§ Mr.Austin Mitchellasked the Chancellor of the Exchequer whether he will publish in the Official Report a table showing the savings which could be made in (a) foreign exchange and (b) the £ sterling, if public expenditure on the 444W promotion of exports ceased; what the effect would be in reduced exports; how this compares with the saving to the current account balance of payments from a 1 per cent. reduction in the real exchange rate, and what has been the increase from 1 January 1979 in the real exchange rate as measured by relative export prices, having regard to the rate of inflation in other competing countries.
§ Mr. LawsonPublic expenditure on export promotion by the Department of Trade is expected to total £24.8 million in 1979–80. Some of this expenditure relates to payments made overseas, but it is not possible to identify readily the direct foreign exchange savings that could be achieved by withdrawing the export promotion programme.
Public expenditure in 1979–80 by the Export Credits Guarantee Department on the support of fixed rate export credit and on the cost escalation scheme is expected to total £98.7 million. Of this, £20.4 million relates to the interest support of credits financed in foreign currency and therefore involves a direct foreign exchange cost. However, even if public expenditure on these facilities were withdrawn, significant expenditure would continue for several years as a result of past commitments. No estimates are available of the immediate savings that would be achieved, but they would be very small in the first couple of years.
It is not possible to quantify the effect on exports of ending public expenditure on export promotion.