§ Sir Anthony Meyer
asked the Secretary of State for Industry whether it is possible to reduce the interest rate on loans to small firms made under the agency agreement between Her Majesty's Government and the European investment bank.
§ Mr. David Mitchell
Yes, I am pleased to announce a reduction in the rate of interest on agency loans to 10 per cent. This represents a cut of 1 per cent. on the rate which has applied since I signed the current £20 million agency agreement in March. I hope it will be possible to hold this rate for the rest of this year. Loans worth a total of over £2 million have been advanced at the new rate last week to a number of firms. The combination of a 10 per cent. loan from the European Investment Bank and full exchange risk cover under the Government's exchange risk guarantee scheme represents an attractive borrowing opportunity which I hope that small firms in manufacturing industry will take fully into account in deciding to invest in the assisted areas. These facilities are available to projects which meet the new criteria for assistance we announced last July.