§ 4. Mr. Raynsford:
To ask the President of the Board of Trade on what terms export credit guarantees are offered to British industry in respect of major south American countries.
§ Mr. Leigh
Short-term credit insurance is available from the private sector. ECGD medium-term cover, on credit terms of two years or more is available for British exports to Chile, Colombia, Venezuela and Uruguay. At present, medium-term cover is not generally available for other south American countries, but the position on individual markets is kept under regular review.
§ Mr. Raynsford
Does the Minister accept that the absence of export credit guarantee support in respect of Brazil and Argentina has severely prejudiced the prospects 252 of a world-beating firm that is based in my constituency—STC—which has sought to win an international submarine telecommunications contract in those countries? Will he review urgently the nature of the export credit guarantee scheme to ensure that British firms are no longer left at a disadvantage as against their overseas competitors, whose Governments give them far more effective support than ours do?
§ Mr. Leigh
The hon. Gentleman was kind enough to write to my right hon. Friend about the issue on 26 November. We replied to him yesterday. I hope that by now he has received the letter. I think that I see the hon. Gentleman nodding. What I said in that reply was that of course we keep all these matters under review. The hon. Gentleman will be aware that I have already intervened on behalf of STC and that I wrote to the procurement group of companies to see whether any help could be given to the company, for which it was grateful. To put the matter into context, £800 million of Brazilian debt and £150 million of Argentinian debt has been rescheduled. There has to be a real possibility of the debt being repaid. It does not help UK Ltd. if exports are not paid for. To ignore economic reality would, to quote the hon. Gentleman's article on the anaesthetised, torpid Labour party, be to sleepwalk into oblivion. We are not prepared to do that.
§ Mr. Jacques Arnold
May I draw to my hon. Friend's attention the fact that we are losing many opportunities in the major countries of Latin America, due to the lack of capacity and flexibility of the Exports Credits Guarantee Department? I draw his attention also to the major city of Sao Paulo in Brazil which has always used the River Tietê to get rid of its sewage, with very smelly consequences. It is looking to Britain, to the example of what we have done to the River Thames, as a means of improving the position. That gives great opportunities to British water companies and to British technology. May I ask my hon. Friend to ensure that Britain is at the forefront of this activity in Brazil?
§ Mr. Leigh
I am grateful to my hon. Friend. The whole House recognises his expertise in south American affairs. The Minister for Energy, who is sitting on my left, met the governor of Sao Paulo last week. The competitive nature of ECGD generally has been improved by the additional £700 million of cover that has been obtained by the sterling efforts of my right hon. Friend the President of the Board of Trade. Of course we shall keep these matters under review, but my hon. Friend will be aware of the difficult economic situation in Brazil.
§ Mr. Bell
The Minister has not yet answered the question put to him by my hon. Friend the Member for Greenwich (Mr. Raynsford). He talked about competition from our European competitors—our European counterparts. Is it not a fact that their interest rates are lower than ours and that their time scales are longer than ours? As we now have the presidency of the European Community, can the Minister tell the House what initiatives have been taken within that presidency to bring those rates and time scales into harmony, in the interests of British industry?
§ Mr. Leigh
The Government continue to press ahead with initiatives in the EC and OECD to ensure that other agencies charge premiums that more closely reflect the 253 risk. In recent months, a number of agencies in Japan, France, the Netherlands and Belgium have announced increases in rates or have advised that they plan to do so.
§ Mr. Anthony Coombs
I recognise the generally excellent performance in the recession of British exporters to south America and elsewhere, but will my hon. Friend bear in mind the representations made by the CBI in "Making it in Britain" and by the Engineering Employers Federation in "Industrial Strategy"? Both ask for a more level playing field for export credit guarantees compared with their European competitors.
§ Mr. Leigh
I take my hon. Friend's point, but repeat my point: my right hon. Friend the President of the Board of Trade and my hon. Friend the Minister for Trade are committed to promoting British exports. In the spring, they secured the major achievement of cutting premium rates in more than 50 markets, since when we have obtained another £700 million of cover. They constantly strain every nerve to promote British exporters and exports. I am sure that my hon. Friend will accept that in these difficult markets there must be some realistic chance of the product and export being paid for; otherwise the taxpayer will lose out considerably. There is about £4 billion worth of debt outstanding on ECGD.