UK Exports: Comparisons (Hansard, 25 June 1990)

§ The Minister of State, Department of Trade and Industry (Lord Trefgarne)
My Lords, on the basis of the figures published by the OECD, in 1989 approximately 1.5 per cent. of the UK's total exports went to the COMECON countries, including the USSR. In the same year some 3.8 per cent. of the exports of the Federal Republic of Germany and 2 per cent. of French exports went to those countries. The figure for the FRG does not include exports to the GDR, which are not published.

§ Lord Donoughue
My Lords, I thank the Minister for that reply. It confirms the discouragingly low percentage of our exports which go to that large and expanding market. Is he aware that Germany and France—which the Minister has confirmed already have a much larger share of those markets—have recently increased the credit cover provided for exports and trade to those markets? Does he not agree that it is perhaps a little eccentric of the Secretary of State for Trade and Industry to propose both to reduce the scale of the operations of the Export Credit Guarantee Department and to increase charges?

§ Lord Trefgarne
My Lords, I am afraid that the noble Lord is misinformed. My right honourable friend has reached no decisions on this matter and nor has he announced them. However, it is true that in due course we shall move the short-term part of the ECGD's business into the private sector; that has already been announced. We are also considering the future for the projects side of the business to which the noble Lord referred. The important objective is to ensure that British exporters remain equipped to compete effectively in world markets. That is certainly what we shall do.
As regards ECGD facilities for Eastern Europe, the subject of the Question, the noble Lord will be aware that in some of the countries in Eastern Europe with which we trade there are very serious financial difficulties which very much confine the amount of additional credit that we can make available. In at least three of the Eastern European countries we are continuing to offer significant credit facilities where they are required.

§ Lord Peston
My Lords, is the noble Lord not in a position to say anything more positive than that? At the moment the most interesting and exciting economic developments are taking place in the world. Is the Minister aware that the Germans, French and the Japanese are in the process of pouring capital into those countries and that we seem to be the one country that is saying "it is all very risky and we had better be very careful"? Does the 1269 Minister agree that when we have lost those markets in a few years' time everyone will be asking why we did nothing at the time?

§ Lord Trefgarne
My Lords, again the noble Lord is not well informed on this matter. The Government are taking a number of steps to promote and support the activities of British firms in the newly emerging markets of Eastern Europe. I say that they are "newly emerging", but the economies of most of the countries concerned are in very considerable disarray. There is a limit to the amount of money that, to put it frankly, we should pour down the drain in some of those places where there is no prospect of a sensible return ensuing.
In some cases there will be important business to be secured. We shall support the efforts of British firms to do that by, for example, the Know-How Fund of which the noble Lord may have heard. Recently a number of visits to that area have taken place. My right honourable friend the Secretary of State, my honourable friend Mr. Redwood and I have all made visits. We have also expanded the use of the ECGD to support investment in Eastern European countries by guaranteeing appropriate investment projects in that area. We are also continuing a number of the traditional trade promotion arrangements, such as joint commissions and ventures of that kind.

§ Lord Peston
My Lords, far from being uninformed, the Minister has confirmed precisely what I was implying; namely, that the Government are adopting an entirely minimalist approach by emphasising the risks involved. Is he not aware that the greatness of this country in its heyday in the 19th century was not built on people emphasising the risks involved but on the great potential for returns? That is precisely the view that the Japanese and Germans are taking. Will the Minister not at least suggest to his right honourable friend that some return to the entrepreneurial spirit by this country might be highly desirable for that part of the world?

§ Lord Trefgarne
My Lords, I am all for the entrepreneurial spirit to which the noble Lord refers. We shall certainly support and encourage appropriate entrepreneurism in sensible cases. The fact is that in Poland, for example, the ECGD already has major liabilities. I am not sure that we would be doing the Poles any favour by lending them more money. We shall certainly try to help in other ways, such as through the Know-How Fund to which I have referred, and through the possibility of guaranteeing investments in Eastern European countries which may be aimed particularly at generating exports to help their economies get back on the rails.

§ Lord Whaddon
My Lords, will the noble Lord bear in mind another obstruction to the development of East-West trade? It is a matter which is well within the competence of the Government. It is the dreadful delay in granting visas to businessmen who need to visit this country. Will the Minister take some steps to clear up the enormous delays? In asking this question I must reiterate my own interest in it.

§ Lord Trefgarne
My Lords, I agree that we need to do everything we can to ensure that there are no unnecessary bureaucratic difficulties placed in the way of commercial exchanges of every kind. A number of improvements and simplifications have been made recently to the visa regimes. For example, in respect of some countries we are allowing applicants to have a multiple entry visa as opposed to a single entry visa. I believe that that goes some way towards meeting the noble Lord's question.

§ Lord Stoddart of Swindon
My Lords, is the noble Lord aware that on the one o'clock news today a spokesman for the USSR predicted that if the Soviet Union did not extend into relevant credits there could under certain circumstances be a slip back to dictatorship in the USSR?

§ Lord Trefgarne
My Lords, I am not sure that I would wish to comment on that unhappy possibility. The United Kingdom already has major lines of credit open to the USSR, much of which has not been taken up but is available for use by Soviet buyers if they think fit.

§ Lord Donoughue
My Lords, is the Minister aware that many people will be relieved if the implication of his reply is that charges in this area will not be increased? Is he further aware that, for someone who travels there on business, it is most depressing to see how small the British presence is in Central and Eastern Europe?

§ Lord Trefgarne
My Lords, I am sorry that the noble Lord thinks that our presence is small. I should point out that it has been greatly strengthened in recent times. We are seeking to seize the opportunities that are available, particularly, for example, through the medium of joint ventures and projects of that kind which do not need hard currency. The fact is that most if not all the Eastern European countries are extremely short of hard currency and are therefore very constrained in what they can do except by means of projects which earn the necessary hard currency.