Export Credits: Future Policy (Hansard, 14 November 1984)

§ Lord Stanley of Alderley
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)
My Lords, Her Majesty's Government will keep available a wide range of facilities to assist United Kingdom exports and at the same time will continue their support for international agreements to limit credit terms and to minimise associated costs to Government. Agricultural exports from the United Kingdom are entitled to the full range of appropriate Government support services, including ECGD's credit insurance guarantees where the risks involved are judged acceptable. Other countries in the European Community make support available against similar criteria.

§ Lord Stanley of Alderley
My Lords, I thank my noble friend for that apparently helpful Answer. But will the Government ponder and, indeed, accept the great damage caused by failure to provide export guarantees and export credits, similar to those in the EC, and that we are losing our long-term competitiveness as an exporter? Can my noble friend tell me whether, this being less than equal to the French, it has resulted this year in the French exporting their corn whereas most of the British corn has, very regrettably, gone into intervention at great cost, as was mentioned yesterday by his right honourable friend the Chancellor of the Exchequer?

§ Lord Lucas of Chilworth
My Lords, I can tell my noble friend that I am not aware of the anomaly with regard to the French to which he drew my attention. The arrangements in force under the Berne union of export credit insurers, as with the OECD sector agreements, ensure that there are similar, if not totally equal, credit terms throughout the Community. As for my noble friend's question about the French sale of grain, I am sure that he knows better than I do that this year's record grain surplus in the United Kingdom has posed a totally new problem. I can say that Her Majesty's Government are looking at that problem in isolation.

§ Lord Taylor of Blackburn
My Lords, is the Minister aware of the frustration felt by many companies in the United Kingdom, compared with companies in Europe, at the delay before they are informed whether they will be allowed to export items out of this country? The average processing time when a British company applies to the EEC is in the region of six weeks. In Germany it is four, and in France, five.

§ Lord Lucas of Chilworth
My Lords, I am not quite sure whether the noble Lord is referring to export licences or to acceptance of credit loan arrangements through the ECGD.

§ Lord Taylor of Blackburn
Credit loan arrangements, my Lords.

§ Lord Lucas of Chilworth
My Lords, as I understand it, the timescale that the noble Lord has instanced is the exception rather than the rule. But if he has in mind a particular example, I should be happy to look into it for him.

§ Lord Walston
My Lords, will the noble Lord confirm what I understood him to say; namely, that British grain exported from British ports to third countries qualifies in exactly the same way as any other British commercial export for ECGD cover, where that is available?

§ Lord Lucas of Chilworth
My Lords, I think that the noble Lord possibly misunderstood me. Grain exports are normally guaranteed to a length of 180 days. There have been exceptions to that; for example, the two-year term which was given in the case of a shipment of grain to Morocco. Normally other hard goods, if I may call them that, qualify for longer periods of credit.

§ Lord Mackie of Benshie
My Lords, can the noble Lord tell us the difference in cost between exporting grain immediately and putting in and out of intervention? I understand that it is very significant.

§ Lord Lucas of Chilworth
My Lords, the likely saving of such storage costs is one factor which the Government are taking into account in considering the representations which have been made and to which I alluded in my earlier answer with regard to the exceptional surplus this season.

Lord Bruce of Donington
My Lords, leaving out the agricultural aspects of this matter, is the noble Lord aware that whatever formal arrangements have been 313 reached between various members of the EEC and ourselves, and indeed outside the EEC, in practice, somewhat mysteriously, other countries seem to be able to get more favourable terms than those offered by the ECGD? Is he further aware that, despite the overriding necessity, which I am quite sure the Government recognise, of making every possible effort to increase our exports, the ECGD's attitude to applications appears to be getting increasingly stringent?

§ Lord Lucas of Chilworth
My Lords, I am sorry that I cannot leave aside the agricultural issue since that is exactly the Question on the Order Paper. It is a connected Question about the export credits and ensuring that British agricultural exports are not disadvantaged; so I cannot leave that aside. I would, however, remind the noble Lord that the ECGD is required to operate on a commercial basis. Consequently, ordinary commercial considerations have to be taken into account. On his last point, I fear that I cannot agree with his suggestion that the ECGD's attitude leaves something to be desired.

