§ 2.49 p.m.
§ Lord Taylor of Gryfe asked Her Majesty's Government:
§ Whether similar cover is available from the Export Credits Guarantee Department for major industrial projects as is provided for defence contracts overseas.
§ Lord BeaverbrookMy Lords, the services offered by the Export Credits Guarantee Department in support of major overseas industrial projects arc broadly equivalent to those available for major defence contracts. In total, the amount of cover provided by the ECGD for industrial projects far exceeds that provided for defence contracts. For major civil contracts the current range of ECGD facilities provides more comprehensive cover to UK exporters than is available to their foreign competitors from their domestic ECGD equivalents.
§ Lord Taylor of GryfeMy Lords, is the Minister aware that my Question is prompted by an announcement by his right honourable friend that a further -£1 billion will he set aside to the ECGD by the Government to cover defence contracts? Can he assure me that bids for power plants in Jordan, or petrochemical plants in Nigeria, or port facilities in Pakistan will be treated no less favourably than bids for frigates, tanks and other defence contracts?
§ Lord BeaverbrookMy Lords, civil exports may be helped to the extent that cover for defence sales is set against the new facility and, depending on the outcome of the detailed country assessment, may even release cover for non-defence business.
§ Lord Taylor of GryfeMy Lords, I asked the Minister a specific question as to whether bids for civilian projects in which contractors in this country are involved will be treated no less favourably than bids for frigates. Tornados and tanks.
§ Lord BeaverbrookMy Lords, that would depend on the circumstances. On the whole, I believe that the new £1 billion facility for defence sales should improve the situation relating to cover available for civil contracts.
§ Lord PestonMy Lords, following the noble Lord's question, and bearing in mind how flat the profile of exports has been over the past year or two, perhaps I may ask this question. Is there not a very strong case for intensifying the efforts of the ECGD, and indeed other efforts that the Government might undertake to encourage exports?
§ Lord BeaverbrookMy Lords, the ECGD is a very important part of the export facilities that we offer to firms in this country which are involved in international business. The new arrangements will apply only to a very small number of exceptionally large defence contracts, whereas the bulk of ECGD business is in the civil field.
§ Lord Harmar-NichollsMy Lords, is my noble friend aware that the Government cannot go far wrong in continuing to give whatever help they can to projects that are decided upon their merits and not on the basis of a comparison one with another?
§ Lord BeaverbrookMy Lords, every export contract has to be looked at on its merits. Therefore it is very difficult to make a comparison. However, I believe that we shall assist those exporting civil goods by setting up the new defence facility.
§ Lord Taylor of GryfeMy Lords, I am sorry to press the Minister on this matter, but if a further £1 billion is set aside by the Government specifically for defence contracts, does that not indicate that preference is being given within the ECGD to defence contracts as against the normal criteria for civilian contracts?
§ Lord BeaverbrookNo, my Lords. I think that 1 should explain to the noble Lord that from time to time defence sales to a particular country have absorbed a rather high percentage of the available insurance cover for that country. Therefore it was decided to establish the new £1 billion fund for defence sales so that there would still be enough insurance capacity for the normal civil trade with the particular country.
§ Lord Harmar-NichollsMy Lords, does the guarantee given on those defence contracts preclude similar advantages being given to civilian contracts? Does one rule out the other'?
§ Lord BeaverbrookNo, my Lords. The new fund will improve the ability for those exporting civil goods to obtain insurance cover, as I have already explained.