§ Mr. Chapmanasked the Secretary of State for Trade whether, in the light of the changes in the arrangements for Government refinancing of fixed rate export 414W credit which he announced on 13 February, the policy of requiring the use of currencies other than the £ sterling for Export Credits Guarantee Department supported fixed rate export finance for large export contracts is being reviewed.
§ Mr. ParkinsonThe Government have reviewed the policy operated by the Export Credits Guarantee Department of requiring fixed-rate export finance for large export contracts to be provided in currencies other than sterling. When it was introduced three years ago, this policy had a number of advantages. Particularly important were the public expenditure savings achieved by reducing the amount of sterling refinance that the Government had to provide. As my hon. Friend notes, I recently announced the withdrawal of this refinancing facility for new sterling business so that there is now no public expenditure argument for requiring exporters to finance in foreign currency.
The Government have, therefore, concluded that a mandatory policy for foreign currency financing need not be maintained. In consequence, ECGD will henceforth no longer require exporters to finance large export contracts in foreign currency.
Nevertheless, ECGD facilities in support of foreign currency financing will still be available and I hope that exporters will continue to use these to the full. As many exporters have discovered, financing in foreign currency frequently offers important competitive advantages. I feel sure, therefore, that it will continue to play an important role in our export effort.