HC Deb 14 March 1990 vol 169 cc472-4
11. Mr. Colin Shepherd

To ask the Secretary of State for Trade and Industry what representations he has recently received from the group of major British exporters in respect of ECGD.

Mr. Redwood

Recent representations made by the Major British Exporters Grouping were taken into account in the report submitted to the Secretary of State by the official interdepartmental working group formed at his request to advise on the Kemp review of status options for ECGD.

Mr. Shepherd

Is my hon. Friend aware of the concern felt by the group of major British exporters on the future of the project sector of ECGD, in that the international competition is much involved in utilising its own ECGD type of mechanisms? Is not the national interest involved? In view of the substantial contribution that the major British exporters make to our balance of payments, how does my hon. Friend view the future of the project sector?

Mr. Redwood

My right hon. Friend the Secretary of State and my noble Friend the Minister for Trade made it clear when they announced their proposals for the ECGD that the project sector would be kept separate from the insurance sector. The insurance sector is already profitable and is suitable for privatisation. The project group will remain under the Government's aegis. I accept that there is a role for such assistance to leading British exporters.

Mr. Skinner

Will the Minister confirm that the Export Credits Guarantee Department is bankrupt? Is he aware that the ECGD is supposed to help Third world countries as a sort of insurance against the lack of money that they suffer from time to time? Is not it odd that the Government, who pride themselves on their business activities, now find their insurance department in the red? On top of that, we hear today that invisibles are also invisible.

Mr. Redwood

The hon. Gentleman has it the wrong way round. The purpose of the ECGD is to offer cover for British exporters doing deals in those countries and to protect them against specified risks in return for certain premiums. Of course ECGD is not bust—it is supported by Her Majesty's Treasury and it has money from the Consolidated Fund to make sure that it can fulfil its role and carry out its remit. The hon. Gentleman is right that there has been generous support for ECGD in past years. That was necessary, given the risks that were covered and the important role played by that organisation in helping to finance British trade.

Mr. Ian Bruce

Will my hon. Friend say something about the review of the ECGD and that we would like to see a level playing field for European and worldwide trade? Surely other countries give better deals to their manufacturers and exporters. Unless we provide equal treatment for our traders, they will be at a great disadvantage, particularly as our trade is now suffering and needs a boost. Will my hon. Friend give an assurance that the ECGD will continue to back British industry?

Mr. Redwood

The ECGD has to conduct its policy within the framework of the GATT disciplines and of the European Community policy against state aid. If my hon. Friend has evidence of unrealistically high levels of state support by competitor countries I should be interested to see it, as would the European Commission, which is currently conducting an inquiry into the general issue of state aid. Of course, Britain does not wish to be undercut by other countries abusing state aids, but the British Government believe that the disciplines within the European Community and GATT should be strengthened to avoid an expensive and damaging trade war by escalating subsidies in that way.

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