UK Export Promotion Services (Hansard, 20 May 1992)

§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield)
My Lords, the Government, through their overseas trade services operation, provide a wide range of help, advice and financial support to UK exporters. We have made substantial improvements over the past three years to our services and we keep them constantly under review to ensure that they continue to meet the needs of exporters. We are customer led.

§ Lord Jay
My Lords, since a number of large industrial groups, including those in the construction, engineering and chemical industries, are pressing for much more effective government action, particularly in such matters as insurance premium rates and aid and trade provisions, and since the Government have really done little other than selling a major part of the ECGD to the Dutch, would this not be an ideal case for the new Secretary of State to embark on one of those constructive interventions which he is supposed to favour?

§ Baroness Denton of Wakefield
My Lords, I can at least confirm the President of the Board of Trade's great interest in and anxiety about the export market, in particular as regards manufacturing. However, it may be that the facts do not portray the dismal picture painted by the noble Lord, Lord Jay. In the three months to March of this year manufacturing exports were 4.5 per cent. higher than in the same period a year earlier and 74 per cent. higher than in 1981. They were at a record quarterly level and the privatisation has meant that 90 per cent. of the business has been put through the private market.

§ Lord Mellish
My Lords, how does that marry up with the statement made yesterday by the noble Baroness herself that firms—I have in mind Ford in particular—are moving from this country to overseas? They are manufacturing overseas and importing to us. How does that add up and why are the Government taking no action to stop companies from doing that?

§ Baroness Denton of Wakefield
My Lords, as I said yesterday, we believe that it is the companies, and not government, that run companies. Ford is a multi-national company. It produces many of its 598 products in this country but is moving some of its R&D. However, at the same time we must remember the enormous investments that Nissan, Toyota and Honda are making in this country.

§ Lord Ezra
My Lords, for a number of years I served on the BOTB. At that time I was worried about the comparison between what we were doing to support our exporters and what other countries, particularly those in the EC, were doing to support theirs. Will the noble Baroness tell the House whether we keep that constantly under review and whether she is satisfied that the support which we give to our exporters is in line with that provided by our competitor countries?

§ Baroness Denton of Wakefield
My Lords, I thank the noble Lord, Lord Ezra, for that question. There are disparities in rates with other export credit agencies. We are aware of those and we monitor them constantly. The correct way to reduce that disparity is to press other countries to charge more economic rates. I am delighted to say that there has been some movement in European rates. We do not believe that two blacks make a white to get it legal and right.

§ Lord Taylor of Gryfe
My Lords, will the Minister accept that British industry is disadvantaged both in relation to its competitive position and ECGD premiums? Will she accept also that our limited aid budget, as compared with some of our competitors, limits our ability to provide aid as part of the incentive package to the purchase of British goods?

§ Baroness Denton of Wakefield
My Lords, I am sorry, but I cannot accept that. We are working extremely hard to support groups. The project business on overseas building and civil engineering work, which won contracts worth nearly £2.5 billion in 1990, is running at the same level this year. In fact, we are spending £59 million on support. We are not looking just at large projects, although we are always delighted to see gains, such as recently in Hong Kong. We are looking also to introduce companies to the export market.

§ Lord Wade of Chorlton
My Lords, is my noble friend aware that I am closely involved in the export of foodstuffs from this country? Recently we received enormous support from the Government who are extremely responsive to any request for assistance. We have been particularly impressed by the fact that, since privatisation, that part of ECGD with which we as food exporters are involved has been much more flexible and helpful in its approach. I am sure that my noble friend will confirm that that is the position.

§ Baroness Denton of Wakefield
My Lords, I confess that my noble friend Lord Wade certainly knows more about that subject than I. I am therefore grateful to him for his intervention. However, I have watched with admiration the work done by Food From Britain in building up the market.

§ Lord Williams of Elvel
My Lords, will the noble Baroness accept that there were many speeches in the debate on the Address concentrating on the question 599 of exports, not least the speech from her noble friend Lord Trefgarne, who, before the noble Baroness, was a Minister in her department? Will the noble Baroness accept also that the noble Lord, Lord Trefgarne—I am sorry to see that he is not in his place today—described the Government's approach to long-term ECGD as unilateral disarmament? What is the Government's response to that?

§ Baroness Denton of Wakefield
My Lords, my noble friend is entitled to his view. However, it is totally untrue. As I have already said, the long-term projects are running at a rate which matches last year in a market which by no means matches last year in terms of recession. We are keeping an even playing field. The support is there and is being used.

§ Lord Williams of Elvel
My Lords, the noble Baroness says that she is keeping an even playing field. Is she not aware that the premiums charged by ECGD for long-term projects are way in excess, in almost every instance, to those charged by French and Italian export credit agencies?

§ Baroness Denton of Wakefield
My Lords, yesterday the noble Lord, Lord Williams, asked me to be aware of how we looked after taxpayers' money. We must take account of the risks involved. The international debt crisis and, more recently, the Gulf war and developments in Eastern Europe have shown those risks to be potentially significant. Since 1984 ECGD has paid claims under its guarantees which exceed its premium income by a factor of eight. As a result it has accumulated a deficit with the Exchequer. The Government would be failing in their duty if they did not seek to balance the legitimate interests of exporters against those of taxpayers who have to face the cost.