Export Credits Guarantee Department

HC Deb 09 February 1976 vol 905 cc24-5

21. Mr. Pattie

asked the Secretary of State for Trade whether he is satisfied with the current working of Export Credits Guarantee Department procedures.

Mr. Deakins

Yes, Sir. Naturally we keep our procedures under review in the light of changing circumstances.

Mr. Pattie

Is the Minister aware that British companies have recently been discouraged from tendering for turnkey projects in the Middle East because the ECGD has insisted on guarantees even where Arab development funds are involved? Does he agree that the ECGD should be encouraged to be more flexible in terms of Section 2 business?

Mr. Deakins

The ECGD will be more flexible on Section 2 business, provided that the criteria for assessing applications under that provision are adhered to. It refers to business undertaken not on commercial grounds but in the national interest. In regard to the Arab Fund, officials from my Department will visit the Kuwait headquarters of the Fund shortly to discuss closer co-operation to enable the ECGD facilities and money from the Fund to work together more easily in order to finance new business in countries that otherwise might not be assessed for credit of that kind.

Mr. Tim Renton

To what extent are ECGD cost escalation insurance policies being used by British manufacturers? Furthermore, what discussions are taking place with the French, who offer more extensive benefits than we do in this respect?

Mr. Deakins

On the question of cost escalation, British industry was a little unhappy with the scheme announced last year. We have made distinct improvements, culminating in the series announced in December 1975. It is too early to say what extra business has resulted following those considerable improvements. Nevertheless, having spoken to the CBI committee on these matters, I am confident that we have gone a long way towards meeting the demands that British industry placed on us in terms of improving the cost escalation scheme.

Obviously, we are anxious to ensure that the benefits of the French scheme do not exceed those of our own. We hope, from the point of view of public expenditure, that a time will come when we can both get rid of our schemes. We introduced our scheme only because the French introduced theirs.

Mr. Speaker

I remind the hon. Gentleman that he has an all-time record for the length of an answer.