§ The Minister for Women (Ms Patricia Hewitt)In previous statements to the House on 22 July 2002,Official Report, columns 779–78W, and 17 December 2002, Official Report, column 45WS, I reported on the Export Credits Guarantee Department's (ECGD) progress towards being established as a Trading Fund.
The Government recognise the important contribution exports make to the UK economy. Capital goods exporters, in particular, attach a great deal of importance to ECGp support, pointing to its value in helping them secure business in competitive overseas markets.
Last year, the Government made a firm commitment to ECGD's stakeholders to maintain the level of ECGD support at broadly the current level, and to tackle unfair export credit subsidies on a multilateral, and not a unilateral basis. The Government therefore remain committed to maintaining the level of ECGD support at broadly the same level as it provides now.
I am publishing today a study by National Economic Research Associates (NERA) on the costs and benefits of ECGD's support to exporters and investors overseas, which I commissioned last year jointly with the Chief Secretary to the Treasury. Copies have been placed in the Library of the House.
This report builds on the earlier NERA report that concluded ECGD should continue to provide cover for medium to long term capital goods exports, because it was likely that the market was failing to work effectively. However, it also concluded that the justification for providing subsidy through ECGD is weak, although the Government's view remains that any attempt to eliminate the subsidy should be done only on a multinational basis.
The report I am publishing today suggests a wide range of possible costs and benefits from ECGD's business over the last 10 years; and to maximise the benefits in the future proposes an approach to pricing and managing risk which reflects the full costs of the business supported.
My right hon. Friend the Chief Secretary to the Treasury and I met Digby Jones and several of ECGD's key exporter customers earlier this week to discuss the NERA report and the Government's response.
The Government have listened carefully to exporters' concerns regarding ECGD, and will maintain a dialogue with them as ECGD progresses towards Trading Fund status. The move to Trading Fund status will help ECGD to improve its management arrangements, including operating efficiencies, while offering better levels of customer service.