HL Deb 09 December 1982 vol 437 cc260-2

3.16 p.m.

Lord Hatch of Lusby

My Lords. I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they plan any action in regard to the difficulties contemplated by the Export Credits Guarantee Department in view of the dangers to British exporters.

Lord Lyell

My Lords, despite the current difficulties of trading worldwide, the Export Credits Guarantee Department will continue to make its facilities widely available to British exporters, subject to the exercise of prudent judgment and the department's obligation to pay its way.

Lord Hatch of Lusby

My Lords, while I thank the noble Lord for that Answer, may I ask him two questions. Is it not a fact that there is a danger that the ECGD may have to raise its premium rates, and would this not be a setback for the Government's rightful attempt to increase the competitiveness of our British exports?

Secondly, is it the case that the surplus from the ECGD is at present invested in the Consolidated Fund? Have the Government looked at the suggestion made by the developing countries at the GATT meeting, that organisations like the ECGD might very well offer loans to the developing countries, which would increase both exports from this country and the purchasing power of those countries?

Lord Lyell

My Lords, as far as the noble Lord's first question is concerned, the department is charged to pay its way, and its premium rates must reflect the difficult trading conditions of the world today. As far as the noble Lord's second question is concerned. I think it is a little wide of the original Question, but I am sure we are all grateful for his observations.

Lord Hatch Of Lusby

My Lords, with respect, my second question was not wide of the original Question. What I am asking is whether the Government have considered the proposals made at the GATT meeting by the developing countries, that the British Government—because this is a state organisation—should use the ECGD for the provision of loans which would increase the purchasing power of those countries, and therefore increase our exports and jobs in this country, rather than investing their surpluses (and, as the noble Lord knows, there was a trading surplus last year) in the Consolidated Fund?

Lord Lyell

My Lords, as the noble Lord will know, it is very soon after the conclusion of the GATT meeting in Geneva for the Government to have any firm views on this particular suggestion by the developing countries. As the noble Lord and the House will be aware, the ECGD is a commercial operation to assist British exports, and of course it is funded in the main by premiums paid for by British exporters.

Lord Paget of Northampton

My Lords, is the noble Lord aware that I was first a little surprised to find a Question from my noble friend on the Order paper which appeared to be interested in British interests, but that his two subsequent additional questions seem to be to the effect that we should incur more rather than fewer bad debts?

Lord Lyell

My Lords, the noble Lord only stresses my replies to the first two supplementary questions of the noble Lord, Lord Hatch of Lusby.

Lord Taylor of Gryfe

My Lords, is the Minister aware that the Export Credits Guarantee Department is in fact an insurance organisation and is perhaps not the appropriate organisation for making loans? On the other hand, can the Minister assure us that the terms applied by the ECGD are subject to consensus agreement with other countries and that it would be unwise to get into a credit competition with some of the other lenders in international fields?

Lord Lyell

My Lords, I am grateful for the noble Lord's reminder, contained in his first important point. He is absolutely correct on his second point.

Lord Shinwell

My Lords, can we have an assurance from the Minister that any obstacle that bars the way to a revival of trade based on the export credit guarantee arrangement will be removed? We are anxious to revive international trade in any possible form. That is the only way to escape from our present difficulties.

Lord Lyell

My Lords, the noble Lord is, of course, right. I draw his attention, and that of your Lordships, to the comments of my noble friend the Secretary of State for Trade. In July he pointed out that there is little point in this country supplying goods abroad for which it is not paid and for which it cannot be paid.

Lord Hatch of Lusby

My Lords, am I correct in assuming that the ECGD does make loans and that it does so to the Consolidated Fund out of its trading surplus each year? Are we not in a "Catch-22" position where our exports are restrained because of the lack of purchasing power overseas and at the same time that purchasing power cannot be raised because development is hindered through the lack of our exports?

Lord Lyell

My Lords, the noble Lord, Lord Hatch of Lusby, attends more moving pictures than I do. I am not too sure about this "Catch-22" movie. I have never seen it, so he has completely lost me there. The noble Lord is in danger of confusing accountancy terms, since in no way could the surplus accrued by the ECGD be described as a loan.