§ Ms. QuinTo ask the Secretary of State for Trade and Industry if he will make a statement on the current operation and level of usage of the home shipbuilders credit guarantee scheme.
§ Mr. Lilley[holding answer 21 May 1991]: The home shipbuilding credit guarantee scheme has been in operation since 1967. The scheme offer United Kingdom-based shipowners, placing orders with United Kingdom shipyards for the construction, completion or radical alteration of merchant vessels, financing terms comparable with officially supported export credit terms available for orders placed with overseas yards. Vessels which may qualify for support under the scheme conform with the definition in the OECD understanding of export credits for ships. The scheme provides two elements of support:
- (i) a Government guarantee of up to 80 per cent. of the loan arranged by the purchaser of the vessel and repayable by equal half yearly instalments over a maximum of eight and a half years;
- (ii) a fixed rate of interest for the duration of the loan with the Government paying the difference between the fixed and commercial loan interest rates. The Government support conforms to the OECD Understanding.
In the year to 31 March 1991, payments of interest support grants totalled £52 million. As at 31 March 1991, the amount of loan principal guaranteed under the scheme totalled £924–6 million in respect of 305 vessels. In the year ended 31 March 1991, a total of 40 new guarantees were given.