Soft Loan Facility

HL Deb 21 June 1989 vol 509 cc222-3

2.55 p.m.

Lord Taylor of Gryfe asked Her Majesty's Government:

Whether they will make an early Statement on the future of the soft loan facility in view of its importance to United Kingdom exporters.

Lord Glenarthur

My Lords, the aid and trade provision soft loan facility was launched in 1986 for a five-year period. A mid-term review is currently under way to assess the achievements of the scheme so far and make recommendations for the future, after the present facility has expired. A decision on the future of the scheme is unlikely before the autumn.

Lord Taylor of Gryfe

My Lords, is the Minister aware that this facility provides considerable assistance to British exporters particularly in heavy industry, while at the same time to some extent discharging our aid obligation to third world countries? In view of these circumstances and the fact that British contractors have to be competitive with other countries, can he give some assurance that the Government are likely to continue this facility at least in its present terms?

Lord Glenarthur

My Lords, I am certainly aware of that view but of course that is something which Ministers will wish to consider as they review all the relevant aspects of the current scheme before reaching a conclusion later in the year.

Baroness Ewart-Biggs

My Lords, can the Minister name the development criteria used in deciding whether or not to grant soft loan facilities? Are the Government satisfied that the schemes which they fund are those which alleviate the very poorest?

Lord Glenarthur

My Lords, the criteria are fairly complex. I do not think that it would be possible just now to go into the full detail for which the noble Baroness asks. So far as concerns the alleviation of the poorest, the answer is yes, to a very large extent, but there will of course be other methods of providing aid which are particularly targeted on the very poorest conditions. I do not think that one ought to imagine that there is any difficulty in reconciling the ATP with the poorer conditions about which the noble Baroness is concerned.

Lord Taylor of Gryfe

My Lords, is the Minister aware that this facility has generated orders to the extent of £400 million for British contractors? Since many of those contracts involve long-term negotiations, does he agree that it would be wise to make an early announcement in that regard so that the client countries as well as the companies competing for those contracts know where they stand?

Lord Glenarthur

Yes, my Lords, I am aware of that point and representations on the commercial and industrial aspects of the scheme have been made by British industry. The views of those who have made representations will be taken into account. The autumn is not too far away.