Parliament has passed the Industry and Exports (Financial Assistance) Act 2026, which received Royal Assent on 18 March 2026 and comes into force on 18 May 2026. The law raises the two state‑backed finance caps that most affect UK exporters and industrial investors. (en.wikipedia.org)

On domestic industry support, the Act amends section 8(5) of the Industrial Development Act 1982. The aggregate limit for “selective financial assistance” rises from £12bn to £20bn, and the amount by which ministers can lift that ceiling via secondary legislation increases from £1bn to £1.5bn per order. (publications.parliament.uk)

On exports, the Act revises section 6 of the Export and Investment Guarantees Act 1991. UK Export Finance’s portfolio cap moves from 82.7bn Special Drawing Rights to a sterling figure of £160bn, future increases can be made in £15bn steps, the cap on the number of such increases is removed, and a small tidying change omits section 12(2) of the 2015 Small Business Act. (publications.parliament.uk)

What did that SDR figure mean in practice? Using the IMF’s daily rate for 18 March 2026 (1 GBP = 0.980741 SDR), the previous 82.7bn SDR cap equates to roughly £84.3bn. The new £160bn headroom is therefore about 90% higher, reducing the risk of big-ticket deals running into a hard legal ceiling. (imf.org)

Why now? The Government had already used three SDR-based orders in November 2024 to take the limit to 82.7bn SDR, and by March 2025 UKEF had used around 70% of that capacity. Legislators have now both expanded and simplified the framework by fixing the limit in sterling. (researchbriefings.files.parliament.uk)

For exporters, more headroom means greater scope for large buyer credits and long‑tenor project finance without squeezing out working capital guarantees for mid‑market suppliers. In 2024/25 UKEF supported about £14.5bn of business across 667 firms, with an estimated 70,000 jobs supported, underlining the scale at stake. (publications.parliament.uk)

For manufacturers and SMEs at home, the Section 8 envelope under the 1982 Act often underwrites major plant upgrades, decarbonisation projects and regional clusters. Lifting the ceiling from £12bn to £20bn-roughly a two‑thirds increase-largely reflects price levels since the last reset in 2009 rather than a change in what qualifies. (publications.parliament.uk)

Timing matters. The Act starts two months after Royal Assent, so 18 May 2026 becomes the practical date for bids and investment decisions that depend on the refreshed limits. Finance teams can plan procurement and tender timetables with that cut‑over in mind. (publications.parliament.uk)

A caveat for modelling: the statutory limit is not the same as the operating ceiling. UKEF also works to a lower Treasury‑set limit, and support remains conditional on value‑for‑money, climate and sanctions checks, so projects still need to clear those gates. (researchbriefings.files.parliament.uk)

Politics shaped the text at the margins. Opposition proposals on modern slavery, Russia‑related sanctions circumvention and transparency for any steel support were debated but not added; ministers argued this was a technical Bill and it passed without amendment. (lordslibrary.parliament.uk)

SDR‑to‑GBP in one line: the old power to raise the EIGA cap by 5bn SDR per order worked out at about £5.1bn at the 18 March 2026 rate; the new law allows up to £15bn per order-around three times the previous step size, and now expressed in sterling. (imf.org)

Bottom line for boardrooms: expect fewer procedural bottlenecks on large export finance packages and a bigger domestic assistance envelope, while decisions remain gated by Treasury appetite and project quality. For SMEs, the most visible effects will feed through supply chains and working‑capital support rather than an immediate subsidy surge.