (grid-connectivity, CAPEX), and emphasized domestic energy security (North Sea). They pressed for a cross-government coherence in policy levers (procurement, public finance, skills, and energy policy), urged an accelerated reform of ZEV mandates and rules of origin, and called for a statutory footing for the Industrial Strategy Council. A closing signal from the committee pressed Ministers to move to a statutory basis for the Council before prorogation.

This session scrutinises the policy landscape for the UK’s economic relationship with China, capturing business views on the scale and nature of opportunities, risks, and the government’s role. Witnesses emphasise that China is a major growth driver and the UK’s third-largest trading partner, and call for a clearer, gouvernement-led strategy toward China underpinned by active economic dialogues. They urge better, more targeted guidance for SMEs, a coherent cross-Whitehall framework to manage risk and opportunity, and continued engagement in services, including financial services, education, and creative industries. There is concern about industrial subsidies in China, the need for proportionate trade-remedies tools, and the importance of safeguarding academic freedom and IP. Witnesses also press for on-the-ground support, stronger export-finance backing, and a UK-Australia/Asia-Pacific balanced approach to investment and trade, while warning against over-reliance on a single market. Across panels, the consistent government-position signals desired are renewed dialogue, clarity on risk-appetite zones, and a strategic, multi-sector China-engagement plan that aligns with national security and economic resilience.

This evidence session explored the UK’s position in frontier AI within the context of business and the workforce, focusing on government strategy, data-centre infrastructure, energy costs, and capital markets. Witnesses stressed that the UK should avoid a simplistic ‘race’ narrative, instead prioritising governance, data quality, and the adoption of AI by SMEs and public services. Key government commitments identified include the AI opportunities action plan and the sovereign AI unit; witnesses urged active governance through AI assurance, data-centric metrics, and prudent regime design (e.g., CMA pro-innovation stance under Digital Markets, Competition and Consumers Act). Sector-specific concerns highlighted the fragility of data-centre capacity, grid-connection delays, and high energy costs, which risk constraining the UK’s ability to attract investment in AI infrastructure. The hearings also underscored the need to mobilise private capital (pensions, VCs) domestically, improve access to international markets, and scale up adoption of AI in mainstream businesses through targeted incentives (R&D credits, scale-up reinvestment relief). Overall, the thrust is for a balanced, locally grounded approach that aligns AI development with citizen needs, while ensuring robust governance, strategic energy planning, and better activation of domestic capital and SMEs.”,

The Royal Mail evidence sessions scrutinised the deterioration in service quality, labour-resource pressures, and the workforce and governance dynamics following privatisation and the EP/Privatisation takeover. Witnesses and committee members highlighted a retention crisis, escalating workload from parcels and tracked items, and a management culture issue. A core focus was the ongoing Universal Service Obligation (USO) reform, negotiations with the CWU, and Ofcom’s regulatory remedies (including fines and enforcement plans). The government/oversight position is being shaped by tripartite engagement (Government, EP Group, Royal Mail, CWU) and By March 2026 Ofcom signalled it expects a credible improvement plan backed by investment and a clear implementation timetable for USO reform. Key commitments/positions include: EP Group commitments not to break up Royal Mail and to avoid compulsory redundancies; Ofcom’s enforcement framework and requirement for a credible plan with investment; Royal Mail ownership (Křetínský) pledging investment and alignment of incentives with parcel/letter sustainability; and ongoing Government scrutiny to ensure delivery of a rebalanced, sustainable Royal Mail.