§ 70. Mr. David Priceasked the Minister of Technology if he will make a statement on the recent agreement concluded in the Organisation for Economic Co-operation and Development for the reduction of subsidies by member Governments for the exports of ships and on the consequential effects on Government policy towards the British shipbuilding industry.
§ Mr. BennUnder this Understanding, which comes into effect on 1st July, the United Kingdom together with major West European shipbuilding countries, Japan and Canada have agreed that officially supported credit for ships should be limited to 80 per cent. of the contract value and repayable over eight years and that the minimum interest rate should be 6 per cent. net of charges.
Our main competitors are adhering to the eight-year limit save where they have to match offers of 10-year credit and we, in addition, have reserved the right to go to 10 years when genuine competitive conditions do not exist. In the case of the United Kingdom and some other countries, the calculations of the minimum interest rate will be made on a gross basis including finance and interest charges. Some of the other shipbuilding countries also have reservations on particular points.
This Understanding is in accord with the Government's policy for the removal of obstacles to competition in international shipbuilding, and, as a result of its negotiation, some countries are raising their interest rates and some reducing the period of credit they offer.