§ Mr. Wrigglesworthasked the Secretary of State for Trade whether any new steps have been taken to control international export credit competition.
§ Mr. DellThe authorities in a number of major trading nations have indicated their intention to change the terms on which they are prepared to provide official support for export credit for two years or more.
I am therefore instructing the Export Credits Guarantee Department to apply new guidelines as from 1st July. Prior commitments will be unaffected.
ECGD will be publishing the details. The new guidelines affect the arrangements which will normally apply to minimum pre-delivery payments, minimum rates of interest and maximum lengths of credit. The new guidelines are not binding: departures from them may be made, for example, to match competition, and the intention is to review experience in mid-1977.
The main effects will be to set minimum pre-delivery payments of 15 per cent. of the contract value for sales to all markets; to raise the minimum interest rate for credits of from two to five years to 7¼per cent. per annum, except sales 125W to the wealthier markets, for which the minimum will be 7¾ per cent.; and to set maximum lengths of credit varying between five and 10 years according to the relative financial strength of markets, whilst maintaining minimum interest rates on credits exceeding five years at, or above, the existing internationally-agreed levels. I would emphasise that these guidelines represent minimum and maximum positions: they are not to be regarded as norms. ECGD will continue to consider cases individually. Certain classes of goods which are the subject of existing arrangements are excluded.