§ Mr. Goodlad
asked the Secretary of State for Trade if he intends to change the arrangements for the fixed rate sterling export and shipbuilding credit scheme; and whether he will make a statement.
§ Mr. Parkinson
Under long standing arrangements the Export Credits Guarantee Department has provided the banks with refinance for certain fixed interest rate sterling export credits. After a review of the arrangements, the Government propose to withdraw the refinance facility for new business with effect from654W 1 April 1980. In future, therefore, the banks will provide sterling export credits entirely from their own resources. This will result in increasing and significant savings of public expenditure over the coming years.
The Government have decided to continue the present arrangements under which the banks receive a commercial rate of return on the finance they provide for fixed rate export credits on terms of two years credit or more. However, it has been agreed that in future the level of the return will be reviewed more frequently.
In addition, the range of institutions which will be eligible to participate under the ECGD supported fixed rate schemes will be widened so that all acceptable banks which are recognised under the Banking Act 1979 will be eligible to lead or participate in sydicates providing sterling export credit. In addition, the Export Credits Guarantee Department will be prepared to consider requests from other acceptable deposit-taking or non-deposit-taking institutions to participate as lenders in such syndicates. These wider eligibility rules also apply to foreign currency financed credits.
The revised arrangements will apply to new commitments from 1 April 1980. The review has shown that these arrangements are generally acceptable to the banks. They should continue to ensure an adequate supply of fixed rate export finance to our exporters whilst reducing the burden on public expenditure of the support of these funds.
My hon. Friend the Minister for Industry has asked me to confirm that they will also apply to the home shipbuilding scheme with effect from the same date.