§ Mr. Peter Bruinvelsasked the Secretary of State for Trade and Industry what measures he will take to maintain Export Credits Guarantee Department support for United Kingdom trade with countries which have rescheduled some of their officially guaranteed debt but which, nevertheless, are taking vigorous and effective action to deal with their economic problems.
§ Mr. ChannonI recognise the value of maintaining trading links wherever possible with such countries. Consequently I now intend to allow ECGD greater flexibility so that, in appropriate cases, cover may be restored at an earlier stage after the rescheduling of officially guaranteed debts. This cover will be given for exports of United Kingdom goods and services contributing to the economic recovery of the debtor country and will be provided under ECGD's section 2 (national interest) powers. However, in the light of previous assurances that have been given to Parliament about the use of these powers, I would make it clear that use of this discretion will be selective and only authorised where we are satisfied that the debtor country is taking appropriate action in dealing with its problems. I would stress that this does not represent any relaxation of ECGD's general standards of assessing country risks on overseas markets.
251WWhilst I would expect that ECGD cover in these circumstances could be provided on a break-even basis over the longer term, I recognise that the provision of new cover to countries carrying a heavy debt burden does involve a high degree of risk. For this reason, it is intended to control its use especially carefully. However, it has been agreed that the financial outturn of this business will not affect the level of ECGD's premium charges for other categories of business.
This modest improvement in ECGD's arrangements should not only assist United Kingdom exporters to maintain a stake in overseas markets which are in the process of recovering from debt service difficulties; it should also help in the present international debt situation by providing an incentive to the debtor countries to adopt vigorous adjustment policies, usually in conjunction with an IMF programme. Decisions on the resumption of cover for particular debtor countries will be announced by ECGD from time to time.