§ 12. Mr. K. Thompson
asked the President of the Board of Trade why increased premiums are charged by the Export Credits Guarantee Department when extended credit facilities are offered by the British exporter; to what extent this is the practice; and if he will issue revised instructions to his Department, in view of the need for offering such extended credit facilities in face of competition of this kind from other exporting countries.
§ Mr. P. Thorneycroft
In conformity with general insurance and financial practice the Export Credits Guarantee Depart- 184 ment equates rates of premium to the nature and period of the risks undertaken. The Department charges increased premium when extended credit facilities are offered by exporters, the risk naturally being greater when longer credit is accorded. Since E.C.G.D. rightly tries to conduct its operations on commercial lines, I do not propose to instruct the Department to change its practice.
§ Mr. Thompson
Is my right hon. Friend aware that this is a very formidable argument for separating the ordinary commercial from the political section of the risk which the E.C.G.D. covers, and is he aware that the extension of credit facilities over long terms is now an important weapon in the armoury of those who export from this country?
§ Mr. Thorneycroft
So far as I know the facilities offered by the E.C.G.D. are at least as good as those offered by any other exporting country.