HC Deb 02 March 2000 vol 345 cc547-8
14. Mr. Gerald Howarth (Aldershot)

What discussions he has had with other departments on the review of the remit of the Export Credits Guarantee Department. [111545]

The Secretary of State for Trade and Industry (Mr. Stephen Byers)

I asked Cabinet colleagues to advise me of issues that they wished to see covered by the review of ECGD's mission and status, and this was reflected in the terms of reference for the review.

In addition, I shall discuss the recommendations of the review team with colleagues.

Mr. Howarth

I hope that the Secretary of State will acknowledge the extremely important part played in British industry by defence exports. Britain is the second largest exporter of military goods in the world, and this enables us not only to help our friends, but to ensure that we have economies of scale in the production of defence equipment for our own forces.

Can the Minister assure me that ECGD support will continue to be available to major British companies such as BAe Systems, and that there will be no plans for the Government to curtail exports as the Chancellor of the Exchequer has sought to in respect of 63 countries, only one of which has been a beneficiary of ECGD support for defence exports in the past 12 years?

Mr. Byers

The ECGD's role is very important to many major exporters in the United Kingdom, including the defence industry. I think the hon. Gentleman will find when we announce the outcomes of the review that the defence industry will, where appropriate, continue to receive export credits as it does now.

It is always a question of striking the right balance. I believe that when we present our proposals in the light of the review, the right balance will be struck—a balance that recognises the importance of the export licensing regime, which is entirely different from the export credits guarantee regime. The two should not be married. In my view, export credits have a distinct role to play, and they will continue to do so.

We need to change the system to reflect the needs of particular sectors. I do not think that the small and medium-sized enterprise sector uses export credits as much as it might, but I do not believe that any issues arising from the review will cause concern to those of us who feel that export credits have an important role to play in supporting British exporters generally—and that includes the defence sector.

Mr. Geraint Davies (Croydon, Central)

Will my right hon. Friend confirm that most export credits are non-defence credits? On a wider issue, will he confirm that we are taking on a new role in relation to debt relief for emerging markets and third-world countries, while also lowering tariffs to facilitate market access? In that context, do not export credit guarantees hold the key to enabling countries that have suffered severe poverty to catch up with the western world in terms of economic growth?

Mr. Byers

My hon. Friend makes an important point about the positive role that export credits can play in helping countries to develop their own economies. The Government certainly intend to do that, which is why we have concentrated on productive expenditure, especially in the case of the least-well-developed countries. Such countries need to commit their finance to projects that will make economic growth possible. That will form a crucial part of the ECGD's role in the future, and can, I think, be compatible not just with supporting British business, but with our development objectives.

I hope that, when we announce the outcome of the review in a few months' time, the House will see that we have struck the right balance between our two aims. They are not in competition with each other: we want to unite the interests of British business with countries' development needs.

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