§ Mr. Skeetasked the Secretary of State for Trade and Industry whether any change is contemplated in the fixed rate of 6 per cent. per annum charged by the clearing banks for finance for medium- and long-term export credits guaranteed by ECGD.
§ Sir G. HoweYes. The rate has been reviewed in the light of the economic situation generally and the rates charged by our competitors. The latter have in general moved up since March 1972 and in many cases embody a range of rates. Against this background, therefore, I have decided to replace the single rate of 6 per cent. per annum by a range of rates from 6 per cent. to 8½ per cent. per annum. Within this range a rate of 7 per cent. per annum will apply for finance for credits of from two to five years inclusive. The rate for shipbuilding contracts will continue to be fixed in accordance with our international obligations in this field and is at present 7 per cent. For other contracts where the credit period exceeds five years, specific rates within the range will be determined by the Export Credits Guarantee Department on a case-by-case basis.
These provisions will come into effect for contracts signed from 1st January 1974 after the expiry of any period for which the existing 6 per cent. has been committed forward.
The new system will give greater flexibility to British exporters while fully maintaining our competitive position.