HC Deb 21 December 1961 vol 651 cc1556-8
34. Mr. McMaster

asked the Chancellor of the Exchequer what steps he is taking to discover the current rates of interest being charged in respect of credit facilities and the rates of premium paid on export credit guarantees made available to exporters abroad; what measures Her Majesty's Government intend to take to ensure that British manufacturers and exporters are not placed at a disadvantage in this respect as a result of any lower rate of interest being made available generally to any of our principal overseas competitors; and if he will make a statement.

Mr. Barber

We take all reasonable steps to obtain the sort of information to which my hon. Friend refers. With regard to credit facilities in this country, I do not think I can usefully add to the statement which my right hon. and learned Friend made in the House on Monday of this week, 18th December.

Mr. McMaster

Is my hon. Friend aware that the Bank Rate and the corresponding bill discount rate charged in Germany at the current rate is about half of that in this country and that, therefore, exporters of heavy industrial items, particularly ships and such things as paper-making machinery, are at a definite disadvantage because contracts running into many millions of pounds can be very much affected by a difference of interest rate or by a difference of credit guarantee rate of only 2 or 3 per cent.? Will he consider publishing more information about this for the benefit of the House?

Mr. Barber

If there are any particular points which my hon. Friend would like me to answer in the House, I shall be very pleased to consider them. I must remind him that it was only earlier this week that my right hon. and learned Friend said that he thought there was room for improvement in our machinery for the provision of credit. He was, of course, referring there not only to the availability of credit, but also to the terms of credit. I assure my hon. Friend that these are matters among those uppermost in my hon. and learned Friend's mind. The discussions he is at present having have not yet been concluded, but he hopes to be able to say something to the House as soon as Parliament re-assembles.

Mr. Rhodes

Is the Minister aware that this is one of the most important problems which must be considered by his Department during the next few months? Is he aware that the Japanese economy is now geared to a very high Bank Rate, never less than 10 per cent., which gives an enormous advantage to Japanese exporters when bills are discounted at 2.55 and loans are made to Japanese industry at no higher rate than 4 per cent. for everything in the pipeline for export up to six months? These are very serious disadvantages for exporters in this country. The hon. Gentleman will find those figures in a report compiled by the Federation of British Industries.

Mr. Barber

I appreciate what the hon. Gentleman says, namely, that rates of interest are of very considerable importance to exporters. Of course, the situation inevitably varies from country to country, and the hon. Gentleman will I know accept the fact, as in fairness he must, that earlier this year we were faced with very considerable balance of payments difficulties. Inevitably, I think, in our present economic situation, we have to face high interest rates.