§ Mr. Wrigglesworth
asked the Secretary of State for Trade and Industry (1) when and why exchange rate cover was withdrawn from European Investment Bank loans;
(2) what has been the impact of the withdrawal of exchange rate cover from European Investment Bank loans; how many businesses benefited from European Investment Bank loans in each of the three years before the Government withdrew exchange rate cover; and how many since cover was withdrawn.
§ Mr. Giles Shaw
Exchange risk cover was withdrawn from loans provided by the European Investment Bank (EIB) to private sector businesses in the United Kingdom with effect from 18 July 1985, but subject to transitional arrangements for applications which were under consideration at that date. The reasons for doing so were given by my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) the then Minister of State, Department of Trade and Industry, on 18 July 1985, at column 205, in reply to my hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard). The number of separate loans provided by the EIB to United194W Kingdom private sector businesses in each year since 1982 (excluding loans made from new community instrument funds raised by the EC Commission) was as follows:
Year Number1 Number2 1982 28 1 1983 36 3 1984 30 2 1985 75 2 1986 14 5 1 Number of EIB loans made with exchange risk cover (including loans through intermediaries. 2 Number of EIB loan commitments made without exchange risk cover.
Withdrawal of exchange risk cover has reduced very significantly the number of loans made to private sector business in the United Kingdom, and has meant that EIB loans are in practice no longer made to United Kingdom small businesses through intermediaries.