§ Mr. Hooley
asked the Secretary of State for Trade if he can now announce the results of the studies which have been carried out on the question of cover for the risks incurred by United Kingdom contractors arising from joint and several liability in very large overseas projects.
§ Mr. Dell
My predecessor announced on 18th December 1975 a facility whereby ECGD would insure the risk of losses 301W arising in these contracts from the insolvency of a sub-contractor or consortium partner. Experience has, however, shown that this criterion of insolvency is too narrow to meet all situations where overseas buyers require suppliers to be jointly and severally liable for excess costs.
Accordingly, for an experimental period of three years and on a selective basis, ECGD is now prepared to extend its facility, on payment of appropriate premium, so as to insure United Kingdom exporters against a proportion of such losses which may arise in a situation falling short of the actual insolvency of a United Kingdom subcontractor or consortium partner, though excluding causes of loss which should properly be the subject of force majeure clauses. This facility will only be available for overseas projects which constitute particularly attractive export business in the national interest, of which the value is £50 million or more, and for which the United Kingdom participants have a demonstrable commercial capability.
I believe that this scheme will help a number of United Kingdom exporting industries to overcome a disadvantage from which they have hitherto suffered. Further discussions will now take place with representative interests, and details of the facility will shortly be circulated to potential users.