§ Lord Molloy
My Lords, does the noble Lord agree that it might be useful if he were to consult the National Farmers' Union, the agricultural workers' union and the specialist engineering organisations concerned with this problem? A discussion with those three bodies might help the Government to understand what the problem really is.

§ Lord Lucas of Chilworth
My Lords, I do not think that the Government have any misunderstanding as to what is the problem. The Government and my department are, of course, always happy to discuss with anybody, whether an agricultural union, the NFU or engineering businesses, any problems that they may have over exports.

§ Lord Harmar-Nicholls
My Lords, I should like to avoid our developing an inferiority complex about how we make use of the EEC machinery. Does my noble friend agree that the criticisms from the opposite Benches may well have been true four years ago, but that the knowledge that we have, the use that we make of the machinery' and how we take advantage of it for national reasons, are so much better now that the implications behind the questions put to him are unwarranted?

§ Lord Lucas of Chilworth
My Lords, I am grateful to my noble friend for his intervention. I think that the House would expect me to say that, of course, I broadly agree with him.

§ Lord Beswick
My Lords, is the noble Lord aware that the question here is not one of party policy but of what is happening to our attempted exports? The noble Lord has made a categorical statement that there is equality of criteria as between the different EEC countries and the level of support they give to their respective manufacturers. Will he look at the recent cases of the attempted export by British Aerospace of 748s to Zimbabwe and the attempted export of 748s to a Caribbean country, where he will find that there was not that same equality of criteria?

§ Lord Lucas of Chilworth
My Lords, in my answer earlier I said that there were a series of understandings within the Berne union. I did not say that there were laws or rules. There are understandings and notices given with regard to terms as between one partner and another, but the general criteria remain basically the same. In so far as the export of aeroplanes to Zimbabwe is concerned, I think that I answered that question a short while ago. Concerning the other export matter, of British Aerospace 748s, I very much regret to have to tell the noble Lord that I cannot help him this afternoon.

§ Lord John-Mackie
My Lords, does the noble Lord have any figures that tell us how much help in cash terms has been given to agricultural exports during this past year?

§ Lord Lucas of Chilworth
In monetary terms, my Lords, no. The export of agricultural products is around £700 million. It is a very small percentage—less than 2 per cent.—of our total exports in hard goods.

Lord Bruce of Donington
My Lords, is the noble Lord aware that the first part of the main Question did not deal specifically with agriculture? That was the second part of the Question. Therefore will he answer my question about future policy on export credits, without restricting his answer to agriculture, which forms only the second part of the main Question?

§ Lord Lucas of Chilworth
My Lords, the policy with regard to support given by ECGD remains broadly the same as it has done for a number of years.

A noble Lord
It is better now than it was.

§ Lord Monk Bretton
My Lords, may I ask my noble friend the Minister whether he is aware that there is information coming from Brussels that the French intend further national aids for beef producers to the tune of £35 million? May I ask my noble friend to keep a very close eye on this and to consider whether the French really ought to withdraw it, or else whether more ought to be done universally within the EEC, bearing in mind the pressure upon meat markets of the milk quotas? Will he do this in order to ensure fair competitive conditions?

§ Lord Lucas of Chilworth
My Lords, I am grateful to my noble friend for drawing the attention of the House to this matter of French beef exports. What I can say is that through the association we have with our partners in Europe, to which I have earlier referred, I will certainly cause investigation to be made. Obviously, I cannot prejudge the result of such an investigation, but, if I may, I will take the opportunity of writing to the noble Lord.

§ Lord Cledwyn of Penrhos
My Lords, can the noble Lord briefly confirm that he is saying that the British producer is on exactly the same footing as his French counterpart in so far as the export of grain and beef is concerned? Is he aware that there is considerable concern at the present time about the export of beef and what is regarded as unfair competition from the French producer?

§ Lord Lucas of Chilworth
My Lords, what I am saying, and confirm to the noble Lord, Lord Cledwyn of Penrhos, is that through the understandings which we have through the Berne union, and through other organisations to which I have referred, there is parity, there is agreement as to the credit terms and charges that are generally levied as between one and another. Having said that, there is also an understanding that where one country departs from the strict criteria, notice is usually given. We have no knowledge that a departure from the agreed terms has occurred in recent times in relation either to grain or to beef. However, I have given an assurance that we will look at the specific point that my noble friend raised in his supplementary question a moment or two ago.