HC Deb 01 June 1981 vol 5 cc629-30
3. Mr. Sims

asked the Secretary of State for Trade what representations he has received concerning the changes in the Export Credits Guarantee Department cover for third market trading.

Mr. Parkinson

I have received a number of representations from merchants and other organisations for relaxing the more stringent terms of cover for external trade introduced recently. However, the heavy losses being met on this facility have made these changes necessary if ECGD cover for direct exports is not to be adversely affected.

Mr. Sims

Does my hon. Friend agree that British trading houses make a substantial contribution to the nation's economy not only in their direct export business but in third market trading? Is he aware that while the trading houses are grateful that the ECGD has decided to continue cover on external trading, a number of those houses, particularly those involved in the chemical business, will be seriously affected by the withdrawal of buyer default cover? Will he reconsider the situation with regard to that aspect of the changes?

Mr. Parkinson

I should like to help my hon. Friend, but the House should know that this cover offered by the ECGD has resulted in substantial overall losses of about £75 million, and £23 million on buyer credit default. Therefore, we had to look at the terms of the cover and tighten up the premiums. However, we have tried to make sure that those who have made the biggest claims in the past pay the bigger premiums in the future.

Mr. Durant

Will the Minister speed up the procedures in this matter, because contracts are often lost owing to the long delay in getting decisions?

Mr. Parkinson

If my hon. Friend will give me specific examples, I shall follow them up. I take note of his general point.