§ Dame Irene Wardasked the Secretary of State for Trade and Industry whether he will now make an announcement about future arrangements for credit facilities for orders placed in United Kingdom shipyards by United Kingdom shipowners.
§ Mr. RidleyThe Government recognise the importance to the United Kingdom shipbuilding industry of the fixed rate credit facilities for orders placed by United Kingdom shipowners in United Kingdom yards. The present credit scheme is administered by the Department of Trade and Industry but at present under Section 7 of the Shipbuilding Industry Act, 1967, before a guarantee can be given a recommendation has to be made by the Shipbuilding Industry Board.
Following the advice of the Geddes Report, a recommendation by the S.I.B. is conditional upon confirmation that the shipbuilder either has undertaken or is undertaking a reorganisation scheme. Under the Act the S.I.B. ceases to exist at the end of the year and the Geddes conditions would then no longer be operable. The Government therefore intend to introduce legislation to enable shipbuilding credit guarantees to continue to be given after the end of this year, 316W without any requirement for a recommendation by the S.I.B. The present limit of £700 million will be increased to £1,000 million. Taking into account repayments revolving within the scheme, the new limit should be sufficient to cover all home orders placed within the next five years. Arrangements for provision of the additional finance are being discussed with the banks.