§ Mr. RedmondTo ask the President of the Board of Trade if he will make it his policy to end subsidies to the arms export trade; and if he will make a statement. [17915]
§ Mr. OppenheimIt has been long-standing Government policy for the Export Credits Guarantee Department to support defence exports on no more favourable terms than apply to civil sales. The ECGD operates to a financial break-even objective on its new business, applying the same prudent underwriting criteria, cover policy and premium rates to civil and defence business.
Although there is the possibility of a subsidy arising from fixed rate export finance supported by the ECGD, the United Kingdom has been at the forefront of international negotiations to progressively eliminate the potential for such subsidy. The minimum interest rates supported under FREF are determined by international agreements, and fixed by reference to market levels.
While defence-related exports are not covered by these agreements, the ECGD applies the same rules in financing support for defence sales as for civil sales.